1964-06-12

PRIVILEGE


Mr. C. A. Gauthier (Roberval):: I rise on a question of privilege, Mr. Speaker, because I have reason to believe that the Minister of Agriculture misled the house, perhaps unwillingly, in replying to some comments I made last night while speaking on the farm credit bill.
As reported at page 4218 in yesterday's Hansard, I had stated:
For two years I have been actively looking after farm loans in my riding, and I must say that we succeeded last year, by our efforts, in having 15 per cent of the applications-
I repeat, the applications.
-accepted by the Farm Credit Corporation.
And a little further on I said:
This is not to our credit, but I must say this, because I found last year that half the applications for loans were being turned down because of political partisanship.
Those are the words I uttered and the reply of the Minister of Agriculture may be found at the bottom of the same page:
Mr. Chairman, I rise on a point of order, 1 should like to give the committee some details concerning the hon. member's riding. Out of 1,500 projects he said that barely 100 were accepted. The corporation reports that for the four constituencies in the lake St. John district there were a total of 369 persons who contacted the local credit adviser for loans during the fiscal year. The dominion bureau of statistics figures for the census of 1961...


Mr. Speaker:: Order. Having had the advantage of listening to the hon. member for a few minutes, it appears to me that this is not basically a question of privilege but that it concerns, rather, a misinterpretation of words. The hon. member will have the opportunity this afternoon, I understand, to clear up any misunderstanding, and I suggest that for the moment he desist.


Charles-Arthur Gauthier: My question of privilege, Mr. Speaker, is intended to correct figures at the same time-


Mr. Speaker:: Order, please. This is basically a matter for the committee. I am sure the hon. member will have the opportunity this afternoon to raise this point and clear up any misunderstanding.


Charles-Arthur Gauthier: Thank you, Mr. Speaker. I will reserve it for the committee, to give accurate details.



MR. LACHANCE  ARTICLE IN &quot;TIME&quot; MAGAZINE

Mr. Georges Lachance (Lafonlaine):: Mr. Speaker, I should like to make a brief statement on a question of privilege with regard to a survey of members of parliament which Time magazine conducted by telephone on the flag issue. It is reported on page 12 of the June 12, 1964 issue that I refused to make my views known on the matter.
Since many people seem to misinterpret this statement allow me to correct my reply to the person who called on me, that is "I did not wish to discuss the matter over the phone", since I was unable to identify the party calling-


Some hon. Members:: Order. You are out of order.


Georges-C. Lachance: I must add that if this person could have seen the flag referred to in the resolution introduced by the government displayed in my office, there would have been no doubt in his mind as to my intention to pass it.



PRIVILEGES AND IMMUNITIES (UNITED NATIONS) ACT AMENDMENTS CHANGING TITLE, EXTENDING APPLICATION, ETC.

Hon. Paul Marlin (Secretary of Slate for External Affairs) moved: the first reading of

Display of Canadian Flag Bill No. S-24 (from the Senate), to amend the Privileges and Immunities (United Nations) Act.
Motion agreed to and bill read the first time.



CANADIAN FLAG


Mr. A. D. Hales (Wellington South):: I ask
leave under standing order No. 26 to move the adjournment of the house for the purpose of discussing a matter of urgent national importance, namely the right of the Prime Minister, without any legal authority, to display an unauthorized flag on the property of the crown, stating that this is being done at the request of certain members of parliament.
I submit that this matter is of great importance, and the urgency of debate is substantiated by the fact that the right hon. gentleman intends to take this unprecedented action, within a few hours of which he informed the house yesterday. As a matter of fact the flagpole has already been erected on the grounds in front of this building-


Some hon. Members:: Hear, hear.


Alfred Dryden Hales: This request, Mr. Speaker, is something entirely apart from an anticipated order of business next week. The purpose is not to debate the flag issue but the principle involved in this action, namely the right of the Prime Minister of Canada to circumvent and ignore order in council No. 5888 assented to on September 5, 1945.


Mr. Speaker:: Perhaps I might have the privilege of hearing from a few members as to this proposed motion before rendering a decision.


Right Hon. L. B. Pearson (Prime Minister):: Mr. Speaker, the question is one of alleged urgency in view of the fact that the design of a flag which is referred to in an order before the house is about to be flown in a few hours, and we are informed by the hon. member who has moved the motion that this circumvents the order in council of 1945 establishing for certain purposes the flag known as the red ensign as the Canadian flag.
I should think, Mr. Speaker, that the same argument could be applied to the introduction of a resolution in the House of Commons, because that resolution does describe verbally a flag that it is proposed should be the IMr. Martin (Essex East).]

Canadian national flag. At the time that resolution was introduced a pictorial representation in colour of the flag was circulated to all members of the House of Commons without objection and, indeed, with approval, because it was felt they could then better make up their own minds in respect of the decision which parliament was going to be asked to make.
Last week certain members asked that this flag should be flown because the best way to come to an opinion as to the merits of a flag is to see it flying and not merely see it in a colour reproduction. The government, not the Prime Minister, has decided that it would be a courteous and useful thing to do to let hon. members see the flag design which is described in the resolution, and which is the only design which will be before the House of Commons unless and until there is an amendment moved altering the design or substituting a design.


An hon. Member:: Backtracking again.


Lester Bowles Pearson: If and when an amendment is moved, and it will not be moved on this side-


Some hon. Members:: Hear, hear.


Lester Bowles Pearson: -if and when an amendment is moved on the other side, Mr. Speaker-


Mr. Knowles:: Mr. Speaker, I rise on a point of order. It so happens that I agree with the position the Prime Minister is taking on this matter, but is he not debating the motion rather than the question as to whether or not it should be debated? Should he not stick to the question whether there is urgency of debate?


Lester Bowles Pearson: The question as it was put to the house is one of urgency because of the announcement of the decision of the government to fly the flag, which would be considered by the hon. member who moved the motion as an improper act. In arguing the matter of impropriety I am relating that, of course, to urgency. I was just about to point out, and this is all I have to say, that if there was an amendment moved by the other side altering the design, that amendment would have the same official status as the design now in the resolution and would become part of the proceedings of the house. In those circumstances I suggest that such a design, if and when moved and if and when it became part of the proceedings of the house, should be given exactly the the same right of display as the design now set out in the motion.


Hon. Gordon Churchill (Winnipeg South Centre):: Mr. Speaker, the Prime Minister diverted from the motion before the house and indicated to us that once again he is going to shift his position. He is asking for an amendment from his supporters on this side of the house, and suggesting that that amendment will be adopted. The degree of uncertainty as to the design that is favoured by the Prime Minister continues.
What is before the house now is a proposal by my hon. friend that we should debate today whether the Prime Minister should take the action that he said yesterday he would take. I quote from Hansard, page 4183:


Lester Bowles Pearson: Following a request made by certain hon. members, it is intended to fly the flag referred to in the resolution tomorrow evening-
Which is Friday.
-I think from 5 p.m. until flag lowering time.
Now, Mr. Speaker, the Prime Minister has just recently said that the government has decided-not himself but the government, and we conclude from this that the cabinet has met and that they have perhaps passed an order in council to authorize this otherwise unauthorized showing of a piece of Liberal propaganda, which is all it is-


Some hon. Members:: Shame.


Gordon Minto Churchill: This is an attempt to influence the public of Canada by flying on government property, here on the grounds of parliament, a flag which is the personal choice of the Prime Minister and not the choice of the people of Canada.
It is a rare thing, Mr. Speaker, for a motion to adjourn the house to discuss a matter of urgent public importance to be allowed, because so frequently it is possible to suggest there will be other opportunities to debate the matter, that the matter has not been raised early enough, and arguments of that nature. Beauchesne, in his fourth edition at page 90, citation 100, paragraph 3 says:
"Urgency" within this rule does not apply to the matter itself, but it means "urgency of debate", when the ordinary opportunities provided by the rules of the house do not permit the subject to be brought on early enough and public interest demands that discussion take place immediately.
This motion comes within that citation because the opportunity for debating the proposed action will lapse just within a few hours. The Prime Minister told us yesterday that his personal choice will be flown from the flagpole at five o'clock today. It is now about 11.30, and if the house is to pass judgment on this unusual action it must imme-
Display of Canadian Flag diately have a chance to debate the purpose of the Prime Minister's action.
Beauchesne refers to the fact that public interest must demand that discussion take place immediately. If this opportunity were postponed it would be too late. Consequently we are suggesting that under the rule of urgency of debate, this motion is in order. I think, sir, that on a reference to Erskine May's sixteenth edition you will find also that this particular motion meets any of the objections which are sometimes raised when such motions are brought before the house. May points out that the matter must be definite and must deal with a single, specific matter. This motion deals with a single, specific matter, the determination of the government to fly an unauthorized flag-


Some hon. Members:: Question.


Gordon Minto Churchill: -on the grounds of the parliament buildings.
May deals with the various objections which may be raised, and deals particularly with the question of whether another opportunity would be available for debate. I suggest to you, sir, that there is no other opportunity today for debating this particular matter. The business which was announced last night is the discussion in committee of the whole house of the bill dealing with amendments to the Farm Credit Act, and in view of the very lively interest that was taken in that bill last night there is no reason for anyone here to conclude prematurely that that bill will be passed within just a few minutes or within an hour. So if it happens that that bill is under discussion for the balance of the day, as might well happen because of its importance, there will be no other opportunity presented to the house to debate this particular matter.
It is on those grounds, and others which might be raised, that I suggest you allow this particular motion so the house may have an opportunity to express an opinion on this unprecedented action of the government in its attempt to display and gain public approval for a flag design which has not received the approval of this House of Commons or of the Senate, and certainly has not the approval of the people of Canada.


Stanley Howard Knowles: Mr. Speaker, I think in considering this matter Your Honour should pay attention to something that the hon. member for Winnipeg South Centre said, I believe twice, during the course of his remarks, namely that

Display of Canadian Flag this debate is necessary in his view in order that the house may render a judgment or make a decision as to whether the proposed flag should be allowed to fly on a special staff on parliament hill this afternoon.


Gordon Minto Churchill: On a point of order, I did not use the words judgment or decision. I said pass an opinion, express an opinion, which is different.


Mr. Pickersgill:: It is the same thing.


Gordon Minto Churchill: It isn't the same thing.


Stanley Howard Knowles: I quite accept the hon. member's correction. Whatever Hansard says is quite satisfactory to me, but the point is that the hon. member is urging we should have the debate so that an opinion can be expressed, and I expect that means he wants some kind of a decision to be taken about this matter.
I want to point out that the debate that is proposed in the motion by the hon. member for Wellington South will not settle anything. We will debate the question presumably all day. That will put the farm credit matter off until Monday and interim supply off to Tuesday or Wednesday, and we will not get to the flag issue until some day later next week, or heaven knows when.


An hon. Member:: That is what they want.


Stanley Howard Knowles: I put this forward to underline my point that I do not think there is any value to this kind of debate. If my hon. friends in the Conservative party felt the government was doing something wrong, they should have brought up a question of privilege on which a motion should have been founded, so that a vote of the house could be taken to determine whether the action of the government was invalid. Merely debating it all day will not prevent the government from flying the flag at five o'clock. All we will do is spend a day in advance on another measure which we will be debating fairly soon. I think parliament has more important business to do than that-


Some hon. Members:: Hear, hear.


Stanley Howard Knowles: -and that this motion does not qualify under the requirement that there be urgency of debate.


Mr. Marcel Lessard (Lake St. John):: I shall be brief, Mr. Speaker. However, in view of the motion introduced by the hon. member for Wellington South (Mr. Hales) and the remarks made afterwards by the hon. member

for Winnipeg North Centre (Mr. Knowles), I feel I must say a few words on behalf of our group. We see no urgency in discussing the motion today because ever since the resolution was introduced at least half an hour has been spent each day on the question of the flag.
I feel the issue was sufficiently discussed last week and we will have full opportunity to debate it next week. The point discussed today, that is the question of whether or not the flag should be raised tonight so that the people of Ottawa and the members of the house might have the chance to see it and form an opinion, does not justify the adjournment of the business of the house.
On the other hand, I should like to point out to the Prime Minister (Mr. Pearson) that it is unfortunate that he has chosen that hour to display the flag, because several hon. members of the house will be away then to catch a train or a plane.
Consequently, I would ask the Prime Minister to forestall the moment and display the flag on parliament hill at one o'clock, so that we may all see it together, this afternoon, and also that the flag may convince certain other hon. members that it is definitely acceptable to all Canadians.
It is unfortunate that there is some fear that this alleged Liberal propaganda is liable to contaminate people.
Personally, if the Liberal party, since it has been in power, had never used any other kind of publicity I would have become a Liberal long ago.


Mr. Raymond Langlois (Meganiic):: Mr. Speaker, as far as the motion of the hon. member for Wellington South (Mr. Hales) is concerned, I go along with the hon. member for Winnipeg North Centre (Mr. Knowles), in that this motion is likely to take up the whole day without settling anything.
The right hon. Prime Minister (Mr. Pearson) was kind and courageous enough, to a certain extent, in selecting a special pole to fly a very special flag; indeed, and this in the general interest; and I think that if the former government had showed as much intestinal fortitude and determination, we would have had a flag a long time ago. Now, today-


An hon. Member:: We have one, what is the matter?


Some hon. Members:: We have one.


Mr. Winkler:: We have one, if you would only recognize it.


Raymond Langlois: Mr. Speaker, I think this is going to be another waste of time if we continue this discussion, which is not on the point of whether we are going to raise or lower this flag. By the time we have finished discussing it, as the hon. member for Winnipeg North Centre has stated, it will probably be six o'clock and the flag will have been raised since five o'clock. I go along with the hon. member for Lake St. John in that we should possibly have it up at one o'clock so we can all see it before some of us leave.


Some hon. Members:: Hear, hear.


Raymond Langlois: Those who look at the flag and are not convinced, who intend to hang on to their own ideas and not change their minds about it, should not even be in this house.


Gordon Minto Churchill: Withdraw.


Raymond Langlois: I agree with the hon. member for Winnipeg North Centre and the Prime Minister that we should have the flag up this afternoon as a trial. We will have ample opportunity on Monday to discuss this matter, and possibly the whole of next week. So I say to the Tory party, quit looking back to where you have come from and start looking at where you are going.


Mr. G. L. Chatterton (Esquimali-Saanich):: Mr. Speaker, I wish to make a point which indicates the urgency of debate on the motion put forward by the hon. member for Wellington South. On three occasions yesterday the Prime Minister said the reason the flag is being flown today is that this has been requested by certain members. I refer to his statements as reported at pages 4183 and 4184 of Hansard. I have here a request addressed to the right hon. Prime Minister and dated June 11:
We, the undersigned members of parliament, hereby formally request that the three maple leaf flag named in the resolution be not allowed to fly on parliament hill by action of the government, or any member thereof, until this flag resolution has been approved by parliament.
This request is signed by 39 members of parliament. In view of the statements made by the Prime Minister yesterday as to the reason for flying the flag, I consider that the urgency of debate is indicated by this request.


Mr. R. A. Webb (Haslings-Fronlenac):: Mr. Speaker, I would only like to suggest to you, sir, that three examples of Canada's national flag are proudly flying outside the building
Display of Canadian Flag at this present moment, and I do not think we should waste a lot of time debating this issue.


Eric Alfred Winkler: Mr. Speaker, I rise to make a few very brief points, one being in reply to the hon. member for Winnipeg North Centre with regard to the debate and its purpose. The purpose of this particular debate and the order under which we are discussing this question is not to make a determination on the flag but to allow the opportunity of free discussion, which is the right of members and should be the case in this particular parliament, in order that we can perhaps bring the government around to making some change in their attitude or, should I say, in their common sense-


Some hon. Members:: Hear, hear.


Eric Alfred Winkler: Let me remind you, sir, that the right hon. Prime Minister himself, when he rose this morning, said it is an urgent matter, if I understood his words correctly; and I think we might well agree that we should proceed with this debate. Although I would very much like to elaborate beyond these few words, I think this is sufficient to give Your Honour my views.


Mr. Terry Nugent (Edmonion-Strathcona):: Mr. Speaker, I wanted to say just a few words on the question of urgency of debate. My remarks really are germane because of what the Prime Minister said with regard to the flying of this flag. He himself remarked that there is a possibility that someone may wish to move an amendment. Certainly we can see that many members may have different ideas of flag designs. It is going to be up to parliament to accept some design, and this is a matter of persuasion. I do suggest to the Prime Minister and to the government that while they have a right to put forward their own design, it is taking an unfair advantage of other designs or members' ideas for the government to use the premises of parliament in this manner to help brainwash not only the members of this house but the public on their particular choice. We have seen various flag designs circulated in the house, and one day we saw members at the far end of the chamber with a design of their own; they had flags on their own desks. Therefore it is obvious that other designs may be desired by other members.
There is certainly nothing in the Prime Minister's argument that because their particular design is described on the order paper,

Display of Canadian Flag that gives it any legality or any position other than being just one design which may be considered by this house. Just because it is on the order paper does not give it any priority or legality. I say it is unfair to every member in this house who may have a different design in mind. I suggest that once the flag is flown the damage is done, and so this matter must be discussed early today.


Mr. Harold E. Winch (Vancouver East):: Mr. Speaker, I may have a completely wrong perspective on this matter and on the issue before us, but may I say, as I did yesterday, that I think we are becoming a little bit childish on this issue. Therefore through you, sir, I would like to ask the Minister of Public Works whether any tenders have been called for a diaper service.


Alfred Dryden Hales: Mr. Speaker, if I may be allowed to speak again before you make your ruling, I would say that you should not have any problem in deciding whether this question is of national importance or whether it is urgent. Continuing from there, Mr. Speaker, 1 should like to refer to the remarks of my hon. friend who referred to this house as being childish, and some other remarks that were made concerning this issue. The issue here is not the flag but, as I said in the motion, the legality of displaying this flag on government property. The point is not to debate the flag issue but the principle involved, which is the right of the Prime Minister of Canada to circumvent and ignore order in council No. 5888 assented to on September 5, 1945. This is the principle at stake.
I do not wish to get into the debate at all, Mr. Speaker, but I would refer to what the hon. member for Winnipeg North Centre said. He said we would not settle anything. I think it is the duty of parliament to settle whether a prime minister or a cabinet minister or anyone else in the house has the right to circumvent a statute or order in council. The argument is not what flag is flown; there is a principle at stake here. What right has the Prime Minister to circumvent a statute or an order in council? I think all these other remarks which have been made miss the point, and I still come back to my argument that this parliament should have the right to say whether anyone has the right to circumvent or ignore one of the statutes of Canada.


Stanley Howard Knowles: Would the hon. member permit a question?


Alfred Dryden Hales: Yes.


Stanley Howard Knowles: If the hon. member wishes parliament to express its opinion or to have its say on the issue, why did he not move a motion so parliament could do just that?


Alfred Dryden Hales: I would answer my hon. friend in this way. If the government were thinking of courtesy, as the Prime Minister said-he said they did it through courtesy-it would have been courtesy to give the members of this house an opportunity to express their views on whether or not that flag should be flown.


Mr. Speaker:: It seems to me that there is little doubt about the urgency of this matter because there is a deadline this afternoon, and we must decide whether the proposed flag will or will not be flown. So under the heading of urgency, the matter does seem to be urgent. It also seems to me that the matter is national in scope, particularly in view of the great interest shown by all Canadians on the subject. However, it is my duty to point out to hon. members that under standing order 26 the words are:
Leave to make a motion for the adjournment of the house when made for the purpose of discussing a definite matter of urgent public importance-
The standing order provides that a motion be made for the adjournment of the house, which means that discussion could range all day if necessary, and at the end of the sitting time no conclusion would have been reached and no decision would have been made. But we would have had an all day discussion on the subject matter.


Mr. Howard:: That would have been just a normal day, Mr. Speaker.


Mr. Speaker:: That may be true, but at least the Chair is not responsible for that.
It seems to me that this morning we have had a rather full discussion. Many views have been advanced, and it seems to me that many of the views are in the nature of a complaint, an objection. Instead of losing the whole day discussing this matter, which is of great emotional import, I would have hoped that the discussion this morning would have given a certain amount of satisfaction to hon. members, and I doubt whether much more can be said on the question after the brief debate which has just taken place. I ask myself whether there is now any real urgency for debate, after having had a small, miniature debate already this morning. Therefore in the circumstances I do not see that urgency, that necessity to set aside the important business already on the order paper in order

to continue the small pocket debate we have already had this morning.


Mr. Thomas M. Bell (Saint John-Alberl):: Mr. Speaker, I accept your ruling, but with great respect may I ask you, so that we can be sure there is a precedent for the future on this very important motion, whether you are ruling this motion out because no decision can finally be taken and because a day would be lost? Do I understand that aright? If so, would you please explain to me how this motion is different from any other motion in those two respects?


Gordon Minto Churchill: Mr. Speaker, may I, with respect, draw your attention to page 90 of Beauchesne.


Some hon. Members:: Order.


Mr. Speaker:: It does seem to me that having endeavoured to render a fair, impartial and just decision the members of the house should accept that decision. Surely at this stage I do not have to continue giving further reasons ad nauseam in justification.


Gordon Minto Churchill: Mr. Speaker, I am rising on a point of order. My point of order is with regard to the Speaker's jurisdiction in this matter, and I very respectfully put it before you.


Harold Edward Winch: Mr. Speaker, I rise on a point of privilege. I do not want to interrupt the hon. member, but is this house to be turned into a spectacular sideshow? I would ask you as Speaker to look at this matter and to say whether it is permissible to turn this House of Commons into a sideshow on a most important issue.


Some hon. Members:: Oh, oh.


Mr. Speaker:: I would ask the hon. member to take down the piece of cloth on his desk. It is against the rules of the house to display apples or anything of that sort.


Mr. Marcel Prud'homme (Si. Denis):: Mr. Speaker, I should like to draw your attention to the fact that I am cordially inviting the hon. member who just had the floor to come with us this afternoon when the flag will be flown. He may then be convinced.
As for the flag design I had on my desk, I displayed it in order to permit the hon. member for Winnipeg South Centre to see what it looked like, and I think he can see it pretty well from where he sits.
Display of Canadian Flag


Gordon Minto Churchill: Mr. Speaker, I am quite seriously drawing your attention to page 90 of Beauchesne, citation 100 (6), which reads as follows:
The Speaker's duty with regard to a motion to adjourn the house for the purpose of discussing a definite matter of urgent public importance, under standing order 26-
That is our present standing order.
-is confined to determining as to whether, in the first instance, a motion so proposed is in order. There his responsibility ends.


Mr. Byrne:: Mr. Speaker, on a point of order, I suggest the hon. member has no point of order because there is no matter before the house. If the hon. member does not wish to respect it I would ask him to appeal your ruling.


Gordon Minto Churchill: Mr. Speaker, I will not take instructions from the hon. member. I would ask, on what ground has he the right to interrupt me? Was the floor given to him?


Thomas Miller Bell: No, he just bobbed up.


An hon. Member:: Strike the remarks from the record.


Mr. Speaker:: If it is any satisfaction to the hon. member let me say I did not hear the remarks of the hon. member to my right. However, I should like to say that I have given a ruling to the best of my ability and conscience, and it is now up to the house either to accept it or to reject it.


Gordon Minto Churchill: Mr. Speaker, if your ruling is subject to appeal I would appeal your ruling.


Mr. Speaker:: Perhaps the hon. member would allow me to refresh his mind. On April 23, 1964, as reported at page 2485 of Hansard, I gave a ruling in more or less similar circumstances. I said then:
In answer to the hon. member I must recall the following to his attention, and I shall read it very slowly so that all hon. members, I hope, will agree.
Hon. members will recall that on April 7, 1964, at page 1845 of Hansard, the house sustained a ruling of the Chair to the effect that there was no appeal from a decision made by the Speaker under standing order 26.
The house having already taken a decision on this matter, it is my view that it cannot be questioned again during the current session and must stand as the judgment of the house. In this regard I wish to refer hon. members to May's sixteenth edition at page 400, Bourinot's fourth edition at page 328 and Beauchesne's fourth edition citation 200 (1). For the above reason I cannot permit this appeal.
4238	HOUSE OF
Inquiries of the Ministry Then there were certain interruptions, and I said:
I would like to call to the hon. member's attention Beauchesne's fourth edition, citation 200, paragraph (1).
An old rule of parliament reads: "That a question being once made and carried in the affirmative or negative, cannot be questioned again but must stand as the judgment of the house".
It seems to me that the Chair has given a full and detailed explanation, and I must ask the hon. member to accept the decision of the Chair.
Then later on:
The hon. member is not appealing my decision, as stated in that way; he is appealing the decision rendered by all members in this house on a matter which has been put to the vote and decided by the members in the house. That decision I am applying this afternoon, and that decision I am not going to change.


Hon. J. A. MacLean (Queens):: I wish to rise on a question of privilege, merely to say that the understanding of this party was that your ruling was not appealable, and that is why we did not immediately appeal your ruling. It was because we understood-and I think Your Honour's statement just now confirms our opinion-that your ruling was not appealable. When one of the hon. members on the other side rose a few moments ago, I understood him to say that if we did not agree with Your Honour's ruling we should appeal it-


An hon. Member:: He is no expert.


John Angus MacLean: Maybe that is right.


Mr. Herridge:: Are you referring to the hon.
member for Kootenay East?


John Angus MacLean: I wish to make it perfectly clear that the reason we do not appeal the ruling is not that we necessarily approve it, but simply because we have no recourse of appeal from it.


James Allen (Jim) Byrne: On that question, Mr. Speaker-


Mr. Speaker:: Order, please. I suggest we have spent considerable time on this matter and that we should get on with the business before the house.



BRITISH COLUMBIA-REQUEST FOR STATEMENT ON SITUATION

[Stage Direction]
On the orders of the day:
Frank Howard: I wonder if I may direct an extremely important question to the Minister of Northern Affairs and National Resources, one which I am glad has not


been pushed to one side by the silliness of the motion we have just dealt with. Could I ask the minister whether he has any up to date information about what I understand to be an extremely disastrous flood situation in British Columbia.


Hon. Arthur Laing (Minister of Northern Affairs and National Resources):: I indicated some days ago that there were worrisome days ahead for British Columbia due to the extremely late run-off and the considerable increase in temperature. I will admit at once that the next several days are going to be extremely difficult for the people in the valleys.
The Mission gauge stood yesterday morning at 22.07 feet. This is a height which gives ground for anxiety. At Hope the flow is 420,000 feet per second; at Prince George the gauge stands at 32.07 feet and the water level will rise over the next several days, as is anticipated also at Hope and Mission. Nevertheless there has been no serious breaching of any dikes, although there has been loss and damage, both in the private and the public sectors, as a result of seepage through the dikes and underneath the dikes. I will say at once that this loss is, in total, not inconsiderable. On the Skeena the gauge stood this morning at 38.6 feet. The second crest is about to occur and it is likely to be of the nature of the first. Considerable flooding has taken place in that area. The Peace river, too, is experiencing a flow unprecedented in history. It is now running at 275,000 feet per second and this is causing a great deal of concern, especially with regard to the construction work which is being carried on, because I believe the diversion tunnels are designed to deal with a capacity involving 300,000 feet per second.
I can only say we are hopeful that no critical dikes will be breached, and if we can get over the next week we shall be safe for at least another 12 months.


Frank Howard: A supplementary question. Could I ask the minister whether he or the government has received any request or communication from the government of British Columbia in relation to federal assistance in overcoming these difficulties; and if not, has the government of Canada made an offer to work with the provincial government so as to minimize the damage caused?


Arthur Laing: The answer in both cases is, at this time, no.



FINANCE


[Stage Direction]
On the orders of the day:
Herbert Wilfred Herridge: wish to address what I consider to be a somewhat helpful question to the Minister of Finance. In view of the fact that a pamplet written by one Thomas Kent entitled "Behind the Gordon Report" is becoming rare and is in great demand, would the minister arrange for the republication of this pamphlet at public expense for the illumination of members?


Hon. Walter L. Gordon (Minister of Finance):: I doubt whether that would be a proper expense to charge to the treasury.



CANADIAN FLAG


[Stage Direction]
On the orders of the day:
John Angus MacLean: I should like to pose a question to the Secretary of State and ask him whether, in the light of the fact that the Prime Minister said the purpose of flying the maple leaf flag design this afternoon on a flagpole on parliament hill was to enable members of parliament to see it and use it as a basis of judgment when making up their own minds, he can assure the house that the occasion will not be used by the C.B.C. or any other television network or station as the basis of subtle propaganda to leave the impression that parliament has already acquiesced in or approved of this design.
Hon. Maurice Lamonlagne (Secretary of
State): I am certainly not in a position to impose censorship on our media of communication.


Some hon. Members:: Oh, oh.


Mr. M. J. Moreau (York-Scarborough):: Mr. Speaker, I have a question for the Prime Minister. Would the Prime Minister consider having a second flagpole set up for the use of the official opposition so the house may be aware of what design they favour?


Eric Alfred Winkler: A good idea.


Raymond Langlois: A supplementary question to the Prime Minister. Would the Prime Minister consider the request of the hon. member for Lake St. John a
Inquiries of the Ministry few minutes ago with regard to having the flag flown at one o'clock?


Lester Bowles Pearson: Mr. Speaker, in view of the fact that many members apparently are leaving before five o'clock-


Thomas Miller Bell: How about the C.B.C.?


Lester Bowles Pearson: -the government would be very glad indeed to change the hour of the flying to one to two and five o'clock to flag lowering time.


Gordon Minto Churchill: Mr. Speaker, in view of the statement made by the Prime Minister earlier today that the government has decided to take this otherwise unauthorized action, will he table immediately the order in council reflecting the government's decision in this matter?


Lester Bowles Pearson: Mr. Speaker, no order in council is required in a matter of this kind.


Eric Alfred Winkler: Mr. Speaker, in view of the request of certain members of the house I wonder whether the Prime Minister would voice his opinion in regard to the petition before him at this moment.


Lester Bowles Pearson: Mr. Speaker, I have just received this petition from certain members on the other side requesting that the flag be not allowed to fly on parliament hill until the resolution has been approved by parliament. The first reference to the flying of this flag for the purpose I have indicated was made by me in the house on Thursday, June 4. I have just received this petition signed by certain members of the house, but I think this does not justify changing the course that has already been announced.


Mr. Augusie Choquetle (Lolbiniere):: Mr. Speaker, may I direct a question to the right hon. Prime Minister in respect of the petition he received to the effect that he should not fly his proposed flag? Will the right hon. Prime Minister be kind enough to table the said petition in the house?



ELIMINATION OF REFERENCE IN RESOLUTION TC UNION JACK

[Stage Direction]
On the orders of the day:
Mr. L. J. Pigeon (Jolielle-L'Assompiion-Montcalm):: Mr. Speaker, 1 would like to
4240	HOUSE OF
Inquiries of the Ministry direct a question to the Minister of Justice who is also the Liberal leader for the province of Quebec.
In view of the fact that the large majority of the people, especially in the province of Quebec, want to have only one distinctive flag, can the minister exert pressure upon the government so that the resolution may be amended by removing the union jack provision from the resolution, so that we may have only one flag and not two?


Mr. Speaker:: Order. To my knowledge this question has been asked once or twice before.


Louis-Joseph Pigeon: Mr. Speaker, I rise on a question of privilege-


Mr. Speaker:: In any event the question is out of order in that it anticipates an order of the house.


Louis-Joseph Pigeon: Mr. Speaker, may I discuss this question at ten o'clock, next Monday.


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


Louis-Joseph Pigeon: Mr. Speaker, may I direct a question to the Prime Minister?
So as to comply with the request of the majority of the Canadian people, would the Prime Minister reconsider his decision and delete the last part of the resolution concerning the union jack, so as to give Canada one single flag?


Mr. Speaker:: This question is out of order. ADMINISTRATION OF JUSTICE



TORONTO-REPORTED CONVICTION OF JUVENILE FOR ILLEGAL ENTRY

[Stage Direction]
On the orders of the day:
Mr. David Orlikow (Winnipeg North):: wish to address a question to the Minister of Citizenship and Immigration. Is the minister aware of the fact that George Sarris, who was tried on April 10 in Toronto for entering Canada contrary to section 50(b) of the Immigration Act, was only 14 years of age when he committed this offence and entered Canada on November 6, 1963; that he was 15 

years of age when he was apprehended on March 26, 1964, and had just turned 16 when he was tried-


Mr. Speaker:: What is the point of the question? We are having a long, detailed statement.


David Orlikow: It seems to me that there was an infringement of the basic rights of a person in Canada who was under 16 years of age when he was arrested. I want to know whether the department knew of this action and whether the magistrate in this case was informed of the facts.


Hon. Rene Tremblay (Minister of Citizenship and Immigration):: The hon. member gave me notice of this question, and I thank him for doing so. I am now in a position to answer part of the question. The hon. member may be mistaken in respect to this young man's age. In fact, under oath he declared on March 31, 1964, at the inquiry held under the provisions of the Immigration Act, that he was born on March 29, 1947. Therefore according to his own words, when he was arrested for criminal entry into Canada he was 17 years old less a few days. When the special inquiry was held he was aged 17 years old plus one or two days, and when he was charged before the criminal tribunal of provincial jurisdiction he was 17 plus 12 days. In Ontario a person under 16 years of age is a minor, and a person aged 16 and older is an adult.
May I add that this young man is at the present time represented by a Toronto attorney, Mr. Bruce Thomas, and my information is that Mr. Sarris will within a few days be filing a notice of appeal from the conviction and sentence. I am following the developments in this case very closely and will gladly inform the house of the results.



INQUIRY AS TO PROGRESS OF PENAL REFORM PROGRAM

[Stage Direction]
On the orders of the day:
Thomas Miller Bell: Mr. Speaker, I have a question for the Minister of Justice. With reference to the statements that have been made by the minister concerning a new penal program before the end of the year, may I ask him what will happen to the existing and most commendable program inaugurated in 1958, with regard to which there does not seem to have been very much action recently?


Hon. Guy Favreau (Minister of Justice):: Mr. Speaker, in announcing, which was normal, that in conjunction with the officials of my department I was considering a further stage in the evolution of our penal reform system, I am pleased to say for the benefit of my hon. friend that twice recently I have noted the commendable steps taken by one of my predecessors, Hon. Davie Fulton, in introducing certain very good penal reform measures, but this surely should not prevent this government from taking further steps ahead.



IMMIGRATION


[Stage Direction]
On the orders of the day:
Hon. Theogene Ricard (St. Hyacinihe-Ba-got):: Mr. Speaker, I should like to direct a question to the Minister of Citizenship and Immigration.
Would he tell the house whether it is true that his department has established an office at Baie des Sables?


René Tremblay: No, Mr. Speaker.


J.-H.-Théogène Ricard: Mr. Speaker, I should like to put a supplementary question to the Minister of Citizenship and Immigration.
If there is no immigration office at Baie des Sables, why is there a resident employee there?


René Tremblay: There is no employee at Baie des Sables; when Mr. Cote was appointed he was living at Baie des Sables, but his residence now is in the Ottawa area.



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
Mr. Reid Scott (Danforlh):: Mr. Speaker, I have a question for the Prime Minister not related to the growing national support for a single maple leaf. In view of the action of the Toronto city council in supplying birth control pills to certain persons in Toronto and in view of the fact that such action by the council makes its members liable to prosecution and to be jailed for up to two years, would the Prime Minister remove the widespread fears or hopes of the Toronto population of such a result by arranging
Inquiries of the Ministry for an early debate on Bill No. C-48 introduced by the hon. member for Bumaby-Richmond which would legalize such activity?


Lester Bowles Pearson: I will be glad to examine this matter, Mr. Speaker, though some aspects of it are certainly outside my jurisdiction.



LABOUR RELATIONS


[Stage Direction]
On the orders of the day:
Mr. Gilbert Rondeau (Shefford):: Mr. Speaker, my question is directed to the Minister of Labour.
Can he tell us what reply he gave or intends to give to the longshoremen's union in Montreal, Quebec city and Three Rivers about the threat o fa strike which now hangs over the national harbours and what solution he has to offer to this union which has asked for his intervention in this problem?


Hon. A. J. MacEachen (Minister of Labour):: Mr. Speaker, I have not yet received any communication from this particular union. Just as soon as I have I will be glad to consider it and reply to the hon. member.



REQUEST FOR ADJOURNMENT FOR ST. JEAN BAPTISTE DAY

[Stage Direction]
On the orders of the day:
Mr. L. P. Antoine Belanger (Charlevoix):: Mr. Speaker, I have a question to direct to the Prime Minister. Has he studied the possibility of granting a few days' leave to the members from the province of Quebec to enable them to join with their colleagues from the provincial legislature and their fellow citizens to celebrate our national holiday, next June 24?


Lester Bowles Pearson: I should like to think, Mr. Speaker, that progress with our work would justify consideration of that matter.



TRANSPORT


[Stage Direction]
On the orders of the day:
Mr. J. H. Horner (Acadia):: Mr. Speaker, I should like to direct a question to the Minis-

Inquiries of the Ministry ter of Trade and Commerce. Has the minister received correspondence from the Oyen and Acadia valley farmers and chambers of commerce pointing out the urgent need for box cars in the east central part of Alberta, and would he take action to see that this need is provided for?


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


John (Jack) Henry Horner: There is an urgent need.



CONTINUED SUSPENSION OF INCREASES IN EXPORT OF GRAIN RATES

[Stage Direction]
On the orders of the day:
John Whitney Pickersgill: I should answer the question asked by the hon. member for Saint John-Albert as I promised yesterday I would. The reason I did not answer it yesterday was that I was not quite sure whether the order in council had been passed. I knew the recommendation had gone forward to extend the date to which these proposed increases in rates are suspended. The rates that are now in existence will continue in existence until the end of the year, and perhaps longer if that is necessary.



CANADIAN CONSTITUTION


[Stage Direction]
On the orders of the day:
Stanley Howard Knowles: Mr. Speaker, can the Prime Minister bring us up to date on the proposed amendment to the constitution with respect to the survivor benefits aspect of the Canada pension plan? Has the Quebec legislature yet dealt with the matter and can we assume that this resolution may be dealt with by the house before we get into the flag debate?


Lester Bowles Pearson: Mr. Speaker, I have been informed that the Quebec legislature will not be able to deal with this matter until Monday. We hope and I believe they hope that it will be passed very quickly, but it will not be passed quickly enough to enable this house to discuss the matter before the flag debate begins on Monday. However, I would hope that we would be able to deal with it later in the week.


Stanley Howard Knowles: A supplementary question, Mr. Speaker. In case the amending bill to


the Farm Credit Act and interim supply are not disposed of today, is it the intention of the government to go ahead with the flag debate on Monday in any event?


Lester Bowles Pearson: Yes, Mr. Speaker, we intend to go ahead with the flag debate on Monday.


Thomas Miller Bell: Continuously?



COLUMBIA RIVER-METHOD OF PAYMENT BY UNITED STATES

[Stage Direction]
On the orders of the day:
Herbert Wilfred Herridge: wish to address a question to the Minister of Finance, and it is an important question to many of us. It is based on a lengthy article in the Globe and Mail entitled "Huge Payment by U.S. Under Columbia Treaty Unique and Complicated." In view of the information in this article and the contradictory statements to this article made in some United States publications; and in view of the fact that we were able to obtain very little information on this matter from the Secretary of State for External Affairs in the committee when we were considering this treaty, for which I do not blame him because it is a complicated matter, will the minister take advantage of the debate on interim supply to explain to us the circumstances surrounding the payment of these funds so all members will understand them?


Walter Lockhart Gordon: I would be pleased to explain how the financial aspects of this transaction will be dealt with. I have not read the article and I am not in a position to do so now. I will be away for a few days, and when I return I will be pleased to go into this matter.



BEEF-STEPS TO INCREASE EXPORTS TO GREAT BRITAIN

[Stage Direction]
On the orders of the day:
Mr. C. S. Smallwood (Battle River-Camrose):: I should like to direct a question to the Minister of Trade and Commerce. In view of the serious shortage of beef in Great Britain, will the minister inform the house what action his department has taken to increase our exports of beef to that country?


Mr. Speaker:: This is surely a question for the order paper.


Clifford Silas Smallwood: This is a very urgent matter. The price of beef is going down in our country today and they are importing beef into the United Kingdom.


An hon. Member:: You will have an opportunity to debate that later.


Clifford Silas Smallwood: I will debate it at ten o'clock.



HEALTH AND WELFARE


[Stage Direction]
On the orders of the day:
Mr. Ralph Cowan (York-Humber):: I should like to direct a question to the Minister of National Health and Welfare. In view of the unfortunate experience we had with thalidomide under the previous administration when doctors were issuing prescriptions, surely the department of health and welfare is not now considering having any part in the use of machines for passing out dosages in the hospitals of Canada?


Mr. Speaker:: This is a question which is highly important but has not that element of urgency, it seems to me, that should be in questions asked at this time. Will the hon. member put the question on the order paper.



FARM CREDIT ACT


[Stage Direction]
The house resumed, from Thursday, June 11, consideration in committee of Bill No. C-100, to amend the Farm Credit Act-Mr. Hays-Mr. Lamoureux in the chair.
On clause 1-Farming.
The Chairman:: I believe the hon. member for Roberval wanted to raise a question which he submitted to the house earlier this morning.


Charles-Arthur Gauthier: Thank you, Mr. Chairman, for giving me an opportunity to pursue my question of privilege at the opening of this sitting.
I was saying that I had some reason to believe that the Minister of Agriculture (Mr. Hays) had-perhaps inadvertently-misinformed the house last night when answering some arguments of mine. I read over this morning those arguments and that statement of the minister, which I found on page 4218 of Hansard, where he put words in my mouth
Farm Credit Act
to the effect that out of 1,500 requests, only about a hundred were accepted. I never mentioned those figures; I simply stated that 15 per cent of the loans had been accepted in my county.
In order to rectify the fact, Mr. Chairman, I telephoned this morning to the Roberval office of the Farm Credit Corporation and spoke to the official now responsible for that agency, with some witnesses on the line, so that it could not be alleged that I was making up those figures, as it was suggested last night. I gave this telephone call to the new incumbent because, last night, I somewhat put the blame on the credit advisers, but I shall tell you in two minutes that I found out something new.
The minister's words last night somewhat enlightened me and made me discover another reason which prevents the Quebec farmers from obtaining the farm loans to which they are entitled. I called up the new incumbent, because I have the pleasure to announce that the Minister of Agriculture replaced the former adviser for the county of Roberval. So, I called that office where I received some information.
Now, note this. The minister stated that 369 requests had been filed in our four counties and 121 loans had been granted, but I maintained there had been a much greater number of requests. I maintain that today, and I have proof, which I hold from the head of the Roberval office, who told me that, at the first stage of applications-and that is precisely the point to which I want to call the minister's attention, for I believe he has been misled by the Quebec report- first of all, requests are received, and the head of the office tells me that at that stage applications are not registered-and I make a distinction between applications and registered applications-about 30 per cent of farmers' applications are rejected. So, when I said the number of our farmers' applications was much larger than 369, it was because I considered that those received at the office were applications for loans.
Mr. Chairman, it is precisely at the second stage that all sorts of contradictory actions are taken, that 30 to 35 per cent of loan applications made by farmers are refused, and then the whole question is re-examined. It is at the second stage that they say that there were 369 applications, that is farmers have been allowed to make application to the Farm Credit Corporation by depositing $10. I believe that the minister has in his possession information concerning the second

Farm Credit Act
stage only, that he has never been provided with information concerning the first stage.
Taking into consideration that a minimum of 30 per cent of the applications are refused, it is easy to establish the percentage, even at the second stage, of farmers who are denied loans. Considering that the minister stated that 121 applications had been accepted, I have reason to say that in the four ridings (because we have a district office for the four ridings) hardly 15 per cent of the farmers were allowed a farm loan.
I said also that, after having studied the question for approximately a year and a half, I had finally come to the conclusion that this situation was probably due to credit advisers who did not perform their duties adequately.
As can be seen on page 4219 of Hansard, the minister stated:
The dominion bureau of statistics figures for the 1961 census indicate that there were 1,244 farmers in the municipality of Lake St. John West who had gross sales of over $1,200. During the fiscal year ended March 31, 1964, the corporation approved 121 loans for an amount of $1,293,900 in this county, or about one loan for every ten farmers with a gross income of $1,200 or more.
Mr. Chairman, that is precisely the secret I have been trying to find out for a long time and the statement made by the minister provided the answer. He mentioned applications approved at the second stage.
I was wondering why between 35 and 40 per cent of applications for loans from farmers were rejected at the first stage. Now, I know it is because it was discovered that their gross income was less than $1,200. The minister told us last night that the corporation makes loans only to farmers who can prove that their income is above $1,200. This means that loans are granted to farmers whose gross income is $5,000, $6,000, $8,000 and $10,000, but that no money is loaned to the farmer whose income is less than $1,200. In other words, loans are granted to the rich, but they are denied to those who need them. That is how I see it.
Mr. Chairman, even if the minister misinterpreted my remarks last night, he nevertheless gave us an explanation; he gave us evidence, once more, that the government encourages those who have money and discourages those who have none.
That is exactly why we fight and want those loans to be granted to farmers who do not earn more than $1,200 and who own two, three and even four lots, but are refused a loan of $6,000, $7,000 and $8,000 which would enable them to live advantageously and develop their lots.

On several occasions, I called on the adviser and he told me that the act did not allow it. It is understood that, in my area, the act does not authorize loans to the small farmer; the farmer has to be rich to borrow. On account of conditions prevailing in the province of Quebec, it is therefore useless to speak about improving our land, since 60 per cent of our farmers earn less than $1,200 per annum.
The minister keeps making comparisons with the province of Saskatchewan, and says -please note this because it is good:
The hon. member related loans in his constituency to the number of loans being made in the province of Saskatchewan. The d.b.s. figures show that, in 1961, there were 82,285 farmers in Saskatchewan with gross income of over $1,200.
In Saskatchewan, 82,285 farmers earn more than $1,200 per annum. Now, more loans are made to farmers in Saskatchewan precisely because those farmers are richer than those in the province of Quebec.
And the minister adds:
During the last fiscal year, the corporation approved 2,332 loans in Saskatchewan, or about one loan for every 40 farmers.
Mr. Chairman, if the minister wishes to make comparisons, he should go back a few years. He said 121 loans were granted in my constituency, but I should like to know the total number of loans granted in the province of Quebec in 1964.
Then the minister goes on:
From this it will be seen that the rate of lending by the corporation in the hon. member's constituency is about four times as high as in the province of Saskatchewan-
This is untrue. I am not very good at mathematics, in fact, some are better than I am, but while in 1962, 109 loans were granted in the province of Quebec, 1936 were granted in Saskatchewan. The minister would have us believe that 109 is higher than 1936.
In 1963, the province of Quebec succeeded in obtaining 104 loans against 2,307 in Saskatchewan. Will the minister again try to make us believe that 104 is more than 2,307.
In 1964, in Saskatchewan, 2,300 loans were granted. The minister will likely say that there are more people there; he will try to make comparisons between the population and the number of farmers. But I am prepared to put my seat at stake if the province of Saskatchewan has a greater population than the province of Quebec.
We are told that four times as many loans are granted in the province of Quebec than

in the province of Saskatchewan. How ridiculous can one be. You have put your finger on the trouble: namely that 2,307 loans were granted in Saskatchewan to farmers who are well off, while in the province of Quebec where our farmers really need loans, only a very small number were made.
The province of Quebec should be getting 5,000 loans a year, against 300 for Saskatchewan. That would be a fair proportion considering the taxpayers. Just figure it out: the province of Quebec pays five times more taxes than Saskatchewan. I have nothing against Saskatchewan, but I maintain that the province of Quebec is entitled to the same fair treatment.
If the Minister of Agriculture wants to study the situation and be responsible, let him compare the number of small farmers, not the rich farmers but the poor ones, in Quebec and in Saskatchewan. Then the figures could be reversed and doubled, and 5,000 loans would have to be granted in Quebec and only 300 in Saskatchewan, so that those two provinces could be given the same treatment.
That is the core of our agricultural problem. The needs of the province of Quebec where family farms have to be improved have never been understood. The minister's statements concerning family farms indicate that he has never known such farms nor considered their proportions.
In the application of the law as it stands at present, no consideration can be given to farmers who earn less than $1,200 a year. That is precisely what we have been criticizing for the past four or five years. As I said last night, when a farmer goes to the office, the credit adviser tells him without too much explanation: "Sell your farm and move to the city."
Only last night I got another letter from a farmer who owes $5,000 on his two farms, and yet he has 155 acres under cultivation. All he needs is a small $2,000 loan to complete his organization. But he is told to sell his farms and to leave.
What a fine reasoning. People are being paid to advise and help farmers, but this is not the way to revive agriculture in the province of Quebec, and more especially our family farms.
We were justified in the past to ask for a minister of agriculture for the province of Quebec and we shall keep on making such a demand, because I realize more and more that the legislation implemented by the min20220-269
Farm Credit Act
ister in the western provinces is not adaptable to the province of Quebec.
The Department of Forestry was created as a front to help-


Lucien Lamoureux: Order. I wonder whether the hon member is not straying away from the matter under consideration, that is the amendment to The Farm Credit Act.


Charles-Arthur Gauthier: I will come back to the subject under discussion; this was only an aside to illustrate how amendments to the Farm Credit Act even though they offer a few benefits, are still favouring western and not eastern Canada, and that is because the problems of the eastern farmers were never seriously considered.
The introduction of these new credit terms is intended to make our farmers agricultural contractors, as in western Canada. These family farms which were handed down from generation to generation are going to disappear. It is for that reason that we want to safeguard the soil of Quebec, because we must protect our family life in all spheres of society.
I consider that if the proposed amendments were more appropriate to the kind of farming carried out in Quebec, our farmers would be able, a few years hence, to compete on an equal footing with those farmers of other provinces. Our farmers merely ask for the same standard of living as that of other provinces. But what is being done today? They are shown to the door and told to go into town and to leave their farms.
Mr. Chairman, I am pleased with these amendments because two or three of them have to do especially with beekeeping and other types of farming. Farm production, in the province of Quebec, is so highly diversified that instead of these amendments, we should have had at least 10 or 12 more directly related to Quebec farming. I am sure we will get nowhere as long as the Minister of Agriculture does not examine the question. I know he can do it if he wants to. Let him come to Quebec not as someone dealing occasionally with people but as one who considers the type of farms we have and the living conditions of our farmers and, Mr. Chairman, I can guarantee that we will have only words of praise for him in the future.


Mr. Hamilton:: Mr. Chairman, as I listened to the hon. member for Roberval I could not help but think that if the Creditiste party in this house stuck with the issues about which

Farm Credit Act
he spoke today instead of following will-o'-the-wisp issues such as the flag, which means nothing to the people of rural Quebec, and helped the people in his county by joining with us in trying to get some long range program to help the smaller farmer across the country, we would be in a much better position than we are today with regard to agriculture.
I rise to speak on the amendments to the Farm Credit Act. Some two or three weeks ago I indicated to the Minister of Agriculture that we on this side of the house would welcome legislation brought in that was positive, constructive and would do some good for at least some section of the Canadian people. Therefore I was pleased when the Farm Credit Act amendments were brought down. However, in reading over the debate, and particularly the minister's words yesterday, I was shocked to find that what I thought was just poor drafting in the bill is a deliberate policy on the part of the government.
I am referring to the cost of money. We had a farm loan board in existence in Canada from 1929, and until 1957 all the farm loan board was able to lend was approximately $110 million. This works out to roughly $4 million or $5 million a year. The reason they could not fill this big demand that arose as the result of a revolution in agriculture was the attitude of those who administered the farm loan board. This board was under the Department of Finance, and their concept of a loan was "If you want $5,000, show us $10,000 worth of assets and then we will give you a $5,000 loan".
The revolutionary, new concept that was brought in in 1959 with the Farm Credit Corporation was altogether different. This new concept was that we were trying to help agriculture to get on its feet so that more and more farmers could become commercial in their operations. I wish the hon. member for Roberval would not keep referring to these "rich" farmers in Saskatchewan. What he is really trying to say is that compared with the people in his county, many people in other parts of Canada are commercial farmers and are farming to make money. It is just as true to say this, because the wealthiest farmers in Canada are actually in the province of Ontario, where in proportion they number twice as many as there are in Saskatchewan. The job of this government and our job as representatives in this parliament is to help more and more farmers reach the commercial level of farming; and the Farm

Credit Act was one of the best acts ever put on the statute books of this country to help that development. Now the very philosophy of that act is being attacked; its basic, fundamental purpose is being changed. The basic, fundamental purpose of the act was to stabilize the cost of money to the agricultural industry in order to assist those who wanted to go into commercial farming.
If you look at the history of debt in Canada -that is, debt held by the federal government -you will find, when you apply the amount of interest paid to the total amount of debt, that the average interest rate fluctuates between 3 per cent and 4 per cent. It is true that during temporary periods of around four, five and six years the interest rate goes above 4 per cent, and there are other periods when it goes below 3 per cent; but the average amount paid by the treasury of Canada to the people of Canada who lend money to the government varies, on the total debt, between 3 per cent and 4 per cent. I am not talking about the day by day cost of money; I am simply talking of the average interest paid on the total debt.
We had this issue before us when we formed the government, and we decided that if we were to bring the agricultural industry up to a higher level so that it could participate in the wealth of this country we had to give to the industry some assurance that if a farmer borrowed money for 30 years there would be a stabilized interest rate, and we picked 4 per cent as the basic interest rate that we would charge farmers.
We added to it 1 per cent to cover the costs of running the corporation and to provide a reserve against loss. We took the maximum of the average interest rate paid by the government of Canada to the people of Canada for borrowing money-because the long term average on the total debt is, as I said, 3 per cent or 4 per cent-and we were going to ask the farmers, in periods of low interest rates when the government was getting the money at below the average interest rate, to continue to pay 5 per cent so we would build up a reserve when the country swung into a high interest period, and this reserve would carry the Farm Credit Corporation through without the government having to come back to this house and ask for money. We were prepared as a government, if that reserve did not build up and the Department of Finance took the loss, to say to the farmers that they had not a fluctuating interest rate but a stable interest rate.

Therefore the issue was very simple. On the question of the basic principle of providing farm credit to lift more and more farmers to the commercial level we decided to take a stabilized rate of 4 per cent plus 1 per cent to cover costs, so that when the interest rate was low the farmer would pay 5 per cent and when the interest rate was high he would still only pay 5 per cent. We took the highest level so that in the long run there would be no cost to the treasury, and no subsidization.
The government has now changed the principle drastically. I did not realize how drastic was the change until I read the remarks made by the minister last night, as reported at page 4216 of Hansard. I would ask every hon. member in this committee, whether he comes from a rural constituency or an urban constituency, to write these figures down and calculate them, and then go back to his voters and ask for their support for this sort of thing. This is what the minister said:
If a farmer were to borrow $40,000, his payment on the first $20,000 would be $1,322 a year-
I ask hon. members to put those figures down and to work them out. What does it come to at $1,322 a year? It works out to a rate of 6.6 per cent on the first $20,000. The minister went on:
-and his payment on the other $20,000 would be $1,551-
That works out to 7.7 per cent. Then the minister went on to say:
-so his gross payment plus taxes

-and I do not know how taxes got into this-
-would be $2,873.
That works out to an average of 7.2 per cent over the whole loan. When I read those remarks, Mr. Chairman, and when I read over the previous debate during which the minister and the hon. member for Essex South were lamenting about farmers having to go out and pay 10 per cent for money borrowed if they wanted more than the maximum of $20,000 and $27,500, it seemed a terrible thing. The hon. member for Essex South referred to these people who lend money as Shylocks. The more polite term for them is "loan sharks". But who is the loan shark now?


Mr. Hays:: Mr. Chairman, on a point of order, there is absolutely no change in the first $20,000. It was exactly the same a year ago or three years ago. This is principal and interest. Let us get this matter straight.
20220-269J
Farm Credit Act


Francis Alvin George Hamilton: The minister has made a remark which I am going to follow up. He said that on the first $20,000 the interest rate is unchanged at 5 per cent, and that is what the amendments say. Why did he say last night that on the first $20,000 the payment would be $1,332?


Harry William Hays: That is principal too. There is no change.


Francis Alvin George Hamilton: All right. Let me now go back to the amendments. Clause 4 is adding a new section 16A, subsection (1) (b) of which states:
-where the amount of the loan exceeds twenty thousand dollars,
(i) five per cent per annum on the first twenty thousand dollars of the loan-
-and 5 per cent on the first $27,500 when a farmer borrows under part III. Then when you define what is the interest rate on the additional amount, subsection 4 of the new section says:
With the approval of the governor in council, the corporation may from time to time by order prescribe.. .a rate of interest applicable to any loan made by the corporation, which rate shall be sufficient, if the whole amount of the loan were to be loaned by the corporation at that rate, to return to the corporation an amount equal to the cost to the corporation of any money borrowed for the purposes of the loan and the expenses of the corporation in respect thereof, including a reasonable reserve against loss.
If you go back, Mr. Chairman, and read the remarks of the minister in Hansard, he points out that the cost of the money is at a rate of 5.375 per cent, or 5|. The cost of operating the corporation is .87 per cent, and the minister expects the reserve against loss on the money will be one eighth or one quarter. Now if we take the lowest possible figure of one eighth we get an interest rate of 6|, which is what is charged on the second part of the loan. Is that correct?


Harry William Hays: Yes, that is correct.


Francis Alvin George Hamilton: The minister says that is correct. If he will take a piece of paper and a pencil and figure this out, this is what he will find. Let us suppose that a man wants to borrow $20,000 plus an additional $1,000. On the first $20,000, at a rate of 5 per cent the interest will amount to $1,000.


Harry William Hays: That is interest.


Francis Alvin George Hamilton: Farm Credit Act


Harry William Hays: Mr. Chairman, if the hon. gentleman could be in the house a little more often and would read the act more carefully he would be able to understand it.


John (Jack) Henry Horner: Who are you to talk?


Francis Alvin George Hamilton: 
Harry William Hays: Yes.


Francis Alvin George Hamilton: Then how does the minister get around this problem. If the whole amount of the loan were to be lent by the corporation the interest must be equal to the total cost, which is 6| per cent. Is not the whole amount of the loan $21,000? The minister shakes his head. What is the total amount of the loan, then?


Harry William Hays: Mr. Chairman, I will be glad to explain this when the hon. gentleman is through, and I hope he will be able to understand it, because I am sure most hon. members will.


John (Jack) Henry Horner: You will have to change this bill.


Francis Alvin George Hamilton: 
An hon. Member:: You are wrong.


Francis Alvin George Hamilton: I hear a voice saying I am wrong. I can only go by what the minister says and by what is contained in the amendment before me. If what the minister said earlier about the manner in which these rates are to be charged was correct, then the interest rates I have quoted are also correct. If I am wrong I want to find out. We do not wish to hold up good legislation, and this is good legislation. I know that every year or so it has to be amended, and we intend to support these amendments. But these doubts have been placed in our minds after reading what the minister said earlier in this debate and after reading the amendment. It may be that the minister intends to change the cost of money on the upper part of the loan far beyond the additional penalty which has been mentioned, and to carry that cost right down to the whole amount.

I know how the minister feels about amendments to this act. This legislation is intended to help certain types of farmers, the farmers who are trying to establish commercial farms. It is not supposed to help a man farming in a really big way. But these provisions certainly cannot help those with low incomes, as those the hon. member for Roberval has talked about. Neither, by and large, can it help young people to become established and this, above everything else, is one of the things I should like to see accomplished by this legislation; because young people today cannot be assisted unless they have a father or some other relative who is able to help them. Eventually, I hope, many of these young people can be raised to the status of commercial farmers.
When I was minister I had this problem before me and I had one or two ideas about it; I had been hoping that in these amendments a start, at least, would be made. I had hoped to bring them forward in 1962 when I brought in some amendments, but a doubt remained as to whether the ideas we had at that time would have worked in practice. The provinces of Ontario and Manitoba both felt there were weaknesses in the act in this respect. They themselves brought in bills to help young farmers.
I hope the minister's advisers will continue to work on this problem of young farmers so that we may be presented with amendments likely to be of assistance to them. I know that the precedents in the United States are not altogether suitable for us in Canada, but I do think a move in this direction is the big task before us.
I will close by expressing the hope that when we get to the particular clause concerned the whole question of interest rates will be cleared up, with examples, so that we know what interest rate can be expected in connection with loans of the type under discussion.


An hon. Member:: Filibuster.


Mr. Korchinski:: I would not normally have risen, but I heard an hon. member say "filibuster".
Some hon. members have received answers from the minister to questions they raised earlier in the discussion, and I am wondering whether the minister is prepared to reply to several points which I raised yesterday. For example, I asked the minister whether there was any possibility of provision being made for appeals, whether an appeals committee could be set up. My second ques-
Farm Credit Act
tion concerned the interest rate to be set. Was it to be set annually, or semi-annually, or would it fluctuate from day to day? How were people going to know what rate of interest they would be expected to pay when they approached a farm credit officer for a loan?
My third question was in relation to the annual payments. Since there is to be a separate rate for loans above $20,000 or $27,500, I was wondering how the annual payments would be calculated. Would there be a higher annual payment in the first instance until the amount additional to the $20,000 had been paid off, or would another rate apply after this repayment had been made?
Those are the three questions I raised yesterday, and had they been replied to I should not have needed to intervene again at this point.


Lucien Lamoureux: I do not wish to complicate the business of the committee, but I wonder whether in the case of questions having to do with particular clauses other than clause 1 we might not wait until we have reached the clause concerned before the minister answers those questions. I understand that this suggestion was made by the hon. member for Qu'Appelle as far as his intervention was concerned with regard to interest rates. It seems to me this was a valuable suggestion, and perhaps other members of the committee would be willing to agree. For example, questions which have been asked with regard to interest rates might be renewed or answered by the minister when we reach that particular clause.


Stanley James Korchinski: That might be possible and I would go along with it, but the first question I raised might not relate to any particular clause.


Harry William Hays: I would be glad to answer one particular question, the question asking whether there might be provision for appeal. Under the provisions of the act the corporation has the responsibility to decide whether or not to make loans to individual applicants. Many farmers feel that when an application is declined they should have the right to appeal from this decision. The corporation has decided under the authority of section 11 (l)(d) of the act to set up an appeal board in each province composed of farmers or representatives of farm organizations who will be independent of the corporation and who will be asked from time to time to consider appeals by individual farmers with respect to decisions made by the corporation. In this way both the corporation and the applicant

Farm Credit Act
will have the benefit of an independent review of decisions. We are now in the process of arranging this.


Lucien Lamoureux: Shall clause 1 carry?


Mr. Fane:: No. May I call it one o'clock?
At one o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at 2.30 p.m.
Frank John William Fane: Mr. Chairman, as almost everybody says, I did not intend to speak on this matter at all. However, I find I am constrained to speak because of certain remarks the minister made last night. The minister must be corrected because should such remarks go forth from here unchallenged he will be in worse odour in the farming regions than he is now. First of all, the minister said about the farmers last night, as found on page 4222 of Hansard:
Some of them may even need money to finish putting in their crops.
It takes about three months for inspection and appraisal of the land to be made, and if a farmer made an application now he would be pretty late getting his crop in by the time he got any money from the Farm Credit Corporation. He would certainly have to wait a long time.
The remarks that the minister made about lawyers do not have very much to do with the bill but nevertheless they were made in discussing it. When the minister makes remarks in this regard such as he did, I think he cannot know what is going on in his department. Lawyers are not too plentiful in my part of the country, and in my constituency there are five. There are two firms in the town of Vegreville. One firm is headed by my Liberal predecessor in the house. That firm was doing some of the work. The junior partner in the other firm is the Liberal heir apparent in my constituency. Both these firms were doing this work.
The processing of Farm Credit Corporation loans was taken away entirely from the firm headed by the former Liberal member of parliament for my constituency and all the work in the constituency of Vegreville was given to the other firm. Believe it or not, work was taken away from the senior partner in that firm and given to the junior partner. The same girl will do the work and the only difference will be that a different man in the same firm will sign the documents. Believe me, that is a smart way of doing business. Incidentally, both these men were at one time

very strong Liberals. As a matter of fact, the lawyer from whom the work was taken away was the returning officer in my constituency for 30 years. I do not think the minister knows what is going on in this regard.
I might say that I was told by a senior official of the Farm Credit Corporation that the processing of loans by the lawyer who had been the returning officer for that constituency was done more quickly than by any other lawyer in the province of Alberta. But the work was taken away from him and transferred across the hall to another lawyer in the same firm. The same girl will be looking after the work, so there is not a hope in hades of the work being done any more quickly or efficiently. However, that is by the way. I just wanted to put that on record.
The minister is very worried about farmers moving away from the farms, and he may well be. While Bill No. C-100 no doubt is a very good bill and the amendments will work quite nicely for farmers who have two or three sections of land, the bill makes no provision whatever for people with only a quarter section. A quarter section can be an efficient, economic unit. People can make a living from a quarter section if they want to work hard enough. I am talking about the west. I do not know what conditions are in Quebec or Ontario. But the Farm Credit Corporation is under the impression that the smallest amount of land that can constitute an economic unit is half a section. That is the premise on which they work.
Now, if a man has a quarter section and he needs, say $5,000 in order to get another tractor-no, I had better not say a tractor, because then he could get a farm improvement loan-but let us assume he requires something else, then he cannot get any help from the Farm Credit Corporation because there is no provision for it. I found the same fault with this act when it was first brought into being. It provides for a large outlay, but does not go down the scale far enough to provide for smaller amounts. If one is thinking in terms of two quarter sections of land in Alberta, stock and equipment to operate it properly, then that takes quite a little bit of money, especially if the farm is purchased as a going concern.
However, let us assume a man wants a loan of $5,000 to help straighten out his business. What happens? The Farm Credit Corporation inspector comes out and says "You will have to have another quarter section; perhaps you can buy an adjoining piece of land and that will cost you about $10,000 if you

are lucky". Then, the stock tor that quarter section will cost another $5,000 or $6,000, so in order to get a loan of $5,000 this man will have to go into debt to the extent of about $16,000 more to the Farm Credit Corporation because they want him to have an economic unit. This is not where assistance to the farmers should start. Assistance to the farmer should start at the bottom, where the need is greatest. It is the farmers who are on small, family farms who need assistance, these people with a quarter section. They do not want to extend their operations because, perhaps, they are getting on in years and may not have any family. I mean they are not likely to be 20 years old, and they have no family to whom to turn over the farm. They just want to get the farm organized so it can be worked efficiently by the man himself.
People of this type cannot get any help, so I think provision should be made in this bill to cover such situations. The object of the bill is very good. It is to increase the capital available to be lent to the farmers of Canada, and that is very good. But when it comes to increasing the size of the loan up to $55,000, then I say one would need to have a big operation to make this economically feasible. I do not believe a farm could carry a loan of that size unless it consisted of at least two and a half sections or about 1,600 acres. The idea seems to be that the farmer is expected to borrow himself rich. This is something that cannot be done. I feel that in the majority of cases $55,000 is too large an amount to be made available, especially if the interest on the amount over $20,000 is going to be set at 6J per cent or 7 per cent. The payment of interest on a loan of that size will just about take all the profit a man will be able to make from his farm in a year.
I say to the minister therefore that he should draft his amendments so they will include the small farmer, the farmer with a quarter section. He should make the 5 per cent interest rate mandatory, whatever the size of the loan that is granted. A 6J per cent interest rate is too great a strain on any business such as a farm. I say to the minister that the more $55,000 loans that are made and the more interest the farmers have to pay, then the more farmers we will find moving off the land. The farmers who move off the land are mostly those who have small farms and who just cannot get help. They cannot compete under the conditions with which they are faced. I believe these amend-
Farm Credit Act
ments would be a lot better if they included help for the people on a quarter section.
As I said that my remarks were going to be brief, I think I will make any further remarks I have to make on the other clauses of the bill as they come before the committee.


John (Jack) Henry Horner: I have a few more questions to ask before we pass the first clause. I am not yet convinced on this question of the credit corporation making large loans. I am somewhat concerned that the amendments increasing the size of the loans to $40,000 or $55,000 might cause an undue increase in the cost of land. I should like the minister to give me some idea as to what relationship there is between the price of the land and the loan. I suggest in some cases in western Canada it is perhaps 50 per cent of the going price of the land. If I am wrong in this suggestion, I should like the minister to correct me. This has been my experience in some areas in which the Farm Credit Corporation has operated.
If my assumption is correct, then I believe that an applicant for a $40,000 loan would be buying an $80,000 farm or between $80,000 and $100,000. This leads one to ask where the prospective purchaser would get the other $40,000 or $50,000 which would be needed, after borrowing $55,000 under part III of this act. I come back to my conclusion that these provision are a direct help to the large farmer who has the extra $50,000 in his pocket and who goes to the Farm Credit Corporation to borrow another $40,000 or $50,000.
I should like to correct any false impression the minister may have in his mind when he suggested yesterday that I had a great deal of land in the Hanna district. The Hanna district lies east of Calgary some 200 miles from the Rocky mountains. It has been referred to on many occasions as the dried out part of Alberta. During the thirties farmers were shipped out from that area and the government paid the cost of shipping them out. Much of this area was broken up at one time, but now has been allowed to go back to grass. It is an area which, to some extent, is a bit behind the rest of the province of Alberta. If anyone has not got a large holding of land he cannot survive in that area because it takes 50 acres to support one cow. I do not know whether the minister was fully aware of this, and that most people in the Hanna area have to have a fairly large provincial lease in order to run a fair amount of cattle. I mention this so that it may receive better understanding.

Farm Credit Act
I am pleased with the corporation's operations in this district which is a unique one in its own regard. It does not operate in the municipality. It operates under what the Alberta government calls special areas. They will only allow one cow to 50 acres, and you cannot buy the land from the provincial government. There are something like 3 million acres under provincial lease, and in 1961, or the spring of 1962, the federal government and the Farm Credit Corporation worked out an agreement with the province whereby money could be lent on this leased land for the purchase of it.
That was a major step forward in this dried out part of Alberta. It is an area which suffered tremendous economic losses during the thirties, recovered to some extent during the forties, but is still at the far end of what might be called an agrarian revolution with regard to enlarging farms. In order to enlarge their holdings most farmers in this area must have an opportunity to buy out their neighbours. In fact, any person coming into a special area cannot purchase land until it has been advertised for one month and the local residents have an opportunity to meet the price which the outside purchaser is prepared to offer. If a local resident meets this price, then he gets the land and the outside person has to go somewhere else to look for a place. The reason the provincial government has written this provision into its special areas act is to try and help local farmers enlarge their holdings.
In many cases when leased land comes up for sale all a resident farmer needs is a small loan, something in the neighbourhood of $10,000 to $15,000 to enlarge his holding. As I say, this is a unique area in Canada but it is an area in which the corporation, during the short term of years it has been operating there, has played a great part. I hope it will continue to play an even greater part.
I have mentioned that the district went through a tremendous economic upheaval in the thirties, with the result that bankers, lending institutions, and more particularly the old farm loan board would not venture into the area to make loans. Now the corporation is doing a tremendous job of work in the district and out of one office in Hanna it lent something like $500,000 last year. This is a small amount compared with the totals loaned in other parts of Alberta and throughout the country, but it helped a great many farmers in the district.
Under the new scale of loans proposed in this bill $500,000 would represent only 10

loans. There are some 3,000 farmers still operating in this district and I would like to see more than 10 of them benefit from loans given by the corporation.
There is a tremendous lot of cultivated land in many parts of my constituency, and in these areas it has been my experience that the corporation lends something in the neighbourhood of half the going price. If this is not the case I would like the minister to correct me, but if it is, it suggests that a purchaser must have another $30,000 to $50,000 to back up his proposed loan in order to buy a farm, and if he has this he does not need a loan from the corporation.
Last night the minister told the committee what he thought an economic unit should be. He said that a dairy farmer must have a big enough milk contract to justify his operation and provide his family with a good standard of living. He suggested that a dairy farmer should have 100 acres of pasture for his cattle, and that an economic beef herd in eastern Canada should include 50 cows. I would like to think that the same would apply to western Canada and, if I am wrong, again I invite the minister to correct me.
Further, before we pass clause 1, I would ask the minister to enlarge upon what he feels is too large a unit upon which the corporation should make a loan. We are all aware of the principle upon which the corporation was set up, that of helping those who need help most. Last night the minister said there were still many farmers who operated too large holdings to receive loans under the Farm Credit Corporation. He has outlined what he considers a minimum holding should be, and I would like him to outline what he considers is the maximum holding. He may point his finger at me, meaning I qualify under the minimum. I am pleased to hear that.
My neighbours and I have suffered severe drought conditions during the past three or four years, but we have been able to survive this by shipping in feed, by a tremendous expansion of P.F.R.A., and by pumping water into dugouts. We have gritted our teeth and borne with the dry weather of the past few years. This year we hope that once again we will be able to grow some feed of our own and raise some crops. This is considered the poor area of Alberta. Sometimes I have referred to it as the forgotten part of Alberta, and certainly from time to time the Alberta government has completely forgotten about it.

I would like the minister to outline what the corporation considers a maximum unit for a dairy herd, a beef herd and a grain farm. Further, is it not a fact that the increase in loans might cause land costs to go up? Is it not a fact also that the standard practice of the corporation is to make loans averaging about half the going price of the land for sale? These are two questions that concern me and which should be answered before clause 1 is passed.
I am still concerned about the proposition of a father borrowing for his son. This was the question I raised last night, and which the minister did not answer. Many other hon. members have referred to this matter of sons aged 16 and 17 years prepared to undertake farming after leaving school, and working with their fathers. I would like to see a father be able to borrow money for a son who is, say, 18 years of age. Earlier today, and not in connection with the Farm Credit Corporation, it was mentioned by an hon. member that 16 years of age was considered in Ontario to be an eligible age with respect to another matter. I wonder if age 16 also has a bearing with regard to a farmer borrowing money for his son in order that he may purchase land. Perhaps the minister would make a brief reply to the three questions I have dealt with particularly in my remarks, Mr. Chairman.


The Deputy Chairman:: The hon. member for Mackenzie.


Some hon. Members:: Oh, oh.


Stanley James Korchinski: Mr. Chairman, I hear some groans from the Social Credit part of the house. This being the first piece of legislation the Minister of Agriculture has introduced into this house, one would have thought everybody would have taken advantage of this occasion to try to make this the best piece of legislation he could ever introduce. But obviously there does not seem to be too much concern from that quarter.


An hon. Member:: That's what you think.


Stanley James Korchinski: That appears to be the case, judging from the groans anyway. The first thing I am concerned about is something the minister mentioned last night. He said that in future any interest charged will take into account a provision for bad debts. This is to be found on page 4212 of Hansard, where the minister is reported as having said that interest would be charged, plus an amount for bad debts. In my view this is a wrong prin-20220-270
Farm Credit Act
ciple to be applied here. First of all, Mr. Chairman, why should any future borrower have to make up for any bad debt in respect of a loan that, perhaps on the advice of the Farm Credit Corporation adviser, somebody had obtained and for one reason or another was not able to repay? Why should anybody obtaining a loan from the corporation in the future have to make up for a bad debt which may have been incurred by the fault of the corporation.
If the department is going to take that attitude, I wonder how the corporation will react when an applicant comes in for a loan. Probably one of the first things they will think about is, "We want to make sure this is not going to be a bad debt". In other words, they will take the view that every loan they approve should be paid off 100 per cent. There may be many borderline applications where the people involved would end up being a good risk, but where the Farm Credit Corporation adviser at the time the loan was applied for may have felt it was not a good risk. The adviser may well have uppermost in his mind the thought that the corporation does not want to incur a bad debt, because if they did somebody in the future would have to make up for that bad debt and the corporation would be criticized for borrowers being obliged to pay a higher rate of interest to make up for it.
I see the minister shaking his head in disagreement, but I think this is what his words mean. I should like to quote from Hansard what the minister said with regard to this question:
We do not expect this will be much larger, and it will be plus an amount for bad debts.
To my mind this spells trouble. First of all the maximum use of the Farm Credit Corporation facilities will not be obtained because the corporation's adviser will be hesitant about approving a loan for fear it will result in a bad debt and somebody will question his decision. If this practice is followed, naturally any man who asks for a loan in the future will ask the question, "Why should I pay for somebody else's bad debt?" If there is a bad debt incurred by the corporation, I suggest this should be something the government should subsidize. I think the government should pay for these bad debts and should allow the Farm Credit Corporation adviser enough leeway so that he will not withhold a loan in respect of someone who might be a good risk.

Farm Credit Act
I hear voices on the other side of the chamber, Mr. Chairman. I do not know what the argument is over there because, as I said, this is the first piece of legislation the minister has introduced and the record of this government indicates that after scrutiny by the opposition they have had to change so many other things they have introduced. I think this is another of those areas with regard to which they should be prepared to accept some good suggestions. I ask the minister to reconsider his position on this matter and remove the provision that farmers taking out loans should pay for bad debts which may be incurred as a result of a decision made by the farm credit adviser, who may have been thinking properly and on the basis of information he had received but might not have made the right decision. If a bad debt is incurred I do not think it should be considered to be the fault of the Farm Credit Corporation adviser, and the government should revise its position in this regard and provide a subsidy if necessary to make up for any bad debts that are incurred. It should not be the responsibility of the borrowers to make up for bad debts. I wonder whether the minister would care to make any comment on this question, Mr. Chairman.


Harry William Hays: Mr. Chairman, the very thing the hon. member is suggesting is in the act at the moment, which provides that the corporation shall establish a reserve out of which may be paid any losses sustained by the corporation in the conduct of its business.


Stanley James Korchinski: Where is this provision to be found?


Harry William Hays: This is on page 7 of the Farm Credit Act. It is already in the act, and we do not propose to change this provision. The hon. member for Qu'Appelle mentioned this matter this morning. We are proposing that in regard to amounts in excess of the $20,000 and the $27,500, an amount being not more than one quarter of 1 per cent-and it would probably be one eighth of 1 per cent-be charged to take care of bad debts. The hon. member is suggesting that we should be a little more lenient when considering loan applications. I am sure all hon. members feel that the discussion during the last five days has been to the point that perhaps the administration are a wee bit too tough in regard to granting loans.
I should like to reply to the questions raised by my hon. friend from Acadia, who is not privileged to receive a loan because

he has so much money that he would not qualify.


John (Jack) Henry Horner: Mr. Chairman, I would like to make a correction here, on a point of order. The minister is imputing great wealth to me. Great wealth is a nice thing to have even for a minute or two, but I certainly haven't got it. I would like to point out to the minister, though, that no member of parliament is allowed to take advantage of the facilities of the Farm Credit Corporation, and under this clause I certainly could not do so; otherwise there would be no restriction as far as 1 am aware.


Harry William Hays: I still have a right to my personal opinion-


Some hon. Members:: Oh, oh.


Harry William Hays: -with regard to the hon. member and I know he is down here mostly for the sport of it. I have answered one of the questions raised by the hon. member for Acadia. The Farm Credit Corporation was not in the original instance, I believe, designed for the benefit of the farmer who is in a good economic position; the industrial development bank would take care of this sort of person.


John (Jack) Henry Horner: Could the minister give us a better outline of this provision? He outlined the minimum, and I would ask him to outline the maximum. It would be a great guide to me in advising my local farmers-and I know this applies to many other hon. members also-if he would outline the maximum as well as he did the minimum yesterday.


Harry William Hays: As I suggested at the beginning of the debate, Mr. Chairman, the annual report is now in the hands of the queen's printer, and we would like this to go to the agricultural committee. It seems to me we could have a thorough discussion on the matter at that time.


John (Jack) Henry Horner: Is the minister suggesting that this bill will be referred to the agricultural committee?


Harry William Hays: No, Mr. Chairman.


John (Jack) Henry Horner: This was the desire of the critic who was the former member for Assiniboia when the matter came up before.


Harry William Hays: Farm Credit Act
the additional $20,000. This would amount to a total annual payment over the whole amount of $40,000 of $2,834. The average interest rate on today's market would be 5f per cent and the average amortization over the whole period would be at 7.08 per cent. After 30 years the whole $40,000 loan would be retired. Perhaps I should explain at this time that when the person who had borrowed $40,000 was down to the last $15,000 he would still be paying 7.08 per cent principal and interest.
As I mentioned yesterday, the Farm Credit Act is a very close copy of similar acts in the United States and other countries, and is certainly an improvement over the old farm loan board; I do not think there is any doubt about that. The limits in the United States are $95,000; $65,000 for land and $30,000 for chattels.
These are some of the studies which we made during the last year and which I think fully justify the increase in the larger amounts. One group of grain farmers in Saskatchewan had an average capital investment of over $31,000. The average cash receipts for those farmers were $4,700 and the average net return was $1,400. Another group of farmers in the same area had an average investment of about $48,500. The cash receipts were $8,100 and the net returns were about $3,600. The net returns to the farmers with the larger capital investment were more than double those of the farmers with the smaller capital investment, and it is natural that they should be because there would probably be the same equipment, and that sort of thing, to take care of the larger economic unit. That is with regard to grain farmers.
Another example is that of the mixed grain and cattle farmers in Saskatchewan. Farms with a capital investment of $38,500 showed cash receipts of about $5,500 and a net return of about $1,400. Similar farms in the same area but with an average capital investment of $57,600 had cash receipts of $8,900 and net returns of $3,340.
The same relationship was shown on farms in Manitoba. There were three groups of grain farms. These had capital investments of about $37,000, $52,000 and $76,000. The cash incomes for this group amounted to about $10,000 with a $37,000 investment, $13,300 with a $52,000 investment and $21,300 with a $76,000 investment. The respective net returns by groups of farmers were about $5,200, $7,600 and $11,800.
A study of the livestock farms of Manitoba has shown that the same farmers with a capi-

tal investment of $13,500 had a net return of $1,700. As the amount of capital increased, the net return increased. Farmers with an investment of $55,000 showed an average net return of $6,400.
These are some of the methods by which we can attack these agricultural problems. I know that help is needed by a combination of methods. We need the assistance given by ARDA and some of these other measures, but I think the bill before us has a very important part to play in the setting up of economic units. This provision for making proper credit facilities available is closely tied in with our amendment concerning farm improvement loans, with the crop insurance bill now on the order paper and with the farm machinery bill which we hope to get on the order paper very shortly. I know this is not a complete answer; there must be proper markets, and so on. But we hope these amendments will bring about a marked improvement in the act for the benefit of farmers.
There is one other question I should like to answer. I believe it was raised last night by the hon. member for Burnaby-Coquitlam who asked what the rates of interest were under Small Businesses Loans Act. I think we are completely consistent in making the proposals contained in this amendment. In this whole field of government lending, or government guarantee of loans, various practices are followed. Under the National Housing Act a rate of interest is prescribed in much the same way as it is proposed to do under this bill for loans in excess of $20,000 and $27,500.
Under the home improvement loans provisions, the banks make insured loans at a present interest rate of 6 per cent. The industrial development bank lends money to small industry at 7 per cent. The hon. member for Burnaby-Coquitlam yesterday referred to the Small Businesses Loans Act. These are bank loans, guaranteed by the government, and in this case the maximum interest authorized is 5 J per cent. The maximum amount of these loans is $25,000.
Then there are fisheries loans. These also are made through banks under government guarantee. The interest rate is 5 per cent and the maximum loan is $4,000. There has also been the Veterans Business and Professional Loans Act under which loans have carried a 5 per cent interest rate to a maximum of $3,000. Under the Farm Improvement Loans Act, loans under which are made by banks under government guarantee, the interest rate is 5 per cent. The present maximum limit is $7,500. This brings us to the Farm

Credit Act and the present bill and, as the committee knows, the rate of interest on standard loans up to $20,000 and supervised loans up to $27,500 is not being disturbed.
So we think there is full justification for doing what is proposed here. It is consistent with practice in the past, and we think it is right, that after a certain minimum we can go on and charge the economic rate. This rate is based on what the government has to pay for money, plus the cost of administration and the reserve.


John (Jack) Henry Horner: Would the minister answer my question with reference to the relationship between the loans and the going price of land? Have any studies been made?


Harry William Hays: We have not made many studies. This is one of the reasons we set up an interdepartmental committee. The loans are based on the ability of a farmer to repay them plus interest in addition to making a living for himself and his family. The value of land varies, of course. If it is a tobacco farm it may be worth up to $1,000 an acre. A dairy farm close to Toronto, for example, is worth more than similar land elsewhere. But the corporation lends the money on the basis of the borrower's ability to pay.


John (Jack) Henry Horner: Is it not a fact, in practice, that the loan is approximately half the going price of the land? I am not thinking of a tobacco farm. I am thinking of an average situation across Canada.


Harry William Hays: I still go back to the statement that this is a matter of judgment and administration. The corporation is investing the people's money and it is, naturally, very careful in doing so. In some respects I think the hon. member may be correct. I would point out that the corporation was able to lend $108 million last year, which is a good deal more than in any previous year, and present applications indicate that another record is going to be set. Part of the reason, no doubt, is that more people are becoming familiar with the procedures to be followed under this act.
The question has been raised whether these loans will cause an increase in the price of land. Some people think they will, others that they will not. Nevertheless I think we need to raise this limit and I am sure the hon. member must agree with me, because he said so himself yesterday.


Stanley James Korchinski: Can the minister indicate whether, if the amendment is passed, he foresees that there will be a loss in the reserve-
Farm Credit Act
in the fund which normally sits there in case of bad debts?


Harry William Hays: The provisions we are seeking will have to do only with the portion of the loan which is in excess of the present level. The reserve to be set up is intended to cover loans in the higher brackets. It will have nothing to do with the lower brackets.


Stanley James Korchinski: In other words, there could conceivably be a loss sustained if the corporation has to get its money at a rate higher than the 5 per cent charged under the previous set-up.


Harry William Hays: Yes, we can conceivably sustain a loss.


Francis Alvin George Hamilton: I should like to thank the minister for the explanation he has given. What he has done is to say that the experts in the Department of Justice and the Department of Agriculture have interpreted this subsection under discussion to mean that the interest rate arrived at will not be a rate sufficient to cover the losses or carrying costs of the whole loan; it will just cover the cost of that section of the loan which is over $20,000 or $27,500.


Harry William Hays: The estimated .87 per cent will pertain to the whole loan. Any losses incurred will come from the reserve established for the larger loans.


Francis Alvin George Hamilton: Perhaps I might take a little longer on this point. First of all, I have learned from experience that when the legal officers of the crown advise you, you accept their word because they are the final authority to which we can go. If they interpret the language of this amendment in that way, I will accept that finding for obvious reasons. But the point raised by the hon. member for Mackenzie is a valid one, that since the Farm Credit Corporation is paying 51 per cent on the money it needs to borrow there obviously must be a tremendous loss on the amount of money lent under the original provisions of the act. I think that is true. If you are borrowing money at 5| per cent and there is a cost of 1 per cent to carry on the work of the corporation and set up a reserve, then the cost of handling a loan of $20,000 or less is 6| per cent. The point the hon. member for Mackenzie was making was that if you do not have enough money in the corporation accounts to absorb this continual drain, would it not be necessary to come back to the house and ask for a vote to make up the loss on loans up to $20,000 and $27,500?

Farm Credit Act


Harry William Hays: This will be done by special vote as it was done last year.


[Stage Direction]
Clause agreed to.
On clause 2-Capital.
Mr. Leboe:: On clause 2 I have a lew questions I should like to put to the minister lor purposes of clarification. First of all, I should like the minister to inform us as to what the total loan capacity would be under this provision. Would the $24 million from the consolidated revenue fund which is placed in the capital account of the corporation mean a borrowing capacity of $600 million? Would the total amount of loans that the corporation could make be $600 million or $624 million?


Harry William Hays: It would be $624 million.


Bert Raymond Leboe: If I understand correctly, I believe the corporation does not pay any interest on the $24 million in its capital account. Is that right?


Harry William Hays: That is right.


Bert Raymond Leboe: I should like to ask the minister a question having to do with clause 2, but I should like to relate it to clause 4 which provides for a new section 16A. My question has to do with the part of clause 4 specifically stating that there is going to be a varying interest rate according to the cost. In that connection I should like to know where the consolidated revenue fund gets the money it is going to lend. I should like to find out, because there is a varying cost here. I should like to know from the minister exactly where the money in the consolidated revenue fund comes from which has an influence on what we are dealing with here, the interest rate.


Harry William Hays: That is quite a question, Mr. Chairman. The government, of course, gets its money from various sources. It gets it from taxes. It gets some of its money from crown corporations such as Eldorado Mining and Refining Limited, and Air Canada, which made a little money last year. In the case of a deficit, say in the Export Credits Insurance Corporation the government has to go to the people and borrow money. Whenever I want to get any money from a crown corporation for the Farm Credit Corporation I tell the officials to be sure to get it from that portion of the money they have had to raise by way of bonds and to pay members of parliament with the money they get from taxes.


Bert Raymond Leboe: I like that last sentence, because this leads me right into the core of my question. The minister referred to borrowing. Can he tell me whether or not in connection with this legislation the government has sold bonds to the Bank of Canada?


Harry William Hays: We should have the Minister of Finance here. The only thing I can do as a businessman is to borrow on behalf of the Farm Credit Corporation and then repay. I think the hon. member is relating this to clause 4 of the bill. The particular money we would get would come out of that portion on which something had to be paid to get it.


Bert Raymond Leboe: In other words, the minister is indicating to me that there are certain funds being made available to the government on which they do not pay anything. Is that what he is indicating?


Harry William Hays: That is your statement.


Bert Raymond Leboe: I want to know whether the minister is indicating that to me. I have in mind that the economic rate is going to be based on the cost, and it seems to me we should be in a position to know the situation. That is why I took the trouble to telephone the minister's office and talk to him about this question. As he will recall, I wanted him to get in touch with the Minister of Finance so he would have an answer to this question. I think it is an important question. I believe that if the bonds of the government related to this particular act were confined to bonds sold to the Bank of Canada, and the profits from the interest rate on those bonds reverted to the consolidated revenue fund we could supply money to the farmers at a much cheaper rate than 5 per cent. I think this would be a very important step, particularly in the case of smaller farmers in the lower income brackets, from the point of view of making their farms economic units. That is why I should like to find out from the minister if any of the bonds that the government sells to get this money are sold to the Bank of Canada and whether the Bank of Canada actually retains these bonds for any length of time. This is what I wanted the minister to find out from the Minister of Finance before he got away. Apparently he did not get an answer for me.


Harry William Hays: I would be very glad to take this matter under serious consideration. We will investigate it thoroughly.


Bert Raymond Leboe: Will you give me an answer some time?


Harry William Hays: Yes, I will be glad to investigate this matter and give the hon. member an answer, if we can get one.


Bert Raymond Leboe: "If we can get one". I should like the minister to undertake to give me an answer because I know that if he persists, as I hope to do from now on, he will get an answer, and I would rather the minister would do the persisting.


Harry William Hays: I will be very vigorous in this regard.


[Stage Direction]
Clause agreed to.
On clause 3.
Stanley James Korchinski: Mr. Chairman, this clause enables the borrower to acquire farmland or to advance money to a person who is a son, son-in-law, daughter, and so on. I will not read the whole clause. I wonder whether the person who is willing to sign a document enabling his son or daughter to acquire land must be a farmer or whether he may be a businessman, financier or any other type of individual?


Harry William Hays: In the first place, Mr. Chairman, he must be a farmer. Probably I should explain subclause 1 of clause 3. Suppose a father has two sons who wish to take up farming. His own farm unit may not be large enough to support the two of them. He may wish to transfer to one of his sons but at the same time to assist the other son to buy a farm of his own. This son may have worked for years on the family farm and contributed labour at a relatively low cost to his father.
Although the father may wish to assist the son financially it may be that his own farm, while adequate for his needs, did not produce enough revenue that he could make savings and have the money available to assist his son. This clause would permit him to borrow from the corporation and turn the money over to his son to permit him to make a down payment on the purchase of another farm. The son, who would then have an equity in the farm he was buying, would be able to go to the corporation and obtain a loan under part III of the act, the part where there is supervision, to pay the balance of the purchase price of the farm and to purchase livestock and equipment.
He would probably share in the use of his father's machinery and exchange labour with him, so that his requirements for machinery would be modest and he could use more of the credit available to him from the corporation to purchase livestock. Under this arrangement,
Farm Credit Act
it may be quite possible for a father, even with a modest sized farm, to join with the corporation in providing the capital necessary to start his son up in a farm career of his own.


Stanley James Korchinski: Supposing a farmer might not qualify for a loan because he may have too large a holding and the corporation refuses him a loan for his own purposes. Then he turns around to the farm credit officials and says he wants to purchase land for his son. Would he be able to do this?


Harry William Hays: If the son is going to farm on his own and he needs the land for this purpose, the corporation would entertain such an application.


Stanley James Korchinski: What provision would the corporation have for investigating whether or not the son is actually farming on his own? Could the minister indicate what they would have to look for, and would the officials go around every so often to see if the son were actually farming on his own? Perhaps the father wanted to expand, and used this method of doing it.


Harry William Hays: I suppose the same principles would be applied as are applied today on any loan. The officials would probably ask the hon. member, if this were in his area, and this would be good, solid information upon which they could act.


Stanley James Korchinski: Will the minister also give me an indication as to whether the father and son have to sign the document or who makes the repayment in this case? Is it the son who is responsible or is it the father?


Harry William Hays: The father pays back the money he borrows from the corporation and the son pays back what he owes.


Stanley James Korchinski: In other words, then, there will be two payments that would have to be made to the corporation.


Harry William Hays: Not necessarily, but possibly.


Stanley James Korchinski: What do you mean, "not necessarily"? Either the father has only one payment or the son has one payment, or there is a separate payment for each loan.


Harry William Hays: The father would pay for the amount that he borrowed to help the son, and the son would pay back the amount he owes on his own loan.


Stanley James Korchinski: Suppose the father does not qualify because he does not have a large enough holding to qualify, would he be able

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to assist his son in this case? Is there any provision which makes it possible for the son to be given assistance under those conditions?


Harry William Hays: I suppose if the man could not pay back his loan, the loan would not be granted. It is a matter of judgment as to how this would operate. The corporation, I believe, will co-operate with anyone to see that a combination of circumstances such as those to which the hon. member referred would be resolved, just as long as they were able to receive their money. If it were a father and son relationship they would probably work that out without too much difficulty.


Stanley James Korchinski: Suppose a father and son have to make payments and the father makes his payments but the son does not, or refuses to do so; what happens in a case like that? Does the corporation foreclose on the father, or on the father and son? What is the situation?


Harry William Hays: The mortgage held on the father's farm would be dealt with separately, and we would deal with the son in so far as his mortgage is concerned. I suppose this would be the procedure. There are two separate mortgages.


Stanley James Korchinski: I am suggesting that the father is making his payments and the son is not. What happens in a case like that? Why would the father be penalized for what the son is not doing?


Harry William Hays: We would do the same thing the hon. member would do. We would take a look at the situation objectively, approach it with great caution and dignity but with a sense of dispatch, and I think we would be able to resolve the problem. I can see the hon. member's concern in this regard, but I believe the supervisor of the Farm Credit Corporation would take everything into account, check the regulations and if it were a big problem he may even go to his superior. However, I feel we could resolve this problem. We are not trying to set up anything difficult, and it seems to me these problems could be handled.


Stanley James Korchinski: What steps would the corporation take in the event the father passed away?


An hon. Member:: Insurance.


Stanley James Korchinski: All right, someone volunteered information about insurance. What happens if the father has been making his

payments and the son is willing to continue making his payments? Is there any provision to take care of a situation like this?


Harry William Hays: It would be handled in the same manner as the case of a farmer who dies today. In some cases part III loans carry compulsory insurance. Insurance is not compulsory for farmers who have part II loans, but about 60 per cent of them are insured for the protection of the borrower. I suppose that situation would be handled exactly the same way today as when a person dies.


Stanley James Korchinski: I think this is important because in some cases the son may have been making payments for 15 or 20 years. He does not want to find himself suddenly in a position where he may lose his property. Is there any provision or is there not, to safeguard against such a situation? It is quite possible to get into a situation such as this.


Herbert Wilfred Herridge: Is it not true that every person who signs a document assumes an obligation? If as a result of unfortunate or unforeseen circumstances he is not able to meet this obligation on time, the corporation will accept its responsibility to the government and the people and also consider the circumstances in its usually humane manner to arrive at a satisfactory settlement?


Harry William Hays: I should like to thank the hon. member for his complete explanation. I am sure it will satisfy the hon. member for Mackenzie.


Stanley James Korchinski: I thank the hon. member for his wonderful co-operation with the minister, but he still did not answer my question. Let me put it another way. In the event of the death of a father, would this debt be immediately recoverable or be considered a bad debt?


Harry William Hays: May I ask the hon. member to give a specific case?


Stanley James Korchinski: I have not got a specific case because you have not got the bill before the house yet.


Harry William Hays: There are two separate loans and they would have to be repaid. Each one is treated as an individual loan. There are provisions in the agreement and these people are supposed to discharge their obligations. If one member dies, then the same thing would happen as if he died today and one loan was in existence. We have two loans here and we are dealing with two separate people. They are both obligated to discharge their own responsibilities.


Mr. Rapp:: Mr. Chairman, I should like to have some clarification with regard to beekeeping. I cannot see where in this paragraph it says a beekeeper can obtain a loan. Can he obtain a loan if he is strictly a beekeeper, or does beekeeping have to be a sideline? If he farms half a section of land and has a couple of hundred hives can he obtain a loan strictly to improve or get more hives? Must he be strictly a bee farmer?


Harry William Hays: If he wants to be a bee farmer, a grain farmer and a livestock farmer, as is my hon. friend, he can be so. If he wants to retire and go to town, and be a bee farmer all by himself, this will take care of him too.


Mr. Nasserden:: With regard to loans made to sons and relatives, does the unit the young person is going to set up have to be an economic farm unit?


Harry William Hays: We would hope it would, but we might see the son starting off on a modest venture, and he would probably be sharing his father's equipment and increasing his unit from time to time.


Edward Nasserden: Am I correct in assuming it would not have to be an economic farm unit?


Harry William Hays: Not necessarily, if he were just beginning.


[Stage Direction]
Clause agreed to.
On clause 4-Interest on part II loans.
Francis Alvin George Hamilton: I want to make now the remarks I originally intended to make on this amendment. First of all, I would like to remind the members of the committee that the subject of interest rates has been the core of the whole debate on farm credit ever since the bill was introduced originally. I should like to read into the record the original clause introduced in this house on June 29, 1959, and then I think the history will become dramatically clear. Section 9(c) read:
Interest rates on loans shall be at a rate that, in the opinion of the corporation, is sufficient to provide for the interest payable by the corporation to the Minister of Finance and the expenses of the corporation, including reasonable provision for reserves against losses.
This was the original draft brought into the house in June 1959. In those days we had on the government side a large number of members now sitting on the opposition side, who stood up in their places and said they did not want that provision as it was. The government of the day yielded to the mem-
Farm Credit Act
bers of the government party and changed that clause 16(c) to read as follows:
The interest rate on loans shall be 5 per cent per annum.
In the amendment proposed it is stated that section 16(c) shall be repealed, and that is why earlier today I mentioned the doubt in my mind whether the forces that want high interest rates back in Canada had won a victory over the Minister of Agriculture. I wonder, in view of the struggles we had in 1959 to get the principle of the stabilized interest rate of 5 per cent for agricultural loans, whether that principle has been lost to a degree in these new amendments, and particularly in this amending clause 4.
Once you get it accepted that you are going to depart one step from the principle of stabilized loans and apply a variable rate of interest to loans above a certain amount, it is not much of a step backwards to try and apply that principle-as finance people try to do-over the whole of the original part of the loan.
Today we have accepted in effect that we are going to put amendments through that will allow for the keeping of this 5 per cent principle on loans up to $20,000 under part II and on loans up to $27,500 under part III, but will the minister give the committee his assurance, and I hope with it the assurance of the whole government, that there will be no further steps taken to try and change the 5 per cent rate on the first part of the loans up to $20,000 and $27,500, to this variable amount?
This assurance from the minister would be a great help to us in the opposition. We belong to the group that fought for and won the principle of stabilized interest rates. Now the minister is varying the rate for the higher amounts. We are not going to quarrel with this too much, but if we do accept this one step does it mean the minister will be coming back and asking for the same principle to be applied to old loans?
The second question I would like to ask has to do with the variable part of loans. As I understand the principle now, when the interest rate goes up every three months, when the interest rate is set by the Department of Finance, the Farm Credit Corporation under this new amendment will be duty bound to sit down and decide what the interest rate is going to be for loans above $20,000 under part II and above $27,500 under part III. Will the new contracts needed for the next three months be at this new interest rate?

Farm Credit Act
If the answer to that question is yes, then my major question is this. What happens when interest rates turn down? Let us say the cost of money, plus the cost of running the corporation, totals 4J per cent-and this has happened-then will the additional amounts be at 4 i per cent, and the original amounts of $20,000 and $27,500 still be at 5 per cent? In other words will the interest rates follow steadily the fluctuating cost of money to the Farm Credit Corporation from the Department of Finance?
My third question, which is supplementary to the second one, is this. If a man has signed up today for a loan, part of which is going to be at 6| per cent, and next year the rate is down to 6 per cent, and down to 5 per cent two years from now, will he be given any opportunity to get a change in his contract or will he be stuck for the whole life of the contract at 6| per cent, even if the cost rate goes down?


Harry William Hays: 
Francis Alvin George Hamilton: This bringing in of principal payments is rather confusing, and the minister admitted that a little while ago. He says that for now the government is not going to change the 5 per cent rate, but I would like a little stronger assurance from the government than that, stating that the ordinary farmer will have guaranteed to him, for perpetuity actually, a stabilized interest rate. We have accepted the figure of 5 per 
cent, which I think has covered the history of borrowing for the last 30 or 40 years.
As a matter of fact, the government has lots of precedents in this regard. If you want to borrow money from the people, as is done under government annuities, you just go to the government office and they will tell you that for the period of your life annuity the maximum amount you can get is 4 per cent. They know this is the maximum they can guarantee, and the Canada pension plan talk is all based on 4 per cent. I point out to you that when you are asking people to lend their money to the government all you will give them on long term contract is 4 per cent. However, we, when we were the government, accepted this principle in reverse, and said that when lending money to farmers we would accept this long term average of 4 per cent, to which we added 1 per cent for costs. The minister has departed from this principle for loans above the previous limits. All I am asking for now is a little stronger assurance from the minister, representing the government, that the government has no intention now or in the foreseeable future-and when I say the foreseeable future, I mean as far ahead as 15, 20, 25 or 30 years-of changing this situation. A long term contract has been made with farmers of Canada that the interest rate will be stabilized, based on 4 per cent plus the cost of running the corporation, and if we could get this strong assurance from the minister-I know that some members of the government will fight with him, and the finance people will fight for the principle for which they have always fought-* I think we would be happy to go along with an interest rate which is a little higher on the higher rate of borrowing.


Harry William Hays: Mr. Chairman, first of all I want to thank the hon. member for the confidence he has in the government, that it will be here for another 20 years. In this regard I can assure him that we will take this question into close consideration. We have indicated in a very tangible way that we think this 5 per cent rate should be held this year, and this amendment will take us into the future as far as 1966. Certainly it is my feeling that this should be done. I share the opinion and the views of the hon. member for Qu'Appelle; I also believe that high interest rates are often the cause of many problems in so far as agriculture is concerned, and personally and as the Minister of Agriculture I would oppose it very vigorously if this rate were sought to be changed.


Francis Alvin George Hamilton: Mr. Chairman, that last sentence is all I wanted, because if the Minister of Agriculture will fight for this I know the people in the back benches will support him.


Herbert Wilfred Herridge: Mr. Chairman, would the hon. member for Qu'Appelle permit a question, as he has completed his remarks? The hon. member mentioned what a fight the backbenchers in his party put up to see that there was a flat 5 per cent interest rate on farm credit loans; and that is quite correct. But would he not admit at the same time that the seven N.D.P. members in the house at that time put up an equally vigorous fight for the same principle?


An hon. Member:: In caucus?


Herbert Wilfred Herridge: In the house.


Francis Alvin George Hamilton: This is very true, Mr. Chairman, and this is why I cannot understand why the N.D.P. have sat so quietly during this debate and let these interest rates go up. As I read Hansard, there was not one member of that party who raised any question with regard to these interest rates.


Harold Edward Winch: You were not here when the other members spoke.


Francis Alvin George Hamilton: No, but I did read Hansard.


Herbert Wilfred Herridge: Mr. Chairman, our concern was very similar to that of the hon. member for Qu'Appelle, but not wishing to take the time of the house we did not think it necessary to repeat his arguments. We endorse them.


Mr. Cardiff:: Mr. Chairman, I should like to ask the Minister of Agriculture how many generations these lawyers were removed from the land before they received their education, because I think the bill could have been drafted in much more simple language to the advantage of this committee and all concerned. The bill may be understandable to a great many people, but why was it not drafted in simple language so that the ordinary farmer would know exactly what he was signing before he signed an application for a loan? There are many farmers who will be so anxious to obtain money that they will sign this document before they realize what they are doing, and because they may not understand the language in which it is drafted. The minister has explained it this afternoon. Why was it not explained in the bill before it was given to us?
Farm Credit Act


Harry William Hays: I can assure the hon. member that before we send out the changes we will make them very plain so that everything will be thoroughly understood. There has been no change in the Department of Justice in the last two years, so the same people drafted this bill as drafted the previous one.


Lewis Elston Cardiff: In other words, you hire a group of lawyers to draft the bill and then put it out in language people can understand. Why don't you do that in the first place?


Mr. Simpson:: Mr. Chairman, I have a question for the minister in relation to clause 4. However, at the outset I should like to inform him that I firmly believe it would be very desirable and much more acceptable if the government would arrive at a stabilized rate of interest with regard to loans in excess of $20,000 under part II and $27,500 under part III, instead of using the sliding scale of interest which they have put into these amendments. Last night the minister said, as I understood him, that in relation to loans in excess of $20,000 under part II and $27,500 under part III there would be an added amount to cover what it cost the government to borrow that money, plus the cost of operation of the corporation, plus an amount of, I believe he said no more than one quarter of 1 per cent in relation to bad debts. I am wondering what assurance the minister can give the house that this will not exceed one quarter of 1 per cent. I see nothing in the amendments as listed in Bill No. C-100 in regard to this and I am very interested in knowing just how the minister can assure the house that this will not exceed one quarter of 1 per cent.
Speaking on the desirability of maintaining a stabilized interest rate instead of having a sliding scale, I am thinking of the case which occurs quite frequently when a smaller farmer applies for a loan of possibly between $20,000 and $25,000; then when the consultants go out to look over the farm and make an assessment they sometimes, and in fact quite often, find that to make it an economic unit it is desirable for the applicant to request a larger loan. In such a case the man would be told, if he applied for $25,000 to make his unit economic, that he should ask for $30,000. However, on the first $20,000 he is going to be paying 5 per cent, but in regard to the larger amount recommended by the corporation the interest rate will go up quite excessively. I am thinking that we might find a farmer may not wish to pay these interest rates, and he will be put in quite a predicament as to

Farm Credit Act
whether to accept the recommendation of the consultant and apply for a loan of $30,000 or whether to leave it as originally applied for, in which case he would not be making it an economic unit in the eyes of the corporation. I think this is an area in which we could run into difficulty, and we should have a stabilized interest rate of possibly 5 per cent. I would like the minister to tell us what assurance he can give the committee that one quarter of 1 per cent will be the ultimate limit applied to the interest rate to cover bad debts.


Harry William Hays: Our experience in the past has been that it is less than one tenth of 1 per cent, and the loss has generally always occurred on the smaller loans. The hon. member suggests that quite often when a farmer is making application for a loan in order to make his unit economic it is suggested that he should ask for more money. In this regard I might say that all our branch managers were called in from all across Canada and were here for quite some time. We suggested to them that they should adopt a little more vigorous attitude in so far as loans were concerned, not to hold people down but to see that they did have an ample amount which would make their farms an economic unit. Sometimes the difference between 10 and 12 cows, in a cow and calf proposition, is the difference between $1,000 and $1,200 revenue; and the difference of another 100 acres would facilitate their paying back the loan much more easily, if they had enough money to provide for such an operation in the first instance. I have said all during the debate that this would not be more than one quarter of 1 per cent. It will more likely be below that-probably one eighth or something like that. This will be a reserve set up on that portion of the loan in excess of the $20,000 or the $27,500.
With regard to the stabilization of the interest rate, it is liable to slide up and down; but the farmer who borrows money will have a steady rate throughout the life of the loan. There will be no escalation clause in it. He knows that on the first $20,000 he will pay 5 per cent. If he were to borrow today he will pay 5| per cent plus the cost of the operation of the corporation, which is becoming smaller as time goes on due to the magnitude of the loans being made. The cost is about .87 of 1 per cent plus the one eighth of 1 per cent.


Robert Simpson: I hope the minister's predictions are correct and that the rate will not increas over that one quarter of 1 per cent.

I should also like to make it quite clear that I was not criticizing the corporation in any way for suggesting in many cases a higher loan to make a farm a more economic unit. I think that is a very good feature of their assessments. I myself have had several cases where this has been done and it has worked out quite satisfactorily. I have also had cases where the loan was not approved to the amount the applicant wished. In these cases in the opinion of the farmer, of course, he felt he needed the amount to make the unit economic, whereas in many cases the corporation felt that his holdings did not justify a loan of that size. Here again we have a clash of opinions as to whether the amount of a loan would make the farm an economic unit. I did want to make it quite clear that I am not criticizing this aspect of the corporation, because I know they are very anxious to assess these farms to the best of their ability and to make a loan of the nature which will make a farm an economic unit.


Clifford Silas Smallwood: Mr. Speaker, I am in agreement with the amendment, but I am concerned at the increased rate of interest which will be charged on the extra money. As the former minister of agriculture said, the members of our party put up a terrific fight both in front and behind the curtain with the Department of Finance to keep the interest rate at 5 per cent. Now it is going to be increased.
I think the Minister of Agriculture will agree that farming is a risky business. A farmer may have a crop failure and have to carry his payments over the year, and a high rate of interest could be very harmful. I am sure he would like a steady rate of 5 per cent right across the board, and I wonder whether the minister would be supported by his backbenchers and those interested in farming if they went to the Department of Finance and asked them to keep the interest rate down to 5 per cent. We have not heard from these backbenchers today, but we on this side should like to keep the rate of interest at 5 per cent. If the minister is interested in doing this, would he consider referring the matter back to the agriculture committee? I am sure he would get enough support from our members on the committee, and if the minister also felt that it should be 5 per cent on all of the loans he could bring the matter back to the house again.


Harry William Hays: We feel that the present amendments which charges an economic rate on the increased loan is the proper approach at

this time. I can assure the hon. member that J feel that I do know farming, because I started out with nothing. I think all farmers will agree that this is not too much to ask, when you stop and think that last year, outside of the amount of money put up by the federal government, the farmers borrowed $235 million at interest rates in excess of 10 per cent. Therefore this act will help solve some of their problems. When you stop and think about it, an extra $5,000 on part II loans up to $25,000 costs only $75 a year amortized over 30 years.


Edward Nasserden: Mr. Chairman, the minister seems to be very complacent today that the opening up of the interest rate in the second part of this proposal places the stabilized rate in the first part of this proposal in no danger. I cannot share the view he has expressed today. If he and the backbenchers across the way have been unable to hold the fort in this regard today, once this is in operation the demand to raise the rate on the first $20,000 will become much louder than it is at the present time, and it will only be a matter of time before the minister comes back to the house and says it has worked so well for those who have been paying the economic rate that all farmers should be paying the economic rate, and there will be very little criticism of that from them.
I think this legislation will be much better if there were a stabilized rate so that everyone would be treated alike, not only six months from now but a year or two years from now-or for whatever time a loan were taken out. I do not think it is too late at this time for the minister and the government to decide to do this. After all, the amount of money which might be involved for a year or two under the circumstances prevailing today is not so great when you compare it with the over-all needs of the agricultural industry and the entire budget of the nation. For that reason I ask not only the Minister of Agriculture but all members of the cabinet -and I am sorry to see so few of them here today-to take this whole problem into consideration.


Maurice John Moreau: How many backbenchers have you over there?


Edward Nasserden: If you want to make a speech you can make one.


Maurice John Moreau: Why don't you make one?


Edward Nasserden: I will if you will allow me.
Farm Credit Act


Mr. Mcllrailh:: I do not like to hear the hon. member misrepresent the facts as to the attendance in the house at the moment.


Edward Nasserden: I said there were not too many ministers of the crown present at the moment.


George James McIlraith: There are six present at the moment; and my hon. friend will see that the vast majority of the official opposition is absent from the house, and that there are only two frontbenchers out of the whole front row of the opposition present at this time.


Herman Maxwell Batten: Order. I think it might be as well if we returned to the substance of clause 4.


Edward Nasserden: I am very much aware that our boys have been here most of the day and yesterday to deal with this question, and our farming members are also here today, as well. I think the minister will agree with that. If I understood correctly, the minister was not too happy because we questioned some of the clauses in the legislation he is bringing forward. I hope he will get that smile back on his face and things will go much better.
Last night when this was discussed I was seriously disturbed by something the minister had to say. He referred to the fact that the money was running out and he was going to hold that as a club over the heads of the opposition with regard to this measure. This is not the first time members on the front benches across the way have tried to utilize a weapon of that kind with regard to legislation which they want to bulldoze through the house. In this case we agree with some of the proposals put forward but on this particular item regarding the changing of the statutory interest rate on these loans I should like to see the government as a whole give the matter more consideration.
I think the suggestion put forward by the hon. member for Battle River-Camrose that this whole measure be referred to the committee on agriculture is a good one. We on this side assure the minister that we will help him in his fight with members of the treasury board with regard to this matter. I see the minister smiling, or laughing. This is no laughing matter. We think this measure should be referred to the agricultural committee for further consideration, and I believe we could do a great deal to help the minister in this regard. One thing is certain. Farmers across Canada would know what the interest

Farm Credit Act
rate would be from time to time, and all farmers would know that they would be paying the same interest rate as their neighbours who might take out a loan at a different period in the life of this act. I hope the minister will give us an answer.


Stanley James Korchinski: I wonder if the minister could indicate whether the interest rate will be known at least for a three month period or a four month period, or every half year. What is the situation to be? Will the rates fluctuate from day to day?


Harry William Hays: We would possibly set a rate of interest for the year. It would not be less than a year; it might even be longer.


Stanley James Korchinski: I would suggest that if the government has to get this money at varying rates it could take an average and set the rate out for the coming year so farmers would know what they would be expected to pay. I think this is only fair because confusion would result if the rate were to fluctuate from month to month.


Harry William Hays: I will be glad to follow the hon. member's suggestion. We will do exactly that.


Robert Simpson: In relation to interest rates, I wonder if the minister can assure the committee that the interest rate on any loan in excess of $20,000 or $27,500 would be determined on the date the application was received by the corporation.


Harry William Hays: I rather think we would have to pay regard to the interest rate on the date the application was approved, not on the date it was made. I believe this is laid down in the act and the regulations, and there has been no change as far as this requirement is concerned.


Stanley James Korchinski: In introducing this new aspect of the legislation the minister must have had some information either from within his department or from other sources respecting the need for loans of this type. He must have believed there were farmers who wished to borrow more than $20,000 or $27,500. I wonder if he has any information as to the number of loans the corporation anticipates making in this category in the first year. Farm credit advisers across the country must have suggested a possible figure. As the minister said, they met here in Ottawa and it was on the basis of suggestions made by them and by others that these amendments were brought forward. Could the minister indi-

cate, for example, how many loans of this order were requested in the course of last year.
I am asking this question for the following reason: I am wondering how much money we can possibly expect to save by increasing interest rates above 5 per cent. If only a few loans are to be taken out, it seems to me we should drop this whole clause entirely. I feel that by adopting it we would be opening the door to a revision of the act in a year or two upon the recommendation of the minister's supporters, or some financial firms, to the effect that this is not the right way in which to conduct business, with the result that the rate would be increased from 5 per cent to whatever rate might be necessary to recoup expenses, write off debts and so on. The minister said he anticipates that a certain amount of money will not be recovered under the 5 per cent provision. If this is the case, I wonder how much he will save by increasing the interest rate above 5 per cent; I am wondering whether it is worth the trouble.


Harry William Hays: About 13 per cent of the loans last year were for the maximum amount. We anticipate that these people will be back, because to most of this 13 per cent the amount available was not sufficient. Of course, the percentage will grow as time goes on, as more people become familiar with these terms of the legislation. I think a great many people in Canada are still not familiar with this act. I believe there is still a great educational program to be carried out. The need for these additional amounts is substantial and the number of applications will surprise hon. members. I think, also, they will be surprised to see which provinces they come from.


Stanley James Korchinski: Since the minister has indicated that perhaps 13 per cent took the maximum loans last year, it is conceivable that 13 per cent more will take them out in the coming year. If we have provided loans to the extent of $100 million, we can expect another $10 million or $12 million in the following year. Therefore what we are really concerned about here is not an interest rate of 5 per cent on that $12 million, but on just a fraction of it. So it is obvious that the government will really save very little by introducing this legislation. I repeat that the amount of saving to the government is going to be infinitesimal, but to the individual farmer the amount is going to be considerable as he pays off his loan over a period of years.
If we must concern ourselves about trying to remedy the financial situation of the gov-

ernment, then let the minister say so. Are we going to provide legislation that will be beneficial to the farmer, even at the expense of a little money from the government? This is the important feature. As I have already pointed out, I am concerned that we are opening the door for the future in such a way that the interest rate will be increased still more.
We still do not know what the rate is going to be. The minister has not indicated whether it is going to be 6 or 7 per cent. But if the minister wants to raise the rate in the future and wishes to amend the legislation again for that purpose, he will be able to say, on the basis of the precedent we are setting here, that the corporation is again losing money and the rate should be raised.
Is the minister prepared to accept the responsibility of saying that money must be saved for the government, or is he introducing this legislation for the benefit of the farmers? Since the minister cannot give us an indication of the rate we must assume that the amount of money the government is going to save will be very small and that in effect the government is not concerned about the welfare of the borrowers but is perhaps trying to assist the Minister of Finance. What position is the government taking? Whom are they helping?


Harry William Hays: Our whole purpose, of course, is to help the farmers. Under this amendment we are doubling the size of loans. I can see the Farm Credit Corporation lending a total of $1 billion in the future. I do not know how high it is going to go but at that time I suppose it will be a revolving sort of thing. Many of these loans will never be completely repaid by the original borrower. There is provision in the bill that when a farmer passes on or retires his son can pick up the loan and carry on in much the same way as a man who owns a house and dies before the mortgage is completely paid off. He may own the house all his life and never get it completely paid off.
This is a long range policy. It is tied in with three other pieces of legislation that we hope to have before the house in the next 30 days. It is difficult to explain some of these things until we have all parts of the picture together. This particular piece of legislation will do twice as much, so far as providing capital for farmers is concerned. At the time the Farm Credit Corporation was established I think it was possibly adequate then. But times have changed and now we need to take
Farm. Credit Act
the next step, which we have done. We are certainly not discriminating against small farmers because we have not changed the situation so far as they are concerned. But in the case of the farmer who wishes to borrow above a certain amount we are simply trying to see that he does not have to pay an excessive amount of interest, that he does not have to go outside of the Farm Credit Corporation and obtain money at 12 or 15 per cent. I think this provision takes care of this situation.


Mr. Soulham:: Mr. Chairman, I spoke on second reading of the bill on June 9 and the minister will recall that at that time I registered a strong protest against the interest rate being increased at all. I should like to do so once again on this clause. In listening to the debate and interpreting the mood of the house I feel that hon. members are not too happy about this provision. The minister just said that this amendment is being made in the interests of the farmers. I do not think the farmers are going to feel too happy about increasing the interest rate from 5 to 6i or 7 per cent, or whatever the rate is going to be, on the additional amount of loan.
In answer to the hon. member for Mackenzie I believe the minister said that only a small percentage, possibly 13 per cent, of the total number of loans are going to be in this category. If we use a figure of approximately 12 or 13 per cent of the total applications, it is obvious we are only dealing with a small section of the total farming population. The extra cost of administration and setting up the tables, to which the minister referred in trying to explain this matter, is going to involve a certain amount of money. To me it appears that whatever effect the minister is trying to achieve from an increase in the interest rates on loans over $20,000 and $27,500 is going to be lost. It is going to mean a bigger headache for the advisers in the field in trying to explain the legislation to the farmers.
I think the hon. member for Battle River-Camrose had a good idea when he suggested that this matter should be referred to the committee on agriculture for consideration at one meeting at least. Possibily that would give government members an opportunity to support this provision. The hon. member for Kootenay West said that he was in favour of the low 5 per cent interest rate we introduced when the legislation was brought in in 1959. I have not heard too many members of his

Farm Credit Act
party support his stand, although he did get up in his place a few moments ago and put forward that view.
This whole thing has turned out to be a very contentious matter and I should like the minister to explain to the committee again just what the specific point is in increasing the rate from the present 5 per cent level to which the farmers are accustomed to the new rate on the second part of the loan. The hon. member for Qu'Appelle referred this morning to the fight our party had put up in objection to the views of members of treasury board at that time. I expect the Minister of Agriculture has had the same problem on his hands but apparently he has not had the support of enough of his backbenchers. When he says he is working in the interest of the farmers, all I can say is that I do not think farmers across the country are going to be too happy if this interest rate provision is adopted.


Mr. Moore:: On the same point brought up by the hon. member for Churchill, I should like to ask the minister to tell us whether a farmer will know at the time he applies for a loan what the interest rate he will be expected to pay on that loan.


Harry William Hays: He will know. We will set the interest rate on the second part of the loan. It will be set for at least a year and possibly longer, so he will know. The rate on present loans is not going to be changed in any way and the additional loan rate will be set. It will be something over 5 per cent.


Harry Andrew Moore: The farmer will know the exact amount of interest at the time of application?


Harry William Hays: That is right.


Mr. Pascoe:: A few minutes ago the minister referred to a point I dealt with on second reading. He said that there are three or four other measures in the farm program coming forward in the near future. As I said then, I think those measures should have been made known to parliament before we were asked to deal with the farm credit legislation so that we could see where the farmers stood under this program. I think this is an important point, having in mind particularly the minister's promises about reducing the cost of farm machinery. I think that would influence operating costs.
One point I want to bring out right now concerns a particular program that I feel we should be sure is going to be in force

again this year, and that is the cash advance on farm stored grain.


Lucien Lamoureux: Order; I am afraid I cannot permit a reference to other legislation. I should like to suggest to the hon. member that the committee will have to deal strictly with the clause before it, that is clause 4 of this bill. I do not believe the hon. member should refer to other legislation which may be introduced later.


James Ernest Pascoe: The reason I mention it, Mr. Chairman, is that it relates to the ability of the farmer to pay these interest charges. For example, this year the delivery quotas were quite slow in coming in, and a farmer may have to make his payment at a time when he could not deliver his wheat. It is for this reason I think we should be told he is going to be able to get a cash advance, interest free, to make a payment on his loan. This is the point I wanted to bring out.
I am sorry the minister has not got the annual report for this year. He says it is in the hands of the queen's printer. The minister has told us the interest charges are going to be based on the cost of money, plus the operating cost, plus the cost of building up a reserve. The last report says:
Costs of salaries, office accommodation, and other operating expenses increased from $2,466,717 in 1961-62 to $3,186,399 in 1962-63.
This represents an increase of almost three quarters of a million dollars. Can the minister inform us what the operating costs are going to be for the past year? This report also states, with reference to building up a reserve, that the reserve for losses had been built up to an amount of $3,748,862 in 1962. Can the minister tell us what the reserve is at this time?


Harry William Hays: The report is still at the queen's printer. The cost of operation last year was .871 per cent and we lent $108 million. The present reserve is $1,665,340.


James Ernest Pascoe: It is down from what it was.


Harry William Hays: But the cost of operating the Farm Credit Corporation is also down. It is the lowest this year that it has been since the corporation was formed, .87 per cent.


Mr. Forbes:: Before we leave this clause, I should like to ask one question of the minister. I believe this is the only clause under which I can ask it. At the present time the Farm Credit Corporation will lend up to 75 per cent of the appraised value of the farm. People who are otherwise qualified

have difficulty in raising the other 25 per cent. I would remind the minister that if you are an urban dweller and you want to purchase a house you can obtain one for 10 per cent down, and in some cases less than that. I wonder if the minister would give consideration to increasing the amount of the loan to 80 per cent or 85 per cent of the appraised value of the farm?


Harry William Hays: We have this under consideration, and it is for this reason we have established this interdepartmental committee. We are taking a look at these problems and I realize this is a problem.


Edward Nasserden: I have one question I should like to ask. The minister mentioned one eighth per cent or one quarter per cent for a reserve. Can he give a definite figure that will be used for this purpose if the bill passes?


Harry William Hays: The reserve we are building up is only for losses and the losses have been less than one tenth of 1 per cent. I have many times pointed out that it will not be more than one quarter of 1 per cent, and I suggest it would be less than that. Perhaps one eighth of 1 per cent; it is difficult to estimate a specific figure.


Edward Nasserden: Am I to take it that at the beginning there will not be any charge in that regard until some losses occur? What figures will be put in?


Harry William Hays: Well, when the act was originally passed, provision was made on the same basis. The amount that was put into reserve was one eighth of 1 per cent. This is the figure the hon. gentleman mentioned as being something like $3 million and which is now down to something like $1,665,000. We are just speaking of those amounts in excess of $20,000 and $27,500. There is going to be no change whatever in the present amount.


[Stage Direction]
Clause agreed to.
On clause 5-Interest of corporaton in secured lands.
Herbert Wilfred Herridge: I did not say much on clause 4 because when Progressive Conservative members take a socialist approach to a clause I am quite willing to yield the floor and listen to them. The explanation of clause 5 reads as follows:
The new subsection (2) would make the interest in land acquired by the corporation by way of security or the realization of security taxable by a taxing authority notwithstanding that the corporation only holds such interest as an agent of Her Majesty.
Farm Credit Act
While I am somewhat illiterate, I do grasp, I think, the meaning of the clause. My question is this: Why is this new clause required when it was not previously in this act?


Harry William Hays: As I understand it, this part of the act is being amended so that the municipalities will receive protection for their share of the taxes which might be delinquent. This is the interpretation of this part.


Herbert Wilfred Herridge: Was this clause inserted, then, as a result of discovering the municipalities did not have this protection previously? There were some instances where their equity was found to be unprotected.


Harry William Hays: Yes, this change was suggested by the provinces.


[Stage Direction]
Clause agreed to.
On clause 6-Maximum to one person.
Stanley James Korchinski: I was just wondering why the loans made under clause 6 cannot exceed $40,000? Is there any provision to make it possible for loans under part III to be $55,000?


Harry William Hays: I think the provisions of clause 7 go up to $55,000.


[Stage Direction]
Clause agreed to.
On clause 7.
Francis Alvin George Hamilton: There is one question I should like to ask here in connection with the second part of the amendment. Is the crop payment plan still in effect whereby the applicant or the present holder of the loan decides to pay on the basis of the crop payment plan?


Harry William Hays: This is still in effect.


Stanley James Korchinski: The reason I asked the earlier question is that it seems to me under clause 6 someone could back up two loans, if necessary, while under clause 7 this cannot be done. There is not a similar provision here.


Harry William Hays: No, you cannot because under part III the loans are supervised loans for young men.


Stanley James Korchinski: Would it not be possible to back up somebody under part II and at the same time qualify under part III?


Harry William Hays: We will take that into consideration, but we have not had such instances at this time.


[Stage Direction]
Clause agreed to.
Title agreed to.
[Stage Direction]
Interim Supply
Bill reported and read the third time and passed.
[Stage Direction]
The house in committee of supply, Mr. Lamoureux in the chair.

George James McIlraith: Resolved, that a sum not exceeding $469,308,421.26, being the aggregate of-
(a)	One twelfth of the total of all of the items set forth in the main estimates for the fiscal year ending 31st March, 1965, laid before the House of Commons at the present session of parliament, $329,299,209.25;
(b)	an additional one twelfth of the amount of agriculture item 5, privy council item 25 (schedule A) of the said main estimates, $2,259,116.67;
(c)	four twelfths of the total of all of the items in the supplementary estimates (A), laid before the House of Commons at the present session of parliament, $134,897,245.34;
(d)	an additional seven twelfths of the amount of loans, investments and advances item L37a (schedule B) of the supplementary estimates (A), $2,625,000.00;
(e)	an additional two twelfths of the amount of loans, investments and advances item L12a (schedule C) of the supplementary estimates (a) $227,850.00,
be granted to Her Majesty on account of the fiscal year ending 31st March, 1965.


Lucien Lamoureux: Shall the resolution carry?


Mr. Nowlan:: Before the resolution carries I presume the minister is going to refer to the items and give us the usual undertaking given at this time.


George James McIlraith: Yes, Mr. Chairman. The resolution provides for supply up to July 31, 1964, so that if there is the much talked about long week end by way of holiday it will be necessary to come back for further interim supply if the estimates are not then passed.


George Clyde Nowlan: I don't understand the minister's reference to "if". I am sure that is a mistake.


George James McIlraith: I appreciate that interjection very much. This interim supply bill is comprised of one twelfth of the total of the items set forth in the main estimates. It is comprised of four twelfths of the total of all items set forth in supplementary estimates A. That brings them up to the same point as the main estimates have been provided for under interim supply bills.
It provides for an additional one twelfth of the amount of the agricultural item No. 5, that is, the item having to do with research and general operations of the experimental farm. The reason for that is because there is more of the work done in the summer.

It provides an additional one twelfth of item No. 25 of the privy council, which covers centennial administration expenses. That is to pay for part of the costs of the memorial building in Charlottetown. There is an additional seven twelfths of item L37A, which is the uranium contract that expires in June of this year, and the whole payment will then be due. The effect of this will be to provide for the release of eleven twelfths of the whole item, and reserve one twelfth so that there can be full opportunity for debate when the estimates are before the house.
There is provision for an additional two twelfths of item LI 2A, which is loans to the government of India to finance the purchase of aircraft and associated spare parts in Canada. That is an old program and this provides for completion. It will be seen that in no instance is any item released by this bill, and the form of the bill I might add, is in the usual form for interim supply bills. I want to give the formal undertaking that the passing of this bill will not prejudice the rights and privileges of hon. members to discuss any item of the estimates when it comes up for discussion in committee of supply. I am undertaking that such rights and privileges will be fully protected and not curtailed by the passage of the bill.


Terence James (Terry) Nugent: There is enough time before five o'clock to mention one subject which has been raised recently and has been of considerable importance during the last week or so. That is the revelation of the number of people who have been held in jail for what I consider to be an unconscionable length of time, in connection with immigration cases.
I do not want to be unfair to the minister or to the department of immigration staff. I recognize that there is a strong duty on the immigration staff to check to make sure that Canada's laws for immigration are upheld and we do want civil servants who will try to uphold the laws. But with that realization must come the realization to the minister that, unless closely watched, the zealousness of one civil servant can result in considerable harm to individuals, and that in this democratic nation the prolonged incarceration without rightful cause of anyone in prison is one of the most harmful things that can occur.
I am sure the fact that there are many cases must cause the Minister of Citizenship and Immigration much soul searching, and in

fact should cause him to do much departmental searching to find out how this could happen. I am sure they must cause the Minister of Justice more than a little concern.
If there is one thing that it is essential we in this country present to the rest of the world, and perhaps to reassure ourselves of, it is that in Canada the freedom of the individual is sacred. Many countries have seen fit to subjugate the citizen's rights to the welfare of the state to a greater degree than others. Here, where perhaps the individual rights to freedom have been subjugated to *departmental efficiency, or where freedom has been taken away because of some departmental inefficiency-or where there is a suspicion of this in even one case-I am sure members of parliament will be most concerned and alert to make sure this is not the sort of thing that can happen frequently, that can happen often, and with or without a lot of soul searching and thorough investigation by the department.
In a country where our system of law is based on the premise that it is better that ten guilty men should go free than that one innocent man should be punished, it seems to me almost incredible that we can have so many people held so long in jail, with so little explanation. These are my introductory remarks.
May I call it five o'clock.


George James McIlraith: I wonder if the committee would be disposed not to see the clock for a few minutes? Is there a disposition on the part of the opposition groups to have the interim supply bill dealt with either by not seeing the clock for a few minutes or by waiving the private members' hour?


Eric Alfred Winkler: Mr. Chairman-


Lucien Lamoureux: May I suggest consideration be given to that when the Speaker is in the chair.
Progress reported.



BUSINESS OF THE HOUSE

Mr. Deputy Speaker:: When shall the committee have leave to sit again, later this day or the next sitting of the house as the case may be?


George James McIlraith: Mr. Speaker, I wonder if the house would consider continuing with the interim supply resolution and bill with a view to concluding them tonight?


David Orlikow: Mr. Speaker, it is the intention of a number of members in this group to have
Business of the House considerable discussion on the matter raised by the hon. member for Edmonton-Strathcona and we certainly expect the minister to answer in considerable detail, because we are far from satisfied, in fact we are completely dissatisfied with the answers we have had up to now. Therefore I am certain we would not finish it even by six o'clock today, Mr. Speaker.


George James McIlraith: Mr. Speaker, perhaps my point was a little misunderstood. I was not asking hon. members to waive their right to discuss a rather important question that had been raised; I intended to ask whether they would consider letting this interim supply bill go through and discuss this matter- which will merit, I gather, a rather lengthy and full discussion-on another occasion, either on the main estimates or at some other time that could be arranged.


David Orlikow: Mr. Speaker, how can we answer that question unless the minister can give us some idea as to when "some other time" will be. If "some other time" is going to be next week or two weeks from now, perhaps we should think about it; but if "some other time" is going to be next September, of course we could not agree to that.


George James McIlraith: I would think we could arrange to call the estimates of the Department of Citizenship and Immigration first, Mr. Speaker. I wanted to check to make sure they were in, but this has been verified. We could discuss this matter on the estimates of the Department of Citizenship and Immigration, if they were called first.


Gordon Minto Churchill: When?


George James McIlraith: I do not know how to make it more firm than that, because with the flag debate starting next week surely it is not suggested that I should fix a day now. We have tried to follow a pattern of getting the estimates forward for discussion-and it is becoming increasingly necessary that we do so-on suitable occasions. I would certainly go as far as indicating that the first estimates called would be those of the Department of Citizenship and Immigration, if that is agreeable to all hon. members.


David Orlikow: Mr. Speaker, the Prime Minister has announced that we will be starting the flag debate on Monday and then we have the constitutional amendment to consider. I have no intention of speaking in the flag debate, but I have a feeling that a large number of members will want to speak in it;

Question of Privilege
therefore this question may not come up for weeks. In any case, while it is the only matter on which I would like to speak, I am sure there are other matters on which other members would like to speak. It does seem to me that if the government wanted this kind of arrangement it should have been discussed among those people who usually discuss these things and agreement reached-but not at five o'clock on Friday afternoon. I am not disposed to agree, Mr. Speaker.


George James McIlraith: I appreciate the hon. member's difficulty, Mr. Speaker, but it is not usual on interim supply to enter into a discussion of the general administration of the department, even though the matter may be considered important. I wonder if it would be agreeable to hon. members to continue the discussion on interim supply now and see whether that part the hon. member urgently wants to raise is dealt with today. Then perhaps the remainder of the points hon. members wish to raise could be dealt with when the main estimates are called.


Bert Raymond Leboe: Mr. Speaker, I want to deal with another matter on interim supply, which may or may not take more than five minutes. I want to deal with the question of the order of business of the house, which may take me about five minutes; but there may be other hon. members who are interested in the same subject, and this I do not know.



PRIVILEGE


René Tremblay: Mr. Speaker, I rise on a serious question of privilege which affects me as minister of the crown responsible for the Department of Citizenship and Immigration and which also affects members of this house and the public in general. It concerns a statement which appears in today's issue of a Toronto newspaper which reads as follows:
I asked if the minister had read the Telegram report that official transcripts supplied to a defence lawyer had been tampered with, and two questions and answers deleted.
Yes, Mr. Tremblay had read that. He investigated it, he said, and was satisfied that this was not so.
How, I asked, could he be sure his officials were supplying him with the full story.
If documents were being edited and awkward bits being deleted, in material supplied to the Supreme Court of Ontario, why should those responsible hesitate to keep back information from the minister?

For the first time, Mr. Tremblay's composure was ruffled. "What reason do you have for thinking that might happen?" he asked.
"Only that there was evidence to indicate it had happened to one document at least, and perhaps two", I replied. And Mr. Tremblay said he would look into that again.
The author of this article visited me in my office last night, the 11th of June. In the course of discussion reference was made to a previous allegation made by his newspaper that documents had been altered. He was informed that this allegation had been carefully checked and had been disproved. The author then undertook to provide me this morning with evidence that various documents were being altered and that I was not receiving true information from my officials in Toronto. If any such charge could be substantiated it would be a serious matter to the department and to me. To this moment he has produced no such evidence and I am therefore entitled to assert that the charge is not only unsubstantiated but mischievous.


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



INDUSTRIAL RELATIONS


Stanley Howard Knowles: the second reading of Bill No. C-36, to provide for minimum wages for employees in federal works, undertakings and businesses.
He said: Mr. Speaker, the explanatory note to this bill sets out its purpose rather clearly. It reads as follows:
The purpose of this bill is to establish a minimum rate of wages with respect to all employees in Canada who come under federal labour jurisdiction. This bill provides that such minimum rate of wages shall be $1.25 per hour. The bill also provides that its terms do not affect any employee whose rate of wages is higher than the minimum established by this legislation. However, any rate of wages less favourable to employees than $1.25 per hour is superseded by this bill.
About a quarter to five I went up to the cafeteria to have a cup of tea. As often happens when one goes there, one finds oneself sitting opposite a favourite newspaper reporter, and that was my experience today. After I had had my cup of tea I said I would have to leave and get down to the house to move my minimum wage bill. His reply was "Pardon me if I don't come down; I've

heard that one before". I asked him how old he was; I think he knew what was coming. He said: "I am only 35". Of course, the hon. member for Kootenay East (Mr. Byrne) knows what my reply was. I said: "Yes, this matter has been the subject of discussion in the political life of Canada for at least 10 years longer than you have been alive." And that is the situation, Mr. Speaker.
I realize my hon. friends opposite get tired of hearing about 1919, but it is still one of the facts of Canada's history that in that year the Liberals made certain promises to the people of Canada, and one of those promises was for a national labour code. Here we are 45 years later and we still have not got it. I wonder where this myth got started that the Liberals are a progressive outfit; that the Liberals are the people who will do things for Canada. When one looks at their record, one realizes that they are just about the slowest moving aggregation known to political science.


Miss LaMarsh:: Give us another ten members.


Stanley Howard Knowles: What an interjection to come from the Minister of National Health and Welfare (Miss LaMarsh). She did not have the experience of sitting in this house when the Liberals had an overwhelming majority. But I have had that experience, and they did not move any faster when they had an overwhelming majority than they do now when they are in a minority position. As a matter of fact, in this minority position they feel the prodding even more sharply than when in a majority position. I suggest that it is a subject for study by the political scientists in this country as to how the myth ever got started and how it has ever been maintained that the Liberals are a progressive people, moving in the direction of progressive social legislation. I said they were the slowest moving aggregation known to political science. In fact they do not move at all. After 45 years we are still waiting for most of what they promised in 1919.
I know what the answer will be today to my proposal for a national labour code. I can see it on the face of the parliamentary secretary to the Minister of Labour. He is going to say: "Does the hon. member for Winnipeg North Centre not know that this was mentioned in the speech from the throne; that the Prime Minister (Mr. Pearson) promised it in his speech on the address; and that the Minister of Labour (Mr. MacEachen)
Industrial Relations
confirmed the promise?" Three or four times since, during the session, we have been told that a national labour code is going to be brought in by this beneficent Liberal government. Well, we have had these promises through the years. The Minister of National Health and Welfare made a delightful interjection a moment ago. I think of what happened after the election in connection with the Canada pension plan and of the promises we were assured would materialize on the statute books last session. Those promises were repeated this session, but so far we are still waiting. However, today we are discussing one of the elements of a national labour code, and I submit it is not good enough for the Liberals to keep on fooling the people of Canada that somehow, if the people will stick with them, they will get some of this legislation.
I was tempted at the start of this session, even though I filed all my bills which are part of a national labour code, to let them stand in view of the clear cut promise the government had made. But here we are on the 83rd day of the session and there is no suggestion of a national labour code on the order paper in any way, shape or form. There have been conferences, and no doubt the parliamentary secretary will tell me about the conferences which have been held between the Department of Labour and representatives of provincial departments of labour. He will tell me that there are all sorts of involvements and complications which have to be worked out, that these have to be studied, and that one of these days these problems will all be resolved and we will get the legislation. We will also be told that the government does not like to see this done in a piecemeal sort of way and that it is a mistake on my part to bring in a bill regarding vacations with pay on one occasion, a bill regarding statutory holidays with pay on another occasion, and a bill regarding minimum wages on still another. I am sorry I am taking away the hon. member's speech; I can see it vanishing from his face as well as from his notes. But, Mr. Speaker, we have listened to this time after time when the Liberals were on that side of the house.
It was, of course, different when they were sitting on this side of the house. When I moved this very bill now before the house in the last parliament, who was the member to stand up and speak strongly for it and say it was good legislation and should be supported? It was the then hon. member for

Industrial Relations
Inverness-Richmond, now the Minister of Labour. This is interesting. It is a nice political in-and-out playing of the game, but it is not good enough for the people of Canada. It is part of a gigantic hoax which the Liberal party has been perpetrating on the people across the years, and if it is going to be true to its promise of 45 years ago, true to the promise of the Minister of Labour which he made on November 8 of last year, which was made in the speech from the throne, and true to all the promises which have been made, in view of the fact that this measure is not yet on the order paper the least the government can do, the least step it can take to show that it has some concern for its promises, would be to let this bill have second reading today and refer it to the industrial relations committee so that that committee can start studying the various elements of a national labour code. I think that this should happen to all of the bills I have on the order paper relating to this subject. I submit that if the government does not do that, it means that its promises about the things which really matter are not taken as seriously as some other promises which it seems anxious to push along, despite the difficulties which might be created.
I do not need to go into the details of this bill. Everyone knows what a national minimum wage would involve. It would involve setting a figure and declaring that no employees coming under federal labour jurisdiction should be paid a rate of wages less than the amount in this bill, namely $1.25 an hour. This has been a figure advocated for a number of years by the Canadian Labour Congress. At the recent convention of the Canadian Labour Congress, which the Minister of Labour attended-he promised that a labour code would be brought in at this session. That was only a few weeks ago, however, and I do not expect action that fast from the slow moving Liberals-at that convention the congress had before it a proposal that the amount asked for be $1.50 an hour. That proposal was one of those left over at the end of the convention and it was referred by the convention to executive council of the Canadian Labour Congress. I believe this proposal will be endorsed by the council and that $1.50 will become official policy as far as the Canadian Labour Congress is concerned. I suggest that this is a more realistic figure for today, and if I do not get this bill through this year, the next time I bring it in the amount indicated will be $1.50 an hour.

This bill cannot, of course, apply to all the workers in Canada. It can only apply to those who come under federal labour jurisdiction. Nine tenths of our workers come under provincial jurisdiction. In some provinces minimum wage legislation is in effect-not very advanced, as yet-but some of us feel that if we put appropriate legislation on the federal statute books it would give a lead to the provincial governments and we could move along in giving this kind of protection to our people.
All parties in the house are committed to advanced labour legislation and to this particular item of labour legislation, namely a minimum wage rate, and I hope that because we all believe in it and because there is no other such proposal on the order paper at this time either in the name of the government or anyone else, the house will be fair and let this bill have second reading today, upon which I would move that it be referred to the standing committee on industrial relations.


James Allen (Jim) Byrne: At the risk of violating the rule against repetition I should like to make my speech. The hon. member for Winnipeg North Centre (Mr. Knowles) has referred to the promises made by the Liberal party over many years. I think he realizes, despite his misgivings, that practically all the good social welfare legislation which is on the statute books today both federal and provincial has been brought in by the Liberal administrations.
As he himself has said, nine tenths of those employed in Canada today come under the jurisdiction of the provincial authorities. We attach a great deal of importance to this proposed legislation. I have made some extensive notes and I am sure the house will be prepared to forgive me if I take some time to explain the difficulties which arise when legislation of general application is introduced in Canada, that is, legislation encompassing the whole of our territory from Newfoundland to Victoria, or Vancouver island. As the hon. member said earlier, there is no question about it; the Minister of Labour will be introducing legislation which will embody this minimum wage provision and other labour standards legislation.


Stanley Howard Knowles: What year?


James Allen (Jim) Byrne: My information is that it is before the officials of the Department of Justice for drafting and should appear before

what is normally termed the summer holiday.
I have on other occasions pointed out that these are extremely complex problems and must be considered in the light of their effect on private industry and regional differentials. The government has therefore been giving this matter serious and urgent consideration. This does require considerable time to expound and, certainly, the hour allotted to private members' legislation would be completely inadequate to deal with this question in detail.
The government's proposed legislation, as is I believe the case with the hon. member's proposal, anticipates covering all industries under federal jurisdiction including transportation and communication, banks, grain elevators and feed mills, crown corporations and so on. And, of course, it would be expected that it would have application to all those employed by the government itself. In total, about 11 per cent of the non-agricultural force would, therefore, be covered.
Industries within the federal jurisdiction are for the most part relatively high wage industries. It is estimated that some 50,000 workers out of a total of about 550,000 within federal jurisdiction currently receive wages of less than $1.25 per hour. This represents about 1 per cent of Canada's non-agricultural labour force.
While complete statistics are not available as to the number of workers within provincial jurisdiction who earn less than $1.25 an hour-


Stanley Howard Knowles: Would the hon. member permit a question? Since he has just said that that figure is roughly 10 per cent of the federal labour force, does he think it is fair to say it is 1 per cent of the total? He should compare like with like.


James Allen (Jim) Byrne: I do not know that I understand the hon. member's question correctly, but this 10 per cent does represent about 1 per cent of the total labour force.


Stanley Howard Knowles: The hon. member created the impression that the passing of this legislation will affect only 1 per cent of the total work force in Canada. But it would affect 10 per cent of those covered by federal labour legislation, and could it not be presumed that this kind of legislation would, if enacted generally affect 10 per cent of the total working force of Canada?


James Allen (Jim) Byrne: The hon. member can make his argument if he wishes. I am sorry he did not find time to do that when he was talking
Industrial Relations
about former Liberal promises. Perhaps next time he will deal with this matter in more detail.
The field of provincial jurisdiction includes many high wage industries, but it also includes a number of low wage industries. Industries such as bakeries, food canning, confectionery, dairy products, leather footwear, clothing, textiles, saw and planing mills, retail trade and some of the service industries including laundries, hotels and restaurants employ substantial numbers of workers at rates below $1.25 per hour.


Harold Edward Winch: Aren't you ashamed of that?


James Allen (Jim) Byrne: Yes, there is no doubt that $1.25 is a very low rate indeed, and it is difficult to understand how individuals and families are able to live on such a rate. At the same time, it is the provinces which are responsible for setting minimum wages in these areas. I think the hon. member will agree that even in Saskatchewan we have not yet arrived at $1.75 an hour as a minimum rate of general application.
It is estimated that the immediate cost to the employers directly affected would be approximately $17 million in one year. Of this immediate increase, about one third would likely be borne by the banks with whom, I am sure, not many members are likely to feel much sympathy. They could absorb part or all of the increased costs by transforming year-end bonuses to the payment of higher rates of wages. There may be, however, important secondary cost effects through the impact of this legislation on the wage structure of the economy. It is not possible to make an estimate of these secondary cost effects but it is thought by some people secondary effects could be significant. These are the people, of course, who are opposed to the suggestion that there be a minimum wage established. Surely the establishment of a minimum wage standard and, for that matter, better working conditions for Canadians, is a highly desirable objective. But the matter must be approached with a certain amount of caution; otherwise serious consequences and dislocations do result. I am sure the hon. member has noted that just the other day in Ontario it was necessary to revoke an order for $1 an hour, I believe, and reduce it to 85 cents so that messengers would continue in their jobs.
While many workers within the field of federal jurisdiction are members of labour unions, there are also many who are not covered by labour legislation or who do not

Industrial Relations
enjoy the protection of a union. Each of the
provinces has extensive minimum standards legislation applying to labour within its own jurisdiction, but with some gaps. In addition, there is a significant gap not covered by minimum wage legislation within the field of federal jurisdiction. I am certainly hopeful and feel quite sure that this will be attended to within the next few months.
Some of the industries covered by the hon. member's proposal could probably absorb the consequent increased labour costs through increased efficiency or a marginal reduction in costs. But to the extent that the wage increases go to persons who would use their increased income to buy goods, there is no question that there would be a stimulus to the economy.
The view has been advanced by opponents of the minimum wage that the introduction of such a proposal would encourage wage increases and the extension of fringe benefits throughout the country. Such a move, it is said, could be interpreted as placing the authority and the prestige of the federal government behind those who would be seeking so-called excessive increases. It is said that if this were to occur it would affect our competitive position at home and abroad at a time when it is vital for the Canadian economy to maintain and extend its ability to compete.
It is my opinion that the extension of such legislation as we anticipate, and as is anticipated by the hon. member, would set a desirable pattern and I believe it should be pressed forward. I doubt that a minimum of $1.25 an hour would lead to any excessive demands, and I am sure hon. members agree that this is a very basic minimum.


Stanley Howard Knowles: It is really too low.


James Allen (Jim) Byrne: On the other hand, few rates in industries organized by unions are as low as $1.25 an hour, so that it can be argued that it would be difficult for unions to use the introduction of federal legislation as a basis for raising wages already above that minimum.
In Canada most negotiations take place at the local level. They are concerned with the problems and experiences of workers in these local areas and at local levels. The parties involved in the bargaining usually pay attention to the factors that govern their local situations and, of course, the ability of the industry to pay. In these circumstances it would seem that the introduction of a federal minimum wage would not be a determining

factor in evoking wage increases, except where other factors warranted such increases.
Apart from its possible effect on collective bargaining, federal legislation would have an important impact on wages outside federal jurisdiction if it led to extending higher provincial minimum standards. The provincial governments of Canada have set minimum labour standards over a wider range than is proposed in this bill. The rates for some industries are higher than proposed in this bill, but all provincial minimum rates of general application are lower and in many cases substantially lower. In this regard I would draw attention to the province of Saskatchewan and some of the maritime provinces. In the province of British Columbia, of course, the standards are a little higher and they have a minimum rate for construction of $2 an hour.
Generally speaking low wage industries in Canada come under provincial jurisdiction which help to explain the fact, as I have said earlier, that there have not been greater demands for legislation in the federal field. Provincial orders of general application set minimum wages varying from 50 cents an hour in Newfoundland to $1 an hour in the Toronto-Oshawa-Hamilton zone of Ontario. Orders applicable to particular industries are generally higher, ranging from 60 cents an hour for hotels and restaurants outside metropolitan Montreal in the province of Quebec to $2 an hour for the construction trades in the province of British Columbia. The impact which the passage of federal legislation might have on provincial standards would depend in part at least on the strength of the consideration each province would give to its particular economic situation and its social needs before advancing its standards.
It has been suggested by other opponents that legislation providing for minimum hourly wages of $1.25, the same as exist in the United States, will be regarded by some people as an indication of parliamentary support for wage parity between Canada and the United States. At the present time wage differentials between Canada and the United States are in the order of 15 to 25 per cent over a wide range of industries, and this situation has prevailed virtually throughout our history. It is true that these wage differentials help certain branches of Canadian industry to overcome competitive advantages enjoyed by large scale firms in the United States.

The area covered by federal jurisdiction in the United States is much broader than in Canada. United States federal legislation covers many traditionally low wage industries which in Canada come under provincial jurisdiction. Therefore federal minimum wage legislation in Canada is not comparable to federal legislation in the United States.
The view has been advanced that an increase in costs to import competing industries, some of which such as clothing and textiles pay low wages, would limit the ability of such industries to compete with imports. Moreover, some of the increased costs of services to export industries, it has been suggested, could result in higher export prices, thus tending to reduce rather than expand exports, with consequent significant balance of payments implications. At the same time it should be noted that Canada's export industries fall mostly under provincial jurisdiction and that for the most part these industries already pay wages well above the minimum proposed in this legislation. The introduction of this legislation should thus have little or no effect on exports, even if the provincial minimum wage rates were to be raised to the federal level.
To the extent that the introduction of federal minimum wage legislation would tend to equalize minimum wage and other labour standards throughout the country, this of course could have adverse effects for those regions of the country badly in need of new industries and employment opportunities. It is widely believed that lower wage costs in these less developed regions are an important element in helping them to attract new industries in competition with the more favourably placed regions of Canada. But such is a spurious argument in my opinion and should hold no place in long range Liberal planning.


Stanley Howard Knowles: "Long range" is right. Well put.


James Allen (Jim) Byrne: But to allay such existing fears it can be argued that the effect of federal legislation on regional differentials would not be very great. The legislation would provide standards for minimum wages and its effect on average wages in any province would be limited. If this turned out to be the case, existing differentials in average wages would not be seriously disturbed. Moreover, it is sometimes held that the value of low wages to regions of slow growth is open to question.
Existing industries in these areas have frequently suffered from poor organization, antiquated methods, inefficient labour and as a 20220-271
Industrial Relations
result low productivity. It is essential in some cases to improve the quality of the labour output as a means of achieving higher productivity. To the extent higher wages and other improved labour standards can promote efficiency and increase income, the underdeveloped regions would be stimulated.
Members, in the true spirit of co-operative federalism, I am sure would want to consider the fears of provincial legislators and the relations with the provinces in any subsequent discussions we may have. Some provincial ministers of industry have referred to the difficulties that would arise for the provinces if scales of salaries and wages paid by the federal government did not take account of regional differences. Provincial standards applicable to industries in general, where they exist, are appreciably lower than the proposed federal levels. As mentioned earlier, some rates for particular industries are higher. Moreover, in many provinces the minimum wage legislation sets out rates for different regions within each province.
For these reasons, some provinces may feel that the introduction of a high general minimum standard for all industries under federal jurisdiction, regardless of their location, would place those provinces in a rather difficult position. On the other hand, the power of the federal government to legislate in this area is quite clear. Some provinces have, in the past, pointed out the administrative difficulties arising from the absence of legislation covering industries within provincial boundaries but under federal jurisdiction.
Now, having regard to the intense study given this question by officials, members of the government and the hon. member himself, I am sure the hon. member, if he will have patience, will find that the proposed labour standard legislation introduced by the government of Canada will incorporate most, if not all, the objectives he has in mind in considering Bill No. C-36. I am sure the hon. member will agree also that this legislation must be kept in perspective and in relation to all the other standards that will be introduced, having regard to the cost and the effect on the provinces and the various regions of Canada.


Georges-C. Lachance: Mr. Speaker, I know that the hon. member for Winnipeg North Centre (Mr. Knowles) is perfectly aware that in the province of Saskatchewan, which was until recently administered by the hon. member's good friends,

Industrial Relations
the minimum weekly salary is about $34 tor 44 hours of work, or approximately 76 or 77 cents an hour. This proves, to some extent, that the problem does not only concern the federal government but also the provincial authorities.
Even if the hon. member for Winnipeg North Centre seems to be introducing most of the bills concerning labour standards, it does not mean that his party is the only one in the house interested in labour conditions, for the Liberal party has been pioneering in that field, but without putting the cart before the horse. That is what makes the difference, from a political standpoint, between the two parties. And the workers know they can depend on the Liberal party, because its past record is a guarantee of its future policies.
The hon. member is well aware that, in the near future, the government intends to introduce in this house a complete program of labour legislation covering all the most urgent problems and designed to establish minimum wage rates, minimum working hours, statutory holidays and other working standards for establishments under federal jurisdiction.
Those measures were announced in the speech from the throne and repeated in many circumstances both by the Prime Minister (Mr. Pearson) and the Minister of Labour (Mr. MacEachen).
As a matter of fact, in a statement made to the delegates of the Canadian Labour Congress assembled in Montreal, on April 21, 1964, the Prime Minister said:
In addition to the pension legislation, the federal government intends to undertake other projects in the field of social welfare and labour, matters which are of particular interest to this congress.
Among those problems, the one dealing with work standards has been too long neglected.
The Prime Minister stated that the Minister of Labour would say more a little later, and that is when the Minister of Labour, who followed the Prime Minister, stated:
Parliament will be asked during this session to set up national labour standards ''in order to set a good example in that field".
Mr. Speaker, all that is in accordance with the Liberal party platform which was published and distributed from coast to coast during the last election campaign.
The government is fully aware, not only of its promises, but also of its responsibilities, and it has no intention to legislate out of hand in so important and so serious a matter.
I can assure the hon. member for Winnipeg North Centre that a quite important

committee made up of Liberal hon. members meets regularly to discuss those problems and that members of that committee are fully aware of the needs of the working class. They are also conscious of the many problems to which the passing of a new legislation in that field will give rise.
It should be considered that provincial governments, while being favourable to legislation designed to set a reasonable minimum wage, do not seem very enthusiastic as regards setting a minimum rate of $1.25 per hour, the effect of which would be to upset, for some time, certain sectors of the economy.
Of course, we should consider all the problems that could result from this legislation, the problem of service contracts, or manufacturing contracts. I know that certain industries, in several provinces, operate factories outside the large urban centres and, therefore, are favoured with cheaper labour. We should not take offence at that situation, since such legislation has enabled certain regions far from large centres to become industrialized and has prevented an exodus towards large cities.
If the minimum rate of $1.25 an hour is extended to all regions, there is reason to believe that industries established in remote places, away from the larger cities, will no longer benefit from any advantages, because then they will be faced with transportation costs which will no longer be compensated by payroll savings.
Far be it from me to be against a minimum rate of $1.25 but we must face the facts, and those are problems which must be discussed and examined thoroughly before setting up legislation for that purpose.
Until now the federal government has had limited responsibility as far as salaries are concerned, and that because of the 1935 legislation and other similar ones, even dating back to 1907.
Every province has legislated in the field of minimum wages, but wages offer a great deal of variation and very little similarity.
There is no doubt that the introduction by the federal government of minimum wage standards would help to equalize incomes, and would promote a better distribution of goods and a higher purchasing power.
Therefore, the principle of the minimum wage being accepted, at what amount should it be set?
The hon. member for Winnipeg North Centre introduced a bill suggesting a minimum wage of $1.25 an hour. In a year or

two it might have to be increased to $1.50. But on the basis of the present situation, it must be admitted that this figure of $1.25 would settle certain difficulties and would materially improve a serious situation.
A while ago, I was saying that in Saskatchewan the minimum rate is $34 a week. If you examine the situation in the other provinces, you will see that in Newfoundland, the standard is 50 cents an hour for men and 35 cents for women; in Prince Edward Island, it is 90 cents an hour. The situation in Nova Scotia is rather unusual in that only female employees are mentioned; it is set at $21.60 per week in centres of more than 8,000 population, but it is much lower in smaller communities. In New Brunswick, the minimum rate is 60 cents an hour and, in Quebec, it is 70 cents an hour in certain areas, including the district of Montreal, and 64 cents in the rest of the province. In Ontario, the standard is $1 an hour; in Manitoba, 70 cents; in Saskatchewan, $34 for a 44-hour week, and $34 a week in Alberta.
Most Canadian provinces have minimum wages which are much lower than the said minimum of $1.25.
It has also been mentioned that some 50,000 employees would benefit from such increase in minimum wages. If, for example, minimum wages were increased to $1.10, some 23,000 employees would benefit.
In my opinion, Mr. Speaker, $1.25 per hour is fair and reasonable under the present circumstances.
How does the government intend to set minimum wages at $1.25 per hour? As 1 said earlier, there are several problems and I mentioned, for example, that of small industries situated outside large urban centres.
As I said before, those small industries have often established themselves in those places because labour was cheap there. We should not forget that it was that cheap labour which made possible the industrialization of those areas.
I come back to the point I raised earlier. If a minimum salary of $1.25 an hour was set for the whole of Canada, it would not only tend to reduce the number of industries in some parts of the country, but also induce an exodus of workers towards large cities.
The government is conscious of those problems. As far as I am concerned, 1 know 20220-2714
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about them personally because I have studied them carefully. I am sure that the hon. member for Winnipeg North Centre is also aware of the situation.
We must consider here the whole problem concerning the standard rights of the workers.
Since the government stated repeatedly its desire to introduce general legislation on those problems, I think that all the main problems mentioned in the address in reply to the speech from the throne should be taken into consideration.
Indeed, it would be to no avail to submit piecemeal legislation to be brought before the house.
I can assure you Mr. Speaker, that the promises made by the Liberal party during the last election will be carried out and that every Canadian will benefit therefrom and, of course, will be pleased.
But, the legislation which the government may introduce will not satisfy the hon. member for Winnipeg North Centre, nor his party. As I said before, they are people who love to put the cart before the horse. They are men in the van, and we need men like that. I admire them for their optimism-


Stanley Howard Knowles: We want to get out of the horse and cart age.


Georges-C. Lachance: I can assure the hon. member for Winnipeg North Centre that, in the end, the cart will certainly run very well, even if the horse is before it, and not behind it.
I have had the opportunity of studying those problems seriously for some time. I think tnat the freedom of the labour unions
which until now was the cornerstone of our system with regard to workers' rights- to promote better labour standards is still the best weapon to help workers solve their problems.
I feel that there is good reason to be satisfied. According to the figures given by the parliamentary secretary to the Minister of Labour (Mr. Byrne), you will note that there is only a small number of workers whose salary is lower than that minimum. It must be remembered that, in some cases, for instance hotel and restaurant employees, not one hon. member believes that those people get only the minimum wage prescribed by the act.

Business of the House


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



BUSINESS OF THE HOUSE

Gordon Minto Churchill: May I ask the acting house leader with regard to the business for next week. We are aware that the resolution pertaining to the two flags is to be considered
on Monday. Is it the intention of the government to have that debate continue without interruption during the course of next week?


Mr. MacNaughl:: Mr. Speaker, in reply to the hon. member I must say the only interruption will be if the constitutional amendment is ready to go before the house.


[Stage Direction]
At six o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Monday, June 15, 1964