1964-07-14

PRIVILEGE


Mr. H. Russell MacEwan (Piclou):: Mr. Speaker, I have a question of privilege which I should like to put briefly before the house, which affects all members of the house and the rights of parliament. It is with regard to a press release, small as it may be, in the Halifax Chronicle-Herald for Friday, July 10, 1964, page 19, which reads as follows:
Award of a $18,616 public works department contract to Colin R. MacDonald Limited of Antigonish for repairs to pier A at Pictou was announced from the office of labour minister Allan J. Mac-Eachen here yesterday.
On July 3 I placed a question on the order paper, being question No. 1,423, which asked the number of tenderers and the amounts of the various tenders for harbour improvements and repairs to pier A at Pictou, and I also asked to whom the contract would be awarded. On checking Hansard it will be seen that this question was not answered. What has been done by the minister is to circumvent the rights of parliament. The order paper today is even more sacred following the changes in the rules, and although the minister may have been in Switzerland or perhaps visiting the Queen to right the wrongs of the Minister of Transport in the United Kingdom, this is not the first time this has come before parliament and the rights of parliament must be upheld. I think the government must take due notice of this.


EXTERNAL AFFAIRS
Hon. Paul Martin (Acting Prime Minister):: I wish to table, as I told the hon. member for Greenwood I would, the memorandum of the government of the Soviet union regarding certain proposals to strengthen the effectiveness of the United Nations in safeguarding international peace and security. I am tabling copies in French and in English.
On the orders of the day:


Right Hon. J. G. Diefenbaker (Leader of the Opposition):: In connection with matters arising out of the tabling of the document referred to a few moments ago by the Acting Prime Minister, I would ask him whether the apparent change of attitude on the part of the Soviet union in connection with peace keeping operations has been followed up by any action by the U.S.S.R. to place itself in a position of responsibility in the United Nations by arranging to pay its membership dues and its share of expenses in connection with peace keeping. Would the minister say whether there has been any consultation with the Soviet union in this regard, and does this recent action on the part of that country indicate that an arrangement has been made whereby the voting rights of the U.S.S.R. which would end in September through failure to pay arrears are not now likely to be affected?


Paul Joseph James Martin: There has been no change, since the distribution of this proposal by the Soviet union for a permanent United Nations peace force, in the amount of money which the international court of justice, by way an advisory opinion, has said is owing by the Soviet union to the United Nations. There have been some discussions with the Soviet union with regard to the confrontation that will inevitably face that country at the next general assembly under article 19 of the charter, if some moneys have not been paid by the Soviet union to reduce its total indebtedness to a figure less than the assessment owing by the Soviet union to the United Nations for the previous two years. The secretary general himself is leaving tonight on a tour that will take him to a number of countries, including the Soviet union. I do not know what will be the nature of their discussions, but I would be surprised if this were not one of the subjects to be discussed at that time.


John George Diefenbaker: I thank the minister for his very full answer, and ask him this question. Have any representations been made by Canada directly to the U.S.S.R. pressing upon that country and other countries that are in default the necessity of respecting their undertakings and responsibilities under the charter, and in particular the payment of their share which, as the minister has

Wheat Sales to Poland stated, was declared to be a proper levy in an advisory judgment of the world court?


Paul Joseph James Martin: Yes, Mr. Speaker, there have been at least two occasions when I, on behalf of the government of Canada, have discussed this matter with spokesmen of that government.


Mr. T. C. Douglas (Burnaby-Coquitlam):: Mr. Speaker, may I direct a question to the Secretary of State for External Affairs. In view of the fact that the proposal of the Soviet union regarding peace keeping operations has now been received by the government of Canada, could I ask the Secretary of State for External Affairs what reply the Canadian government intends to give, whether it is favourably disposed to the proposal and whether in the minister's opinion this proposal would place peace keeping forces entirely under the jurisdiction of the security council and reduce the powers enjoyed by the assembly.


Paul Joseph James Martin: Mr. Speaker, the proposal of the Soviet union is not addressed to any country. It was generally distributed this morning to all delegations at the United Nations. I have already indicated in the external affairs committee last week some of my reactions to the proposal. I would simply say now that if it represents, as the right hon. gentleman suggested we should hope it might, a positive attempt on the part of the Soviet union to share in all the obligations having to do with United Nations peace keeping responsibilities, then it is certainly to be welcomed. It is in a spirit of constructive interpretation that Canada is examining this proposal.


Hon. Mitchell Sharp (Minister of Trade and Commerce):: The Canadian wheat board is announcing in Winnipeg today that it has negotiated a contract for the sale of approximately 200,000 metric tons of wheat for shipment to Poland. This sale, totalling about 7.4 million bushels, is for shipment during the period August to November, 1964. This is the second sale made to Poland under the provisions of the long term agreement signed on November 5, 1963 and completes the quantities Poland had agreed to buy during the first year of the three year agreement.
Payment for the wheat is to be made on the basis of 10 per cent at time of shipment

with the remaining balance to be paid in equal instalments plus interest at two, two and a half and three years respectively. These credit arrangements were authorized by the government of Canada under the provisions of the Export Credits Insurance Act.



PENSIONS


[Stage Direction]
On the orders of the day:
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, may I direct a question to the Acting Prime Minister. Can he say whether the government is yet ready to table the white paper on the latest version of the Canada pension plan, which was promised some weeks ago?


Paul Joseph James Martin: Mr. Speaker, the Prime Minister did mention this white paper. We are not disposed to distribute it at the moment, but I should not think there would be too long a delay.


Stanley Howard Knowles: A supplementary question, Mr. Speaker. Has the government learned whether the parliament of Westminster has yet passed the amendment to our constitution
that we prayed it to pass?


Paul Joseph James Martin: No. We did receive an intimation yesterday that the matter will be dealt with not later than the 18th of July, I think, and it is already on the order paper now in the United Kingdom parliament.


Stanley Howard Knowles: A supplementary question, Mr. Speaker. When that amendment has been passed will the government be placing on our order paper the resolution preceding the new bill?


Paul Joseph James Martin: Mr. Speaker, I would not want to prognosticate as to procedures, but my hon. friend knows there will be no delay that could in any way be regarded as irresponsible.


Stanley Howard Knowles: What have we had thus far?


John George Diefenbaker: That definition is subject to ample expansion when irresponsible delay is spoken of by the minister. I should like to ask him this. Is it the intention of the government, as soon as possible after this amendment has been passed by the United Kingdom house, to have the pension bill brought forward as a matter of priority rather than placing it in a position secondary to some

other matters that I think the general public feel deserve to be in a secondary position?


Paul Joseph James Martin: The government attaches the highest priority to this matter. As I indicated yesterday to the hon. member for Winnipeg North Centre, the government did not accept a suggestion from one of the provincial premiers that this should have a lower rating than other important measures, and that being the case, my right hon. friend will be assured that consistent with what faces us in this parliament, there will be no protracted or unnecessary or irresponsible delay.


Mr. Eric A. Winkler (Grey-Bruce):: Since the constitutional amendment will be made so that parliament could go on to deal with this matter at an early time, will the Acting Prime Minister inform the house if we might expect it before any projected recess?


Paul Joseph James Martin: Will my hon. friend be good enough to understand that I have limitations-


Some hon. Members:: Oh, none.


Mr. Marlin (Essex Easl):: -and I would prefer to answer each situation as it arises.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Mr. Gerard Laprise (Chapleau):: Mr. Speaker, I should like to direct a question to the Associate Minister of National Defence.
I should like to ask him whether any action is taken in order to reimburse for their moving expenses the families which will be displaced on account of the closing of the radar station at Parent.


Hon. Lucien Cardin (Associate Minister of National Defence):: Mr. Speaker, I do not know exactly to what families my hon. friend is referring. However, if he would be kind enough to tell me what families he has in mind, whether those of civilian employees or those of temporary employees, I shall be glad to give him an answer.


Mr. Speaker:: Order, please-this is a question for the order paper.
Inquiries of the Ministry



BEAVERBANK, N.S.  REQUEST FOR UTILIZATION OP FACILITIES

[Stage Direction]
On the orders of the day:
Mr. C. F. Kennedy (Colchesler-Hanis):: should like to direct a question to the Minister of National Defence. Has the minister received a petition from the citizens committee of Beaverbank, Nova Scotia? If so, what action is being taken to utilize the defence facilities located there and preserve the economy of the area?


Mr. Speaker:: This is a question which should be put on the order paper.


Cyril Frost Kennedy: This is an urgent matter upon which we have been trying to get some answers for some time. May I ask the minister to make an early statement on it?



REQUIREMENT RESPECTING BILINGUALISM IN CONSIDERING PROMOTIONS

[Stage Direction]
On the orders of the day:
Mr. Erik Nielsen (Yukon):: I should like to direct a question to the Associate Minister of National Defence, in the absence of the minister, based on press and radio reports with respect to the armed forces. Can he say whether it is government policy that the armed forces promotional policy has been altered, requiring a knowledge of both languages before promotion proceeds in any of the three services?


Louis-Joseph-Lucien Cardin: Mr. Speaker, it has been obvious in recent years that there has been a greater requirement for bilingual officers, and it is a fact that there is an order which states that officers who are bilingual will be required in promotions. Now when we speak of bilingualism, it is a two way street; we speak of French speaking officers being required to know English, and English speaking officers being required to know French. This is in keeping with trying to promote bilingualism within the country.


Erik Nielsen: A supplementary question. Can the minister say whether a directive to this effect has left either his office or the office of the minister of defence to all three armed services, and whether that directive includes a provision that before any officers will be promoted in future the French speaking officers will be required to have a knowledge of English and the English speaking officers will be required to have a knowledge of French?

Inquiries of the Ministry


Louis-Joseph-Lucien Cardin: That order did leave the department. As far as the rest of the question is concerned, it is quite complicated and I would prefer to read it in Hansard tomorrow.


Hon. Leon Balcer (Three Rivers):: A supplementary question to the Secretary of State. I wonder whether the minister could tell the house if it is the intention to have the same policy which has just been explained by the Associate Minister of National Defence applied all through the civil service.


Hon. Maurice Lamoniagne (Secretary of State):: Mr. Speaker, the interdepartmental committee responsible for this problem has asked the civil service commission to submit a report but, as yet, we have received no recommendations from the commission.


Erik Nielsen: A further supplementary question. I assume that the minister will read my question in Hansard and answer it tomorrow. When he does, will he make a statement as to whether a recommendation in this regard was made either to himself or to the minister of defence or to the government by the B and B commission suggesting that such a policy be adopted?


Louis-Joseph-Lucien Cardin: Mr. Speaker, the B and B commission has not yet made its report.



INDUSTRY


[Stage Direction]
On the orders of the day:
Mr. P. V. Noble (Grey North):: I should like to direct this question to the Minister of Industry. Will the minister look into the possibility of having his department extend some assistance to the city of Owen Sound which now has several empty factory buildings and more unemployment than existed last year?


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



REQUEST FOR PROGRESS REPORT ON WORK OF DEPARTMENT

[Stage Direction]
On the orders of the day:
Percy Verner Noble: Mr. Speaker, I have another question for the Minister of Industry. Will the minister inform this house of the achievements of his department by way of a progress report?


Hon. C. M. Drury (Minister of Industry):: Mr. Speaker, I do not think the orders of the day is the right time to make a progress report of the kind asked for.



TRANSPORT


[Stage Direction]
On the orders of the day:
Mr. L. J. Pigeon (Jolieite-L'Assomption-Montcalm):: I should like to address my question to the Minister of Transport. In view of the deficit which the government has for various reasons, why has the Minister of Transport bought a Jet Star plane at a cost of $1,200,000 to permit the minister to travel?


Hon. J. W. Pickersgill (Minister of Transport):: The Jet Star was purchased by the previous government headed by the right hon. gentleman opposite.


Some hon. Members:: Oh, oh.


Louis-Joseph Pigeon: That is the second one the minister bought.


Mr. Jean Chretien (St. Maurice-Lafleche):: Mr. Speaker, may I direct a supplementary question to the Minister of Transport?
Can the Minister of Transport tell the house why the previous government bought that plane?


Louis-Joseph Pigeon: I am speaking about the second plane.


John Whitney Pickersgill: I haven't the foggiest idea, Mr. Speaker, but I know the present government declined to buy another one.



ADDITIONAL FERRY SERVICE BETWEEN NOVA SCOTIA AND NEW ENGLAND

[Stage Direction]
On the orders of the day:
Mr. Lloyd R. Crouse (Queens-Lunenburg):: Mr. Speaker, I should like to direct a question to the Minister of Transport. In view of the urgent need by the tourist industry for a second ferry service between Nova Scotia and New England, as indicated by the increase in passengers of 1,282 and in passenger automobiles of 387 over the same month last year, will the minister inform the house whether any definite progress has been made toward establishing this much needed ferry between these two areas?


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



ST. LAWRENCE SEAWAY    POSSIBLE REMOVAL OF TOLLS

[Stage Direction]
On the orders of the day:
Gérard Laprise: Mr. Speaker, I should like to direct a question to the Minister of Transport. Could he tell the house whether he is considering the possibility of abolishing tolls on the St. Lawrence seaway, between Montreal and lake Ontario?


John Whitney Pickersgill: Mr. Speaker, I think it would be very difficult and rather a waste of time to give consideration to this question, because this parliament made a law requiring tolls to be imposed.



FINANCE


[Stage Direction]
On the orders of the day:
Mr. A. D. Hales (Wellington South):: Mr. Speaker, I would like to address a question to the Minister of Finance. Is the minister aware that bankruptcies in Canada have reached an all time high-as a matter of fact the highest peak in the last 30 years-and, if so, what does he propose to do to stop this alarming trend?


Mr. Speaker:: Well, under the orders given to me by the house, though this is a very interesting question it requires a detailed and long answer, and I think it should be on the order paper.



THE CANADIAN ECONOMY


[Stage Direction]
On the orders of the day:
Louis-Joseph Pigeon: Mr. Speaker, I address my question to the Minister of Finance. What measures does the minister intend to take in order to stop the rise in the cost of living, since Montreal has already recorded the highest rise?


Mr. Speaker:: Order, please. It seems to me this question has been asked at least once during the last three or four weeks.


Louis-Joseph Pigeon: I will ask it again at 10.30, Mr. Speaker.
Inquiries of the Ministry CANADIAN COASTGUARD



ESTABLISHMENT OF NAVIGATIONAL TRAINING SCHOOL

[Stage Direction]
On the orders of the day:
Thomas Clement (Tommy) Douglas: Mr. Speaker, I wish to direct a question to the Minister of Transport and ask him whether any representations have been made to him regarding the setting up of a navigational training school at the Point Edward naval base, Cape Breton island.


John Whitney Pickersgill: Mr. Speaker, I think the first person who suggested this was myself, when I made a formal announcement in the house. The plans are proceeding.


Thomas Clement (Tommy) Douglas: Mr. Speaker, may I ask the Minister of Transport a question supplementary to the one I asked a few moments ago. Can he tell me when the navigational school planned for the Point Edward naval base will be operational?


John Whitney Pickersgill: I would not like to say how soon it would become operational. It is going to be a pretty big undertaking to assemble a staff and get the classrooms and buildings ready. However, it is our hope that we will be able to give the first year of training of most of the candidates in already existing marine schools in various parts of the country, so that when the college is opened we will not be duplicating any services that are now available in other parts of the country.


Léon Balcer: A supplementary question, Mr. Speaker. I wonder whether the minister could tell the house if this means that the Rimouski navigation school will be closed after the opening of this new school at the Point Edward naval base.


John Whitney Pickersgill: Quite the contrary, Mr. Speaker. It is our hope that a good many of the candidates who will go on to this school, which is to be a training school for officers, will have their first year of training in the school at Rimouski. I have had correspondence with the present minister of education of Quebec, who I think at that time was minister of youth, on this very subject.



LABOUR RELATIONS


[Stage Direction]
On the orders of the day:
Hon. A. J. MacEachen (Minister of Labour):: Mr. Speaker, yesterday I promised the hon.

Inquiries of the Ministry member for Burnaby-Coquitlam that I would reply to a question he asked some time ago in connection with the action taken by the Imperial Oil Company in dismissing a crew of Canadians and replacing them with West Indians.
This matter has been gone into by the Department of Labour, and we find that the action of the company has given rise to no dispute which calls for mediation by our department. We are concerned, of course, with the employment of Canadian seamen and Canadians in general, but the action taken by the company does not seem to be in violation of any law administered by the Department of Labour. For that reason there is no appropriate action that we see that can be taken at the present time.
In reply to the additional question asked by the hon. member as to whether we have any information on recent cases of a similar nature, the answer is no; although I am sure my hon. friend is aware of the incident of some months ago involving the vessel called the Canuk Trader, the crew of which was replaced by a Chinese crew in Hong Kong.


Thomas Clement (Tommy) Douglas: A supplementary question, Mr. Speaker. May I ask the Minister of Labour whether he intends to bring down any legislation to deal with situations like this, or whether the government intends to adopt any policy, particularly with reference to granting government contracts to ships which are not of Canadian registry and which are dismissing Canadian crews in order to obtain other crews for smaller wages?


Allan Joseph MacEachen: No particular policy is under consideration at the present time. I think the development of such a policy would involve several departments, especially the Department of Transport.



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day;
Mr. Robert Beaule (Quebec East):: Mr. Speaker, I should like to direct a question to the Minister of Justice.
Could he tell us why the submission of the second report of the committee on privileges and elections has been delayed and when he intends to submit it?


Hon. Guy Favreau (Minister of Justice):: Mr. Speaker, I am not in a position to answer this question now but I will look into the matter.



INQUIRY AS TO CONSIDERATION OF MAIN ESTIMATES

[Stage Direction]
On the orders of the day:
Hon. Gordon Churchill (Winnipeg South Centre):: Mr. Speaker, I would like to ask the Acting Prime Minister a question. In view of his steadily increasing authority in the absence of the Prime Minister, would he use his influence now to have the main estimates brought before the house for examination. We would like to have a look at the spending program of the government, and we have had only seven days on main estimates, which is half the number of days normally allowed at this point in a session.


Paul Joseph James Martin: Mr. Speaker, my hon. friend was good enough and generous enough to pay me a left handed compliment, but he will not misunderstand if I say that the authority of whoever is presiding over this house as acting prime minister is of course second to that of the Prime Minister who is now engaged in very important business outside the country.


Some hon. Members:: Hear, hear.


Paul Joseph James Martin: I want to make it clear, Mr. Speaker, that his authority has been properly asserted and, I am sure, widely respected. With regard to the suggestion that my hon. friend has made, I understand that the next two Fridays have been set aside for the discussion of estimates and this is pursuant to a co-operative arrangement made, I believe, among the house leaders. If there is anything the leader of the house wishes to add, he will no doubt do so.


Gordon Minto Churchill: Mr. Speaker, I thank the Acting Prime Minister for his very lucid explanation-


Some hon. Members:: Oh, oh.


Gordon Minto Churchill: -after wandering so far afield. However, the custom in other years in July and August has been to spend up to 16 days in a month on main estimates, rather than just two days as allotted for this month.



CANADIAN BROADCASTING CORPORATION


[Stage Direction]
On the orders of the day:
Mr. Barry Mather (New Westminster):: Mr. Speaker, I have a question I would like to ask either the Secretary of State or the Minister of Labour. Can either minister confirm the report that negotiations between the C.B.C. and its employees have broken down to the extent that the employees' union has now asked that a mediator take over?


Allan Joseph MacEachen: Mr. Speaker, if my hon. friend is referring to a dispute between the C.B.C. and its employees in the radio and television news departments represented by the Canadian wire service guild, then the answer is yes. On July 10, at the request of the union, a conciliation officer was appointed to mediate this dispute, and it is hoped meetings will be resumed early next month.



VANCOUVER


[Stage Direction]
On the orders of the day:
John George Diefenbaker: Mr. Speaker, I would like to direct a question to the Minister of Industry and ask him whether consultations are now going on between him or his department and the C.B.C. in order to secure the consent of the C.B.C. to taking property in Vancouver other than parkland on the Kitsilano reserve.


Charles Mills (Bud) Drury: Mr. Speaker, consultations are going on with those who have made proposals to the Crown Assets Disposal Corporation regarding the disposition of the Kitsilano property.


John George Diefenbaker: Have alternative offers been made to the C.B.C. of property in downtown Vancouver, rather than the area that has been asked for in the Kitsilano reserve?


Charles Mills (Bud) Drury: As the right hon. gentleman knows, perhaps, Crown Assets Disposal Corporation have no alternative property to offer.


John George Diefenbaker: Does that answer mean, therefore, that the attitude of the minister is that the government intends to carry out what Mr. Ouimet said it would, namely turn over this Kitsilano acreage to the C.B.C.? Is that what that answer means?
Inquiries of the Ministry


Charles Mills (Bud) Drury: A decision on this particular point has not yet been taken. As soon as it is, it will be announced.


John George Diefenbaker: Mr. Speaker, who is going to take that decision, if it is not the Minister of Industry? I would like to know who this uncertain entity is that is going to make the decision. Is it the minister or is it the cabinet?


Charles Mills (Bud) Drury: It is the government of Canada, Mr. Speaker.


John George Diefenbaker: Mr. Speaker, I should like to direct a question to the Postmaster General, representing as he does a Vancouver constituency. Has he received a communication from the Young Liberal association of B.C. to the effect that they join with the parks board of the city of Vancouver in opposing the turnover of the 17 acres in the Kitsilano reserve to the C.B.C.? If so, what would be his answer thereto?


Hon. J. R. Nicholson (Poslmaster General):: Mr. Speaker, I have no recollection of any such request having been made to me by the Young Liberals of British Columbia.


John George Diefenbaker: If he did receive such a communication and has read-


Some hon. Members:: Order.


John George Diefenbaker: -the editorial in the Young Liberals "Voice" demanding this, what is his attitude to it?



TRANS-CANADA AIR LINES REPORTED FLIGHT DELAY THROUGH LACK OF ENGLISH SPEAKING STEWARDESS

[Stage Direction]
On the orders of the day:
Mr. Eldon M. Woolliams (Bow River):: have a supplementary question which is related to a question asked the Minister of Transport. Would the minister inquire into the circumstances which led a T.C.A. captain to refuse to take off when piloting a T.C.A. plane because there was no stewardess on the plane who could speak English? In view of the fact that most of the passengers were English speaking, for safety reasons he refused to take off?


John Whitney Pickersgill: Mr. Speaker, I have not heard this fantastic story, but I will look into it.
5442	HOUSE OF
Loans to Students EDUCATION



MEASURE TO FACILITATE MAKING OF LOANS TO STUDENTS

Hon. Waller L. Gordon (Minisler of Finance) moved: the second reading of Bill No. C-110, to facilitate the making of loans to students.
He said: Mr. Speaker, it is with considerable satisfaction that the government has placed before the house this legislation to launch the Canada student loans plan. From references already made to this subject in various quarters I know that, whatever may be said of the details, the purposes and principles of this bill command widespread support.
This is surely as it should be. It is a cliche to say that a country's future depends upon its young people. But cliches are often true, and the importance of the truth embodied in this one can scarcely be overstated. The need for financial assistance, such as the loan plan that we are now considering, can be established in economic terms, in statistical terms and, most important, in terms of human lives and human hopes.
In economic terms, Canada's future strength and prosperity depend not only on the quality of our natural resources, about which we so often remind ourselves, lout even more on the quality of our human resources. This is particularly true if we are determined, as indeed we are, to be more than hewers of wood and drawers of water. We must make sure, in the complex and competitive world of today, that an ever growing proportion of our young men and women have ready access to the benefits of higher education. In this age where undereducation so often spells underemployment, we must put forward very special efforts to ensure that no competent student lacks the financial support to continue his education beyond high school.
In statistical terms the need for new and very substantial financial facilities is easy to demonstrate. As is well known, we are in the early stages of an unprecedented "bulge" in our population at the university entrance age. This results from an unprecedented rise in the Canadian birth rate in the late war and post-war years. Statistical estimates published by the Canadian universities foundation suggest that rates of increase in university attendance during the rest of this decade could exceed 10 per cent per year. As hon. members know, the government has recognized the need for the provinces to have a


greater share of revenues and higher equalization grants to meet such educational requirements.
This growth in the number of students in itself would greatly overstrain existing arrangements for student financing. In addition, however, one must take into account that because these war babies and post-war babies were spaced unusually close together, families will now be faced with the cost of keeping not one but possibly two or three of their children in college at the same time. This will accentuate the need for financial support.
Moreover, because the population of posthigh school age is and will continue to be unusually large, students will experience unusual difficulty in finding summer jobs. Actually the number of summer jobs will no doubt be increasing, but the increase of students may be expected to exceed them. This again constitutes a special need for setting up enlarged arrangements for student financing at this time.
Finally, and most importantly, the need, the great and growing need, exists not merely as an economic problem or as a statistical projection, but as a pressing problem for the young men and women of this country. It exists for them and it exists for their families, the older families that they grew up with and the younger families they are even now founding and forming. A university education or its vocational equivalent is the highest achievement of our educational system, and it should be within the financial grasp of every young Canadian who is capable of making good use of it.
There was a time when some people actually believe that the children of the well to do, those who could afford to buy a university education, were the only ones who should be entitled to profit from it, and that people in poorer circumstances should not aspire to it.
This belief has long since been proven false. If we do not provide the means whereby all children with the necessary abilities can share the privilege of higher education, we are doing them a grave injustice and we are denying to our country a source of economic and intellectual benefit which we can ill afford to sacrifice.
Higher education is an investment, an investment for the individual and an investment for the society in which he lives. Both will be the richer as a result. The student's earning power may be expected to increase

substantially on the basis of such an investment. This is why it makes sense tor him, and for his government, that he should borrow in order to make this investment. It also makes sense for the individual and his government to share the cost of this investment, and this is exactly what the Canada student loans plan sets out to do. In the early stages, while the student is not yet earning, the government bears the whole cost. Later, when the student has graduated and has had some time to settle down and start earning, he himself takes over the debt. But still the government stands behind him, guaranteeing his loan, moderating its cost to him and taking over in case of his death.
What, in practical terms, can the Canada student loan plan offer to a young student? It can offer him annual loans up to $1,000 a year and total loans up to $5,000. The actual amount and terms of the loans to any individual will, of course, be related to his individual requirements and prospective earning capacity. For example, a student living in a university residence or in a boarding house may well need more than a student living at home. Again, a student in a course such as medicine, which is very expensive, may require more than a student in nursing. Obviously the prospective doctor can afford to take on a larger debt than the prospective nurse.
To be eligible for a loan a student must have attained a satisfactory scholastic standard-a judgment that is naturally to be made, under our plan, by the educational authorities. He must also, as is required in other student loan plans and as is essential to prevent possible abuse and to protect the taxpayer, make it clear to the authorities that he actually needs the loan. Given eligibility on these grounds, a student will qualify for a loan if he is a Canadian citizen or if he has resided in Canada for at least a year and intends to continue to reside here.
The loans are to be made to full time students. One of the main purposes of this plan is to make it possible for students whose university education would otherwise drag on over many years of part time work or night courses to complete their college education more quickly and to reap its intellectual and financial benefits at an earlier age.
Students who are residents of other countries will not be eligible for loans under the Canada student loans plan. Students from the richer countries abroad who choose to study here will have their own sources of finance; with our universities already crowded we do 20220-345
Loans to Students
not consider we should offer them special inducements to come here. Students from the less developed countries may, of course, obtain educational assistance under several Canadian programs.
Apart from this, both undergraduate and graduate students may qualify under our plan. Moreover, as I have already implied, it will not be limited to students proceeding to an academic degree. It can cover any form of post-secondary school education. In order to designate the institutions which qualify in this category, bearing in mind the differences across Canada in this regard, we have invited the help of the provincial governments. They, or authorities designated by them, are to specify the institutions which student borrowers may attend, whether at home or abroad. It is clear from our discussions with provincial representatives that the coverage will be as comprehensive as reasonable administrative and educational standards can permit.
In this connection it is relevant to record that all the provinces, with but one exception, already operate some sort of general student loan plan. In virtually every case the amounts which can be made available for the loan plan, and in some cases to individual students, are substantially less than are to be made available under the Canada student loans plan. Nevertheless we are anxious both to learn from their experience and, if they are agreeable, to make use of their administrative machinery including the machinery set up for establishing student eligibility.
We recognize that the provinces are better able than the federal government to determine which students require assistance for the pursuit of their education in provincial educational institutions. Consequently we are hopeful that provincial governments will be prepared to act as partners in the Canada student loans plan through making available their machinery for establishing the eligibility of students for loans. Not only would this simplify the administration of the Canada student loans plan-it would be very difficult for the federal government itself to duplicate provincial machinery-but it would also serve as a useful point of liaison between the actual educational institutions, which clearly fall in the provincial jurisdiction, and a plan for guaranteed bank loans to students provided by the federal government.
Accordingly it is our expectation that students seeking loans under the Canada plan will, in each province, file applications through familiar and established channels. I expect that in almost every case a student will file his

Loans to Students
application in the province where he lives, but in certain cases where he pursues his studies in another province it may transpire that his application should be filed there.
I should emphasize that it is not our purpose to supersede any existing plan or arrangement. Some may well be modified, a few may possibly be discontinued; but in the field of student assistance there is room for many and diverse arrangements. A big national plan can carry the main financial problem, but other bodies can allow themselves greater flexibility, greater adaptability to local conditions and personal needs of students.
In this respect I would like to pay tribute particularly to the existing provincial plans and university plans, and to private plans such as those of the chartered banks themselves and such imaginative and worth-while arrangements as the Canadian scholarship trust plan which was initiated a few years ago.
Once a student has received from the appropriate provincially designated educational body or its agent-perhaps a student loan board; perhaps a university or governmental body in the province where he resides-a certificate for a loan of a specified amount, he or she will go to a bank to arrange the loan. The student can go to any branch of any chartered bank, either near his home or near his university. While the banker is not under compulsion to make the loan-after all, he is lending the money that other people have deposited with him-it would only be in exceptional cases that he would find a reason to question the amount stated on the certificate. He will, of course, satisfy himself that the person who presents a Canada student loan plan certificate is indeed the student to whom it has been issued, but as long as there is no corner cutting or double dealing-and I am sure there will be none of this-the student may normally expect to get his loan.
The loan he obtains, however, will differ in very important respects from the loans the same banker is making to other people. The student, under the Canada plan, will be specially favoured in three ways. First, he will not have to pay any interest on his loan or repay any part of the capital until six months after he has completed his studies. In the meanwhile the government will pay the interest to the bank. Second, when the time comes for the student to begin to pay interest and repay his loan it will cost him less than an ordinary borrower who, on a

personal loan, will normally pay his banker the maximum legal rate of 6 per cent and a service charge as well. Under the Canada plan the government which guarantees the loan will also establish from time to time the maximum interest rate that may be charged, and no additional service charges will be permissible.


Stanley Howard Knowles: What is that rate going to be?


Walter Lockhart Gordon: Initially, this rate is expected to be 5f per cent. When you take service charges into account this is considerably less than the rate at which anybody can obtain a loan under other circumstances.


Thomas Clement (Tommy) Douglas: Is that the rate to the Minister of Finance during the period he is responsible for paying the interest or the rate to the borrower when he becomes liable to pay the interest? Is it the same rate in both cases?


Walter Lockhart Gordon: That will be the rate the borrower will have to pay.


Thomas Clement (Tommy) Douglas: What does the minister expect to pay?


Walter Lockhart Gordon: Something less than that, because there will be no charges or costs involved. The third advantage to the prospective borrower is that the government guarantee comes into operation automatically if the student dies. Therefore he need not fear that his young wife or his family will have to repay the loan for him; once again, Canada will bear this risk.


Mr. Rynard:: Is the loan insured?


Walter Lockhart Gordon: The loan is guaranteed and it is insured in case of death.
The advantages of making use of the facilities of the chartered banks in connection with a student loan plan are in part clear from what I have said already. There are branch banks all across the country near people's homes and near educational institutions. If a student is not satisfied by one bank or one branch he can approach another. In addition, the branch banking system which facilitates the making of loans also facilitates the consolidation of a series of loans into a single total. Further, it facilitates loan repayments and collections.
The Canadian government is already operating four other systems of guaranteed loans with the chartered banks, for farmers, fishermen and small businesses, and for home

improvements. Experience shows that the system is efficient and economical. The costs to the government in terms of administration and in meeting losses are very small-


Stanley Howard Knowles: Will the minister permit a question? Perhaps I may be anticipating the next paragraph in his speech, but can he tell us how many arrangements there are under which the government lends money more directly, such as the Farm Credit Corporation, the industrial development bank and so on?


Walter Lockhart Gordon: I cannot give the number off the top of my head, but I do not think there is much doubt that this system of lending through the banks will be of much more assistance to students. After all, the Farm Credit Corporation, for example, has only a limited number of branches. It would be impracticable for the government to set up lending offices all across the country, and it would be very expensive.


Thomas Clement (Tommy) Douglas: You do not need to do that.


Walter Lockhart Gordon: The hon. member says there is no need to do that, but somehow or other you have to get the money to the student, which is the main objective of this legislation. What we want to do is to make sure, as I have already said, that no student or prospective student is prevented from going to a vocational training school or to a university because of financial difficulties-


Mr. Martineau:: May I ask the minister one question?


Walter Lockhart Gordon: May I finish this sentence- and I am satisfied that this scheme will accomplish that objective.


Paul Raymond Martineau: I should like to know if the provisions will apply to students under 21 years of age?


Walter Lockhart Gordon: I wonder whether I might answer that question later. I am going to deal with that in my remarks. I know there are a number of lawyers in the house who will be greatly interested in this matter. I have said that the advantages of making use of the facilities of the chartered banks in connection with a student loan plan are in part clear from my previous remarks. I pointed out that there are branch banks all across the country, and that if a student has difficulty with any particular branch he can go to another. I have said that we are already operating these other plans and that the costs to the government in terms of administration and of meeting losses are very small, far less than 20220-345J
Loans to Students
1 per cent of the total loans outstanding. Under the student loan plan there will be an additional cost to the government during the interest free period enjoyed by each student borrower, but even making allowance for this the costs will be substantially less than would be involved in any other arrangement. The Canadian government has a natural advantage in sponsoring this sort of system on a large scale, country-wide basis.
I turn now from the plan as it will look to the student to the plan as it will look to parliament in its traditional role of custodian of the national purse and defender of the national taxpayer. At the outset let me reassert what is probably clear from what I have already said. The government has not approached this plan in any penny pinching spirit. We have been anxious to avoid waste and duplication in administration, but we are not proposing to parliament financial limits that are expected or intended to be restrictive. On the contrary, they are expected to accommodate all reasonable needs; and if, perchance, actual needs should outrun our expectations we shall bring the matter back to parliament for amendment. We can envisage that under the system we have in mind the outstanding loans at the end of five years could well be of the order of $200 million. At the end of 10 years we would expect them to be of the order of half a billion dollars.
For the first year of the plan, beginning this fall, we propose that parliament should provide for guaranteed bank loans up to $40 million. This, we calculate, would provide for a loan exceeding $500 for one out of every three students enrolled, a proportion that is unlikely to be reached in the first year of the plan or, indeed, for several years. This is the judgment of all the people whom we have consulted in this matter who have been administering loan plans for some years.
We also provide in the draft legislation for year by year escalation in the total to be guaranteed. Beginning from $40 million, this escalation is calculated on the basis of the growth of the age group in our population that may be expected to take advantage of university education and vocational training facilities. For calculation purposes, this group is 18 to 24 inclusive. Lest there be any misunderstanding, let me stress that this age group is used solely for purposes of statistical estimates. The benefits of the plan are available to students of any age, below 18 or above 24 or within those limits.
I might mention also the fact that the bill before the house establishes that bank loans

Loans to Students
under this legislation are to be recoverable even though they may be made to minors. While under normal circumstances a student who is not of full age may be expected to have his loan endorsed by a parent or someone else whose guarantee would be acceptable to a bank, we feel that this is not necessary, nor even desirable, if Canada provides a guarantee along the lines provided in this bill. We would expect that normally the parent would be aware of the application, but we would not wish to stipulate that the loan would require approval of the parent. To our way of thinking, it is better for all concerned that the student should take full responsibility and should feel fully responsible from the start.
Not only does the annual total grow from year to year on the basis of the 18 to 24 age group, it is also divided, year by year, among the provinces on the basis of the distribution across the country of the same age group. Thus the $40 million available in the first year would be divided approximately in the following amounts, using 1963 population data. Of the total of $40 million, $1.14 million would be allocated for Newfoundland; Prince Edward Island, $0.23 million; Nova Scotia, $1.73 million; New Brunswick, $1.37 million; Quebec, $12.96 million; Ontario, $12.49 million; Manitoba, $1.98 million; Saskatchewan, $1.89 million; Alberta, $2.89 million; British Columbia, $3.24 million; Yukon and Northwest Territories together, $0.08 million.
We considered the possibility of a system which was based not on provincial allocations but on some sort of uniform educational standard which would be equally applicable in any part or portion of the country. However, it soon became clear that such a uniform standard was impossible to devise and, even if it could be devised, would be impossible to apply. We are satisfied that the provincial allocation arrangement is more fair and more defensible than any alternative. Moreover, while different criteria could be considered both for the escalation and for the division between provinces, the use of the age group 18 to 24 appears to be at once the simplest and the most generally acceptable. I might add that if over the years serious anomalies show up the matter would be brought back to parliament for revision.
I have already explained that this plan, while very substantial in its proportions and in its provisions for future growth, is nevertheless quite economical from the point of view of the public purse. Actually, costs in the first year, even if all provinces used

all their quotas and the whole $40 million were used up, would not be likely to exceed $2 million. In later years, when the outstanding loans would accumulate and the interest burden therefore grow, and when the government was meeting its guarantees, the costs could rise appreciably. Nevertheless I believe they will always look reasonable and moderate by comparison with the size of the plan and the importance of its purpose.
When the Canadian student loan plan was discussed at the provincial conference in Quebec last March we made it clear that if a province decided to rely entirely on its own student loan plan instead of participating in the Canada plan, it would be able to receive equivalent compensation. The bill makes provision for this. As hon. members know, the province of Quebec has indicated that it intends to rely on its own plan. Some other provinces may decide to do the same thing. While I would be happy to see the Canada plan operating universally from coast to coast, I think all hon. members should be made aware that of all the provincial student loan plans, that which is at present operated by the province of Quebec is amongst the most generous in its terms and by all odds makes the largest number of loans.


John George Diefenbaker: Would the minister be willing to tell us what other provinces he has in mind that have given any indication they are going to operate on their own rather than come under this plan?


Walter Lockhart Gordon: Mr. Speaker, I would prefer not to mention the names of the other provinces. It was not indicated that these conversations would be made public. There were one or two provinces, one in particular, which suggested at the beginning of the conversations they would probably continue under their own plan. After considerable discussion, and after a full appreciation of this particular plan and its advantages, that province asked that it be given time to consider whether or not it would be in its own interests to come under this plan. Until I have a definite understanding one way or the other, it would be unfair to mention the name.


Thomas Clement (Tommy) Douglas: May I ask a question which the bill does not make clear? In the event a province should decide to operate a student loan plan on its own, will the government pay them actual cash or simply guarantee the bank loans which they may make?


Walter Lockhart Gordon: I will come to that in my statement in just a moment.


John George Diefenbaker: Before the minister goes on, he mentioned one province and he does not want to indicate the name of that province; I am not going to argue with him on the basis of that refusal. Were there any other provinces in the same position of being uncertain, beyond Quebec and the province undesignated as yet?


Walter Lockhart Gordon: No province has formally stated whether or not it wishes to come under the Canada student loans plan as yet. In each case we have had very useful conversations, but understandably every province wished to see the bill in its present form after it had been passed by parliament, as I hope it will be, before making a definite statement one way or the other.
The option of receiving equivalent compensation is, of course, available to any province. To the extent that the growing demand for such loans now exceeds or may come to exceed the resources available under provincial student loan plans, I expect that the provinces will be inclined to contemplate the operation of federal and provincial plans side by side.
The formula for equivalent compensation, while it involves certain complications, is simple in essence. At the end of each year's operation we shall add up the cost of operating the plan in the other provinces and we shall then pay to any province qualified for equivalent compensation a proportion of those costs equal to the proportion that its age group 18 to 24 bears to the same age group in the provinces where the plan is in operation.
So, to amplify just a little bit and to answer the question, there would be no suggestion of guaranteed provincial bank loans. It would be up to a province that maintained its own plan to provide the funds that would be required, which might be a quite heavy drain on its credit, and all it would receive would be its proportion of the net costs to the federal government and the other provinces.


Mr. Gregoire:: May I ask the minister if he has made the calculation of what it would cost the federal government according to clause 12 of the bill, his own formula?


Walter Lockhart Gordon: According to what?


Gilles Grégoire: Have you made a calculation according to the formula expressed in clause 12 of the bill of what it would cost the federal government?
Loans to Students


Walter Lockhart Gordon: It would be easier if I tried
to answer some of these more detailed questions when we come to deal with the clauses of the bill. Naturally I have made those calculations, and I shall be glad to give the answer at that time.


Mr. Chalierton:: This is not a question requiring detailed information, but can the minister say whether this equivalent payment to a non-participating province would include not only the interest but also the defaulted loans?


Mr. Leboe:: Mr. Speaker, on a point of order, we ought to deal with these things in committee. We should let the minister finish his statement and then when we get into committee we can ask these questions. We are acting as though we were in committee now.


Mr. Deputy Speaker:: I think that is a very good suggestion. Possibly hon. members will want to withhold detailed questions until we have reached that stage.


Walter Lockhart Gordon: I appreciate the considerable interest of all hon. members in this piece of legislation, which I think we would all agree is a very important step forward in this field. Now I think it would be better if I were to finish my speech.
Apart from such a province, that is one that would be receiving this equivalent compensation, there is no doubt that the Canada plan will provide a very substantial element of support and relief in connection with the rapidly increasing financial burden of higher education. The resources of the federal government are greater than those of the provinces, and none of them can have the same access to a country-wide system of guaranteed bank loans.
In conclusion I would like to repeat that while other plans may be expected to continue, the Canada student loans plan will be the biggest and by far the most widespread of them all. Its launching is to me, and I am sure to hon. members of all parties, a matter of great personal satisfaction. As we consider this bill I hope we will all be able to recall the hopes and aspirations of our own early days. It is surely a good thing to take part in launching a plan that can give so much help and encouragement to so many young Canadians and, through them, to the country for whose future we in this house must bear a major responsibility.


John George Diefenbaker: Mr. Speaker, I say at once that the minister has set forth a summary of

Loans to Students
the concepts that led to this legislation, and some general ideas as to its application, in a way that is most commendable. I say that because he has covered the situation connected with the difficulties of young men and women in securing education beyond secondary school age in a way that makes this legislation a subject that I am sure will receive general support in the house.
However, in saying that I should add that it falls far short of the undertakings and promises that were made during two election campaigns, and even prior thereto. The promise of 10,000 scholarships, which had a tremendous appeal, apparently has been forgotten and joins what the minister has described as cliches which have served their purposes and ends and are no longer regarded as of such importance as they were one and a half, two and three years ago.
I am glad to see this legislation among others in the priorities that have been placed before us. The Postmaster General is not here at the moment, but I must say I am very much indebted to him for an article which appeared in the West Ender of Vancouver, a report from parliament hill in which the following appears:
Although during the past few weeks the House of Commons has made significant inroads in the legislative program, there are still very important measures which must be adopted.
To renew the progress of the past few weeks it is gratifying to report the following items have been dealt with:
-The approval of the Columbia river treaty.
-The national housing legislation.
-The farm credit extension bill.
-The constitutional amendment to provide for supplementary benefits in our pension legislation.
Then he goes on to say:
Your government has reason to be pleased that these measures have passed as they are necessary and constructive measures. But it is equally important that other measures in the government's program for action be dealt with before members can leave Ottawa.
The Prime Minister has proposed that the following urgent legislation be completed in July:
-The national defence bill.
That has been passed by the House of Commons.
The extension of family allowances to 16 and 17 year olds who continue their education.
That has received the consideration of the house.
The bill providing for student loans.
We are now dealing with it.
The federal-provincial fiscal arrangements bill.
Third and final reading of the extension of the fishing zone to 12 miles.

The significant part of this is that parliament is away ahead of the government's expectations, because the next paragraph says:
When these items are completed, hopefully by July 22 or 23, the house will return to the flag debate-
This is the first admission on the part of a member of the government that the progress made in the house is even much faster than their optimistic hopes could have expected or anticipated. Indeed, I am grateful that the Postmaster General saw fit, in a non-political report to his constituents, to pay tribute to the efficient manner in which those prior matters in legislation are being passed by parliament.
However, there is one other matter that is of interest, because after all this question has been delayed for months. Student loans have been expected ever since the speech from the throne gave promise of their being presented to parliament, and we in the opposition have continually pressed for this legislation to be brought before parliament. Apparently it belonged to the category of legislation that was promised; the program enunciated before there was consultation with the provinces, and then when consultation took place and threats of legal action were made against the federal government if it proceeded without regarding provincial jurisdiction, changes and alterations were made.
This legislation could have been introduced a long time ago. Indeed, it is now quite late, for everywhere across our country we find students in the position referred to by the minister, of being as it were in a state of suspended animation awaiting legislation while at the same time realizing that without the legislation they might very well be unable to carry on their education. The minister went back to the earlier days of his youth and spoke of the difficulties-


Walter Lockhart Gordon: That is a long way back.


John George Diefenbaker: -experienced by all who were not possessed of many worldly goods. Many in this house-I do not know whether he is in that category-have had the experience of having to endeavour in various fields of work to earn sufficient to carry them back to university for the next term. I had that experience for several years. I remember one year in particular when I worked in the summer as a hired man, lived on salt pork and ended up with a growth on the back of my neck that used up my entire savings of the summer. The Secretary of

State for External Affairs belongs, I understand, to a group that found it necessary to do many things to provide for an education. As the minister has said, those days have changed and today there is in all parts of the free world legislation to provide assistance to students.
I mentioned a moment ago that this legislation enjoyed a position of priority. I would not want to interpolate anything of a political nature, with the Secretary of State for External Affairs sitting opposite me, but I was impressed a day or so ago by a statement made by the premier of Saskatchewan. There is another piece of legislation that should be before the house but has been forgotten, and that is the redistribution measure. It came; an amendment was suggested by the N.D.P., and it passed away. It was a shadow that came before parliament, darkened the house for a moment and then disappeared.
Now we begin to see, in view of a statement made the other day, the reason for that. I am beginning to wonder, sir, whether this priority legislation, followed as it is to be by the renewal of the flag debate, is not based on a determination of the government to have an early election, to which I referred the other day but did not have any supporting evidence. Now I have that of the premier of Saskatchewan, who last Thursday said:
Premier Ross Thatcher said today he believed there would be no redistribution of seats in the House of Commons before the next federal election.
Mr. Thatcher said he had discussed redistribution, under which Saskatchewan could lose four of her 17 federal seats, with Prime Minister Pearson.
"He didn't flatly say there would be no redistribution before the next election, but he expressed doubt that there would be at the rate parliament is moving".
That is one of the most interesting revelations. Out of the mouths of babes comes wisdom. This legislation is part of that priority group that apparently is far more important than any question of redistribution. I would not want to exacerbate the sensibilities of the Acting Prime Minister by bringing in anything of a political nature, Your Honour, but I feel that Premier Thatcher's frank revelation of conversations with the Prime Minister indicates that that must be the purpose and the aim. That is the reason this legislation is brought in at this time, to be followed by the flag resolution; and then, in the event that there is not that submissiveness on the part of parliament to the Prime Minister's diagram, there is going to be an election before there is redistribution.
Loans to Students
The particular subject for discussion today is one of these priority questions. I listened with interest to the minister as he said, as does the bill, that $40 million a year will be made available. I am all for this legislation, but I ask this question. What is the effect of this measure going to be on the universities and other institutions of higher learning, with regard to the numbers of students? What is going to be done on the part of the government of Canada to provide, following consultation with the provinces, the additional plant, laboratory, classroom facilities and so on to handle even a small part of the additional numbers that will enter universities, when facilities are now strained to capacity in every province? What plans are there in this regard?
When we were in office we faced this problem. The province of Quebec took strong objection to the acceptance of university grants. Indeed, the amount had piled up to some $25 million by 1960. The premier of Quebec at that time was the late Paul Sauve. An arrangement was made between the government of which I had the honour to be the head and the government of Quebec whereby this matter was solved for the first time. It had remained unsolved, indeed untouched, for a period of years. During the period we were in office we increased the amount of grants, on a per capita basis, from $1 to $1.50, and in December, 1962 to $2 per capita.
The result of our interest in university education and assistance thereto was that compared with the year 1956-57, when under the then Liberal government Canadian universities received $16 million in per capita grants, by 1962-63 they received $26.3 million and in 1963-64 the amount which would have been expended was some $26.8 million. In other words we were doing something to achieve that objective which the Minister of Finance has described, giving to young men and young women the opportunity to secure education not only in quantity but also in quality.
This is a problem which must be faced. For the first time, during the days of our administration there was made available long term low interest loans to universities for the construction of student residences, which was a tremendous advance on behalf of university education in this country. We made available loans to Canadian universities to construct living accommodation for resident students, and those loans amounted

Loans to Students
in total to more than $41 million. We made possible the doubling of student residence capacity, with new residential accommodation for 10,000. We encouraged university students. For the first time we provided for the deduction of tuition fees for income tax purposes. We also provided special assistance to parents who were supporting their children at university by allowing exemptions even after the students had reached the age of 21. In addition we implemented legislation increasing the monthly education allowance for the children of war dead from $25 to $60 a month. All these things were done to reach the objective so necessary today of increasing opportunities for university education.
I am not going to put a large number of statistics on the record. I am going to suggest instead that hon. members who have not done so read the report entitled "University costs and sources of support" published in 1962 by the Canadian universities foundation. Also a further report by the same foundation and the same author, Dr. Edward Sheffield, concerning the projected student enrolment in Canada in 1976; and finally, to consult figures available from the higher education section of the dominion bureau of statistics.
Without going into detail I should like to summarize one or two projections for the future. There are today some 141,000 university students. That number will greatly increase. Indeed, by 1976 it will be more than three times what it is today. One of the reasons is not only the desire for education but, as the minister indicated, the increasing numbers in our population between the ages of 18 and 24 years. There has been a tremendous increase in this regard. The minister mentioned the birth rate. In 1951 there were only one and a half million in that age group. Today there are close to 1,900,000, and this figure will greatly increase.
Then there is the increase in the percentage of young men and women as well as older people who go to universities. In our day there was only a very small percentage of people who went beyond grade 12, but in recent years the increase in this number has been tremendous. If one goes back to 1951-52 one finds that 4.2 per cent of the population between 18 and 24 years of age were enrolled in university. By this year this figure has approximately doubled. It will continue to increase and will double again to about 16 per cent by 1976. That is

why this is one of those problems-education within the jurisdiction of the province- which we must solve.
However, university education is becoming such a vast and tremendous problem that it requires national endeavour, and that national endeavour has to assist and correlate itself with provincial action by agreement. The number of graduates of universities gives some idea in this connection. The veterans' peak was in 1951-52; the number of graduates that year was about 15,000. In 1962-63 it was 28,913, and in 1963-64 it was 32,250. By 1976 the number will be 95,400.
Not only have the numbers and the percentages increased, but as well the operating cost per student in Canadian universities has mounted tremendously. In my day one's fees amounted to $35 or $40 per year. Today they are 10 to 12 times-I am not speaking about specialized professions-what they were then. The actual operating cost of the university student in Canada in 1956-57 was $1,200. Today it is close to $1,920. By 1965-66 it will be $2,200.
Those, Mr. Speaker, are challenging figures. The operating costs of universities in 1956-57 amounted to $85 million a year. In 1962-63 it was $225 million, and the projection for next year is $325 million. These statistics indicate the need for action. What is being done is beneficial, but it is just a start. It is just a stopgap, if we in Canada are to keep pace with the ever increasing need for university graduates, in particular those in science and engineering.
How are we to finance this? Where is the money to be found? Is free university tuition practical or practicable? Shall we continue to have university students pay increasing amounts in tuition fees to meet the rising cost of university education? I do not think so. Should universities control student enrolment by making entrance standards progressively tougher? Well, I know there are some very brilliant students in this house, men who were brilliant in their university days. But I also know that some of the ablest lawyers in this country found it impossible to pass their examinations and would not have any hope of admission on the basis of present day requirements. I know, too, that some of the most successful Canadians were anything but brilliant in the days when they attended university. For some

reason, over the passing years they outdistanced those whose brilliance was apparent in their university days. I am glad to see the Postmaster General here, because he and I are in agreement on this.


Murdo William Martin: Winston Churchill is a good example of that in another country.


John George Diefenbaker: Yes. The Acting Prime Minister, again free from all political considerations, has suggested Winston Churchill as an example and there are many more. 1 sometimes wonder, though, whether the fact that he was not a success as a student was due not to any lack of intellectual capacity but to the fact that he did not really like the place he was attending. It was too slow for him. He had other views. One has only to read his reports from the Malakand campaign in the 1890's, only a few years after he was unable to pass his scholastic examinations, to be confirmed in this view. He wrote reports of that campaign which in my opinion are equal, if not superior, to anything he ever wrote in later life.
But this is just an occasion when I have been diverted from my subject by a very pertinent observation. If I were to be personal about the matter, I would look over at the Acting Prime Minister and say that he is one of those outstanding examples of high scholarship who showed such promise during his student days.
This student loan plan is an attractive one. It must be recalled, however, that six months after graduation or after the expiry of five years there will be a $500 payment required plus $300 interest. I just mention this, though I am sure the minister has concluded that on the basis of the present day earnings of recent graduates this will really not be difficult to meet. But it deserves consideration. This plan is an emergency measure. It is to be supported generally, I think, by members of the house, but it does not meet the overwhelming problem of advanced education in Canada, a problem which will have to be faced if this nation is to be able to meet in the years ahead the destiny which lies before it.
I will not enter into any further particulars at this time. Various members of the opposition will deal in detail with certain aspects of the subject. I conclude by summarizing what I have said. This question of university education is in my opinion one of the greatest problems our nation faces. We, while in office, make great advances. As I have indicated, this is a further step. I think it would 20220-346
Loans to Students
be the course of wisdom when we come back this fall for the second part of the session- if we do-for a committee of the house to be set up to consider this whole question of advanced education and postgraduate education, so that in a community of co-operation in a field which is above all political considerations the members of this house, and there are many who are interested in this subject, will be able to give a consensus of their views. This having been done, the government would be in a better position to present the question to the provinces in its national context.
This university problem and the necessity of assuring the widest and most soundly based university training to all who are qualified is not solved by makeshifts, however beneficial. This is a field in which we have fallen behind. We are 15 years, I think it is, behind the United States. My hon. friend from Digby-Annapolis-Kings has made a profound study of our position vis-a-vis that of the United States, and I believe that in the course of his remarks he will deal with this aspect of the question.


Thomas Clement (Tommy) Douglas: There can be no doubt as to the need for legislation to provide financial assistance to young people who are desirous of acquiring a university education or higher learning. There was a time when advanced education was thought of as being reserved to a comparatively small proportion of the population, particularly for those who were interested in entering the professions or the higher echelons of business.
That is no longer true. We have now moved into a technological era in which, in order to make a good living and in order to make a useful contribution to society, a very large percentage of our population needs advanced education. This has been shown by the steady increase in the number of students enrolled in universities in Canada. The number has gone up from 62,000 students in 1952-53 to
141.000	in 1962-63. It is estimated that it will double in the next six years and may reach
480.000	by the year 1976-77.
Not only is enrolment at universities steadily increasing but the cost is going up. While the number of students at universities is going up 11 to 12 per cent per year, operating costs of universities have been going up at the rate of 16 per cent per year. Prom the standpoint of the student, what is even more alarming is that since 1957 student tuition fees have risen by 22 per cent. There
54S2

Loans to Students
is no way by which the average student can make up that 22 per cent increase. No student's earnings from summer employment have gone up 22 per cent. There has been a very rapid increase in student fees and the amount of money it is necessary to have in order to get an advanced education has been climbing steadily.
The fact is that in Canada today lack of finances is denying a very large group of young people the opportunity to avail themselves of advanced education. Dominion bureau of statistics figures show that in 1960-61 there were over one million young Canadians between the ages of 18 and 21. It was estimated by educational authorities that of that number over 20 per cent had the mental and intellectual capacity to acquire a university education. But the fact is that Qnly 11 per cent were able to attend centres of higher learning or about 114,000 young people. This means that about half the young people who could have acquired a university education were unable to do so and I think it would be a fair assumption that a fairly large percentage of them did not acquire a higher education because they lacked the necessary financial resources.
It is significant that the burden of finding the necessary money to attend a centre of higher learning is very naturally most prevalent among young people who come from homes that are in the middle or lower income brackets. The Financial Post of February 8 last carried a survey which looked into where most students get the funds to attend university. They came from a variety of sources, some from private scholarships, some from provincial scholarships, .some from money lent to students by relatives and so on; but the two large items ->y which students financed were summer work, which accounted for 28.6 per cent of all i evenue which students got, and funds supplied by parents, which accounted for 31.9 per cent. This means, of course, that where parents are not able to supply these funds students are unable to get an education.
The University of Toronto advisory committee on ex-service students made a survey. Their study revealed that whereas normally only 20 per cent of the university student population came from the homes of industrial workers, 32 per cent of the veterans came from such homes; and whereas 55 per cent of the normal student population came from the homes of professional, managerial and business people only 36 per cent of the veterans came from such homes. This helped

to establish at the University of Toronto at least that the number of students suited for university education from low income groups was significantly larger than the pitifully small number who can ordinarily obtain such an education.
The Canadian union of university students has done a great deal of work on this matter. They hired a group to make a survey for them and tried to ascertain the effects on students in Canada of the lack of financial resources. I have here a table showing the number of students who over the years have had to interrupt their education because of a lack of money. It is interesting that the bulk of them, of course, fall in the category of those who come from homes of fairly modest incomes. I can sum up their whole survey by quoting from a speech which was made to members of parliament in room 112N by Mr. Patrick Kenniff of the Canadian union of students on June 25 last. He summed up the situation by saying:
It is very significant that among students whose family income is less than $5,000 per annum, over 30 per cent are required to interrupt their university education to go out and earn the necessary money to continue. It is also interesting to note that this rate drops sharply as family income increases. At $6,000 the interruption rate is 15 per cent, while at $8,000 it is 3 per cent. Without increased student aid now, we are risking making financial means the chief criterion for a university education right across the country.
Therefore, Mr. Speaker, I certainly agree that legislation to assist needy students is long overdue in this country. I want to say, however, that the legislation now before us is, of course, a long way from the promises which were made by the Liberal party and by hon. members opposite not only before the election but even after the election. I have here a photostat copy of the Toronto Daily Star of May 1, 1963 with a great banner headline saying that Ottawa is going to make available 10,000 scholarships of $1,000 each for four years to students. This was announced by the Minister of Northern Affairs and National Resources (Mr. Laing). These scholarships were promised by Liberal speakers in every corner of the country. No scholarships have so far appeared. The student loan legislation now before us is a poor substitute for the 10,000 scholarships that were promised.
This legislation is really not going to cost the government very much money. Someone asked the minister how much a while ago and he said he had made estimates and that he would tell us when the bill is in committee of the whole. On the assumption the minister

is going to pay 5 per cent interest on this $40 million, and assuming it is all lent out in any one year, it is estimated there will be a payment of somewhere in the neighbourhood of $2 million a year or slightly more if the minister has to pay a higher rate than 5 per cent. This is not a very heavy contribution toward removing the financial barriers or, to use the minister's phrase, to ensure that no competent student lacks financial support to go beyond high school.
The fact is, Mr. Speaker, we are not really going to grapple with this problem until we make university education absolutely free to every young person in Canada who has the intelligence to acquire it. After all, education is no longer a luxury. Education is something which is absolutely essential to enable young people to make a living and, consequently, to enable them to make their contribution to modern society in this era of the scientific revolution. After all, tuition fees now account for at the most 28 per cent of the cost of operating a university. This means that society as a whole pays up to 72 per cent of the cost of the university education of those who are able to put up the other 28 per cent. If a student or his parent cannot put up that part which they must pay through tuition fees, then all the rest of the benefits of a university education which are provided by society as a whole are denied to that student.
Most of the modern countries in the world today are now providing free education to university students and to students going on in the fields of art, music and dramatics. In the United Kingdom, ever since the education act of 1948 and in the Scandinavian countries, even in a little country like Israel with all the economic problems which confront it, free higher education has been provided. In Israel special allowances are provided to enable a student to go to university, and there are special allowances for those who are married. Dr. Cyril James, a former president of McGill University, said this:
A young Canadian from a family of modest circumstances has less chance of getting a university education today than a youth in any other country with which I am familiar.
This, Mr. Speaker, is the most damning indictment that has ever been levelled at this country. We are years behind most of the modern industrial nations of the world. We have a much larger drop-out of students between grade 1 and graduation from university than most of the countries in western Europe and larger, of course, than the United States.
20220-346i
Loans to Students
I say that one of the first things we have to do in Canada is to abolish university tuition fees. The government of Canada could do this by increasing its per capita grant to universities on the condition that the universities, in turn, discontinued tuition fees. This would be a comparatively small contribution financially in terms of the vast need. It would be an advantage not only to the individuals concerned, but for the technological development of Canadian society which in the years ahead must compete with other countries that have highly trained personnel.
I readily acknowledge, of course, Mr. Speaker, that neither scholarships nor student loans will meet the real problem of university education. The real problem of university education, over and above the things I have been mentioning, is the lack of educational facilities, equipment and trained staff. There is little value in enabling a young man to go to university if there is no classroom for him to sit in, if there are no professors to teach him and no laboratories in which to do his experiments. The crying need in Canada today is for capital to expand the university equipment and facilities. The universities have been struggling to cope with the demands. Their capital expenditures have risen faster than enrolments, because scientific courses require expensive laboratory equipment. For instance, in 1956-57, university capital costs were only $21 million. By 196162, they had gone up to $136 million. It is estimated that for the three-year period 1963-64 through 1965-66, some $800 million will be required.
Now, Mr. Speaker, it is a sad commentary on our society that we have no difficulty getting capital for supermarkets, filling stations and more hamburger stands, but we have not as Canadians been able to find the necessary capital to expand university facilities in order to train the young people who will supply the technical personnel that will decide whether or not Canada can compete in the scientific era of tomorrow.
We in this party have been arguing throughout the years that the federal government must provide social capital which is necessary to enable the universities to keep pace with the growing demands for space, equipment and trained personnel. The capital requirements are such that they are far beyond the financial capacities of the provinces. As a matter of fact, there is no reason why the provinces should be saddled with this capital cost of university expansion because the universities in the respective prov-

Loans to Students
inces train students from all over Canada as well as from outside of Canada. All the students trained in the province of Quebec do not come from Quebec. All the students trained in the province of Nova Scotia do not come from Nova Scotia. Therefore it would be demonstrably unfair to burden the people of a particular province with the capital cost of supplying university plant and equipment.
We say that one of the responsibilities of the federal government is to supply the social capital which is necessary. We have been starving the universities. If we continue to do so, we will of necessity have to limit the number of students who can attend university. If we limit the number of students in the manner we are doing now by raising these tuitions fees, the students who will be shut out of the universities will be the students who come from homes that are in the lower and middle income brackets. If there is anything that ought to be determined on the basis of individual ability and not on the basis of financial ability it is higher education. There are hundreds of thousands of young people in this country who can make a contribution to our society and can live full, useful and meaningful lives if the university facilities are available and if we make it financially possible for them to attend.
With reference to the bill before the house, in my opinion it is very largely window dressing because the ability to secure a loan under this legislation will not depend on the Minister of Finance. It will not depend on the provincial authority which grants the eligibility certificate. It will depend upon the whims of the local bank manager. It is all very well for the minister to say, as he said in his speech, that if a student is not satisfied by one bank he can approach another. Yes, he can keep on approaching banks. He can spend a week or two going from bank to bank, but what is the experience of the banks?
I do not say this in criticism, but what is happening is that every branch bank is allocated a certain amount of money per month and per quarter, which is available for making loans. It is not an unlimited amount and a bank manager is under the necessity of making the best showing he can. As the Porter commission points out, he can make commercial loans and, by charging the regular 6 per cent interest, not on the money due but on the total amount of the loans, he

can make anywhere from 9J to 11} per cent interest. I myself have seen loans that made as high as 12 and 14 per cent.
If a bank manager has to choose between lending money to a student at 5f per cent- as a matter of fact during the period that the Minister of Finance is going to pay the interest it will probably be less than 5f per cent-and making a loan to one of his commercial customers and getting a return of 9 to 11 per cent, it is not very difficult to see who is going to get the loan, because there are not unlimited funds. The bank manager has only a stipulated amount of money available for lending purposes and he is anxious to make the best possible showing he can.
If anyone doubts that that is what is going to happen I suggest he take a look at the Small Businesses Loans Act and what has transpired under its operation. That is an act which was passed by the previous government in 1960. Most of us approved of it and thought it would be helpful to small businessmen. But last fall the Minister of Finance admitted in the house that although that legislation makes available up to $300 millions in loans, in the years of its operation only $90 million has been lent out-less than one third of the money made available for loans to small businessmen.
During the Christmas recess I decided to make some inquiries as to why more use had not been made of this act. I talked to businessmen and chambers of commerce and they told me many people had made application but had not been able to get loans. I then talked to bank managers and they said to me very frankly, "If you were only allowed $200,000 to be lent out in the third quarter of the year, would you lend it out under this legislation at 5 per cent when you could lend it out otherwise and make a higher rate of interest and a better showing for your branch?" The answer is obvious.


Walter Lockhart Gordon: May I ask the hon. member a question? How does he explain the fact that the present amount available under the Farm Improvement Loans Act, $400 million, which was the amount for the current three year lending period, is expected to be used up prior to the end of the period? I think the hon. member knows there is a motion on the order paper to increase it to $500 million, and under that piece of legislation the rate allowed is only 5 per cent.


Thomas Clement (Tommy) Douglas: The minister is talking about the family farm improvement loans. For

one thing, Mr. Speaker, that scheme has been operating over a long period of time and I have some experience of it in rural communities where we made surveys on family farm improvement legislation. This applies largely in rural areas where the local bank managers do not have too much competition for the amount of money available to them for lending purposes. This is not true to the same extent in urban areas.
If the minister is going to give explanations, will he explain to me why small businessmen have received only $90 million in loans instead of the $300 million available, although that act has been in operation for six years?


Walter Lockhart Gordon: May I ask another question.


Thomas Clement (Tommy) Douglas: Yes.


Walter Lockhart Gordon: Does my hon. friend not think there will be considerable competition on the part of the banks to establish commercial relations with these young men and women from whom will come the leaders of the future? I know in my experience banks have been very anxious to secure accounts early in people's business and commercial life, if they think they are going to develop into important customers. Does the hon. member not think there is something in this? I know the banks do.


Thomas Clement (Tommy) Douglas: I hope there is, but I have had enough dealings with bankers to know this warm sentiment that the minister expresses is not likely to be very widespread.


Walter Lockhart Gordon: Please don't misunderstand. There is nothing warm about this sentiment; it is cold business acumen or judgment.


Thomas Clement (Tommy) Douglas: Exactly, and it is because it is cold business acumen I am saying that when a bank manager has to choose between one commercial customer doing business with him every day, who wants to borrow $5,000 on which the bank manager can make from 9 to 11 per cent, the manager will probably find that a better loan to make than loans of $1,000 to five individual students, in the hope that some day those students will be back living in that community, and will be in business and be his customers in the future. I think the minister is stretching it pretty far.
As a matter of fact the minister is doing his best to put a good face on a pretty shabby piece of legislation. This legislation is like so much that the Liberal party brings into the house. Their whole principle seems
Loans to Students
to be, "How little can we get away with? What can we do that will look as though we are doing a great deal when actually we are doing very little?" This is like the 12 mile fishing limit. It is like so much of the Liberal legislation that pays lip service, to enable the minister to come into the house and say we are now going to reach the stage when no young person will be denied university education merely because he has not got the money.
He ought to say there will be no young person denied university education provided he can get a bank manager who will lend him the money. He did not say that. A moment ago the minister said he could not set up lending institutions all over the country. I said he did not need to do that, and of course he does not. He has a very simple remedy at his disposal and that would have been to have co-operated with the provinces in setting up a student loan fund in each province, administered by the province. Then the federal government could turn the money over to that student loan fund committee, which committee would then be in a position to allocate the money to students in the form of loans on the basis of the need of the students and on the basis of the students being able to show they have been conscientious and will make good use of the money being lent to them.
In that way there would be student loan committees whose primary interest would be in seeing that young people get an education, rather than having the loans screened by people whose primary interest will be safeguarding their money and making sure they get the best possible return for their employer, the banks for whom they are working. I do not think it is too late yet for the government to change its mind.
I have had some experience with this question of student loans. We found that the only way we could really make sure that students got the money they needed was to do as follows. I am talking in this case of a province. The province went out and borrowed the money, put the money into a fund, and set up a committee of representatives of the teaching profession, the universities, the student body and the department of education. They made the loans available out of this fund. The only test was, did a student need it, and was the student likely to make good use of it? Those are the only tests there ought to be. But when a student has to run the gamut of the gimlet eyed bank manager, the

Loans to Students
student who is going to get the loan is ofttimes going to be the student whose father has good security, or the student whose father has an account with the bank and the bank manager wants to keep on the good side of the family. But what happens to the boy whose father has no bank account, who may not even have a father, and who has to go to the bank manager with no security, with no prospects, just hoping that the bank manager will see fit to make him a loan? The minister says that if he does not get it from one bank, he can always go to another. He will certainly be doing that; he will know all the banks in the community before he is finished.
There are one or two minor things about the act that I just want to mention before I sit down, Mr. Speaker. I am surprised that the minister has not put in the act the interest rates, but I understand from his statement that he hopes, of course, they may drop from time to time so he is going to set the rate by regulation. I am a little at a loss to understand why there should be two interest rates, an interest rate which the borrower will pay when he becomes liable, which is six months after he graduates-that rate is 5J per cent- and a lower rate which the minister expects to pay during the period that the minister is responsible for the payment of interest. After all, the federal guarantee is behind the loan, and it seems to me that a rate of 5| per cent is very high under those circumstances.
I am wondering why no provision is made here for graduate students, because certainly $1,000 a year will not begin to meet the requirements of a graduate student; and these are increasingly necessary particularly in the fields of science, engineering and medicine. At the present time the student union estimate that an undergraduate, if he is staying at home, needs around $1,100 a year, and if he is staying away from home he needs some $1,550; but graduate students, particularly if they have to go to the United States to do Ph.D. work, need anywhere from $2,500 to $3,000. These are the kind of people we will have to train if we are going to have, in turn, professors to train the other students who are going to be coming to our universities in increasing numbers.
I am wondering why there is no provision in this legislation for loans to be made by credit unions with the same guarantee that is provided here for the banks. Hundreds of credit unions all across Canada have been

lending money to students for years with the guarantee of the parents or members of the credit union, and I imagine these credit unions will continue to make those loans to needy students. Why should they not have the same guarantee in this legislation that the banks are going to enjoy? I hope that when the legislation gets into committee of the whole, the minister will be prepared to accept an amendment or introduce an amendment himself to include credit unions, because I am sure he is aware that there are vast areas of Canada now in which there are no chartered bank branches. I see my hon. friend for Humboldt-Melfort-Tisdale (Mr. Rapp), who I am sure will agree with me that there are great stretches in the rural parts of the prairies where there are no chartered banks; where the only banking in the small rural communities is being done by credit unions. My hon. friends from the province of Quebec know that the young people there have been trained from the time they start in public school to put their money in the caisse populate.


Gilles Grégoire: Exactly.


Thomas Clement (Tommy) Douglas: They are used to dealing with the credit union movement. I see no reason why, if the government of Canada is going to guarantee loans to students, it should not guarantee them to the credit unions and to the caisse populate as well as to the chartered banks of Canada.


Gilles Grégoire: Hear, hear.


Thomas Clement (Tommy) Douglas: There is one small matter I want to mention to the minister merely because I hope he will give some thought to it and will give us an explanation when we get into committee of the whole. I am not a lawyer, but it strikes me as very strange that in clause 2, paragraphs (b) and (k)-I know I cannot discuss the clauses of the bill -there is provision for certain things to be done by the lieutenant governor in council. Lieutenant governors in council may pass orders in council on the basis of a provincial statute. I do not know how they can pass orders in council on the authority of a federal statute. It seems to me that somebody either has a very good explanation which indeed is ingenious or somebody has not thought about it and we are liable to be in great difficulties.


Mr. Nowlan:: It will have to be ingenious, but will it be constitutional?


Thomas Clement (Tommy) Douglas: It can be got around, of course, by the provinces enacting legislation and passing orders in council under their own legislation; but they certainly cannot pass orders in council under this legislation. This is something which should be looked into.


Mr. Graffley:: It is the new centralist look.


Thomas Clement (Tommy) Douglas: In closing, Mr. Speaker, may I say that this legislation will be of some value, and I hope the minister is right and that it will be of considerable value. It will allow loans to be made, when the whole $40 million is put out in any one year, to about
40,000	students. Since these students will be at university for three or four years, assuming it is four years only 10,000 new students a year can come on to the plan. If the average length of stay of the student is three years, we will be able to take on some 13,300 additional students per year. I suggest that this is totally inadequate. To be bringing 10,000 or 13,000 or even 15,000 additional students a year into university enrolment is completely inadequate in light of the fact that we have probably in excess of 100,000 students a year who are capable of making use of a university education or training at some higher centre of learning. If it is correct-and this figure seems to be general in other countries-that
20	per cent of the age group between 18 and
21	should be university material, then we should be increasing our university enrolment by something over 100,000.
This legislation, Mr. Speaker, will not do it. This legislation is similar to giving one solitary peanut to a hungry elephant. It will help. But let the government not feel that it has dealt with the whole problem of advanced education. Let it not throw this legislation as a sop to the problem of how to remove the financial barrier to providing education to the young people of Canada. We just have not done that. This is a useful step, but the government still has to tackle the much more fundamental proposition of increasing operating grants to universities so that they can remove tuition fees. The government also has to start making capital grants to universities so that they can expand their facilities, if we are ever going really to tackle the problem of bringing Canada into line with other modern nations so that every young Canadian will be able to get a university education irrespective of the financial ability of the parents of that young person.


Mr. R. N. Thompson (Red Deer):: Mr. Speaker, it is a pleasure indeed, as one who belongs to the educational profession, to
Loans to Students
speak on this bill which is before us. Certainly the government deserves commendation for bringing it in. Certainly also the principle is sound, as far as it goes. But I do not think it can be counted as anything more than the first step toward meeting the tremendous educational needs which exist in Canada. I say the principle is sound because I believe it is well that we leave some of the responsibility for getting an education up to the student himself, who has the opportunity of going on to school.
I look back in my own experience and realize that I would not have been able to go beyond high school if a very kind, dear elderly lady who was a neighbour of ours had not done for me exactly what this bill is intending to do for many other Canadian students, namely provide the money to go on to school. I was not even asked to pay interest while I was going to school, because it was assumed I would repay it when I was at work, using the benefits of the education I had received. Therefore, this is a good piece of legislation and we are happy to support it, albeit that it is only the first step and that there are some basic weaknesses in it.
As the minister has already pointed out, a number of provinces in Canada have preceded the federal government in bringing in some similar type of legislation to assist students within their own boundaries. While some of this legislation may not provide as much money as will these loans, to an individual student, in other ways it is far superior in its operation than this legislation. I think it is encouraging-and I would pass this piece of information on to the minister-that in the province of Alberta, where a student loan fund has been operating now for a number of years, they have not had a" single student default in his payments under the operations of the loan fund. I am sure that this speaks well for our young people. I think it also speaks well for the principle under which this legislation is being set up, because it places some responsibility on the individual, and very often that responsibility assists the individual in doing a better job and perhaps being more purposeful and understanding while he is in school.
An amount of $40 million in a student loan fund represents, if students use the maximum amount of loan available to them, 40,000 more young people going on to school who might not have been able to do so otherwise. However this figure, while it seems staggering, is not just as much of a windfall as it seems to indicate. Because what happens in the

Loans to Students
second and third years of this further education? Supposing 40,000 students are successful this year in receiving loans amounting to $1,000 a piece. Or let us say 50,000 students receive loans, because some of them may be asking for less than $1,000 each. When they wish to continue on at school for a second year they will require the same amount of money. Yet as I read this legislation, this amount will not double next year. This will certainly place a restriction on what at first sight seems to be a very optimistic picture.


Thomas Clement (Tommy) Douglas: It is 15,000 students a year at the most.


Robert Norman Thompson: The hon. member says
15.000	students, but it is hardly that many. It seems to me that the government will have to reconsider this because I am sure that after the first year of operation of this loan fund more than 12,000 to 15,000 students will need help.


Walter Lockhart Gordon: Where do you get your 12,000 to 15,000?


Robert Norman Thompson: The minister asks where I get these figures. According to this legislation, the maximum loans each year will total $40 million. Does that mean that there will be $40 million next year in addition to the loans which are made this year?


Walter Lockhart Gordon: That is correct.


Robert Norman Thompson: Or does it mean that only
40.000	students who this year are going on to school will be able to continue next year, and that not until some of those students drop out will there be replacements?


Walter Lockhart Gordon: It will be $40 million the first year and then the amount will go up. It will escalate to about $200 million at the end of the fifth year, which will mean-


Thomas Clement (Tommy) Douglas: In a single year?


Walter Lockhart Gordon: It will go up at the rate of about $40 million a year, we estimate, for the first five years, and after that it will go up at a faster rate. I thought the figure the hon. member mentioned of the number of students was not quite correct. I agree with him that the number is far too few, but we are not intending to limit it to those numbers at all.


Robert Norman Thompson: According to what the
minister says, if this year 40,000 students applied for a $1,000 loan this sum will be required again next year, which means there will be no new students next year able to
[Mr. Thompson.}
get these loans because the government will have to carry through next year the obligations made to the students this year. Certainly this limits the potential of the legislation unless the government intend to escalate each year. I think this is something which the minister must clarify and reconsider, because we have a greater obligation to students who want to go to university than just those who want loans this year and who intend to go on to finish their education.
The success of this legislation will not be known until it has been proven whether or not the students will be able to get loans from the banks; in other words, whether their credit is going to be acceptable to the banks so that the students will readily get these loans. As I read the legislation, I understand that the parents will not have to share in the responsibility of paying back these loans. If bank managers are going to operate as they do in normal commercial transactions, they will have a great problem when dealing with youngsters who are 18 years old in satisfying themselves as to the credit rating of a student.
However the need for this type of assistance is urgent in Canada. It is estimated that there are approximately 600,000 Canadians, and the figure is a conservative one, in Canada's work force today under the age of 19 years. I maintain that no young Canadian in this day and age is really fit to go out into the work force equipped to earn his own living before the age of 19. If we can assist 40,000 students a year, each year, to go on to these higher fields of education it will be a strong and substantial beginning in helping our young people to reach the standards of education they need. I do not think there is any doubt that a university education or its equivalent today is just as important in terms of job buying power as was a high school education in my day or a public school education in the days of our fathers and grandfathers. Therefore as has already been brought out very clearly by the hon. member for Burnaby-Coquitlam (Mr. Douglas), the greatest and most urgent need in our country at this time is to make available to our young people the education they need to carry their own load and earn their own living. I commend the government on this first step. In my opinion, something has been accomplished, albeit the principles upon which it is based are not as strong as they should be.
It was my privilege in my years overseas to assist in the development of an educational

system right from the beginning in the country of Ethiopia. During the fascist occupation of that country between 1935 and 1942 no Ethiopian national was permitted to go to school, except to a political school. So we had to begin right from the beginning when we set up an educational system in 1942 and 1943. I would draw the attention of the minister concerned to the fact that even in a country such as Ethiopia which we might, from our position, consider primitive and which is certainly undeveloped by our standards, education at all levels is free, even to graduate level, as long as the student is able to obtain the necessary marks. This is the objective toward which we all must work. It is in this light that the present legislation represents only a small beginning. Other countries are far ahead of us in providing opportunities for education.
I was startled by several statements the minister made. In referring to the method by which this student loan fund would be administered he said the students themselves would have to go to their local bank managers after getting clearance or approval from some provincial authority. Subsequently he said there would be no compulsion on these bank managers to grant these loans. And then, as if to justify that statement, he said: "After all, they will be lending out their customers' money". Surely, the hon. gentleman is not so ignorant of banking practice as to believe what he said. Or did he merely think members of this house would believe him when he made that statement? Actually that is not what is done at all. That is not how banks operate. It was certainly an amazing statement to come from a man who is charged with the responsibility for looking after the finances of this country. Just to correct him I would refer to the evidence contained in the official report of the banking and commerce committee here in parliament. As reported at page 455 in 1939 a former governor of the Bank of Canada said: "The banks cannot, of course, lend the money of their depositors". Earlier at page 398 of the same record he said: "They do not lend their deposits, of course". To hear the Minister of Finance make a statement to the contrary is startling. The hon. gentleman went on to say something about the government being responsible for the national purse, and being the protector of the nation's taxpayers. I suggest that both the national purse and the taxpayers need a little more protection than
Loans to Students
they are getting today particularly when the Minister of Finance gives us such wrong information as he did this afternoon.


Mr. Herridge:: And after he has voted for Social Credit principles, too.


Robert Norman Thompson: Some of us talk a great deal about social capital. The hon. member for Burnaby-Coquitlam (Mr. Douglas) referred to it this afternoon and said it was necessary for the federal government to make available the social capital required to meet the educational needs of our country. That statement is correct, because certainly if social capital is classified as being the capital necessary to develop our capital resources it is not limited only to physical resources; it extends to the capital development of our human resources also, and it is this category we are considering this afternoon. Student loans fit right into this class of capital. However as long as we are to operate under the present system which insists on taking our social capital needs out of taxes instead of from our own credit sources, our ability to meet the demand for both industrial and social capital will be very restricted. I suggest to the minister that we must mobilize our financial and credit resources to provide the capital which will be needed if the tremendous cost of interest which would otherwise fall upon the taxpayer is to be avoided. I have just made a calculation without working it out in detail and I am sure that by the time the fifth year arrives, when there will be approximately $200 million out on loan-I think, in fact, there will be much more because these loans cannot be restricted to the 40,000 students who are expected to apply initially-the taxpayers of this country will have to pay a very substantial amount in interest on this capital fund. Certainly, in ten years, when the fund will have reached half a billion dollars-and I believe it will be even more when that time arrives-interest charges will run into a couple of hundred million dollars. This is not something to be regarded lightly. Nor would it be necessary to pay interest charges if we were to use our own public bank to provide this public or social capital which we are considering. Certainly, this is one of the legitimate spheres where it ought to apply.
The Leader of the Opposition (Mr. Diefen-baker) has indicated the tremendous need to increase the number of our young people attending institutions of higher learning. One factor likely to limit the scope of this legislation is this. I doubt whether we shall be

Loans to Students
able to provide the physical facilities necessary to accommodate the tremendous increase in the number of students if an attempt is to be made to accommodate all those students who wish to take advantage of the legislation. The very fact that it will take time to develop these facilities will afford us an opportunity to bring in much more substantial legislation designed to meet our over-all academic needs. Again we return to the question of social capital. The cost of the physical equipment and accommodation which will go into the provision of these additional facilities will be tremendous. Under our present system we draw our social capital from the commercial or tax market, which means we, the taxpayer, are going to pay double the cost of this expansion as compared with what would be necessary if we were to raise the capital through our own public bank. This involves no small considerations, Mr. Speaker, because the status quo cannot be continued indefinitely. The pressures which are building up within our society will shortly demand that something altogether different be done.
Suppose our population in 10 years or in 1975, let us say, reaches a figure of 30 million people, as I am sure it will. Suppose that the percentage of our young people proceeding to a university education remains at approximately 1J per cent, the figure now. This means that we are going to have 450,000 university students in school within 10 years or five times as many as we have now. How can we ever meet this need with this kind of legislation or with the rate of progress we are making in meeting the need for physical accommodation for these students?
The Canadian education association, meeting in convention last year, said that the greatest need in education today is financial. This is true. But it is also true that we cannot expect to continue meeting the financial need from the pockets of the taxpayers because they simply cannot continue to bear the load. In that regard it does not matter whether the federal government or the provincial governments collect the taxes because the people are the ones who have to pay in either case.
We are fortunate in Canada that we have a tremendously wealthy nation. We have the timber, the steel, the cement, the manpower and the know-how to put all these things together to build the finest educational facilities of any country in the world and make them available to every student who wants to go on to higher education and who at the same time has the initiative and ability to do so. This is the challenge that is facing us.

The question has been asked this afternoon-. Where is the money to be found? If we are to continue to take money out of the same well from which we are taking it now, that well is about to run dry. Unless we bring in basic economic reforms there will be no possibility of our finding the money to do this job and we are going to be found guilty of robbing our own children of the opportunities they must have in order to take our places after we are gone.
Therefore I say that we must lay plans now to mobilize all our resources for the development of our nation as this nation must and deserves to be developed. The minister has said that the government, as the controller of the national purse and the protector of the national taxpayer, has these things at heart. I disagree with him very much. In a very particular way this responsibility falls on him as Minister of Finance at the present time. But I do not believe that the minister under present policies, to which he not only gives lip service but which he follows in application, is actually controlling the national purse as it should be or protecting the taxpayers' pockets either. Therefore I say that while we support this legislation in principle, while it is a first step toward meeting the needs now facing us, certainly it is only one very small step toward the ultimate goal which must be ours, that of making education available to our own children.
The suggestion of the hon. member for Burnaby-Coquitlam that the government should have co-operated with the provinces in setting up within each province a student loan fund operated and supervised by the provincial government is a sound one. I think it is one deserving of the consideration of every member of the house and particularly the government and the minister concerned with this legislation. We speak a great deal about the responsibility for education belonging to the provinces. The only reason the provinces are unable to meet their educational responsibilities at this time as they would like to, and as they should, is the financial limitations that are placed upon them primarily because of the inadequate federal-provincial fiscal arrangements now in existence. In my opinion it would have been a far better policy for the government to consult first with the provinces and obtain their advice on this matter because they have had far more experience than the federal government has had in this field. I believe

they would have received this advice if the course suggested by the hon. member had been followed.
I would go even further than he did and say that these student loan funds within the provinces should have been set up with social capital from the Bank of Canada and not out of the taxpayers' pockets. A revolving fund could have been established and as students completed their education and repaid the money it would go back into the fund to be used over again. This is a very fundamental and basic principle in developing funds of this type intended to perform a similar function. The process is a continuous one. If the minister had set up this kind of fund to be administered by the provinces he would not be faced with the dilemma confronting him now in trying to figure out how he will be able to give a further 40,000 students next year the same opportunity he has made available to 40,000 students this year.
I do not intend to speak longer on the bill at the present time. We will support it because we believe it is a step in the right direction, but we would again emphasize that it certainly does not reach the goal that should be reached nor is it trying to do so by a method that would have been far more satisfactory not only to the federal government but to the provinces, and most of all to the students it is intended to assist.


Gilles Grégoire: Mr. Speaker, in a debate such as this one must begin by distinguishing between the objective to be reached and the means to reach that objective.
The objective to be reached here is, of course, to see to it that those who are able to benefit from education, that is, our young people, are given access to the best educational systems, so that they may be better prepared for life.
The legislation introduced today is only a method, of course, and can only be a means to attain that end. The goal to be attained is to develop the educational field, so that our young people may have access to the various schools, colleges and universities. In order to do this, the essential factors will be, first the schools, and then the colleges and universities. Moreover, there is a need for teachers, books, material, and finally, our young people must be able to reach all these educational stages.
Loans to Students
There is no doubt that we favour the proposed objective and that we want our young people to have access, without any restriction, to the schools, colleges and universities throughout this country, and to avail themselves of the best educational system and the best teachers.
Today, one way of attaining that end is submitted to us. However, under the proposed legislation, there are no means of building more colleges or universities, developing laboratories or training a greater number of teachers.
This legislation is only supposed to be part of the general machinery of our educational system, which aims at giving our young people financial access to our educational institutions. And how do we go about it? Simply by saying: We shall lend you money up to $1,000 a year, for five years, and you will repay this loan at the end of your studies.
Education is said to mean a country's enrichment, but I wonder why, every time this country is to become wealthier in some way, either by developing natural resources or by allowing our young people to continue their studies, the only means that is found is to let them incur a debt. I find this surprising aspect in every piece of legislation submitted by the Minister of Finance (Mr. Gordon). There is apparently no possibility of developing this country, of increasing its wealth and assets, without putting it in the red by incurring a considerable debt. A surprising fact, indeed. I cannot understand why this country could not be developed without getting further in the red.
I think we should launch an inquiry on the subject, in order to increase this country's prosperity, either by developing its natural resources or by using its human capital, without going further into debt.
And how are we treating our young people? At the end of five years, they will be graduated as doctors, dentists, lawyers or engineers, and they will have incurred a debt of $5,000, even before they start practising their profession. They will be 25 or 26 years of age and, in the case of a doctor or an engineer, perhaps even 30, if they specialize, and they will be burdened with a debt of $5,000 even before they start their career. This means that right in the first year when they will begin to practise their profession, after starting their studies at the age of four or five, and finishing them at 25 or 26, they

Loans to Students
will already have debts to pay off to the banks, as the result of loans made under this legislation.
Moreover, they will have to obtain further loans in order to buy the required equipment for their offices and, when getting on in years, they will owe fairly large sums.
In fact, in the case of a student in dentistry, he will probably have to borrow $7,000, $8,000 and even $10,000 in order to buy his chairs and all the required office equipment and, in some cases, his debts will be paid off only at his death when the insurance company will extinguish his debts with the premiums he will have paid all his life.
In my opinion, if the Minister of Finance is really eager to help young Canadians so that they might help in the development of this country, he should think of a system other than the debt system.
I note that the federal government has acquired the habit in recent years, of encouraging all classes of Canadians to get into debt. In fact, under the farm loans scheme, farmers are getting into debt. The same policy is followed in regard to rural development; again, the farmer is being involved in debt. Legislation concerning loans for industry and trade has already been passed; now we will have loans for students. The federal government has become a lending agency, which gets everybody into debt, from the cradle to the grave. And before long, there will be loans to enable Canadian citizens to borrow to pay the cost of their own funeral, because frequently families have not enough money for this purpose.
It is exactly the policy that this government seems to follow and, in order to make us forget what is behind all that, namely the continuous running into debt of the individuals, they gild the pill. In fact, the Minister of Finance did not mention any repayment. He merely said: Education must be developed. Then, in utter confusion he takes the objective for the method. As far as the objective is concerned, everybody is in favour. But with respect to the financial method, for instance, we do not agree.
Students should have access to institutions of higher learning, to colleges, universities and technological institutes. Very well. But why push them into debt? Why force those young people to start in life with a debt of thousands of dollars on their shoulders, even before earning one cent? That is what we cannot approve in the legislation before us.

And how will those loans be granted? The chartered banks will create the money to enable our young people to continue in school. But those chartered banks enjoy an exceptional privilege. In fact, when a young man goes to the bank, the manager says: "Very well, my friend, we will lend you the money you need. The federal government will pay the interest and guarantee the loan. We will lend you $1,000." Then, all the bank manager has to do is to take his pen and a piece of paper and make an entry in the amount of $1,000 in the young student's ledger. He will have created $1,000 with no more trouble than that. Then, bankers will be getting rich at the expense of students as they are now getting rich at the expense of farmers, industrialists and businessmen for whom the federal government guarantees certain loans.
That is exactly what happens. And the almighty bank, not only will keep on doing like in the past, but will also develop education in our country.
It is really a shame to see that so much power is given to that organization which is getting richer on the pursuance of public works or the development of natural resources in this country and even today, that organization is called upon to push our young people into debt even before they start in life. Indeed, those young students will start school owing a debt to the most powerful banking institutions.
And when a young professional, a doctor, a lawyer or a dentist wishes to open an office, he will have to borrow again in order to purchase the necessary equipment, and maybe to pay the rent for the first few months. The credit of the young student will be practically exhausted by then. The banks will hesitate to allow him another credit margin to open an office, especially when we know that, in certain professions like medicine, science, dentistry or business all the necessary furniture and equipment cost a lot. Then, the young professional will have the greatest difficulty to start practising and the government will have to introduce other legislation to guarantee loans to young men who have completed their studies in order to help them open an office and practise their profession. In this manner, they will be indebted all their life.
Mr. Speaker, there is another point on which I would like to insist. The measure under consideration comes after many other measures by which the federal government

interferes more and more in an exclusively provincial field as specified by the constitution, that is education.
There have been grants to universities, grants to technical schools and, not long ago, the act providing for an allowance of $10 to students was passed. Today, we are considering a measure providing for loans to students. We already have special scholarships. In fact, for a number of years, practically every session we have had before us new federal legislation increasing the intrusion of the Canadian government in the educational field.
In general, education gives rise to a number of problems which can only be settled by united action, not by piecemeal and inadequate expedients. At present, the federal government takes certain steps in the field of education and, a little later on, a province takes other steps, with the result that there is no uniformity within the educational system of the provinces. Why is this? Because too many governments have a finger in the pie.
Instead, why does the central government not transfer to the provinces part of its taxation powers with respect to individuals and corporations so that the provincial authorities may carry out on their own a responsibility which is given to them by the constitution, the development of education within their territory.
In the province of Quebec, we already have a loan scheme, a scholarship scheme. And knowing the present Quebec premier, we can imagine that this new federal intrusion in provincial affairs will enable Mr. Lesage, by accepting those new loans to students, to keep the money which used to provide loans and scholarships to students. Indeed, that is what he did when the federal government increased old age pensions and raised students' allowances by $10; he kept for himself what he used to give. It will be the same thing with those new loans.
Then, the provinces will be inclined to withdraw their scholarships and say: use the federal loans to students scheme.
There are replacement payments, but they are always controlled by the federal government.
Mr. Speaker, we cannot accept the principle of this bill. We agree with the objective of the program, but not with the method advocated, at the present time, for it amounts to another interference, on the part of the
Loans to Students
federal government, in a field over which the provinces have the exclusive jurisdiction, that of education.
After this, people are surprised to find there is dissatisfaction. Why? Because the federal government wants to interfere in fields not under its jurisdiction.
It would be much simpler, for the government, to return their sources of income to the various provinces which want them back so that these provinces could themselves develop the field of education.
But today, the opposite is taking place. It is the federal government which takes the larger part of the cake, that is, of the taxes, and which, in so doing, tries to enter fields which do not come under its responsibility. The federal government, on the contrary, should hand back to the provinces a larger part of income, in order that they may themselves meet their obligations.
In the province of Quebec, people wish to develop this field of education, but they lack revenues. Already, private property is taxed and overtaxed by school boards; the provincial government has again increased the sales tax, from 2 to 4 per cent in some cases, in order to meet the expenses for education. Despite all that, the federal government keeps the major part of the taxes and interferes in the field of education.
It would be better-and we are going to submit an amendment to that effect-if the federal government turned over to the provinces 2, 3 or 4 per cent of personal income tax and, with those amounts, the said provinces would look after student loans. The advantage would then be as follows: The provincial government, being the only one to look after education, could standardize its general programs in order to improve the educational system within the province; the provincial government could make all the decisions without having to deal with the federal government. But, at the present time, both governments are interested in the same field.
Mr. Speaker, there are several clauses in that bill which make us question its legality. Thus under section 15, even those under age can borrow as if they were of age at the time the loan is granted.
There is a civil code in the province of Quebec which comes exclusively under provincial jurisdiction. This clause is clearly inconsistent with the civil law of the province, because, once again, under the constitution,

Loans to Students
civil law comes under provincial jurisdiction. Has there been an amendment to the constitution allowing the insertion of such a clause which departs from the civil law of the province of Quebec?
There are many such clauses which are not consistent with the constitution.
For instance, under section 12, a provincial government may receive compensation payments if it does not want to take part in the over-all plan but, under that section, the ten payments will be paid to the province only six months after the fiscal year. This means that a province will be penalized for an 18-month period, that is the whole year plus another six months. In the meantime, the province will have to pay, meet costs, interest charges, and so on, during 18 months. Therefore, it will be at a disadvantage compared to the other provinces, if it wishes to get the compensation payments.
Mr. Speaker, this legislation contains things which are not necessarily acceptable. For instance, the federal government would like to have the right to determine what institutions the students wanting to secure a loan should approach. In section 13, the government would like to establish a set of rules which would be glaringly inconsistent with our Canadian constitution. It wants to reach agreements directly with the institutions the borrowers will approach. This is found in section 13.
Mr. Speaker, this legislation is contrary to our Canadian constitution, on several points.
It is often said that students need those loans to continue their studies. Well, Mr. Speaker, I would like today to congratulate the students of the province of Quebec, that is the students' federation of Quebec, including the general students' association of the University of Montreal, the general students' association of Laval University and the general students' association of Sherbrooke University. They all stated categorically that they are opposed to the federal program of loans to students. Why? Because those students' associations, which are primarily concerned wanted to put the general interest before their own personal interest. They said: The federal government must not get into the field of education, even by passing such an act.
I have here an article, which was published in the July 9 issue of Montreal-Matin, on page 10:
No loans for students: French Canadian students once again required from the federal government the return to the provincial government of the taxation powers which will enable the latter to fulfil the priority needs of the province of Quebec.

The Quebec general university students associations once more stated that they objected to any step that would promote the passage of the student loans bill, saying that such a measure, although commendable, runs counter to the aspirations of the students who are in favour of a greater provincial autonomy.
Although they need this assistance, the people primarily concerned in this are opposed to the federal government intruding further into the field of education by way of this bill.
If those most directly concerned object so much, the federal government should realize that it must find other means to reach its objective.
We readily accept the method suggested by the Quebec students and which is that the Minister of Finance should say: For the provinces which do not want this legislation, we will give them back a certain percentage of the income tax. It would be exactly the same thing as in the case of the $10 a month allowances to students of 16 and 17 years of age.
I do not see why the minister cannot provide for such an alternative in this legislation. He would thus respect the provinces' autonomy while avoiding more disputes. Why always try to make matters worse?
It seems to me that the situation is already tense enough and that nothing should be done that could make it worse. The Minister of Finance should realize that this is not the time to provoke further people who do not want any intrusion from the federal government in the field of education.
We do not want Ottawa meddling with education in the province of Quebec. We believe we are qualified to organize our own educational system; we know that we are at least as qualified as the federal government. So, why always try to provoke and arouse the anger and the opposition of the whole population of a province? That is what we cannot accept.
After that, they will complain, they will say that there are fanatics. The fanatics are not the ones you think, but those who are always trying to intrude into other people's affairs.
The constitution states clearly that education is exclusively of provincial jurisdiction. To pass such a bill is certainly to intrude into a field that is no concern of the federal government.
It would be so easy, since it is going to cost money to the banks, to draw these amounts from income sources or taxation

rights and give them back to the provincial governments so that the latter could consolidate the development of their educational system. The provinces who would rather take advantage of the federal plan would be free to do so. We do not intend to force anything upon the other provinces. If they want to keep on letting the federal government interfere with the education field, we will not object to it, but so far as the province of Quebec is concerned, we object because that province will not have it and besides, the majority of the students in that province also objected to such an interference.
I also make it a point to protest against this new intrusion into the field of loans to students by the federal government. It has been suggested by the hon. member for Burnaby-Coquitlam (Mr. Douglas) that these loans should be made through the banks. I think the suggestion should be taken into consideration; loans could also be made available through credit unions or caisses populates. Better still, since this is for the betterment of Canada, we should, and this is the suggestion we would like to make, allow every province to borrow from the Bank of Canada, without interest, so that every province may set up a students' loan fund.
But, what would be even better than loans would be to see to it that every province could draw from the Bank of Canada enough money so that it would have the necessary funds to improve the Canadian educational system: that is train teachers, build schools, colleges and universities, provide students with the means to live while they are studying. In short, the Bank of Canada should put at the disposal of the provinces the money they need for developing education.
The Bank of Canada must help to increase the wealth of our country, not only in the field of natural resources but also with regard to human capital. It should finance our needs through the provinces. The Bank of Canada is needed to develop our education system.
Those are our suggestions with regard to that bill. We are against it, first, because we see no point in getting students into debt before they can go out and earn a living. We feel they will have enough debts in their lifetime without being burdened with more while still in school. We much prefer a scholarship scheme, not a federal one, but one handled through the provincial governments. For that, the provinces must have the sources of income that will enable them to
Loans to Students
maintain a scholarship scheme which will help students to further their education without getting into debt.
In due course, we shall propose amendments to the act to allow those provinces wishing to do so to select another slice of income sources, either from personal or corporate income tax, so they can use those additional funds to grant scholarships to students.
That is what I wanted to say, Mr. Speaker. We will propose amendments in due course, but we are against the bill as it stands now. [Text]


Mr. John N. Turner (Parliamentary Secretary to Minister of Northern Affairs and National Resources):: Mr. Speaker, I rise to congratulate the minister on his presentation this afternoon and on the moderate, balanced tone with which he presented this refreshing piece of legislation to the house.


Mr. Pugh:: That is quite a change.


John Napier Turner: I rise, too, out of a personal interest. The riding I have the honour to represent is the home of two of Canada's leading universities. I speak of McGill University and Sir George Williams University. My riding is, as well, the site of an outstanding ladies' college, Marianopolis College. At these three institutions over 30,000 students pursue daily their studies toward a recognized degree. I would say on my part and on their behalf that the principle behind this legislation, the principle that talent and admission to university should not be denied by reason of financial straits, is one appropriate to justify the approbation of every member of this house. I would say, too, that it epitomizes what this government and this party is trying to achieve in the way of equality of opportunity; that any young man or woman who has the intellectual qualifications sufficient to gain admission and retain admission in a university should be able to pursue a university course of education; because as the hon. member for Burnaby-Coquitlam (Mr. Douglas) pointed out, a university education today is no longer the luxury it once was but is a necessity, a necessity not only for those who seek to make a contribution to this country later in life but a necessity for the country in that the skills of our young men and women are surely the prime asset this country has.
This legislation, therefore, is an investment, an investment in the intellectual capital of Canada in that it will achieve a bettering

Loans to Students
of the skills of our young people and thereby increase the spiritual and intellectual assets of the country. I would hope this would encourage more young men and women at an earlier stage in their lives to point toward a university education so they may help us build up a Canadian bank of brains. I would say to the minister that I would hope any inducements he has made toward encouraging research in Canada, toward encouraging those who have achieved university status and the status of a degree in Canada to remain in this country, will be continued; because the purpose of this legislation, which is to bring into the academic institutions of Canada more of our brains and develop more of our brains will not be fulfilled, not only if we do not have the physical plant to service this potential but if we do not retain in Canada the young men and women who are able to take advantage of this legislation.
I listened with great interest to the hon. member for Lapointe (Mr. Gregoire) making his constitutional argument. Coming as I do from the province of Quebec and representing, in so far as their university studies are concerned, about 30,000 students who pursue their studies in that province, I would like to deal briefly with the constitutional position a little later on. Before I begin that analysis I would say that I think the constitutional argument is now an academic question in that I am satisfied that the rights of the provinces have been adequately fulfilled and that Premier Lesage, who once threatened to take the proposed legislation to the courts, has now no reason to challenge the legislation. In fact I am going to suggest that in his own bursary and loan plan as developed under the department of education he has a wider, more generous plan than that offered under the present federal legislation. I would think that in view of the fact that the province of Quebec now devotes over one third of its annual budget to education, it will be the intention of his government and the intention of Mr. Gerin-Lajoie, the new minister of education, to maintain the standards of the bursary and loan plan and to increase the services, the eligibility and the amounts payable under that plan. Taking the academic argument for what I now think it is-that is to say, academic in the sense that it will not entail any practical problems for the legislation-I would think the Canadian government has a responsibility under the general welfare provisions of the British North America Act to the youth of the country to increase the skills of our youth. Just

as the federal government has a responsibility in the area of manpower retraining so as to meet the threat of automation, so also have we a duty to see that our youth is skilled sufficiently to survive and prosper in an automated and complicated age.
It should be noted that the subsidy, if subsidy there is under this legislation, attaches not to any educational institution but to the individual. We are living in a mobile society where students tend to get their education often in provinces other than those from which they come. We are now dealing with a payment largely along the lines of the welfare payments which attach to individuals, and this surely would constitute a powerful argument in favour of a federal jurisdiction.
Indeed, we have the general banking power under the British North America Act. Clause 3 of this bill makes it clear that this enabling section authorizes a bank to assume responsibility for loans to students, such loans being guaranteed by the federal government. Clause 15 is a recovery provision authorizing the bank to recover the repayment of a loan. In passing, might I say I could not agree more with the hon. member for Red Deer in saying that we anticipate very little failure to honour loans under this legislation. The experience of those provinces and institutions which in the past have maintained provincial bursary or loan schemes is such that it is found the rate of repayment is almost 100 per cent. As to the legal ability of a bank to pursue its rights under this particular legislation, any discussion while proper is probably academic in view of the record of students in this country who have in the past honoured the repayment of their loans.
On the other hand, I recognize that the provinces have a strong constitutional argument on their side. But I repeat that my conclusion is that the argument has been satisfied and reconciled. The argument advanced at the federal-provincial conference by the province of Quebec when discussing this subject was that this item fell under the head of education within the meaning of section 93 of the British North America Act by virtue of the remission of the interest payments during the tenure of the loan. While a student is at any university, and until six months after his graduation or withdrawal from university, such remission of interest in effect constitutes a subsidy for the purpose of his continuing his education. This is made clear in clause 4 of the bill.

The second argument advanced by the province of Quebec was that that province, as indeed other provinces like Saskatchewan, Alberta and others, was already in the field. I believe that in the year 1963 over $18 million was advanced by the province of Quebec under its bursary and loan plan to students; and roughly 50 per cent of those moneys were advanced in the form of bursaries, the other 50 per cent being in the form of loans. According to the official brochure put out by the government of Quebec, 40 per cent of the bursaries are repayable and in effect might be treated as loans. Taking this mathematically, if 40 per cent of the bursaries are repayable and the bursaries constitute half of the money advanced, roughly 65 to 70 per cent of all moneys advanced by the province of Quebec to students is in effect in the form of loans.


Louis-Joseph Pigeon: May I ask the hon. member a question?


John Napier Turner: If I might continue first, and then I shall be glad to answer any questions.


Louis-Joseph Pigeon: Does he agree that the system of the province of Quebec is superior to this one?


John Napier Turner: I understand the usual ticklish impatience of the hon. member for Joliette-L'Assomption-Montcalm (Mr. Pigeon), but I said earlier that the plan of the province of Quebec is a remarkably fair and generous plan, and its terms of eligibility are wider in many respects than those of the present plan. Since 70 per cent of the moneys disbursed by Quebec is in the form of loans, it seems to me there should be no difficulty when it comes to working out the mechanics of making loans or distributing loans to students who travel from one province to another, in dovetailing these two plans.
I have mentioned two arguments in favour of provincial jurisdiction, namely that this matter falls under the head of education and that the province of Quebec was already in the field. A third argument underlying those two is the feeling that if an item falls under provincial jurisdiction, and if education is a crucial factor in maintaining a provincial autonomy, then there should be the constitutional power and the necessary resources to allow the provinces to fulfil that jurisdiction. To that opinion I subscribe.
Let me say, after posing the constitutional positions as I see them, Mr. Speaker, that this bill satisfies the constitution of this country. First of all, clause 10 allows any province
Loans to Students
to designate the appropriate authority for the issuance of a certificate of eligibility to a student. In other words, the province, as the minister has said, will act as a partner of the federal government. In the case of any province which decides to set up its own provincial student loan program, as Quebec already has, clause 12 of the bill makes it quite clear that that provincial right is maintained in its full sanctity. I rely too on the expression of intent of the minister when he said that the federal government has no intention of superseding any plan now in existence, and I interpret that to mean any provincial plan now in existence and certainly any plan privately endowed.
I have said that Quebec already has its own plan, and I understand that it is the intention of that province to maintain and continue its plan. On reading its terms of eligibility I feel confident that the students in the province will receive equal or better treatment than those in the rest of the country.
This massive attack designed to improve education standards in the province from which I come is succeeding to such an extent already that there are enrolled in universities in Quebec 10,000 more students than in the province of Ontario, and with this impetus I have no hesitation in saying that students who attend universities in my riding, and indeed in the province, will be well looked after.
Speaking to the bill itself, may I say I think it is a commendable and good beginning. I do not agree with the Leader of the Opposition (Mr. Diefenbaker), if I may say so with respect, when he calls it a makeshift. I think it is an admirable inauguration of legislation which will I hope be improved over the years. I would have wished to see the term "student" defined more broadly. Under the terms of this bill a student must be a full time student at a post-secondary educational institution. This disqualifies part time students, and particularly night students. I hope that in future years eligibility will be widened. I hope that the precedent which was set in the recent amendment to the Income Tax Act whereby tuition fees paid by part time students were made deductible, just as those paid by full time students are, will be followed in this field. I hope we shall see the day soon when part time students and particularly students attending courses at night will be able to take advantage of this legislation. I might say that provision to this end is made in the

Loans to Students
law and regulations of the province of Quebec. This is an important area of education at university level. In every large city of this country a growing proportion of those attending university are not doing so full time in the day time but are doing so in their leisure time at their own cost at night. Of the 30,000 students who attend McGill and Sir George Williams Universities, more than 15,000, that is more than half, attend those institutions at night. I would imagine that similar figures apply to universities in the other major cities of this country. I realize the difficulty attached to making a beginning, but I would urge the government, in passing, to widen the eligibility under this measure.
I think there may be problems concerned with the mobility of our students and I hope the mechanics of arranging for students from one province who attend universities in another can be satisfactorily worked out. I do not wish to continue at any greater length. I congratulate the minister most heartily on his tremendous inauguration, a tremendous advance in the legislation of this country. I commend this bill to every member of the house hoping that we all recognize that it constitutes perhaps the first positive stimulus provided toward increasing the skills of our young people and encouraging them to advance to higher education.
The result of this legislation will be that young men and women having the necessary talent and qualifications regardless of their financial resources can now be assured of a university education. I interpret this as bringing us a step closer to a society in which equality of opportunity will be realized and this is of particular importance in a society in which success depends in such a great measure upon access to education. I hope too that this will be a stimulus, through true constitutional means, to any province which wishes to administer and manage its own plan. I think it satisfies the needs of a mobile society and the need for certain national educational standards. By this I do not mean national administration. I mean an equality of standards from province to province. I think it must also be a fulfilment of what we have called in this house cooperative federalism and I hope that members who enjoy debate will recognize that it preserves provincial autonomy and jurisdiction over education.
In closing may I say that I am sure the students of this country are immensely en-

couraged by what has been said today and by what is envisaged in this legislation.


Louis-Joseph Pigeon: I have one question to ask the hon. member. Does he agree to support the establishment of a department of education at the federal level?


John Napier Turner: Mr. Speaker, as soon as I came here, I was taught to answer only questions relevant to the bill under consideration. In those circumstances, I will abstain from answering the hon. member for Joliette-L'As-somption-Montcalm (Mr. Pigeon), but I can assure him that I will give him an answer on a more appropriate occasion.


George Clyde Nowlan: May I call it six o'clock?



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Deputy Speaker:: It is my duty to announce that the question to be raised at 10.30 is as follows:

The hon. member for Joliette-L'Assomp-tion-Montcalm, a measure to control the rising cost of living.

At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at 8 p.m.


[Stage Direction]
The house resumed consideration of the motion of Mr. Gordon for the second reading of Bill No. C-110, to facilitate the making of loans to students.
George Clyde Nowlan: Mr. Speaker, we have had an interesting debate this afternoon on the matter of loans to students and for a few moments I should like to discuss the matter further. I am not going to deal with any details of the bill itself. During the debate this afternoon there were references by a number of speakers to

various matters of detail which I think are important but which in my opinion can be much better dealt with in committee than in the house.
There are problems of constitutionality. I am not speaking of the educational prerogatives of the provinces. I think there are one or two sections of the bill which might be questioned vis-a-vis constitutionality. There are one or two sections the legal implications of which I think are rather dubious. However, these matters can all be dealt with much more adequately at the committee stage and I do not propose to deal with them now, important though they may be and quite properly referred to by some hon. members who have preceded me.
We have been dealing primarily this afternoon with the problem of the individual student. Other than the speech of the Leader of the Opposition (Mr. Diefenbaker), who referred to the general problem, other speakers dealt primarily with the problem of the individual student. It is a real problem and one could spend a great deal of time in discussing it. One could spend a great deal of time discussing just what comprises a university and the place of the student in it. I think it was Aristotle who, we are told, taught under a tree, and that was a university. When I survey the problems with which our universities are confronted it seems to me that our problem is not only to find the tree under which we are going to teach but to find the teachers who are going to operate under the tree.
I think it was Stephen Leacock who once said that the way to establish a college is first to find a teacher, then to get a smoking room and then to find the students thereafter. That may be a rough paraphrase of what Leacock said but generally speaking I think that was an apt description in his humorous way of the founding of a university.
Our problem today is not to find students to enter the universities. Our problem is to find the universities which can accommodate the students. That is the primary problem and it is in that regard that I should like to speak for a very few moments tonight. The suggestion has been made today that in the past possibly universities were the prerogative of the sons of the rich, that this measure is going to solve that problem, and that there will now be an open sesame whereby the sons of those not so rich or those who are in relatively poor circumstances will be accommodated in the universities. Personally I do not accept that statement at all. I am sure there are numerous members in this chamber who were
Loans to Students
not sons of the rich but who entered university and graduated therefrom, although perhaps with some difficulty and some hardship. That has been the tradition of our educational system in the past.
I can think of someone I know who was lucky enough to get a job as housemaster at a school for the blind at $25 a month and free room. If one wants the privilege of eating with the blind day in and day out, when they are really blind, even a stomach which is attuned to overseas service may find it a little bit difficult when you first enter that environment. But that is part of the background of which I am sure many hon. members have had experience.
The bill before us has an impact upon the individual and to that extent all of us welcome it. We know that there is a need for increasing opportunities for education. We welcome the bill. As I said, there are details in it which we can criticize and which we will criticize when we go into committee. But certainly the party to which I belong and I am sure all members of the house welcome the bill as such and are glad to see this additional step toward the educational development of this nation.
Having said that, we cannot overlook the problems which are flowing in upon the universities of this country today. The hon. member for St. Lawrence-St. George (Mr. Turner) referred this afternoon to his association with universities in his own riding and their great traditions. In a very small way I have been associated with a university as a member of the board of governors for 20 or more years, and I know something of the problems of a small university as well.
I think we can all appreciate the problems with which we are confronted. The truth of the matter is that there has been a phenomenal growth in the student bodies of our universities during the past few years, a growth which has taxed the universities to the utmost. Prior to the outbreak of the war the combined registration of the universities of Canada was approximately 35,000. That number had gradually built up during the years as Canada progressed. Immediately following the war, with the influx of veterans with the preferences they obtained from the government, the student bodies of the universities increased to a total of approximately 83,000. This was a really phenomenal increase and every university was taxed to the

Loans to Students
utmost. Basements were used. Every possible type of accommodation which could be found was made use of. But it was done.
Following the influx of the veterans registration dropped off fairly substantially, not to the pre-war level but down to about 67,000. This year registration at our universities is approximately 158,000 students, male and female. When you consider that growth in that short time, you can envisage the problems with which the universities are confronted today.
Projections perhaps can be inaccurate. The Minister of Finance (Mr. Gordon) will recall that when he was chairman of a royal commission quite a few years ago he projected the student registration for this year. His estimate was considerably less than that which has ensued. As a matter of fact, every estimate, every projection of student registrations for these years have been substantially lower than the actual registration. If the projection of the conference of Canadian universities for 1970 is accurate we will have a student registration of 312,000 as compared with 158,000 today. This, Mr. Speaker, is only six years from now. If history proves, as experience has in the past, that this projection of 312,000 students is an underestimate rather than an overestimate-and this is without any stimulus such as is proposed in the bill we have before us-and is based on the assumed growth in population of this country, then the problem is acute indeed. If we assume the regular gifts and contributions which universities have received, the scholarships and bursaries, the usual accommodation which students are receiving today, and if we are facing a student body of 312,000 in 1970 under existing circumstances, and if the figures of the Minister of Finance are correct as to the effect of this $40 million-I am certainly assuming they are-then, you can see the terrific strain that is going to be placed upon our educational facilities within the next few years.
As I said, we welcome the bill in so far as individuals are concerned. However I suggest this is not any solution to the problem of education in Canada. We have to go much farther because actually we are facing an increase in registration of approximately 12 per cent per year and at the moment we have not the facilities to accommodate the students which we have today. The growth is going to be very much greater. I am sure the Minister of Finance would not be surprised to hear that I saw a brief, a copy of which I am sure was distributed to all members, from
[Mr. Nowlan.i
the university conference suggesting that in three years from 1963-64, the capital demands on our universities for the normal expansion to which I referred will be over $800 million. It is assumed that the provinces will probably advance roughly $300 million; there will be gifts from corporations and individuals of roughly $100 million; there will be loans for construction purposes of another $100 million, which would make $500 million in all. This still leaves a shortage of $300 million to be raised to take care of the mere physical requirements of the universities.
Speaking of the loans, I should emphasize what the Leader of the Opposition (Mr. Dief-enbaker) said this afternoon. These loans are, of course, under Central Mortgage and Housing Corporation for housing accommodations and provision was made for them by the government of which I had the honour to be a member. I referred a moment ago to the relatively small university with which I have been associated for many years. This university is now contemplating borrowing $900,000 just to increase its residential accommodation. I hope, and I expect as a member of the board, we will be able to get most of that money from Central Mortgage and Housing Corporation to provide the additional residential accommodation which is required. Tenders are to be called tomorrow or the day after tomorrow for a million dollar library. A great deal of that money has to be raised by loans.
This means that $1,900,000 will be required for a relatively small university which a few years ago was accommodating 400 or 500 students and now is accommodating 1,500. The demands are still growing. Applying that little yardstick with which I have intimate personal knowledge, and the same problems to a greater extent apply to all the universities of this country, you can see something of the demands on the physical capacities of universities. A Liberal government of a former year under Mr. St. Laurent, as I recall it, gave $50 million to the Canada Council on the condition that they would lend or give this to universities, provided there were matching grants of an equivalent amount. In that day, when demands were not nearly as great, this was a real bonanza, a tremendous help to the universities of this country.
As I said a moment ago, if this estimate is correct and $800 million has to be acquired within the next three years, and if there are $500 million available as suggested, this

still leaves $300 million to be acquired. I suggest that possibly the Minister of Finance might consider following the same pattern followed by a preceding Liberal government, and make matching grants available so that this $300 million can be raised by dollar for dollar contributions from the federal treasury and from the grantors or donors to individual universities. I am speaking quite hastily, so this is a very rough outline of the physical demands, a minor pen sketch of the physical demands which are going to be required under existing circumstances, forgetting altogether the impact of this bill upon universities in the next few years.
I have been speaking of the physical demands. However as Aristotle exemplified, you get the tree and you get the teacher. Where are you going to get the professors and the teachers to meet the requirements of this burgeoning student body? The problem is not an easy one to solve. Perhaps in the field of arts, with increases in salaries, you can bring forward a certain number of teachers and professors to meet the demands. However in the field of science, with the competition from the United States, the competition from national defence laboratories where technicians, particularly physicists, are in the greatest demand, you have a great problem which is going to be very difficult to solve. Heretofore we have been fortunate; we have been bringing professors and teachers from Europe, emigres who wished to escape and who were well trained in the sciences. They were coming here, but that source of supply is pretty well finished. We now have to look for professors, teachers and instructors, to people trained in our own universities.
The province of Ontario I think is making a contribution towards this end. They are providing scholarships and loans to those who are prepared to enter the teaching profession, and as a condition of accepting these loans these people must enter the teaching profession. This would cover professors and instructors for universities. I think there, too, we can consider not only loans to students, desirable as they may be, but if we are going to solve this educational problem or make even an approach to it, we will have to do something to induce more and more graduate students to enter the teaching profession, because there are so many fields today which have their financial appeal that it is very difficult to meet the demands being made.
I read the other day that we are only graduating enough teachers-professors-that if they all stayed in this country they could only
Loans to Students
accommodate the present student body, without any possibility of meeting an increase in it in the future. If the figures I gave the house a moment ago are correct we shall have to double the teaching body during the next few years, and we are not going to do that by simply increasing the student body, desirable as that may be. Somebody, whether it is the government, private institutions, corporations or the provinces-and I suspect it is going to be a combination of all of them-will have to provide inducements for a terrific increase in our teaching body if we are going to attempt to deal with the demands for teachers.
Very hastily I have referred to the capital and to the problems of the teachers. What about the current problem, about the current demands and the deficits which every university is running up today? Despite the generous contributions, despite assistance from governments these demands and deficits are increasing. The government of Canada started to give assistance with grants based on 50 cents per head of the population of Canada, on a provincial basis. That ratio was raised under the aegis of the former government and under the aegis of the government preceding that, until today it is $2 per head for every person in Canada. But I suggest, Mr. Speaker, it is based on an entirely wrong principle. It is based on the population of the provinces, and the provincial population is not increasing anything like the increase in the student body. The student body is increasing at over 12 per cent per year, and we know the factors which have entered into this, such as the birth explosion, the post-war marriages and so on. It is because of these we have such a terrific increase in the student body, but still our grants remain based on population per province.
I think it was a wrong basis to start with, and perhaps I am a little selfish in saying that; but every province could give the same example. In Nova Scotia we have no provincial university, even though we have more universities per capita than any other province in Canada. There was a time when some consideration could have been given to amalgamating them but that time is long since past and now we have several, relatively small but very efficient and very good universities. Yet up until a year or so ago we had no provincial grant whatever from the province, and we were based on grants of 50 cents per head of the population, $1 per head, $1.50 per head and $2 per head, which is the present figure, and the universities have had to seek all the gifts they could obtain.

Loans to Students
Because of the obvious high quality of those universities down there they have been getting students from Ontario, Quebec and all the other provinces of Canada. The law school to which I owe a little allegiance was recognized at one time, and possibly still is, as the best law school in Canada, attracting people from all over Canada to come down there as students. We have a large number of students from the West Indies. We have them from China, from Hong Kong and from various places throughout the world; but of course we get no credit for that whatever because we receive this payment on the basis of the population of the province, even though a large part of our student body may be coming from outside the province. If there is any unjustifiable system by which grants are made, this is certainly one which should be considered and revised in the immediate future. Because of that special problem of the maritime universities I draw the minister's attention to this fact, and I know he may well say to me, "Of course, you may have heard of that while you yourself were sitting over here." That is true, but there were factors which entered into the situation and the minister knows them well.
All universities in Canada are facing great demands; we recognize that. Yet the conference of university presidents unanimously recommended to the government of Canada, last year and again this year, that there should be a special increase in grants to the universities of Nova Scotia and New Brunswick because of the peculiar situation in which they find themselves. They recommend that pending a general revision of the basis to which I referred a moment ago, there should be an increase in the grants to Nova Scotia universities to $500,000 a year and an increase in the grants to New Brunswick universities to $300,000 a year.
When you get university presidents with all the justifiable demands made upon them, meeting in conference and coming to the government with requests to meet their own situations, and yet they unanimously join in a request for special consideration to the universities of Nova Scotia and New Brunswick, then I suggest there must be some real merit in the proposition they put forward or else they would never have joined in that appeal.
I am not going to take any more time of the house except to suggest that these problems I have mentioned, the fiscal, the current and the teaching problems, all require special attention and there are none of the answers
[Mr. Nowlan.l
to those problems in this legislation. Desirable as it is, worthy as it is, if it is successful- and I am sure it will be-it will simply aggravate the problems because it will create a larger student body and therefore greater demands on the fiscal, personnel and current problems of the universities in Canada as a whole.
My hon. friend from Burnaby-Coquitlam suggested this afternoon that the time had come when all university tuition should be free, that this was only a pourboire and that we should give free college tuition to everyone. That is a question which might be debated, a question which may have merit, but I do not think we have reached that stage yet. We have too many pressing problems at the moment, problems which I have outlined very briefly and very hastily.
Over-all, this country has a problem in education. It is not only a government problem, it is one that concerns the provinces, individuals, corporations and the federal government. It is a problem too big to be dealt with without the active co-operation of and a greater degree of assistance from the federal government than we have had heretofore. Much as we may welcome this bill today we are simply skating over the surface of the problems of education facing this nation, and I think the time has come when we have to evaluate the demands being made upon us.
Only the other day we had the royal commission on health reporting to us, and incidentally when you read that royal commission report you can see just one of the problems. You cannot proceed with the health scheme it recommends until you build larger and better medical schools, until you find more medical professors and teachers, and a problem of 10 years duration is going to ensue before that facet of the educational problem is met, assuming we can start meeting it tomorrow morning. That is only one of the problems with which we have to deal, and that is one of the demands being made on us for a health scheme which will be very valuable, very helpful and of great assistance to everyone.
We have a pension scheme just coming over the horizon, as we know, which presumably is going to provide security for everyone in their old age. Then we have this educational problem, which is a very pressing one. I quite agree with what everyone said here this afternoon, that the greatest asset this nation could have is a well trained, well

educated youth. Without that we cannot get ahead but, as I say, we have to evaluate the demands of these competing services.
Yesterday the Minister of Finance, dealing with another problem, said there should be conferences to cover taxation problems. The right hon. Leader of the Opposition advocated a general conference to deal with all the problems with which the nation is confronted. Whether we adopt the idea of one conference or a number of conferences the time has come when there must be a serious study given to the problems of education. It must be evaluated as against other demands made upon us. This bill we have before us tonight, which we will all support, is one step along the road; but the fact that we take that step creates other problems which must be dealt with in the near future.


Mr. Arnold Webster (Vancouver-Kings-way):: Mr. Speaker, very briefly I wish to recommend that the bill before us this evening should receive the unanimous and speedy approval of this parliament. To keep our nation strong we must encourage an ever larger percentage of our youth to attend institutions of higher learning. If we do not, we shall very soon lag far behind the nations of the western world. A university education is a prerequisite to an increasing number of positions in business and industry as well as in the professions and the public service.
The Canadian union of students maintain that only one half of the young people who are capable of higher education ever enrol in a Canadian university. They assert that such waste of human talent is indefensible. Few will disagree with this judgment. Student loans will not solve this problem, but they will help. This bill merits support only on the basis of half a loaf being better than no bread at all. In fact, compared to an adequate program of scholarships or the elimination of student fees entirely, it is a very poor half loaf indeed. During the immediate post-war period thousands of our best students would not have been able to go to university except for the grants they received through the Department of Veterans Affairs; and today many of the young people who need help are the sons and daughters of veterans who themselves were assisted by the federal government at the end of the war. I wish grants were available to them on the same basis as applied to their parents, but this is not so. There are very practical reasons why university attendance is beyond
Loans to Students
the reach of many good students in every Canadian community. Let me list some of them:
1.	University fees are being increased year by year; living costs remain high. The minimum amount required for a girl or boy living away from home is approximately $1,500.
2.	Good paying summer work is scarce in many parts of the country because of chronic unemployment; part time employment during the winter is difficult to find.
3.	Hundreds of excellent students fail to qualify for the few scholarships that are available; they need help.
4.	An increasing number of students are married and accordingly have family responsibilities.
5.	Students are frequently required to travel to another province to secure specialized training or to pursue postgraduate work.
All these factors and others should be kept in mind in deciding whether or not students are in need of financial assistance. Another point that I should like to emphasize is that arrangements for negotiating loans should be directed by university administrators who have experience in dealing with students. Direct contact between students and banks should be kept to a minimum. Loans should not be hedged about with requirements and conditions that may be embarrassing and discouraging to many deserving young people I was glad to learn that no guarantor was needed, and not even the consent of parents.
Although loans are not a substitute for scholarships, let us make them as easily available as possible. Separate arrangements with those provinces which may prefer to expand their present programs is most commendable. In this way, delay can be avoided and benefits made available at once. This parliament should not withhold from any young person in this land the opportunity for the fullest possible education. With this thought in mind, let us not delay the passage of this bill in the hope that many students will be able to take full advantage of it this year.


Mr. Joseph Macaluso (Hamilton West):: Mr. Speaker, I rise to take part in this debate because of my interest in the student loan program and also my interest in education. Another reason is that in my own riding there is situated McMaster University, which is well known for its research laboratories in, I think, radioactive isotopes, for its

Loans to Students
engineering school and also for the great work done by its president, Dr. Thode, in the research field.
I do not wish to start my discourse in any political manner, but I do wish to comment on the fact that the right hon. Leader of the Opposition (Mr. Diefenbaker) mentioned the promise of the Canada scholarship program made by the Liberal government in the last election campaign and said it had been forgotten. I can tell the right hon. gentleman that there are many members on this side of the house and on the treasury benches who have not forgotten this scholarship program. I for one have not forgotten it; and it is our intention to come forward with it as soon as possible.


An hon. Member:: What year?


Joseph Angelo Macaluso: We hear that our legislation is too late; it is too late already. The right hon. gentleman's words were that this legislation concerning the student loan program is too late also. But we should listen to the words of Mr. James G. Mitchell, president of the students council of the University of Waterloo and Mr. James D. Kraemer, chairman of the board of external relations of that university. They said this in a letter they sent to me:
The Ontario legislature did not adequately meet the needs of her expanding universities and as a result there has been a widespread increase in tuition fees (a situation common throughout Canada). The increase in fees (which in our case amounts to more than $75) coupled with the growing scarcity of summer employment once again threatens to make "university" a "privilege of the wealthy".
Earlier in their letter they say:
Our earnest hope is that the members of parliament will effectively expedite this priority legislation-
That is referring to the student loan program now before parliament:
-which awaits the house, in order that a system of federal loans for students will be in effect for September, 1964.
Education today is one of the major public services in Canada and is absorbing an increasing share of the total revenues of all governments. Expenditure on education takes a very high proportion of provincial and municipal revenues, and this affects directly and vitally the public finances of the provinces and municipalities. The federal government's finances are also subject to strain as potential additions to federal revenues are

reduced by increasing provincial and municipal levies and as the federal government is requested to assist increasingly in financing education.
It is generally felt that all have a right to obtain the level of education which they are able and willing to achieve. Education today is a door opening up opportunities for all individuals, but it is also a pathway, I suggest, to a nation's economic growth and development. It is becoming realized generally that education is an important factor inducing national economic growth as well as enhancing individual potentials. Universal education can be provided only by public authorities, and all levels of government, I suggest, need to co-operate in framing national education objectives and devising appropriate methods of financing the level of education which it is deemed we can afford in this country today.
In the modern society of today it has become essential to pay attention to the development of our human resources and skills. Failure to utilize these to capacity is a loss, not only to the individuals concerned but also to the economy of this country. One of the greatest challenges faced by modern society is to develop the full potential of its human resources, and virtually every country in the world shares this challenge.
The hon. member for St. Lawrence-St. George (Mr. Turner) earlier today commented upon the constitutionality of this program. As we all know, section 92 of the British North America Act sets forth those matters which are the sole responsibility of the provincial governments, and included among them is education. In the field of education the problem of intergovernmental division of responsibilities has grown rapidly since the turn of the century, when the total expenditure on education was about $10 million per year. Between 1951 and 1961 the expenditure on formal education increased from $516 million to nearly $1,800 million.
Expenditures on formal education are still increasing rapidly and in 1963 it was expected that this would exceed $2,300 million. By 1981 it is expected likely to exceed 7 per cent of the gross national product. This I submit includes not only the cost of students' education, but operational costs and capital costs to the universities themselves.
Everyone is aware of the rapidly increasing enrolment at universities and colleges. The number of persons of university age is rising

at a high rate and is increasing proportionately every year. At this university age level, a greater proportion are going to universities and colleges today than ever before. It is becoming increasingly necessary for young people to take higher education in order to qualify for the top and middle ranks of positions in our society.
It is further to be noted that the number of students engaging in graduate studies is increasing at an even greater rate than the undergraduate enrolment levels. University enrolment increased from 86,800 in 1957 to over 141,400 in 1962. The sharpest increases are still to come as the population bulge resulting from the great increase in births in the immediate post-war years is beginning to reach university age level.
Many young people too are having difficulty obtaining employment because of lack of training. Vocational training has been provided by public school boards for many years. The federal and provincial governments have recently been providing vocational training, and very recently the federal government began a crash program in co-operation with the provinces to provide complex training facilities throughout the country.
Before the post-war period the main federal contributions to formal education in this country were in the field of Indian and Eskimo education, and some small grants to the provinces for vocational training. During the postwar period the federal government began to contribute to higher education-I mean by that university and college education-under a scheme to assist war veterans, and capital grants to universities were introduced in the 1950's. Many of us recall, certainly I do, that when we first attended university there were a large number of veterans who had returned from the war and were taking advantage of this grant to aid their education and to receive training at school.
At the university level students are charged an annual fee varying from $200 to $700, depending on the institution they are attending and the faculty they are entering. The cost of textbooks and students' supplies must be added to tuition fees, so that the total education cost imposed very considerable financial burden on many students and their families. Scholarships and fellowships and bursaries help, I submit, offset these costs for many students, but these are not sufficient, and insufficient students are able to take advantage of these scholarships, fellowships and bursaries.
Loans to Students
A survey was made of university and college students enrolled in selected faculties for the academic year 1961-62, which survey was to analyse expenditures and sources of income. This survey showed that for a single male undergraduate living at home the total expenditure during the college year ranged from $1,060 to $1,652 per year. Those not living at home spent between $1,406 and $2,321. Expenditures for single female undergraduates were slightly lower than those for males. Married undergraduate students spent on the average-and it is interesting to note this figure-from $2,758 to $2,929. Male unmarried students at graduate level, therefore, had an average expenditure of $1,598 for those living at home and $2,035 for those living away from home. This is quite a sum of money, Mr. Speaker, when you realize that most of these university undergraduates come from families of low income. Married male graduate students spent on the average $3,968 during the college year.
It is also interesting to observe that in a brief submitted by the Canadian school trustees' association to the royal commission on taxation the following passage appears at pages 30 and 31, with which I agree:
With the high degree of division of labour and mobility of the labour force which characterizes our society there is a continuous pressure to have education expenditures covered to an increasing extent by the national government. What is required in a federation like Canada is much division of labour among the three levels of government in providing and financing different kinds of education.
We suggest that the local governments be primarily responsible financially for elementary education, assisted wherever required by the provincial governments-
The federal government could assume much of the responsibility for vocational and higher education, in co-operation with the provinces.
The brief further goes on to say:
A suitable system of student loans or bursaries could be worked out in such a way that no individual with the required capacity would be unable to borrow funds for investing in his own education. The repayments would have to be stretched over a long period of time, perhaps over most of the working life of the individual as in the case of house mortgages. Such a scheme would be superior to the usual scholarship systems which are limited to the relatively few outstanding students and are largely financed from public funds. The loan scheme could be available to all students who could meet entrance and passing requirements and would provide substantial private sources of funds as repayments were made.
These conclusions were arrived at by the Canadian school trustees' association in their

Loans to Students
submission to the royal commission on taxation, and it would seem to support 100 per cent the type of student loan program which is now before the house.
This legislation, Mr. Speaker, is no giveaway measure. It makes it incumbent on the student to repay money made available to help him and her pass through university or college. It should instil, I submit, a sense of responsibility and at the same time remove the unfair yardstick of making financial means the only criterion for education. Many students have to take jobs to help finance their way through college. Many of us in this house have had to do this, myself included. There is nothing wrong in this during the long summer vacation, but summer jobs today are harder and harder to find for university students. My own experience this past summer has given me evidence of that. Many university students willing to work are finding it more and more difficult to place themselves in jobs and it is becoming more and more difficult to find jobs open. When one speaks to personnel managers who previously set aside a certain number of jobs for university students, the answer he receives is: We have just so many jobs for them; we cannot open any more because we have to make room, and logically so, for these people who are displaced from our industries by automation and technological change. Therefore it is becoming much harder for a university or college student to obtain summer employment, and therefore the student loan program will assist him in this regard. Further, Mr. Speaker, students are forced to do part time work during their semester years, and this can seriously interfere with their studies. Because of this a student may be prevented from producing his or her best results.
I believe the hon. member for Burnaby-Coquitlam (Mr. Douglas) mentioned the fact that more than 30 per cent of the college students from the lower income groups must interrupt their schooling for at least one year to earn tuition money. This is a waste of valuable time and energy. The federal government, with this legislation, can now take a great step forward to alter a state of affairs which has plagued students for so many years.
It is true, as has been said by many speakers on the other side, that this is not a program which will solve all the problems of the students and of the universities. Of course it will not. But it is one step forward

toward a solution. We remember the heavy inflow of immigrants in the post-war years, the years immediately after the war. Today the families of these people are of university age; many of them are leaving secondary schools and are eligible for universities and colleges. In many cases their families are not able to put them through courses of higher learning. It is true they can borrow from the banks, and that some of these students will be able to win scholarships and bursaries. However, the great majority would not be able to continue their education, through lack of funds. This legislation will come as a special benefit to them. I know that many people in my own riding will be able to take advantage of this program and send their children to colleges and universities to get a higher level of education than they themselves were able to obtain.
This program is another forward step by the present government, implementing as it does the second of four promises to young Canadians in the field of educational opportunities. The youth allowance bill has been passed. That is one promise which was made and which was carried out. The student loan promise has been made, and we are now about to carry it out. The scholarships program is a promise which I submit will be carried out also. In addition there are the per capita grants to universities which are now being discussed.
Today machines and automated programs are performing an ever increasing number of routine, repetitive tasks, thus reducing job opportunities for untrained workers while at the same time opening up new fields for highly skilled personnel. Studies conducted by the national employment service have clearly demonstrated that there is a distinct relationship between lack of education and unemployment. I think no one with an awareness of the increasing complexity of our labour market and the distinct shift from the unskilled segment of the labour force to semi-skilled, skilled and technical workers as well as professional and managerial workers will question the value to the individual Canadian of a high level of education.
I, too, wish to support the argument put forward by my hon. friend for St. Lawrence-St. George (Mr. Turner) on behalf of part time students attending universities. In my own alma mater of McMaster University there are thousands of night time students taking extension courses. These people work

during the day and the money they earn is set aside to pay for their education. I think it is proper that at some future date after this bill has been passed the government should give consideration to including among those who qualify under this measure these part time students who take these classes, often at considerable sacrifice, to advance their own education, and I suggest the welfare of this country. This principle was recognized in an amendment which was recently made to the Income Tax Act and I submit that these people, as well as full time students, well merit the advantages afforded by this type of student loan program.


Mr, Winkler:: Will the hon. member permit a question? Does he not agree that had it not been for the efforts of the Canadian students union itself, goodness knows when we would have had this legislation? Will he not admit that, rather than try to heap glory on his own shoulders and on this incompetent government?	.


Joseph Angelo Macaluso: I am glad the hon. member has asked that question. He should look at the position of his own side. He says, now: We are willing to co-operate; put the legislation before us. But it is interesting to note that the opposition has only adopted this attitude after pressure by the students, by the universities and in the press. It is only now that they are co-operating in this matter. No, we promised this program; we put it forward and we have kept our promise. For four years hon. members opposite did nothing for the students.


Léon Balcer: Mr. Speaker, since the last war, education, and more particularly secondary or higher education, has developed tremendously in this country. In the province of Quebec, there has been an extraordinary effort, especially since 1959-60.
It began with the famous Barrette bills, during the 1959-60 session, and the effort was maintained under the following administrations, so that today, for the first time in Canada's history, the province of Quebec has a larger budget than Ontario with regard to education. The fact is rather extraordinary, considering that the province of Ontario has a million more people than the province of Quebec.
Today, one only has to talk with the young Quebeckers in our respective ridings to discover the craze and enthusiasm of our young
20220-347J
Loans to Students
people for education, and more particularly for technical education. Everywhere in Quebec, our engineering schools, our technical schools, our institutions of higher learning, our high schools of commerce, and various other scientific schools, are doubling and even trebling their establishments over the years.
We often hear, Mr. Speaker, that there is, at present, a terrific atmosphere, and that all governments should encourage this trend among our young people.
Doubtlessly, such an effort requires considerable sacrifice, financial sacrifice on the part, not only of the provincial governments, but of the institutions themselves and, more particularly and directly, on the part of the parents, because our fellow citizens, whoever they be, all agree that it would be a great tragedy if it should happen, that, in 1964, a talented young man in Canada were financially unable to continue his studies at a university. I am convinced that all people of good will will see to it that such an eventuality does not take place, here, in 1964.
The aim of the legislation before us tonight is to enable some students in our universities to obtain the necessary loans for continuing their studies. To my mind, this legislation will not meet with much opposition on the part of hon. members from the other provinces, except Quebec. On the contrary, I even believe that it will be rather enthusiastically welcomed. But, in the case of the province of Quebec, the situation is somewhat more difficult, because there is a rather delicate constitutional problem involved.
As a matter of fact, the premier of the province of Quebec, Mr. Lesage, made a somewhat violent statement when this question was raised. He even threatened to resort to the courts in order to have the constitutional priority of the province acknowledged in that field.
More recently, we saw with a certain amazement that the students' associations of Laval, Montreal and Sherbrooke Universities, as well as the association of the students of classical colleges and teachers' colleges send to the Minister of Finance a resolution protesting against this intrusion of the federal government in the field of education, which is essentially provincial.
These students, as well as the provincial government, expressed an opinion which is not new and which is that such loans should come from the provincial government.

Loans to Students
I must admit it is with much hesitation I rise tonight to support the bill before us.
I do so after having carefully studied the various sections of the bill, for, needless to say, before supporting it, I believe it is my duty to express serious doubts on the constitutional aspect of this document. On the other hand, I am not too surprised to see that this legislation was introduced by a Liberal administration. We have been used, in the past, to see Liberal governments always trying to interfere in the provincial fields: they never missed an opportunity to weigh down the scale in favour of the central government and to enter, with all kinds of flimsy excuses in a field which is not theirs.
No doubt, we all know that section 93 of the British North America Act, makes it crystal clear that education comes under provincial jurisdiction, and not only that education belongs to the provinces, but that they have an exclusive right in that respect.
What does an "exclusive right" mean? It is a right which is our own. An exclusive right is one that lies above an ordinary right and which even transcends a priority right or a relative right. In its own framework, an exclusive right becomes an absolute right.
But rights alone are not enough. There must be means to exercise them. This is undoubtedly where the federal government is keeping on centralizing, where it is following the line it laid down long ago, that is always try to intrude further into fields where it has no jurisdiction whatsoever. But since it holds the purse strings, it can use a little blackmail and reach its goals.
Many people will no doubt find this speech somewhat academic; they will find that these essays on the constitution are not practical enough. Personally, I see very practical applications here. That is why I have serious doubts about the legislation before us.
First of all, the federal government definitely lacks the organization to look after education. From time to time, the federal government introduces into the house enticing pieces of legislation concerning a particular field or a group of citizens; but since it has no department of education, no agency or crown corporation which might supply it with the required information so that it could decide whether or not such and such a step is necessary in a province in order to help education, one is entitled to ask why the government wants to intrude in this field. One is also entitled to wonder if this intrusion by the federal government will bring happy results for the population as a whole.
tMr. Balcer.]
In brief, the federal government intrudes in this field on the excuse that it has the means to do it, that it is somewhat easier for it to control the field, because it controls the monetary system, and so on. It collects taxes for this purpose and uses its credit for a particular measure intended to help education. This is what it is doing through this bill.
Fortunately, this bill includes an alternative payment formula. I shall give my opinion later on that subject, but I revert to my argument to the effect that the federal government does not really have the organization to look after education, to lay the foundations of the various pieces of legislation concerning education.
Consider the position of the provincial government. There you have a department of education and all the required experts. It is there that budgets and programs are prepared. It is there that the balance sheets of the various institutions are reviewed. It is there that there are meetings with the authorities of the higher education institutions. In short, the provincial government is really equipped to know what are the priorities in the field of education in the province.
That is why one may have misgivings about this bill and wonder-and here I speak as a citizen of the province of Quebec-whether this is what we really need at the present time in the province of Quebec. Is it right for the federal government to pledge its credit to the amount of $40 million in order to offer loans to students? It may be that the most necessary need, the most urgent need is the construction of laboratories, the training of university professors, the establishment of new teachers' colleges, the setting up of new libraries, a change of program, and so forth.
How can we tell? Only the provincial government can. As I said, the federal government is really not in a position to decide. That is why I think the federal government is taking a chance in going into that field. As a matter of fact, the federal government which preceded us, had gone into university grants in an absolutely disastrous way, and it is the province of Quebec which was deprived, for several years, of those amounts of money, simply because the then federal government had no replacement payment formula to enable the provinces to accept university grants.
Fortunately, this legislation, because of the opposition from Quebec, I am sure, provides for a replacement payment formula. I hope

that this formula will give the expected results. In short, I hope that this option system which certainly offers great difficulties from a constitutional point of view, will not place the province of Quebec in an inferiority position or will not completely upset the scholarship program of the provincial government and will not hinder the cause of education in that province.
The option system surely gives rise to great difficulties from a constitutional standpoint. It should not be used by the federal government as a roundabout way to keep on intruding slyly in matters where it has no jurisdiction.
However, as the hon. member for Pontiac-Temiscamingue (Mr. Martineau) explained yesterday, this option formula is not without merits and we should support it instead of simply penalizing a non-participating province.
Those options are conditional payments. They should merely be replaced by unconditional equalization payments. Then, we would not be trampling on the constitution but allowing the people of the various provinces to benefit from those surplus funds the federal government seems to have and the provinces could use that money to promote education.
There is no doubt, as always, that with such priority measures we are venturing into fields of activity where the needs are most pressing, in the education program of a given province, to achieve better results. For my part, I wanted to make that reservation about the constitutional aspect of the measure now before us and I must say that, because of the options provided for under section 12 concerning repayments, well, I shall support the bill while making a strong reservation from a constitutional standpoint.


Mr. Real Caoueiie (Villeneuve):: Mr. Speaker, the bill now under study is certainly a very important one, since it concerns our Canadian students. This afternoon, the hon. member for Lapointe (Mr. Gregoire) said very appropriately that the bill had a certain object in view and was advocating a certain method, and of course there is quite a difference between the methods used even if the aim to be attained is commendable.
When considering the contents of the bill, it is easy to realize that it does not at all fulfil the promises which the government made to Canadian students. In the first place, loans were to be interest free up to full repayment while the present bill provides just
Loans to Students
the opposite. A 20-year old student borrowing $1,000 per year during five years, when he will have reached 25, that is when his studies will be completed-or that part for which he will have borrowed up to $5,000-will be starting his career with a $5,000 debt. All the ministers and members will admit that it is quite shameful and discouraging for a 25-year old man to have a $5,000 debt.
Measures have been passed and suggestions have been made in the past to help our young students. Now, this legislation provides that a student who will have obtained a loan up to $5,000 will be compelled, six months after the end of his studies, to begin paying the interest on that loan, since the government will then stop paying it. On the other hand, if he takes five or ten years to repay this $5,000 loan-the minister has not even mentioned the interest rate. It is reported to be 5f per cent. Now 5f per cent over a ten-year period means that the student will have to repay $7,500 for the $5,000 be obtained.
Mr. Speaker, the essential point is this: let us suppose that the student is 25 when he completes his studies and is unable to find employment for a year or 18 months. Will the government then introduce a bill to help unemployed persons just out of university at the age of 25 and unable to repay those loans?
This afternoon, the Minister of Finance (Mr. Gordon) also stated that we shall have to resort to banks which only lend the deposits entrusted to them. I do not hesitate in the least to say that if the Minister of Finance really means what he asserted this afternoon, namely that banks only lend the depositor's money, he is not competent to hold his present office. The minister is lying not only to members of the house, but to the whole country.
The hon. member for Red Deer (Mr. Thompson) recalled that the former governor of the Bank of Canada, Mr. Graham Towers, stated before the committee on banking and commerce in 1939, that banks cannot lend their depositors' money.
I shall give an example to the Minister of Finance, because being a chartered accountant, he should know all about accounting.
An industrialist goes to a bank to borrow $100,000. The manager asks him if he has any personal collaterals, such as insurance policies, redeemable securities and often asks him to produce his marriage contract, not to take away his wife, but to ascertain if she will become the owner of his properties after

Loans to Students
his death. In any case, the manager takes all necessary precautions and finally agrees to make a loan of $100,000. Immediately, he asks him to sign notes, papers, collaterals, etc., covering the amount of $100,000. Then he creates a credit in favour of the borrower for an amount of $100,000, and this is entered into the books. Before the industrialist came to the bank, this $100,000 did not exist in the books. And to prove it, if we add up all the bank accounts that existed before the industrialist went to the bank and add them all up again after he left, the Minister of Finance would see that the bank accounts total $100,000 more than they amounted to before the industrialist went to the bank to obtain a loan.
Where is this amount of $100,000 coming from? Let the Minister of Finance inquire from the Bank of Canada. Let him inquire from the chartered banks of Canada who are authorized to create credit, who not only have the right of creating credit but the exclusive control over credit for the whole Canadian people. Then, we are told that bankers lend the money of their depositors, the money deposited in private accounts. When the loan for $100,000 was made-I see that the Minister of Fisheries finds this very funny, he does not understand anything, but he still finds it funny. People often laugh at this, but they do not know why they are laughing.
Mr. Speaker, the Minister of Finance was not speaking the truth this afternoon when he stated that bankers were lending the money of their depositors. I should like to draw his attention-
An hon.Member: We need the banks.


David Réal Caouette: We are not against the banking system; we object to the faulty control of the bank. I am not, by far, the first to condemn that system. In fact, if my hon. friend, the Minister of Fisheries (Mr. Robichaud) wants to read Pope Pius XI's encyclical Quadragesima anno, he will see that it says that those controlling money and credit are the masters of our lives, including that of the Minister of Fisheries, that they control the economic life of the whole nation and that, without their permission, nobody has the right to breathe.


Mr. Boulanger:: Including the Chrysler car dealers.


David Réal Caouette: Including my hon. friend from Mercier, who never shows more intelligence.
But when we criticize that system and when the Minister of Finance asks us to approve

this measure, at the risk of getting the next generation into debt, the rising generation which, it seems, is being placed in the hands of a few people who control money and credit in Canada, I wonder whether the Minister of Finance, the members of cabinet and the members of parliament have the right to recommend or to support such a bill?
Why did the Minister of Finance not present Bill C-110 saying: We are going to use the credit of the Bank of Canada; we are going to grant $1,000 a year scholarships to Canadian students, because these young people will be an asset which will help further the development of our country and our natural resources, not by crippling them right from the start, dwarfing them right from the start, lowering them, but by giving them all the necessary leeway so that they may become prominent people and go on to other things rather than having to repay the debts which the Minister of Finance is prepared to let them get into at this time.
Mr. Speaker, I will meet with some opposition. That same thing happened in this house in 1941 and 1942, when two good Liberal members, Messrs. Arthur Slaght and "Gerry" Mc-Geer, were sitting here. At that time those two men asked that the Bank of Canada be used and the then minister of finance, Mr. Ilsley, replied: "If we use the Bank of Canada to create any land of credit, the chartered banks, under the federal act, have the right to increase immediately 10, 12, 15 and even 20 times the credit granted by the Bank of Canada."
Well, let us amend that act instead of getting generations to come into debt. Therefore, let us amend the Bank of Canada Act and use Canadian credit created by the Bank of Canada, debt and interest free credit, to develop normally our human and natural resources. Actually, it is only a matter of credit to allow students to continue their studies. It is the same thing in all fields but, since we are dealing with Bill No. C-110, we approve of the principle of aid to students but we reject and disapprove of the principle of getting into debt our students, our own children and, as I said a little earlier, the generations to come.
On the other hand, the former minister of transport, the hon. member for Three Rivers (Mr. Balcer), said that the federal government is interfering with education, that it controls its monetary system. In his opinion, the monetary system is the control of taxes. That is all it amounts to. Moreover, he is not too sure that the Canadian government is

right in engaging its credits for $40 million. We do not know, he said, if technical schools, high schools or schools of higher learning are needed. He knew, he did not know; he knows, he does not know.
In short, one is not very well informed, but to be agreeable to the province of Quebec, the federal government must be pulled out of this mess whereas under such circumstances, these are not gifts from the government to Canadian students, but guaranteed loans. However the federal government-


Mr. Gauthier:: They are becoming real estate agents.


David Réal Caouette: Mr. Speaker, as my colleague, the hon. member for Roberval rightly pointed out, the federal government is becoming a real state agent, a loan agency and this occurs nowadays in all spheres of the economic field.
Mr. Speaker, as far as education is concerned, the only conceivable solution, which would respect provincial rights as well as individual rights and more particularly the rights of our young people, of our students, would be to make available to provinces credits, established by the Bank of Canada, without interest of any kind, not a kind of education, an indebted education, a kind of education which, in 15 or 20 years hence, will be entirely controlled and dominated by the Canadian chartered banks.
According to the principle of the bill the problem would perhaps not be too thorny this year, but in five years hence we will have five times more students who will have taken advantage of this loan system.
And why will the students take advantage of this loan plan? Because at present, they cannot fulfil their obligations. Therefore, advantage is taken of this and a plan to directly socialize education is proposed which would be controlled by the Canadian government and Canadian finance.
Today, automobiles are finance controlled, furniture is finance controlled; nearly everything is finance controlled, and we will now have finance controlled education for our children. What a beautiful system the present government is setting up in Canada.
Mr. Speaker, we are in favour of loans to students but, as the hon. member for Lapointe (Mr. Gregoire) rightly said this afternoon, not to get our students further into debt, so that five or ten years from now,
Loans to Students
they will not be able to repay their debts. Then, the federal government would no longer pay the interest; the students would have to pay it six months after completion of their studies.
That is not what the Liberal party promised the students during the 1963 election campaign. Students were promised scholarships and loans without interest. The Liberals did not tell the students they would have to repay the loans six months after having completed their studies. They were then misleading the Canadian students, and particularly the Canadian electorate.
The Liberal government hopes to get out of it like that, but I am convinced it will not. We will not allow future generations to get into debt as the government is now advocating. It is time the Minister of Finance stops telling us that Canadian chartered banks are merely lending the money of depositors. He should get information about that; otherwise, I will have to conclude that he knows nothing about the Canadian monetary system. When we know something about it, we are aware of other means than the one he is suggesting to assist the Canadian students, as the provinces do. Let us use the Bank of Canada. Let the Minister of Finance be convinced and let him use the Bank of Canada to establish new credit for our children's studies. And when the time of the reimbursement, without interest, will come, then we will be able to tell the government of Canada that he has helped the future generations. But, in the meantime, these are still only poultices on wooden legs applied by the government under this Bill C-110 now under study.


Joseph Jacques Jean Chrétien: Mr. Speaker, I should like, first of all, to pay tribute to Mr. J. A. Richard, a former member of parliament for St. Maurice-Lafleche, who died this morning.
Born in a poor section of the province, at St. Gregoire, and forced to leave school at an early age to earn a living, he built up, by dint of hard work, a going concern in Shawinigan and served his municipality as school trustee and alderman, and was active in charitable organizations.
At an age where most people think of retiring and living comfortably on their private income, Mr. Richard agreed, at 62 years, to run in the general election of 1949 and he remained in the public service until June 1962 as member for the constituency I am now representing.

Loans to Students
His friends from St. Maurice-Lafleche and his colleagues in the House of Commons remember him as a hard working, honest, devoted and sincere person. May he get his well deserved reward.
During the present session of the legislature, the province of Quebec gave itself a department of education. A man decided to provide his fellow citizens with the instrument they most sorely needed to ensure the fulfilment of the French language, an adequate educational system. That man was Paul Gerin-Lajoie. He succeeded in convincing the people of Quebec that, as far as economic standards are concerned, the only way to catch up with their most important neighbours, the United States and Ontario, was to train competent people who could play their respective roles in the community. And now, I feel it is my duty to say to the whole of Canada that thanks to that dynamic action in the field of education, Quebec and French Canada are preparing themselves for the mission which is entrusted to them in this country. We no longer want to be silent partners in the economic expansion of Canada; we want to be in the van. At present, Quebec is investing more in its human resources than Ontario whose population is larger by one million. "Operation education" has been launched. Quebec is on the march and we are proud of it.
For us, Quebeckers, education is the field where we are most concerned about our prerogatives and, under no circumstances will we tolerate any intrusion in that sector. The survival and emancipation of French Canada depend on education, and we will fight for our rights in this regard to the last ditch. If we want to survive, we must be intolerant in this matter.
This being said, we must recognize that the bill concerning student loans brings into confrontation the jurisdictions of two different governments. The federal government is responsible for credit control, but education falls under the exclusive jurisdiction of the provinces.
I hope that nobody will deny that education is exclusively a provincial matter. Anyone questioning that would get one biting answer from all hon. members of the province of Quebec, regardless of their political affiliation.
In all fairness, we must also recognize that, in the past, the federal government enacted legislation in many fields to provide credit

for citizens in all parts of Canada. I will mention just a few: small businesses loans; farm loans; Central Mortgage and Housing Corporation loans; loans to municipalities; loans to fishermen; university grants and assistance to technical training.
Now, the government is well aware of the problem that comes up in this legislation, that is the possible conflict between two different jurisdictions. Having understood that difficulty, it has prepared its bill so as to remedy that problem.
In the past, when the federal government grappled with any legislative problem, it did so without any or with very little regard for the opinion of the provinces in a given field. The central government used to take a rather lofty attitude which was likely to set public opinion against it.
Now, with reference to Bill No. C-110, the government first wanted to know the views of the provinces at the last federal-provincial conference, and the Minister of Finance pointed out this afternoon that several provinces-and I say several, because too many people think only of Quebec-informed the federal government that this came within their jurisdiction and they would not tolerate any unwarranted intrusion by the federal government. However, the federal government obviously had to enact legislation on behalf of those provinces which were anxious to provide their students with the necessary funds to continue their studies but which were unable to do so because of the large size of their population, their financial position or various other reasons. Once the provinces had expressed their views on the project submitted by the federal government, the Minister of Finance prepared a bill in accordance with the two following principles which are of the utmost importance:
(a)	education comes under the provinces while credit is a matter of federal jurisdiction;
(b)	the recognition of the contracting out formula under which a province may withdraw from the scheme without sustaining any financial loss.
The first principle-provincial jurisdiction in matters pertaining to education-is clearly recognized in section 10 of the bill which
states:
-the appropriate authority for a province may issue or cause to be issued a certificate of eligibility.

In addition, paragraph (b) of section 2 gives the following definition:
"Appropriate authority" for a province means such person, body or authority as may be designated by the lieutenant governor in council of that province as the appropriate authority for that province for the purposes of this act.
Accordingly, it will always be the provinces which will designate the students eligible under this legislation. Consequently, it is quite clear that the federal government does not infringe upon the field of education since control of the scheme will rest in the hands of the body chosen by the province and the latter will always be free to entrust its department of education with the administration of the program. Furthermore, in order to cover any province which is not convinced that it is in its interest to take part in this plan, the government has included in the resolution a second principle, mentioned above, namely: the possibility for a province to contract out and to receive in return an equalization payment; this illustrates the new philosophy of co-operative federalism.
As a matter of fact, section 12 of Bill No. C-110 specifies that a province that will not participate in the program will get an amount per student equal to the cost the federal government pays in all the other provinces.
I think this is a major change in the attitude of federal legislators to such an extent as to improve understanding in this country.
That being said, what must Quebec do in view of this situation? First of all, it is important to state that the effort made by Quebec in the field of education must be continued without faltering. But you must not forget a principle brought forward by the party I represent which, at the provincial level, was saying in 1960 that not one student in Quebec should abandon his studies because of financial difficulties.
That is why I would urge the province of Quebec to give serious consideration to this bill, so that it can benefit thereby to the fullest extent possible.
However, there is a point which I find important and which I consider to be a victory for a group of members of my party who have been advocating this for months. I refer to the fact that it is entirely up to the province to decide whether or not to take part in this program. That decision is left to the province. No province is obliged to participate. I think such a change of attitude should make my fellow citizens in the province of Quebec very happy.
Loans to Students
Only two years ago, such a provision in federal legislation would not even have been considered possible.
It is by putting up a positive and intelligent fight that Quebec will succeed, and not by resorting to demagogy and irresponsibility.
At the federal-provincial conference other provinces raised objections to the bill now before us. However, I was glad to learn this afternoon, from the Minister of Finance himself, that, now that they have been informed of the formulas advocated by the present government, some provinces would be ready to reconsider their positions.
If my province, after having considered the bill in every detail, does not consider it constitutionally objectionable as an impingement on exclusive provincial jurisdiction in matters of education, I hope that the students of my province, like other students in this country, will be able to benefit by this formula.
I think, if our governments could agree on this project, that Canadian unity would immediately benefit. If there were uniform opportunities, while maintaining the unquestionable prerogatives of the provinces, some English speaking students who do not reside in the province of Quebec would be able to go there to study and get a better knowledge of the French element in Canada. I think there would be a considerable advantage in uniformity, as there would be an advantage to French speaking students who would want to study in another province to acquire a culture which suits them.
I submit that this bill is something new. It is a historic bill, because, for the first time we have a piece of legislation containing all the provisions needed to help the provinces fully avail themselves of their autonomy, while permitting the application throughout Canada of a policy which would be of great service to the people.
I am not afraid to say that there is no political impingement in the educational field by the federal government at this time, because the final decision, according to the provisions of this bill, is not in the hands of the federal, but of the provincial governments.
I hope that the Canadian provinces will try to make use of this plan as we must not indulge in vain constitutional conflicts either on poverty or on education.
What we want is to give Canadian citizens the greatest opportunities we can so that our country will be a united country where every

Loans to Students
citizen will be in a position to achieve the objective he has in mind without being deprived of education.


Mr. Reg Canlelon (Kindersley):: Loans to Students
The minister has detailed them very well. But I join with the leader of the New Democratic party (Mr. Douglas) in saying that the number of loans which the minister believes will be granted are almost certain to fall far short of the number which should be granted if our country is to educate all those who are capable of being educated.
Most of us on this side of the chamber are certain this legislation should not have preceded the granting of the 10,000 scholarships proposed by the minister of northern affairs (Mr. Laing) a year ago last March, but should have followed the introduction of legislation to implement that promise. We wonder whether this is just another cute trick to avoid carrying out an election promise. As a teacher friend of mine, a rather shrewd person, said-and he is not a Liberal-there is a fear that this new lending program may get in the way of an adequate bursary program. This would certainly be a most undesirable thing to happen.
This, then, is a desirable step but it is not perfect, as my hon. friend from Digby-Annapolis-Kings so ably demonstrated in his informative and constructive address. It is not the answer to the real problem of the doubling and redoubling of the university population. We should continue to search for solutions to this pressing problem-solutions which are made even more difficult to find by the need to avoid interference with provincial rights in the field of education.


Mr. M. J. Moreau (York-Scarborough):: Mr. Speaker, I wish to make a few remarks on the bill now before us. First I should like to say how strongly I support this type of legislation. I am one of those who believe that the only limiting factors in an industrial society such as Canada's in furthering one's education should be the individual's own ability, capacity and application. This legislation seems to me to go a long way toward equalization of opportunity for our youth. I would expect it would receive ready support from all members of the house, particularly from the hon. member for Northwest Territories (Mr. Rheaume) who spoke so strongly last night in favour of equalizing opportunities in Canada. I would hope the official opposition would not oppose such an equalization measure, as they did the Family Allowances Act.
I am also one of those who found it necessary to skimp, to save and to borrow in order to get through university. While worry and privation may possibly contribute to self-reliance, we should not delude ourselves into
[Mr. Cantelon.l
thinking that many students can be successful in this way. It only takes a very short illness, a month without a job or some other unforeseen circumstance to place the dream of a university education completely out of reach of the student who is trying to make it entirely on his own. With rising tuition fees and living costs, I doubt that it is possible to work one's way through college nowadays, particularly if the student is taking an engineering course, an applied science course or if he is in medical school or any of the many other fields that require 35 to 40 hours of lectures and laboratory work a week, in addition to studying and preparing the reports that the student is required to submit.
I believe that the students of Canada are only asking for an opportunity, not a subsidy, and in my view this plan will go a long way toward solving a growing national problem. I want to remind hon. members, however, that this loan plan is not an end in itself but should really be regarded as only a beginning, a first step, if you will. I want to urge the provincial authorities to give top priority to the provision of more university facilities for our growing student population. This legislation will make it possible for more students in our society to attend university, and we are already faced with the problem of overcrowded facilities in most provinces. In my opinion this is a problem which is reaching crisis proportions and I would urge the federal and provincial governments to give it top priority.
We also have a critical shortage of trained university staffs and we must deal with this urgent problem which threatens to limit all our efforts in this field. We are currently spending thousands of dollars to train young people, only to lose them to the United States because of the limited opportunities for research and the lower salaries which are paid in Canada. We provide our youth with free public and secondary school education. We support them through state supported universities. We support them through scholarships, and now we are going to support them through loans so that in many cases they can find better jobs and opportunities in the United States.
In view of the technological changes facing our North American society, the revolution in which we are now involved and the need for trained and skilled minds in such a changing society, in view of the shortage of staff and of facilities, the lack of research opportunities and the difference in pay scales between Canada and United States, I urge the

government to convene a conference with the provincial authorities forthwith, or at least to place this matter very high on the agenda of the next federal-provincial conference in order to tackle what I consider to be a problem of national concern.
One aspect of this legislation is that it may help to solve another very serious and related need in our technological society. I refer to the low incidence of postgraduate students at Canadian universities. I should like to quote from an article which appeared in the Globe and Mail in early February of this year. It deals with a brief submitted by the Ontario council of university faculty associations to the provincial government outlining the seriousness of the problem. The article reads in part as follows:
Of the many points of powerful argument made in the excellent brief of the Ontario council of university faculty associations presented to the government several weeks ago, not the least is the story of the deficiency of Ontario and, indeed, of Canadian universities in graduate education. University education has two facets which are not always recognized by the public-undergraduate study and postgraduate study.
Later the article goes on to state:
It is from this latter group that professors and other university teachers are ordinarily obtained, and also the top scientists and research staff used in industry. University education is generally considered impossible without these highly qualified people-
The ratio of graduate to undergraduate students in Canadian universities is ridiculously lower than in universities of similar national importance in the United States. For instance, Harvard has about 60 per cent of its students in graduate work- The university of Chicago has about 68 per cent; Columbia about 60 per cent; Yale and Princeton, 50 per cent; University of Michigan, 35 per cent; University of California, about 30 per cent.
By comparison, (the latest figures from the dominion bureau of statistics are for 1961-62), the University of British Columbia has a ratio of about 6.8 per cent graduate students; Alberta, 6.3 per cent; Saskatchewan, 4.4 per cent; Queen's 9.1 per cent; McGill, 12.3 per cent; Western Ontario, 13 per cent; and the University of Toronto, about 9.3 per cent-
The article continues:
We cannot hope for very much from the other provincial universities in Canada-the biggest outside Ontario, the University of British Columbia, had its provincial grant heavily cut by the Social Credit government last year-and it can be seen from the above figures that the production of university professor material is on a low level in the others.
If we are to produce the staffs we are going to need for the universities in Ontario, which are expected to triple in size of enrolment in less than 10 years, we shall have to invest very heavily indeed in graduate schools of all kinds. This need is probably more urgent than any other phase of the university crisis.
Loans to Students
The approach of this crisis was made known to the Ontario government 10 years ago, but it did nothing about it when there was still time. About a year ago, Premier John Robarts set up a scheme for fellowships for advanced study by graduates of Ontario universities, and provided a modest capital sum for planning further facilities. It is necessary to enlarge these funds substantially. The difficulties of the situation ought not to paralyse action.
I believe, Mr. Speaker, that this brief really points out a national problem, one which merits the attention of all levels of government and certainly of all members of this house. I believe this legislation is a significant step because it can be used not only by the student who needs assistance during his undergraduate years but the student who wishes to take postgraduate work. It can be used by the student who feels he has been a burden to his parents long enough and feels he should begin to pay his own way. He will now be able to apply for a loan under this plan to continue his education.
In my opinion, there is also perhaps the further need for an incentive to encourage the student to take postgraduate training after four years or more of toil with no income. Once having gotten him through a postgraduate course, either here in Canada or in a university in the United States, there must be some means also for encouraging him to return from the United States. It was with this in mind, Mr. Speaker, that I placed a motion on the order paper on February 27, motion No. 38 which calls for the granting of a tax free period to the successful student for each year spent in accredited postgraduate study. This would provide an incentive to our trained people by way of an opportunity to recapture the costs incurred in these studies.
A further result of this scheme, Mr. Speaker, would be to keep highly trained minds at home, or alternatively to bring back to Canada students who are Canadians and who are doing postgraduate work at universities in the United States. They would return to Canada in order to benefit from this tax concession. In support of this idea, I would remind hon. members that it has been estimated that it costs approximately $50,000 to train a Ph.D., and most of this money comes from public funds. I also feel that the period during which we are likely to suffer the greatest loss of trained minds is in the period immediately following graduation, when the student has not incurred any family obligations. He has not earned any seniority or pension benefits with

Loans to Students
a company. He has not earned any promotions with a Canadian company. He is therefore very susceptible to the higher starting salaries and to the higher grants given to research in the United States. I therefore urge that the Minister of Finance (Mr. Gordon) consider this suggestion of mine. I hope that we might see it in our next budget.
I think it would play a very significant role in keeping these highly trained minds in which we have a tremendous investment of public funds here in Canada, in order that they may contribute what they can to our economic development.
Now, Mr. Speaker, the same factors apply in the academic world. Certainly, the need for university professors, the need for trained people in our universities, would also be helped by such a measure. I should like to place on the record some of the views regarding this very serious strain of our human resources which have been appearing in our newspapers in recent months. I have here an editorial which appeared in the Globe and Mail from which I should like to quote:
A disturbingly large number of these Canadians who move to the states have obtained costly education and training here. The House of Commons was informed this week that in the 12 month period ending last June, a total of 1,583 highly trained persons-mainly engineers, but including scientists, university teachers, physicians and surgeons-left Canada for the United States. For the previous year, the figure was 1,295; and for the year before, 1,270.
I should like to quote from the Globe and Mail for Tuesday, April 21, 1964:
The brain drain of Canadian university professors to the United States was blamed here yesterday for contributing to a shortage of specialized international study courses in Canadian universities.
Dr. J. F. Leddy, a professor at the university of Saskatchewan, told a special meeting of the national conference of Canadian universities and colleges-
There is more in this article and I could go on, but I have already quoted from the brief of the Ontario council of faculties of Canadian universities, indicating the need for a threefold increase in university staffs in the next ten years.
I was interested also in reading an article in the New York Times commenting on the furore in Britain over this same problem, which by contrast with our own on a per capita basis is really very minimal. Mr. Wilson, the leader of the Labour party devoted a major political broadcast to this exodus of political scientists. He is reported as follows:
He scored the "miserably inadequate provisions by the government of research facilities" and said

that even when a British scientist scored a breakthrough "it is left to American or other business firms to build the industry that this British discovery made possible."
Mr. Wilson said about 140 Ph.D.'s were leaving Britain every year permanently, a lot of them for the United States. He said this was nearly one in eight of Britain's yearly output of highly qualified scientists-
Government officials, smarting under the criticism, are suggesting that Prime Minister Sir Alec Douglas-Home will raise the issue with President Lyndon Johnson when they meet in Washington.
I think the New York Times comment was indicative of the seriousness with which this problem is regarded in Britain. Certainly, the problem in Britain is really insignificant compared to the per capita problem we have here in Canada. I would strongly urge that the federal government and provincial governments take note of this serious problem which I feel is limiting Canada's ability to compete in this highly industrialized and complex world.
I would ask the Minister of Finance to look seriously at the notice of motion currently on the order paper in order to determine if it could not be used as a further means of attacking a problem of national significance.
I commend the government for moving quickly on this loan legislation. I suggest a further step could be taken, perhaps in the next budget, by the adoption of my motion. I strongly urge that a conference be held with the provinces concerning university facilities. This latter problem must be given priority, even ahead of student scholarships, of which the opposition has been making much. I feel this problem of the facilities which we are able to provide for the greater student population is a much more urgent one and one which requires the full attention of all levels of government. I would ask the Minister of Finance strongly to urge the cabinet that this be placed as one of the top priority items for the next federal-provincial conference. I suggest, Mr. Speaker, that this whole problem of advanced education is becoming such an urgent one that our next step must be planned very carefully indeed, and in my own mind I feel that the problems of the facilities and the staff are much more urgent than anything else.


Mr. Remi Paul (Berihier-Maskinonge-Dela-naudiere):: Mr. Speaker, considering the requirements of modern science and the need for higher education which our young people must have today, the government takes this

pretext tor introducing legislation which, at first sight, may have a great appeal, which may be understandable, for the majority of hon. members, but which, in my humble opinion, is quite unacceptable to the province of Quebec. And I propose to give hon. members the legal grounds.
The end does not justify the means. When introducing this legislation, the government cannot, ostensibly due to the magnitude and complexity of the problem, make a constitutional issue out of it, when education is under exclusive provincial jurisdiction under the British North America Act.
Today, federal-provincial relations are reaching a dramatic turning point in Canada, in the fields of taxation and of responsibilities. A conference should be held to decide whether we must come back to the federal system, with the sharing of powers and responsibilities, or whether we should continue, by all possible means, to realize a Unitarian system which will assume all responsibilities, absorb the majority of the taxation fields and act as a distributing clearing house, whereas the provinces will become vassals or branches of this Unitarian system, the policies of which will be dictated by the central government under the guise of national importance, national scale or national standardization.
It is interesting to hear discussions about co-operative federalism. Since our hon. friends came to power, they have been trying to find a camouflage for their centralizing feelings which always characterized Liberal administrations under the King and St. Laurent governments.
Later on, in my remarks, I intend to deal with that problem, referring especially to the problem of the setting up of assistance or grants to universities and legislation which was brought forward in 1951, while Hon. Mr. Cass, said: If we push assistance to universities too far, there will be a subsequent necessity for the federal government to go into the field of elementary and secondary education.
There is no doubt whatsoever that cooperative federalism is used as a smoke screen by our Liberal friends. It is a new formula, as during the last war, when the new phrase had been coined-people spoke no more of conscription, but of mobilization. Today, we speak no more of centralization, but of co-operative federalism.
Canadian federalism is a system of association between independent governments, that is the governments which practise it are coordinated but not subordinated to each other.
Business of the House
However, under such a system of association, these governments co-operate in the common duties, such as mentioned in article 95 of the constitution, with respect to immigration and agriculture. These governments must respect each other's exclusive rights.
Under such an association system, the same governments know they cannot do indirectly what the constitution forbids them to do directly. As a matter of fact, the privy council in London gave a decision on that point, as well as the supreme court.
The federal government is now trying indirectly to intrude in a matter directly under provincial jurisdiction, that is, education. Through the legislation now before us it is trying to do indirectly what it is prevented directly by the constitution.
Indeed, that principle of Canadian federalism has been recognized and approved many times by judgments of the privy council in London. I am sure the Minister of Justice (Mr. Favreau), the Liberal leader for Quebec, who has held high administrative posts, had the opportunity to read those judgments, and especially the Great West Saddlery case (1921), the Edwards case (1930), the Aeronautics case (1932) and also the unemployment insurance case (1937).
May I call it half past ten?



BUSINESS OF THE HOUSE

Gordon Minto Churchill: May I ask the house leader about the business for the rest of the week?


Guy Favreau: As the first item of business tomorrow we will carry on with the debate on the second reading and with the committee stage of the student loans bill, and then we will take the second reading and committee stage of the bill relating to the federal-provincial fiscal arrangements. After that we will deal with the third readings of these two bills and we will spend Friday on main estimates. First we will discuss the estimates of the Post Office Department, after which the estimates of the Department of Public Works will be dealt with, followed by the estimates of the Department of Northern Affairs and National Resources.



PROCEEDINGS ON ADJOURNMENT MOTION

[Stage Direction]
A motion to adjourn the house under provisional standing order 39A deemed to have been moved.
5490	HOUSE OF
Proceedings on Adjournment Motion

Louis-Joseph Pigeon: Mr. Speaker, at the outset of today's sitting, I put a question-I regret that the Minister of Finance (Mr. Gordon) is leaving-but I am sure that his parliamentary secretary (Mr. Pennell) will give me an answer.
I directed a very significant question to the Minister of Finance as follows:
What measures does the minister intend to take in order to stop the rise in the cost of living, since Montreal has already recorded the highest rise?
The city of Montreal is among the ten metropolitan areas covered by the dominion bureau of statistics the one which has recorded the highest increase in the cost of living from May to June 1964.
In fact, the increase in Montreal was 0.9, the index rising from 134.3 to 135.2 while in Toronto it was only 0.7; however, it must be pointed out that in the latter, the index is the highest one in Canada, that is 137.1 compared with 136.4 last May.
Mr. Speaker, the main Canadian cities, especially the city of Montreal, have to face a serious problem on account of the cost of living index which is constantly rising, especially since this government has assumed office. It must be borne in mind that from an economic point of view an emergency situation prevails in Montreal. It has 55,000 unemployed and 25 per cent of its workers do not earn enough to provide an adequate standard of living for their families.
How can heads of families in cities such as Montreal overcome their difficulties if the cost of living keeps on rising? And the same situation is true in every Canadian city.
I would be very happy to know what the Minister of Finance intends to do to stabilize the cost of living and check further increases because there will come a time when the situation will become unbearable for the Canadian worker. I should like to know what the government intends to do to remedy such a catastrophic situation.


Mr. L. T. Pennell (Parliamentary Secretary to Minister of Finance):: Mr. Speaker, I can quite understand the hon. member raising
[Mr. Favreau.l

this very important question of the rising cost of living index. I notice that he brought to our attention the fact that the largest increase had occurred in the city of Montreal. Of course I should point out to him that this situation fluctuates from city to city, so that while in the period of May and June the city of Montreal may have been the city that had the largest increase, it does not necessarily follow, of course, that the cost of living index will be constantly rising at a higher rate in the city of Montreal than elsewhere.
The movement of consumer prices in Canada over the past year has been moderate and in line with the experience of the past few years. Over the past year, prices have risen about 2 per cent, about the same rate of increase that was experienced during the previous three or four years. Not all kinds of prices have risen at this rate. Services, particularly medical costs and automobile insurance, have risen more-by some 2.4 per cent. Prices of durable goods, such as appliances, are actually lower now than they were a year ago.
It is worth noting that the rise in prices in Canada has been only fractionally higher than it was in the United States. It is well below the price rises which have been occurring in most European countries and Japan. I noted that the hon. member quoted the Financial Times, I believe, as a source of his information, and I am sure he will agree that it is only proper that I should reply in kind. Only last week-that is, on July 13- the Financial Times of Canada had this to say:
Routine monthly reporting of changes in Canada's consumer price index repeatedly brings newspaper headlines of "new record highs". But it does not follow that the cost of living is skyrocketing every time the index moves up-
The longer-range trend of consumer prices remains remarkably stable. The June index was 1.9 per cent above June, 1963, but the increase in ten months since August has been only 1 per cent.
This is well in line with the average annual increase of 2 per cent experienced in recent years. It is also significant that industrial wages and salaries have been increasing at a steadily faster rate than consumer prices. The industrial wage index stood at 200.8 at May 1, (1949=100), compared with 198.5 a month earlier and 194.4 a year earlier.
The total wage index has thus risen 100 per cent since 1949, for an average annual gain of 6.6 per

cent while the consumer price index has increased only 35 per cent, or just over 2 per cent per year.
I might say, Mr. Speaker, that the rise was largely due to seasonal factors mainly in the food index. I think this fell rather heavily, of course, on-
Proceedings on Adjournment Motion Mr. Deputy Speaker: Order. I am sorry to interrupt the parliamentary secretary, but I must advise him that his time has expired.
Motion agreed to and the house adjourned at 10.38 p.m.

Wednesday, July 15, 1964