1965-06-17

EXTERNAL AFFAIRS


Mr. John R. Malheson (Leeds) moved: that the first report of the Standing Committee on External Affairs presented to the House on Tuesday, June 15, 1965, be concurred in. [Translation]


Mr. C. A. Gauthier (Roberval):: Mr. Speaker, before this motion is agreed to I must point out that the member of our party who sits on this committee will find it hard to attend every sitting, since it will meet while the house is sitting.
It is understood that if a matter relating to external affairs is being discussed in the house, so that the attendance of our representative is required in the house, he will not be able to be in both places at the same time.
I merely wanted to warn the house, and especially the members who have criticized us in the past, suggesting that we did not attend certain committee meetings. Both sides of the matter must be considered.
If the committee and the house meet at the same time in the future, our representative will certainly not be in a position to be in both places. I only wanted to forewarn the house.


[Stage Direction]
Motion agreed to.


[Stage Direction]
On the order:	Government notices of
motions:
June 15-The Solicitor General:
That a joint committee of the Senate and House of Commons be appointed to inquire into and report upon the problems of consumer credit, more particularly but not so as to restrict the generality of the foregoing to inquire into and report upon the operation of Canadian legislation in relation thereto;
That twenty-four members of the House of Commons to be designated by the House at a later date,
22620-16H
be members of the joint committee, and that standing order 67(1) of the House of Commons be suspended in relation thereto;
That the said committee have power to call for persons, papers and records and examine witnesses; to sit while the House is sitting, and to report from time to time and to print such papers and evidence from day to day as may be deemed advisable, and that standing order 66 be suspended in relation thereto; and to engage the services of counsel, accountants and such other clerical and technical personnel as may be deemed necessary, that the minutes of proceedings of and evidence given before the joint committee at the past session be referred to the said committee and be made part of the records thereof; and that a message be sent to the Senate requesting that House to unite with this House for the above purpose, and to select, if the Senate deems it advisable, some of its members to act on the proposed joint committee.
Mr. Deputy Speaker:: Pursuant to section 2 of Standing Order 21, this notice of motion is transferred to and ordered for consideration under government orders at the next sitting of the House.



AGRICULTURE


[Stage Direction]
On the orders of the day:
Right Hon. J. G. Diefenbaker (Leader of the Opposition):: I rise to ask the Acting Prime Minister whether the Government intends to make changes in the Wheat Board act, and whether the Minister of Forestry in the speech which he was kind enough to send me was expressing Government policy when he said:
The policy of the Canadian Wheat Board cannot be regarded as a national farm policy.
And further:
The Canadian Wheat Board is therefore using its powers for strictly regional purposes.
And later on:
If we are to change the present feed grains policy, we have two options before us: either the Canadian Wheat Board relinquishes its wide powers over what happens to feed grains in Canada, in exchange for a gradual abandonment of freight assistance for grains shipped to eastern Canada, or the Prairie producers will have to resign themselves to seeing the eastern feeders set up an effective countervailing agency. Since acceptance of
June 17, 1965

Inquiries of the Ministry the first option seems highly unlikely for the time being, the setting up of an agency in eastern Canada with wide powers, plus a system of equalization payments based on the difference in price between the two grain markets, seems to offer an alternative worth considering.
Is the Government in agreement with this speech? Does it agree with the view that the wheat board "juggles with delivery quotas, adjusts interim payments and regulates the allotment of freight cars, and has sometimes been able to bring about an artificial rationing of feed grain availabilities at the Lake-head"? Does this speech represent the view of the Government, and does the Government intend to attack the wheat board in this way, an attack that has not been made against that body for as far back as I remember?


Mr. Fisher:: The new guard.


Hon. Maurice Sauve (Minister of Forestry):: Mr. Speaker, on Friday when I spoke in Drummondville I was talking about options. This is on page 2 of the speech, where I said:
We shall now consider the various options open for Federal Government action in an attempt to resolve the problems just raised.
I tried as much as possible to explain how the feed grains market operated in Canada, and I explained the various problems. It seemed to me that inasmuch as I was trying to explain to people what was happening, I was doing my duty so that public discussion could follow the presentation of the report of the Standing Committee on Agriculture and Colonization of the House of Commons, which was tabled in this House on March 22, 1965. Before Government legislation was introduced in this House it would be excellent to have public discussion. You will recall, Mr. Speaker, that in the Speech from the Throne there was an announcement about a feed grains policy.


John George Diefenbaker: Mr. Speaker, I did not know the Minister would be answering this question. Does the Minister now state that he believes the Wheat Board, "by juggling with delivery quotas, adjusting interim payments and regulating the allotment of freight cars, has sometimes been able to bring about an artificial rationing of feed grain availabilities at the Lakehead, basic stocks on which the bidding runs on the Winnipeg Grain Exchange"?
Does he believe that these charges against the Wheat Board are well founded, and do they represent Government policy?


Maurice Sauvé: Mr. Speaker, it is evident that inasmuch as the wheat board and the brokers


are the only outlet for feed grain for eastern farmers, the price is set by the wheat board for eastern feeders.


Mr. W. H. Jorgenson (Provencher):: A supplementary question, Mr. Speaker. Does the Minister not realize that in the report of the Standing Committee on Agriculture and Colonization, which he quoted, they completely absolved the Canadian Wheat Board of any responsibility for the problems of feed grain in eastern Canada?


Mr. Deputy Speaker:: Order, please. May I suggest that this is becoming a debate.


An hon. Member:: Answer that question.


Mr. Smallwood:: That is a good question. Get up and answer it.


Mr. E. Nasserden (Rosihern):: Mr. Speaker, I should like to ask the Minister of Forestry what he meant by the "pervasive influence" of the policies pursued by the Canadian Wheat Board.


Mr. Deputy Speaker:: Order. I suggest this is not a proper question at this time.


Edward Nasserden: Mr. Speaker, I submit that when a Minister of the Crown attacks an agency of government such as the Canadian Wheat Board using the word "pervasive" in regard to influence, that is a matter which should be brought up on the floor of the House of Commons.


Mr. Deputy Speaker:: The hon. Member has done that now.


Hon. Alvin Hamilton (Qu'Appelle):: Mr. Speaker, my question is addressed to the Minister of Trade and Commerce and deals with the same matter. I want to ask the Minister of Trade and Commerce this question in view of his remarks in Winnipeg on June 11, which was the same day the Minister of Forestry made his remarks at Drummondville. Does he agree with the scurrilous statement made by the Minister of Forestry against the Canadian Wheat Board?


Hon. Mitchell Sharp (Minister of Trade and Commerce):: Mr. Speaker, I have only heard the excerpts that were read by the Leader of the Opposition, and if that was all that my colleague said, then I would not agree.


An hon. Member:: Read the rest.


Mitchell William Sharp: I cannot say whether the Leader of the Opposition has fairly represented the views of my colleague.
June 17, 1965	COMMONS


Some hon. Members:: Oh, oh.


John George Diefenbaker: Mr. Speaker, may I immediately ask that the Minister of Forestry table in the House and make available to the Minister who reports to Parliament for the wheat board these statements that are a scandalous derogation of the Wheat Board.
I am surprised that the Minister has not seen these statements.


Mr. Deputy Speaker:: Order, please.


Hon. Theogene Ricard (St. Hyacinlhe-Bagot):: Mr. Speaker, I should like to put a supplementary question to the Acting Prime Minister.
Does the Minister support and approve the remarks and views of the Minister of Forestry (Mr. Sauve) concerning feed grain as expressed in Drummondville last week?


Hon. Paul Martin (Acting Prime Minister):: Mr. Speaker, I would like to examine this statement before answering. I would be undoubtedly pleased to say to my hon. friend that I agree, but I will at first consider this statement.


J.-H.-Théogène Ricard: Can I infer that the Acting Prime Minister is in agreement with his colleague the Minister of Forestry?


Mr.   Marlin@Essex East: I have already answered that question, Mr. Speaker.


Hon. D. S. Harkness (Calgary North):: Mr. Speaker, I should like to direct a question to the Liberal Party chief agricultural critic while in opposition, the present Acting Prime Minister. Is the basic purpose of the Government's agricultural policy in regard to feed grains to transfer to the greatest extent possible the feeding of livestock from western Canada to eastern Canada?


Mr.   Marlin@Essex Easl: Mr. Speaker, first of all may I say that I would be lacking in the human qualities if I did not at once acknowledge the tribute which the former Minister of Agriculture has paid to my capacity as agricultural critic in those days when he was both the Minister of Agriculture and the Minister of National Defence. I should say, however, that when he was Minister of Agriculture he did not recognize these qualities to the same generous degree that he has today. I will have to take notice of the question.
DEBATES	2523
Inquiries of the Ministry
Som hon. Members: Oh, oh.


Mr. T. C. Douglas (Burnaby-Coquillam):: rise on a point of order. The Minister of Forestry quoted from the speech he made in Drummondville. We are all interested in it and in view of the fact that he has quoted it in the House would he agree to table it?


Douglas Mason Fisher: Get it printed in Hansard.


Some hon. Members:: Hear, hear.


Mr. Deputy Speaker:: I understand that since this is not an official document the unanimous consent of the House would be required in order to have it published as an appendix to Hansard.


Some hon. Members:: Agreed.


Mr. Churchill:: No.


Mr. Deputy Speaker:: I understand there is an objection.


Gordon Minto Churchill: Table the speech. Only its tabling should be accepted.


Thomas Clement (Tommy) Douglas: On a point of order. Surely the Minister cannot quote from a document without tabling it.


Mr. Deputy Speaker:: Order, please. This is a very simple matter. If the Minister is prepared to table it and there is no objection, we shall proceed on that basis.


Mr. Knowles:: Agreed.



WHEAT-EXTENSION OF INTERNATIONAL AGREEMENT

[Stage Direction]
On the orders of the day:
Thomas Clement (Tommy) Douglas: Mr. Speaker, I wonder whether the Minister of Trade and Commerce could give the House some information with respect to the International Wheat Agreement. I understand that the present agreement, which expires on July 31 this year, is to be extended for one year, and that the United States Senate has just ratified the extension in so far as that country is concerned. Has Canada signed an extension? Will this matter be referred to the House of Commons? If it has not been signed by the Government of Canada, is it the Government's intention to sign it fairly soon?


Mitchell William Sharp: Mr. Speaker, my recollection is that I announced in this House that it was the Government's intention to agree to an extension for one year. There are no changes
June 17, 1965

Inquiries of the Ministry in the provisions of the international wheat agreement; the provisions are simply to be extended for another year. At that time I expressed the hope that the United States would ratify the extension, and it has done so.
There will be an opportunity, I hope very soon, for the estimates of the Department of Trade and Commerce to be brought forward for discussion, at which time there will be an opportunity to examine me and members of the Canadian Wheat Board.


Thomas Clement (Tommy) Douglas: A supplementary question, Mr. Speaker. Are meetings now going to be held with respect to either a new agreement or a further extension after the expiration of the present agreement, which will expire on July 31, 1966? Has the Minister any hope that there will be any change in the price range?


Mitchell William Sharp: Mr. Speaker, the international wheat agreement was not renegotiated but was simply extended for another year because of the discussions now going on in Geneva concerning a cereals agreement which will comprehend not only wheat but other grains. It was because of those discussions which were proceeding currently that it was decided that it would not be in order to attempt to renegotiate the international wheat agreement itself. We are hopeful, indeed I can give the assurance, that there will be an agreement in effect before the present international wheat agreement expires.



LABOUR RELATIONS


[Stage Direction]
On the orders of the day:
Mr. H. A. Olson (Medicine Hat):: Mr. Speaker, I should like to address a question to the Minister of Labour. I should like to ask him whether any progress is being made in settling the strike of grain handlers at the port of Montreal. I understand that a federal labour conciliator has been appointed. I would also ask him the position of the grain handlers' strike which has been going on in Vancouver for the last two weeks.


Hon. A. J. MacEachen (Minister of Labour):: Mr. Speaker, in Vancouver the Industrial Inquiries Commission is still at work and has not yet reported on efforts which are continuing to settle the dispute. In Montreal the officers of the Department are presently attempting to get a resumption of work so that the conciliation board can proceed in a normal way to deal with this dispute.
{Mr. Sharp.]



IMPROVEMENT OF WORKING CONDITIONS OF INTERPRETERS

[Stage Direction]
On the orders of the day:
Mr. Real Caouette (Villeneuve):: Mr. Speaker, I should like to put a question to the Secretary of State.
I have been informed that the employees doing the simultaneous interpretation of the debates of the house come under the Civil Service Commission instead of coming under the Speaker of the house.
Could consideration be given to changing their status; there are six interpreters at the present time and they work from 2.30 p.m. to 10 p.m.? Under the circumstances they are not treated as human beings because they are overworked.
Would the Secretary of State see to it that the lot of the interpreters of the house is improved?


Hon. Maurice Lamoniagne (Secretary of State):: Mr. Speaker, some time ago I gave a lengthy reply to a question put by the hon. member for Quebec East (Mr. Beaule) and the hon. member for Burnaby-Richmond (Mr. Prittie). I said then, among other things, that the working conditions of the interpreters of the house were being considered very carefully. I hope to be able to make a statement very soon in this regard.


David Réal Caouette: Mr. Speaker, a supplementary question.
Would the Secretary of State consider the possibility of transferring interpreters from the Civil Service Commission to the staff of the house?


Maurice Lamontagne: Yes, Mr. Speaker. [English']



CANADIAN BROADCASTING CORPORATION


[Stage Direction]
On the orders of the day:
Mr. Harold E. Winch (Vancouver East):: Mr. Speaker, I desire to direct a question to the Secretary of State which is of a most urgent nature, and of which I gave notice yesterday afternoon.
I should like to ask the Minister whether Mr. Caple, the regional director of the C.B.C. in Vancouver, spoke with the authority of the Government when he advised the Van-
June 17, 1965

couver City Council that the C.B.C. would require a lease of not less than 25 years on the former R.C.A.F. Kitsilano property, and that if the same was not forthcoming the C.B.C. would remove its operations from Vancouver to some adjoining municipality. Further, did the same Mr. Caple have the authority of the Government to repudiate the commitment given last fall by Hon. John Nicholson, that the Federal Government would contribute financially to urban development in downtown Vancouver, which development would include a location for the C.B.C. if the City of Vancouver and the Province would participate on a financial basis?


Maurice Lamontagne: Mr. Speaker, I have already asked the C.B.C. to make a full report about this incident, but unfortunately I have not yet received that report. As soon as I receive it I will be very pleased to answer the question the hon. gentleman has asked.


Mr. R. W. Prittie (Burnaby-Richmond):: have a supplementary question, Mr. Speaker. Will the Minister remind the President of the Canadian Broadcasting Corporation that land in Burnaby has been offered to the C.B.C. if it cannot find a location in Vancouver?



BICULTURALISM AND BILINGUALISM


[Stage Direction]
On the orders of the day:
Mr. Erik Nielsen (Yukon):: Mr. Speaker, I have a question for the Secretary of State. Will he inform the House whether he has authorized or the Bilingualism and Bicultur-alism Commission has decided to send a delegation to Yugoslavia, and for what purpose?


Maurice Lamontagne: Mr. Speaker, I have said repeatedly in the House that I am not responsible for this or any other Royal Commission. The Prime Minister is responsible for Royal Commissions.


Erik Nielsen: Then may I ask the Acting Prime Minister if this is the case?


Paul Joseph James Martin: What was the question?


Some hon. Members:: Oh, oh.


Paul Joseph James Martin: Mr. Speaker, I was thinking of the brilliance of my reply to the hon. Member for Calgary North. I will
Inquiries of the Ministry therefore want to carefully consider my reply to this question.


Erik Nielsen: Will the Acting Prime Minister answer it tomorrow?


Paul Joseph James Martin: I will certainly endeavour to do so if the circumstances warrant a reply.


EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, I should like to address a question to the Minister of National Defence. In view of the fact that that great British field commander, Field Marshal Montgomery, has recently expressed the opinion that British forces no longer serve a useful purpose in Europe and has urged their withdrawal from NATO at this time, would the Minister inform the House whether the Canadian Government is giving consideration to the withdrawal of all Canadian forces now committed to NATO in Europe?


Hon. Paul Hellyer (Minister of National Defence):: Mr. Speaker, I just received notice of this question as I entered the House and I have not yet seen the article referred to by my hon. friend containing the statements attributed to Field Marshal Montgomery. I would certainly want to study it very carefully before expressing any opinion on the matter.
With regard to the direct question, is the Government of Canada giving consideration to the withdrawal of all Canadian forces now committed to NATO in Europe, the answer is no.


Hon. Marcel Lambert (Edmonton West):: Mr. Speaker, on June 111 asked the Secretary of State for External Affairs a question with regard to reports of basic shifts in the policy of western countries in NATO and whether this would involve a reduction in Canadian forces in Europe at this time. The Minister of National Defence has partially answered, but I am wondering whether the Secretary of State for External Affairs can confirm that there are these basic shifts in the defence policy of western countries in Europe, and can tell us in which of these changes Canada is actually involved.
June 17. 1965

Inquiries of the Ministry


Hon. Paul  Marlin@Secretary of Stale for External Affairs: Mr. Speaker, I am sorry I did not give this reply earlier. I had intended to give it yesterday but my hon. friend was unavoidably absent, I am sure on public business.
Hon. Members are aware that reports of a speculative character appear from time to time concerning developments in NATO, and particularly concerning the effect of these developments on the future of the alliance. The Canadian military contribution to NATO is, of course, under constant review in the light of political, strategic and technological developments in order that Canada, like other member states, may determine the best way in which we can make a realistic contribution to NATO's capability to deter aggression. Thus, for example, Canada last year committed a battalion group to the allied command Europe mobile forces which was established to enable SACEUR to respond to threats to the flanks of NATO. I think that my colleague's reply of a few moments ago, read in conjunction with this reply, will more than satisfy my hon. friend.



EDUCATION


[Stage Direction]
On the orders of the day:
Mr. George Muir (Lisgar):: Mr. Speaker, I have a question for the Minister of Finance. Inasmuch as the Government is now going to apply a means test in granting student loans, will the Minister explain how he justifies the required disclosure of the parents' taxable income, when it is my understanding that even the Minister of National Revenue is prohibited from making such disclosures?


Hon. Walter L. Gordon (Minister of Finance):: Mr. Speaker, I presume my hon. friend is referring to the report tabled last week on this matter. As I said at the time, or I think I did, the officials of the Provinces who have been working on the application or administration of this program with the officials of the Department of Finance include Provincial officials who have had the most experience in this field. It was their view that if this particular program was to be administered uniformly and fairly across the country, they should ask for certain information.
As my hon. friend will know, it was agreed that the administration of the program would be left to the Provincial officials. It was their considered judgment that they should ask for such information, and that is why the matter

is included in the report. They have been asking for information about the financial position of parents. They feel strongly that they should ask for this information; and it is information which the parent, of course, is free to provide or not as he sees fit.


George Robson Muir: A supplementary question, Mr. Speaker. Is it the Minister's view that parents should be forced to disclose their financial means to the Provincial authorities-


Walter Lockhart Gordon: There is no enforcement, Mr. Speaker.


George Robson Muir: -before such loans can be obtained?


Douglas Mason Fisher: As a supplementary question I would like to ask the Minister whether his officials have had legal advice from the Department of Justice, in that the asking of such information by any authority from a taxpayer may be illegal under the acts administered by the Department of National Revenue.


Walter Lockhart Gordon: I will be glad to inquire as to whether they had any formal legal opinion on the matter. This is a practice which has been followed in the provincial field for many years, but on the particular question I will be glad to inquire into it.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Mr. Stuart A. Fleming (Okanagan-Revel-stoke):: Mr. Speaker, my question is directed to the Minister of Labour. In view of his presumed interest in the fortunes of older workers in this country, may I ask him why a directive has been issued by his Department forbidding the employment of temporary workers over 65 years of age at Vernon military camp this summer?


Allan Joseph MacEachen: Mr. Speaker, I cannot offhand understand how the Department of Labour would issue a directive of this kind, but I would be glad to inquire and advise my hon. friend later.


Stuart A. Fleming: As a
supplementary question may I ask why the Minister has not been made aware of the fact that I wrote to him on the subject on June 7 and have not even had the courtesy of an acknowledgement? What I am particularly concerned about, and I said this
June 17, 1965

in my letter, is the position of war veterans allowance recipients and disability pensioners who have always had these opportunities, but who have been advised this year that they are withdrawn.


Allan Joseph MacEachen: Mr. Speaker, I regret that my hon. friend's letter has not been answered, but I will look into the matter and advise him more fully later.



CANADA LABOUR CODE


[Stage Direction]
On the orders of the day:
Mr. Andrew Brewin (Greenwood):: Mr. Speaker, I have a question for the Minister of Labour, and I am sorry I did not send him notice of it. Will the Minister tell the House whether the very expensive full page advertisements which appeared in a number of newspapers yesterday purporting to give an account of the Canada Labour (Standards) Code passed by Parliament, and which contained excellent pictures of himself standing before a microphone in front of the parliament buildings, were paid for by the taxpayers of Canada; also, whether he thinks it is appropriate to introduce political propaganda into paid public advertisements?


Allan Joseph MacEachen: Mr. Speaker, the advertisement was paid for by the Department of Labour in an effort to inform the Canadian public as to the terms of the Canada Labour (Standards) Code. It was suggested as an effective form of advertising, and I think it has demonstrated itself in that respect in view of the interest of my hon. friend and others in it. If he will look again at the ad he will observe there is no picture of the Minister of Labour in the ad at all.


Mr. Eric A. Winkler (Grey-Bruce):: Mr. Speaker, I would like to ask the Minister a supplementary question. Did he approve of the ad?


Allan Joseph MacEachen: Yes, Mr. Speaker, I approved of the ad after careful consideration.


John George Diefenbaker: Of the political benefits.


J.-H.-Théogène Ricard: A while ago the Minister said it was not his picture that appeared in this advertisement. Could the Minister tell us whose picture it was?


Allan Joseph MacEachen: Mr. Speaker-
Inquiries of the Ministry


Mr. Deputy Speaker:: Order, please.


Douglas Mason Fisher: Mr. Speaker, I want to ask the Minister of Labour whether his department is planning to supply more substantial, more factual and more detailed information, particularly with regard to how the Canada Labour (Standards) Code is going to affect railway and marine workers; and will he supply this before July 1 in lieu of the advertisement in which we have all taken such an interest, and which glorifies and beautifies the Minister so much?


Allan Joseph MacEachen: Mr. Speaker, it is proposed to distribute a booklet in connection with the Canada Labour Code containing greater detail with respect to the operation of the Code itself, and very shortly we hope to be able to announce the regulations, that are now under consideration by the Government, in connection with the Code. When these additional steps are taken a good deal of the interest shown by the groups mentioned will be expressed in them.


Douglas Scott Harkness: Is
this further pamphlet that is to be issued going to be in the same format as the advertisement which we have just been talking about, primarily designed to enhance the selfaggrandizement of the Minister?


Mr. Deputy Speaker:: Order, please. The 30 minutes allotted for questions has now expired.


John George Diefenbaker: Mr. Speaker, the question period having expired, I rise on a question of privilege. The Minister has just said that the ad did not have his picture in it. Well, I have the ad here, and this person noted for his masculine pulchritude has all the appearance of being the Minister. Does he disavow this person as being he?


Allan Joseph MacEachen: Mr. Speaker, in reply to the question of privilege raised by the Leader of the Opposition, I said it was not a picture. It is not a photograph.


John George Diefenbaker: Oh.


Allan Joseph MacEachen: It has been suggested that it is a likeness of the Minister of Labour, but it is not a picture or a photograph.


John George Diefenbaker: More deception.


Mr. Deputy Speaker:: Order. Is the hon. Member for Burnaby-Coquitlam rising on the same question of privilege?


Thomas Clement (Tommy) Douglas: No.

June 17, 1985
Income Tax Act


Mr. Deputy Speaker:: Then I suggest to hon. Members that there is no point of privilege in what has been raised by the Leader of the Opposition, and I would like to call the orders of the day.



APPLICATION OF MINIMUM WAGE TO FEDERAL WORK UNDER CONTRACT

[Stage Direction]
On the orders of the day:
Mr. David Orlikow (Winnipeg North):: In
connection with the Canada Labour (Standards) Code I would like to ask the Minister whether the provisions of the Code in respect to the minimum wage of $1.25 an hour will be applied to employees working on Federal Government work which is contracted, bid or tendered for by Canadian business or industry?


Allan Joseph MacEachen: Yes, Mr. Speaker. I have indicated several times that it is the intention of the Government to propose amendments to the Fair Wages and Hours of Labour Act, applying the wage principle to special categories of Federal contracts.



PENSIONS


[Stage Direction]
On the orders of the day:
Mr. S. J. Enns (Portage-Neepawa):: Mr. Speaker, my question was intended for the Minister of National Health and Welfare, but perhaps in her absence her Parliamentary Secretary might shed some further light on the information pamphlet which arrived on our desks which deals with old age security pensions, the question of when to apply and so on. The Canada Pension Plan is a very complicated piece of legislation. Is this one of a series of pamphlets about this important legislation, or is this all the information the public will be given?


Mr. J. C. Munro (Parliameniary Secretary to Minister of National Health and Welfare):: I am informed it is one of a series.



WAYS AND MEANS

[Stage Direction]
The House in Committee of Ways and Means, Mr. Lamoureux in the Chair.

[Stage Direction]
Resolved, that it is expedient to introduce a measure to amend the Income Tax Act and related provisions of the Federal-Provincial Fiscal Arrangements Act and to provide among other things
1.	That for the 1966 and subsequent taxation years the income tax payable by an individual be reduced

by an amount equal to the lesser of 10 per cent of basic tax or $600 and for the 1965 taxation year by an amount equal to the lesser of 5 per cent of basic tax or $300.
2.	That for the 1965 and subsequent taxation years a taxpayer may deduct in computing his taxable income an amount for the support of a person who was his niece or nephew and who during the year resided in Canada, was wholly dependant upon him for support, and was
(a)	under 21 years of age,
(b)	21 years of age or over and dependant by reason of mental or physical infirmity, or
(c)	21 years of age or over and in full-time attendance at a school or university,
(d)	the mother of the niece or nephew was divorced or separated and not in receipt of alimony or similar payments, or
(e)	the father of the niece or nephew was deceased or mentally or physically infirm,
not exceeding $300 if the person was a child qualified for family allowance and $550 if he was not so qualified.
3.	That for the 1965 and subsequent taxation years a taxpayer may deduct in computing his taxable income an amount not exceeding $550 expended by him during the year for the support of a person who was his aunt or uncle and who during the year resided in Canada and was dependant upon him for support by reason of mental or physical infirmity.
4.	That for the 1970 and subsequent taxation years the additional exemption of $500 now allowed to a taxpayer who has attained the age of 65 years be allowed only if the taxpayer has attained the age of 70 years and that for the taxation years 1966 to 1969 inclusive a taxpayer who has attained the age of 65 years but has not attained the age of 70 years be allowed the additional exemption of $500 only if he did not receive a pension under the Old Age Security Act in respect of any month in that year.
5.	That for the 1965 and subsequent taxation years a taxpayer who deducts in computing his income from an office or employment
(a)	annual dues to maintain membership in a trade union or to maintain membership in an association of public servants,
(b)	annual dues retained from his remuneration pursuant to the provisions of a collective agreement and paid to a trade union or association, or
(c)	annual professional membership dues the payment of which was necessary to maintain a professional status recognized by statute,
shall not by reason of such deduction be ineligible to deduct the standard deduction of $100 described in paragraph (ca) of subsection (1) of section 27 of the Act.
6.	That for the 1966 and subsequent taxation years a person, the spouse of such person residing with him and previously resident in Canada, or any dependant child of such person, shall be deemed to have been resident in Canada throughout a taxation year if such person was at any time in the year performing services in a country other than Canada under a prescribed international development assistance program of the Government of Canada, and was resident in Canada during a part of the year preceding the commencement of such services.
7.	That for the 1966 and subsequent taxation years a contribution made by a person under the Canada Pension Plan or under a provincial pension plan
June 17, 1965
[Stage Direction]
as defined in section 3 of the Canada Pension Plan may be deducted in computing the income of such person.
8.	That for the 1965 and subsequent taxation years the limitation on the amount related to earned income that a taxpayer may deduct as a premium under a registered retirement savings plan be increased from 10 per cent of earned income to 20 per cent of earned income.
9.	That for the 1965 and subsequent taxation years such part of any amount that would otherwise be included in computing income of a taxpayer as a retiring allowance be deductible if it is paid in the year, or within 60 days after the end of the year, as a contribution to a registered pension fund or plan, as a premium under a retirement savings plan, or to a trustee under a deferred profit sharing plan.
10.	That there may be deducted in computing the income of a taxpayer an amount in respect of an outlay or expense made by the taxpayer in the 1965 and subsequent taxation years
(a)	to a person with whom the taxpayer is dealing at arms length and who is the lessee of property owned by the taxpayer, to obtain the cancellation of a lease on such property,
(b)	for landscaping property used by the taxpayer for the purpose of gaining or producing income,
(c)	for clearing land or laying tile drainage for the purpose of carrying on a farming business,
(d)	as or on account of the cost of making representation to a government, municipality or other public authority in connection with a business carried on by the taxpayer, including representations for the purpose of obtaining a licence, permit, franchise or trademark,
(e)	as or on account of the cost incurred in investigating the suitability of a site for a building or other structure planned by the taxpayer for use in connection with a business carried on by him.
11.	That for the 1965 and subsequent taxation years a corporation shall be deemed to be resident in Canada throughout a taxation year if
(a)	it was incorporated in Canada before April 27, 1965 and was resident in Canada in its taxation year that included April 26, 1965 or in any subsequent taxation year, or
(b)	it was incorporated in Canada after April 26, 1965.
12.	That with respect to payments received by a taxpayer after April 26, 1965, other than a payment made upon the death of an employee, the amount that a taxpayer may elect to have taxed under section 36 of the Act shall not exceed
(a)	in the case of a single payment
(i)	out of or pursuant to a superannuation or pension fund or plan, or
(ii)	pursuant to deferred profit sharing plan, or
(iii)	pursuant to an employee's profit sharing plan,
$1,500 times the number of years during which the employee, in respect of whom the payment was made, was a member of the plan, or
(b)	in the case of
(i)	a single payment upon retirement of an employee in recognition of long service, or
(ii)	a payment or payments made by an employer to an employee or former employee upon or after retirement in respect of loss of office or employment
$1,000 times the number of years during which the employee, in respect of whom the payment was
Income Tax Act
made, was an employee of the employer who made the payment.
13.	That for taxation years commencing after April 26, 1965, a trust or estate (other than a trust or estate arising on death) that has income from a business carried on by it in Canada may not deduct in computing its income an amount paid or payable to a beneficiary who is
(a)	a non-resident of Canada,
(b)	a non-resident-owned investment corporation, or
(c)	another trust or estate resident in Canada, unless that other trust or estate
(i)	arose on a death, or
(ii)	has been since April 26, 1965 a beneficiary of the trust or estate paying the amount and the trust or estate paying the amount has been carrying on the business since April 26, 1965,
and any amount paid or payable out of the income for the year of the first-mentioned trust or estate will continue to be included in the income of its beneficiary notwithstanding the fact that the first-mentioned trust or estate was not entitled to deduct the amount in computing its income.
14.	That for the 1965 and subsequent taxation years the amount of income derived from a new mine that a corporation may exclude in computing its income shall be confined to income from the operation of the mine by the corporation.
15.	That where a joint exploration corporation acquires after April 26, 1965 a right, licence or privilege to explore for, drill for or take petroleum, natural gas or other related hydrocarbons, the cost of the right, licence or privilege may not be renounced to a shareholder corporation.
16.	That for the 1965 and subsequent taxation years an amount that a taxpayer may exclude from his income because it is consideration for a mining property acquired as the result of his effort as a prospector, or as the result of efforts of a prospector who was employed or financially assisted by him, shall not include a share of profits, a royalty or a payment based on production.
17.	That the Minister of National Revenue with the approval of the Governor in Council may on behalf of the Government of Canada enter into an agreement with the government of a province, under which one government undertakes to transfer to the other, in respect of income tax paid by an individual from whom deductions were made at source as though he were resident in a place other than the province in which he was resident on the last day of the year, a part of the amount deducted or withheld under section 47 of the Act or a similar provision of a provincial income tax act.
18.	That in order to give effect to the provisions of paragraph 1 without reducing the amount of equalization payments to any province a consequential amendment be made to the Federal-Provincial Fiscal Arrangements Act to adjust the fractions set out therein in the definition of "standard individual income tax" used in the computation of equalization payments.
19.	That a new section be added to the Act concerning expenditures of a taxpayer for advertising space in a non-Canadian newspaper or periodical having effect substantially as follows:
"12A (1) In computing income, no deduction shall be made in respect of an otherwise deductible outlay or expenses of a taxpayer for advertising space in an issue of a non-Canadian newspaper or periodical dated after December 31, 1965 for an advertisement directed primarily to a market in Canada.
[Stage Direction]
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Income Tax Act
(2)	An issue or edition of an issue of any newspaper or periodical that is edited in whole or in part in Canada and printed and published in Canada and that was not on April 26,1965 a Canadian newspaper or periodical shall be deemed, for the purposes of subsection (1), not to be an issue of a non-Canadian newspaper or periodical if
(a)	through the period of twelve months ending April 26, 1965 issues or editions of issues of that publication were being edited in whole or in part in Canada and printed and published in Canada at the usual intervals for issues of that publication and have since that date continued to be so edited, printed and published without interruption except for a reason other than the cessation of the business of publishing that publication; and
(b)	in the case of a periodical, the periodical is
similar, in content and	in	respect of the class	ofreaders to whom it is	directed, to	the issues	or
editions of that periodical that were throughout the period of twelve months ending April 26, 1965 being edited in whole or in part in Canada and printed and published in Canada.
(3)	Subsection (1) does not apply with respect
to an advertisement in a special issue or edition of a newspaper that is edited in whole or in part and printed and published outside Canada if such special issue or edition	is	devoted	to features	ornews related primarily	to	Canada	and the publishers thereof publish such an issue or edition not more frequently than twice a year.(4)	Subsection (1) does not apply with respect to an advertisement in(a)	a catalogue, or(b)	any publication the principal function of which is the encouragement, promotion or development of the fine arts, letters, scholarship or religion.(5)	In this section,(a)	'Canadian issue' means,(i)	in relation to a newspaper, an issue, including a special issue,(A)	the type of which, other than the type for advertisements or features, is set in Canada,(B)	the whole of which, exclusive of any comics supplement, is printed in Canada,(C)	that is edited in Canada by individuals resident in Canada, and(D)	that is published in Canada, and(ii)	in relation to a periodical, an issue, including a special issue,(A)	the type of which, other than the type for advertisement, is set in Canada,(B)	that is printed in Canada,(C)	that is edited in Canada by individuals resident in Canada, and(D)	that is published in Canada,
but does not include an issue of a periodical
(E)	that is produced or published under a licence granted by a person who produces or publishes issues of a periodical that are printed, edited or published outside Canada, or
(F)	the contents of which, excluding advertisements, are substantially the same as the contents of an issue of a periodical, or the contents of one or more issues of one or more periodicals, that was or were printed, edited or published outside Canada,
(b)	'Canadian newspaper or periodical' means a newspaper or periodical the right to produce and publish issues of which belongs to or is vested in
(i)	a Canadian citizen,
(ii)	a partnership of which at least 2 of the members are Canadian citizens and in which interests representing in value at least 2 of the total

value of the partnership property are owned by Canadian citizens,
(iii)	an association or society of which at least 2 of the members are Canadian citizens,
(iv)	Her Majesty in right of Canada or a province, or municipality in Canada, or
(v)	a corporation
(A)	that is incorporated under the laws of Canada or a province,
(B)	of which the chairman or other presiding officer and at least 2 of the directors or other similar officers are Canadian citizens, and
(C)	of which, if it is a corporation having share capital, at least 2 of the shares having full voting rights under all circumstances, and shares representing in the aggregate at least 2 of the paid-up capital, are owned by Canadian citizens or by corporations other than corporations controlled directly or indirectly by citizens or subjects of a country other than Canada; and
(c)	'issue of a non-Canadian newspaper or periodical' means an issue that is not a Canadian issue of a Canadian newspaper or periodical."
Robert William Prittie: Before I continue my remarks I should like to ask the Minister of Finance a question which has occurred to me. Will the effect of the Canadianizing of Time magazine permit the Time-Life Corporation to purchase Canadian radio and television stations? I believe the Corporation owns a number of such stations in the United States.


Lucien Lamoureux: Order, please. It is very difficult to follow the hon. Member's speech.


Robert William Prittie: I think the Minister heard my question, the question I should like to ask before I proceed further.


Walter Lockhart Gordon: The answer is no, Mr. Chairman.


Douglas Mason Fisher: How can we be sure?


Robert William Prittie: We shall have more to say about this later.
There has been a great deal of discussion about the clause which deals with newspapers and the proposal to retain Canadian ownership of Canadian newspapers. Some have said that the freedom of the press is involved in this proposal. I cannot agree with that at all. If we consider what the freedom of the press means we can only conclude that it means freedom to print editorials and news stories without government interference or censorship of any kind. And it presumably includes freedom to establish publications in the country. In practice the latter freedom is severely restricted by economics, as I am sure the owners of the Vancouver Times would testify. Their venture has already cost them about $1J million and the future of the publication is not at all certain.
Essentially, freedom of the press must mean freedom to print what is desired without
June 17, 1965

interference. I cannot see that this is affected by the proposal before us. Certainly the freedom to sell Canadian newspapers to nonCanadian owners is interfered with, but this is a very different matter from what we generally understand as being the freedom of the press.
I feel the term "freedom of the press" is much abused. In many cases it merely means that the press is as free as the publisher of the paper wants it to be. In Canada many newspapers are personally controlled by their publishers, and these newspapers do exactly what their publishers want them to do. For example Mr. Bassett, the owner of the Toronto Telegram, is quite free to call the present Leader of the Opposition Canada's greatest Prime Minister one year to turn against him the next. He is free to publish the column written by my hon. friend from Port Arthur or to kill it at any time he wishes. The same applies to the contributions by Mr. Lubor Zink. The former publisher of the Ottawa Citizen was quite free to let his editorial staff determine the paper's editorial policy; it was rather to the left of centre. But when the new publisher took over he was free to get rid of that editorial staff and establish an editorial policy the effect of which was to make the paper almost an organ of the Liberal party. The former publisher of the Vancouver Sun was free to run editorials supporting the Liberal party, but he was also free to suggest to his reporters that they should write stories at election times in favour of Liberal candidates. The publishers of La Presse were quick to fire Mr. Pelletier when they did not agree with the editorials he was writing. It is true these are probably bad examples, and I am not suggesting that all Canadian newspapers act in this way.
How free do publishers want to be? They have the freedom to run their papers in any way they please, and the public be damned. This is increasingly true, I suggest, in cities which have only one newspaper, an increasingly common circumstance today.
I object to being presented with this omnibus resolution which includes so many things -income tax reductions for most taxpayers, exemptions dealing with dependants, trade union dues, mineral exploration, important principles dealing with the press, and so on. The opposition is placed in the position of voting either for or against the whole package. This may be smart politics, but it is a poor way of transacting public business.
The proper way to handle this would be to take certain important clauses out of the
Income Tax Act
resolution and allow the committee to debate them separately. The clause dealing with periodicals should be debated separately, and the clause dealing with newspapers should be debated and voted upon separately. I think if given the opportunity to vote on these items separately, members of this party would support the provision suggested by the Minister concerning ownership of Canadian newspapers. However, during such a discussion I believe some members could propose other methods of handling this particular problem.
I am sure the Minister has received a copy of the Winnipeg Free Press of yesterday with its editorial, as have other Members of the House. If he thought the hon. Member for Port Arthur was rough with him the other night he should read that issue of the Free Press, in which the words "outright falsehood" are used. I do not intend to quote the whole of this editorial, but there is one part of it I should like to draw to the committee's attention:
Mr. Gordon knows full well that there are a number of practical alternatives to the advertising tax which are equally effective and far less dangerous. One (proposed by F.P. Publications) would involve voluntary renunciation by newspapers of the right to transfer their shares to nonresidents. Another would have Parliament simply declare, by resolution, its intention to prohibit take-overs should they occur. Still another would be to invite the provinces, which have constitutional power over property and civil rights, to introduce their own legislation forbidding foreign ownership of the press.
I am not sure that this would be as effective as the measure which is proposed, but they are certainly alternatives and perhaps these, as well as others which hon. Members might like to propose, could be voted on. We cannot do that as long as we are dealing with this legislation in what I would have to call this rather tricky manner of including everything in the one resolution.
[DOT] (3:20 p.m.)
I repeat, Mr. Chairman, that it may be a smart political move, but it is a very poor way to transact public business. The effect of it will only be to make the whole resolution much more difficult of passage. I would like the Minister to bear this in mind, because Members are placed in the position of opposing certain items and supporting others. But we do intend to put up a fight on those items to which we are very strongly opposed.


Mr. MacLean (Queens):: Mr. Chairman, I want to take the time of the committee for only a short period in order to make some comments on this resolution which precedes

June 17, 1965*
Income Tax Act
a bill to amend the Income Tax Act. I do not intend to spread my remarks over all the items in this package of amendments proposed to the Income Tax Act; I shall confine my remarks to two items that are in the resolution.
Prior to doing that I want to express my disappointment with regard to an omission from the resolution. I refer to the failure to relieve from corporation taxes private corporations engaged in the production and distribution of power. I think this is an opportunity the Minister and the Government should have taken, because here in my judgment we have a discriminatory tax. After all, these private corporations operate in a field in which many provincial Crown corporations also operate; they are providing the same service. Although they are not usually in direct competition with each other, they are nevertheless supplying a service to the Canadian people.
The nature of their industry is such that due to the fact that they have no competition in their field, they are a monopoly in the area in which they operate and are therefore controlled by provincial utilities commissions. This produces the result that Canadian citizens in areas served by private corporations supplying the public utilities are subject to a tax to which Canadian citizens in other areas are not subject. This of course creates a situation where there is tremendous pressure on Provincial Governments to take over privately owned public utilities and transfer them into provincially owned Crown corporations. This is a situation that cannot be justified from any purely logical point of view.
I am not one who maintains that public utilities should necessarily be publicly owned. I think there are cases where it is in the general interest that they be publicly owned, but on the other hand I think there are cases where services of this sort can be operated perhaps more efficiently by private industry. The two methods should be judged on their merits; and one method, namely private ownership in this case, should not be burdened with an artificial load which happens to fall on it and its clients because of an anomaly in the income tax structure.
For example, in my own province of Prince Edward Island the power is provided by a privately owned corporation in most cases. This means there are extra taxes going into the federal treasury from Prince Edward Island which are part of the individual cit-

izen's light bill in that area. This would not be the case if it were a provincial Crown corporation. This to me is completely unfair from any logical point of view, and the Minister should have taken the opportunity to correct this anomaly.
I now wish to refer briefly to paragraph 10, in which reference is made to certain items of expenditure that now can be claimed as an expense by taxpayers. I refer to (d) and more particularly to (c), which says:
That there may he deducted in computing the income of a taxpayer an amount in respect of an outlay or expense made by the taxpayer in the 1965 and subsequent taxation years
(c)	for clearing land or laying tile drainage for the purpose of carrying on a farming business,
Subparagraph (b) also provides for such a deduction in respect of landscaping property used by the taxpayer for the purpose of gaining or producing income. I presume that both these things would apply to farms; that is landscaping and clearing land or laying tile drainage. This is a very small step in the right direction, I believe, and I commend the Minister for taking it. I regret, however, that it will have very little application and therefore the beneficial effects flowing from it will be minor indeed; because I think it will apply only in isolated cases. It will only provide an incentive to landscape or clear land where the operation is already a profitable one, sufficiently profitable to be taxable under the Income Tax Act. But the greatest problem, as far as agriculture is concerned, in this field is that many operators do not have an economic unit; it is too small to be economic and therefore is not profitable. It is these people who need most to enlarge their acreage of land under cultivation, and there will be no incentive for them to do so.
I believe, Mr. Chairman, that we should give careful consideration to the importance of keeping our agricultural land in Canada in such condition that it is potentially productive even though it is not in production at the present time. We should keep it in such a state that it can be readily made productive in the very near future. I am convinced that within very tew years, probably in this decade, agricultural surpluses will become a thing of the past, and that the full impact of the world population explosion will begin to hit the productive capacity of North America as it has long since hit the productive capacity of more highly populated countries.
I think in this circumstance it is wasteful from a national point of view that large
June 17. 1965

acreages of our productive agricultural land should be going out of production permanently due to temporary conditions. A great deal of suitable agricultural land is being used up every day for the development of residential and commercial areas, airports and things of that sort. But this is not all. There are vast acreages of good agricultural land in Canada that have been abandoned because the units in which it has been operated up to the present time have not been economic.
[DOT] (3:30 pjm.)
In this connection I would refer to the Province of Prince Edward Island. There are vast acreages of farms there which have been abandoned over the years because of the economic conditions in agriculture which have existed over a long period of time. These abandonments have also been caused through the inability of the owners of these farms to acquire the necessary capital and markets to operate them as economic units. I am sure the situation is the same in other parts of Canada.
This is an appalling state of affairs, because this agricultural land is growing up in scrub and bush and becoming almost worthless, producing nothing of value. If it were growing up in valuable timber this would prove a long term asset, but in this case this land grows up in scrub, becoming unsuitable for agricultural use except at great cost for clearing and so on. This situation is more widespread than is generally realized by the public, I think.
In Prince Edward Island agriculture is the main industry, the backbone of our whole economy. Our only other important industries are the fisheries and tourism, but agriculture is far more important than they are, relatively speaking. In this regard I should like to quote from "Land Utilization in Prince Edward Island", which is Geographical Memoir No. 9 published by the Department of Mines and Technical Surveys. The following is a quotation from page 49:
Between 1911 and 1956 the Island's acreage of improved agricultural land decreased from 769,140 acres to 645,492 acres, or by approximately 16 per cent. Since all but a small proportion of this contraction has occurred since 1931, and as much as 74 per cent between 1941 and 1951, much of the abandoned acreage has had insufficient time to revert to forest growth.
I might say that most of it will never revert to forest growth which will have any value.
I think this provision is a tentative step toward recognizing the need for farmers to be in a position to bring more potentially good
Income Tax Act
agricultural land into production, but it will not touch the heart of the problem. I would most strongly suggest that the Minister point out this question to his colleagues the Minister of Forestry and the Minister of Agriculture, because something much more than this minor assistance must be given before there is any appreciable benefit.
I now wish to turn for a few moments to another item in this omnibus resolution. I refer to paragraph 19, which reads in part as follows:
In computing income, no deduction shall be made in respect of an otherwise deductible outlay or expense of a taxpayer for advertising space in an issue of a non-Canadian newspaper or periodical dated after December 31, 1965 for an advertisement directed primarily to a market in Canada.
Then it goes on to define what is a Canadian publication and what are the exceptions; and the following paragraphs Canadianize- artificially, I think-Reader's Digest and Time magazine. I not only object to the detail of the matter; I object most strenuously to this approach to the problem. It is dangerous when a government takes the attitude that it can judge which freedoms can be encroached upon with impunity, especially in view of the necessity for the complete freedom of the press. By that I do not mean licence, but the complete freedom of the press to criticize, and to criticize especially actions of governments where the press think it is suitable to do so. This is something which should not be tampered with in any way either directly or indirectly.
In his remarks the other evening the Minister expressed the opinion that no strong opposition had been taken to his measure by the Canadian press. To refute this, Mr. Chairman, I would merely quote from an editorial which appeared in yesterday's Toronto Telegram which I think summed it up well. It says in part:
The Canadian Daily Newspaper Publishers Association unanimously passed a resolution condemning the Gordon proposal and sent a delegate to Prime Minister Pearson urging the abandonment of this legislation.
Freedom of the press is at stake in this issue, in spite of Mr. Gordon's protestations to the contrary. It always has been.
The whole principle of protecting Canadian publications-periodical or daily-through legislative manipulation is odious. It touches the question of press independence, one of the pillars of a free society.
I agree wholeheartedly with this point of view. I object to the other items and details contained in the proposal, but I object most strongly of all to this particular principle. Therefore I would strongly urge the Minister

June 17, 1965
Income Tax Act
to seriously consider dropping this item from the resolution. For my part I must say that I am in favour of the first part of it, which provides for reduced taxes for many individuals; but the odious part of this resolution cannot be forced down my throat by putting it into a package like this. If this item remains in the resolution, then I cannot support the resolution, despite the fact, as I say, that it contains a good many items of which I approve.


David Réal Caouette: Mr. Chairman, my comments concerning the proposed amendment to the Income Tax Act will be rather short.
A while ago we had the opportunity of saying a few words on this, and I do not intend to repeat what was said then. On the other hand, I find it odd that the Minister of Finance (Mr. Gordon), who introduces these amendments, did not take into account our representations when the resolution was before us for the first time.
For instance, last year difficulties were encountered with regard to receipts for charitable donations throughout the province of Quebec and Canada. Income tax inspectors burst into rectories and called on clergymen to enquire about the accuracy of charitable donations receipts. Please note that according to the act, a Canadian citizen has the right to deduct up to a maximum of 10 per cent for charitable donations. And yet the department does not accept from a taxpayer receipts not exceeding 10 per cent of his income.
Last year these receipts were reduced to their simplest expression, namely $100, amount which any Canadian taxpayer has the right to claim without producing receipts. Someone produced receipts totalling $500 and it was reduced by $400 to $100.
This year, instead of changing the situation, a basic deduction of 10 per cent is proposed. This is an amendment which will help those having a high income but Canadian workers will gain no advantage on the whole. I ask the Minister of Finance this: instead of providing that charitable donations may be deducted up to a maximum of 10 per cent, thus leading the taxpayer to believe that he is entitled to deduct the maximum of 10 per cent of his income, why not reduce the rate to 6 per cent and tell him that he may deduct this amount without having to produce receipts?

[DOT] (3:40 p.m.)


Walter Lockhart Gordon: Mr. Chairman, the hon. gentleman has asked me a question which to my knowledge has nothing to do with any of the items in this resolution. Perhaps it would be more appropriate to ask that question of the Minister of National Revenue, who is responsible for the administration of the Income Tax Act.


David Réal Caouette: I knew that was coming; nevertheless, these are amendments to the Income Tax Act, and when I am dealing with the Income Tax Act I believe I am in order.


Stanley Howard Knowles: The Minister of National Revenue never makes amendments to the Income Tax Act.


Walter Lockhart Gordon: But he is responsible for its administration.


David Réal Caouette: Surely we can discuss the whole thing. The Minister is in the potato field, anyway.

Mr. Chairman, we are dealing with the Income Tax Act and, as was pointed out by the hon. member for Medicine Hat (Mr. Olson) and the hon. member for Winnipeg North Centre (Mr. Knowles), only the Minister of Finance is empowered to amend this act. When we discuss it, the Minister tells us that to speak about the income tax is to go beyond the scope of those items.
Mr. Chairman, section 1 introduces an amendment providing that for the 1966 and subsequent taxation years the income tax payable by an individual be reduced by an amount equal to the lesser of 10 per cent of basic tax or $600 and for the 1965 taxation year by an amount equal to the lesser of 5 per cent of basic tax or $300.
I said a while go that the minister was not helping the Canadian workers with this 10 per cent reduction of the basic tax. If the Minister of Finance had, for example, moved an amendment providing that incomes less than $5,000 for married persons and $2,500 for single persons would be exempted from income tax, then he would have helped all Canadian workers.
I would like to point out that under this new legislation, those earning high salaries will profit more from it, but low income groups will not profit from it at all. The federal members of Parliament will profit from this legislation, since our taxable income will be reduced by 10 per cent, out of
June 17, 1965

our income of $12,000 per year and we will thus save about $350 or $375 per year on income tax. But our fellow citizens, our electors in our respective ridings, will get hardly anything out of it.
Mr. Chairman, there is something else. The Minister of Finance should have added another amendment to that act to allow workers, for instance, to deduct from their income the cost of the tools they need to work and do their job.
If a lawyer buys something for his office, furniture, for instance, his bookkeeper deducts the cost of it from his income tax. If a doctor buys some equipment, scalpels or something else, he is allowed to deduct the cost from his income; he can get an income tax deduction for those amounts. As the owner of a garage, if I buy equipment for it, I can deduct it from my income.
But the worker who has to buy for $800, $900, $1,500, or $2,000 of equipment, the carpenters, the mechanics, those people are not entitled to deduct from their income the cost of the tools which they need to do their job.
Why did the Minister of Finance not take into account our suggestions, while preparing those amendments to the Income Tax Act. Had he done so, he would have helped, thousands of Canadian workers.
In conclusion, I shall say-I have often said it before I repeat again-that the legislation introduced by the Minister of Finance allows the rich to grow richer, though fewer and the poor to grow poorer and to multiply. It seems that the government and its ministers always come up with this kind of legislation.
Therefore, I suggest to the Minister of Finance to consider seriously the possibility of stabilizing, for instance, the percentage in respect of receipts for charitable donations. The basic exemption should be increased to $5,000 for married men and $2,500 for single persons. This would permit those in the lower income brackets to enjoy some advantages and workers should be allowed to deduct from their income amounts spent for purchasing the tools they need to work at their trades. Then, they would not have to pay heavy taxes on the equipment they need to do their work.
Mr. Chairman, there are several other important points besides those I have mentioned. There is for instance the provision under which a nephew, a niece or another dependant may finally be recognized as human beings. We approve the good points of this measure.
Income Tax Act
We also approve the 10 per cent income tax reduction, but we think it does not help sufficiently the small wage earner, the farmer or the worker.
We agree with the good things contained in these amendments, but we find that the government is, once again, rather mean as far as a great number of Canadian workers are concerned. We would like the government and the minister of Finance to be more generous and fair for those who need it most, that is the Canadian worker, the Canadian farmer, in short, the people of Canada.


Gordon Minto Churchill: Mr. Chairman, I enter this debate because of the importance of the resolution, particularly paragraph 19 with which I want to deal in detail. I do so also because at the resolution stage hon. Members are provided the opportunity of pointing out deficiencies in proposed legislation, and the Government is provided with an opportunity to reconsider and withdraw or modify the bill which follows the resolution.
[DOT] (3:50 pjn.)
It may be that the bill is printed and ready. Nevertheless, if the Minister of Finance will heed those Members of the House who have spoken and accept their advice he may be saved from error in the future, though I doubt very much that this particular Minister can be saved from making mistakes. But at the resolution stage an opportunity is presented to make suggestions, and on the basis of those suggestions the Minister can then redraft his bill, if that is necessary, or modify it by withdrawing the offending section entirely.
I have another reason for speaking today on this particular matter. The proposed change in the Income Tax Act as envisaged in section 19 of the resolution is, as has been pointed out by others, the beginning of an attack on the freedom of the press. The Minister cannot brush this aside by any casual statement such as he gave us on Tuesday. He cannot convince us, and I do not think he can convince the Canadian people, that this Liberal Government, as he said in the course of his remarks, "would never contemplate any measure which could seriously be construed as interfering with the freedom of the press". We do not have that confidence in this Government; and any confidence the people of Canada had in the Government two years ago has been dissipated over the course of the period since then.
The reason that confidence has been dissipated is the lack of information supplied to

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the House of Commons from day to day. As long ago as October, 1963 the hon. Member for Kootenay West used these words, as found on page 3887 of Hansard:
Regardless of our differences, it has always been the practice of this House and in the country to respect the word of a member of the Cabinet. When we can no longer respect the word of a member of the cabinet, democracy in this country is on the downhill grade.
Those are very serious words from a senior and highly respected Member of this chamber. As long ago as October, 1963 the hon. Member for Kootenay West cast doubt upon the type of information that was being supplied at that time by the Government. We have had example after example over the intervening months. I have said in the House before that I can no longer rely on the word of the Prime Minister, which is a very serious matter indeed. I doubt very much that I can rely any longer on the word of the Minister of Finance, as I will point out in a minute or two.
One of my reasons for losing confidence in the Prime Minister emerged last year during the course of the flag debate, when on three different occasions he stated in the House that "none of us saw a Canadian red ensign in those years", referring to the first world war. That statement was refuted by our late friend Hon. George Nowlan and by myself, both of us having served in France during that period. But despite that denial by serving soldiers who had been there and who saw that Canadian flag, the Prime Minister repeated that statement in the House, on three occasions although he himself, of course, was not present in France. That is one of the reasons I cannot place any confidence in statements made by the Prime Minister.
We are accustomed to evasion time after time in the House when we ask questions. We are subjected to evasion on the part of the Secretary of State for External Affairs-I am sorry he is not here-who on six or seven different occasions has evaded the question when I have asked him what the Government is doing about its promise to negotiate out of the use of nuclear arms. He has engaged in evasion instead of simply saying no, we have not done anything about it, which would be the truthful answer.
I get evasive answers from the Minister of National Defence. Only last week I inquired whether our Voodoo planes in Canada are equipped with nuclear missiles. His answer was that they are fully operational, which was

an evasion of the question, instead of saying either yes or no. Today we had an example in the case of the Minister of Labour. So it goes down the line.
But the situation has become very serious with regard to the Minister of Finance. He has been attacked by very prominent Canadian newspapers, and I think he must make a statement to the House with regard to these attacks. He has been accused in words that we are not allowed to use in the House. He has been accused of falsehood. His statements are called untrue, and these accusations are broadcast throughout the country. When newspapers of the standing of the Globe and Mail and the Winnipeg Free Press make such accusations against a Minister of the Crown the situation becomes extraordinarily serious. These are not accusations such as are sometimes made in the heat of debate in this chamber, but are accusations made by responsible newspapers. What answer is the Minister going to give to these accusations? In an editorial in the Globe and Mail of June 16 these words appear:
Finance Minister Walter Gordon suffers either from a bad memory inexcusable in a Minister of the Crown, or he is tampering with the truth.
What stronger statement could be made? There is a stronger statement in the editorial, which quotes these words from the speech of the Minister on June 14, as found on page 2386 of Hansard:
-this had not aroused opposition or suggestions that it posed a threat to the freedom of the press when it was to be applied to periodicals. It has been surprising, therefore, that this charge should be raised when the same principle is now to be applied to newspapers. It is difficult to accept the fact that a principle can be right and good, and widely accepted as such, when applied to one field of communications but not when it is applied to another.
What does the Globe and Mail say? These are the words of the Globe and Mail of June 16:
Mr. Gordon's statement is false.
I say, Mr. Chairman, that this is indeed very serious. What is the Minister of Finance going to do? The people of Canada have read that statement in the Globe and Mail. Are they going to place any further reliance on statements made by the Minister of Finance? The editorial in the Globe and Mail goes on to point out that that newspaper had expressed opposition to the proposals time after time, going back to the proposals with regard to periodicals in 1961. Yet the Minister says that it has not aroused opposition, or sugges-
June 17. 1965

tions that it poses a threat to the freedom of the press.
[DOT] (4:00 p.m.)
I do not know how he describes opposition to his proposals. If we say they are wrong, is that not opposition to his proposals? If the newspapers say they are wrong and that other things should be tried, is that not opposition to his proposals? Yet he has the audacity to stand up in this Chamber and say this has not aroused opposition, or suggestions that it poses a threat to the freedom of the press.
Two days ago when the Leader of the Opposition was speaking he drew attention to opposition expressed by the Winnipeg Free Press, which dealt with a resolution passed by the Canadian Daily Newspapers Publishers Association, and quoted from the Winnipeg Free Press as follows:
They could lay open the way for some future and less scrupulous government to use them as a method of punishing or bestowing favours on Canadian newspapers.
Then he quoted further, as recorded at page 2424 of Hansard for June 15:
Whether by design or through sheer clumsiness, what the Minister proposes would give this and all future governments the power to interfere with the right of all Canadians to read what they choose.
That is opposition to the Minister's proposals. The Leader of the Opposition expressed opposition to them but there has been no substantial reply, if any, from the Government side. As recorded at page 2427 of Hansard the Leader of the Opposition stated:
The freedom of the press in a society of free men depends upon commercial freedom of the press, freedom from direct or indirect government subsidies or other form of control. The irony of the present situation is that the Government purports to assist the press by making it impossible for ouside competitors to compete. The fact is that these budgetary proposals will bring about a degree of government control not known in this country, and not known in any country today which has inherited the British tradition of freedom.
There could be no more complete description of what is contained in the Minister's proposals, and surely that is opposition to his suggestions.
The most serious attacks on the Minister's proposals have come from the Winnipeg Free Press. That is not a Tory paper. It is not a supporter of mine, as I have well known all these years. I enjoyed the experience of getting a small but complimentary editorial comment in the Winnipeg Free Press 14 years ago when I entered this House and made my maiden speech-
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Stanley Howard Knowles: The hon. Member and I have this in common.


Gordon Minto Churchill: -and that was the end of our friendly relations. Nevertheless I have respect for many of the men who report for the Winnipeg Free Press, and sometimes its editorials are worth reading with considerable care. The one it published on June 16 deserves the most careful scrutiny. I expect that editorial will be widely quoted by other papers across the country. It makes the strongest attack yet on the Minister of Finance; and under these circumstances, with other papers attacking him and accusing him of misleading the House of Commons and the public, there is only one reasonable recourse for him. The Winnipeg Free Press has this to say:
Mr. Walter Gordon's defence in the Commons Monday evening of the Government's legislation to prevent foreign take-overs of Canadian publications is a mixture of weak arguments and outright falsehoods.
These are not my words. These are the words of the Winnipeg Free Press-"outright falsehoods." We are entitled to the truth from the treasury benches. How can you carry on democratic government if you cannot get the facts and the truth, if you are to receive evasions to questions and, in the words of the Winnipeg Free Press, "outright falsehoods"? This reminds us of Goebbels at the time of the Second World War and prior to it; the falsehood repeated over and over again.


The Acting Chairman (Mr. Cameron, High Park):: Order. May I suggest to the hon. Member that he is trying to do indirectly what he has no right to do directly.


Gordon Minto Churchill: I thank you for your direction and advice, Mr. Chairman, but I am dealing with a very serious matter here. The Minister has introduced a section in his resolution to amend the Income Tax Act which strikes at the freedom of the press, and he has stated in the House that what he is doing does not strike at the freedom of the press, that no objections have been made, that his proposal asserts no control whatever over newspapers and other publications, that it provides no precedent for any kind of government interference with complete freedom of the press, that no practical alternative has been found despite careful thought and much discussion with the people concerned, and so on.


Mr.   Cameron. High Park@Acting Chair(man)? of Committees of the Whole: May I direct the hon. gentleman's attention to Beauchesne, citation 157(5):

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It is not in order to read articles in newspapers, letters or communications emanating from persons outside the House and referring to, or commenting on, or denying anything said by a member or expressing any opinion reflecting on proceedings within the House.
I suggest to the hon. Member that probably on reflection he will do directly what he is now trying to do indirectly; then I will be able to try to rule on what he is doing.


Gordon Minto Churchill: Mr. Chairman, you are not
suggesting that I do not accept these statements? Unintentionally I think you are leaving an innuendo that I do not believe these statements are accurate. I am inclined to believe they are accurate, and I certainly will accept them for accuracy; because it is a simple matter dealing with the false statements that the Minister made in the House, and shows the inaccuracy of the Minister.
I think I am within my rights to draw attention to the fact that the editorial in the Winnipeg Free Press of June 16 condemns the Minister of Finance in the strongest terms for misleading statements which it calls "outright falsehoods." That is a term I cannot use here, but I am quoting from what the paper says. Surely the Minister should be able to deal with this, and I hope he will before the debate is concluded.
We are aware that a great many newspapers have opposed the suggestions put forward by the Minister. That is common knowledge, and we have opposed them too. As recorded at page 2386 of Hansard, for June 14 the Minister stated:
The Government proposal asserts no control whatever over newspapers or other publications.
This has already been drawn to the attention of the Chamber by hon. Members who preceded me. I am quite prepared to accept the statement of the Winnipeg Free Press, and I will accept its words:
[DOT] (4:10 p.m.)
This is the exact opposite of the truth. The Government's proposal asserts, for the first time, the Government's right to impose discriminatory taxation on advertising by defining who shall and who shall not be entitled to tax exemption.
This is what is contained in the Government's proposal. The Minister went on to say, as reported at page 2386 that it "provides no precedent for any kind of Government interference in the complete freedom of the press". I am prepared to accept the statement made by the Winnipeg Free Press in respect of this matter-"Again a complete falsehood". And those are not my words; they are the words of the Winnipeg Free Press.
[The Acting Chairman (Mr. Cameron, High Park).]
The legislation does set a precedent, and a most dangerous precedent at that. Having asserted for the first time a Government's right to tax advertising on a basis of ownership there is nothing to prevent extension on other bases.
That is a statement which I accept as a reply to the Minister's earlier statement. Then the hon. gentleman went on to say-and again his words may be found in Hansard-that no practical alternative had been found despite careful thought and much discussion with the people concerned. Well, alternatives were suggested. The Winnipeg Free Press put forward quite a number before this resolution came before us for debate.
I can mention three which have been drawn to my attention. It was suggested that the Government might urge all newspapers to voluntarily forfeit the right to their own alienation through the sale of their voting stock. That was one suggestion. Another suggestion was that the Government might declare any foreign purchase of a Canadian newspaper to be null and void. The Free Press made a further suggestion. It said if the Government were to introduce a formal resolution in Parliament to the effect that in no circumstances would the alienation of Canadian newspapers be allowed, and that if necessary retroactive legislation would be passed to deal with such a situation, such a resolution would receive unanimous or virtually unanimous approval. Then, trying to win the attention of the Prime Minister, the paper suggested that if the Prime Minister would proclaim in the name of Parliament and the whole of the Canadian nation a solemn embargo on the foreign control of communications media, all foreigners would understand.
These are alternatives which have been suggested, but the Minister brushed them all aside and said that no practical alternative had been found. I think these are practical alternatives. The Minister himself gave us an example, reference to which will be found on page 2386. He was very proud of the announcement he made last September the effect of which was retroactive to the time of the earlier statement he made in September of 1964, with regard to the acquisition of any of our chartered banks by people not resident in Canada.
There are two points at issue here. One is the maintenance of the freedom of the press, which is just as important to the Canadian people as is the maintenance of freedom of speech in this Chamber. We feel this proposal would be an encroachment on the freedom of the press. It is our duty to protect the
June 17. 1985

Canadian people against any such encroachment. We are not satisfied with assurances that this particular government would, of course, not do anything which might interfere with press freedom, an expression merely of good intentions on the part of this administration.
I mentioned earlier in my remarks that there is no longer any confidence in this House or throughout Canada with regard to the good intentions of this Government. There is too much evasion, too much withholding of information, and a regrettable lack of frankness in this Chamber. Here is the culminating point. We find the Minister of Finance accused by leading newspapers in this country of not telling the facts, of not giving the truth. They use the word "falsehood" with regard to his statements.
This, I say, is a most serious thing. It is one of the most serious things which have occurred in the last two years and which have come to our attention. The Minister of Finance, one of the most powerful figures in the Cabinet, close adviser to the Prime Minister, is accused by leading newspapers in this country of falsifying the record. I think there is only one course open to that Minister, and that is for him to submit his resignation.


Some hon. Members:: Oh, oh.


John George Diefenbaker: There is little I can add to what has been said by my hon. friend from Winnipeg South Centre. However, while I have been sitting here my mail came in and it does carry strong support for the views expressed a moment ago by my hon. friend.
This Government has made the telling of partial truths the cornerstone of Government policy. We have had example after example, particularly in the last few months, of Ministers giving us but part of the truth. We had an example this afternoon from the Minister of Labour. I do not understand it. I cannot conceive that giving answers which are not truthful is any mark of forensic capacity or of ministerial responsibility in this Chamber.
We had an example a couple of weeks ago in connection with the action being taken by the Government to bring in a new social security card. I had certain information. I brought it before the House. It had to do with the removal of the coat of arms of Canada from the card and the substitution of a single maple leaf. The answer I received was evasive. The information I had was that objection was being raised in parts of Canada
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to having a coat of arms because it had the crown and the union jack on it. I had that direct information, because I do not ask questions in the House of Commons unless I have reasonable ground for knowing what the answer will be.
But they do not learn over there. When I have asked questions and those questions have been evaded, it has not been very long before the truth has come out showing that the questions were well based. But they cannot learn. One does not expect some of the Parliamentary Secretaries to learn; that would be expecting too much. But I knew this was a fact. The answer was evasive. First the Minister of Labour said, in effect, "There is nothing to it". Well, they have come out with it now. They had to admit it.
[DOT] (4:20 p.m.)
Now that card bears the strongest possible resemblance to the membership card of the Liberal Party organization in Canada. The removal of the coat of arms and the substitution therefor of the maple leaf produces a card that bears a striking resemblance to that denoting membership in the Liberal Party.
The point I make is this. This Government does not give Parliament the facts. The Prime Minister-and I am not going to deal with him in his absence; I have dealt with him in his presence on this-told Parliament last November that he had no information regarding the connection of an executive assistant with alleged bribery. He maintained that position until after a period of weeks, knowing that it would be revealed in the crime report, he finally remembered that he had been told.
A selective memory is not conducive to sound Parliamentary procedure. Indeed, if one looks at the British system, Profumo was not removed for his extramarital activities; he was removed because he deceived Parliament. Over and over again this Government has shown a propensity for deception in answers.
The Minister said the other day there had been no complaints offered about the press legislation. I am not going to quote from any editorial but, Sir, if you are looking for reading in your spare time, read the condemnation of the Government in the editorial entitled "Weak Case" referred to by my hon. friend from Winnipeg South Centre. I have never been one to complain about criticism. That is not criticism; that is condemnation of evasion of Parliament. One paper after another is taking the same course.

June 17>
1965
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It is obvious, Sir, that in the past few years deception and maliciously false propaganda have become a course of action followed by the Liberal Party. They did it in 1962; they did it in 1963. I could go over the record of the things they condemned and said were wrong. They follow today the courses that we followed. Now they have become right. Mr. Chairman, deception, delusion and outright falsehood can never be tolerated in a democracy.
It is said that there is no foundation for fear about this measure. The full story of Parliament and what happens here is not getting out to the people. I have referred to the C.B.C. and to the fact that after discussions in Parliament there are always commentators able to smooth over the problems and wipe out the inferences. There will be nothing in the news about this. It would not be helpful to the Government if it got out that once again Parliament had been fooled. I use that expression advisedly. Cover up, conceal, attack, assassinate character, endeavour to destroy your political opponents by falsehood that you know is false.


Mr. Byrne:: That is what you are doing.


John George Diefenbaker: This has become the cornerstone of Liberalism in Canada.


Mr. Clancy:: It always has been.


John George Diefenbaker: It did not take place in the days of Laurier and King, but it does today. I say to the Minister of Finance: You had a lot to do with the falsehood of the campaigns of 1962 and 1963. Indeed, you were the planner, I am told.


Some hon. Members:: Hear, hear.


John George Diefenbaker: I am also told the Minister of Finance was the father of the truth squad, although he has never admitted paternity. But I have information, he might be surprised to learn, on that and it makes him the one who said "If we follow this course we can destroy the Leader of the Conservative Party". And he today finds himself in a position-


James Allen (Jim) Byrne: You are destroying yourself.


John George Diefenbaker: -where he has placed before Parliament legislation that gives him the right to control. He may not exercise it today. Is he exercising it? Well, I do not know anything about this paper; it came to me a few moments ago. I have before me the Muskoka News of June 16. It is 10 cents a copy and it is published at Gravenhurst,

Ontario. I do not know the publisher; I do not know the paper. It says it has a fairly large circulation. This is what it says:
Ottawa Gestapo Tries to Silence Free Press
Gravenhurst-Without warning the "Gestapo" branch of the Department of National Revenue seized the advertising income of the Muskoka News in reprisal for articles published in this paper critical of the Liberal government in Ottawa.


Some hon. Members:: Shame.


John George Diefenbaker: That was yesterday. It came to me while the hon. gentleman who preceded me was speaking. Then it says this:
The Muskoka News payday is on Wednesday.
Then it says:
Garnishee proceedings were instituted against the free press without a warning to the publisher who, if advised in time, could have taken appropriate action. Like a thief in the night, our government forces have invaded the freedom of the press and set it back 50 years.. .to the time when governments told editors what they must not print about scandals in public affairs.
That is yesterday's paper, as I say.


Mr. Bigg:: Freedom of the press.


John George Diefenbaker: What further evidence do you need to support the contention that what this Government has tried to do, is bring about thought control in Canada, destroy political opponents, malign them by means of mercenary publicists who peer in keyholes or invent in the darkness of their offices. Isn't it a strange thing that this has all developed within the last two, three or four years?
I have never complained but, Sir, the libels that have been published have been inspired. What a Government. Why, only the other day it was shown that even the Civil Service within the departments cannot recognize their Ministers. It indicates how things are going. An Order for Return was brought in and was found by the Hansard office to come from the Department of Public Works, in the name of "Honourable Lucien Rivard". Just imagine; this went through the Civil Service. It must have gone through the Minister. This shows the tremendous impact the Minister of Public Works has made on his own Department; or else it reveals the fact that Mr. Rivard enjoys a position of responsibility akin to that of a Minister of the Crown. Imagine the alertness shown by the Hansard people. We have not yet had an explanation from the Minister of Public Works, and I should like to hear from him what happened. What would hon. gentlemen
June 17, 1965

opposite have said when we were in office if one of the greatest thugs engaged in narcotics distribution had been so signally-honoured as to have been raised by the Department of Public Works to the status of minister on a document of Parliament, elevated to the Privy Council, indeed the Cabinet itself?
[DOT] (4:30 p.m.)
Now, Sir, what is the reaction to this legislation? I know the Government has tried to tell us that this is the same legislation as that which was recommended by the O'Leary Commission. It is nothing of the kind. The O'Leary Commission made no recommendations about newspapers. It endeavoured to preserve Canada's periodicals against unjust competition by Time and Reader's Digest and other United States magazines which have masqueraded as Canadian, establishing themselves in Canada in a preferred position to Canadian magazines endeavouring to retain a Canadian identity.
I speak of Maclean's magazine, Chatelaine and the like. We wanted to see something which was Canadian preserved so that Canadian opinion would be available. We said if these people can come into Canada from the United States with what I call ready print or ready prepared editorial content or other content against which Canadian magazines cannot compete, then this matter is far removed from the question of newspapers. This was at the request of Canadian periodical publishers, it being the only course for their preservation as national entities within Canada.
Who asked for the present legislation? Nobody. Why do the Government want it? They must have a reason. They published tremendous advertisements in the press during the last few days giving the detail of the redistribution of seats in the provinces as an attempted sop to the great newspapers of Canada. After all, they said, here is a quarter of a million we will let you have. They thought they could buy silence with that.
What is going to be the reaction to this legislation in other parts of the world? We have already had one reaction from the International Press Institute meeting in London. Sean MacBride, Secretary General of the International Commission of World Jurists, quoted Article 19 of the Universal Declaration of Human Rights, as proclaimed by the United Nations, in a speech he made within the last week. That declaration says:
Income Tax Act
Everyone has the right to freedom of opinion and expression. This right includes freedom to hold opinions without interference and to seek, receive and impart information and ideas through any media and regardless of frontiers.
This is the most important right guaranteed to human beings, and, as he said in his speech, it must be preserved.
What is behind this, Mr. Chairman? I have seen this Government throttling opinion, pressuring people by the subtleties of modern propaganda, covering up facts relating to matters before Parliament. It is the strangest thing today, but a matter is reported on one page of a newspaper, and anything difficult or embarrassing to the Government is then explained away by commentators. With this sort of governmental control, where will freedom be?
Who asked for this legislation? We would like to know if the Minister would tell us. Did it have the same paternity as the truth squad? Did it have the same paternity as the campaign which has been waged across this country? I dislike mentioning myself personally, but it is a campaign designed to destroy, to assassinate. Indeed, the Prime Minister said "I do not think we need to worry about 'him' any more" in the speech he made in Toronto in September, 1962.
Who asked for this? Whose brainchild is this political abortion? What is behind it? The Minister has but to read the press comment across Canada to discover that they are not asking for it. Since I came into the House today a number of telegrams have come to me. One of them is from Mr. I. H. MacDonald, Deputy Chairman of Thomson Newspapers, dealing with these proposals in detail. Immediately it will be said "Oh, he is one we are getting after". Is that the reason for this legislation, because some of the Thomson newspapers have not bent the knee at will? Mr. MacDonald says in his telegram:
Canada's Image abroad can be seriously impaired by impetuous action on press restrictions.
It then goes on to deal with the speech made by Mr. MacBride, to which I have referred. Mr. T. L. Wilson, publisher of the Oshawa Times, who is one of the great publishers of our country, says:
We of the Times of Oshawa are deeply concerned that the Government would even consider placing on the statutes any motion that interferes with the free flow of advertising in publications whether wholly owned by Canadians or otherwise. We must therefore register our strongest opposition to the bill now under discussion.

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That was dated 1.58 p.m. today. The next one is from the publisher of the Daily Standard-Freeholder of Cornwall. Are these men who are not entitled to consideration? The Minister laughs, but what does Mr. Robertson, the publisher, say? He says:
Proposed legislation restricting newspaper ownership serious blow to freedom of the press and inherent right of Canadians to be informed by press free of Governmental control. Implications of legislation and possible abuses threaten this democratic right. Am gravely concerned and oppose contemplated legislation. Reconsideration urgent.
Then I read from the telegram sent by Dick Malone, general manager of Free Press Publications:
Before final decisions taken on projected press legislation I wish to register on behalf of our newspaper group our strongest possible protest against this discriminatory taxation measure which would threaten press freedom in Canada.
[DOT] (4:40 p.m.)
Are these men mad? Have they no common sense? Are they to be brushed aside? Is that the Government's view?
This afternoon one of the hon. Members from Vancouver mentioned that this resolution should be divided up, but we want an opportunity to oppose it and oppose it strongly. As the hon. Member for Queens has said, they have wrapped this up in one parcel and you either take all or take nothing; you take the things that are beneficial with the things which cannot be condoned. Should we divide this up? Let us go further than that; let us remove it, or let the Government drop it.
What will be the situation all over the world if this type of stand is taken? Let the Minister take the trouble to find out the ownership of some of the papers around the world and he will find that many of them are owned elsewhere. In Hong Kong the South China Post is British; in Okinawa the Morning Star is American; in the Philippines the Manila Bulletin is Swiss and the Evening News is American; in Thailand the Bangkok Post is Canadian and the Sienyitpo is Chinese; in Malaysia the Strait Times is British and Sin-chew Jitpo is Chinese; in Kenya the ownership is Indian and British; in India the Calcutta Statesman is British; in Lagos the Sunday Graphic and the Sunday Mirror are both British.
What is the situation in Europe? The New York Herald Tribune, Paris edition, is American and the New York Times, Paris edition, is American. The Rome American is American and the Scandinavian Times is American, and the Weekly Tribune, Geneva, is American.

No one has ever said that the ownership of these papers circulated abroad is undermining the thinking of the people of those countries. I would have more to say about this but I am anxiously awaiting the Minister's reply, because no one could possibly sit silent in the face of the press references to the Minister's action.
I said earlier that the Minister had said that the O'Leary Commission report recommends some measures for imposing Canadian control on periodicals. The Winnipeg Free Press answers that suggestion by saying:
Mr. Gordon is comparing apples with oranges. The O'Leary Commission was concerned with magazines, not newspapers: its dubious recommendations were aimed at channelling advertising from foreign owned (mainly Reader's Digest and Time) periodicals to domestic ones. Since no Canadian magazines were threatened by foreign take-overs, the matter of ownership was of little or no concern to the commission: the question of ownership of newspapers was not even touched upon.
Where did this idea come from and who produced it? Is this part of Mr. Kent's philosophy which he enunciated in September of 1960, that advertising was dangerous and that if manufacturers could not advertise then people would not buy things they did not need? After all, bureaucratic men know what is good for Canadians and do not think Canadians have the capacity of being able to decide what is good for themselves.
The Winnipeg Free Press says the Minister made the statement that the Government's proposal asserts no control whatever over newspapers or other publications. The answer in the Winnipeg Free Press is:
This Is the exact opposite of the truth. The government's proposal asserts, for the first time, the government's right to impose discriminatory taxation on advertising by defining who shall and who shall not be entitled to tax exemption. Advertising revenue is the lifeblood-the principal source of revenue-of any publication and the power to tax it is the power to control the press.
This article deals also with the question of there being no precedent for any kind of Government interference, and I am sure the Minister has read this. The Minister represents many of the great industrialists in Canada who look up to him as the apostolic successor to Keynes, another economist, and the other day he said that some wealthy business financiers objected to the tax because they secretly wanted to expand into other countries and were afraid that foreign governments might retaliate. I ask him now to tell us who are these mysterious businessmen; who are these nefarious wealthy financiers? Has the Minister not already been
June 17, 1965

advised that retaliation will be in order and that this is a contravention of the provisions of GATT? I think about two years ago Mr. Dillon, the Secretary to the Treasury of the United States, took a strong stand in this regard; and did not the Government at that time make one of its frequent retreats in the face of what was said?
Finally, this article says the Minister stated:
"I cannot believe-any Canadian government at any time would ever contemplate any measure which could seriously be construed as interfering with freedom of the press. I know that no Liberal government would ever think of doing so-"
I believe that of the Liberalism of the Lau-rier and King governments, but not of the Liberalism of today. The Minister was speaking of the past. That statement is answered by the Free Press in this way:
The fact, of course, is that a Liberal government has not only contemplated a law interfering with press freedom, it has introduced one-and in a particularly vicious and dangerous form.
Surely these responsible newspapers are not taking a stand based on personal considerations, and there can be no such suggestion. This goes beyond that, and that is why I come back to the request to the Minister that he drop this proposal. No good can come of it, and the dangers have been pointed out. The press of this country, with two exceptions, say this is wrong. Will the Minister even now not give what might be called a pause, because it is a pause that refreshes, as has been suggested by the Government in another connection? Let us drop this matter.
[DOT] (4:50 p.m.)
If he will not do that, will he put it in cold storage, set it aside and let a committee of Parliament consider the matter, thus giving an opportunity to the press of Canada and to all who love freedom in this country to place their considered views before that committee? The Minister turns his back on all arguments that are advanced, smiles with that enigmatic smile for which he is famous, and deals with all criticism by pretending that he is not the kind of person who would undermine freedom. Mr. Chairman, everybody in history who has ever undermined freedom has always protested his love for freedom while at the same time doing his best to destroy it.
The one question the Minister must answer is, who is the father of this proposal? Who suggested it? What organization across Canada in the newspaper world asked the Minister to protect them? He has not been able to answer that question. If he could he no doubt would clear away a great deal, 22620-162
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because we would get the truth and if we got the truth in that connection, out the window would go the bill.


Mr. Saltsman:: Mr. Chairman, my colleagues have informed me that I did not have to give way to the Leader of the Opposition. I wish I had known that. I would have argued for the opportunity to speak before him, because his is quite an act to follow. However, I have only a few words to say with regard to section 19 of the resolution. I intend to be brief and concise in my objections to the section as it now stands.
Let me say first of all that I have a fair amount of sympathy with the Minister of Finance, his desire for Canadian objectives and his concern about Canadian nationalism. I think that desire is shared by very many people on this side of the House. However, I disagree considerably with the Minister both with regard to his diagnosis of the problem and the solution he proposes, and I resent the way the Government is bringing in this measure.
The Government is being very brave with Canadians and Canadian newspapers in particular. I do not see the Government being nearly as brave in bringing about Canadian ownership of some of the industries of this country which are dominated by foreign interests. I think the Government could very well have shown its bravery, its desire for Canadian nationalism and its recognition of the need for greater Canadian ownership of our industries by approaching the matter from that end.
I find it very difficult indeed to see how the Government can justify the measures it is proposing and the arguments it has made. Its worries in connection with the ownership of Canadian newspapers exclude Time and Reader's Digest. I believe we have in these two magazines a domination of the Canadian mind through a pervasive pattern such as would never exist even if every one of our newspapers was owned by foreign interests. I think any measure that excludes Time and Reader's Digest cannot be anything but an ineffectual device.
It makes no sense whatsoever to me to exclude Time and Reader's Digest and at the same time say we must be concerned about Canadian ownership. I see the Minister is smiling. I know he has heard this before and I am sure he is not smiling unkindly, but simply because he is saying to himself that this is the same old song he has already heard yesterday and today. However, this

of measure could best be introduced in some other way.
I think the idea of a voluntary approach to Canadian newspapers would be very effective. I have been highly impressed,-though perhaps I should not be, because the newspapers have not been particularly friendly to those of us who sit on these benches,-with the fact that newspapers in Canada tend to be quite fair and to be Canadian oriented. The Government, I think, should seriously consider a voluntary approach to the newspapers in order to find the solution, knowing the objective and knowing that a solution can be worked out that will be satisfactory without this kind of imposed direction.
Again I repeat the problem of freedom of speech is not involved. I do not think that is the intention of the Minister or the Government, but it could work out that way and it brings suspicions to the fore that something along this line is being considered. Therefore I ask the Minister to remove this paragraph from the resolution so that we can all vote for the things that are good in it, and so that we do not have to vote against measures simply because we resent one portion of them. There would be no loss of face involved in removing the paragraph. There are alternative answers to that suggested by the Minister.
I have some strange ideas-maybe they are not so strange-for someone who is a member of this party. My strange ideas relate to the profit motive in newspapers. A few years ago I saw Mr. Roy Thomson being interviewed on television by one of Canada's leading intellectuals who, I am sure thought he was going to make mincemeat of Mr. Thomson. The burden of his argument went like this, "Mr. Thomson, don't you think it is a terrible thing that Canadian newspapers should be run for profit instead of ideology?" I was quite impressed with Roy Thomson's reply with his argument that if you run a newspaper essentially for profit you tend to be guided by public intention, by the need for public acceptance, and that this tends to neutralize a newspaper. A newspaper run with this motive does not get on a high horse and start developing ideologies. This, I think, is a good thing.
I am far less suspicious of a newspaper that is run for profit than of a newspaper run to promote some ideology. All of us at some time or another would wish to see a newspaper that in its editorial policies favoured us quite strongly. But as Mr. Thomson pointed out, the day may come when it
22620-162J
Income Tax Act
will favour the very things we disagree with, and then we cannot do anything about it.
There is a strong argument in favour of newspapers in this country being accepted as profit making organizations. Our freedoms are in much better hands under those circumstances than they would be in the hands of the ideologists. We have seen many examples in the United States of press barons who decided they were going to change the world with their ideas. They were not interested in whether their papers made or lost money, as they made their profit in other ways. They used their newspapers for propaganda and the result was that they spewed hatred, and everything else that went with it.
We in Canada are quite fortunate that our newspapers are run on a profit motive. One of the leading newspapers in my riding is the Evening Reporter, a Thomson newspaper. I have had many disagreements with the Evening Reporter, both as a businessman in the community and as a politician who felt he was not getting a square deal, but I will say this for the Evening Reporter, that it reports local thought and local opinion, and at no time have I felt someone was telling it what to print, someone somewhere else. If it wants to criticize me, and that is local criticism, well, fine; but I would resent any central organization trying to direct that criticism. This problem of Canadian ownership and identity connected with newspapers is important. We are not going to get it through Canadian editions of Time and Reader's Digest.
I suggest to the Minister that some time in the future the Government might consider subsidizing political journals in Canada to ensure that all Canadians get fair access to coloured opinion. There is a need for interpretive news reporting. It cannot be given in the daily papers, nor should they attempt to give it, but it should be attempted in the weeklies and the magazines. Many of the people in the smaller parties, many of the people who do not agree with what the majority think, are entitled to have their voice heard; but at present they cannot, except in special cases. To me this would be a practical way to create a Canadian identity and disseminate ideas that might be of value to all Canadians.


Mr. Hales:: Mr. Chairman, my remarks will deal specifically with paragraph 19 which reads:
That a new section be added to the Act concerning expenditures of a taxpayer for advertising space in a non-Canadian newspaper-

June 17. 1965
Income Tax Act
I	am amazed that this piece of legislation should be introduced in this fashion.
[DOT] (5:10 p.m.)
Last session as I recall there was a separate resolution on the order paper dealing with this very question. It was there for weeks and weeks. It was discarded and is now concealed in the new income tax resolutions. We have been asked to accept or reject the whole deal. I think the Minister would have been much better advised to have brought in this proposal as a separate resolution since it deals with a matter of such great importance to the people of Canada, namely the freedom of the press.
This has all the appearance of a piece of legislation which was rushed through and poorly thought out. In my humble opinion it seems to be the first step toward control of the press. The remarks I have to make will be along this line of thinking-that the power to tax is the power to control. If this Government has any notion of obtaining control of the press it is on the most dangerous ground which a Government could tread. For an example we need only turn to the country of Ceylon, where last year, the lady Prime Minister of that country decided to gain control of the press and fought an election on that issue. She met with a resounding defeat. Let me warn the Government that if it has any thought of obtaining control of the press it is treading on dangerous ground.
As I have said, my remarks will centre on the statement that power to tax is power to control. I do not think there is any escaping the logic of that statement. The other day the Minister said the proposal put forward by the Government asserted no control whatever over newspapers or other publications. This would seem to be an unusual statement because the Government's proposal does assert for the first time its right to impose discriminatory taxation on advertising by defining who shall, and who shall not, be entitled to tax exemption. As we all know, advertising is the lifeblood of any publication, whether it be a newspaper or a periodical. If this revenue is taken away, freedom is taken away at the same time.
The Minister also said concerning this resolution that it provides no precedent of any kind for Government interference with the complete freedom of the press. Well, in my opinion this legislation does set a precedent, and a most dangerous precedent at that. Having asserted for the first time a Government's right to tax advertising on a basis of owner-

ship there is nothing to prevent extension on other bases. What is there to prevent the Government, in the case of the ownership of a newspaper by a religious or trade union group, for instance, of which it does not approve, imposing such conditions on advertising as to make the venture impossible? The power to tax is the power to control.
I suggest that the Minister should withdraw this proposed legislation in the interest of freedom. He should throw it out. If he does not agree to do this now, he should certainly reintroduce this particular resolution so that the question can go before a committee where representatives of the press and those connected with publishing would have an opportunity to put forward their views. The Minister has said he is prepared to stand or fall by this legislation. Those are strong words and I hope he will think very carefully before he proceeds further with this proposed legislation. In any case I sincerely hope he will consider excluding newspapers from the resolution. To the press I would say this: It is time you spoke out on this subject; do not let the Government silence you with regard to the particular subject now before the Committee, thereby losing the freedom you now enjoy.


Mr. Baldwin:: Looking over this fairly complex and lengthy omnibus resolution I am reminded that taxation will always be with us. It has been said that only in heaven will there be no taxation, and then only because Minister of Finance usually go to the other place-and, when I say that, I do not mean the other place usually referred to in this House.
On clause 19 I have this comment to make. In some ways I do not take such a serious view as to the merits of the issue which is now being debated fairly extensively. I would be glad at some time to debate the whole question of economic nationalism which, in its present form, to my way of thinking is cutting across the trend of world development today. However, that can be done on another occasion. But clause 19 does seem to introduce a principle-and this has been referred to by my hon. friend from Wellington South-which constitutes a travesty on the whole constitutional process by making use of the power of taxation as a means by which the British North America Act can be circumvented and the Federal Government can enter into spheres of jurisdiction and authority which
June 17. 1965

certainly do not lie within the contemplation of that Act.
As hon. Members know, section 91(3) of the B.N.A. Act says the Federal Government has jurisdiction with respect to "the raising of money by any method or system of taxation." It seems to me to be quite outside the simple English meaning of that section for a Federal Government to use fiscal policy in such a way as to attach conditions of the kind set out here, and then, by exempting certain types of development, to control them, in effect, by the incidence of taxation. By this use of fiscal policy the Government is in effect laying down conditions and regulations with respect to commercial undertakings-in this case, newspapers-which it cannot control in a direct way.
[DOT] (5:20 p.m.)
It is well known that in 1933 the Alberta Government passed a press bill. I have not the legislation here, but it purported to be a form of licensing to bring newspapers under what could be probable Government supervision. There was no intention indicated in the legislation that it was to control the press; it was simply a licensing bill. The then Liberal Government recognized the dangers of a policy of this kind. There was no attempt, no suggestion, that this legislation was ultra vires. There was a tacit admission that this lay squarely within the powers of a provincial government if it saw fit to exercise the powers. So the then Liberal Government disallowed the legislation, and to my thinking properly disallowed it, although at the time of disallowance no attempt had been made by the Alberta Government to take advantage of the authority which it might have exercised if it had seen fit to do so. I think there is no doubt that the control of newspapers is a matter lying squarely within the ambit of provincial jurisdiction.
This particular philosophy introduced by paragraph 19 could be pursued in many, many other ways by simply attaching conditions to any industry at all, the power to regulate which industry lies squarely and solely in the Province. Then the Federal Government by attaching certain conditions would say in effect, "If you, the industry, comply with these conditions you are in a position to avoid the incidence of taxation or to take the benefit of certain exemptions". If this power were utilized, as it could well be, then I see no field of endeavour into which the Federal Government could not intrude if it desired to do so, and I would
Income Tax Act
think quite legally. I would doubt if a principle of this kind can be successfully attacked in any court, but I suggest it is an attempt to do indirectly what the British North America Act, our Constitution, says you cannot do directly and I would be rather surprised if some of the Provinces do not, on the occasion of some Federal-Provincial Conference, raise this issue.
It may be all right. I am not going to argue the merits of this newspaper issue at this particular time. But as a practice, as a precedent I deplore it and feel that it could lead to very serious consequences. I think it was pointed out today by one hon. Member, as it was once before in the House, that this was done in the Broadcasting Act. I did not like the way it was done then, but there is this difference, that by a Privy Council decision the right to deal with matters of broadcasting was vested exclusively in the Federal Government, and when the Federal Government saw fit, whether rightly or wrongly, to attach certain conditions in connection with the formation of companies and the ownership of shares in companies which would be entitled to participate in broadcasting activity, they were legislating properly within the terms of their jurisdiction. I will not say any more on this matter, Mr. Chairman. I felt I should deal with it on this basis because, while I do not take the same view as other hon. Members as to the actual merits, I do think I would be derelict in my duty if I did not point out the dangers involved in a course of this kind.
Before I sit down, Mr. Chairman, there is another matter I wish to bring to the attention of the Minister and on which I ask for some comments either now or before the legislation is finally passed. I refer to paragraph 10(c) dealing with the clearing of land for the purpose of carrying on a farming business. This involves, in my constituency probably more than in any other constituency or area of Canada, a measure which could be and I hope would be beneficial if there is a liberal construction of this particular section. It could bring considerable benefits. There are in the constituency of Peace River some 10 million or 11 million acres of land now being farmed, and, some two million or three million acres which need to be cleared in order to be brought under cultivation. In addition, following the construction of the Pine Point Railway and as a result of the improved means of transportation and the increasing flow of settlers into the north, there is another vast area of

June 17, 1965
Income Tax Act
10 million or 12 million acres of land, most of which has on it a great variety of brush both heavy and light. This is the kind of area which could benefit from a proper definition of the phrase "clearing land" contained in this particular amendment.
This is no idle suggestion, either, because during the course of the last four years approximately 2,000 or 3,000 homestead leases or homestead sales have been made in each year in the Peace River land district. These involve units of 320 acres, and by simple arithmetic it appears that annually there are well over half a million acres of land being taken up for settlement; and this process will continue for a number of years yet. Under those conditions, Mr. Chairman, it seems to me that some time in the next 15, 18 or 20 years, 10 million to 12 million acres will benefit from legislation of this kind if it means what I think and hope it does mean. Clearing land is the first step in making it available for cultivation. This is a request which has been made for many years by people in the north country. 1 recall 20 years ago sending resolutions down here urging that there be provided a provision to deduct on a yearly income tax basis moneys expended in clearing and breaking land. This has been neglected, and I am happy to give credit to the Government for taking this first, but still rather feeble step in the right direction.
It happens that other parts of Canada, through certain programs applicable to the designated areas, have received substantial benefits through the accelerated write-off and recently through outright grants. We from the north, my colleague the hon. Member for Yukon, the hon. Member for Northwest Territories and other hon. Members, have for many years urged that some particular concession on an income tax basis be provided for those who live in the north and who have to undergo the difficulty of meeting much higher costs either in their business or farming operations. I have no objection to these other benefits being made available to the designated areas in Canada, but it does seem to me very highly illogical to keep on doing so when it may have the result of perpetuating uneconomic conditions, and at the same time paying no attention to making similar benefits available to the northern parts of the country, which are now in the early stages of development.
I do not know what the Minister means by "clearing land". I assume this may have to

be subject to interpretation by the officials of the Department of National Revenue. If it does in fact mean all the steps which need to be taken to clear brush from land so it can be cultivated, then it is a substantial step in the right direction. The only difficulty about it is, as I think one hon. Member pointed out, that all too frequently the people who first take over these homestead leases and homestead areas have to go for a period of several years before they come into the tax paying bracket. I would suggest to the Minister that he give consideration, if not now then certainly the next time there is an amendment to the Income Tax Act, to giving to people who could benefit from this amendment the right over a period of years to select the year in which they can ask for this particular deduction.
Generally it takes a homesteader three or four years to break, cultivate and brush 150-200 acres of land. Only at that time does the farmer come into a position where he might hope to make sufficient revenue from which taxation would be paid to the federal Government. Unfortunately most of the money spent in doing the clearing is paid several years before the first year in which the farmer earns a taxable income. I think it might be feasible for the Government to consider providing a period of five or six years following the year when the clearing has been done in order to permit the farmer to select the year when he can ask for and obtain his exemption. I would ask the Minister to give consideration to this suggestion. I am quite sure that this would be a very valuable and useful aid to settlements in Northern Canada, and I feel that the Government, having taken this first step, might well consider going the whole distance.
[DOT] (5:30 p.m.)


Mr. Coates:: Mr. Chairman, up until the introduction of this resolution the newspaper industry has looked upon the ineptitude and stupidity of this Government in a rather nonchalant way. That industry has not become personally involved at any time with the kind of legislation this government has been bringing forward in the House for the two years they have been in office. But all of a sudden the newspaper industry has come face to face with the nonsensical intrusions that this Government has been making into the field of free enterprise ever since it has taken office, and this may be an indication to the industry iust how dangerous a Government this is.
June 17. 1965

When one reads the resolution and interprets what this Government intends to do in connection with newspapers which have been in existence tor many years, and have rendered great service to the Canadian nation by way of providing information, we become aware of the degree of irresponsibility to be found in the actions of this Government almost every day of the week. When the Minister of Finance indicates that the life of the Government would depend on the acceptance of the legislation embodied in this resolution, Canadians will quickly become aware that this Government's life expectancy is not too long as of now. When a newspaper such as the Winnipeg Free Press, which has been willing to coddle the Government so often, makes the kind of statements found in the editorial of that publication for June 16, one becomes aware of the degree of interference exemplified in the legislation proposed by this resolution. If the Minister of Finance and the Government have the brains that God gave a goose they will be clever enough to remove this particular legislation from the order paper, and remove it quickly.
This is a Government loaded with bureaucrats who want to interfere in everything that is going on in this nation of Canada. These bureaucrats, as my leader pointed out in his speech earlier today, are experts in red tape and deceit. The Government has Cabinet Ministers who do not know how to give a straightforward answer to any question asked; they have become experts in halftruths. The Government has a Prime Minister who has been described as having selective amnesia; one who has had to sit in this House and watch every Member from every party in the Opposition question the authenticity of his statements in the House; one who, if he were in Great Britain, would have resigned his office when the vote was taken.
The Winnipeg Free Press entitled its editorial, "Weak Case". Some may assume from the title of this editorial that it is not very damaging. Let me tell the Minister of Finance that the only thing weak about it is the title. It is the most damning piece of editorial writing that has probably ever appeared in this paper, one which has been the guardian and promoter of the Liberal party ever since it has been in existence. I do not intend to read every word contained in the article, although it is all good advice to which the Minister of Finance should pay very close attention. It tells the Minister just how shocked it is by what he proposes, and just how afraid it is of this oligarchy of bureaucrats who form the
Income Tax Act
Government today and run this country in whatever way they feel it should be run, no matter what the Canadian people might think.
This publication is not alone in this view, Mr. Chairman. There are many supporters of the contention set out in the editorial of the Winnipeg Free Press. Here are some telegrams received by the Leader of the Opposition which I intend to place on the record for the edification of the Minister of Finance. This one is from Ralph Costello, publisher of Saint John:
The Telegraph-Journal and Evening Times-Globe of Saint John, N.B. are among the many Canadian newspapers which strongly oppose the Government intervention and threat to freedom of the press contained in the advertising tax measure now being considered by the House of Commons.
It is conceivable that the almost unanimous opposition of daily Canadian newspapers to this method of control will be ignored by the House. This opposition has not been motivated by self interest. In opposing this measure the newspapers of Canada are sincerely concerned about the precedent being established and the possible misuse of this precedent in future.
[DOT] (5:40 p.m.)
It is signed by Ralph Costello, publisher of the Telegraph-Journal and the Evening Times-Globe.
I have another telegram which reads:
This newspaper strongly opposes budget proposal to control newspaper ownership through control of advertising budgets. This regarded as first insidious step toward possible future government control of press and contrary to Bill of Rights. Strongly urge proposal be withdrawn for further study
Robert L. Curran, Sault Daily Star
I feel certain, Mr. Chairman, that every newspaper, whether or not affected by the tax in question in this resolution, will oppose this resolution with vim and vigour.
Let me tell the Minister of Finance this. Up until now the Liberal Party has enjoyed a degree of attention from the newspapers of this country that in my opinion certainly has been unjustified from any point of view, for it has been a Government so fraught with fumbling and bumbling and outright stupidity that if the newspapers of this nation had educated the public as to its faults, it would not now be in office. Perhaps the newspapers will now smarten up and realize just how far the fumbling and bumbling of this Government has gone, just how willing it is to interfere with any and every facet of the economy of this nation, and how willing it is to weaken and damage even the freedom of the press if it benefits in some known or unknown way.
One of the newspaper groups that will be adversely affected by this legislation if it is passed is the Thomson chain. While there is

June 17, 1965
Income Tax Act
not a Thomson newspaper in my constituency, and I have no love or hatred and hold no brief for this chain, I want to go on record as saying that I have found it to be the kind of newspaper chain about which no one in Canada can complain. I have seen this chain purchase newspapers and know that one would never realize that the ownership had changed because there has been no change in the editorial policy; and the same requirements, maintaining its standards in the community, have remained. This Government is willing to throttle and destroy that chain just as surely as if it passed a law which forced Canadians to stop purchasing its newspapers.
It would appear that if this Government cannot control a newspaper, it intends to destroy it. The Leader of the Official Opposition indicated that one newspaper in Ontario, and I believe it was the Muskoka News, has already had the boys from National Revenue move in and tie up its operations. What will happen after this legislation is passed? It would be difficult to even guess what will occur next, particularly when one realizes what is in the minds of those men who sit in the Treasury Benches of this nation today. Those men can get themselves into terrible messes without even knowing that they are walking into them.
Let me say this to the Minister of Finance. If he thinks he ran into difficulty in respect of the budget resolution dealing with the 11 per cent sales tax, he has no idea what trouble is, and could certainly not envisage the difficulty he is going to encounter in the days to come as he endeavours to get this piece of legislation through this House. As bad as the 11 per cent sales tax was and is, with the many bankruptcies of reputable businessmen it has brought about, it is nothing compared to what will emanate from this legislation because of the degree to which the freedom of the press will be suppressed.
No one in his right mind would bring this kind of legislation before the House unless he had an ulterior motive. One certainly cannot discover what the Government's ulterior motive is in this regard. Certainly any Member of the Opposition who by asking questions has made an effort to find out why this Government does the things it does from day to day, knows how difficult it is at any time to obtain a straight answer in respect of any matter, important or unimportant.
I should like to conclude my remarks by quoting the last paragraph of an editorial

which appeared in the Winnipeg Free Press of June 16, 1965, as follows:
No one, least of all the newspapers of Canada, quarrels with the government's objective of assuring a press which is completely controlled by Canadians and immune from foreign ownership. It is with the method Mr. Gordon has chosen that every responsible newspaper must strongly disagree and, if it is adopted by Parliament, seek to have rescinded by some future government.
I should like to say this. This is North America, not South America; this is a democracy with a democratic Government, not a dictatorship. We do not use the gag or the mailed fist to stop the newspapers from saying what they desire to say in their columns. If that is the intention of the Government, then I say once again: Smarten up; take this legislation off the order paper, and let us get on with the business of the country.
0	(5:50 p.m.)


Mr. Peters:: Mr. Chairman, I want to make a comment or two following the statement made by the hon. Member for Peace River with regard to the matter of a tax concession to farmers who clear land. We are all well aware of the fact that the Minister of Agriculture is concerned with a certain class of farmer who is in a fairly high economic bracket and does, I am sure, pay income tax. However, anyone who has really looked at agriculture in the development areas of northern Ontario or other areas of northern Canada where land clearance is still worth while, and an economic proposition from the point of view of the country would have to question whether or not this provision really gives much of a concession to such farmers.
It is quite true that in some areas of southern Ontario land is being cleared, and
1	am sure this is probably the case in the southern areas of other provinces as well. I know that considerable land clearance is going on in southern Quebec. But such clearance in the main is not being done by individual farmers setting out to homestead, as many of those in the newer areas are doing. Rather, it involves the clearing of land on a fairly large scale.
It is well understood that the Province of Ontario has been concerned about land clearance and I know that this is also true of the Province of Quebec. The former Federal Government showed seme inclination to interest itself in this field through ARDA. I think it is a fact that a great deal of land has been cleared in Ontario and Quebec that never should have been cleared at all. This has resulted in a very detrimental situation and
June 17, 1985

one that ARDA was really established to correct.
We know that the Ottawa valley, for instance, once had one of the largest and most valuable stands of timber in the country. The trees were cut down and land was cleared for agricultural purposes which any agency interested in the conservation of our resources would know should never have been cleared. As a result water and land conservation problems have arisen which we are now having to face, and under ARDA a program of planting trees is being carried out because of the fact that the land is not agricultural and never will be.
It is also known that much of the land being cleared in many areas today is being cleared with the help of provincial grants, which take care of about half of the actual cost of clearing the land. In northern Ontario, where land is selling for $30 to $50 an acre, it has always surprised me to find the Farm Credit Corporation, a Federal agency, making grants of from $12 to $18 an acre for clearing farmland, while the Ontario Provincial Government has paid $25 an acre for the clearing of similar land on the basis of a 50 per cent grant.
I am well aware that there are farmers in my area who will take advantage of this tax concession. I as a Member of Parliament can take advantage of it. I have been thinking for some time of clearing some land I own, and I am also often concerned about the amount of income tax we have to pay. I also know that I was going to be able to clear some of the land in another manner and that this provision obviously cuts me off now from doing so. The fact is that companies will want to get into the business of clearing land for purposes of speculation. They will have the equipment to do so and they will find that clearing land can be done for the grants that will be allowed, and they will also be entitled to a write-off for tax purposes.
I wish to refer to another point brought out very clearly by the hon. Member for Peace River who represents a large segment of the newly developed areas of Canada. I am not too sure whether the riding of Peace River covers what I consider to be the Peace River area, but I know of people who have gone to the Peace River area and have secured land there, just as people have in my riding. On the basis of cases that have come to my attention and my personal knowledge I know that most of these people have no income at all. In my area they can receive 22620-163
Income Tax Act
no assistance from the Provincial Government because they have less than 25 acres cleared and the agricultural representative considers that they do not earn half their income from the land they have cleared. These people, of course, are not now eligible for assistance from the province and they are not going to be eligible under the provision in the resolution, for the simple reason they are not earning any income and do not pay any income tax.
I am wondering whether some safeguard is going to be provided by the Department of Finance and whether the Minister is really going to consider certain things that may be in direct conflict with some of the other things the Government is doing. I have always been concerned with what appears to be the lack of knowledge of the Liberal Government with regard to the purpose for which the ARDA program was established. I think we have here another indication that there has not really been too much co-ordination of thinking between the people who are going to benefit from this provision, and those concerned with ARDA who really believe in the conservation of our natural resources and the application of those resources to bring about the greatest economic benefit to the Canadian people.
We know that many of the areas that are going to be reforested under the ARDA program are areas where the Ontario Government made a considerable monetary contribution for the clearing of the land without really knowing if the land should have been cleared. I was of the opinion that in the initial stages of the ARDA program a survey would be made right across Canada for the purpose of seeing that land was properly utilized and put to the most productive use. I do not see any protection under this provision for that aspect of the ARDA program.
There are many people in Timiskaming and elsewhere who really are not pioneers any longer because pioneers usually have only a quarter section of land and really are not in a position to make the kind of contribution that would warrant an income tax reduction for any purpose. But those engaged in large farming operations are in a position to buy land and will be able to take advantage of this proposition. Before the resolution passes I hope the Minister will indicate what type of regulations he anticipates the Department will make to guarantee that there will not be a conflict with the best utilization of land under ARDA and to make sure that

June 17, 1965
Standing Committees
this deduction will be in the general interests of the best utilization of our land.
I hope the Minister will consider this point which was raised initially by the hon. Member for Peace River because I think there is a conflict between what many of us hope the ARDA program will do with regard to land utilization and what this program may do for those who really do not need this type of concession.


Lucien Lamoureux: Order. It being six o'clock it is my duty to leave the Chair so the House may proceed with the consideration of private Members' business.


PROCEEDINGS ON ADJOURNMENT MOTION
Mr. Deputy Speaker:: It is my duty, pursuant to Provisional Standing Order 39A, to inform the House that the questions to be raised at ten o'clock p.m. this evening are as follows: The hon. Member for Prince Edward-Lennox (Mr. Alkenbrack), redistribution-publication of maps in weekly newspapers; the hon. Member for Parry Sound-Muskoka (Mr. Aiken,) education- student loans-inquiry as to improvements in plan; the hon. Member for Rosthern (Mr. Nasserden), agriculture-feed grains.
[DOT] (6:00 p.m.)
Order. It being six o'clock the House will now proceed to consideration of private Members' business as listed on today's order paper.


Hon. J. Watson MacNaughi (Solicitor General):: Mr. Speaker, could I have the unanimous consent of the House to revert to the item of business "Presenting Reports by Standing and Special Committees" to permit the Whip to make a report on the personnel of the various committees?


Some hon. Members:: Agreed.


[Stage Direction]
Mr. J. E. Walker (York Centre) presented the first report of the Special Committee appointed to prepare and report lists of Members under Standing Order 65 to compose the Standing Committees of the House, as follows:
[Stage Direction]
Messrs:
Berger
Cowan
Dinsdale
Drouin
Fisher
Gelber
Gregoire
Groos
Horner (Acadia) Jewett (Miss) Mackasey Marcoux
Mather
McCutcheon
Morison
Nesbitt
Otto
Prud'homme
Pugh
Simpson
Stewart
Tardif
Thomas
Valade
[Stage Direction]
Messrs:
Addison
Asselin (Notre Dame de GrSce)
Beaule
Cameron (High Park) Cameron (Nanaimo-Cowichan-The Islands) CotS (Longueuil)
Cote (Chicoutimi)
Douglas
Eudes
Gundlock
Hales
Kindt
Lloyd
Loiselle
Maclnnis
Matheson
McCutcheon
McLean (Charlotte)
Muir (Lisgar)
Otto
Pigeon
Rheaume
Rouleau
Stewart
[Stage Direction]
Messrs:
Basford
Bell
Cameron (Nanaimo-Cowichan-The Islands) Chretien Douglas
Flemming (Victoria-Carleton)
Forest
Francis
Gelber
Grafftey
Gregoire
Irvine
Kindt
Lambert
Lloyd
Macdonald
McLean (Charlotte)
Monteith
Moreau
Pennell
Pilon
Thomas
Thompson
Whelan
[Stage Direction]
Messrs:
Armstrong
Barnett
Basford
Bechard
Blouin
Cadieu (Meadow Lake)
Carter
Cashin
Chatterton
Crouse
Cyr
Danforth
Dionne
Dube
Granger
Howard
Loney
MacLean (Queens)
McLean (Charlotte)
O'Keefe
Patterson
Stefanson
Tucker
Willoughby
[Stage Direction]
Messrs:
Brown	C6te (Longueuil)
Cameron	(High Park)	Cowan
Cardiff	Enns
June 17, 1965
[Stage Direction]
Flemming (Victoria-	Marcoux
Carle ton)	Munro
Francis	O'Keefe
Harley	Perron
Howe (Hamilton South) Regan	
Howe (Wellington -	Rideout (Mrs.)
Huron)	Rochon
Jones (Mrs.)	Rynard
Knowles	Wadds (Mrs.)
Laverdi&re	Willoughby
HOUSING, URBAN DEVELOPMENT AND	
PUBLIC WORKS Messrs:	
Aiken	Macaluso
Badanai	Martin (Timmins)
Basford	McBain
Boulanger	Me William
Cashin	More (Regina City)
Chatterton	Nielsen
Frenette	Pascoe
Gendron	Prittie
Graff tey	Rinfret
Kelly	Rondeau
Lloyd	Ryan
Loiselle	Vincent
INDIAN AFFAIRS, HUMAN RIGHTS AND	
CITIZENSHIP AND IMMIGRATION Messrs:	
Asselin (Richmond-	Lachance
Wolfe)	Macaluso
Badanai	Macquarrie
Baldwin	Moore (Wetaskiwin)
Boutin	Nielsen
Brewin	Orlikow
Crossman	Prud'homme
Danforth	Rheaume
Fane	Roxburgh
Gray	Thompson
Klein	Wahn
Konantz (Mrs.)	Watson (Ch£teauguay-
Korchinski	Huntingdon-Laprairie)
INDUSTRY, RESEARCH AND ENERGY	
DEVELOPMENT Messrs:	
Addison	Laniel
Alkenbrack	Latulippe
Asselin (Notre Dame	Leboe
de Gr&ce)	McNulty
Choquette	More (Regina City)
Chretien	Moreau
Crouse	Mullally
Davis	Noble
Forest	Peters
Granger	Ricard
Hahn	Saltsman
Hales Irvine	Stenson
JUSTICE AND LEGAL AFFAIRS Messrs:	
Bell	Coates
Belanger	Drouin
Bigg	Fairweather
Cashin	Girouard
Chapdelaine	Greene
Choquette	Guay
Chretien 22620-163^	Honey
Standing Committees	
Howard	Paul
Macdonald	Ryan
Nielsen	Scott
Nugent	Temple
Otto	Woolliams
LABOUR	AND EMPLOYMENT Messrs:
Barnett	Lessard (Lac-Saint-Jean)
Basford	Mackasey
Byrne	Maclnnis
Cashin	McBain
Cote (Longueuil)	Millar
Dionne	Muir (Lisgar)
Emard	Regan
Foy	Ricard
Godin	Rideout
Gray	Starr
Jones (Mrs.)	Valade
Knowles	Wahn
MISCELLANEOUS ESTIMATES Messrs:	
Asselin (Richmond	- Korchinski
Wolfe)	Leblanc
Barnett	Leduc
Cadieu (Meadow Lake) Muir (Lisgar)	
Cote (Chicoutimi)	Peters
Emard	Pilon
Eudes	Richard
Forbes	Rochon
Foy	Rondeau
Girouard	Skoreyko
Habel	Smallwood
Harley	Watson (Chateauguay-
Jorgenson	Huntington-Laprairie)
MISCELLANEOUS PRIVATE BILLS Messrs:	
Addison	Mather
Alkenbrack	Matte
Deachman	Mitchell
Ethier	Mullally
Frenette	Nixon
Gelber	Paul
Horner (Acadia)	Perron
Kennedy	Pugh
Kindt	Smallwood
Lambert	Wadds (Mrs.)
Laverdi^re	Webster
Loiselle	Whelan
NATIONAL DEFENCE Messrs:	
Bechard	Lessard (Lac-Saint-
Brewin	Jean)
Churchill	MacLean (Queens)
Deachman	MacRae
Dube	Martineau
Fane	Matheson
Groos	McMillan
Hahn	McNulty
Harkness	Rock
Lambert	Smith
Langlois	Temple
Laniel Lessard (St. Henri)	Winch
[Stage Direction]
June 17, 1965
Standing Committees NORTHERN AFFAIRS AND NATIONAL RESOURCES
Messrs:
Alkenbrack	Howard
Berger	Laprise
Blouin	Leboe
Cadieu (Meadow Lake)	Legault
Cantelon	Madill
Crossman	Mitchell
Cyr	Moreau
Dinsdale	Nielsen
Godin	Rheaume
Granger	Ryan
Groos	Turner
Herridge	Woolliams
PRIVILEGES	AND ELECTIONS
Messrs:	
Armstrong	Lessard (Saint Henri)
Blouin	Leboe
Coates	MacEwan
Doucett	Macquarrie
Francis	Martin (Timmins)
Grafftey	O'Keefe
Greene	Paul
Habel	Pigeon
Harkness	Prud'homme
Homer (The	Richard
Battlefords)	Rochon
Howard	Tardif
Latulippe	
PUBLIC	ACCOUNTS
Messrs:	
Baldwin	Lloyd
Cameron (High Park)	McMillan
Caron	Mitchell
Cote (Chicoutimi)	Nasserden
Crouse	Noble
Fleming (Okanagan-	O'Keefe
Revestoke)	Pilon
Forgie	Rinfret
Gendron	Saltsman
Hales	Southam
Hamilton	Tardif
Leblanc	Winch
Legault	
STANDING ORDERS	
Messrs:	
Asselin (Notre Dame	Howard
de Grace)	Jewett, (Miss)
Balcer	Kelly
Boulanger	Leblanc
Chapdelaine	Maclnnis
Cyr	Nielson
Forest	Ouellet
Gauthier	Simpson
Gray	Skoreyko
Guay	Wahn
Hahn	Webb
Horner (Acadia)	Winch
Horner (Jasper-Edson)	
TRANSPORT AND COMMUNICATIONS	
Messrs:	
Balcer	Cantin
Boulanger	Cowan
Cantelon	Dea chinan
	
Fisher	Macdonald
Flemming (Victoria-	Millar
Carleton)	Nasserden
Foy	Olson
Guay	Pascoe
Homer (Acadia)	Prittie
Howe (Wellington-	Richard
Huron)	Rideout (Mrs.
Kennedy	Rock
Macaluso	Tucker
VETERANS AFFAIRS Messrs:	
Bigg	Legault
Carter	MacRae
Chatterton	Madill
Emard	Matheson
Fleming (Okanagan-	McIntosh
Revelstoke)	Morison
Forgie	Ormiston
Granger	Patterson
Groos	Peters
Herridge	Plourde
Kelly	Rock
Kennedy Laniel	Temple
Mr. Walker moved: that the report be concurred in.


[Stage Direction]
Motion agreed to.
John Watson MacNaught: Mr. Speaker, I wonder could I have the unanimous consent of the House to revert to motions to refer the estimates of various departments to the committees announced by the Whip?


Some Hon. Members:: Agreed.


John Watson MacNaught: That, saving always the powers of the Committee of Supply in relation to the voting of public moneys, the items listed in the Main Estimates for 1965-66, relating to the Departments of Defence Production, Fisheries, Industry, Justice, Labour, National Defence, Trade and Commerce and Veterans Affairs be withdrawn from the Committee of Supply and referred to standing committees of this House, as follows:
Defence Production-to the Standing Committee on National Defence:
Fisheries-to the Standing Committee on Fisheries;
Industry-to the Standing Committee on Industry, Research and Energy Development;
Justice-to the Standing Committee on Justice and Legal Affairs;
Labour-to the Standing Committee on Labour and Employment;
National Defence-to the Standing Committee on National Defence;
Trade and Commerce-to the Standing Committee on Finance, Trade and Economic Affairs;
and
June 17, 1965

Veterans Affairs-to the Standing Committee on Veterans Affairs.


[Stage Direction]
Motion agreed to.


Robert Carman Coates: That an Order of the House do issue for a copy of the report prepared by the Commissioner of the R.C.M. Police which resulted in the forced retirement of Chief Superintendent Belec and SubInspector Poitras.
He said: Mr. Speaker, I have waited some time to have an opportunity to enlarge upon the request that 1 first made in the last session of Parliament to have tabled in the House the report that was prepared by the Commissioner of the R.C.M. Police for the Minister of Justice, (Mr. Favreau).
I realize that when the Government spokesman answers me he will no doubt explain to the House, through a long recital of precedents, the reason why this should not be done; but it is my intention in as brief a manner as possible to state the reasons why I feel this should be done, and should have been done many months ago.
The situation related to this matter is almost unprecedented for, to the best of my knowledge, what happened was that a request was made by the Commissioner of the R.C.M.P. to the Minister of Justice to dismiss the two individuals mentioned, Chief Superintendent Belec and Sub-Inspector Poitras. One will quickly appreciate that these were not insignificant individuals in the R.C.M.P. Indeed, it is my understanding that Chief Superintendent Belec was in charge of the R.C.M. Police in the Province of Quebec, and it is indeed a serious matter when the Commissioner of the R.C.M. Police considers it necessary to make a recommendation to the Minister of Justice to have an Order in Council passed for their dismissal.
One must always keep in mind that the high reputation of the R.C.M. Police must be maintained at all times, regardless of the involvement of any individual; but it is my belief that the Minister of Justice did not do that on this occasion. When he received this request from the Commissioner he had two alternatives available to him. Certainly we in the House do not expect the Minister to rubber-stamp anything that might come before him from the Commissioner, but at the same time we do expect that, when a request comes to his desk from the Commissioner,
Motions for Papers
he will give it that consideration whifch warrants action almost immediately.
[DOT] (6:10 pjn.)
In the circumstances the Minister had two alternatives available to him. He could have said to the Commissioner: The facts as set out are correct; the action you recommend is correct, and an order in council will be prepared immediately for the dismissal of these men. Or he could have said: The facts are not serious enough to warrant the kind of action you recommend. In either case the Commissioner and the R.C.M.P. would have known where they stood. But the Minister of Justice, instead, did the worst thing possible: He did nothing. He allowed the matter to hang in the air in suspended animation. He allowed it to hang there for months, and during that period of time a great deal of talk developed which materially affected morale in the force. He allowed two senior men, men who had spent many years in the R.C.M.P., to remain on tenterhooks not knowing what their fate would be. The Minister placed the force in a most demoralizing position for reasons no one knows-reasons which no one can know unless the report in question is tabled in this House, or a public inquiry is recommended by the Government.
In the end, what we find is that the two individuals involved are no longer members of the R.C.M.P. But they do have their pensions. It is something very strange when two individuals find themselves in a position where they can no longer remain members of this illustrious organization-their actions have resulted in their no longer being considered capable of remaining in the force-while at the same time they are allowed to leave with their pensions.
Mr. Speaker, one is either guilty or not guilty. If these men were not guilty of the offences of which they were accused, they should have been allowed to return to the posts from which they had been suspended. If they were, they should be dismissed, brought before the courts and prosecuted for the offences which are alleged. We find it is impossible to learn exactly what transpired except that these men are no longer members of the R.C.M.P. and that they have obtained their pension entitlement from that force. With the affairs which have taken place in the Province of Quebec over the past two years and with the involvement of Members of the Liberal party in so many of these scandals, and with the involvement of those officers in matters associated with suggested devious ac-

June 17, 1965
Motions for Papers
tions, one begins to wonder whether the Government is not afraid of what might be said by these two individuals if a public inquiry were announced and those involved were allowed to state their case and place their story before the Canadian people.
I am responsible enough to know that one does not in ordinary circumstances expect the Government to agree to the tabling of a report of this kind. But these are not ordinary circumstances: These are very strange circumstances. These are circumstances of the kind which revolve around everything which has been going on between this Government, the upper echelon of the executive which serves the Cabinet of this country, and organized criminals in the Province of Quebec. If these men have been involved in any way, it is my belief the Canadian people should know about it. They should know also that the Commissioner was willing to take action of the kind which would eliminate this kind of thing from the R.C.M.P. Instead, we find the Minister of Justice and the Government unwilling to provide the facts for the Canadian people, though willing to allow the reputation of the R.C.M.P. to be discredited for their own protection.
I believe that in fairness to everyone concerned this report should be made available or a public inquiry should be set up in order that the Canadian people may be allowed to judge the facts in a public way.


Mr. D. S. Macdonald (Parliamentary Secretary to Minister of Justice):: The hon. Member has made certain insinuations about a connection between Members of this House, members of this party and of the executive, and organized criminals. I take great exception to that. I say they are wholly unfounded. They are false insinuations and I regard them as contemptible.
As the hon. Member knows very well, I am not in a position to make the details of this particular disciplinary case available, but they bear no relation at all to any of the other incidents which may have been discussed in this House or to any of the insinuations which he or other Members of his party have made with regard to certain people in this House or outside it.


Gordon Minto Churchill: Is the Parliamentary Secretary not himself making certain insinuations by saying that hon. Members of this House have made insinuations? Speak (plainly.


Donald Stovel Macdonald: I am just dealing with the rather contemptible remarks of your colleague. I make no insinuations. I say directly that they are contemptible.
The hon. Member has professed some familiarity with the precedents and the law affecting this situation. He says he is aware of the long established principles which have been laid down in this House in connection with matters of this kind. Yet he makes the statement-a puzzling one in view of the clear provisions of the R.C.M.P. Act-that either these persons are guilty or they are not. He says that if they are guilty they should be dismissed and brought before the courts.
0	(6:20 p.m.)
I think it is necessary for the benefit of the hon. Member and for the sake of the record to make clear exactly what are the provisions of the R.C.M.P. Act in this respect, and the purpose of those sections which provide for disciplinary procedure-the procedure followed in this case. Before doing so
1	would just like to make reference to some of the precedents in this House which make it quite clear that it is long established tradition that the internal documents of the R.C.M. Police relating to disciplinary matters should not be made subject to an order under this type of motion. The rule, of course, is founded very soundly on principle and is related to the special character of the service which the R.C.M. Police perform on behalf of Canada. It is related to the very high standards of discipline which in part at least have contributed to the high reputation that force has, and to its very great responsibility as a police force, which is something all police forces have.
I would like to make reference to Hansard for May 7, 1952, and to a motion by the hon. Member for Prince Albert, now the right hon. Leader of the Opposition (Mr. Diefenbaker), for the disclosure of all the evidence taken on a similar kind of disciplinary proceeding against a former member of the R.C.M.P. Speaking on behalf of the government of that time, the former Minister of Justice, Hon. Stuart S. Garson, laid out several principles which I think it is well for the House to bear in mind in dealing with this particular motion. After making reference to the fact that there were precedents-and he cited them on that date-for the non-production of this kind of material, he went on as follows:
The right of the Commissioner, acting under the authority given to him by the Act and under the
June 17, 1965



general supervision of the Minister, to engage and discharge personnel at his discretion has over the years proved to be one of the principal factors in maintaining a high level of discipline and efficiency within the Royal Canadian Mounted Police. Any suggestion that that authority may be questioned would weaken the whole fabric of discipline and control.
Then he continues in the same passage:
The strict, even severe, standards of discipline insisted upon by the force are well known and are accepted by recruits when they are engaged as well as by older members each time they re-engage. The reputation the force enjoys and is striving successfully to maintain in the face of recent substantial expansion is based very largely on adherence to these standards.
That particular motion was refused by the House. It was submitted to a vote of the House and the vote was negative. One would have assumed that if the hon. Member for Prince Albert, who was the mover of the motion at that time, had felt the proceedings with regard to disciplinary action in the R.C.M. Police were wrongful, if he had felt there should have been a change in the governing statutes so as to make these proceedings public, he would have taken action to bring about that change. The fact is that while the right hon. gentleman headed the Government of this country the Royal Canadian Mounted Police Act was brought before the House, and perhaps even the hon. Member for Cumberland was present when it was submitted to some very searching scrutiny by the Opposition of that day.
It might be useful, Mr. Speaker, to put on the record the exact details of both the disciplinary proceedings which are followed and some of the statements made by the former Minister of Justice, Hon. E. D. Fulton, on the question of disciplinary proceedings and what were the views of that Government. Under Section 25 of the Statute there is set out a series of offences which are referred to as major disciplinary offences for which disciplinary action may be taken against members of the force, and under Section 26 distinction is made between those offences and certain other violations of the regulations which are referred to as minor service offences.
Hon. Members will recognize at once that Section 25, and indeed the regulations, impose higher standards in many cases than are expected of a person in normal employment. The disciplinary offences are put there in order to maintain the particularly high standard of performance and service in this police force, and because someone may have been tried under that particular section, as
Motions for Papers
was the case with the two former officers involved in this motion, it does not necessarily indicate that there has been anything in the nature of an offence against the Criminal Code nor does it necessarily indicate, as the hon. Member seemed to think, that the individuals in question should be tried in the courts or prosecuted in the courts for these offences. This force, like the armed services, is a highly disciplined one and the failure to observe these particularly high standards may result in this disciplinary action being taken, which of course would not necessarily involve and did not in this case involve the bringing of any proceedings in the criminal courts against the members.
Once an offence has been discovered it is provided by section 32 of the Statute that an investigation is to be carried out, and if after the investigation it appears to an officer that a member has committed a major service offence, a report shall be made to the Commissioner, and if the Commissioner feels the evidence justifies it he shall direct that a written charge be prepared and served on the member. The Statute goes on, under Section 34, to provide the procedural rules which are to be followed in trials under this provision.
This proceeding under the former Statute and as contained in the present one is not a proceeding in the normal course, and it is because of the special character of the R.C.M. Police that the former Government supported by the hon. gentleman decided to take this particular matter outside the ordinary courts and establish it in a particular tribunal to be conducted internally by the R.C.M. Police. Under these provisions, once the sentence is given, by Section 35 it is provided that if the presiding officer is satisfied on the evidence submitted at the trial that the accused is guilty of the offence as charged, he must so find and the presiding officer may then sentence the accused to such punishment as is provided by that part of the Statute.
There is provided to a member of the force the right of appeal. The appeal is to the Commissioner and thereafter a Board of Review shall be appointed under the Statute to consider the appeal. I have already made clear, Mr. Speaker, that the opportunity was there for the former Government, if they felt there was something wrong about these proceedings, and particularly that there was something wrong about the proceedings being conducted in camera, to change the law and make provision for open and public trial in

June 17/ 1965
Motions for Papers
these matters. This was all the more so because several years before the right hon. gentleman assumed power, that is to say in 1956, the Supreme Court of Canada had had the opportunity of passing judgment on this particular proceeding. I am referring to the case of The Queen and Archer v. White, reported in 1956, Supreme Court Reports, at page 154. There, again, there was disciplinary action taken against a member of the force who subsequently took proceedings by way of certiorari to bring those proceedings before the normal civil courts for review. The Supreme Court of Canada refused at that time to review this particular decision, but stated that if it could be established that there was a lack of or an excess of jurisdiction by the R.C.M.Police tribunal, the courts could review. Mr. Justice Rand, who perhaps more than any other living Canadian can claim to be a defender of justice and of civil rights, remarked in that particular case as follows- and I think it is useful to have the statement of such a jurist put on the record with respect to the force:
Parliament has specified the punishable breaches of discipline and has equipped the force with its own courts for dealing with them and it needs no amplification to demonstrate the object of that investment. Such a code is prima facie to be looked upon as being the exclusive means by which this particular purpose is to be attained. Unless, therefore, the powers given are abused to such a degree as puts action taken beyond the purview of the statute or unless the action is itself unauthorized, that internal management is not to be interfered with by any superior court in exercise of its long established supervisory jurisdiction over inferior tribunals.
He goes on to point out that the force is "a group executing a function of a public or quasi-public nature where obedience to orders and dependability in carrying them out are, for the safety and security of the public, essential and their maintenance of standards the immediate duty of every member". For this reason the learned jurist concurred in the conclusion of his colleagues that the proceedings were not such as to require, on the basis of natural justice, a review by the ordinary civil courts of the country, and he concurred in the reasonableness of the establishment of a special procedure for disciplining members of the force, o (6:30 p.m.)
I have already made reference to the fact that the former Minister of Justice, Hon. E. D. Fulton, had some considerable comments to make about the procedure of which the hon. Member appears to be so critical, and

also he commented on the stand being taken by the Government, one which has been taken by all Governments in the past, namely that the subject matter of these particular proceedings should not be made the subject of public scrutiny and debate. On June 9, 1959, as reported at page 4483 of Hansard, during the course of discussing the bill which has now become Chapter 54 of the Revised Statutes of Canada, 1959, the former Minister of Justice had this to say:
I turn now to the provisions regarding discipline. Here, as I have said, the emphasis is upon making the procedures more democratic and of eliminating wide and arbitrary powers which were contained in the former act. Again I want to emphasize that the fact that these powers are eliminated and modified should not be taken and is not to be taken as an indication that there were abuses in the past; but we have felt that when we are introducing legislation to amend and to modernize the Royal Canadian Mounted Police Act then, in accordance with the pattern and indeed with the desire of the senior officers of the force itself, it is better to provide what X call a democratic procedure, and particularly to provide for a review and appeal procedure in connection with those disciplinary cases.
A little further on he continues in this way:
We are making an attempt here and X think a successful attempt, to write into the statute the rights of the accused with respect to the holding of his trial so that he will know and have in statutory form that protection which is also available to a person tried before the civil or criminal courts.
I think it is clear from the two authorities I have cited that, first, every effort was made -and the hon. gentlemen opposite passed judgment on what was a reasonable procedure in these circumstances-to provide members of the force who are disciplined for major offences with all the proper defences they could have, given the circumstances of the case. That was certainly the view of the former Minister of Justice, who was supported by the hon. Member for Cumberland. It is also clear, I think, from the remarks I have made in connection with the case of The Queen and Archer v. White, that the remedy of certiorari was available to the two members of the force if they felt that action should be taken in the civil courts indicating a lack or an excess of jurisdiction by the tribunal concerned.
I suggest that all proper proceedings were taken in this case. It does not lie with the hon. Member to suggest that there is any impropriety here. I agree it is a matter of concern-I think all hon. Members will agree with this-and indeed of some chagrin, not only for members of the force but for all
June 17, 1965

members of the public, that from time to time there should be these unhappy cases of discipline. But given that situation, I am sure that the House would not want to aggravate those particular circumstances, or to put in jeopardy those particular disciplinary proceedings or to set aside the long series of precedents established in the House in this connection, by acceding to this motion. Therefore, Mr. Speaker, I hope that the hon. Member and other hon. Members who have had an opportunity of expressing themselves on this question will recognize that this is not a matter to be made the subject of political debate. It is an important matter for the internal operation of the R.C.M.P. It is also an important matter for the status of the members of the force in the eyes of the public. Therefore I hope, now that the hon. Member has been promoted to the front bench, that he will exercise a little of the responsibility which goes with that position in the House, and withdraw his motion.


An hon. Member:: You are the one who should withdraw.


Donald Stovel Macdonald: Well, he may not be there long either.


Gordon Minto Churchill: We are trying to get you moved up to the front.


Donald Stovel Macdonald: Let me say I appreciate the kindness behind the hon. Member's efforts. Nevertheless, the amendment passed by hon. gentlemen in 1959 was again scrutinized by the courts, and this in connection with another of the great legislative enterprises in respect to which they take so much pride, namely the Canadian Bill of Rights. Here again in the case of Re Walsh and Jordan, which was tried in the Ontario Supreme Court in 1961 and is reported in volume 31 of Dominion Law Reports, second series, page 88, another effort was made by a disciplined member of the force to take proceedings to set aside one of the disciplinary decisions of the R.C.M.P. on the ground that improper procedure had been followed.
The court pointed out in this case that a special regime had been established under the statute which, given all the circumstances, assured a fair trial of the officers in question. Reference was made to the Canadian Bill of Rights in this case, and once again the Canadian Bill of Rights was found to be not applicable to the circumstances of the particular case.
I submit, Mr. Speaker, that if hon. gentlemen opposite, such as the hon. Member for
Motions for Papers
Cumberland, had been concerned about the procedure which they had passed into law at that particular time, they could well have prevailed upon their own colleagues-bearing in mind that this was 1961-to introduce amendments so as to make these particular procedures public, and thus require publication of these matters. I think it is obvious from that fact that they did not do this that those responsible in that day, along with members of Governments who preceded them, had recognized that the best interests of the Mounted Police would not be served, and the desire of Canadians for an effective operation of the service would not be effectively achieved if this type of material was made public. Therefore, Mr. Speaker, if the hon. Member decides not to withdraw his motion, he having had his day in Parliament and made his political speech, I would ask hon. Members to take the early opportunity, when the matter does come to a vote, to reject this particular motion.


Herbert Wilfred Herridge: Mr. Speaker, before I commence my brief remarks on this interesting motion for the production of papers I want to bring to the attention of the House that at the present time there is no Member of the Government in the House, and I am wondering whether the Parliamentary Secretary has the authority of the Minister to speak for him on this question.
Before proceeding with what I wish to say, let me say that as a Member of the Opposition I do not like the tone of the Parliamentary Secretary when he accuses the hon. Member who brought this motion forward of doing so in a contemptible manner, and so on. The hon. Member for Cumberland (Mr. Coates) has asked for this report for one reason only. It is because he wants to make certain that justice is done equally to all people in Canada. I am not much enamoured of these legal arguments which some lawyers make in cases I have read, certainly not since I discovered on reading the reports of the Supreme Court that one lawyer in this country managed to get $3,000 damages because the fair name of Harold Chamberlain Banks had been trespassed upon by a certain newspaper of this country. This award was granted upon an argument based upon technicalities and legalities similar to those the Parliamentary Secretary put forward today.


Mr. Deputy Speaker:: Order. I realize the hon. Member's remarks are introductory and that he proposes in due course to return to

June 17, 1965
Motions /or Papers
the subject matter of the motion, but as he knows, these motions are very limited in scope. What we are now considering is whether the documents sought by the hon. Member for Cumberland (Mr. Coates) should or should not be tabled, and it seems to me that the hon. Member is straying some distance from that very limited subject.
[DOT] (6:40 p.m.)


Herbert Wilfred Herridge: Mr. Speaker, I respect your position in that respect, but I was simply illustrating my reason for suspicion in respect of the argument put forward by the Parliamentary Secretary. The interesting thing about his argument is that not once did he suggest to this House that the Commissioner agreed with the Minister's decision, and he was very careful to avoid that statement. If the Commissioner did agree with the Minister's decision, I should like the Parliamentary Secretary to so inform the House. Did the Commissioner agree with the Minister's decision in this respect? The hon. Member is silent.


Mr. Deputy Speaker:: Order, please.


Herbert Wilfred Herridge: What have I done wrong?


Mr. Deputy Speaker:: Is the hon. Member relinquishing the floor?


An hon. Member:: No.


Mr. Deputy Speaker:: I suggest that the Parliamentary Secretary has made his speech, and that it is not in accordance with the rules of debate that an hon. Member in the course of his speech should resume his seat, seeking answers from the other side of the Chamber.


Herbert Wilfred Herridge: Mr. Speaker, I shall be only too pleased to donate a minute of my time and interrupt my remarks to give the Parliamentary Secretary an opportunity to reply, or to rise on a question of privilege, if necessary.
The subject of this question has been of considerable importance and concern to the public generally, but the only information the public has at the present time is that meagre information that has appeared in the press. A great number of people in Canada believe that these former officers of the R.C.M.P. are guilty of misappropriation of funds. I am not going to discuss that feeling, or the information leading to it, as it will be brought to the attention of the House when the Minister's estimates are before us, but there is more information about this situation than is commonly known and I am sure that the Parlia-

mentary Secretary will be surprised when the Minister's estimates come before the House.
There is a general feeling in Canada that the law is not being applied equally to all Canadians. It is very natural, but unfortunate that the people of Canada need have concern in this regard. Many people are under the impression as a result of what they have read in the press and stories that have been going the rounds in Montreal-I am not going to go into those at the present time-that these officers are guilty of misappropriation of funds. If they are not guilty, let the Parliamentary Secretary inform this House that they are not guilty.
The R.C.M.P. held an inquiry under the R.C.M.P. Act, and we understand that as a result the Commissioner recommended to the Minister of Justice (Mr. Favreau) that these officers be dismissed from the force, and this is the thing that the ordinary citizen of Canada and the Members of this House are concerned about. Are these senior officers of the R.C.M.P. being treated differently than the ordinary Canadian citizen would be treated? That is the core of the question, not a question of irresponsibility in dealing with this matter in a contemptible way, as the Parliamentary Secretary suggests. This is an attempt on the part of the Members of the Opposition to get the facts.
I am not quite certain that this is the best way to obtain the truth, although I support the motion in principle. The Minister may have some personal reason for his decision to recommend the retirement of these officers with substantial pensions, and there is no question but that they have retired on substantial pensions. Perhaps the Parliamentary Secretary can inform the House as to the basis of the Minister's decision. I understand these two ex-officers are now employed by some private agency, so their talents have been recognized.
In conclusion, I should like to say this. I have great respect for the R.C.M.P. and it is very fortunate that we in Canada have a force of this kind, particularly when we hear about the corruption of lesser forces in this country, and how corruption can creep into a force so easily and quickly.


Some hon. Members:: Hear, hear.


Herbert Wilfred Herridge: We are very fortunate to have the R.C.M.P. and throughout the years we have respected this force, although perhaps we have not agreed with their actions
June 17, 1965



on occasions. We have always respected their integrity and I should like to say right now that I respect the integrity of the Commissioner. I have not always agreed with certain actions taken by him, but I do believe the Commissioner of the R.C.M.P. is an honourable man whose integrity cannot be questioned. Like any other human being, he may make mistakes. In fairness to the force, to the accused, who will otherwise live under a cloud for the rest of their lives in this country, and in fairness to the public who are concerned with the procedure that has been adopted in this case, and that justice be applied equally to all people, I think this matter should be cleared up.
If an ordinary citizen steals a loaf of bread, he must appear before the local beak and accept his punishment. Every Canadian should be treated alike and, in fairness to the groups I have mentioned, there is only one thing the Minister of Justice can properly do, and that is to stand in this House and say that he has ordered a public inquiry into this whole matter so that the truth will be established and the facts made known, which will put the public's mind at rest.


Donald Stovel Macdonald: Mr. Speaker, the hon. Member suggested that I might reply, but I do not know whether I have the consent of the House to do so.


Mr. Deputy Speaker:: Order, please. The hon. Member has already taken part in this debate.


Horace Andrew (Bud) Olson: Mr. Speaker, we in this party do not disagree with the contention of the Parliamentary Secretary (Mr. Macdonald) respecting the statutory provisions for dealing with a disciplinary case in the R.C.M.P. It is pretty obvious that the former Government when it was in power had the power to change the statute if it so wished, but did not, and did not therefore disagree with the provisions.
At the outset let me say that whether or not the remarks of the hon. Member for Cumberland (Mr. Coates) are contemptible, or whether or not he has attempted to drag political parties, particularly the Liberal party, into this case involving discipline within the R.C.M.P., I think that is a wrong thing to do. The R.C.M.P. should not be associated with parties and political activity, or, which is perhaps a better phrase, dirty political actions. As to whether that has happened, the Parliamentary Secretary could very easily allay any suspicions in that respect by
Motions for Papers
simply telling the House whether or not there was any ministerial discretion exercised in respect of these two officers, in that they were treated in a manner somewhat different from that recommended by the tribunal that heard the case. We should like to obtain that information. Did the tribunal that heard the case recommend that these two men be dismissed without pensions because the gravity of their offence was such that this was proper punishment, and was there then some intervention by the Minister of Justice (Mr. Favreau) that lessened the punishment? If that is the case, then there is some credence to the remarks made by the hon. Member for Cumberland. The Parliamentary Secretary could settle the matter very easily, but since he has had his opportunity to speak, perhaps some other Member of that party could do so.
As a result of stories which have been circulating in Montreal and other parts of the country, as well as newspaper reports, we are under the impression that there was some misappropriation of funds in this case. The stories that are circulating are to the effect that these funds were provided to pay for information. That is probably the normal and acceptable way a police force, particularly one charged with the responsibility of national security, obtains information. It may be that that is one of the most effective ways of getting information that is essential to the performing of that function. However, the question arises as to whether or not the suggested misappropriation of funds is simply a matter of internal management, and of maintaining disciplinary standards within the force, or if it involves an offence under the Criminal Code of Canada.
[DOT] (6:50 p.m.)
We would like to have explained whether or not the offence was one coming under statutes with which this internal tribunal should deal, or whether the nature of the offence was such that it should have been tried in an ordinary court of law as an offence under the Criminal Code. On the basis of what information we have I cannot agree that these men were either guilty or not guilty. There are degrees of guilt, and even in an ordinary court of law penalties are meted out according to the nature of the offence. Therefore I can accept that perhaps the proper sentence would be that of being dismissed with pension, or perhaps without pension. If they were guilty of a violation of the Criminal Code amounting to theft or misappropriation of funds, maybe a penalty

June 17. 1965
Motions for Papers
even more severe than dismissal without pension would have been appropriate.
But so far we have not been given any of this information. However, I am prepared to accept the decision of the tribunal that heard the evidence, without asking for any more details, provided there was no overriding ministerial order.
I think I will leave it at that, Mr. Speaker.


Frederick Johnstone (Jack) Bigg: Mr. Speaker, as an ex-member of the Royal Canadian Mounted 'Police and having some intimate knowledge of this matter, I think I might be permitted to say a word. In my opinion the Parliamentary Secretary is setting up a straw man in imputing motives to the hon. Member for Cumberland (Mr. Coates). I am convinced that the hon. Member for Cumberland wants nothing more than complete frankness. I am not going to support the demand for the production of these papers, without some reservations, but I certainly feel that the matter has to be cleared up.
The Commissioner of the Royal Canadian Mounted Police is in a very unenviable position. On the one hand, he is permitted to exercise almost unlimited discretion and in certain cases the Government is willing to stake its reputation and its whole future on his judgment. On the other hand, other decisions made by the same man are either completely ignored or overridden. I suggest that you cannot have it both ways. If the Commissioner of the Mounted Police is so omniscient that he knows all the answers and his decisions are to be accepted without reference to a higher authority, that is fine; but let that be the system. I believe that generally speaking no person in Canada should be seized with the responsibility of making irrevocable decisions. The House of Commons is the only tribunal which should make irrevocable decisions, and even here our decisions are not really irrevocable because they are subject to the opinions of the Canadian people by the changing of governments.
I think this whole matter should be brought out in the open with complete frankness. It is common gossip not only among the people of Canada but among members of the force itself that there are aspects of this case which have not been brought to the attention of the Canadian people, or even of Parliament. It is very unfortunate that this situation arose because the fact is that any suspicion of protection or the exercise of unfair ministerial discretion certainly reflects on the ability of

the Mounted Police to run their own operation. There is a reflection on the Minister himself if he refuses to give frank answers to the House.
The matter is so serious that I should like the Minister himself to explain why he used his ministerial discretion. I do not deny him that discretion, but over the head of the Mounted Police I think there must be either an independent police commission, something in which I do not believe, or an alert Parliament; and in my view an alert Parliament is all the ombudsman we need. When proper questions are asked in the House I think we are entitled to frank answers. I for one do not impute low intentions to hon. members opposite and I certainly fly to the rescue of Members on this side when all we are seeking is common justice.
From time to time the Mounted Police are forced to discipline members of that organization. I ought to know because I was released from my duties in that force some 20-odd years ago for the crime of getting married without permission. The rule with regard to marriage was changed from six years to seven years service without consulting me, but in spite of that fact I saw fit to get married, which I think is the right of every Canadian citizen over the age of 21, and I was dismissed and fined. I have not complained and I am not complaining now. The standards of the Mounted Police require absolute conformity to the regulations and in my opinion this should apply from the latest joined constable up to the Commissioner himself.
I am not entitled to a full pension. My pension was reduced by 33J per cent some 25 years ago for the crime of getting married and it is still reduced by that amount. I have no recourse, but I am not complaining. I am merely stating the facts of the case. I should like to know whether the far seeing Minister of Justice (Mr. Favreau) would like to review my case some day and decide quite impartially and fairly whether I should not be treated in the same way as these two gentlemen who were relieved of their duties, or asked to retire, or whatever it was that happened to them. We do not know. However, I venture to guess that their pensions have not been reduced. I will also venture to say that they are allowed to wear what is known as the long distance medal. I am not allowed to wear that medal, although my combined service in the Mounted Police and Her Majesty's forces amounts to over 23 years. My service has been smeared because I had
June 17, 1965

the temerity to get married. These men have been charged with embezzlement and misappropriation of funds. That is the only knowledge we have because the facts have not been made public. Must we sit here quietly and trust to ministerial discretion in this regard without explanations and answers to perfectly legitimate questions in the House?
This is not the first time I have mentioned this subject in the House. I have spoken about it on more than one occasion. We hear these days about angry young men. At times I think I am becoming a very angry middle aged man. There is no reason we should not receive answers to questions which are put in good faith. If our questions are not going to be answered in good faith, I am afraid we are going to have to replace those who sit on the treasury benches by people who will answer in good faith. It is not good enough for the Government to say that the former Government did not do it and therefore they are not going to. Surely that is not a good excuse for a Government that knows all the answers.


Mr. Ryan:: May I call it seven o'clock?


Mr. Wahn:: Before calling it seven o'clock, Mr. Speaker, I wonder whether I could have unanimous consent of the House to give second reading to Bill S-7 relating to the Interprovincial Pipe Line Company so as to refer it to a committee. It will be recalled-


Mr. Deputy Speaker:: Order, please. I must bring to the attention of hon. Members that the hour appointed for the consideration of private Members' business has expired unless the hon. Member has unanimous consent to continue.


Some hon. Members:: No.


Mr. Deputy Speaker:: There is not unanimous consent. The hour appointed for the consideration of private Members business has now expired. The House will now resume the business interrupted at six o'clock.
[DOT] (7:00 p.m.)



WAYS AND MEANS

[Stage Direction]
The House in Committee of Ways and Means, Mr. Lamoureux in the Chair.

[Stage Direction]
Resolved, that it is expedient to introduce a measure to amend the Income Tax Act and related provisions of the Federal-Provincial Fiscal Arrangements Act and to provide among other things:
1.	That for the 1966 and subsequent taxation years the income tax payable by an individual be reduced by an amount equal to the lesser of 10 per cent of basic tax or $600 and for the 1965 taxation year
Income Tax Act
by an amount equal to the lesser of 5 per cent of basic tax or $300.
2.	That for the 1965 and subsequent taxation years a taxpayer may deduct in computing his taxable income an amount for the support of a person who was his niece or nephew and who during the year resided in Canada, was wholly dependant upon him for support, and was
(a)	under 21 years of age,
(b)	21 years of age or over and dependent by reason of mental or physical infirmity, or
(c)	21 years of age or over and in full-time attendance at a school or university,
if
(d)	the mother of the niece or nephew was divorced or separated and not in receipt of alimony or similar payments, or
(e)	the father of the niece or nephew was deceased or mentally or physically infirm,
not exceeding $300 if the person was a child qualified for family allowance and $550 if he was not so qualified.
3.	That for the 1965 and subsequent taxation years a taxpayer may deduct in computing his taxable income an amount not exceeding $550 expended by him during the year for the support of a person who was his aunt or uncle and who during the year resided in Canada and was dependant upon him for support by reason of mental or physical infirmity.
4.	That for the 1970 and subsequent taxation years the additional exemption of $500 now allowed to a taxpayer who has attained the age of 65 years be allowed only if the taxpayer has attained the age of 70 years and that for the taxation years 1966 to 1969 inclusive a taxpayer who has attained the age of 65 years but has not attained the age of 70 years be allowed the additional exemption of $500 only if he did not receive a pension under the Old Age Security Act in respect of any month in that year.
5.	That for the 1965 and subsequent taxation years a taxpayer who deducts in computing his income from an office or employment
(a)	annual dues to maintain membership in a trade union or to maintain membership in an association of public servants,
(b)	annual dues retained from his remuneration pursuant to the provisions of a collective agreement and paid to a trade union or association, or
(c)	annual professional membership dues the payment of which was necessary to maintain a professional status recognized by statute,
shall not by reason of such deduction be ineligible to deduct the standard deduction of $100 described in paragraph (ca) of subsection (1) of section 27 of the Act.
6.	That for the 1966 and subsequent taxation years a person, the spouse of such person residing with him and previously resident in Canada, or any dependant child of such person, shall be deemed to have been resident in Canada throughout a taxation year if such person was at any time in the year performing services in a country other than Canada under a prescribed international development assistance program of the Government of Canada, and was resident in Canada during a part of the year preceding the commencement of such services.
7.	That for the 1966 and subsequent taxation years a contribution made by a person under the Canada Pension Plan or under a provincial pension plan as defined in section 3 of the Canada Pension Plan may be deducted in computing the income of such person.
[Stage Direction]
June 17, 1965
Income Tax Act
8.	That for the 1965 and subsequent taxation years the limitation on the amount related to earned income that a taxpayer may deduct as a premium under a registered retirement savings plan be increased from 10 per cent of earned income to 20 per cent of earned income.
9.	That for the 1965 and subsequent taxation years such part of any amount that would otherwise be included in computing income of a taxpayer as a retiring allowance be deductible if it is paid in the year, or within 60 days after the end of the year, as a contribution to a registered pension fund or plan, as a premium under a retirement savings plan, or to a trustee under a deferred profit sharing plan.
10.	That there may be deducted in computing the income of a taxpayer an amount in respect of an outlay or expense made by the taxpayer in the 1965 and subsequent taxation years
(a)	to a person with whom the taxpayer is dealing at arms length and who is the lessee of property owned by the taxpayer, to obtain the cancellation of a lease on such property,
(b)	for landscaping property used by the taxpayer for the purpose of gaining or producing income,
(c)	for clearing land or laying tile drainage for the purpose of carrying on a farming business,
(d)	as or on account of the cost of making representations to a government, municipality or other public authority in connection with a business carried on by the taxpayer, including representations for the purpose of obtaining a licence, permit, franchise or trademark,
(e)	as or on account of the cost incurred in investigating the suitability of a site for a building or other structure planned by the taxpayer for use in connection with a business carried on by him.
11.	That for the 1965 and subsequent taxation years a corporation shall be deemed to be resident in Canada throughout a taxation year if
(a)	it was incorporated in Canada before April 27, 1965 and was resident in Canada in its taxation year that included April 26, 1965 or in any subsequent taxation year, or
(b)	it was incorporated in Canada after April 26, 1965.
12.	That with respect to payments received by a taxpayer after April 26, 1965, other than a payment made upon the death of an employee, the amount that a taxpayer may elect to have taxed under section 36 of the Act shall not exceed
(a)	in the case of a single payment
(i)	out of or pursuant to a superannuation or pension fund or plan, or
(ii)	pursuant to deferred profit sharing plan, or
(iii)	pursuant to an employee's profit sharing plan,
$1,500 times the number of years during which the employee, in respect of whom the payment was made, was a member of the plan, or
(b)	in the case of
(i)	a single payment upon retirement of an employee in recognition of long service, or
(ii)	a payment or payments made by an employer to an employee or former employee upon or after retirement in respect of loss of office or employment
$1,000 times the number of years during which the employee, in respect of whom the payment was made, was an employee of the employer who made the payment.
13.	That for taxation years commencing after April 26, 1965, a trust or estate (other than a trust or estate arising on death) that has income from

a business carried on by it in Canada may not deduct in computing its income an amount paid or payable to a beneficiary who is
(a)	a non-resident of Canada,
(b)	a non-resident-owned investment corporation, or
(c)	another trust or estate resident in Canada, unless that other trust or estate
(1)	arose on a death, or
(ii) has been since April 26, 1965, a beneficiary of the trust or estate paying the amount and the trust or estate paying the amount has been carrying on the business since April 26, 1965, and any amount paid or payable out of the income for the year of the first-mentioned trust or estate will continue to be included in the income of its beneficiary notwithstanding the fact that the first-mentioned trust or estate was not entitled to deduct the amount in computing its income.
14.	That for the 1965 and subsequent taxation years the amount of income derived from a new mine that a corporation may exclude in computing its income shall be confined to income from the operation of the mine by the corporation.
15.	That where a joint exploration corporation acquires after April 26, 1965 a right, licence or privilege to explore for, drill for or take petroleum, natural gas or other related hydrocarbons, the cost of the right, licence or privilege may not be renounced to a shareholder corporation.
16.	That for the 1965 and subsequent taxation years an amount that a taxpayer may exclude from his income because it is consideration for a mining property acquired as the result of his effort as a prospector, or as the result of efforts of a prospector who was employed or financially assisted by him, shall not include a share of profits, a royalty or a payment based on production.
17.	That the Minister of National Revenue with the approval of the Governor in Council may on behalf of the Government of Canada enter into an agreement with the government of a province, under which one government undertakes to transfer to the other, in respect of income tax paid by an individual from whom deductions were made at source as though he were resident in a place other than the province in which he was resident on the last day of the year, a part of the amount deducted or withheld under section 47 of the Act or a similar provision of a provincial income tax act.
18.	That in order to give effect to the provisions of paragraph 1 without reducing the amount of equalization payments to any province a consequential amendment be made to the Federal-Provincial Fiscal Arrangements Act to adjust the fractions set out therein in the definition of "standard individual income tax" used in the computation of equalization payments.
19.	That a new section be added to the Act concerning expenditures of a taxpayer for advertising space in a non-Canadian newspaper or periodical having effect substantially as follows:
"12A (1) In computing income, no deduction shall be made in respect of an otherwise deductible outlay or expenses of a taxpayer for advertising space in an issue of a non-Canadian newspaper or periodical dated after December 31, 1965 for an advertisement directed primarily to a market in Canada.
(2)	An issue or edition of an issue of any newspaper or periodical that is edited in whole or in part in Canada and printed and published in
June 17, 1985
[Stage Direction]
Canada and that was not on April 26, 1965, a Canadian newspaper or periodical shall be deemed, for the purposes of subsection (1), not to be an issue of a non-Canadian newspaper or periodical if
(a)	through the period of twelve months ending April 26, 1965 issues or editions of issues of that publication were being edited in whole or in part in Canada and printed and published in Canada at the usual intervals for issues of that publication and have since that date continued to be so edited, printed and published without interruption except for a reason other than the cessation of the business of publishing that publication; and
(b)	in the case of a periodical, the periodical is
similar, in content and	in	respect	of the class	ofreaders to whom it is	directed, to the issues	or
editions of that periodical that were throughout the period of twelve months ending April 26, 1965 being edited in whole or in part in Canada and printed and published in Canada.
(3)	Subsection (1) does not apply with respect
to an advertisement in a special issue or edition of a newspaper that is edited in whole or in part and printed and published outside Canada if such special issue or edition	is	devoted	to features	ornews related primarily	to	Canada	and the publishers thereof publish such an issue or edition not more frequently than twice a year.(4)	Subsection (1) does not apply with respect to an advertisement in(a)	a catalogue, or(b)	any publication the principal function of which is the encouragement, promotion or development of the fine arts, letters, scholarship or religion.(5)	In this section,(a)	'Canadian issue' means,(i)	in relation to a newspaper, an issue, including a special issue,(A)	the type of which, other than the type for advertisements or features, is set in Canada,(B)	the whole of which, exclusive of any comics supplement, is printed in Canada,(C)	that is edited in Canada by individuals resident in Canada, and(D)	that is published in Canada, and(ii)	in relation to a periodical, an issue, including a special issue.(A)	the type of which, other than the type for advertisements, is set in Canada,(B)	that is printed in Canada,(C)	that is edited in Canada by individuals resident in Canada, and(D)	that is published in Canada,
but does not include an issue of a periodical,
(E)	that is produced or published under a licence granted by a person who produces or publishes issues of a periodical that are printed, edited or published outside Canada, or
(F)	the contents of which, excluding advertisements, are substantially the same as the contents of an issue of a periodical, or the contents of one or more issues of one or more periodicals, that was or were printed, edited or published outside Canada.
(b)	'Canadian newspaper or periodical' means a newspaper or periodical the right to produce and publish issues of which belongs to or is vested in
(i)	a Canadian citizen,
(ii)	a partnership of which at least 3 of the members are Canadian citizens and in which interests representing in value at least 3 of the total value of the partnership property are owned by Canadian citizens,
Income Tax Act
(iii)	an association or society of which at least l of the members are Canadian citizens,
(iv)	Her Majesty in right of Canada or a province, or a municipality in Canada, or
(v)	a corporation
(A)	that is incorporated under the laws of Canada or a province,
(B)	of which the chairman or other presiding officer and at least 3 of the directors or other similar officers are Canadian citizens, and
(C)	of which, if it is a corporation having share capital, at least 3 of the shares having full voting rights under all circumstances, and shares representing in the aggregate at least 3 of the paid-up capital, are owned by Canadian citizens or by corporations other than corporations controlled directly or indirectly by citizens or subjects of a country other than Canada; and
(c)	'issue of a non-Canadian newspaper or periodical' means an issue that is not a Canadian issue of a Canadian newspaper or periodical."
Frederick Johnstone (Jack) Bigg: Mr. Chairman, the changes in the Income Tax Act are one of the most important things we can devote our time to in this Chamber. I agree with many of the recommendations for changes, but once again am faced with the difficulty of what I call the iced cake or double resolution, in that we are expected to pass a group of changes under one heading just because we approve of one or two of them. I approve of one or two of them-


Mr. Barnett:: On a point of order, is it in order to deal with Government business without a Member of the Government present in the House?


Lucien Lamoureux: The Chair knows of no requirement in the rules that there should be a Minister in the Chamber during debate.


Mr. Moreau:: On the same point of order, quite often we proceed without any Member of that particular group in the House.


Thomas Speakman Barnett: I am sure the hon. Member recognizes that those of us in the N.D.P. are not Members of the Privy Council.


Lucien Lamoureux: A point of order has been raised by the hon. Member on which, rightly or wrongly, a decision has been rendered by the Chair, and I suggest we allow the hon. Member for Athabasca to continue his speech.


Frederick Johnstone (Jack) Bigg: Again it seems to me we bog each other down in these points of order. We have come here to discuss the business of the nation and I am going to try to keep myself on that tack.
I agree with some of these improvements, including the so-called 10 per cent reduction in personal income tax, but had the Minister lowered the basic exemption it would have been much preferable. The whole purpose of income tax, as I understand it, is to seek

June 17, 1965
Income Tax Act
the big pocket, and to make it possible for those who do not have enough money to live by the contributions of those who do. If this is our avowed intention, then the proper thing to do is make sure we have a basic living before dipping into it for extraordinary expenditure, and it is only an extraordinary expenditure which should make it necessary for people to dip into their basic living to pay for things which other people need. This may sound a little socialistic, but I call it co-operative living.
With inflation I suggest that anything less than a $3,000 exemption for married couples would not be sensible. I am against moonlighting, but some people say it is perfectly all right if you cannot live on $2,500 a year to get $5,000 by putting your wife out to work. Surely that is not the avowed intention of the Government.
I am pleased with the provision covering improvement of land, but I agree with the hon. Member for Timiskaming that it is an empty gesture toward people living on homesteads, people in the Peace River and Athabasca districts and the outlying northern districts, because the person clearing land there has no income during the time he is doing it.
There should be exemptions for land clearing if a man is clearing land to make himself a better farm and a more productive unit, and I suggest there should be an income tax reduction for the digging of wells, the damming of streams and such things, especially for reforestation as a result of land clearing. I know thousands of acres of land, principally sand hills, where it would be better for people to put it back into evergreens and fast growing wood rather than clear it for farming. Therefore I think the Minister should get together with ARDA people and the farm union people, rather than stepping off in the blind and just making tax reduction gestures. With the proper help farmers can make themselves better farms and preserve the natural resources of the country.
It is probably fair to allow union dues as tax exemptions. It is impossible for many skilled trades people to make a living unless they contribute to a union, and if federal and provincial statutes make it necessary or advisable for people to belong to a union in order to make a living union dues should be income tax free. However, I think we should attach a rider and say when these dues go to the financing of political parties, and are used for political purposes by unions, they should not

be tax free. I can see no reason why a good Tory or Liberal should not have his contributions to party funds exempted from income tax, if no such rider is attached to union due exemptions. Unless union dues go into welfare funds or are used for the protection of unemployed workers, they should not be totally exempted from tax.
[DOT] (7:10 p.m.)
The paragraph which worries me most, and which has been debated at length this afternoon, is the one concerning freedom of the press. The Minister has said that when this becomes law it will not be abused, and that we are putting up straw men. I say they are putting a tiger's teeth into the head of a sheep. Although the sheep may bleat comfortably and quietly in the fold, how do we know that it may not become a tiger? I would be horrified to think I had helped to pass a statute which put teeth into a provision by which I might myself be torn asunder. Perhaps it makes an amusing picture-someone with democratic ideas fleeing over the hill with an important part of his trousers missing, and the tiger licking his chops.
This is one of the package deals I am supposed to accept because I am in favour of tax exemptions in respect to land clearance, or parts of the ARDA program. Unless we divide this resolution clause by clause I may well find myself, in helping to give the homesteader who digs a well an income tax rebate, voting to restrict the freedom of the press. We accept the freedom of the press in this country without much question. It is our way of life and I suppose we do not think about defending it any more. That is when the thief always comes-when you are asleep. If the Minister is as innocent as he says he is, it is our plain duty to shake him, wake him up and tell him what is in this package deal he is asking us to pass. This resolution reminds me of one of those iced cakes I was speaking about a few days ago, those iced cakes which are full of bitter sawdust. I would not be surprised to find, in view of the Minister's record, that he really is innocent and naive. He offers us these cakes and he does not even know the icing is thin and the sawdust unpalatable. On other occasions when he has been told about this he has withdrawn, and put a few raisins in there. I beg him to take another look at this resolution and see whether he can take these sour nuts out of the cake and give us those parts which are acceptable to the economy.
June 17, 1965

Let him not lay the blame on the O'Leary report. The O'Leary report nowhere suggested that pressure should he placed on the press of Canada. Quite the contrary; the report was intended to put up one more peg on which freedom might hang, not to provide rope on which to hang freedom, in the other sense. This Government is too fond of blaming its failures on other individuals or organizations or commissions. If you are looking for weak arguments to back up this type of legislation, somebody may have been reading the gospel according to Kent and Lamontagne. This is the kind of two-headed axe with which they intend to chop down the tree of freedom. This may sound like a florid remark but I do not know how you can expect a man to sit quietly here in the Committee when the press itself is allergic to this proposal, and such notable Whig newspapers as the Winnipeg Free Press have openly called the Minister of Finance a prevaricator. We are not allowed to do that in this Chamber, but I am tempted to agree with this florid opinion from that Whig newspaper. It is only open criticism of the Government, apparently, which can bring them to their senses. We are not allowed, under the changed rules, to do it in the House so there is all the more reason why we need a free press to do it.
In recent years I have at times thought Canada was sound asleep-that the people did not listen to what we said, either here in the House or outside it. I began to think the press was only interested in florid stories and would print nothing unless a man criticized his boss or left his party, or something like that. Perhaps it is because this is closer to home that we have heard so much about it. It would be strange if the press of Canada did not come to the rescue of the press of Canada. In this regard I support the views the press has taken. I do not care whether they appear in a Tory paper or a Whig paper or a red paper. The truth is just as valuable, regardless of the editorial policy. I intend to write to the Free Press in Winnipeg and say: Bravo! This is a fresh breath of air coming out of Western Canada at a time when it is badly needed.
I do not usually quote poetry. I do not think this is very a poetic situation. But about 100 years ago Alfred Lord Tennyson in England summed it up very well. He was answering a hypothetical question-why he stayed in the foggy old island and put up with the English class system, vested interincome Tax Act
ests and so forth. And he gave the answer in four lines of poetry which have always stuck in my mind. The last two are the punch lines:
It is a land where girt with friends or foes
A man may speak the thing he will.
Believe me, if we ever reach the point in Canada where any Government or group of people could control the press of this country you will find me living in the hills, and I will be a very unpleasant customer. As long as a free Parliament stands, I know this: The main peg on which our freedom hangs is freedom of the press. We are going to have it as long as free men live in this country or we shall know the reason why. It is going to take more than a rule book to stop us. If ever there was a filibuster required it should be required until this clause of this particular resolution is taken right out, like a rotten nut out of the same sawdust cake. Then we will not be forced to vote for something we do not like merely because it is wrapped up among certain things we do like.


Mr. Danforth:: I wish to speak first of all on the part of this resolution which has to do with agriculture, and I should like to compliment the Minister for having incorporated in these provisions some relief for farmers in respect of two particularly vexing expenditures with which they are often faced, namely, clearing land and laying tile drainage.
It is true that in areas where there is a tremendous amount of work to be done and whole farms have to be cleared there could easily be no income at all for taxation purposes and the clause would not be applicable.
[DOT] (7:20 p.m.)
But there are, on the other hand, as is the case in the area that I have the honour to represent, many farms that are covered with small wooded areas varying from 5 to 50 acres, many farms which have pastures which for one reason or another have become overgrown with thorn bushes and are not as productive as they might be. I am sure that this particular measure which exempts expenses incurred in clearing this type of land will be especially beneficial to our farmers. In our area a tremendous amount of land is not drained, and farmers are going to be very pleased indeed to find that their representations over the years in this particular field have at last met with success, and the Minister is granting them this much needed

June 17, 1965
Income Tax Act
income tax exemption in connection with expenses incurred in laying tile drainage.
I am particularly impressed with subparagraph (b) which deals with the exemption from income tax of expenses incurred for landscaping property used by the taxpayer for the purpose of gaining or producing income. I hope that the interpretation of this measure will mean that this relief will be available to farmers across our country, because for many years the lack of income or the time of those working the farm has made it impossible to care for lawns and plant the various bushes which are so necessary to make these farms the perfect picture that they might become. If this provision is interpreted in such a way that exempts expenses incurred in landscaping this type of property, I am sure many farms will benefit from it.
Under subparagraph (d) one can deduct from income tax expenses incurred on account of the cost of making representations to a government, municipality or other public authority in connection with a business carried on by the taxpayer, including representations for the purpose of obtaining a licence, permit, franchise or trade-mark. I hope this particular provision will be interpreted in such a way that farmers and businessmen will be able to claim exemption from income tax of any expenses incurred in making representations to government in regard to charges and assessments levied against them. There have been many instances where charges or assessments that have been made against farmers and small businessmen have not been valid. In some instances large expenditures would have been incurred in making these representations and it has been found impossible to make the necessary recommendations. These costs should be allowed to be written off as expenses incurred in the business operation.
Having dealt with that matter, Mr. Chairman, I, too, must turn to paragraph 19, because I think in its present form and the manner in which it has been introduced, it is a deliberate affront to every Member who conscientiously represents Canadians in this House of Commons. After listening to the various speakers who have preceded me it has become increasingly apparent that the smokescreens are rolling away from the course of action taken by the present Government. The various policies and the way in which they have been introduced during the session have made it abundantly clear how the Gov-

ernment proposes to deal with controversial legislation. Mr. Chairman, I listened to the Minister of Finance when he explained patiently to the House of Commons that no government would even conceive of the idea of applying any sort of pressure or control on the news media of this country, even if this particular resolution were adopted. I also heard this Minister explain patiently to the House that our publishers have been consulted and there was no indication of any opposition from those directly concerned with this particular provision. But you can understand, Mr. Chairman, my concern about the credibility of this Minister when, like every other Member of the House, I receive telephone calls and there come across my desk representations in the form of telegrams and correspondence stating in no uncertain terms the strongest opposition to this particular provision.
This seems to be a pattern that is being adopted by the present Government. Here we have a whole series of measures in which is incorporated what we feel to be relief to the people who need income tax relief. We have relief for farmers, for businessmen and for labour. In some instances this relief is very minute, but it is at least a start. Then we have incorporated in paragraph 19 a principle which it is almost impossible to accept, knowing the way this Government campaigns on the election platform. Everyone sitting in the Opposition knows that if we vote against these measures on the basis that we are strongly opposed to controlling the press or limiting the freedom of the press in any way, we would be charged on the hustings with voting against exemptions of income tax and exemptions for expenses for land clearing, tile drainage, union dues and the whole gamut of those things contained in these resolutions. We would be subject to this type of attack on the hustings if we dared to oppose paragraph 19 in no uncertain terms.
I resent most vigorously another picture that is developing, and it is this. We are all concerned about a summer recess. We did not have one last year. We want to get back to our own constituencies; we want to be with our families.


Some hon. Members:: Hear, hear.


Harold Warren Danforth: But the same pattern is developing as developed last year. We are told, "Pass this legislation, or else". We are told that the Government stands or falls on certain legislation. We are told that if we do
June 17, 1965

not pass this legislation there will be no recess and we will be here all summer. Here we walk between the club and the carrot and are asked to take our choice. This is the kind of action on the part of this Government that I absolutely resent, and I know that every man in the Opposition resents it. We resent the attitude of a government that would not separate this resolution, which they know is contentious in some parts, and let us deal with it in that way, without having to determine how we are going to vote in connection with the whole package because we do not in any way agree with paragraph 19.
This is what has happened time and time again. They take an issue that has public favour and tie it in with something they know the Opposition find very difficult to tolerate. The same pattern is involved here as was involved in the reform of Parliament. What happened? This Government brought in desirable reforms of Parliament which all parties accepted, and then they buried in them the guillotine rule, which gives them control because they can stop our debating in the House. Now they are speaking of control of the press. They hold up their hands in holy horror when we suggest they are trying to control all the segments of this country. When we suggest they might be exercising some control over the C.B.C. we hear them deny this in the most vigorous way. But we have only to look back to see what happened to that great production of the Prime Minister that was made for the C.B.C. We know it is gathering dust somewhere, but we do not know where. Hon. gentlemen say they do not control the C.B.C.; yet the C.B.C. produces the film but could not put it over the air.
[DOT] (7:30 p.m.)
Then there is the Canada Pension Plan, which has now been adopted. We received warnings from financial circles that through the Canada Pension Plan governments, be they federal or provincial, or their appointees, could control the tremendous amounts of money brought into the plan, thus giving this Government a great deal of control over all finances in the country. So we have control of the C.B.C., control over finances, and we now see an attempt to control the press.
When is this type of action going to cease, Mr. Chairman? Perhaps now is the time for the Opposition to take a stand and say: No further. The people of Canada expect to have a democracy; they want a democracy. But the actions of this group opposite lead one to think that we are now heading toward a
Income Tax Act
dictatorship. We in the Opposition had been afraid that we were drifting toward a republic. It now begins to appear that we are drifting toward a dictatorship. We must watch what the Government is doing and the actions it is taking. We cannot accept paragraph 19 in its present form and I think the Government knows it. The Minister of Finance has been criticized over and over again for this type of action. The Government as a whole must take the responsibility for such action, not just the Minister of Finance.
I am hoping that the Government will seriously consider the suggestion which was put forward this afternoon by our leader, when he requested that this resolution be withdrawn. In this event we could then proceed into ways and means and deal with these matters in a responsible manner, this particular paragraph having been excluded. I suggest this paragraph was put in deliberately so as to force the Opposition into accepting it along with the other items included with it, thus placing responsibility on our shoulders. This is a deliberate plan to incorporate this disagreeable type of legislation in a honey-coated package, in the hope that the Opposition, either browbeaten or cajoled, will accept it in total.
Paragraph 19 will, I believe, in no way solve the problem to which it is directed but will put the Government in a position where it holds a sword over the heads of the entire press of the nation. But we are not only concerned with the press of this country; we are also concerned with the international press and about the entire picture which actions of this type can conjure up. And we have no guarantee that this is the end. We lost our vacation last year because we found dollar items buried in the estimates. This package deal is the same type of proceeding.
We in the Opposition are tired of these package deals. We think that the Government should stand on their own responsibility and introduce their measures into this Parliament in the way a responsible Canadian Government should, giving the Opposition an opportunity either to support or to vote against them, and to do so conscientiously without being blackmailed in the manner we are here, through the addition of the other items tied into this resolution. I, like all Members of the Opposition, believe that now is the time for the Government, if they are ever going to act like a responsible Canadian Government, to start acting like one and to withdraw this resolution.

June 17, 1965
Income Tax Act


Siegfried John Enns: Mr. Chairman, I do not want to trespass too long on the time of the committee, but I should very much like to make a modest proposal to the Minister of Finance which I am sure he will find reasonable and which will not demand the expenditure of any funds by the Government. However, I would gladly yield my time to him if he would get up and say that he will separate this resolution and make it easier for Members to vote on it paragraph by paragraph, so we can approve those paragraphs we like and vote against those we cannot accept. Surely that makes good sense. It is a businesslike approach and is a way of delineating a complex resolution which cannot find, and certainly will not find, the total acceptance of this House. I know the Minister could do this, and if he really wants to curtail further debate on this resolution that is all that needs to be done. He need only offer to split the resolution into parts or to withdraw paragraph 19 of it.
If I may come to the modest proposal to which I referred, it deals with aid to agriculture which has really been left out of the particular paragraph of the resolution, but which was nevertheless referred to in the budget speech on April 26. The hon. Member for Victoria-Carleton and the hon. Member for Acadia have already referred to the fact that included in the budget is exemption of income tax on money expended on grain storage bins, yet in the resolution we find no reference to it. This is a grave and serious omission in view of the fact that the agricultural industry needs continuing attention. I am pleased to say that it had all kinds of attention from the previous Government, but the present Government seems to be devoid of new plans to aid this important industry.
My supposition-I think it is correct-is that silos, for example, which are used in the developing mechanization of dairy farms to feed dairy cattle, are still subject to a 20 per cent duty when imported from the United States. At the same time farm machinery is exempt from tax. This seems to me to be a contradiction. Both are tools needed in the dairy industry, yet there is a 20 per cent duty on silos and no tax at all on farm machinery.
The suggestion I made in writing to the Minister some days ago was in support of a resolution passed by the Interlake Regional Development Board of Manitoba, which has said that exemptions of capital investment in farm buildings should be applied to all farm structures, not just grain storage bins. I think
IMr. Danforth.]
this would be a tremendous incentive to improve what the Minister of Agriculture has referred to in various speeches across the country as rural slums. He has said that there is a great need to improve farm buildings across the country; and one way of giving an incentive to Canadian farmers, at the same time not costing the Government one penny, would be to make this incentive applicable to the whole structure of farming and to exempt capital cost or depreciation on farm buildings.
The policy of our tax structure these days is getting more and more to be one of penalizing the progressive. We can improve conditions, not just of farms, if we provide the kind of incentive of which I speak.
[DOT] (7:40 p.m.)
In discussing the whole question of silos and grain storage there is a very remarkable difference between the taxation experience of our farmers, and that of farmers in the United States. In regard to silos again, since I want to make my point in this way, United States farmers have the benefit of a capital allowance plan whereby the cost of farm buildings can be depreciated in four years. In other words, they are allowed a depreciation of 25 per cent per year. Our farmers are allowed a 2 J per cent per year depreciation allowance, or capital cost allowance, so that it takes them 40 years to write off the cost of buildings which probably become useless to the farm operation in 10 or 15 years. In fairness to these farmers I think that this injustice should be corrected.
Another feature of the tax laws in the United States which appeals to me, is that feature which allows companies to build storage bins and silos and charge a rental for seven years, at the end of which time they sell them to the farmer for $1. This feature does away with capital cost allowances and depreciation.
That illustration clearly indicates that we in Canada are behind in our methods of providing incentives to the development of better and improved farms. I make the plea to the Government to remove entirely the duty on silos, and to change the capital cost allowance or depreciation rate on farm buildings from 2J per cent per year to 25 per cent per year, allowing farm buildings to be written off in a four year period.
When I commenced my remarks I suggested that the proposals I intended to make were moderate and would not cost the Treasury any money at all, but would provide marvellous
June 17, 1965

incentives to our farmers, so that perhaps by the Centennial year the rural scenery in this country would be vastly improved. I could perhaps have followed up the excellent comments made by various other Members of the Opposition parties in respect of other paragraphs of the resolution but, as I intended, I have confined my remarks to those two subjects I have mentioned. I draw these remarks sincerely to the attention of the Minister, and I hope he will give them some serious consideration.


Mr. Cameron (Nanaimo - Cowichan - The Islands):: Mr. Chairman, while I must certainly subscribe to the views of the two speakers who preceded me in regard to the evil practices of governments presenting us with package deals, I must say that I am always impressed by the ability of parties in opposition to peer past the mote in their own eye to see the beam in the Government's eye, when the Government follows the same practice that they followed when they were in office. I suggest this is merely an example of that which Acton suggested: All power corrupts. We can be thankful that this is a minority Government in view of the fact the Minister of Finance is not likely to obtain absolute power and thereby become absolutely corrupt.
One of the favourite parlour games of Members of the Opposition, particularly in this Parliament, is to examine all the possible fluctuating fortunes of Members of the Privy Council on the other side within the framework of the Liberal Party, and what position of any Member of the Privy Council excites more interest than that of the Minister of Finance? The question of the day very often is: Is Walter up or is he down? Speaking personally, I may say I am always rather cheered when I see evidence that perhaps he is up, and I feel a little depressed when I see evidence that perhaps he is down. I would not want anyone to think that this means too much more than that he is the best of a bad lot.
I am impelled to speak tonight, Mr. Chairman, because of a remark the Minister made when my colleague, the hon. Member for Port Arthur, introduced an amendment to the notorious paragraph 19(a) of this resolution. At that time you will recall that the Minister said he had great sympathy for the purpose behind that amendment. This is interesting to me because I had come to the conclusion that, since the Minister had seen fit to make a special exception of two periodicals, he is a secret Time magazine addict,
Income Tax Act
or is accustomed to taking Reader's Digest to bed with him in order to gain the benefit of the ersatz culture of that magazine, which I find rather a despondent situation. His comment implies that he has great sympathy with the idea that this should not have been done, and we are forced to ask ourselves why it was done when this responsible Minister apparently felt unable to bring such a resolution before the House, and that he had to make this special exception for Time magazine and Reader's Digest. If this was not done because he has some love for those periodicals, there must be some other reason. 1 can only suppose that, unlike Jacob wrestling with the Angels of the Lord, the Minister of Finance wrestled and was thrown by some emissaries of the devil, who insisted that the two magazines should be subsidized by the taxpayers of Canada to further debase the intellectual standards of the people of Canada.
I wonder whether, in view of that evidence that the Minister lost out in this action, he wanted to do a worthy act but was not allowed to do it; because he has told us he has sympathy for the purposes of the amendment, but by his actions has indicated that he was unable to produce any concrete action to carry his sympathy into fact. I suppose we will now be told that he is planning, as he has told us he was going to plan, some other way of curbing these two rather pernicious periodicals.
On April 26 of this year as recorded at page 435 of Hansard the Minister said this, in the course of his budget speech to the House:
-nor will advertising in the two small foreign-owned weekly newspapers already being published in this country. The question of the subsidized postal rates now enjoyed by the Canadian editions of non-Canadian periodicals will be studied as part of a general review being made of postal rates.
I presume part of that general review will also entail a very careful redefinition of what constitutes a Canadian publication. Had it not been for the fact that the Minister has by his actions admitted that he was unable to persuade his colleagues to withdraw the subsidy for Time and Reader's Digest, one might be quite hopeful that he was actually going to do something about the postal rates now enjoyed by those two foreign publications.
[DOT] (7:50 pun.)
We have to consider two things. Has the Minister any assurance to give us that he is going to prevail over the forces of evil among his colleagues and solve this problem, which

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Income Tax Act
he was not allowed to do in the obvious way of doing it, or has this been merely a little carrot he was holding before us, suggesting that if we pass the iniquitous paragraph 19(a) he would try to do by the back door what he was not allowed to do by the front door? It seems to me we need some assurances from him that these words of his on April 26 had some meaning and were not just a meaningless gesture toward the recriminations he was likely to receive when the House realized that once again the Government of Canada was not prepared to deal with these two publications. It is a fact that this Government is not any more courageous than its predecessor in office, which contented itself by appointing a Royal Commission and letting the matter drop. Nothing was done as a result of that Royal Commission and Senator O'Leary's work went up the chimney. This present Government is in no better shape. I think that the night before last the Minister, perhaps having been somewhat irritated by the remarks of my colleague, the hon. Member for Port Arthur, may have gone a little further than he would have done otherwise when, rather like a rooster on a dung-heap, he jumped and flapped his wings and said that the Government would stand or fall on the position of Time and Reader's Digest. It seems an astonishing thing to me for the Government of Canada to be prepared to stand or fall on the maintenance of the position of these two disreputable periodicals. It seems an astonishing thing that the Government, in the words of the Minister, is prepared to stake its life in order to provide special favours at the expense of the taxpayers to support these two extremely deplorable publications which we can well do without in Canada and which at least we should not subsidize to the detriment of Canadian periodicals, Canadian identity and Canadian public life as we are doing today.
I would hope that the Minister would reconsider his rash statement of the other night and subtract from his income tax resolution this sorry business of providing special privileges for periodicals for which he says he has no sympathy.


The Deputy Chairman:: Shall the resolution carry?


Some hon. Members:: On division.


[Stage Direction]
Resolution agreed to, on division.
Herman Maxwell Batten: Shall I report the resolution?


Some hon. Members:: Agreed.


Herman Maxwell Batten: The Committee will now proceed to the consideration of the Customs Act resolution.


THE CUSTOMS ACT
[Stage Direction]
Resolved, that It Is expedient to amend the Customs Act by:
1.	Striking out subsection (1) of section 22 and substituting the following:
22. (1) Unless the goods are to be warehoused in the manner by this Act provided, the importer shall, at the time of entry,
(a)	pay or cause to be so paid, all duties upon all goods entered inwards; or
(b)	in the case of goods entered in accordance with the terms and conditions prescribed by regulations made under subsection (3), present in respect of the duties upon such goods a bond, note or other document as prescribed by such regulations;
and the collector or other proper officer shall, immediately thereupon, grant his warrant for the unlading of such goods, and grant a permit for the conveyance of such goods further into Canada, if so required by the importer.
2.	Adding to section 22 the following subsection:
22.	(3) The Governor in Council may make
regulations prescribing
(a)	the terms and conditions upon which goods may be entered into Canada free of any requirement that the importer shall, at the time of entry, pay or cause to be so paid all duties on the goods so entered inwards; and
(b)	the terms and conditions of any bond, note or other document presented upon the entry of such goods in respect of the duties thereon.
3.	Striking out subsection (1) of section 35 and substituting the following:
35. (1) The value for duty of goods imported shall be determined in accordance with the provisions of sections 36 to 41A.
4.	Striking out all that portion of subsection (2) of section 35 preceding paragraph (a) and substituting the following:
35. (2) In this section and sections 36 to 41A, with reference to any goods,
5.	Adding immediately after section 37 the following section:
37A. Where the Governor in Council is satisfied, on a report from the Minister, that the application of subparagraph (i) of paragraph (e) of subsection (2) of section 36 or subsection (3) of section 36 is inequitable in that it results in discrimination against the importation of goods of a class from any country, as compared with the importation of goods of that class from any other country, the Governor in Council may prescribe the manner in which the value for duty of goods of that class, as determined under section 36 or 37, shall be reduced; but the value for duty of any imported goods upon being reduced as provided in this section shall not be less than an amount equal to the cost of production of the goods plus such amount for gross profit as is deemed reasonable by the Governor in Council.
6.	Adding immediately after section 41 the following section:
41A. In the case of any imported goods that
(a) were shipped indirectly to Canada from the country of origin through one or more other countries; and
June 17, 1965
[Stage Direction]
(b) would, but for this section, be valued for duty under sections 36 to 40B at less than the value for duty of such goods would be if the country of export were the country of origin; the goods shall, nothwithstanding subsection (1) of section 36, upon such terms and conditions as to shipment, documentation, warehousing, transshipment or the like as the Governor in Council may prescribe, be valued for duty as if they were imported direct from the country of origin at the time they were first shipped from that country.
7.	Striking out section 79 and substituting the following:
79. Subject to subsection (1) of section 22, no person shall make, nor shall any officer accept, any bond, note or other document for the purpose of avoiding or deferring the actual payment of duties legally accruing on goods imported into Canada, or arrange for deferring payment of such duties in any way, unless such goods are entered for warehouse, and duly deposited therein according to the laws and regulations governing the warehousing of such goods.
8.	Adding to section 104 the following subsection:
104. (la) Where goods, the property of the
government of a country other than Canada, that were imported into Canada free of duty or at a rate lower than that to which they would otherwise be liable, are sold or otherwise disposed of on behalf of the government of such country in accordance with an agreement between the governments of such country and Canada, such goods shall be charged with duties payable at such rate as may be determined by the Minister.
Marcel Joseph Aimé Lambert: I take it that we are on the Customs Act resolution and is the Minister not going to make an opening statement?


Walter Lockhart Gordon: I will be glad to make a very short statement, Mr. Chairman. I do not think there is anything in particular in this resolution to which I need to draw the attention of hon. Members of the Committee. It does provide for certain relief in the case of British exporters. As my hon. friend knows, the British have felt for some time that they have been under a disadvantage in their efforts to export to Canada. I was in London in July of 1964 and on that occasion I said that we would look into the matter and if we felt they were justified in their complaints I would suggest certain changes at the time of the budget.
We did review this matter and we felt, particularly in view of the difficulties that the British have been having lately, that some changes should be made in the administration of the Act. If it meets with the approval of the Committee, I should like to call on my colleague, the Minister of National Revenue, who administers the Act, to continue the explanation.


Mr. Benson:: Mr. Chairman, during his budget speech on April 26 my colleague, the Minister of Finance, announced several proposed changes in the Customs Act. Two
Customs Act
of the proposals deal with matters raised by the Auditor General relating to practices followed by the Department of National Revenue in releasing goods under bond and in assessing duties and taxes on foreign Government owned surplus goods disposed of in Canada. The proposed changes will implement the recommendations made in this connection by the Standing Committee on Public Accounts.
The third proposal deals with the discriminatory effect which the valuation provisions of the Customs Act have on certain compact countries, which matter has been brought to our attention by the British. The fourth point relates to a situation which is regarded by Canadian manufacturers as a loophole in the law in that in certain circumstances foreign exporters are able to avail themselves of lower values for duty than would normally be the case simply by altering the route of shipment to Canada. The proposed change will remedy this situation. The fifth change which is proposed in the Customs Act is a consequential one in numbering resulting from the introduction of the new section which I have just described.


Marcel Joseph Aimé Lambert: Mr. Chairman, in examining the various paragraphs of the resolution to amend the Customs Act perhaps I might be permitted in my general remarks to comment on each paragraph as I go along. There may be other Members of the Opposition who will then wish to comment on individual paragraphs. I should like to make a suggestion, Mr. Chairman, to avoid the confusion in discussion which arose on the last resolution. After the Minister and one representative from each of the parties have had a general go at the resolution I suggest that the discussion be limited to the paragraphs seriatim. I think this will create some continuity of discussion.
I trust I have made my point clear, Mr. Chairman. With regard to the nature of our discussion I suggest that after a ministerial statement and a general statement by a spokesman for each party the discussion should then be limited to each paragraph seriatim in order to avoid the going forward and then coming back in which we engaged during our discussion of the last resolution. I think this will make for better continuity in our discussion.


Edgar John Benson: We have no objection.


Marcel Joseph Aimé Lambert: That is standard procedure. So far as paragraph 1 is concerned, its pur-

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Customs Act
pose is to provide what one might term administrative ease for the benefit of both the Government and the importer. I do not think it causes any undue difficulty and it is related to paragraph 7 which is consequential upon paragraph 1.
However, when I come to paragraph 2, which adds a subsection to section 22, I am reminded of a certain debate that took place in 1961 when the Government of the day proposed to introduce ministerial discretion with regard to the Customs Tariff Act. At that time there was a great holler and to-do from those then on this side of the House. I can remember the Minister of Transport, the Secretary of State for External Affairs, the President of the Privy Council, the Minister of Mines and Technical Surveys, crying to high heaven for days that the proposed action was arbitrary, that here was another case of ministerial discretion. They did so even though the late Member for Digby-Annapolis-Kings, then Minister of National Revenue, indicated that under the Customs Act and the Customs Tariff Act there were only 60 instances where the Minister was given discretion. I find this proposal passing strange in view of the fact that members of the present administration objected, objected and objected again when they were in the Opposition at that time. If ever there was an opportunity or, shall we say, an encouragement to apply the guillotine, it was on that occasion. Every possible step in the rule book was used to try and block the legislation in the House, and then of course it was blocked in the Senate.
[DOT] (8:00 p.m.)
Personally I think the Opposition may have had something on that occasion, but a position had been taken that there had to be the exercise of ministerial discretion in class or kind, without appeal. From an administrative point of view that was absolutely right, but from a public point of view there were objections. When we come to paragraph 5 of the resolution I am going to indicate to hon. Members that here we have an introduction of ministerial discretion without real appeal, notwithstanding all the fine words that may appear in the proposed paragraph, and the methods of appeal which follow in the act.
It states that the "Governor in Council may make regulations prescribing...." That is ministerial discretion, and in the exercise of ministerial discretion there is no appeal to a court because no court will substitute its

discretion for that of ministerial exercise of discretion. This is an old axiom of law, and it is only those people who are not versed in law who may believe a court will substitute its discretion for that of a minister if it is properly exercised.
Paragraph 3 reads:
The value for duty of goods imported shall he determined in accordance with the provisions of sections 36 to 41A-
But sections 36 to 41A are nothing but ministerial discretion all the way through. We may agree with what the Government is trying to do, but we quarrel with the way it is trying to do it.
Paragraph 5 reads:
Where the Governor in Council is satisfied, on a report from the Minister, that the application-
This establishes valuations, and the Minister of National Revenue cannot tell me where there is going to be any right of appeal, because following section 37 of the act we come to the sections, starting with No. 41, dealing with appeals to a Dominion Customs Appraiser, one of the Minister's officials.
Is he going to upset the Minister's opinion in the report that is furnished to the Governor in Council? From the Dominion Customs Appraiser it goes to the Deputy Minister. From the Deputy Minister it may go to the Tariff Board, and from the Tariff Board to the Exchequer Court on a point of law-not valuation, not discretion. I defy the Minister to tell me where, in the provisions of 37A, there can be any exercise of law. It is entirely a matter of judgment.
The Governor in Council is possibly one of the highest authorities in the land. Are we going to be led to believe that a Customs Appraiser is going to upset its valuation on an appeal from a competitor? This is to assist not only British goods but others. The terms are general but the valuations are important to people who may be exporting to Canada from other countries. They have a vested interest in these valuations, and so do Canadians.
The Minister of Industry is going to be interested so far as Canadian automobile manufacturers are concerned. Is a Dominion Customs Appraiser going to vary a valuation established by the Governor in Council on recommendation of the Minister? Let us not be nonsensical. Is the Deputy Minister going to do it? The Tariff Board might, but the chances are awfully slim.
Let nobody tell me they are going to go to court. Why, there is not a bit of law to
June 17, 1965

be exercised at this point and, recalling from memory, the act specifically states under section 43 or 44 that there lies an appeal to the Exchequer Court on a point of law. In other words, it is not a blanket appeal from the decision, yet these were the people who cried to high heaven in 1961 about the exercise of ministerial discretion without appeal. But if you know your Act, if you understand the workings of the Customs Act-not the Customs Tariff Act-you will note that this is the same thing. Plus ga change, plus c'est la meme chose.
I trust some of my colleagues took note of some of the things said by the Minister of Transport. He stood over here on this bide and waxed most indignant. It was something to behold. This was the traducing of all that was fair and aboveboard and right in this country. This was a denial of democracy. This was a denial of the rights of law, that a Minister should have the right to determine a value without appeal. Now these self-same people come to us and say that the Governor in Council can be satisfied on a report from a Minister. This makes a nonsense of what they said and did.
It will be very instructive to see what the majority of the Government party in the other place does on this occasion. Will it block the legislation? On that occasion it saw fit to block it. I wonder whether their consciences are going to be so tender this time. Is the conscience of the Government going to be so tender, and are its backbenchers going to swallow this?


Edgar John Benson: I hope the hon. Member has noted that the proposed amendment to section 37A says that "the Governor in Council may prescribe the manner in which the value for duty of goods of that class, as determined under section 36 or 37, shall be reduced". The Governor in Council has the right to reduce the value, not to increase the value, as was proposed by the legislation which my hon. friend was supporting when his party was in power.


Marcel Joseph Aimé Lambert: Under the Customs Tariff Act it was not a case of increasing values. It was a case of determining values, and regardless of the words, this means that the Governor in Council is going to fix the value.


Edgar John Benson: Reduce.


Marcel Joseph Aimé Lambert: The Minister says reduce, but reduce to what? It is still a value. It comes to a determinate figure, which is the value for import purposes. I do not care how the Minister wishes to slice it, it still comes 22620-164
Customs Act
out as bread whether it is cut on the length or the breadth. It still comes out as value.
[DOT] (8:10 p.m.)
The Minister insists that this does not provide for the values to assist British and other imports in the event that there may be some technical contravention of dumping legislation, but this is a provision whereby the Governor in Council may circumvent our dumping legislation. This is all that the British have been complaining about. Our dumping legislation establishes a value. It sets out criteria. This provision allows the Governor in Council to devise criteria-to arrive at some other value. But there will be a value and that value is not the subject of appeal. It cannot be, because the appeal provisions make nonsense in relation to a decision by the Governor in Council. I do not disagree with what the Minister is trying to achieve. This is not a new problem; it has arisen under previous administrations. What I am quarrelling with is the method adopted and the sanctimonious attitude of the Minister's colleagues in 1961 when they objected to the same sort of procedure.


Edgar John Benson: You were not reducing values.


Marcel Joseph Aimé Lambert: It is a setting of values. The Minister can argue that reducing values is not a setting of values. What is the difference? Under the Customs Tariff Act the Minister was given authority to determine that a class of goods was of a class or kind not made in Canada. It need not have any value, even. Now the Minister intends to ask us to agree to a provision reducing a value to another value. Again, what is the difference? You are making a final decision from which there is no appeal. I am sure the Minister recollects that in 1961 his colleagues did not object to the Minister determining that goods were of a class or kind not made in Canada. The great objection was, so they said, that there would be no right of appeal. I am not quarrelling with the Minister's setting the values or determining the criteria upon which values are to be set. What I am quarrelling with is the fact that he is not providing for an appeal. Either Members opposite meant what they said in 1961 or it was a hollow mockery. And I prefer to believe the latter.
There is not one iota of an appeal that is meaningful in this regard. With regard to the words I am about to read I should like the Minister to tell us exactly what goods may be affected. For the benefit of hon. Members of

June 17, 1965
Customs Act
the Committee I intend to read section 104(la) present colleagues were nothing but pure in toto.	sham and hypocrisy.
Where goods, the property of the government of a country other than Canada, that were imported into Canada free of duty or at a rate lower than that to which they would otherwise he liable, are sold or otherwise disposed of on behalf of the government of such country in accordance with an agreement between the governments of such country and Canada, such goods shall be charged with duties payable at such rate as may be determined by the Minister.
I understand these are goods which are brought in either duty free or at some lower rate because they belong to a government of a foreign country. For example, they might be bulldozers or other machinery brought into Canada by the Government of the United States. If they had been used for a while they could be brought in at a lower rate and that rate could be zero. I mention bulldozers, but these may already be subject to no duty at all; I may be wrong in my classification. But there are categories of goods which are disposed of by the government of a foreign country and in respect of which the Minister may determine the rate of duty at the time of disposal. This is, of course, the exercise of ministerial discretion. This is nothing new under the Act. As I say, it exists in over 60 places in the legislation. This merely provides for further discretion, I am not worried about that. What I am worried about is the change of mind or conscience on the part of the hon. gentleman's colleagues since they were on this side of the House. "Encore plus ga change plus c'est la meme chose." I should like the Government to tell us precisely the type of goods which the Minister envisages-whether it is furniture in embassies, or something like that, or goods meaningful in volume. He may answer when he is dealing with the questions asked not only by myself but by other Members of the Committee.
As I have said a number of times, this is a further introduction of ministerial discretion. Without the Act before me I cannot see how anyone can appeal against a decision in this regard. This section 104 may be related to the sections which are headed "value for duty" by cross-reference. If so there would be appeals to the Customs Appraiser, etc. I will have an opportunity to look at that later. What I am primarily concerned about in this section is not what it attempts to achieve but the manner in which the intentions of the Government are carried out. I would simply say that I believe a lot of the things which were said in 1961 by some of the Minister's


Edgar John Benson: Would the hon. gentleman permit a question? I believe he was a member of the Public Accounts Committee.


Marcel Joseph Aimé Lambert: No.


Edgar John Benson: I believed the hon. gentleman was, in which case he would know, with respect to the amendments to section 104 that they are specifically as recommended by that Committee.


Marcel Joseph Aimé Lambert: Thay may be so. I am not a member of the Public Accounts Committee. I have enough to do without being on that Committee.


Alfred Dryden Hales: In joining this discussion on the customs tariff I should like first of all to substantiate what my hon. friend from Edmonton West has said regarding ministerial discretion. My attitude toward this is well known. I recall very clearly what happened in 1961 and the position the Liberal Party took during the debate at that time.
I should like the Minister to explain to the committee how section 37A would operate in connection with the importation of cherries into Canada from the United States, and what value for duty would be established. The season is fast approaching and Canadian cherry producers will suffer severe competition unless some protection is given to them either through import duty provisions or by means of the stabilization act. Possibly the Minister has some observations he can make in this regard.
[DOT] (8:20 p.m.)
It was simply a case of the American Gov-vernment moving in a great quantity of dirt-moving machinery that was made in my constituency. This machinery was sent to help establish an American base in Canada. When they had established the base, in accordance with a deal made between the Liberal Government of this country and the American Government the machinery would be thrown on the Canadian market for auction and Canada would be paid 10 per cent for its work in selling the machinery.
The Minister has improved this situation slightly by saying that when this second-hand machinery is sold it will be charged with the duty payable at such rate as may be determined by the Minister. But what rate will be determined by the Minister? This is wide open. The Minister might say, "It is free;
June 17, 1965

there is no rate on it"; or he might say, "It is at just half the regular rate". It leaves the matter wide open for graft and patronage, in my opinion, because of the way it is set out in the amendment. I would suggest to the Minister that this rate should be the same as would be applicable if that machinery had been imported into Canada by a private individual.


Douglas Mason Fisher: Mr. Chairman, there are two pieces of information I would like from the Minister. It would not be necessary if he had given a long, detailed explanation when this was introduced, but I do not think he did. One of the questions I would like to ask the Minister is this. Why is it not possible under section 37A to give some indication of a percentage in terms of the gross profit? The reason I ask is that it seems to me that if this clause is designed to assist the British, for example, coming into the Canadian market, the people shipping into the market would be prepared to give some cost figures in regard to production, and then would come the really controversial point as to what was the profit picture. Almost all the British automobile manufacturers, for example, are world-wide agencies to the degree that the manufacturing organizations are in a sense in many cases American subsidiaries. I do not know how you go about tracing profit, and matters like that, in such a situation. That is why it seems to me that if you just leave it as "such amount for gross profit as is deemed reasonable by the Governor in Council" it will, as was pointed out earlier, give a great opportunity for free play. I would like the Minister to tell me why it could not be a figure like 4 per cent, 7 per cent, or something like that.


Edgar John Benson: Mr. Chairman, perhaps I could deal with the questions that have been raised. First of all dealing with the questions raised by the hon. Member for Edmonton West, of course the matter of the valuation of the particular quantity of goods imported into Canada is always a matter of fact, and a matter which the Dominion Customs Appraiser and the people in my Department try to establish very carefully. I am informed that in connection with the proposed amendment to Section 37, namely the addition of section 37A-* which was the section to which the hon. Member objected-there is an appeal by the Canadian manufacturer if there is the belief that the value established is lower than the cost of production, plus a normal gross profit.
Customs Act
At this point, Mr. Chairman, I might deal with the question raised by the hon. Member for Port Arthur.


Thomas Clement (Tommy) Douglas: Is there any right of appeal by the importer?


Edgar John Benson: The appeal is by the person in Canada, the affected industry in Canada.
At this point I might very well deal with the question raised by the hon. Member for Port Arthur with regard to the establishing of the amount of gross profit. The valuation which is placed upon the goods may not be less than the cost of production plus gross profit. I do not think it is possible to transscribe into legislation what figure of gross profit should be applied in various industries, because from my experience as an accountant before coming to this House, the amount of gross profit varies a great deal depending on the type of industry concerned.
I should perhaps at this point go back and deal with the various matters raised by my hon. friends opposite. I notice, first of all, that the proposed amendment with regard to bonding was not raised as a factor by any hon. Member. The changes here are changes that were recommended both by the Auditor General and the Public Accounts Committee. So perhaps I need not deal with those any further. I will go on to deal with the proposed section 37A, which was the main point raised by the hon. Member for Edmonton West. As I mentioned in his absence I have been informed by officials of my department that under section 37A there is the right of appeal if the value which is established by the Minister under this section is lower than the cost of production plus gross profit. In that case a Canadian producer can appeal this matter; I have been informed.


Marcel Joseph Aimé Lambert: To whom?


Edgar John Benson: He can appeal to the Exchequer Court.


Marcel Joseph Aimé Lambert: The Minister is aware of section 45 of the Act. It is a point of law, in his opinion?


Edgar John Benson: The opinion of the officials of my department is that it is.


Marcel Joseph Aimé Lambert: You speak as an accountant, not as a lawyer?


Edgar John Benson: Yes, I am not giving a legal opinion. Section 37A is being added mainly because of the different methods of distribution that exist in a compact country such

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Customs Act
as Great Britain, and exist in Canada. Section 36 specifies that the value for duty of imported goods shall be the fair market value of like goods when sold for consumption in the country of export under the conditions which are laid down in the section. Under subsection (3), if an exporter is selling to a wholesaler in Canada, while in the home market he sells only to retailers, the value for duty is based on the price to such retailers. Subsection 2(e) (i) provides that if the quantity shipped to Canada is larger than the largest quantity sold for home consumption-that is, in the country of export-those quantities shall be deemed to be the same quantities in determining the value for duty.
The British claim that in certain cases the operation of these two provisions discriminates against the United Kingdom exporter in favour of exporters in other countries. Because of the geographic size of the Canadian market, the lines of distribution in Canada are often longer than in compact countries such as Great Britain. In Canada, for example, goods may pass in turn from the manufacturer to a wholesaler, to a retailer and finally to the consumer, while in Britain the manufacturer often sells to the retailer. Hence the British argue that while they sell in Canada to the same trade level and in similar quantities as, for example, American exporters, the British must, because of the combined effects of section 36 and the anti-dumping law, price their goods as if they were selling in the much more compact British market to a lower level of trade and in smaller quantities. This has raised the value of their goods being imported into Canada. They are thus hard put to compete with other exporters who, because their domestic market is similar in structure to the Canadian one, are allowed to claim trade and quantity discounts denied the British in establishing value for duty under the present law.
In effect, the existing legislation discriminates against certain countries by imposing a higher valuation base than would be obtained if market conditions in those countries were similar to those in other exporting countries. Not only are ordinary duties assessed on the higher values, but in respect of goods of a class or kind made in Canada exporters are prevented from reducing their prices to competitive levels by the threat of our antidumping duty.

[DOT] (8:30 p.m.)
The proposed new section 37A provides authority to remove these inequities to provide for lowering of values of British goods coming into Canada, while at the same time retaining sufficient safeguards against unfair prices-that is, that there will not be wholesale dumping by people selling in Canada at prices lower than their cost of production, plus the normal gross margin in the trade.
The application of the section will not, of course, be limited to Britain but will also be available to other countries against which the present legislation discriminates. The intention of section 37A is to be relieving. I could inform hon. Members that in discussions which my officials have had with British officials they are very pleased that we have introduced this particular legislation in order to assist them and other such countries in the valuation for duty which is placed on their goods coming into Canada. There has been a very warm reception by the British Board of Trade and the British Government of this particular amendment to the Customs Act.
The other main question which was raised was that raised by the hon. Member for Edmonton West and the hon. Member for Wellington South with respect to section 104 (la). I can tell my hon. friends that this does not apply with respect to cherries. I remember very well, when the cherry producers last year were in great difficulty, that our eminent Minister of Agriculture, in consultation with his other colleagues in the Cabinet, came to the aid of the cherry producers in a manner that has never happened before under any Government in Canada's history, and the cherry producers were very well treated last year.


Mr. Pugh:: I wonder whether the Minister could at this point state under what authority payments were made to the cherry growers of Canada.


Edgar John Benson: These were payments allowed the Department of Agriculture under the farm stabilization act.


Marcel Joseph Aimé Lambert: That was legislation enacted by the previous administration.


Edgar John Benson: Even I admit that some little pieces of legislation passed by the previous administration were good. They provided the instrument and we took advantage of it.


Mr. Starr:: Do not be so modest.
June 17. 1965


Edgar John Benson: In regard to section 104 (la), the proposed new subsection is designed to give authority to a practice which has been followed by the Department of National Revenue for some time now, both under the previous Government and the present Government, and which would be consistent with the general responsibility for appraisal imposed by the Customs Act and the Customs Tariff. The subsection is intended to deal particularly with disposal in Canada of surplus United States government property, such as equipment used in joint defence installations. Much of this equipment was originally imported free of duty and taxes under appropriate authority, such as tariff item 708, being the property of the United States government. However, when subsequently sold in Canada the goods became liable to the payment of duties in accordance with subsection (1) of section 104 of the Customs Act.
Over the years the Canadian Government has been a party to an agreement with the United States Government providing for the sale in Canada of certain United States surplus goods by an agency of the Canadian Government, namely Crown Assets Disposal Corporation. Under the terms of the agreement the selling price of such goods to the Canadian purchaser is deemed to include duties and taxes. Crown Assets Disposal Corporation remits a certain percentage of that selling price to the Department of National Revenue as representing the duties and taxes applicable. This percentage is a composite rate based on the average rate of duty, and taxes paid on imports from the United States.
Again I reiterate that this has been the practice over a good many years and was a question raised by the Auditor General and discussed by the Public Accounts Committee. Such a composite rate representing both duty and tax is thought to be a logical expedient in view of the special circumstances relating to the disposal of the surplus goods in question. Under normal conditions imported goods are presented to qualified customs officers who have facilities for rating and valuing in accordance with the law. However, the United States surplus goods are often located in remote and inaccessible areas such as D.E.W. line sites in Labrador and the far north of Canada. In addition, a great variety of goods is involved. This combination of circumstances makes it practically impossible to appraise the goods in the normal way without undue expenditure of public funds. That is to say, the cost of sending Customs Apprais-
Customs Act
ers to go and look at the goods disposed of would be far greater than the amount of maximum additional revenue which the Department of National Revenue could realize from such an appraisal.
During the past year the Department's practice was studied by the Standing Committee on Public Accounts. The committee in its eighth report to the House on December 7, 1964 recognized the practice as being sensible and practicable.


Mr. Simpson:: Would the hon. gentleman permit a question. When these goods are being disposed of interested bidders are provided with a comprehensive listing of all equipment item by item. Therefore, is it necessary to have inspection of this equipment which is being disposed of, which in many cases the bidders themselves have difficulty seeing?


Edgar John Benson: If one is to consider disposal of used equipment in the far north of Canada, Canadian Customs Appraisers must not only value the goods according to their description but also according to their condition. It had been decided by the previous Government which my hon. friend supported in this House that it is much better to establish a composite rate of duty and apply it to the goods, rather than have Customs Appraisers trail off into the far north, look at the goods and try to establish the value; and the Public Accounts Committee and Auditor General have agreed with this.
However, the Public Accounts Committee did recommend that an amendment be made to the Customs Act or to the Customs Tariff to provide a statutory authority to establish a composite rate to be applied to the proceeds of all sales in Canada of United States government property by Crown Assets Disposal Corporation. All we are talking about is the rate of duty which we apply; and it was recommended by the Auditor General and decided by the Public Accounts Committee that such composite rates should be established by statute, which is exactly what we are trying to do by section 104 (la).


Alfred Dryden Hales: Just one question in this regard, and I apologize for displaying ignorance. Was it the fact that previously the full rate of duty was applicable to second hand machinery?


Edgar John Benson: As I understand the situation and have been informed by my departmental officials, for many years, dating back through the administration of the previous Government, the entire term of the Government

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Customs Act
previous to it, and some time before that, a composite rate of duty was used. All we are trying to do here is to establish statutory authority to legalize what has been done in these situations.
[DOT] (8:40 p.m.)


Mr. Douceil:: Do I understand the Minister to say that when a machine is sold the duty is charged on the equity left in the machine? Suppose it was half worn out, would 50 per cent of the duty be charged, or is that arranged before it is handed over to Crown Assets or whoever sells it?


Edgar John Benson: No. What has happened in the past is that a composite rate of duty on like goods has been established and applied to all goods being offered by Crown Assets Disposal Corporation, and that amount reverts to the Department of National Revenue.


Thomas Clement (Tommy) Douglas: I merely want to ask the Minister a question about the proposal made by the hon. Member for Port Arthur. I think 37A will be greatly improved, from the standpoint of British importers who have suffered serious discrimination in the past, particularly with reference to the import of cars. I think some provision like this is essential to meet this discrimination which they have suffered. The Member for Port Arthur, however, was asking the Minister whether it would not be possible to tie this down a little better, because it says only that the Governor in Council can set an amount equal to the cost of production of the goods plus such amount for gross profit as is deemed reasonable by the Governor in Council. I recognize the Minister's point that you cannot set a specific profit or value of profit margin, but would it be possible to either set a maximum, which would be the cost of production and not more than X percentage of profit, so as to prevent the Governor in Council from adding to the cost of the production of machinery a profit that was so unrealistic that the discrimination could actually continue; or if that is not practical, could the importer have some right of appeal, such as the manufacturer in Canada now has so that he might show that his gross profit was nowhere near the amount that was suggested by the Governor in Council?


Edgar John Benson: First of all, X should indicate that this last provision of the Act goes back to the minimum values which anybody can place on anything which is coming into Canada, or being exported to Canada and sold in this country; that is, the cost of produc-

tion plus the normal gross margin in the country in which it is produced. This gets back to the absolute minimum amount of value that can be placed on any goods that are imported into Canada, without being subject to dumping duty. So the values established for goods coming in from other countries would not ordinarily get back to this cost of production plus gross profit.
This is the argument that the British people have been placing before the Canadian Government, that because their lines of distribution are much confined in that country and they frequently sell manufacturer to retailer, we should vary this system in order to put them in a comparable position with other countries which have lines of distribution such as Canada, where the goods may pass from manufacturer to wholesaler to retailer.
Really the question that is raised is a question of minimum valuation, which is the minimum valuation as I understand the situation under the whole of The Customs Act. The minimum valuation that one can arrive at is the cost of production plus the normal gross margin. This is not arrived at by my Department arbitrarily. If a question is raised with regard to value of duty, an officer of my Department looks into the actual cost of production and gross margins in that particular industry in the particular country. I do not think one could establish arbitrarily by law a gross margin that would apply, because if one takes a look for example at the jewellery industry, and I mention this only as an example, he might find a high gross margin, such as 100 per cent of cost. If one takes a look at other sorts of production in different countries, he might find that the gross margin is only 10 per cent. The fair way is to look at the particular industry in the particular country and apply the gross margin to the particular industry that is involved.


Thomas Clement (Tommy) Douglas: Does the Minister think the right of appeal is impracticable?


Edgar John Benson: Well I did mention this, but I will repeat it. I am not going to give a legal opinion, as I am not a lawyer; but in regard to section 37A my Department officials have indicated to me that the right of appeal is on the side of the importer, or the person in Canada who is being affected in this regard.


Thomas Clement (Tommy) Douglas: But there is no right of appeal for the importer who may feel that the Governor in Council has estimated too high the gross profit, with the consequential result that the valuation for the purposes of duty is much higher in his opinion than it should be.
June 17, 1965


Edgar John Benson: I think my hon. friend is correct in that regard. This applies generally throughout the Customs Act. If one looks to the Tariff Board, he will find that there are cases of appeals by people importing into the country who have felt the law as it exists has been unfairly applied.


Thomas Clement (Tommy) Douglas: They would not have an appeal against a decision made under section 37A by the Governor in Council. Would there be any right of appeal against such a decision?


Edgar John Benson: Mr. Chairman, I do not wish to get myself into the position of giving a legal opinion, and I want to reserve the right to get in touch with my hon. friend to give him the legal opinion of my Department in this regard. I do not wish to attempt to argue the legal rights in respect of appeals.


Mr.   Kindi@: I should like to ask the Minister one or two questions concerning the suggested amendments to section 104 (la), which relate to the composite rate. As I understand what the Minister has said, these goods will be sold on the basis of a composite rate. In other words, they will be lumped together, for some reason of which we are not clear, and offered for sale on the basis of a composite rate. The question which arises is this. Supposing a small operator has a legitimate use for and wants to buy one piece of machinery such as a dredge, tractor, or some part of the composite group-and I speak with some experience in this regard-will it be possible for him to do so? My experience has been that it is impossible for an individual to purchase just one piece of machinery because the Government prefers to sell a whole lot as a composite group. The Government prefers to make one deal, and the individual is left outside in the cold. He may have a use for and a desire to purchase a particular piece of machinery, but it is sold as part of the composite group. [DOT] (8:50 p.m.)
The Minister's intention is to impose a composite rate. I take it from the word "composite" that what he has in mind is to take a whole floor of machinery and lump it all and then somebody will come along and buy the whole thing. Will you please answer that question?


Edgar John Benson: First of all, I should explain that under this section of the Customs Act the Minister of National Revenue is not at all involved in selling the particular goods in question. How they are sold by Crown Assets Disposal Corporation is entirely up to the Corporation. The Department of National
Customs Act
Revenue has nothing to say about this. What we are dealing with in this particular section is securing for the Federal Government out of any ultimate sale the amount of tariff to which the Government is entitled. We do not affect the method of sale or to whom Crown Assets Disposal Corporation sells the particular goods. We are simply saying here that the amount of tariff payable to us will be at a certain rate on the particular amount of goods.
As I mentioned previously, this is a matter which was commented on by the Auditor General. It was also studied by the Public Accounts Committee and it was recommended to the Department of National Revenue that something be put in the Customs Act in order to legalize this method of applying duty. We are not at all involved in the selling of the goods. We have no interest in to whom they are sold or in how tenders are called, or anything else. Our sole interest is to apply a tariff to the goods which is fair in all the circumstances, and which provides for the minimum cost of collection so far as the Federal Government is concerned.


Mr. Kindt:: Then you have two Government Departments, the Department of National Revenue and Crown Assets Disposal Corporation, valuing goods. Crown Assets Disposal Corporation usually refers to the appraisal made for duty purposes as a guide in establishing their value and offering the goods to the public.


Edgar John Benson: No.


Lawrence Elliott Kindt: The Minister says "no". In this legislation there is an open end with regard to what method the Department of National Revenue has to follow in making valuations for duty purposes. At the same time the valuation finds its way into the final price which people are asked to pay to Crown Assets Disposal Corporation and the fact is that the two are related. I have followed these sales through Crown Assets and they have got to look somewhere in order to get their value. They will send a man out and he will appraise the goods, and in making his appraisal he will take his cue from the value that the Government has already placed on them for duty purposes.


Edgar John Benson: Mr. Chairman, I should like to answer this question by saying that the whole purpose of this section is so that we do not have to go out and appraise goods. The goods are appraised by Crown Assets Dia-

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Customs Act
posal Corporation and we apply a composite rate of duty to the appraisal placed on them by the vendor. The selling of the goods has nothing to do with the Department of National Revenue. All we want to do is to collect a fair amount of tariff in respect of these goods. We are authorized by this amendment to the section, which is detailed in the bill that will be forthcoming when we complete the resolution, to apply a composite rate of duty rather than applying a rate with regard to each specific item as valued.


Mr.   Kindi@: Do I understand the Minister to say that you take the appraisal of the goods given to you by Crown Assets Disposal Corporation and apply a rate?


Edgar John Benson: Right.


Mr.   Kindi@: Then there are not two Government organizations making appraisals. What assurance have you that Crown Assets Disposal Corporation will make a proper valuation? What basis do they use in making their appraisal? Is it market value, is it value in use or is it whatever someone is willing to pay? We have been given no guide lines with regard to the definition of value, and how it is arrived at is about as uncertain as trying to pin an eel with a blunt fork. The Government should get down to business and give us something to stand on.


George Henry Doucett: Mr. Chairman, I am not very clear yet on this matter and I should like to ask the Minister a question. When those who bring the machinery into Canada are finished with it, and it is then turned over to Crown Assets Disposal Corporation and the Corporation disposes of it, does the Corporation pay the Department of National Revenue on the basis of the price at which they sold it, or do they value it prior to that time and pay on the basis of that amount?


Edgar John Benson: Mr. Chairman, if there are any other questions perhaps I might deal with them at the same time.


Horace Andrew (Bud) Olson: I want to ask the Minister a question. Under this section the composite rate may be such rate as is determined by the Minister. It has been admitted that the Government has been doing this in the past and is now coming to Parliament to legalize a practice that has been going on. I should like to ask the Minister what this rate has been in the past, compared with the regular rate on new equipment?


Edgar John Benson: Mr. Chairman, the composite rate is applied on the selling price, the price at which the goods are actually sold. The composite rate that has been used is 15.25 per cent, I am informed by officials of my Department, and I would think that this rate is determined by taking a group of various assets that are being sold and averaging the rates on all of these assets rather than applying a specific rate to each particular asset.


Horace Andrew (Bud) Olson: The rate of 15.25 per cent is levied on the actual selling price?


Edgar John Benson: Yes.


George Henry Doucett: Mr. Chairman, if the Minister does not mind I should like him to tell me whether the 15.25 per cent is on the valuation established by Crown Assets or on the sale price by Crown Assets?


Edgar John Benson: The sale price.


Lawrence Elliott Kindt: Do those who make the appraisal for Crown Assets Disposal Corporation take into consideration that they can sell the goods at a certain figure, make their appraisal accordingly and then at the same time include within their appraisal the 15.25 per cent? In other words, if Crown Assets valued them any higher they would not be able to sell them.


Edgar John Benson: Mr. Chairman, I am not competent to answer with regard to the basis on which Crown Assets Disposal Corporation may place values on goods. My job as Minister of National Revenue is to collect a reasonable amount of customs tariff on goods which may have come into Canada duty free, or at a small rate of duty, and are then sold within this country. The Department of National Revenue applies a composite rate of duty on the actual selling price of the goods. Our belief, which I think was confirmed by the Public Accounts Committee who looked into the matter, was that we were collecting the amount of duty to which Canada would normally be entitled, and by using the composite rate method rather than proceeding to examine all the goods we were collecting the revenue with the lowest cost to the Government of Canada. The methods used by Crown Assets Disposal Corporation in valuing such goods for tender purposes, and so on, really are not part of the responsibility of the Department of National Revenue.
[DOT] (9:00 p.m.)


Alfred Dryden Hales: To return to my original question, why do we not place on this second hand machinery the original duty that would be
June 17, 1965

appliable to it if it were brought into the country by a private individual? In other words, someone is buying this machinery cheaply, gaining on the duty, and it is unfair competition to the manufacturer of such machinery in Canada. The Public Accounts Committee simply asked that what has been done be legalized, but it did not say this was the right way or right policy.


Edgar John Benson: I would like to think that the Public Accounts Committee, if they thought this was wrong-and I was a Member of it two years ago-would have said they thought it wrong, and said so rather violently. As I explained, under normal conditions goods are presented to qualified customs appraisers in Canada who have facilities for rating them and valuing them in accordance with the law. The U.S. goods which are disposed of in this manner are often located in remote, inaccessible areas such as D.E.W. line sites.
In addition a great variety of goods may be involved in any single disposal. This combination of circumstances makes it practically impossible to appraise the goods in a normal way without undue expenditure of public funds. In other words, it would cost us more money to go and appraise them, and collect the duty than it does to apply a composite rate.


Marcel Joseph Aimé Lambert: If my memory serves me right there is a condition about the sale of these goods which come primarily from the United States, that they shall not be reimported into the continental United States. In other words, Canada is being used as a dumping ground for this surplus of equipment.
I know of cases where traders have swept up equipment in the Pacific islands and brought it to Alaska where huge auctions are held. Then the equipment is brought into Canada. I disagree with the policy of Crown Assets. The Department of National Revenue is not getting what it should, because these goods are sold in the north on an as is, where is basis, and trucks and tractors can be got practically for a song because of the remoteness of the area and the limited number of purchasers.
With modern methods of transportation it would be much better to bring these goods to a more centralized market site where there would be more competitive bidding and the prices would be higher. I ask the Minister to use his good offices to convince the Minister of Industry that Crown Assets policy is rather shortsighted in this regard.
Customs Act
These goods are brought into Canada primarily for a military purpose. They go through some usage and then they are dumped. There are instances of astute men making 1,000 per cent to 5,000 per cent profit by buying this equipment and transporting it to where there is a good market for the goods.


Edgar John Benson: I would like to assure the hon. Member for Edmonton West that as Minister of National Revenue I am interested in getting everything to which the Canadian Government is entitled out of these goods in the form of customs tariff, and I will bring his useful suggestions to the attention of the Minister of Industry.


Mr.   Kindi@: If the Minister or anyone else went into the areas where these sales take place they would find discontent among the residents because usually a trader buys the goods for a song. He offers any items he can sell locally to the residents, but transports the rest to another area and the profits are tremendous. It is impossible for the small man to get a crack at this gain through Crown Assets Disposal Corporation. It is all very good to smile, but if the Minister was up there trying to buy this equipment he would find that what I am saying is exactly the truth. If he wants to keep happy and contented people in these areas, he should look at the problem as it exists in them.


Edgar John Benson: I have already indicated that neither I nor my department are involved in the disposal of the goods but I will bring the representations of hon. Members to the attention of the Minister of Industry.


David Vaughan Pugh: I am thinking along the lines of protection for Canadian manufacturers. This paragraph states that the rate will be such as may be determined by the Minister, and he has said it is based on the actual sales value of whatever equipment might be sold. This may approximate a fire sale, and goods sold at a fire sale, if they are sold in this country, do in effect come in as dumped goods. The rate should be fixed on the reasonable cost of similar goods in Canada, taking into account transportation to the points at which the goods are sold.
In this field Canada is losing revenue, and if the duties were at a higher rate Canada would gain more revenue, o (9:10 p.m.)
Now if they are being undercut by much more, the suggestion is that this might bring about an imbalance in the production of

June 17, 1965
Customs Act
Canadian manufacturers. That is the suggestion I have to make to the Minister. The fixing of the rate is discretionary and if a rate is fixed on the basis of a selling price alone then it constitutes discrimination against the Canadian manufacturer who is producing goods for the same market and for the same people.


Mr. Maclnnis:: I have one further question to ask with regard to this kind of dumping. If I am wrong in my assumption I hope the Minister will correct me. When the Americans bring in this type of equipment for D.E.W. line operations or construction in Newfoundland, Labrador or wherever it may be, it is my understanding that there is legislation for bidding its re-entry into the United States. Why does not the Canadian Government set up a duty more comparable with the value of the equipment which comes into Canada in this way?


Edgar John Benson: I understand that the primary purpose of this material is national defence. The intention is not to offer these goods for sale on the Canadian market. In many instances, as the hon. Member knows, they are used in the far north where the wear and tear on goods and machinery is extremely heavy. The sole purpose of this provision in the legislation is to carry out the recommendation of the Public Accounts Committee that the Minister be authorized to apply a composite rate of duty-15.25 per cent- rather than send somebody out to try to value these things as used.


Donald MacInnis: The Minister has referred to the value of this equipment as "used". Is he aware of the fact that much of this material is re-sold before it is ever put to use? This was the situation during the years between the end of the war and 1957, and it is still going on at the present time.


Lawrence Elliott Kindt: I should like to ask the Minister, or the Minister in charge of Crown Assets, whether he would discuss the possibility of selling these goods by public auction rather than to individual traders. It seems to me it would give a better chance to the little fellow if this material were sold by auction rather than holus-bolus for a lump sum. In addition, I believe the Department of National Revenue would get more money. The small buyer, in turn, would get an opportunity to purchase equipment at a reasonable price and everyone in the area where these sales take place would be in a better frame of mind.

I make this suggestion despite the fact that the person sitting behind the Minister of National Revenue continues to laugh and smile as though he knew something about what goes on in these areas, though I think he is as dumb as the dumbest person could possibly be in regard to matters of this kind.


Mr. More:: I rise merely to make the suggestion that if the Minister of Agriculture were put in charge of the disposal of this equipment he would surely be happy about the results he could get.


Robert Simpson: I should like the Minister to tell us how the duty is paid. Is it paid by the purchaser who bids on the equipment or does the Crown Assets Disposal Corporation pay it to the Department of National Revenue out of the over-all sum which the purchaser bids? Or does the purchaser pay what he bids for the equipment, plus an additional sum in duty?


Edgar John Benson: I am subject to correction but I believe it is paid out of the over-all sum. The bid is made and 15.25 per cent of it automatically goes to the Department of National Revenue.


Robert Simpson: In that case the purchaser would be paying no duty as an individual.


Edgar John Benson: That is correct.


Lucien Lamoureux: Does this conclude the discussion of paragraph 1?


Some hon. Members:: Agreed.
Paragraphs 1 to 8 inclusive agreed to.


[Stage Direction]
Resolution agreed to.

[Stage Direction]
Resolved, 1. That the Customs Tariff be amended by adding thereto, Immediately after section 16 thereof, the following section:
17. (1) The Governor in Council, by order, may from time to time amend
(a)	Schedules A to C, and
(b)	any lists of articles or goods the duties on which are removed or reduced pursuant to any Act or any order in council under the Customs Act or this Act,
by renumbering the items set out in Schedules A to C or in any such list but not so as to affect the status of any of those items with respect to the payment of duty.
(2)	On and after the coming into force of an order under subsection (1) a reference by its former number in any Act or in any statutory or other instrument or document to any item renumbered by that order shall, unless the context otherwise requires, be construed to be a reference to that item as renumbered by the order.
(3)	The Minister of National Revenue may, from time to time by publication in Part I of the
June 17, 1965
[Stage Direction]
Canada Gazette, give notice of any change required to be made, by virtue of an order under subsection (1), in any reference in any Act or in any statutory or other instrument or document to an item renumbered by the order where the reference thereto is by the former number.
2.	That Schedule A to the Customs Tariff be
amended by striking out tariff items 209 E, 210i, 263e,	384,	440m(l),	440n(l),	445z,	541a(2) and
695(c), and the enumerations of goods and the rates of duty set opposite each of those items, and by inserting therein the following items, enumerations of goods and rates of duty:
3.	That Schedule B to the Customs Tariff be amended by inserting therein the following item, enumeration of goods and rate of drawback of duty:
4.	That Schedule C to the Customs Tariff be amended by striking out item 1,220 and the enumeration of goods set opposite that item, and by inserting therein the following item and enumeration of goods:
5.	That Schedule C to the Customs Tariff be amended by inserting therein the following item and enumeration of goods:
6.	That any enactment founded upon resolutions 2, 3 and 4 of the foregoing resolutions shall be deemed to have come into force on the 27th day of April, 1965, and to have applied to all goods mentioned in the said resolutions imported or taken out of warehouse for consumption on or after that day, and to have applied to goods previously imported for which no entry for consumption was made before that day.
7.	That any enactment founded upon resolution 5 of the foregoing resolutions shall come into force on the 1st day of January, 1966, and shall apply to all goods mentioned in the said resolution imported or taken out of warehouse for consumption on or after that day, and shall apply to goods previously imported for which no entry for consumption was made before that day.
Mr. Pennell:: Perhaps it would be useful to the committee if I were to make a few general remarks at this point.
The first resolution provides for the renumbering of items in the Customs Tariff by Order in Council. As was mentioned in the budget speech, this will permit the use of modern tabulating equipment for correlating import statistics and tariff items.
The second and third resolutions cover a miscellaneous group of items. Some of the items expire this year and they are being extended without change for another 12 months. The amendments to other items are of a relieving or of a technical nature.
Resolution 4 provides for an amendment to the item which governs the importation of offensive weapons.
Resolution 5 establishes a new item 1221 to come into effect on January 1, 1966. Entry into Canada will be prohibited for the periodicals described in this item.
Resolutions 6 and 7 relate to the coming into force of the previous resolutions.


Marcel Joseph Aimé Lambert: With regard to paragraph 2, we note that items 440m and 440n are re-22620- 165J
Customs Tariff
dundant. I think that at some time in the past the Parliamentary Secretary indicated that an effort would be made to regularize the position of these annual extensions having to do with aircraft not including engines. This concerns a particular type of aircraft and a particular type of engine. But we seem to be going from year to year without reaching a definite decision. I believe I raised this point last year and the year before. When I was occupying a position similar to that of the Parliamentary Secretary I wondered why we were making these entries from year to year. Perhaps the hon. gentleman could tell us why we do this on an annual basis rather than incorporate it into an item which could eventually be removed.
As to item 445z, may I ask what is the quid pro quo in respect to this change in duty? The item refers to parts for use in the manufacture or repair of electric dry shaving machines for use in removing human hair or of rectifer converters used in conjunction therewith. Has this to do with ordinary electric razors and the rectifiers which are used to convert current from one voltage to another? What is the quid pro quo in regard to this.
[DOT] (9:20 p.m.)
Then item 695c has to do with-and this is a very important matter, I am sure- original sculptures and statuary, including the first 12 replicas made from a sculptor's original work or model; all the foregoing- and I want to know who determines this- the professional productions of sculptors only, and valued at not less than $75 each. Who determines the professional productions of sculptors only?


Mr. Graffley:: The Secretary of State.


Marcel Joseph Aimé Lambert: Is this done under certificate from the ministry for culture, or the Secretary of State? Then we have item 695e, which deals with hand-woven tapestries, suitable only for use as wall hangings, valued at not less than $20 per square foot. What particular sophisticates are going to benefit from this, because this material is now coming in free of duty? In particular, from what countries will this material be imported? To what countries is this provision primarily intended to apply, and why? What, again, is the quid pro quo with regard to this tariff concession?
Then we will also have to deal with item No. 5. I think the Parliamentary Secretary had better have a very good explanation because this has to do with split runs and we

June 17, 1965
Customs Tariff
are back into the periodicals business. In the first line thereof again we have "regulations prescribed by the Governor in Council". Depending upon the answers we get from the Parliamentary Secretary, particularly as to item No. 5, we will see how the discussion will go. The other items are more on the basis of information.


Lawrence T. Pennell: Mr. Chairman, I thought at first I might ask the indulgence of the committee but I carried on without asking it. However, after the deluge of questions directed at me by the hon. Member for Edmonton West perhaps I should ask for the indulgence of the committee in my first attempt at dealing with the Customs Tariff. With regard to items 440m(1) and 440n(l), aircraft and aircraft engines, these items were established in 1952 and have been renewed periodically since then. I suppose the hon. Member pondered the same question between 1957 and 1962.


Marcel Joseph Aimé Lambert: And I was told they were going to be made permanent.


Lawrence T. Pennell: The renewal of these items, I might say, has the support of the Air Transport Association, which represents the operators of aircraft, and of the Air Industries Association of Canada, which represents the manufacturers. I hope that information is helpful to the hon. Member for Edmonton West. I presume these items have been continued on the representations of the Air Transport Association and the Air Industries Association of Canada.
Dealing with tariff item 695c, sculptures, the amendment to this item is of a technical nature to simplify its administration. The words "when certified by the Director of the National Gallery of Canada as being of a cultural character" have been removed from the item because it is thought this might expedite the administration of the item. Limitations as to minimum value and maximum number of replicas made from an original work have been inserted to safeguard against any abuses of this particular item. The hon. Member posed the question as to who is going to determine this matter. I would assume that the officials of the Department would do this, in the same way as they deal with the value of paintings from time to time.


Marcel Joseph Aimé Lambert: Yes, but on the basis of a certificate? Are we going to have an Appraiser of Culture?


Lawrence T. Pennell: I would assume that the officials of the Department are competent to exercise the necessary judgment, Mr. Chairman.
I believe the next item raised was in connection with electric shavers, tariff item 445z. Item 445j provides for the free entry of "electric dry shaving machines for use in removing human hair, and parts thereof". Certain parts, however, such as transformers and nickel-cadmium batteries, are deemed to be more specifically provided elsewhere in the tariff and are not admitted under Item No. 445j. These parts would be dutiable at 15 per cent British preferential and 22J per cent most-favoured-nation.
The purpose of item 445z is to supplement item No. 445j by providing for the free entry of those parts which do not qualify for admission under Item 445j. The maintenance of the duties on these parts would have made it uneconomical for electric shaver manufacturers to continue the production in Canada in competition with complete shavers which enter duty free. With regard to the other item raised by the hon. Member for Edmonton West, I must apologize to him, but it escaped my attention.


Marcel Joseph Aimé Lambert: It was 695e, hand-woven tapestries, that you hang on a wall.


Lawrence T. Pennell: This is a new item, as the hon. Member pointed out, and it provides for the free entry under all tariffs of hand-woven tapestries, suitable only for use as wall hangings. These tapestries are normally made of wool and were dutiable as manufactures of wool under tariff item 533a, at 25 per cent and 27J per cent. Under this new item they will be accorded the same tariff treatment as most other works of art. The minimum value limitation will ensure that commercially produced tapestries are not entered under this item.


Marcel Joseph Aimé Lambert: In view of the fact that the valuation must exceed $20 per square foot, obviously they are going to be rather sophisticated items. What is the quid pro quo for this change? What have we gained as a result of this change, because this is usually as a result of bargaining between countries? Is there any advantage that Canada has gained, because frankly I do not think we are giving away very much here; but on the other hand, what are we gaining?


Lawrence T. Pennell: I am not in a position to give a categorical answer, but I understand that the former rates prohibited for all practical purposes the importation of these very expensive tapestries. As the hon. Member has

June 17, 1965

pointed out, he does not expect very heavy importations; and after all, they must be limited to those for wall-hanging purposes. I am satisfied it was done, not in the interest of making a quid pro quo arrangement but really to deal with works of art.


Marcel Joseph Aimé Lambert: What about item 1221?


Lawrence T. Pennell: To be quite frank, Mr. Chairman, I expect further comment on Item 1221 so I would, with respect, reserve comment until later.


Douglas Mason Fisher: Mr. Chairman, I wanted to make some comments upon part 5, which opens up the whole question of periodicals legislation, Time, Reader's Digest and all that.


Stanley Howard Knowles: This is where I came in.


Douglas Mason Fisher: There are some very interesting problems that come to mind when one looks at this particular clause. I think we are all aware that this Government has entered into an agreement with the United States, and with some American corporations that have Canadian subsidiaries, in connection with the automobile trade. I would like to know whether the Minister has ever considered what a road block this particular rule could be to a real integration of the automobile industries of Canada and the United States. I see we have got the real authority on agriculture and automobiles in the House in the person of the Acting Prime Minister, and I turn to him.


Stanley Howard Knowles: Agriculture and culture.


Douglas Mason Fisher: And automobiles. Mr. Chairman, I would like to ask-


Paul Joseph James Martin: Don't say anything about my constituency.


Douglas Mason Fisher: -the hon. Member for Essex East if he is not aware that in the automobile trade in both Windsor and Detroit there is a common interest in publications and periodicals. I think this is obvious. As I believe many hon. Members will know, a number of publications are shared jointly by the trade where advertising is very important, and if the Canadian parts manufacturers are going to be entering into the Canadian market, and vice versa, and we are going to get this interplay and interpenetration in this industry, one would assume there would be tremendous advantages in having periodicals, weeklies and monthlies, that relate to the trade, with all
Customs Tariff
the information for the trade including franchises, bids, tenders and all the other things that are of common interest. This is one of the assumptions the Government should consider as naturally following the automotive trade arrangement. Yet here we are setting up in the Customs Tariff a series of blocks to any development of that kind.
[DOT] (9:30 p.m.)
Although I have more substantial comments to make on this particular paragraph this seems to me to be an anomaly, the kind of paradox we keep encountering with this particular government and Minister of Finance in office-on the one hand Canadian nationalism, the Canadian Development Corporation, the cry "Let us save our Canadian insurance companies and banks"; and on the other hand the naturalization of Time and Reader's Digest. Let us intermix our automotive industry, but block off any normal kind of trade communications and channels which link them up.
I do not want an explanation of the paradoxes because we know that this is part of the character of the Government. At times we can swallow it a little better. It is like having castor oil with a lot of syrup administered by the hon. Member for Essex East, with his own particular kind of circumlocution, which makes us feel that it is not really as bad as we thought. But we have a situation where the Minister of Finance in one year and in one budget does not want any part of Time or Reader's Digest but passes it over to the Prime Minister; and then this year he changes to this kind of nationalism, at the same time resorting to another kind in connection with life insurance, banks and the Canadian Development Corporation, which makes us a little annoyed and discouraged at the over-all approach which the Government has to these matters.
Paragraph 5 seems to me to have no real planning for the future in terms of certain developments which might take place. I should like the Parliamentary Secretary to note that not too long ago a number of representatives of the churches which put out publications held an annual meeting in Ottawa and lobbied the Government from the point of view that their publications deserved and merited Government advertisements. It is apparent that in the field of religious publications both in Canada and the United States a tremendous effort is being made to put these publications on a commercial basis, so that they have the income to improve their

June 17, 1965
Customs Tariff
editorial content, to get their circulation up, and so on. There is nothing regrettable about this particular trend, but I would point out that religious publications are specifically exempted under this particular item.
I assume that if the same step is being taken by religious publications in the United States which is developing here, then it is quite conceivable that, for example, a publication which generally appealed to fundamentalists, those in the fundamentalist churches or the Lutheran churches, could reach the stage in terms of circulation drive and editorial content which would be quite considerable. All you need do is look at the "Lutheran Hour" on television to realize the potential. I am not saying that the "Lutheran Hour" is commercial, but when this kind of body produces a publication with a commercial base it is conceivable in this area that you would have something which would attract Canadian advertising revenue and also advertisers of United States corporations with Canadian subsidiaries. This is something both feasible and possible, given the present trends which we have.
One of the other points I want to make with regard to the exemptions made here is this. There is the whole question of catalogues. What about coin magazines which, in effect, are catalogues? What about the number of agencies selling long playing records, or books, on the basis of a catalogue circulated on a regular basis? Quite often, as all hon. Members know, these publications include on the frontispiece or at the back, or occasionally in inserts, general advertising in connection with the trade. If that particular kind of catalogue is exempt, it seems to me it offers an obvious vehicle for circumventing what seems to me the intent of the legislation.
Included in this particular item is the following definition:
For the purpose of this Item,
(a)	"issue" includes a special annual issue, and
(b)	"periodical" means a periodical, the issues of which, other than special annual issues, are published at regular intervals of more than 6 days and less than 15 weeks and are distributed as issues of a distinct publication or as a supplement to more than one newspaper, but does not include
(i)	a catalogue,
(ii)	a newspaper, or
(iii)	a periodical, the principal function of which is the encouragement, promotion or development of the fine arts, letters, scholarship or religion.
One other point in connection with these exceptions relate to special issues of Life magazine which are completely devoted to

something like fine arts, or special editions of magazines like Esquire. I interpret from the terms both of the budget resolution which was put through earlier and from this resolution that if a magazine like Esquire or Holiday has a special issue devoted, say, to Canada-


Maurice John Moreau: What about Playboy?


Mr, Fisher:: The hon. gentleman probably knows more about Playboy than those of us over here; he has that lean and virile look anyway. I would advise the hon. Member to make a visit to Russia, which would cool him off in this regard; and he can get advice in that matter from the gentleman sitting near him.
To return to the question of special issues, it would seem to me that under the provisions to which we agreed yesterday and which we are approving here a special issue devoted, say, to Canada or to a general Canadian interest could come into the country, yet it is the very type of issue that our provincial governments and Canadian travel bureau, and so on, will be advertising in. A tremendous number of United States interests would also be advertising in it to link up with the demand which exists in Canada for facilities and services which are particularly close to the border. I agree that one issue does not mean very much, but recently there have been three national United States magazines which have issued special editions devoted to Canada. The range and gamut of United States magazines both in terms of type and also the variety of form and approach is very wide. You could conceivably have a succession of special issues, not necessarily designed as a split run device which could be a threat to advertising revenue in Canada.
[DOT] (9:40 pjn.)
I should like to know from the Minister something a little bit more specific, and I want to give him a couple of examples. Would the New York Book Review or the New York Review of Books, or the Reporter magazine or the Nation, and magazines of that character be considered as being exempted under the last part, the principal function of which is the encouragement, promotion or development of the fine arts, letters, scholarship or religion? I think the Parliamentary Secretary might give us some appraisal of this massive amount of publishing in the periodical and newspaper field which goes on in the United States, using the names of magazines and
June 17, 1965

publications, and give us just what the Government has in mind as to how much would be exempt and how much would not be exempt.
Are we out to simply block The Saturday Evening Post, Life, Look, Esquire, The New Yorker and publications such as that, or are we thinking of the whole range of those hundreds of periodicals which is more than we publish here and perhaps more than we and England publish? This of course raises another point which I wish to touch upon. All the assumptions I have made in my remarks have been based on the Canada vis-a-vis the United States situation, and of course I am still troubled by my anger over the Reader's Digest situation. This particular paragraph will affect more than Canada and more than the United States. We have a sizeable number of publications, although much less than from the United States, coming from Great Britain and from France. In this regard again I would like to know whether the Government has any appreciation as to what kind of magazine is involved. Give us the titles of the magazines that are to be affected by this exempting clause.
Has the Government consulted with libraries which, in the main, are the largest importers of periodicals? I suppose one could make the automatic assumption that if a library bothers to buy a paper or periodical, it is for at least one of the purposes listed here; but it might be quite conceivable, and 1 can tell the Parliamentary Secretary, as someone who has worked as a librarian, that it is amazing what the customs department can throw at you when you are trying to get books and periodicals in from outside the country, that many of these publications will not be included. I am not referring to the difficulties I have had in the past, trying to smuggle copies of Fanny Hill into the country, or anything like that, I am referring to scientific abstracts. I want to be sure that the Government has canvassed this Whole matter and has consulted with these people who bring in periodicals for the purposes that are exempted here and those who are involved in the commercial distribution of periodicals in Canada. I should like to know what American News, for example, has said to the Government about this particular proposal, and how it may affect that company.
There is one last point in relation to this that I want to touch upon, and this really ties in with the complaints that are being made by newspaper publishers. This perhaps has
Customs Tariff
been best exemplified by that editorial which appeared in the Free Press and which has been read so often today, which accuses the Minister of Finance of falsehoods. It would seem to me that if the objections of the newspaper publishers in relation to newspapers are valid, the same arguments should lead them to object to this particular paragraph as it affects the United States periodicals, particularly in view of the fact that it is quite conceivable that under the guise of some kind of culture some Canadian magazine in existence, and it might even be a defunct property like Liberty which probably has a copyright and is entitled to the name, to merge with some United States publications so that we would get a situation where we have in effect a replica of the Time and Reader's Digest situation.
This is one of the things that bothers me about the lack of the information we have had in connection with Time. Time is a representative publication from the publishing empire which includes such very popular and successful magazines which are widely read in Canada as Sports Illustrated, Fortune and Life. It seems to me that once this particular organization with production in Canada has been O.K'd and given Canadian status, we will not have anything specific enough either in this particular Customs Tariff, or in the resolutions to be put into a bill to be presented later on, which will protect us against an imaginative periodical published by Time magazine, using the editorial resources that they can pick up from publications such as Fortune, Sports Illustrated and other parts of the Time, Life, Fortune Luce stable.
I do not think this particular legislation will naturalize Henry Luce, although I am certain it will lead that gentleman to believe that he and his associates have fantastic influence in Canada and have been able to bring this particular resolution about. What we might have done, or may be doing, with this particular paragraph is putting through a protective device, not against the United States influence but against any interference with the leading United States influence in communication, printed and advertising, in respect of Time and Reader's Digest; and it seems to me particularly in respect of Time, because of the other publications which are associated in that stable. It does include Reader's Digest because the digest kind of format can open up so many possibilities that the Government might be worrying

June 17, 1965
Customs Tariff
less about the protection they are getting from United States magazines, that are overtly American and shipped in from the United States, and much more about the prospect of Time and Reader's Digest.
I have asked a number of questions in relation to this subject, and I expect the usual long and detailed answer that Parliamentary Secretaries are much more given to than Ministers.


Lucien Lamoureux: Order, please. May I inquire of the committee if at the moment we are considering resolution No. 1. I did not interrupt the hon. Member for Port Arthur, but I felt he was referring more specifically to resolution No. 5.


Douglas Mason Fisher: Mr. Chairman, did you change the rules since yesterday?


Lucien Lamoureux: If the hon. Member will compare the two resolutions, he will notice that we had one resolution yesterday and five resolutions today, so the rules have not been changed.
[DOT] (9:50 p.m.)


Eric Alfred Winkler: If I may be permitted, Mr. Chairman, I should like to address myself to the same item referred to by the hon. Member for Port Arthur. I want to pose a couple of questions to the Parliamentary Secretary for the purpose of clarification. So far as resolution No. 5 is concerned, I think he should give us initially a very clear indication of what the meaning of this provision is. It may be my ignorance more than anything else that is responsible for my not fully understanding the meaning but it seems to me that item 1221 may be confusing. If subsection 1 were a prohibiting subsection I think we might consider being agreeable to it, and as of this moment I do not believe we would be opposed to subsection 2 and the exemptions permitted thereunder as they will affect the people concerned and Canadians generally. I should like to refer to subsection 1 in particular where I find these words:
Issues of a periodical, one of the four immediately preceding issues of which, if such preceding issue is dated after September 30, 1965, has, under regulations prescribed by the Governor in Council, been found to be an issue of a special edition, including a split run or a regional edition, that contained an advertisement that was primarily directed to a market in Canada and that did not appear in identical form in all editions of that issue of that periodical that were distributed in the country of origin.
If this in fact is not a prohibiting section it could have a very disastrous effect. I do not wish to elaborate on what position I or

some of my colleagues may take until we have an absolutely clear explanation and understanding of what the entire section means. I understand that the subsections are quite different and, as I have stated, I am not opposed to the type of exemption which I understand is provided in subsection 2. Before we proceed further with the consideration of the whole item I think the Parliamentary Secretary should give us a very clear explanation and understanding of what this means.


Lawrence T. Pennell: Mr. Chairman, perhaps I might reply to the hon. Member for Grey-Bruce before dealing with the questions raised by the hon. Member for Port Arthur. The hon. Member for Grey-Bruce has raised a very pertinent question and a fuller explanation of this item would seem to be in order.
Perhaps I might begin by saying that a significant amount of magazine advertising directed to Canadians is originated by companies which operate outside of Canada or by the foreign affiliates of Canadian firms. Such organizations are, of course, outside the reach of the Canadian Income Tax Act. It is therefore necessary to deal with advertising that is directed to the Canadian market by such organizations in non-Canadian periodicals through the Customs Tariff. I think this is important, Mr. Chairman. It will be recalled that the Royal Commission on Publications recommended that action of this sort be taken.


Douglas Mason Fisher: And that Time and Reader's Digest be blocked off.


Lawrence T. Pennell: Hon. Members are probably aware that in recent years it has become quite common practice for many mass circulation magazines in the United States to produce so-called "split runs" or regional editions which involve the insertion of advertising in a portion of the circulation of a particular issue. That circulation may be directed to one region of the United States or to Canada. This is a result of the fact that many American mass circulation magazines also circulate in Canada on a very large scale.
What is envisaged is that if a particular issue-I emphasize the word "a"-is found to be a split run or regional edition containing advertisements directed to Canada, future issues of the publication will be denied entry. This makes it possible for the proprietors of the publications in question to make any changes necessary in order to avoid the prohibition. The Department of National Revenue
June 17. 1965

will, of course, be getting in touch with all known publishers who might be affected so as to give them every opportunity to make such adjustments in their advertising patterns as may be necessary. That covers the first portion of this item.
The second portion relates to the practice of inserting in advertisements in mass circulation United States magazines which are sold in Canada the address of the Canadian agent or supplier of the products advertised. The O'Leary Commission recommended that no magazines be allowed to enter Canada which contain such advertising. We have come to the conclusion that such a measure would work a hardship in certain cases. There are some products which it is unreasonable to expect would be advertised in Canada in any other way, such as goods which are used only in certain professions or trades, or products which are sold in very limited quantity. Accordingly, it is proposed that all magazines entering Canada be allowed to have a minimum amount of such advertising. It is expected it will be relatively easy for foreign periodicals which circulate in Canada to adjust their advertising arrangements in such a way as to make it unnecessary to invoke this prohibition. I hope that explanation deals with the question of the hon. Member for Grey-Bruce.


Lucien Lamoureux: Shall the resolution carry?


Douglas Mason Fisher: No.


Lawrence T. Pennell: During the remarks of the hon. Member for Port Arthur he made a rather forceful argument with regard to what he described as the Canadian nationalism policies of this Government. He enumerated a number of them, for which I am thankful, and then he went on to state that the present legislation regarding magazines was an abandonment of such policies. With great respect may I say to the hon. Member that one variation from a policy does not mean that there is abandonment of a policy and, as a matter of fact, I thought he made a rather strong case for the Government in the course of his argument by enumerating all the things we have done to bring in what he calls a policy of Canadian nationalism.


William Heward Grafftey: The exception proves the rule.


Douglas Mason Fisher: Let the Parliamentary Secretary tell us about the automobile trade industry and the consequences that might affect periodicals in this particular area.
Income Tax Act


Lawrence T. Pennell: The hon. Member is asking me to move into a rather hypothetical area, because we do not know yet what the effects will be.


Douglas Mason Fisher: That is not what the Minister of Industry tells us. He talks in terms of 11,000 jobs, a market of $200 million, in parts, in the United States, and interpenetration of the industry. May I call it ten o'clock, Mr. Chairman.


Michael Starr: Mr. Chairman, since we are so close to the completion of these resolutions, may I offer the suggestion that the House might be agreeable to sitting for another 30 minutes so that we may complete them?


Douglas Mason Fisher: No.


Some hon. Members:: Agreed.


Lucien Lamoureux: There is opposition. Before the Chair calls it ten o'clock, it would appear that we have been limiting our discussion to resolution No. 5 and it may be that there is a disposition on the part of the Committee to carry resolutions 1, 2, 3 and 4. If that is the case, perhaps I might call them.


Douglas Mason Fisher: You might as well call resolution 6 too.
Resolutions 1 to 4 inclusive agreed to.


Stanley Howard Knowles: Ten o'clock.
Progress reported.
[DOT] (10:00 p.m.)
Resolution (Income Tax Act) reported and concurred in.
Resolution (Customs Act) reported and concurred in.


INCOME TAX ACT
Mr. Speaker:: Mr. Gordon moves for leave to present a bill based on the resolution respecting the Income Tax Act.


Douglas Mason Fisher: Ten o'clock.


Mr. Deputy Speaker:: Order. This is the motion for first reading which, according to Standing Orders, has to be called at this time.


Douglas Mason Fisher: It is after ten o'clock, Mr. Speaker. You can call it tomorrow.


Mr. Deputy Speaker:: The understanding of the Chair is that, according to practice, the motion for first reading is made at the same time as the motion is made for concurrence in the report of the committee. There will be no motion made for second reading at this time.

June 17, 1965
Business of the House


Douglas Mason Fisher: My point is that we do not want the second reading tomorrow, either.


Mr. Mcllraiih:: There is no intention of proceeding with that.


Mr. Deputy Speaker:: The Chair is acting according to the practice of the House at this time.


Walter Lockhart Gordon: for leave to introduce Bill C-118, to amend the Income Tax Act and the Federal-Provincial Fiscal Arrangements Act.
Motion agreed to and bill read the first time.


CUSTOMS ACT
Walter Lockhart Gordon: for leave to introduce Bill No. C-119, to amend the Customs Act.
Motion agreed to and bill read the first time.



BUSINESS OF THE HOUSE

George James McIlraith: Mr. Speaker, tomorrow we will continue with the discussion on the resolution that we were dealing with before ten o'clock. When it is completed we will take Government Order No. 10, resuming debate on the motion of the Minister of Justice to set up a joint committee to consider the state of penitentiaries; then the resolution and the legislation dealing with the Fisheries Improvement Loans Act; then item No. 22 on the order paper, House in Committee of the Whole on the proposed measure to authorize and provide for the construction of a line of railway by the C.N.B.; then the second reading of Bill S-8 to amend the Central Mortgage and Housing Corporation Act; and then item No. 12 on the order paper, the measure to provide for the Indian Claims Commission.


Stanley Howard Knowles: May I ask one question. Is it a fact there has been a change of plans regarding Monday and, if so, could that be put on the record?


George James McIlraith: Mr. Speaker, I was anxious not to put it on the record. The situation is that there had been a request that there be no Supply motion this coming Monday, and I have not been able to give a firm answer that there will not be a Supply motion on Monday. For that reason I have made no reference to it, but I hope to be able to give a firm answer on that point first thing in the morning.



PROCEEDINGS ON ADJOURNMENT MOTION

[Stage Direction]
A motion to adjourn the House under Provisional Standing Order 39A deemed to have been moved.

Mr. A. D. Alkenbrack (Prince Edward-Len-nox):: Mr. Speaker, I thank you for the time allotted to me tonight to bring before the House a matter regarding the failure of the Government to contact the Weekly Newspapers of Ontario in the publication of the maps and data regarding the Redistribution Act.
My point deals with discrimination against an important part of the Fourth Estate, the most important part of our news media in Ontario, the weekly newspapers.
This Government has again shown its capacity for downright stupidity, and has portrayed its usual ingrained arrogance in what has been allowed to happen this week with respect to advertisements under the Redistribution Act. The placing of approximately $250,000 worth of advertising exclusively in the columns of the big dailies is an indication of a certain complete consideration or, shall I say, Mr. Speaker, "value received", vis-a-vis, the daily papers to keep them quiet and clear of criticism regarding many evident gerrymanderings in the political redistribution. A good, timely cartoon, in this regard, would show the right hon. Prime Minister and the Secretary of State hurrying by the office of a small weekly paper, with furtive glances, on their way to their destination, the office of a large "daily" to which they intend to give all the business.
I submit that the advertising done under the Redistribution Act need not have cost a quarter of a million dollars; it needed to entail, possibly, only paying for the publishing of the maps. As for the other information concerning the boundaries of each constituency, any newspaper, weekly or daily, would be glad to publish this information free of charge as news. One weekly publisher in my riding wanted to publish this information as news and had to telephone Ottawa at his own expense to get the details. Another weekly publisher in Northumberland County had to do the same, while the Government was paying many thousands of dollars and giving full service, plus advance notice, to their favourites, the dailies.
June 17, 1965	COMMONS
Mr. Speaker, there are at least 215 weekly newspapers in Ontario, with a combined circulation of almost 600,000. The people who read these newspapers, a combined total of at least two million people, or one-third of our population, are people who either cannot afford, or do not choose, to pay the larger subscription rate which a daily naturally, must charge. And so these people look forward to getting their news via the local weekly.
I have no criticism to make of the dailies whatsoever, as to their valuable services. I believe that they have given value for the money which is spent in accordance with their rates, though of course those rates are much higher than the rates of the weekly papers. I submit that the readers of these weekly papers, 600,000 families, or at least two million people, have also been ignored and discriminated against by this Government. Every voter in Canada has the right to know the particulars of the redistribution of his or her constituency, and has the right to be reached. Moreover, every voter has the right to appeal the decisions of the Redistribution Commission if he wishes. This Government is, by its action, or lack of action, discriminating against hundreds of thousands of rural voters who subscribe to weekly papers only.
I have irrefutable proof of this in an example which I will cite in my riding where one rural route which was checked and assessed had 197 drops. Only eight of these drops take a daily newspaper. On that rural route last Tuesday, the day of publication of the Redistribution Commission information, eight families were fully informed regarding the future of their constituency while 189 families were left completely uninformed in this regard.
Mr. Speaker, the Ontario weekly newspaper editors protest the failure of this Government to recognize them as part of our news media. No one had any idea that the whole Province of Ontario would be treated in this way at a high cost per entry in the daily papers. I would give another example: The smallest daily in Ontario received this business, yet its circulation is only one-half that of a weekly paper five miles away.
There is another point, Mr. Speaker. That is the silence of the backbench Ontario Liberal Members, supporters of this Government, which demonstrates their complete agreement with and concurrence in this ludicrous policy which, of course, emanates from their masters, the Cabinet. This is
DEBATES	2593
Proceedings on Adjournment Motion nothing but an insult to the weekly newspapers and a failure to recognize their importance in the printing of public information.
[DOT] (10:10 p.m.)
In my question on Wednesday I asked if the Minister could now advise whether the weekly newspapers of Ontario are even yet going to be allowed to participate in publishing this information, and whether or not they will be authorized to do so for next week's publication. The Secretary of State (Mr. Lamontagne) answered this question in a roundabout way when he said that the suggestion made by the hon. Member for Ontario (Mr. Starr), who raised this matter last Monday, had been communicated to the Commission. I have since been informed that the Chairman of the Commission has been contacted on behalf of the editors of the Ontario weeklies and says he will take direction from Parliament in this matter.
I note that the Secretary of State, as reported at page 2334 of Hansard of June 14, in answering a question posed by the hon. Member for Bow River (Mr. Woolliams) gave the ridiculous answer that these Commissions are not agencies of the Crown and that they are not accountable to the Crown. These Electoral Commissions certainly are accountable to the Crown through the Crown's faithful servant, this Parliament. Now, Mr. Speaker, if the Government ignores this fact and its duties in this regard, they do so at their peril.
I therefore ask the Government, through the Secretary of State, to instruct the Redistribution Commission for Ontario to publish these matters pertaining to redistribution in the Ontario weeklies next week, and so correct this error and give the uninformed portion of the Ontario population this vital information to which they are entitled.


Lawrence T. Pennell: Mr. Speaker, I appreciate and share the concern of the hon. Member for Prince Edward-Lennox (Mr. Alkenbrack). May I say to him in as kindly a spirit as possible that I believe he misapprehends the powers of this Parliament as set out in the Act. I would point out to the hon. Member that under section 10 of the Act the following is provided:
A commission is not an agent of Her Majesty and the members of a commission as such are not part of the public service of Canada.
Therefore it is my understanding that the Act which set up this Commission, and which if my memory serves me correctly was passed
2594	COMMONS
Proceedings on Adjournment Motion by the House almost unanimously, put the powers of advertising in the hands of the Commission. However, I know the hon. Member will be pleased, as I was, to learn that the Secretary of State (Mr. Lamontagne) has communicated with Mr. Justice Richardson, Chairman of the Ontario Commission, asking that notice be taken of his request. I cannot vouch for this, but we are hopeful that there might be a favourable reply.



EDUCATION-STUDENT LOANS-INQUIRY AS TO IMPROVEMENTS IN PLAN

Mr. G. H. Aiken (Parry Sound-Muskoka):: Mr. Speaker, on Friday last the Minister of Finance (Mr. Gordon) tabled in the House a report with reference to the Canada student loan plan. This report dealt mainly with the administrative matters that have occupied the attention of the Federal-Provincial group. Yesterday in reply to a question which I asked concerning the student loan program, the Minister answered:
It may be that at some appropriate time it will be desirable to bring in amending legislation, but I have no plans to do so at the moment.
This is the part of the Minister's answer with which I was dissatisfied and is the reason I am making a very few comments tonight. I would submit that some legislative provisions are needed and should be provided immediately so that students can make their plans for this fall when they enter university. The student loan plan is deficient in some matters of principle and not just in administrative matters. First, Mr. Speaker, I believe the plan should be expanded so that it is in the nature of a bursary loan plan under which a student who has shown exceptional promise in the school year and who has obtained a student loan would have the right to a write-off of part of the loan. This would recognize ability in the student who ordinarily might not have gone to university because of the financial situation and who might turn out to be a good student who would make a real effort in his studies.
They are people who I think should be encouraged. That is why I suggest there should be a bursary type of loan granted, and it should be granted right away. I would suggest that it take the form of cancellation of part of the debt incurred at the end of the school year, perhaps to the extent of 25 per cent for those people with a clear pass, and perhaps to the extent of a further 25 per cent for those in the top quarter of their class.

DEBATES	June 17, 1965
Another group who have not been covered by the plan are graduate students, and those students who have taken their full term and are going on to postgraduate work. I think the ceiling should be eliminated in respect of those people when they go into graduate work so that they can continue their studies. It might be said that this will not take place for a few years; but these people should know now whether they are going to run out of money before they have finished their work. I think it is essential that there be a provision made for graduate students who, in the normal course, will go beyond what is allowed under the loan plan. This is something which should also be attended to right away.
Finally, there is the group whose graduation is followed by an apprenticeship. This group comprises medical students, law students and similar persons, some of whom, I understand, have made a presentation to the Minister on this very point. While they may have graduated they are also engaging upon a further year of study. During this year they are paid only subsistence wages, if anything. They should not be required to start repayment of their loan or to commence paying interest on it, at least until their apprenticeship has been completed and another six months has passed.
There are other improvements in the loam plan which have come up in the past year and which have been suggested in various briefs to the Government. It is not sufficient at this time for the Minister merely to say that we are catching up with some of the administrative problems in relation to this plan and that perhaps at some time in the future we will reconsider the basics. I would much prefer to hear him say that the Government will look at this student loan plan seriously and make the amendments which are really necessary.


Lawrence T. Pennell: Mr. Speaker, in regard to the loan plan let me say at once, whether improvements should or should not be brought in, that the number of students assisted to date, or as of April 1, is 41,284. So in my respectful submission it does provide a very valuable service.
Several Federal-Provincial Conferences of officials have been held to discuss ways and means of improving the operations of the plan. At the last full Federal-Provincial meeting held on March 29, agreement on improvements was reached on those areas where it was felt that experience had demonstrated the lack of
June 17, 1965

harmony in the practices being followed. Full details of these arrangements were included with the statement of the Minister of Finance, which was incorporated as Appendix "A" in Hansard of June 11.
The purpose of these agreed arrangements is to ensure that the plan is available to students on as standard and consistent a basis as possible in all participating provinces. As hon. Members are aware the Canada Student Loans Act makes available to students, by virtue of the federal Government guarantee, a source of financing through the commercial banks and other approved lenders. All questions relating to the eligibility of students for loans and the designation of educational institutions which students may attend with the help of a student loan are administered by experienced provincial authorities who are designated for purposes of the Act by participating provinces. Co-ordination among the provinces concerning their administrative practices is not an explicit requirement of the Act, but of course does much to facilitate its purposes and objectives. No changes in the legislation are required to implement the type of arrangements that have recently been worked out. It may be that as more experience is gained with the plan it will prove desirable to bring in amending legislation.
[DOT] (10:20 p.m.)
I will convey the remarks of the hon. Member to the Minister. I must, however, tell him that at the present time there are no plans to make any amendments.



AGRICULTURE-FEED GRAINS-SPEECH BY FORESTRY MINISTER RESPECTING WHEAT BOARD

Edward Nasserden: Mr. Speaker, I rise to discuss a matter of national importance and urgency. It arises out of the unwarranted and scurrilous attack made on the Canadian Wheat Board on June 11 at Drummondville in the province of Quebec by the Minister of Forestry (Mr. Sauve). This in itself is a serious matter, but when it is coupled with the deliberate result of driving a wedge between farmers in separate parts of this nation, then I say it is encouraging the destruction of Canadian unity and purpose. That is not something new in the Ministry opposite.
Indeed, I recall recently when farmers from Ontario and some parts of Quebec came to the Chateau Laurier at Ottawa. I recall the Minister of Agriculture (Mr. Hays) at that time referring to the hon. Member for Humboldt-Melfort-Tisdale (Mr. Rapp) by
Proceedings on Adjournment Motion name, indicating that he would not consider representations from that particular quarter because he thought it might challenge the interests of farmers in Eastern Canada. Again, this same kind of practice drove a wedge between the farmers of different parts of this country.
Of course, we all know it was the Prime Minister (Mr. Pearson) who, during the election campaign of 1963, travelled through other parts of Canada stating that if he was elected he would do for them what John Diefenbaker had done for Western Canada. That tactic was employed by the Prime Minister, that man who was billed by his Party as a man who cares. I ask you, Sir, where the search for unity and purpose of this country is when the men in the ministerial benches opposite go about making statements such as those which have been made.
I have before me the text of the speech delivered by the Minister of Forestry, and I must say that for the most part this is fiction and prejudice, and not much else. These remarks echo the stand taken by the grain brokers of Eastern Canada. This is the old story of these particular interests which have controlled the distribution of feeds and grains in Central and Eastern Canada. This is the old story of these people challenging the efficiency and purpose of the Canadian Wheat Board. This is the old story of these people attacking the orderly method of marketing grain as being the source of their trouble.
I contend that it is a much different matter to have a Minister of the Crown who is one of the three Ministers charged with the responsibility for agriculture taking up this particular cry. The question must be asked, why this alliance of Ministry and grain brokers at this particular time. It seems to me that in respect of this whole matter which reputedly was supposed to deal with feed grain, the Minister is more interested in the brokers and the grain trades than in the farmers.
What does the Minister mean by juggling of the Wheat Board quota; and I should like the Parliamentary Secretary opposite to give an answer, because that is a serious charge and it should be substantiated or withdrawn. What does the Minister mean by adjusting interim payments? Has this situation developed during the period the Minister of Trade and Commerce (Mr. Sharp) has been charged with the responsibility of the Wheat Board operation? I remember a former Minister of
2696	COMMONS
Proceedings on Adjournment Motion Agriculture in a former Liberal Government, the late James G. Gardiner, and the adjustment he made just prior to an election campaign. Is the Minister of Forestry suggesting that the present Minister of Trade and Commerce is indulging in the same type of tactic at this particular time in directing interim payments from the Canadian Wheat Board?
[DOT] (10:30 p.m.)
The Minister has charged that interim payments have been adjusted. This is a serious charge and I contend that it should be withdrawn. The Minister charges that the Board has regulated the allotment of box cars in such a way as to bring about an artificial rationing of feed grain availabilities. This is not only a serious charge but a mischievous one and it should be withdrawn. All of the evidence I can find refutes the Minister's statement in that regard, and the figures of the Canadian Wheat Board show that this is not the case at all.
I know that the Minister, the Parliamentary Secretary and others across the way have boasted about what they did with regard to the feed grain situation last year and the supplies they laid in in Eastern positions. During the period since then the fluctuations in price have been greater than ever before.
The Minister has charged that the Wheat Board operations have resulted in erratic production of feed grains. I say to you, Mr. Speaker, that that charge is unworthy of the Minister and the Government opposite. The annual report of the Canadian Wheat Board shows that yields have fluctuated from a high of 46.2 bushels per acre in 1956 to a low of 25.2 bushels per acre in 1961. The fluctuation in barley yields has been equally respondent to weather conditions. In the matter of feed wheat grades I ask the Parliamentary Secretary, what can the Canadian Wheat Board do about rust, frost or moisture content?
The Minister went on to say that in Eastern Canada the acreage sown to feed grains is constantly diminishing. It is natural for that to take place when the demand for improved pasture is as great and as economically sound in eastern Canada as it is today. When you consider the price levels of feed grains from Western Canada over the last 10, 12 or 20 years you cannot help but realize that throughout the period right up to the present time these grains have generally been sold by the Canadian Wheat Board at price levels that cannot be touched by producers in other parts of Canada.
I want to conclude by saying that the Government has been guilty of gross negligence
DEBATES	June 17. 1965
in failing to take action with regard to the provision of feed grains for the farmers of Eastern Canada, and to try to place the blame on the Canadian Wheat Board is an action that is unworthy of any Member of the Government.
Mr, B. S. Beer (Parliamentary Secretary to Minister of Forestry: Mr. Speaker, I wish to express my appreciation to the hon. Member for having brought this important matter to the attention of the House. I am confident that it was not the intention of the Minister of Forestry (Mr. Sauve) to cast any aspersions on the operations of the Canadian Wheat Board.
I think I can speak for the Government and for the Minister of Trade and Commerce (Mr. Sharp) in particular, who is directly responsible for the Canadian Wheat Board, in saying that no one has expressed greater confidence in the Board than have the Government, and especially the Minister of Trade and Commerce. It is a matter of very great pride to all Canadians that the orderly marketing of grain in western Canada is in such competent hands. The Wheat Board is envied by other nations throughout the world, which wish that they had marketing agencies that could do the job the Canadian Wheat Board has done for the West and for Canada generally.
This agency was established, of course, for the purpose of bringing about the orderly marketing of grain. Certain responsibilities were placed on the Board by statute and the Board has discharged those responsibilities to its very great credit and to the credit of the country as a whole. I am confident that when the Minister of Forestry was speaking in Eastern Canada it was not his intention, nor would it be the wish of the Government, to cast any reflection on the excellent operation that has been conducted throughout the years by the Canadian Wheat Board. Grain is a very important commodity in Canadian exports and the orderly handling of this product is of national importance.
So, I can say on behalf of the Government and the Minister of Forestry, it was not his intention in any way to cast any reflections but to express confidence in the Canadian Wheat Board and to hope that their operation would continue to be as successful in the future as it has been in the past.
Motion agreed to and the House adjourned at 10.32 p.m.

Friday, June 18, 1965