1965-06-14

Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, I rise on a question of privilege, notice of which I sent to Your Honour in writing at nine o'clock this morning under the provisions of the new Standing Order 41A. I have also discussed it with Your Honour, with the officers at the table and with the Government House Leader who is unfortunately not able to be here at this moment.
My point relates to two rather major errors in the Provisional Orders which we adopted last week as printed in the appendices to Friday's Hansard and Friday's Votes and Proceedings. The first error relates to the new Standing Order 15A, the one that provides for the allocation of time. The special committee of nine which brought in a report Friday morning recommended amongst other things the inclusion of a new paragraph 9. That paragraph has been omitted from page 2309 of Hansard and from page 6 of the appendix to Votes and Proceedings for Friday. In both cases the new paragraph 9 needs to be inserted and the old paragraph 9 needs to be renumbered as paragraph 10. This error was not made in the body of Votes and Proceedings, but it was made in the appendix to Hansard and the appendix to Votes and Proceedings in both the English and the French editions.
The second error relates to Standing Order 6, section 2. During the discussion of this matter in Committee of the Whole on Thursday this section was amended by inserting therein a new sentence which reads as follows:
During an extended period, as provided under the provisions of this section, no order shall be called for consideration unless such order was under consideration prior to the normal hour of adjournment.
The record of that amendment having been passed will be found in Hansard for Thursday, June 10, at page 2211. However, in Friday's Hansard at page 2307, in Votes and Proceedings at page 3 of the appendix and
also in the body of Votes and Proceedings at page 224, inserting this additional sentence has resulted in a certain amount of garbling so we have several lines that really do not make any sense. This same error appears in the French editions, in the appendices to both Hansard and Votes and Proceedings, but the French edition of the body of Votes and Proceedings does not carry this particular error.
Obviously, Mr. Speaker, I am not attaching any blame for these errors. They are the kind of errors that could easily be made last week. It was obvious also to Your Honour when I discussed this matter with you this morning, and I am sure it will be obvious to all hon. members, that the working documents we will need for the rules of the House should be correct. I suggest, therefore, that the appendices that were added to Hansard and Votes and Proceedings on Friday might be reprinted correctly and made appendices to Hansard and Votes and Proceedings for today.


Mr. Deputy Speaker:: I am sure the hon. Member for Winnipeg North Centre will agree with me that there is no valid question of privilege but a very good point of order. A close study of the appendices of both Hansard and Votes and Proceedings of Friday last confirms the printing error to which the hon. Member has referred. I assume there will be unanimous consent to the reprinting of the appendices in corrected form in today's Hansard and Votes and Proceedings.


Some hon. Members:: Agreed.
[Editor's note: For corrected provisional orders see appendix "B"]


EXTERNAL AFFAIRS
Right Hon. L. B. Pearson (Prime Minister):: I should like to table the joint communique issued after the meetings we had with the Prime Minister of India, meetings which I believe were both pleasant and productive. I should like to ask, if the House agrees, that this be printed as an appendix to today's Hansard.


Some hon. Members:: Agreed.
[Editor's note: For text of communique see appendix "A"]
June 14, 1935

Commonwealth Conference FOOD AND DRUGS first report of special committee


Mr. H. C. Harley (Hallon):: Mr. Speaker, I desire to present the first report of the Special Committee on Foods and Drugs. Later by unanimous consent I intend to move concurrence.
[Note: Text of foregoing report appears in
today's Votes and Proceedings]


Harry Cruickshank Harley: Mr. Speaker, by unanimous consent I move that the first report of the Special Committee on Food and Drugs, presented this day, be now concurred in. [Translation]


Mr. Gilles Gregoire (Lapointe):: Mr. Speaker, for a special reason we ask that consideration of this motion be deferred for 48 hours, as provided under the standing orders, and that regular notice be given, so that the motion might be studied in two days from now.


Mr. Deputy Speaker:: Since there is not unanimous consent the motion cannot be put at this time.


Mr. Deputy Speaker:: May I be permitted to lay before the House, on behalf of Mr. Speaker, an extract from the minutes of a meeting of the Commissioners of Internal Economy, held on June 10, 1965, relating to classification changes affecting a number of positions in the House of Commons.
[Note: Text of foregoing report appears in today's Votes and Proceedings]



COMMONWEALTH CONFERENCE


Lester Bowles Pearson: Mr. Speaker, I am leaving later this day to attend the Commonwealth Prime Ministers' Conference which opens in London on June 17. All members of the Commonwealth will be represented at this conference by their Prime Ministers or by Ministers designated by the Prime Minister, I believe, in one or two instances.
The members of the conference will now include-and this is quite a change, as my right hon. friend will recall, from days not so long ago at Commonwealth Prime Min-
isters' meetings-the following in order of seniority inside the Commonwealth: Great Britain, Canada, Australia, New Zealand, India, Pakistan, Ceylon, Ghana, Malaysia, Nigeria, Cyprus, Sierre Leone, Tanzania, Jamaica, Trinidad and Tobago, Uganda, Kenya, Malawi, Malta, Zambia and Gambia; 21 members in all.
All but four of these countries have been admitted to the Commonwealth since 1947. Indeed, all but seven have joined the Commonwealth since 1957. Of the 21 members three are from Europe, if you include the islands of Cyprus and Malta-I am not certain where they belong geographically-three are from the western hemisphere, two from Australasia, four from Asia and nine from Africa.
It is not the custom at these conferences to have an agreed and formal agenda before a conference begins, but the agenda which will be submitted on Thursday by the host Prime Minister, Mr. Wilson of the United Kingdom, I think I can say without impropriety will include the following items which I have no reason to believe will not be formally adopted as items of the agenda:
(a)	The world political situation, and under it the following subheadings: problems in Asia and the Far East, which will include the Indonesian-Malayan difficulty, Viet Nam, and relations generally with China.
(b)	Problems in Africa, and this undoubtedly will include consideration of the question of Rhodesia and the present situation there.
(c)	Problems in Europe.
(d)	East-west relations generally.
(e)	Disarmament and United Nations peace keeping problems.
Then the question of the progress toward independence of British dependant territories which have not yet reached independent status will come up for discussion, and it may well be that the question of Rhodesia will be discussed under this item rather than the one I have just mentioned.
Then there will be a discussion of economic affairs, the general world economic situation, the possibilities of developing inter-Commonwealth trade, and problems of economic development generally. Also, Mr. Speaker, the question of a Commonwealth secretariat, which was considered at the last meeting, will be discussed in terms of the terms of reference of the secretariat and the appointment of a secretary general.
Finally, Mr. Speaker-and this is a matter that was mentioned in the House of Com-
June 14, 1965	COMMONS
mons the other day-there will be discussed the question of a Commonwealth parliamentary assembly, which was suggested by the Prime Minister of the United Kingdom.
That is all I think I can usefully say about the meeting at this stage. When I return I will, of course, be happy to report to the House about the conference. I think I can say with some assurance that the meeting, which will be considering matters of very great importance to the Commonwealth and to the world in which the members of the Commonwealth play such an important part, will further strengthen the relationships among the members of this great association of free nations which now spans all the continents.


Some hon. Members:: Hear, hear.


Right Hon. J. G. Diefenbaker (Leader of the Opposition):: Mr. Speaker, the privilege that comes to a Prime Minister to attend a Commonwealth Prime Ministers' Conference is one of the most challenging opportunities that can come to anyone.
The Prime Minister has spoken of the tremendous growth of the Commonwealth, pointing out that of the present membership of 21 all but seven have joined since 1957. The expansion has been phenomenal, and the past informality of these conferences has been maintained despite this increase in the membership.
My first words to the Prime Minister will be words of good wishes in the mission that he goes on. I wish him Godspeed and a return with that inspiration which comes from attendance at such conferences.
He has mentioned some of the matters that will arise. One of them has to do with further transitions from colonialism to independence, and I have but one word to add in that connection. In 1961 and 1962 I took the stand in the Prime Ministers' Conference that no nation within the Commonwealth should permit itself the luxury of practising discrimination as a foundation or principle. That today is accepted, but I should like to add that in my opinion no nation, no colony desiring to join this commonwealth, should be accepted if its political philosophy constitutes support for communism. I think this is a necessary consequence and should be accepted as a principle of membership. To do otherwise would be to place the members of the Commonwealth in the position of having within their ranks those who would destroy that parliament of nations bound together
DEBATES	2315
Commonwealth Conference neither by seal nor sword but constituting for the world an example of what freedom loving nations can achieve when operating in concert.
Mention was made of one or two matters which will come up for consideration. One is the idea of a commonwealth secretariat. As an experiment in bringing about closer unity I think a secretariat could perform a worthwhile function in providing a continuing group for the exchange of information and an understanding of the problems of other members. But I do hope we shall not give adherence to a secretariat having executive powers. The other day I asked a question regarding the Commonwealth Assembly. I had hoped we might have found some time to discuss this question. We all recall the days of Joseph Chamberlain, who envisaged a new concept of empire in which representatives of the component parts would meet at Westminster. With the passing years that concept has been outgrown and outmoded. Call it what you will, I hope the Prime Ministers will not come to a conclusion that anything in the nature of a representative or parliamentary institution should be set up within the Commonwealth.
My reasons for that are simple. First, such a step would be a retrograde one; and second, if determinations of policies were to be made or recommended, then you would have a central institution which would vote, which is the only way in which democratic assembly decisions can be made. If there is one thing that we must guard against in the Commonwealth-and this applies particularly to the Prime Ministers' Conference-it is that. We should never have a vote. If we were to establish within the Commonwealth, at the Prime Ministers' Conference, the exercise of a vote by the various component, representative countries, it would not be very long before the Commonwealth would cease to exist; for none of us, I think I can say-certainly not Canada, and I know of no other country-would accept the principle that a majority vote among Commonwealth Prime Ministers would in any way be acceptable.
Then there is a third matter, and the Prime Minister did not refer to this. It has been suggested that there should be a Commonwealth court to adjudicate on disputes that arise between member nations within the Commonwealth. Personally I think such an institution might toe an effective one. I realize that there are arguments against it; but at the same time when I think of the situation now existing between India and
June 14, 1965

Commonwealth Conference Pakistan in reference to the Rann of Hutch area and other disputes that I could speak of, I ask myself whether there is any reason that the nations of the Commonwealth should not be able to make one further advance and bring about the establishment of a court, a constitutional court if you will, to deal with matters arising between Commonwealth countries.
I am not going to say anything about the unfortunate events of the last two or three days in Ottawa in connection with this matter, but I do feel that so long as there are disputes between the member nations of the Commonwealth and no means of solving them except through the instrumentality of the Prime Ministers' Conference and other diplomatic, behind the scenes discussion, the acceptance of the principle of a Commonwealth constitutional court is not beyond possibility. It might indeed provide for the settlement of matters that at the present time seem almost insoluble.
I would repeat to the Prime Minister what I said earlier. We wish him well. We hope the conference will be a success. These conferences pass from year to year creating new precedents. My own impression is that we are closer in the Commonwealth today than we were 15 years ago, and the reason for that relationship is the fact that each of the nations endeavours to understand the other and under the Queen, either as Sovereign or as head of the Commonwealth, we bring before the world an example of what nations dissimilar in colour and religion, from all parts of the world and in all states of economic development, can achieve when there is a will to do so.


Mr. T. C. Douglas (Burnaby-Coquiilam):: Mr. Speaker, I am sure we all desire to thank the Prime Minister for giving us some idea of the various items which will be discussed at the Commonwealth Prime Ministers Conference, and I am sure the people of Canada hope the results of these consultations and deliberations will be beneficial not only to Canada but to the world at large.
In these days of power blocs there is a good deal of cynicism about the role which a free association of free nations can play in world affairs. My own personal view is that the Commonwealth has an important role to play. While it does not have a central government and is not bound together by binding treaties, it does bring together Governments of peoples from every part of the world including Asia, Africa, Europe, the
[Mr. Diefenbaker.l
western hemisphere and Australasia, and enables peoples of many tongues and races to meet together with a common loyalty to common democratic objectives.
I think such a meeting cannot do anything but good. Only time, of course, will prove whether or not this free association of free people can play an important part in world affairs. I feel certain that in view of the type of men who will be representing the Commonwealth at this conference they will be capable of making a great contribution.
I am glad to see that the matter of Commonwealth trade is going to be discussed. Commonwealth trade is unfortunately very much like what Mark Twain said about the weather; everybody talks about it, but not very much is done about it. There are great possibilities within this field, and Canada with its present imbalance of payments could benefit from expanded Commonwealth trade. I trust out of these discussions some policies and trade negotiations will be set up which will increase Canada's trade with other parts of the Commonwealth.
I hope the same opportunity will be given for discussions in respect of external aid within the Commonwealth. As the Prime Minister knows, I have frequently suggested that one of the things Canada might well consider is concentrating its external aid efforts on Commonwealth countries within the western hemisphere, adopting them as our special consideration. I am not suggesting that we should do less elsewhere but that we should do more for those small nations that have very serious economic problems and that are at our back door. In this category there are both French and English areas in the western hemisphere. These are areas which we could help very easily, and with which we have close contact. This is one area of assistance that might be discussed at this Conference.
I am sure all Members of this House, certainly the Members of this group, wish the Prime Minister well as he goes to the Conference. We trust and are sure that Canada will be ably represented, and we are proud to have the Prime Minister speak on behalf of the people of Canada. We wish him well and hope he will have a very happy and successful trip.


Mr. R. N. Thompson (Red Deer):: Mr. Speaker, it is a privilege to join with others in this House in thanking the Prime Minister for outlining the program he expects to be dealing with at the coming Commonwealth Conference, and also in wishing him success
June 14, 1965	COMMONS
in the particular role, of which I am very-conscious, that he will be carrying on at this particular Conference. We know of the number of delicate problems which will be dealt with and the rather unique position he presently holds in the confidence of the Prime Ministers of the Commonwealth. We know also the responsibility he faces and that this Conference will not be an easy one.
It is rather significant that this Conference is to be held just preceding the Afro-Asian Conference. Last year the Commonwealth Prime Ministers' Conference was held just before the African Unity Conference at Cairo, and we know how much influence the Commonwealth Conference had on some of those who played an important role in the OAU Conference. It might likewise be anticipated that this Conference will have a good influence on the outcome of the Afro-Asian Conference which follows it.
It is also rather unique that this year-and I think this places special focus on the importance of this years' Conference-is the 750th anniversary of the Magna Carta and the 700th anniversary of the first parliamentary government. Certainly there is a tremendous lesson in this fact particularly for the newer members of the Commonwealth. There is no doubt that the greatest heritage we have from Great Britain is that tradition of parliamentary Government such as we follow here in our parliamentary set-up. This is something very necessary today in the world if the freedoms of the individual and the potential development of free democratic processes are to be fulfilled in these newer countries as well.
I found the remarks of the Leader of the Official Opposition interesting when he referred to the fact that, if things continue as they are now, it might well be possible that the Commonwealth will include a nation with a communist-in dined government. I join with him in questioning whether such could be possible in view of the tradition of parliamentary democracy that is so characteristic of the Commonwealth. It is important, however, to remember that in respect of these problems he voiced there are similar conditions at present which might be just as difficult to reconcile with a parliamentary Government and which threaten to remove from some of the associated Commonwealth nations some of the genuine freedoms of a democratic way of life.
We noted that the Prime Minister mentioned a number of the important items on the agenda. We are particularly conscious
DEBATES	2317
Commonwealth Conference of the decision that is to be made as to whether there is to be a Commonwealth secretariat. It was of interest to note this morning that the Australian Prime Minister has already voiced his opposition to such a set-up. On the other hand, we in Canada have one of the leading contenders for the position of Secretary General of such an organization. Certainly the future of the new Commonwealth is closely related to this decision, and to the decision as to whether there might be a Commonwealth parliamentary assembly.
These decisions, I am sure we all agree, are those which will determine the direction the Commonwealth will take in future years. I am sure that out of this current meeting decisions will be forthcoming which will set the course for the new Commonwealth which I am confident is going to emerge, and which must come about if in the years ahead it is to carry out its responsibility with the same degree of success it has had in past years.
Therefore we join with all Members of this House in wishing the Prime Minister and those who will accompany him great success at this very important and responsible meeting of the Commonwealth.


Gilles Grégoire: Mr. Speaker, the right hon. Prime Minister (Mr. Pearson) will soon leave to attend the conference of the Commonwealth prime ministers. I hope he arrives in London in time to attend the decoration ceremony of the "Beatles" who were made members of the Order of the British Empire. In my opinion, this will be a memorable ceremony, and the Prime Minister of Canada should attend it.
Some 40 years ago, more precisely at the end of the first World War, my father was created commander of the Order of the British Empire. But times have changed since; we do not hear any more about the British Empire, except as regards decorations. We hear about the Commonwealth; the institution formerly called the British Empire has become a democratic association of free countries which discuss on an equal footing their common problems.
I express the wish that the discussions which will take place at the forthcoming commonwealth Prime Ministers' conference will benefit all member countries.
The Prime Minister referred to the possible setting up of a commonwealth parliamentary assembly. I wonder what would be the purpose of establishing such an assembly, when

June 14, 1965
Questions
we already have the commonwealth parliamentary association, an informal association without any official jurisdiction.
What problems would this commonwealth parliamentary assembly discuss? Would it have to make certain decisions on behalf of commonwealth countries? Which matters would come under its jurisdiction?
Mr. Speaker, I wonder if that type of Commonwealth Assembly is indicated, or if it would not rather tend to withdraw certain privileges from each of its members.
I do wish the Prime Minister an excellent trip to England. I am sure the members of the house will, in the meantime, endeavour to accomplish as much as possible in the way of adopting legislation so that, upon his return, he can give us a report on his trip and the discussions that will have taken place. I also hope the legislative program he proposed last week will have been completed, for the welfare of the Canadian people, and that he will be pleased with the work performed during his absence from the house.
We, therefore, wish him "bon voyage" and, in the meantime, we will attend to adopting as many legislative measures as possible.


Lester Bowles Pearson: Mr. Speaker, perhaps I may be permitted to thank my right hon. friend and the other party leaders for their good wishes, and to assure them I am looking forward to the conference. I will work hard in London, right through the dinner hour if necessary, and I am looking forward to my return with even greater anticipation.



QUESTIONS

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

Mr. Lambert: 1.	Did the Minister of National Health and Welfare receive a delegation from the Canadian Association of Optometrists on March 23, 1965, and did this delegation meet other members of the Cabinet?
2.	What was the nature of the representations made?
3.	What is the Minister's reaction and is it anticipated that early decisions in regard to them will be called for?


Hon. Judy V. LaMarsh (Minister of National Health and Welfare):: 1. It was not possible for the Minister of National Health and Welfare to meet with the delegation from the Canadian Association of Optometrists on March 23, 1965. However, at the Minister's request, this delegation did meet with the
[Mr. Gregoire.l
Deputy Minister of National Health on April 7, 1965.
2.	The delegation from the Association expressed its views on the recommendations made by the Royal Commission on Health Services.
3.	The views of the Canadian Association of Optometrists are being given the same careful consideration as is being extended to those of all interested parties.


SURVEY OF HARBOUR, SYDNEY, N.S.
Mr. Muir (Cape Breion: North and Victoria):
1.	Is the government now making a survey of the Sydney harbour and Its facilities?
2.	Who is in charge of such a survey; what is the purpose of the survey and what is the estimated period of time it will take to complete the survey?
3.	What is the cost; when will the results be known and to whom will the results be made available?


Mr. Jean-Charles Cantin (Parliamentary Secretary to Minister of Transport):: 1. A study on the ground was made last fall which has since been revised on the basis of later information.
2.	The study was conducted by the interdepartmental group made up of officials of the Departments of Transport and Public Works. Its purpose was to examine proposals for harbour improvements that had been made by local interests.
3.	No costs specific to the study were incurred. They were covered by normal departmental arrangements. The report was for the information of the Government.


RENTAL FOR RUNNING RIGHTS, PRINCE ALBERT-DEBDEN, SASK.
Mr. Cadieu (Meadow: Lake):
1.	What rentals does the C.P.R. pay the C.N.R. for running rights over the C.N.R. line from Prince Albert to Debden, Saskatchewan?
2.	Are these rentals paid annually and, if not, in what manner are the rentals paid?


Jean-Charles Cantin: The
Management of Canadian National Railways advise as follows:
1 and 2. The Canadian Pacific shares in the operating cost on a wheelage basis and also contributes 50 per cent of the interest on the capital valuation. Rental payments are predicated on the principles of the original agreement dated September 17, 1930, and supplements thereto; payments vary from month to month dependant upon the propor-
June 14, 1965

tion of use made of the facilities by Canadian Pacific Railway Company.


OWNERSHIP OF RAILWAY LINE, NORTH BATTLEFORD-MEDSTEAD, SASK.
Mr. Cadieu (Meadow: Lake):
1.	Do the C.P.R. and the C.N.R. own a railway line jointly from North Battleford to Medstead, Saskatchewan?
2.	If not, what rental payment does the C.P.R. pay the C.N.R. for travelling rights?


Jean-Charles Cantin: The
Management of Canadian National Railways advise as follows:
1.	No, the line of railway is owned by the Canadian National Railways.
2.	The Canadian Pacific shares in the operating cost on a wheelage basis and also contributes 50 per cent of the interest on the capital valuation. Rental payments are predicated on the principles of the original agreement dated November 15, 1932. Payments vary from month to month.


LENGTH OF PRESENT PARLIAMENT
Mr. Chapdelaine: How long will this Parliament last?


Lester Bowles Pearson: Section 50 of the British North America Act provides that "Every House of Commons shall continue for Five Years from the Day of the Return of the Writs for choosing the House (subject to be sooner dissolved by the Governor General), and no longer." Thus the present Parliament can legally continue until May 8, 1968. Whether it will be dissolved at an earlier date depends on conditions and contingencies that cannot now be predicted or scheduled with certainty.


PILOTS EMPLOYED, SARNIA-PORT WELLER DISTRICT
Mr. Smith: 1.	How many Canadian pilots were employed In the Samia-Port Weller district in the 1964 shipping season?
Questions
2.	How many Canadian pilots will be employed in the Samia-Port Weller district in the 1965 shipping season?
3.	On an average, how many hours did each pilot work in the 1964 shipping season?
4.	Did these pilots come within the terms of the Labour Standards Act and, if so, what steps, if any, are being taken so that their hours of work will comply with the provisions of this Act?


Hon. Maurice Lamonlagne (Secretary of State):: I am informed by the Department of Transport and the President of the Privy Council as follows:
1.	33 Pilots.
2.	40 Pilots.
3.	2,733.5 hours on assignment, which includes actual pilotage, time in open water and waiting time on board ship in ports.
4.	The Labour Standards Act did not become effective until April 1, 1965, and consequently pilots could not have come within its provisions in the 1964 season. It has been stated in the House by the Minister of Labour that, while the provisions of the Labour Standards Act do not apply in law to employees of the federal government, the principles set out in the law are accepted as the policy of the government in relation to its own personnel. The effect of the application of the hours of work provisions of the Act to the pilots employed in the Sarnia-Port Weller district is being examined along with the other problems relating to other groups, but no decision has yet been reached on this point.


ARDA EXPENDITURES BY PROVINCES
Mr. Dionne: What were the amounts spent each year in each of the provinces of Canada under the ARDA program since its implementation?


Hon. Maurice Sauve (Minister of Forestry):: The figures stated on page 2320 indicate federal funds only expended since the implementation of the ARDA program. However, the provinces have contributed a like amount but this information is not available.
2320	COMMONS DEBATES	June 14, 1965
Questions
Expenditures under the ARDA Program up to March 31, 1965
Province	1962-63	1963-64	1964-65	TotalNewfoundland	$ -	$ 96,365	$ 366,237	$ 462,602Prince Edward Island	14,984	52,004	136,652	203,640Nova Scotia	29,862	90,877	255,026	375,765New Brunswick	62,101	155,878	364,001	581,980Quebec	216,650	1,090,623	3,114,882	4,422,155Ontario	-	75,201	245,451	320,652Manitoba	56,531	787,650	871,118	1,715,299Saskatchewan	161,673	1,105,063	2,413,374	3,680,110Alberta	-	241,996	549,161	791,157British Columbia	-	103,417	279,598	383,015Federal (National basis)	17,302	170,148	523,801	711,251TOTAL	559,103	3,969,222	9,119,301	13,647,626


DETAILS OF SEALING OPERATIONS
Mr. Muir (Cape Breton: North and Victoria):
1.	What was the yearly revenue, since 1954, for seal fisheries for Prince Edward Island and for the Magdalen Islands?
2.	What was the number of ships engaged in sealing in the Gulf during the 1965 season?
3.	How many aircraft sealing licences were issued for 1965?
4.	What was the exact number of "white coats" taken in the Gulf in 1965 and, how many were taken (a) by each boat (b) by each aircraft?


Hon. H. J. Robichaud (Minister of Fisheries):: 1. In the period 1954 to 1964, landings of seals in Prince Edward Island were reported for only three years, in which value to fishermen was as follows: 1958, $15,000; 1962, $70,200; 1964, $29,900.
On the Magdalen Islands, the value to fishermen during the same period was as follows: 1954, $14,600; 1955, $1,500; 1956, $101,700; 1957, $26,800; 1958, $23,800; 1959, $7,300; 1960, $42,400; 1961, $4,900; 1962, $29,700; 1963, $244,000; 1964, $517,600. Information for 1965 not yet available.
2.	11 small, 8 large.
3.	50.
4.	In Gulf Area 2 as established by the Seal Protection Regulations there was a quota of 50,000, which was all taken. Final figures as to number of seals taken by boat and aircraft in this Area and in balance of Gulf are not yet available.


FOREIGN SHIPS IN SEALING OPERATIONS
Mr. Muir (Cape Breton: North and Victoria):
1.	How many foreign ships have been sealing in the Gulf area for each year since 1954?
2.	Were the Canadian sealing ships' crews wholly composed of Canadians?
3.	After the seal skins are purchased from the sealers, where do they end up and more specifically, in which country and through which channels?

4. Does Canada re-import seal skins, as such, or processed into coats, souvenirs, boots and other articles?


Hédard-J. Robichaud: 1. Years 1953 to 1963-1 in each year. 1964-4; 1965-nil.
2.	In the Seal Protection Regulations there is no nationality requirement for issuance of a sealer's licence; hence, no information is available.
3.	In 1964 Exports of seal skins (raw) from Canada were as follows:
Country	Number	ValueUnited Kingdom	25,384	$385,144Austria	10	324Belgium, Luxembourg 689	15,545West Germany	4,131	110,694Norway	1,675	25,223Switzerland	25	988Puerto Rico	5,587	77,976United States	6,136	56,5554. No information	43,637 available.	$672,449


YOUTH ALLOWANCE PAYMENTS
Mr. Douceti: 1.	What was the amount paid in Youth Allowances in the first six months the program was in effect?
2.	What was the total number of recipients of Youth Allowances for the first six months the program was in effect?
3.	What was the total number of recipients of Youth Allowances for each province, for the first six months the program was in effect?
4.	What was the total amount paid in the first six months in each province?


Julia Verlyn (Judy) LaMarsh: 1. $22,945,494.
2. Youth allowances recipients as at the end of February, 1965-397,321.
June 14, 1965

Questions
Province
Newfoundland
Prince Edward Island
Nova Scotia
New Brunswick
Ontario
Manitoba
Saskatchewan
Alberta
British Columbia
Yukon and Northwest Territories
3. Recipients as at	4.
February 28, 1965	Amount $
13,721	747,783
3,442	197,563
23,582	1,361,271
20,154	1,159,340
186,988	10,802,062
28,174	1,640,392
29,258	1,695,266
41,392	2,396,916
50,135	2,917,471
475	27,430


INTERNATIONAL, JOINT COMMISSION-GREAT LAKES WATER LEVELS
Mr. Marlineau: 1.	What has been the outcome of public hearings on the problem of water levels in the Great Lakes held by the International Joint Commission?
2.	What solutions have been proposed by the experts appearing before the I.J.C.?
3.	Is it proposed to submit the James Bay Diversion plan, commonly know as the Grand Canal Project, originated by Thomas Kierans, of Sudbury, Ontario, for discussion before the I.J.C.?
4.	Has the government communicated with Premier Robarts of Ontario or Premier Lesage of Quebec, or other members of their respective governments, inviting them to participate in a cooperative study of Northern water resources and if so (a) what has been their reply (b) what would be the scope of such studies (c) would it include the feasibility of exporting water to the U.S.A.?
5.	Has the government considered setting up, in co-operation with the United States and the Provinces of Ontario and Quebec, an over-all authority to study the whole question of North American water resources and to implement proposals made?


Hon. Arthur Laing (Minister of Northern Affairs and National Resources):: 1. I have been informed by the Canadian section of the International Joint Commission that the public hearings referred to were the preliminary sessions conducted by the Commission to give the customary opportunity to those interested to submit information and views on the problem under reference. They were held in Toronto; Sault Ste. Marie, Michigan; Windsor; and Chicago. The testimony given at these sessions by the 47 witnesses who appeared and the briefs submitted are presently under study by the Commission and its advisers.
2. I have been informed by the Canadian section of the International Joint Commission that the information and proposals submitted related primarily to the need of regu-22620-1481
lation of lake levels and the effects of specific levels on the various interests involved. The statements were for the most part non-technical in nature.
3.	The terms of the Great Lakes Levels Reference transmitted to the International Joint Commission by the Governments of the United States and Canada quite properly confined its investigation and study to the natural drainage of the Great Lakes which constitute international or boundary waters. The Grand Canal scheme proposed by Mr. T. W. Kierans of Sudbury involves the utilization of resources owned by the Provinces of Ontario and Quebec. It is proposed that investigation and study of this scheme and other possibilities for diversion of Ontario and Quebec waters into the Great Lakes drainage be undertaken nationally under arrangements worked out between the federal and Ontario and Quebec provincial authorities.
4.	(a) The Government has communicated with the Premiers of Ontario and of Quebec inviting their participation in a co-operative study of the diversion possibilities referred to in 3 above. Both Premiers have indicated that such a co-operative study would be acceptable in principle but the Premier of Quebec has indicated reservations which require clarification before completion of mutually acceptable study terms and conditions. This clarification is in progress.
(b)	The exact scope of the study remains to be determined but in general it would include examination to determine the feasibility of diversion proposals already made and of other diversion possibilities which may exist.
(c)	It is not intended to include the feasibility of exporting water to the United States.
5.	No.

June 14, 1965
Questions
COMMUTATION OF DEATH SENTENCES	MOTOR VEHICLE PURCHASES BY DEFART-


Mr. Cowan: In each, of the last 50 years, how many persons who had been convicted of murder, but whose sentence of hanging was commuted to life imprisonment, were confined in Canadian penitentiaries?


Mr. D. S. Macdonald (Parliamentary Secretary to Minister of Justice):: For each of the last 50 years, the number of persons who have been convicted of murder, whose sentence of hanging was commuted to life imprisonment and who subsequently were confined in Canadian penitentiaries, is as follows:
1915	14	1940	61916	9	1941	71917	10	1942	11918	8	1943	11919	14	1944	41920	13	1945	51921	6	1946	81922	8	1947	31923	3	1948	51924	10	1949	61925	9	1950	31926	2	1951	31927	5	1952	81928	7	1953	61929	6	1954	41930	5	1955	91931	3	1956	51932	5	1957	51933	3	1958	161934	5	1959	111935	3	1960	61936	4	1961	101937	2	1962	71938	8	1963	71939	4	1964	3


MENT OF AGRICULTURE
Mr. MacLean (Queens): From March 1, 1964 to May 1, 1965, how many passenger motor vehicles have been purchased by the Department of Agriculture (a) manufactured or assembled in Nova Scotia (b) manufactured or assembled in Ontario (c) imported from the United States (d) imported from other countries?


Hon. Harry W. Hays (Minister of Agriculture):: Number of passenger motor vehicles purchased by the Department of Agriculture from March 1, 1964 to May 1, 1965; (a) manufactured or assembled in Nova Scotia, nil; (b) manufactured or assembled in Ontario, 210; (c) imported from the United States, nil; (d) imported from other countries, nil.


STANSTEAD, QUE.-APPLICATIONS UNDER WINTER WORKS PROGRAM
Mr. Forest: 1.	What cities, towns and villages in Stanstead County filed applications under the Winter Works Incentive Program for the 1963-1964 and 1964-1965
seasons?
2.	Which applications were approved?


Hon. A. J. MacEachen (Minister of Labour):: 1 and 2. Applications were received from cities, towns and villages in the County of Stanstead under the 1963-64 and 1964-65 Municipal Winter Works Incentive Program as listed hereunder. Applications were approved in the amount as indicated for each project.
Project Number	Municipality	Estimated Total Cost During Period of Program	Estimated Fed. Govt. Share of Payroll CostsQue.	1373	Ayer's Cliff (Village)	$ 2,457	$ 1,000Que.	2090	Barford (Township)	.. 1,000	500Que.	2759	Barnston (Township)	.. 3,000	1,500Que.	1825	Barnston West (Without Designation)	.. 2,000	1,000Que.	1801	Coaticook (Town)	.. 40,000	6,665Que.	520	Dixville (Village)	.. 8,500	2,725Que.	1276	Hatley (Township)	.. 3,000	1,500Que.	2001	Hatley (Village)	.. 3,019	650Que.	1139	Magog (City)	.. 219,200	29,288Que.	14	Magog (Township)	.. 15,000	7,500Que.	228	North Hatley (Village)	,. 4,250	1,188Que.	1270	Stanstead (Township)	.. 3,000	1,500Que.	524	Ste. Catherine-de-Hatley	(Without Designation)	.. 7,100	2,300Que.	1494	St. Hermenegilde (Without Designation)..	.. 4,500	2,250Total	
316,026	59,566
JMr. Laing.]
June 14, 1965

Questions
1964-1965
			Estimated
		Estimated	Fed. Govt.
		Total Cost	Share of
Project	During Period	PayrollNumber	Municipality	of Program	Costs$	tQue.	715	Barford (Township)	1,000	500Que.	1598	Barnston (Township)	3,000	1,500Que.	2127	Barnston West (Without Designation)	2,000	1,000Que.	481	Magog (Township)	15,000	7,500Que.	1399	North Hatley (Village)	7,400	1,750Que.	1597	Stanstead (Township)	4,000	1,500Que.	1735	Ste. Catherine-de-Hatley	(Without Designation)	5,500	2,400Que.	1993	St. Hermenegilde (Village)	1,100	550Que.	1639	St. Hermenegilde ( Without Designation)	1,100	550Total	
40,100	17,250


MR. JOHN RATZ-REPRESENTATIVE IN LABOUR DISPUTE
Mr. Howe (Hamilton: South):
1.	Has Mr. John Ratz of the Personnel Division of the Department of Northern Affairs and National Resources been appointed to represent management on an arbitration board in the current dispute between Beach Foundries Limited of Ottawa and Local 641 of the United Auto Workers?
2.	Has Mr. Ratz been given a leave of absence to participate on this board and, if so, will his salary continue during his absence?
3.	Will Mr. Ratz be permitted to accept payment for his service on the arbitration board?
4.	Are civil servants customarily permitted to act in a representative capacity in labour-management disputes?


Arthur Laing: 1. This employee was invited to serve as company nominee on the board of arbitration in question in a private capacity. He consulted the Department before accepting the nomination and the matter was reviewed with officials of the Civil Service Commission to determine whether there was any conflict with section 86 of the Civil Service Regulations with respect to holding office outside the Civil Service. It was decided there was no such conflict and Mr. Ratz was given permission to accept the nomination in a private capacity.
2.	Mr. Ratz' participation on this board will be on his own time.
3.	As Mr. Ratz will be acting in his capacity of a private citizen on this arbitration board, it will be at his option as to whether or not he accepts payment.
4.	The permission given to Mr. Ratz to attend the board does not reflect a change in government policy which is broadly laid down in section 86 of the Civil Service Regulations and more specifically in P.C. 3/1440 of March 21, 1951.


PUBLICATION OF &quot;THE CANADIAN MINERAL INDUSTRY&quot;
Mr. Caouetle: 1.	What year was the publication The Canadian Mineral Industry, 1961 published and distributed in
(a)	English (b) French?
2.	Is this same publication available for 1962 and 1963 in (a) English (b) French?
3.	If not, what are the reasons for not making this publication available?


Hon. W. M. Benidickson (Minister of Mines and Technical Surveys):: 1. (a) 1963 (b) 1965. Advance chapters of this volume, in the form of individual preprints, were issued earlier, beginning in May of 1962 in the case of the English edition, and in August of 1962 in the case of the French edition.
2.	(a) and (b) The English edition of The Canadian Mineral Industry, 1962 was issued in June of 1964; the French edition is at the printing stage. Advance chapters, in the form of individual preprints, were issued to the public beginning in June and October of 1963, respectively. Both French and English editions of The Canadian Mineral Industry, 1963 are in varying stages of production and printing. Advance chapters were issued beginning in April of 1964 (English edition) and November 1964 (French edition).
3.	Every effort is being made to speed the production of this publication. Delays in the issuing of the French edition reflect the time required for translation, editing and preparation of copy; but it is expected that with the help of additional staff it will be possible to reduce this time difference to a minimum.


GROUND WATER SURVEY IN SASKATCHEWAN
Mr. Soulham: 1.	Is the federal Department of Mines and Technical Surveys presently conducting a ground water survey in Saskatchewan and, if so, in what areas are these surveys taking place?


ESTABLISHMENT OF TEST FARM IN SASKATCHEWAN
Mr. Southam: 1.	Is it the intention of the federal government to set up a test farm in Saskatchewan and, if so, where will this farm be situated, and when?
2.	Will the various levels of government share in the cost of these projects, and what is the estimated cost of each test farm?
3.	Who will be responsible for the selection of the farm site?


Harry William Hays: 1. As announced by the Minister of Agriculture on January 14, 1965, it is proposed to establish a series of demonstration farms across Canada. To date one has been established and while no firm plans have been made concerning the locations of the others, it is possible that one may be set up in Saskatchewan.
2.	No, the Federal Government will bear the cost of establishing such farms.
Until decisions are made on the type of project that is to be conducted on each farm, it is not possible to estimate the annual operating cost.
3.	The Canada Department of Agriculture.


MEMBERSHIP IN COMPANY OF YOUNG CANADIANS
Mr. Rapp: 1.	How many applications, by provinces, have been received for membership in the Company of Young Canadians?
2.	When is it anticipated or planned that the selections will be made?


Mr. Jack Davis (Parliamentary Secretary to Prime Minister):: I am informed by the Company of Young Canadians as follows:
1. The Company of Young Canadians has not yet invited any applications for membership nor does it yet have any formal
Date	Duration
November	16,	1961	2	daysJune	14,	1962	6	"February	27,	1963	4	"June	30,	1964	8	"January	18,	1965	4	"

application forms. However, about 1,500 enquiries ranging from preliminary questions to tentative applications have been received by the Company. These applications can be broken down by provinces as follows: Ontario, 45 per cent; Quebec, 9 per cent; British Columbia, 18 per cent; Alberta, 11 per cent; Saskatchewan, 5 per cent; Manitoba, 4 per cent; New Brunswick, 3 per cent; Nova Scotia, 3 per cent; Prince Edward Island, 1 per cent; Newfoundland, 1 per cent.
2. Sometime after the organizing committee has presented its report and the Company of Young Canadians has been formally established and after appropriate machinery for selection has been established,


INDIAN AFFAIRS-YUKON AGENCY ADMINISTRATION
Mr. Howard: 1.	Since June 1, 1960, has Indian Commissioner Boys visited the Yukon Indian Agency and, if so, upon what dates, for what purpose, and of what duration was his stay?
2.	Since June 1, 1960, has Mr. Fred Clark of the Indian Affairs Branch visited the Yukon Indian Agency and, if so, upon what dates, for what purpose and of what duration was his stay?
3.	Since June 1, 1960, has Mr. Fred Clark had any authority over Indian housing in B.C. or the Yukon and, if so, when did that authority commence, and was information to this effect communicated to one William E. Grant, former Superintendent of the Yukon Agency?
4.	During the time that William E. Grant was Superintendent of the Yukon Indian Agency, did he relate to anyone, and especially to Commissioner Boys, or Mr. Appleton, any information to the effect that the administration of Indian Affairs in the Yukon Agency proceeded at times on an unorthodox basis and, if so, what action, if any, did any of the said gentlemen take?
5.	During 1962, did the said William E. Grant relate to Commissioner Boys that relief funds for the Yukon were being used to assist Indian people with such matters as housing, education and handicrafts and, if so, what was the response of Commissioner Boys?
6.	Did Commissioner Boys state to William E. Grant that he (Boys) knew of other instances where money allocated for one purpose was used for a different purpose and that, so long as such arrangements were of benefit to Indian people, the expenditure was not objected to?


Mr. Hubert Badanai (Parliamentary Secretary to Minister of Citizenship and Immigration):: 2.	No.
3.	Upon his appointment as Regional Supervisor of Indian Agencies for the British Columbia Region, from July 1961 until October, 1964, Mr. Clark was delegated some authority over Indian housing and all Agency Superintendents were informed of this.
4.	The William E. Grant case is presently before the courts. Therefore it would be improper to provide a reply to this part of the question.
5.	See (4) above.
6.	See (4) above.


RESIGNATIONS FROM CENTENNIAL COMMISSION
Mr. Webb: 1.	Among personnel earning $5,000 per annum or more in the Centennial Commission (a) how many resignations have been received since January, 1965,
(b)	how many have been accepted, and (c) how many have not been accepted?
2.	What are the names and reasons for resigning given by all Centennial Commission employees referred to in part 1?
3.	Are Sam Cormier, Les Maiden, William McDonald, C. F. Frevey and Robert Hume employed by the Centennial Commission, giving in each case
3. Name	Salary
William McDonald-resigned December 14, 1964	$14,050
C. F. Prevey-yes	15,300
Robert Hume-resigned	
March 31, 1965	12,300
4. Director, Planning Branch, at of $20,150.	a salary
His duties: to assess and evaluate centennial proposals; to plan a co-ordinated program of	
National projects; to implement projects.	approved
He commenced employment June 24, 1963.	
(a) eleven years service in the following departments of the Federal Government:
Questions
the salary received, the position occupied and, if required, the date and reason for resignation? '
4.	What position does R. L. Elliott occupy with the Centennial Commission, giving salary, brief description of duties, date of commencing employment, and previous experience relevant to employment with the Commission?


Maurice Lamontagne: June 14, 1965
Questions


HAMILTON, ONT.-REQUEST FOR INCREASE IN WAGES OF LETTER CARRIERS SALARIES OF FORMER CENTENNIAL COMMISSION PERSONNEL
Mr. Howe (Hamilton South): Has the government received representations from the Federated Associations of Letter Carriers, on behalf of the Hamilton Branch thereof, urging increased wages and improved working conditions and, if so, what has been their reply?


Hon. Rene Tremblay (Postmaster General):: No representations were received by the Post Office Department.


Mr. Aiken: Of the six senior men who have recently left the Centennial Commission (a) what was their job and salary immediately before joining the Commission (b) what was their position and salary in the Commission immediately before leaving (c) for those of the six who have gone to civil service jobs, to what particular job have they gone and at what salary?


Maurice Lamontagne: (a) and (b)-	-January 1, 1965 to June 3, 1965				
Name	Date of Resignation	Job Before Joining Commission	Salary Before Joining Commis- sion	Last Position in Commission	Salary on LeavingJacques S6guin January 31, 1965	Translator, Secretary of State	$6,840	Assistant to Secretary	$8,990Robert Hume	March 31, 1965	Installation Officer, National Gallery	9,300	Visual Arts Officer	12,300A. J. Cormier	April 22, 1965	Sr. Liaison Officer-Dept. Cit. & Imm.	11,800	Chief, Cultural Division	15,300(c)	Name	Job accepted on leaving Commission	Salary of jobJacques S6guin Senior Staff Officer-Dept, oi Northern Affairs and National Resources. A. J. Cormier Chief of Liaison-Dept, of Citizenship and Immigration


CONFERENCE TO FORMULATE NATIONAL HIGHWAY POLICY
Mr. Stefanson: Has the government plans to implement their commitment made in the House of Commons on July 17, 1963 to convene a federal-provincial conference for the purpose of formulating a national highway policy and, if so, when will this conference be convened and when does the government plan on announcing a national highway policy?


Hon. Lucien Cardin (Minister of Public Works):: In view of the forthcoming federal-provincial conference during which many important facets of federal-provincial relationships will be considered, no specific plans are being made for a meeting of highways ministers.


REPORT OF COMMITTEE STUDYING QUEBEC SEPARATION
Mr. Macquarrie: 1.	When does the government expect the report of the committee (referred to by the Prime Min-

ister in the House of Commons on June 30, 1964 and subsequently) studying the economic, cultural and social effects which might flow from the separation of Quebec from the rest of Canada?
2.	Who are the members of this committee?
3.	How many of them are giving full time to this study?
4.	What staff is serving this committee and what is the background of experience and education of such staff personnel?
5.	What persons outside the government service have been asked to serve on this committee?
6.	Is it intended to publish the report?


John (Jack) Davis: There is no committee with the purpose described. The appointment of an interdepartmental committee was announced on September 9, 1964 (Hansard page 7769). The interim report of the interdepartmental committee, which is studying the economic and social forces affecting the unity of Canada, was tabled in the House of Commons on May 7, 1965.
June 14, 19G5


BUILDING TO BEAR NAME OF SIR JOHN CARLING
Mr. Ormiston: Was there ever a decision or an agreement of the Department of Public Works to name an appropriate specified public building after Sir John Carling?


Louis-Joseph-Lucien Cardin: Yes. The new Agriculture Headquarters Building, erected on the Experimental Farm in Ottawa, has been named the Sir John Carling Building.


FINANCING OF EXHIBITION BUILDINGS
Mr. Pascoe: 1. Is the government's policy of Capital Grants to Exhibitions being replaced by a program of long term low interest loans for multi-purpose buildings?
Questions
2. This is a matter of policy and will be announced in the usual manner, should such a program be introduced.


BANKRUPTCIES IN CANADA
Mr. Irvine: 1.	How many bankruptcies were filed in Canada in (a) first quarter 1962 (b) first quarter 1963
(c)	first quarter 1964 (d) first quarter 1965?
2.	Of the total number, what percentage were connected (a) with building business, retail and wholesale (b) with manufacturing (c) with food retailing?


Hon. Mitchell Sharp (Minister of Trade and Commerce):: 1. The number of bankruptcies, estimated by the Dominion Bureau of Statistics for the first quarter of the years 1962 to 1965 inclusive is as follows:
2. Will these	loans be available to Exhibitions	1st quarter 1962 -	-838this year?	1st quarter 1963 -	-945Hon. Harry W. Hays (Minister	of Agricul-	1st quarter 1964 -	-976lure): 1. The	development of a	program of	1st quarter 1965 -	-950long term	loans to exhibitions	for major	2. The percentage of bankruptcies estimated	construction programs is presently under con-	by the Dominion Bureau of	Statistics in thesideration.	industries listed is as follows:	1st Quarter	1st Quarter	1st Quarter	1st Quarter1962	1963	1964	1965%	%	%	%(a)	4.9	4.7	4.6	4.8(b)	10.6	10.8	7.3	9.4(c)	7.9	8.4	6.6	5.4HIGHWAY ACCIDENTS	fication, salary and title of each person employed


Mr. Grafffey: 1.	In the year 1964, how many Canadians, as the result of automobile accidents on Canada's highways (a) died (b) were injured?
2.	How many of those killed were under 15 years of age?
3.	How many of those injured, under 15 years of age, are now crippled?
by the Centennial Commission whose appointment was approved by Treasury Board or Governor in Council following submission of a formal recommendation (s) of the Secretary of State without the specific prior knowledge of the Centennial Commissioner of the intent to make such submission or without prior knowledge of the substance of each particular submission?


Mitchell William Sharp: 1. All motor vehicle traffic accidents, 1964: No. died, 4,655; No. injured, 139,686.
2.	Number killed, 14 years and under: 815*. Includes data for Quebec which relates to 16 years and under; all other provinces are 14 years and under.
3.	This information is not available.


CENTENNIAL COMMISSION APPOINTMENTS MADE WITHOUT KNOWLEDGE OF COMMISSIONER
Mr. Ormiston: Since April 22, 1963, what was the name, dassi-


Maurice Lamontagne: None.


PER CAPITA PERSONAL INCOMES
Mr. Gelber: What are the per capita amounts for the table of personal income published on page 3 in the Weekly Bulletin of the Dominion Bureau of Statistics, Volume 33, Number 21, dated Friday, May 28, 1965?


Mitchell William Sharp: 2328

June 14, 1965
Orders for Returns
Personal income per person, geographical distribution, 1961-1964
	1961
Newfoundland	934
Prince Edward Island	962
Nova Scotia	1,197
New Brunswick	1,064
Quebec	1,383
Ontario	1,843
Manitoba	1,513
Saskatchewan	1,222
Alberta	1,595
British Columbia	1,813
Yukon and Northwest	Territories 1,324
CANADA	1,564
1962 dollars	1963	1964955	1,008	1,0651,047	1,075	1,2241,252	1,291	1,3621,109	1,145	1,2461,453	1,503	1,6081,931	2,020	2,1251,686	1,681	1,7961,692	1,871	1,6831,705	1,751	1,7931,891	1,974	2,0791,282	1,308	1,3411,667	1,735	1,821



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. Fisher: 1.	Did the Minister of Labour receive a request or requests from any Civil Service Staff Association for a meeting with him to discuss the transfer of National Employment Service staff from the Unemployment Insurance Commission to the Department of Labour, if so, what was the gist of such requests and did the Minister have any meetings with staff association representatives to explain the effects this transfer may have on staff morale?
2.	Since the Minister of Labour announced the transfer of the National Employment Service to the Department of Labour has there been any directives or instructions issued to field offices of the Unemployment Insurance Commission as to how they are to administrate the operations of the Unemployment Insurance Commission and the National Employment Service, either Jointly, or as separate operations; if so, what was the nature of such directions and instructions and will the Minister have them tabled for the information of the House?
3.	Did the Minister of Labour or any of his officials make any representations to the Civil Service Commission and Treasury Board for higher salaries to be paid the present staff of the National Employment Service; if so, what action has been taken by those two bodies to implement the Department of Labour recommendations and what will be the retroactive dates for such salary increases?
4.	Have any representations been made by the Minister of Labour or his officials to the Civil Service Commission, for any or all senior positions in the National Employment Service being created since the transfer to the Department of Labour to be filled by open competition, rather than reclassify, present National Employment Service staff now occupying present supervisory and managerial positions at the various levels?
5.	Has there been any instruction issued, or authority given by the Minister of Labour, Civil Service Commission or Treasury Board for a "fitness review" to be held of all or part of the National Employment Service staff transferred from

the Unemployment Insurance Commission to the Department of Labour, April 1, 1965; if so, what is the gist of such instructions and authority?
6.	Is it a general practice in federal government departments to conduct "fitness reviews" of regular staff; if so, are those reviews conducted through the Civil Service Commission or by officials of the department concerned?
7.	What actually are the Civil Service Commission's authority and responsibility concerning reclassification of positions; are they or the department concerned responsible for Interviewing present incumbents of such positions and making the necessary recommendation for or against the reclassifications?
8.	Has the National Employment Service, Department of Labour, Civil Service Commission or Treasury Board, issued any instructions or directives requiring future officers positions in the National Employment Service to be filled by university graduates; if so, has there been any criteria established naming the professional fields those graduates are to be recruited from?
Return tabled.


CENTENNIAL COMMISSION-RESIGNATIONS AND PROJECTS APPROVED
Mr. Mariineau: 1.	Have any officials of the Centennial Commission resigned their office and, if so (a) what are their names (b) what positions did they occupy with the Centennial Commission (c) what reasons motivated their resignations (d) have any persons been appointed to replace them and, if so, who are they?
2.	How many projects have been approved by the Centennial Commission to date?
3.	What is, in each case, the name of the project so approved, the province of origin and the cost thereof?
Return tabled.


ARDA PROJECTS, QUEBEC
Mr. Laprise: 1. Since the introduction of ARDA in Quebec (a) what projects have been carried out (b) what projects are in progress, and (c) what projects are being planned?
June 14, 1965

2. What Is the value of each of these projects?
Return tabled.


EDUCATION-FEDERAL GRANTS TO NEW BRUNSWICK
Mr. Dube: In each year since 1960, what have been the total amounts expended by the federal government, Including per capita grants, in assistance to education in the Province of New Brunswick?
Return tabled.


HMCS &quot;DOCKYARD&quot;-PAY FOR PREVAILING RATE EMPLOYEES
Mr. Douglas: 1.	What was the rate of pay, by classification, for prevailing rate employees at HMCS Dockyard, Halifax, prior to January 1, 1964?
2.	What increases were granted to these employees effective January 1, 1964?
3.	Have any further increases been granted since January 1, 1964 and, if so, on what date and what were the increases?
4.	Were any prevailing rate employees excluded from receiving these increases and, if so, what were the reasons for such an exclusion?
5.	Are driver-operators classified below labourers on the wage scale and, if so, for what reason?
6.	How do the wage rates for these prevailing rate employees in Halifax compare with wage rates paid to similar prevailing rate employees in British Columbia?
Return tabled.


HALIFAX-DARTMOUTH AREA-PAY FOR PREVAILING RATE EMPLOYEES
Mr. Douglas: 1.	What was the rate of pay, by classification, for prevailing rate employees included under the Hal-ifax-Dartmouth area rates prior to July 1, 1964?
2.	What increases in wage rates have been granted to these employees since June 30, 1964?
3.	What was the reason that these employees were not granted an increase effective January 1, 1964, as were the prevailing rate employees at HMCS Dockyard, Halifax?
4.	Were any prevailing rate employees excluded from receiving this increase and, if so, what were the reasons for such an exclusion?
5.	Have any increases been granted to such employees subsequently?
6.	Why are prevailing rate employees of the heavy equipment section demoted to driver-operators between May 1 and October 1?
7.	What is the difference in the rate of pay for heavy equipment operators and driver-operators?
8.	How do the wage rates for these prevailing rate employees compare with wage rates paid to similar prevailing rate employees in British Columbia?
Return tabled.
22620-149|
National Medical Service HEALTH AND WELFARE



NATIONAL MEDICAL SERVICE-MOTION FOR ADJOURNMENT UNDER STANDING ORDER 26

Mr. William Dean Howe (Hamilton South):: Mr. Speaker, I rise tor the purpose of making a motion on a matter of public importance which in my opinion is of sufficient urgency to require immediate debate. As you know, there is a medical services insurance bill before the Ontario legislature, which is now in the committee stage. If this bill passes it will provide voluntary coverage subsidized after a means test, and with minimal benefits, all of which features are in strong contrast to the Hall Commission recommendations.
If this bill passes in its present form it will be extremely difficult, if not impossible, to implement a national medical services plan. As Ontario is Canada's largest province and has the highest per capita income, a national scheme could not possibly function without its participation. In this connection I wish to quote very briefly from the Hall Commission report.


Some hon. Members:: Order.


William Dean Howe: The report refers to "the danger which Canada faces if health planning and health care coverage is left solely to the initiative and financial ability of individual provinces without regard to adequate standards of health services for Canadians from one end of the country to the other". And further:
It becomes evident that a formula must be sought on a national scale, with Federal-Provincial agreement on programs to ensure the provision and distribution of resources for the achievement of the best possible health care...for all Canadians.
This Government may wish to dissociate itself from the stand of its provincial caucus but its leader, speaking for his party, called the Ontario bill "completely inadequate" and moved to amend the bill to incorporate the principles laid down in the Hall report.
It becomes evident that this may well be Canada's last chance for a comprehensive national medical care plan. This Government has so far failed to act on the recommendations of the Hall report to provide Canadians with the care they need-


Mr. Deputy Speaker:: Order.


William Dean Howe: -and is now
allowing a vastly inferior plan to jeopardize the possibility of such care.


Mr. Deputy Speaker:: Order, please. Will the hon. Member kindly resume his seat. If
June 14, 1365

National Medical Service the hon. Member will consult Standing Order 26 he will note that he has to state his case as briefly as possible so the Chair may be given an opportunity to consider the matter of urgency. I do not think the hon. Member should make an argument at this time, but rather he should state what the exact question is that he wants to have considered at this lime under Standing Order 26 (1).


William Dean Howe: Mr. Speaker, I was just at the point of moving a motion. My remarks were merely explanatory to bring me up to this point.
I ask leave, Mr. Speaker, seconded by the hon. Member for Danforth (Mr. Scott), to move the adjournment of the House under Standing Order 26 for the purpose of discussing a definite matter of urgent public importance, namely the failure of this Government to act to provide medical services and the consequent action of the Ontario Government in implementing a plan which will ultimately be detrimental to all of Canada. The imminence of passage of that legislation is sufficient indication of emergency.


Allan Joseph MacEachen: Mr. Speaker, may I say a word about the regularity of the motion that has been proposed by the hon. Member. Standing Order 26 is quite clear. Paragraph 6 (c) of that Standing Order provides that the motion must not revive discussion on a matter which has been discussed in the same session. If the hon. Member will refer to the amendments moved already in the course of this session he will find that medicare has been the subject matter of a motion of non-confidence.
For that reason his motion falls to the ground. If an additional reason were necessary it would be sufficient to point out that such a motion cannot refer to a matter outside the competence of Parliament or the Government and his motion, of course, refers to events taking place in the legislature of the Province of Ontario.
For these reasons, Mr. Speaker, it is evident that this motion is quite out of order.


Lester Bowles Pearson: May I rise on a point of order. We have not yet been able to see the motion which the hon. Member put forward as a matter of such great urgency. There have been no copies distributed.


Thomas Clement (Tommy) Douglas: The Minister of Labour has given two reasons why, in his opinion, this motion is out of order. The first is the fact that medicare has already been discussed, and that statement

is correct. However, the motion which the hon. Member for Hamilton South has moved does not deal with medicare by itself; it deals with medicare in relation to the fact that a plan is now being dealt with in the Ontario Legislature which, if passed, would jeopardize the establishment of a comprehensive health insurance program for Canada. Therefore the subject matter of the motion moved by the hon. Member is quite different from a general discussion of medicare such as we had in the Speech from the Throne debate.
The second objection taken by the Minister of Labour is that this deals with something outside the jurisdiction of this House. I suggest the motion does nothing of the kind. The motion deals with the failure of the Government to act on something which is directly within the purview of this House, namely the steps which are necessary to implement the recommendations of the Hall Commission. The hon. Member's reference to what is happening in the Ontario House is merely used as illustrative of the fact that the Province of Ontario, in addition to several other Provinces, is taking legislative action which if carried to its ultimate conclusion will make it very difficult to establish a national health insurance program in Canada.
May I say just a word while I am on my feet on the matter of urgency. It is now a year since the Hall Commission brought down its report. One of the recommendations of the Commission was that within six months of the report being received by the Government of Canada, a Federal-Provincial conference should be called to lay the necessary plans for the implementation of this report. This has not been done, and because it has not been done several Provinces, British Columbia, Alberta and now Ontario, are proceeding with provincial plans which in the main are to be based on administration by private professional groups and insurance companies.


Donald Stovel Macdonald: I rise on a point of order, Mr. Speaker. The Minister of Labour has just brought before the House a point of order to the effect that this matter should not be heard at this time. I submit that the hon. gentleman is now arguing the question of urgency, which could only arise after Your Honour ruled on the question of order.
June 14, 1965


Mr. Deputy Speaker:: The Chair would like to hear comments from hon. Members on the subject of urgency.


Thomas Clement (Tommy) Douglas: Your Honour must be grateful for all the assistance you get from the Parliamentary Secretary to the Minister of Justice.
Because of the action which several Provincial Legislatures are taking it has become imperative that the Parliament of Canada should act, and act promptly, if the Hall Commission recommendations are ever to be implemented. For that reason it is urgent that this matter be discussed, and be discussed without any further delay. The fact that in the Ontario Legislature the opposition parties, both the Liberal Party and the New Democratic Party, are asking for a health insurance plan which would be Government sponsored and Government operated, as suggested by the Hall Commission, lends support to the idea that the matter of who will administer this plan should be settled now.
Our argument on urgency is that if the Government of Canada favours a Government sponsored and Government operated plan as recommended by the Hall Commission, it should say so now before provincial Governments take action which will make it virtually impossible later on to put the Hall Commission recommendations into effect.
For that reason we think this matter should be debated, and should be debated today. We feel that any further delay will work great hardship on the people of Canada and will prevent a comprehensive health insurance program being established in this country in the foreseeable future.


Mr. H. A. Olson (Medicine Hat):: I suggest that the attempt to move the adjournment of the House under Standing Order 26 by the hon. Member for Hamilton South is out of order for several reasons. The first and most important one, in my view, is that it fails to involve a matter that is within the administrative responsibility of the Federal Government. Citation 100 of Beauchesne's fourth edition states very clearly that the definite matter of urgent public importance for the discussion of which a Member may ask leave to move the adjournment of the House under Standing Order 26 must involve the administrative responsibility of the Government. Quite clearly, at the present time the administrative responsibility for a medicare plan rests within the jurisdiction of the Provinces.
National Medical Service This situation could not change unless there were agreement by the Provincial Governments to transfer that responsibility to the Federal Government.
Now, Mr. Speaker, regardless of the recommendations in the Hall Commission report, these recommendations from a Royal Commission do not transfer the responsibility for this kind of service. I suggest, therefore, that the motion fails in that respect.
The second thing and this was a point that was raised by the hon. Member for Burnaby-Coquitlam-the urgency of debate is to determine who is going to administer a medicare program for Canadians. I suggest at the moment that until there is an agreement between the Provincial Governments and the Federal Government, there is no question but that the jurisdiction lays with the Provincial Governments. This is the reason Alberta, British Columbia, Saskatchewan and now Ontario have gone ahead with these plans within the confines of their area of jurisdiction.
Citation 100 subsection 3, to which I have referred says that urgency does not apply to the matter itself, but it means urgency of debate. It goes on to say that the public interest must demand that the discussion take place immediately. Well, Mr. Speaker, we would then have to decide what substantial progress could be made as the result of having a debate today. I suggest there is absolutely no possibility of transferring jurisdiction over this matter from Provincial Governments to the Federal Government by having a debate today. The motion fails therefore, under the test of urgency of debate and should be ruled out of order.


Mr. Reid Scott (Danforth):: As the seconder of the motion I want to support my colleague as strongly as I can on the important motion he has placed before Your Honour. If I may refer to the two main objections taken by the previous speaker, he first argued that administration of such an important matter as a national health plan is purely within the jurisdiction of Provincial Governments. I suggest an examination of the British North America Act makes it clear this is a field of concurrent jurisdiction. It is not restricted to the Provincial Governments.


Mr. Deputy Speaker:: Order. May I suggest to hon. Members taking part in this debate at this point that they limit their comments to the question of urgency upon which the Chair seeks guidance.
June 14, 1965

National Medical Service


Reid Scott: I would be glad to do so. The argument has been put forward that no useful purpose could be served by a discussion of this matter in the House today and by some decision being rendered. But, Mr. Speaker, the Government of Ontario made clear a long time ago that it would have to take action in the field of health insurance in the absence of any positive leadership and any positive action by the Federal Government. Here we have another example of a Government in Canada hiding behind the B.N.A. Act in order to avoid having to take such-


Mr. Depuiy Speaker:: Order, please. The hon. Member for Lapointe.


Gilles Grégoire: Mr. Speaker, what is urgent in all that is medicare itself and not whether who is going to apply it. The urgent and important point is to see to it that every Canadian citizen can have access to medical care.
Now, today some want to make this problem an urgent one not in order to know whether Canadian citizens will have medicare, but who will administer the plan.
Alberta, British Columbia and Ontario want to apply it under their jurisdiction, but some want to hold a debate on the ground that the matter is urgent. They say the federal government must administer it, because they would like the state to interfere.
For our part, we are in favour of a system which would enable us to obtain medical care, but we object to a discussion led by the socialist, centralist and antiautonomist N.D.P. which would like the federal government to intrude once more and deprive the provinces of their jurisdiction in the field of health. We object for that reason. We do not want any such socialism or centralization, because we want the provinces to be independent and, consequently, we are opposed to the motion introduced today by the N.D.P.


Mr. Deputy Speaker:: Order, please. The Minister of Labour has advanced a point of order which has been considered by the Chair. I think there is much to be said in support of the point made by the Minister, because the question raised by the hon. Member for Hamilton South does refer to a matter which has been disposed of previously in the course of the current session, and on this ground the motion would appear to be contrary to one of the subsections of Standing Order 26.

On the question of urgency, which is the point on which I would make my ruling at this time, I would like to refer the hon. Member who made the motion to Beauchesne, citation 100(3):
"Urgency" within this rule does not apply to the matter itself, but it means "urgency of debate".
In his argument the hon. Member did make the point that this is a very urgent matter. What the Chair has to consider at this time is whether the business of the nation would be advanced by a debate at this point, and I have very serious doubt as to whether a debate at this point in our proceedings would advance the proposition favoured by the hon. Member for Hamilton South. I suggest that the motion fails on the point of urgency, and in the circumstances it cannot be accepted by the Chair.



DOMINION-PROVINCIAL RELATIONS QUEBEC-ADDRESS TO HER MAJESTY RESPECTING PROVINCIAL CONSTITUTION

[Stage Direction]
On the orders of the day:
John George Diefenbaker: Mr. Speaker, before the Prime Minister leaves I wonder whether he would give the House some idea as to the course he, as Her Majesty's adviser, intends to follow with regard to the address passed by the Legislative Assembly of the Province of Quebec asking for the trimming of the powers of the Legislative Council? I ask this in view of the passage by the Legislative Council of a resolution opposing favourable recommendation by the Government of Canada to the address passed by the Legislative Assembly.


Lester Bowles Pearson: Mr. Speaker, the address from the government of Quebec with regard to the resolution passed by the Legislative Assembly on this matter was received by my office for transmission to Her Majesty last Friday afternoon from the Governor General in a letter forwarded by him from Vancouver. The government of Quebec's communication is therefore now before us, as a Government, and it will be discussed by the Cabinet tomorrow. After that discussion, as I will not be here, the Acting Prime Minister will be making a statement on the procedure which the Government will recommend should be followed on this matter.
Perhaps my right hon. friend could wait until we have considered this matter in the Cabinet; then a full statement will be made
June 14. 1965

in the House. I might add, however, we have not received from the government of Quebec any address forwarding the address passed by the Legislative Council. Indeed, I do not know whether the government of Quebec itself has received that address from the Legislative Council via the Lieutenant Governor.


Mr. Lambert:: The counter address.


John George Diefenbaker: Mr. Speaker, I ask the Prime Minister to give consideration to the serious potentialities to the revision of the constitution which would result from the Government of Canada, in pursuance of whatever promise was made to the Premier of Quebec, forwarding the resolution from the Legislative Assembly with its recommendation for acceptance by the Queen. The Prime Minister said the other day that he would make a statement, and I have certainly been looking forward to hearing it in this regard.
Does the Prime Minister not know as a fact that the Legislative Council of Quebec have passed such a motion, whether or not it has been transmitted through the Government and Lieutenant Governor of Quebec? Second, if it is not passed on is there any reason constitutionally why the Legislative Council should not be able to communicate directly with the Queen?


Lester Bowles Pearson: Well, Mr. Speaker, of course I know that an address of this kind has been passed by the Legislative Council. That is common knowledge. I just do not know, Mr. Speaker, and I would not like anything I have said to give the impression, that no action in this regard will be taken. I do not know what action the government of Quebec will take in regard to this address from the Legislative Council. That will be a factor in the consideration we have to give to this matter.
However, I assure my right hon. friend we do appreciate the importance of this matter-constitutionally, as well as from the political point of view-and the aspect of the situation he has mentioned will certainly be taken into account in the consideration the Government is going to give to this matter, a consideration it is going to give it at the first meeting of the Cabinet since formally receiving the communication of the Governor General. I can assure him a full statement will be made as soon as that consideration has been completed.


John George Diefenbaker: After that consideration has been given, with the legislative assembly representing only a part of the legislature of
Inquiries of the Ministry Quebec, will the House have the opportunity of expressing its views in this regard?


Lester Bowles Pearson: The House will have an opportunity of expressing its views on this matter before any request is made of Her Majesty or of Her Majesty's Government in the United Kingdom.



EXTERNAL AFFAIRS


[Stage Direction]
On the orders of the day:
Thomas Clement (Tommy) Douglas: My question is addressed to the Prime Minister. Press reports say that Canada has suggested to Washington and Hanoi a new approach to discussions designed to break the deadlock over negotiations in Viet Nam. The report I have here goes on to say that the Prime Ministers of India and Canada have agreed that negotiations on the future of Viet Nam cannot begin until the bombing is stopped. Is it correct that representations have been made to Washington and Hanoi? If so, when were they made and through what channels were they transmitted?


Lester Bowles Pearson: That report is inaccurate in the sense that it refers to agreement with regard to a new approach. The Prime Minister of India and I discussed the various approaches we had made and which other Governments had made with a view to bringing the conflict to an end by negotiation. There was no new approach discussed, because I think every possible approach has been canvassed in the last two or three months. Therefore the latter part of the article from which the hon. gentleman has quoted is also incorrect, because no commitment of that kind was made.


Thomas Clement (Tommy) Douglas: Is it the intention of the Government of Canada to make any representations to Washington suggesting that there should be a cessation of the bombing of North Viet Nam as a prelude to further peace talks?


Lester Bowles Pearson: We have already made our position very clear to the Government of the United States, and I propose to send a report of the talks we have had with the Prime Minister of India to our embassy in Washington for transmission to the United States Government which will, I think, be interested in them.
June 14, 1965

Inquiries of the Ministry
BROADCASTING	REDISTRIBUTION


INQUIRY AS TO CHAIRMAN OF BOARD OF BROADCAST GOVERNORS
[Stage Direction]
On the orders of the day:
Robert Norman Thompson: In view of the announcement that Dr. Stewart, Chairman of the Board of Broadcast Governors, expects to retire in a few months to assume new responsibilities in connection with the University of Alberta, and in view of the importance of this post can the Prime Minister tell us before he leaves whether he hopes to be able to announce a successor to Dr. Stewart in the near future?


Lester Bowles Pearson: I have been aware for some time that Dr. Stewart was contemplating retirement, but it is not yet a decision and we hope we may be able to prevail on Dr. Stewart to stay for some time longer.


EDUCATION
[Stage Direction]
On the orders of the day:
Gilles Grégoire: Mr. Speaker, may I direct a question to the Minister of Finance?
Since he tabled last Friday a statement of the activities in the nine provinces and the two territories of the Canada Student Loans Act for 1964-65, could the minister tell us what amount was handed to the province of Quebec under that act, if Quebec made an application and if not, if the federal government gave it that amount of its own accord? [English]


Hon. Walter L. Gordon (Minister of Finance):: I would be glad to look into this and report tomorrow.


Gilles Grégoire: Mr. Speaker, may I ask a supplementary question?
If the Minister of Finance cannot tell us what those amounts were could he at least tell us if something was granted to the province of Quebec under that act?


Walter Lockhart Gordon: I would be glad to report on that tomorrow.


ONTARIO-PUBLICATION OF MAPS IN WEEKLY NEWSPAPERS
[Stage Direction]
On the orders of the day:
Hon. Michael Starr (Ontario):: In view of the decision by the Redistribution Commission in Ontario to publish ten-page advertisements of the new maps prepared by the Commission in daily newspapers only in that Province and in view of the fact that many of the constituencies concerned are served by weekly newspapers, would the Minister bring this matter to the attention of the commission and urge them to publish such maps in weekly newspapers in the Province of Ontario as well as in the dailies?


Maurice Lamontagne: I will, Mr. Speaker.


Mr. Eldon M. Woolliams (Bow River):: supplementary question. On Friday the Minister said he did not have authority to report to the House on the leak which occurred in Alberta with reference to the commission's findings before the maps were published in the Canada Gazette according to the law. What authority has the hon. gentleman for such a statement, bearing in mind that this commission has to report to Parliament and is responsible to Parliament, and that the salaries of its members are paid by this Parliament?


Maurice Lamontagne: These commissions are not agencies of the Crown. Therefore they are not accountable to the Crown. However, I have communicated with the commission in Alberta and I expect a report will be sent to me. I shall be glad to transmit it to the House should I receive it.


Eldon Mattison Woolliams: Is the Minister seeking that information or leaving it to the discretion of the commission? The hon. gentleman says he has no authority to demand an explanation. That is a matter of opinion. But is he seeking to obtain this information, or is he just passing on a request?


Maurice Lamontagne: I have been seeking the information, Mr. Speaker.


INQUIRY OF THE MINISTRY
[Stage Direction]
On the orders of the day:
Mr. L. E. Cardiff (Huron):: I wish to address a question to the Minister of Finance. This morning I received a letter from the Women's Institute of Hensall, Ontario, asking whether
June 14, 1965

the Minister of Finance would remove the tax on exterior paint in order than anyone wanting to celebrate the centennial by painting the outside of his house might do so a little cheaper-


Mr. Deputy Speaker:: Order, please.


HEALTH AND WELFARE
[Stage Direction]
On the orders of the day:
William Dean Howe: My question is directed to the Minister of National Health and Welfare. In view of the imminence of the passing of the Ontario Medical Services Bill can the hon. lady make a statement as to what steps will be taken federally to provide all Canada with an adequate medicare plan?


Julia Verlyn (Judy) LaMarsh: The hon. Member probably has reason to know that this is one of the leading items on the agenda of the conference which is to take place next month. The deliberations at this conference will culminate discussions which have been going on for more than a year regarding medicare plans for the whole of the country.


Stanley Howard Knowles: For forty six years.


Julia Verlyn (Judy) LaMarsh: Also, I do not think the hon. Member could have overlooked statements I have seen in the press by both the Premier and the Minister of Health of Ontario-I have had no personal contact with them-indicating that the bill presently before their legislature is not the end of the matter. Both have indicated that their positions were flexible. It is highly possible that if there is a further scheme put forward, a scheme applicable across the country, the Ontario legislation would be amendable.


Mr. David Orlikow (Winnipeg North):: should like to ask the Minister whether at the meeting next month it is the intention of the Federal Government to make a proposal for some kind of sharing of medical costs in a national plan.


Julia Verlyn (Judy) LaMarsh: I do not think in the absence of the Prime Minister I am authorized to discuss a matter of Federal Government policy which has not yet been announced to the House.

Inquiries of the Ministry INDUSTRY


MANITOBA-GRANTS TO COMPANIES IN DESIGNATED AREAS
[Stage Direction]
On the orders of the day:
Mr. Robert Simpson (Churchill):: I had intended to direct a question to the Prime Minister. I see he has now left the House, so I will direct it instead to the Minister of Finance. I should like to ask the Minister, in relation to the program of grants to industries locating in specific areas, whether it is the Federal Government or the Provincial Government concerned which decides the areas which are to qualify for such grants.


Walter Lockhart Gordon: The Federal Government, Mr. Speaker.


Robert Simpson: Can the Minister inform the House why it is that the whole of northern Manitoba has been ignored in this regard, particularly since we have such large numbers of our native Indian people in this area, most of whom are desperately in need of employment?


Walter Lockhart Gordon: I think the hon. Member has probably read the announcement of the plan and the criteria which will apply to it. As he knows, the criteria would not take into account the unfortunate position of the Indian population, who must be helped in other and more direct ways.


Robert Simpson: Does not the Minister feel that if industries such as pulp and paper were to move to areas near these Indian reservations in northern Manitoba a great deal of employment would be created for these people?


Walter Lockhart Gordon: Yes, I am sure it would. But I do not think this kind of industry is likely to move in just because of the particular program to which the hon. Member has referred. I think another program is needed, one which will act more quickly.


TRANSPORT
[Stage Direction]
On the orders of the day:
Mr. Jack McIntosh (Swift Current-Maple Creek):: On Wednesday, June 9 I directed a question to the Minister of Trade and Commerce with regard to quota distributions and the hon. gentleman said he would take it as notice. I would ask him at this time whether he is in a position to answer my question. Although the two bushel differential of which
June 14, 1965

Inquiries of the Ministry I spoke is perhaps not very much, it represents 25 per cent of the aggregate of last year, in other words close to 100 million bushels. If this grain cannot be moved before the end of July the economy of Canada will have suffered an important loss. I wonder whether the Minister will discuss this question with his colleague the Minister of Transport and see whether the railways cannot do something to move these 100 million bushels before the end of July.


Mitchell William Sharp: Mr. Speaker, when I was in the west last week I had an opportunity to have some talks with the Canadian Wheat Board about this matter of quota distribution. They made it quite clear to me then that they had been rather dissatisfied with the performance in particular of the C.P.R. in moving cars, but that the situation had improved considerably and they are hopeful that the quotas can be equalized before the end of July at the highest level to which they have now been raised at some points.


Mr. Mclnlosh:: A supplementary question, Mr. Speaker. The quotas being equalized does not mean anything. If the quota is obtained on the last day they are permitted to haul wheat, it means nothing. Although the quota stands at eight bushels, if they cannot deliver it, it does not mean anything to the economy of Canada.


CANADIAN CENTENNIAL
[Stage Direction]
On the orders of the day:
Hon. Alvin Hamilton (Qu'Appelle):: Mr. Speaker, I should like to address my question to the Secretary of State. It has to do with the meeting of members which the Secretary of State has called for tomorrow morning at 9.30. Will it be possible to have the six or seven men who have resigned from the Centennial Commission present, so we can find out from them their views on what is happening, without any possibility of recrimination against them in civil service positions?


Maurice Lamontagne: Mr. Speaker, we have organized this informal committee in order to communicate to Members interested the programs and projects which are being developed for the Centennial. I do not think this should be an opportunity to inquire about those who have left.


LABOUR RELATIONS
[Stage Direction]
On the orders of the day:
Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, I wish to address a question to the Minister of Labour on a subject of continuing interest to the Members of this House and persons interested in the economy of this country. In view of the fact that Mr. Paul Hall, President of the Seafarers International Union of North America, intends to issue a charter that will provide for the formation of a port council of not less than ten unions at the present time in Montreal-over 22 have been approached-would the Minister inform the House whether this charter is being issued with the approval of the Board of Trustees of the Maritime Transportation Unions; also, does he know whether this charter has the blessing of the Canadian Labour Congress?


Allan Joseph MacEachen: Mr. Speaker, I have asked my officials to ascertain the information requested by my hon. friend.


FINANCE
[Stage Direction]
On the orders of the day:
Horace Andrew (Bud) Olson: Mr. Speaker, I should like to ask the Minister of Finance a question respecting the very large announcements in the press of today in connection with a new bond issue of $325 million. The advertisement also goes on to say that the Bank of Canada will acquire a minimum of $75 million of this $325 million issue. I should like to ask the Minister of Finance whether the Bank of Canada already owns $75 million worth of Government bonds that will be exchanged for the new issue, or is this an additional acquisition of Government bonds by the Bank of Canada?


Walter Lockhart Gordon: Mr. Speaker, this issue plus $75 million of cash is being used to pay off an existing issue of $400 million which matures on July 1. The other $75 million to which my hon. friend refers, to be acquired by the Bank of Canada, is not to replace bonds held by the bank.

June 14, 1965


CONSIDERATION OF BANK ACT AMENDMENTS BY DOMINION-PROVINCIAL CONFERENCE
[Stage Direction]
On the orders of the day:
John George Diefenbaker: Mr. Speaker, will the Minister of Finance say whether requests have been received from any of the provinces to the effect that the Bank Act revisions which will be considered later today should be placed before the Dominion-Provincial Conference for discussion and consideration, particularly the part thereof which would deny provinces the right to own shares or stocks in chartered banks?


Walter Lockhart Gordon: Not to my knowledge, Mr. Speaker.


John George Diefenbaker: Mr. Speaker, did not the Premier of Quebec ask that this subject be included as one of the subjects to be considered by the Dominion-Provincial Conference, and has that not been drawn to the Minister's attention?


Walter Lockhart Gordon: Mr. Speaker, I will be glad to review the correspondence and advise my hon. friend tomorrow.


John George Diefenbaker: Mr. Speaker, in view of the fact that we are about to start our consideration of this matter, I should like to know now whether it has been drawn to the attention of the Minister that as far back as April 29 the Premier of Quebec made this request. Surely the Minister is aware of that fact today.


Walter Lockhart Gordon: Mr. Speaker, the Premier of Quebec told me personally that his only concern, as far as the Bank Act is concerned, is whether pension and other funds shall be given the right to invest in a relatively moderate number of shares. In my statement -I cannot remember whether it was on the resolution or at the second reading stage- I referred to this and suggested that if the Banking and Commerce Committee, having heard the discussion, agreed to go into it and could come up with a suitable suggestion as an amendment, the Government would consider it.


AGRICULTURE
[Stage Direction]
On the orders of the day:
Hon. Theogene Ricard (St. Hyacinihe-Bagot):: Mr. Speaker, I should like to direct a question to the Minister of Forestry.
Inquiries of the Ministry
Can he tell us whether his announcement regarding the setting up of a compensation board for eastern farmers with regard to feed grain, is based on a bill which was on the order paper when the Conservative government was defeated in 1963?


Maurice Sauvé: No, Mr. Speaker.


J.-H.-Théogène Ricard: A supplementary question, Mr. Speaker. Could the minister give us the main outlines of that new legislation?


Maurice Sauvé: In due time, Mr. Speaker.


John George Diefenbaker: Mr. Speaker, I rise on a point of order. The Minister chose to make outside the House the announcement upon which the hon. Member based his question. Surely we have the right to find out what are the plans of the Government in this regard. It is stated in the report in Le Devoir that it will fulfil for eastern agriculture a function similar to that of the Wheat Board. Surely we are entitled to ask what is this plan that the hon. gentleman found it convenient to announce outside the House but refuses in the House to give information about.


Mr. Deputy Speaker:: Order. Perhaps the point is well taken, but the question was asked by the hon. Member for St. Hyaeinthe-Bagot and the Minister gave a reply. Of course the right hon. Leader of the Opposition has to accept the answer given by the Minister even if it is not, in the opinion of the hon. Member, satisfactory.


John George Diefenbaker: Possibly the hon. Member would allow me to ask a question in this connection. Does this announcement, made without details but with much fanfare, mean that in the Province of Quebec or the Province of Ontario a board will be set up for the purpose of purchasing feed grain; and having disposed of it to consumer farmers, whatever the profit may be it will be distributed to them by way of payment at the end of the crop year? Is that the meaning of this?


Maurice Sauvé: Mr. Speaker, this was not at all the topic of my presentation on Friday night. I discussed the report of the committee of the House of Commons, and brought before this audience three hypotheses or possible solutions to the problem. I will be pleased to send a copy of that speech imme-
June 14, 1965

Inquiries of the Ministry diately to the hon. Member for St. Hyacinthe-Bagot and also to the Leader of the Opposition.


John George Diefenbaker: I thank the hon. gentleman, Mr. Speaker, but I have already read his speech and I did not find it any more enlightening than apparently the press did. I ask him, does he intend to set up a board operating, as he stated, in a way similar to the Wheat Board? Surely he can answer that question. He was able to speak with such pride on his potential achievement, and surely he can give us that many facts.


Maurice Sauvé: I am sorry, Mr. Speaker, but I think the hon. gentleman has not read my speech, because if he had he would have seen that the third proposal says, in French:


John George Diefenbaker: I read it all.


Maurice Sauvé: Third hypothesis of action.

I will read slowly. On page 6 it was:

Second hypothesis of action.

And on page 3 it was:

First hypothesis of action.

I did not announce anything; I just brought before the members of that group possible solutions to this very important problem not only for eastern farmers but also for western farmers.


John George Diefenbaker: Just another hold-up.


J.-H.-Théogène Ricard: A supplementary question-


Mr. Deputy Speaker:: Order. May I suggest that this is now argument.



ADMINISTRATION OF JUSTICE


[Stage Direction]
On the orders of the day:
Reid Scott: Mr. Speaker, I wanted to ask a question of the Minister of Justice of which I have sent him notice. On September 17 last the Minister, in answer to a question from myself, indicated that he was conducting a review of the Criminal Code including Canada's outdated pro-

cedures with respect to bail for accused individuals. In view of the urgency of reform indicated by the serious disclosures contained in an article by Professor Martin L. Friedland in the Globe and Mail, has the Minister completed his study, and is he now in a position to make a statement of policy to the House?


Hon. Guy Favreau (Minister of Justice):: Mr. Speaker, I wish to thank the hon. gentleman for having sent me notice of his intention to put that question. I must state further that I have been very much interested, and I am keeping my interest, in the articles by Professor Friedland.
As far as the study of the matter of bail is concerned, it involves many aspects. As the House knows, my own study is being pursued, but I must note for the benefit of the House that this is one of the questions which is referred to within the terms of reference of the Special Committee on Correction, and I must say it is doubtful that a policy will be disclosed in this respect until such time, whether at the beginning of its work or otherwise, as the new committee will have had occasion to report to me in this regard.



REQUEST FOR STATEMENT ON PROPOSED CHANGES IN PAROLE SYSTEM

[Stage Direction]
On the orders of the day:
Reid Scott: Mr. Speaker, because of the fact that this is the only day this week we will have an hour for questions I should like to direct a question to the Parliamentary Secretary to the Minister of Justice. On February 23 the Minister of Justice said he would make every effort to make a statement to the House on Government policy in regard to parole before the House voted on the issue of capital punishment. In view of the fact that this issue weighs heavily on the minds of many Members, will the Parliamentary Secretary ascertain whether we can still expect this statement of Government policy on parole, or whether this is another matter that will be referred to the committee of experts?


Donald Stovel Macdonald: Mr. Speaker, I will be glad to pass on the inquiry.



DUMPING DUTIES ON CHINESE TEXTILES

[Stage Direction]
On the orders of the day:
Hon. E. J. Benson (Minister of National Revenue):: Mr. Speaker, last week in response-
June 14, 1965

to a question from the hon. Member tor Qu'Appelle I undertook to obtain further details in respect of certain mainland Chinese products, the values for duty of which were the subject of recent directives pursuant to section 38 of the Customs Act.
My Department has not received any so-called "affidavits" alleging that the Chinese products involved are not comparable to the Japanese products on which the appraised values for duty were based. One interested party, however, has made oral representations with respect to one product, namely worsted fabrics, contending that in our comparison of the Chinese goods with similar Japanese goods additional allowances should have been made for quality. Although, as I stated on June 2, in making our appraisals we were cognizant of variations in quality, consideration is now being given to the representations which have been made.
It is not unusual for importers to protest departmental rulings in cases such as this, where values for duty have been increased. We are always willing, however, to consider such representations, and I might add that there are ample provisions in the Customs Act itself for the hearing of appeals and redress of grievances.
The hon. Member also wished me to consider valuing goods from mainland China on the basis of Hong Kong goods. On June 2 I mentioned that the procedure we are now using is in accordance with clause II of Memorandum I of the long term wheat agreement, which was signed by the Canadian Wheat Board and a Chinese import and export corporation in August of 1963.
Clause II provides that goods of a class or kind made in Canada shall "be valued for duty purposes on the same basis as similar Japanese goods or their equivalent, with due regard for differences in quality, finish, construction, et cetera." An exchange of interpretive notes between the signatories modified the provisions of this clause to the extent that Chinese goods could be valued on the basis of Hong Kong goods "in situations where Japanese values cannot be established." It will be obvious that Hong Kong values are to be used only as a second resort.
In view of these provisions and the availability of Japanese valuation data, the directives I issued were in terms of Japanese values. Indeed, it is usually more difficult to establish fair market values in Hong Kong than in Japan, due to the nature of the Hong Kong market, where relatively few sales are made for home consumption.
Inquiries of the Ministry COMBINES



REPORTED SPEECH BY RESTRICTIVE TRADE PRACTICES COMMISSION MEMBER

[Stage Direction]
On the orders of the day:
Mr. R. W. Prittie (Burnaby-Richmond):: Mr. Speaker, I have a question for the Minister of Justice, of which I gave him notice.
When Dr. Donald Eldon of the Restrictive Trade Practices Commission said in Vancouver that the Commission is taking a more lenient attitude toward monopolies, was he speaking with the approval of the Minister?


Guy Favreau: Mr. Speaker, I again thank the hon. gentleman for sending me notice of his intention to pose this question.
It is my understanding that in his address Dr. Eldon was expressing his views as to the role of the Restrictive Trade Practices Commission under section 19 of the Combines Investigation Act, in appraising the effect on the public interest of restrictive practices alleged by the Director of Investigation and Research. The duties of the Commission being set out in the statute, the Minister of Justice does not in any way attempt to direct how these duties should be performed, nor does the Commission seek such direction. Dr. Eldon, therefore, did not obtain nor did he require my approval as to the contents of his address in this instance.



PUBLIC SERVICE


[Stage Direction]
On the orders of the day:
Michael Starr: Mr. Speaker, I wish to address a question to the Postmaster General, but in his absence perhaps one of his colleagues in the Treasury benches will bring it to his attention.
Because the letter carriers are so grossly underpaid that in sheer desperation are about to launch a work to rule program, and in view of the fact that they are leaving in substantial numbers for other better paid jobs, will the Postmaster General prevail upon his colleague to bring about substantial pay increases for these underpaid employees?


Hon. J. R. Nicholson (Acting Postmaster General):: Mr. Speaker, as Acting Minister I can state that this matter has been brought to the attention of my colleague the Postmaster General and his department and is at this time receiving careful study.
June 14, 1965

Inquiries of the Ministry


Robert William Prittie: have a supplementary question. Would the Minister tell us when the Government intends to make an announcement concerning that category of employees, in view of the fact we have been told for some months that this matter has been under constant study?


John Robert (Jack) Nicholson: Mr. Speaker, I will have to take that question of the hon. Member as notice, as I cannot supply any information today.


Mr. Barry Maiher (New Westminster):: Mr. Speaker, I have a further supplementary question. Can the Minister indicate whether the Department is aware of a statement issued today by the Federation of Letter Carriers to the effect that unless an increase is granted within a short time, it will consider a work to rule policy?


John Robert (Jack) Nicholson: Mr. Speaker, I did not hear the first part of the hon. Member's question. I think I should take it as notice, at least until I have had an opportunity of reading it.



SUPERANNUATED FEDERAL EMPLOYEES- REQUEST FOR INCREASED PENSIONS

[Stage Direction]
On the orders of the day:
John George Diefenbaker: Mr. Speaker, I have a question for the Minister of Finance. Has he recently-by "recently" I mean within the last few days-received a request, even a demand, from those who are today in receipt of superannuation or their dependants, if any, for increases and boosts in the amount of their superannuation allowances because of the rising cost of living? Is the Minister giving consideration to this matter, and will there be a favourable reply to the request of these people who have a most legitimate case?


Walter Lockhart Gordon: No, Mr. Speaker, not within the last few days.


Michael Starr: Mr. Speaker, I wish to address a question to the Minister of Finance. In view of the unprecedented rise in the cost of living amounting to 2.2 points in one year, which is working tremendous hardship on those on fixed incomes, is the Minister now considering helping those in receipt of old age pensions by granting them an increase in their pensions?


Walter Lockhart Gordon: Mr. Speaker, we seem to be getting a little far afield. I can assure my hon. friend that this matter is being given care-

ful and continuous consideration and, as my hon. friend no doubt knows, it is being studied as a matter of priority by the Economic Council.


Stanley Howard Knowles: One hundred dollars a month is the answer.


Marcel Joseph Aimé Lambert: Mr. Speaker, I wish to direct a related question to the Minister of Finance. Has the Minister received representations, and if so what consideration is being given to them, if any, about a limited number of retired members of the Royal Canadian Mounted Police who find themselves in that particular age group not affected by the increase in basic pensions that took place in 1959 and I960? I have in mind particularly certain men of even the rank of corporal who are now retired on the munificent sum of about $65 a month.


Mr. Deputy Speaker:: Order, please. It does seem to the Chair that at this point we are going rather far afield and are now discussing questions of general policy which Ministers should not be expected to reply to at this time.



ROYAL CANADIAN MOUNTED POLICE

[Stage Direction]
reported statement respecting

[Stage Direction]
On the orders of the day:
David Orlikow: Mr. Speaker, recently the Ontario Civil Liberties Association in a brief to the McRuer Commission urged strongly that steps be taken to prohibit wire tapping. In an article which appeared last week in the Telegram the Commissioner of the R.C.M.P. was quoted as saying that the R.C.M.P. teaches its staff methods of electronic intrusion techniques. I wonder whether the Minister of Justice can tell us if he is aware of this, and whether the Government is giving consideration to introducing legislation to prohibit wire tapping.


Guy Favreau: Mr. Speaker, as to the last part of the question, it is evident that this concerns a matter of eventual policy to be announced in due course, if a decision is made on the subject. As to the first part of the question concerning reference to an alleged statement by the Commissioner of the R.C.M.P., I propose to make an announcement tomorrow.
June 14, 1965



AGRICULTURE


[Stage Direction]
On the orders of the day:
Mr. K. H. More (Regina City):: Mr. Speaker, on a recent trip to western Canada the Minister of Trade and Commerce received some publicity for expressing the view that the future was bright for grain sales and encouraging farmers to grow a bountiful crop of wheat. Crop reports for the same date that he made these statements indicated that some 85 per cent to 90 per cent of the crop was already seeded. If the Minister is still around at the commencement of another crop planting program, will he make these announcements earlier so the farmers can take advantage of his inside information?


Mitchell William Sharp: Mr. Speaker, I can confirm that I made the first of the statements to which my hon. friend has referred, namely that sales have been excellent and sales prospects are excellent. Perhaps it was my exuberance that led the press to infer from this that I was urging increased production. I did not do so.


John (Jack) McIntosh: A supplementary question, Mr. Speaker. How does the Minister intend to get this additional grain to the seaports?


Mitchell William Sharp: Mr. Speaker, there has never been a greater movement of grain in the whole history of this country than has taken place since this Government took office.


John (Jack) McIntosh: Mr. Speaker, I am sure the Minister would not want to misinform the House. The amount this year is going to be less than last year.


Mr. Lawrence Watson (Assiniboia):: A supplementary question, Mr. Speaker. Is the Minister aware that a good many points on the C.N.R. are still on a five bushel quota, and the farmers are beginning to think that if the wheat is going to be moved it had better be moved pretty soon?


Mitchell William Sharp: Mr. Speaker, I do not know what answer I am expected to give to the hon. gentleman's question, but I can assure him that both I and the Canadian Wheat Board are doing everything possible to move as much wheat as can be moved before the closing of the present crop year.
Bank Act



CANADIAN BROADCASTING CORPORATION


[Stage Direction]
On the orders of the day:
Robert Simpson: Mr. Speaker, I should like to direct a question to the Secretary of State. In view of the recent reported statement by the Chairman of the Board of Broadcast Governors, Dr. Andrew Stewart, to the effect that the Canadian Broadcasting Corporation may inaugurate colour television early in 1967, would the Minister suggest to the C.B.C. that they carry out their program of providing network television service to the 98 per cent of the people of Canada whom the C.B.C. state they plan to serve, as the Corporation itself indicated it intended to do, before entering into the provision of colour television which it is reported will cost well over $20 million?


Maurice Lamontagne: Mr. Speaker, I expect to make a statement on this matter in the next few days.



BANK ACT


[Stage Direction]
The House resumed, from Tuesday, May 18, consideration of the motion of Mr. Gordon for the second reading of Bill No. C-102, respecting banks and banking.
Mr. Bernard Pilon (Chambly-Rouville):: Mr. Speaker, at the end of the discussion on this bill I said that the Commission should suggest that the field of mortgages be reopened to the banks, as was done in 1958. When the rates of interest were increased, some banks withdrew from those fields.
It is also strongly recommended that loans of that nature be granted, more particularly as regards already built houses, in order to alleviate the burden of small owners.
There will be more competition if the banks enter the field of mortgage loans, and the rates of interest of small and large lenders will be safeguarded.
I believe that the present rate of 6 per cent is reasonable. It is perhaps more competitive than we might believe. When the loan companies take the rate of interest into consideration, it would be superfluous to say that they lend money at a higher rate of interest for the simple reason that their loans carry greater risks.

June 14, 1965
Bank Act
This bill will allow banking institutions to expand and facilitate their relations with their customers. Soon during this session we will be examining further bill C-5 concerning loans granted under section 88 in order to protect small producers, who are being paid only as regards the products against which claims are not exempted.
I would like to quote what the minister said as reported on page 986 of Hansard:
The Government agrees it is important to maintain Federal authority in the field of banking. Otherwise the time might come when it was no longer possible to effectively carry out national policies in a field which has been clearly assigned to the jurisdiction of Parliament. However, we feel the first step is to improve the provision of the Bank Act itself as it is applicable to the chartered banks.
In concluding, in order to reassure the board of directors of our banks concerning the maintenance of the 6 per cent rate of interest, the minister stated on May 6, 1965, as reported on page 987 of Hansard:
As long as the general level of interest rates remains reasonably close to current levels, the exceptions being made in the case of mortgage loans and the customary service charges on personal loan plans should allow the banks to adopt somewhat more flexible interest rate policies on both loans and deposits. If, however, at some future time there should be a general rise in world interest rates which would make these proposals unworkable, then the Government would reconsider the 6 per cent limit.
[DOT] (4:20 p.m.)


Marcel Joseph Aimé Lambert: regret, Mr. Speaker, that I was having a private conversation with the Minister of Finance, and that is why I was not in my seat when the hon. Member completed his remarks.
The other day, in another context, reference was made by the hon. Member for Medicine Hat to the fact that because of a certain method of conducting its business the House, and particularly the Opposition, had prevented consideration of the changes in the Bank Act for two years. Of course the hon. Member was talking through his hat, and I am not making a pun. He was completely off base, as quite often happens in matters of this kind. After all, we know that the Porter report was only tabled and made available to the public in April, 1964, barely a year ago. Since there had been no such report for 30 years, and since the problem was so complex, the Government required time to examine it and assess public reaction as well as the reaction of the financial world. I believe it was completely wrong to say, as the
[Mr. Pilon.l
hon. Member said so extravagantly, that the House had been delaying this matter for two years. I just wanted to clear up that misconception which may have arisen as a result of that remark.
Now, Mr. Speaker, at the resolution stage a number of speeches were made on behalf of all the parties in this House. I should like to say now that having had an opportunity of looking at the Bill, I think we can agree- certainly I can agree-with an editorial which appeared in the Financial Post in the following terms:
For the first time in 30 years able men Inside and outside government have done the detailed homework to gear our financial machinery to the future. Let us not throw away our chance.
Frankly I think, under these circumstances, as a result of the Royal Commission report, the Government has thrown away the chance. I believe that in many ways this Bill represents a timid approach to the problem. This approach is indicated by the Minister's remarks at the resolution stage. I should like to make some reference to his remarks at that time, when he said that the central theme of the report of the Royal Commission was that financial institutions, particularly banks, should have broader investment and borrowing powers and so become a more competitive and flexible system. He said that the Government was taking a long run view of this matter. The question immediately comes to mind, how long is a long run view? There are certain problems which are not going to go away merely by postponing consideration of them.
I believe one of the problems which the Government has deliberately kept away from is the control of the near banks. This was the central feature of the Royal Commission report, yet there is absolutely nothing in this Bill to cover that subject. I know that at the second reading stage the Minister said the banks represent a much larger segment of the financial community, and since they are under the central banking system the Bank of Canada has certain controls over the chartered banks, the Superintendent of Banking has certain controls over the chartered banks, and whatever control is imposed upon the chartered banks will sort of filter down to the near banks.
I hope the Minister is not serious when he says that, because I am sure he will recognize that there are a number of trust companies not under Federal jurisdiction, for instance. I say immediately that I am not
June 14. 1965

Bank Act
concerned primarily with the operations of those under Federal jurisdiction.
I am concerned about those that are under exclusive Provincial jurisdiction. On May 18 the Minister, rather blithely I thought, indicated that they were relying on the provincial inspection system for these companies, and if it was not up to scratch the effect would not be too great. I am afraid I cannot agree with him. I hope I am not doing him an injustice in paraphrasing his words. I am repeating the strictures I made at the resolution stage. There are some trust and loan companies operating under provincial charter and some of these Provinces have reasonably adequate inspection systems, while in other Provinces I am afraid they do not exist so effectively.
If I may, I should like to repeat what I said at page 1000 of Hansard for May 6, the second column:
In my view, there are a lot of institutions that are carrying on the business of near banking that must be brought under some form of control. Frankly, their operations are very close to the line. It will only take the failure on the part of one or more of these institutions to honour their depositors' credits to start a terrible run, and a lot of people will get hurt. A number of these institutions operate on what I think is a far too narrow principle, in so far as liquid reserves are concerned. They are well over-extended in real estate and construction promotion. It would take but one or two bad breaks for the whole house of cards to tumble.
I hold the same views today. The Government evidently feels that the operations of these institutions may not have too great an effect on monetary policy or in the whole picture of the control of the volume of money. This is a debatable point, and I think it is one which might well be examined in committee. We should like to know, for instance, why the Governor of the Bank of Canada made a certain statement in this regard. It will be very interesting to see why it is thought that the operations of such institutions had such an impact on the monetary supply.
[DOT] (4:30 p.m.)
One has only to consider the remarks of the Chairman of the U.S. Federal Reserve Board the other day, a man who was speaking on behalf of the bankers. We know very well that politically there may be pressures upon him because he went counter to what is an easy credit policy in the United States, but certainly he spoke on behalf of the financial community when he said there are signs, and there can be signs, that some operations may be very dangerous. We have only to reach a flattening out, or to arrive at a plateau in certain types of developments in this country, for a lot of speculative promotions to get into trouble, including some which are being financed by the sort of organizations about which I am speaking.
The Minister indicated that the amendments to the Bank Act were going to deal only with banks. He said he did not feel the Bank Act should deal with the operations of some people who might be brought in under the umbrella if control were extended; he did not think that was a purpose of the Bank Act. I certainly do not think that trust companies which carry on trust business or other activities can escape the supervision of their quasi-banking operations. That is not logical reasoning. If it is intended that banking operations in this country be under supervision, then they too should be under that supervision.
Though the Minister gave his reasons, as recorded at page 1429 of Hansard on May 18, I do not think we have gone into this matter sufficiently, and we will welcome the opportunity of examining him in the Banking and Commerce Committee. Dealing seriatim with the amendments, the Minister said that the operations of the banks would be extended, and he paid tribute to their competitive position.
One does not need to go into the whole history of the banking system in Canada to realize that the banks, by and large, have done a tremendously good job. They provide a very extensive service. I believe there is a branch of a chartered bank in Canada for about every 3,500 people, whereas in the United States the ratio of banks or branches of banks is one for every 5,500 people. From personal experience I know the operations of many bank branches in Canada are not profitable; in other words the branches are not self sustaining. As a matter of fact a lot of the so-called plaza branches in shopping plazas are rendering a public service only. They do collect sums of money, but later I will be discussing the changed nature of the banking system during the past 10 years to show that the number of branches has little relationship to the profit picture. The operation of the banking system as a whole is not successful only because each branch makes a profit.
The Minister indicated that in 1960 and 1961 the banks went into the personal loan field or term plan field and, as a result, interest rates in that field dropped. That is a matter of record. I believe it is generally agreed that in the auto financing field the

hon. gentleman can expect careful examination with regard to it.
I agree with the Minister's remarks about shared ownership and interlocking directorships. I think it is only good sense that there should not be a conflict of interest or domination of the banking system by a small, powerful group.
This limitation of shareholdings to 10 per cent in the case of resident shareholders will not apply to new banks which are being organized. But the bill does not spell out, nor have we been told clearly, how long a bank is to be considered as a "new bank". When will a bank have to regularize, so to speak, its share ownership at 10 per cent? Implicit in the Minister's remarks was a threat to control foreign currency transactions by Canadian banks. The reasons for this are not apparent from anything the Minister may have said. There is also to be a prohibition applied to the establishment by foreign banks of agencies in Canada. This has nothing to do with deposit business; we know an agency cannot accept deposits. This prevents the establishment of any agency in Canada. I do not know how others will view this provision, but the Canadian chartered banks certainly operate agencies. I think immediately of agencies in New York, Chicago and Houston. A number of our banks operate on the basis of agencies-and operate most successfully, I may say. Yet we are about to deny any foreign bank the opportunity to operate in Canada on the basis of an agency. Why is there not to be reciprocity in this regard? Is it because by operating on the basis of an agency a foreign bank would get into Canadian business?


Walter Lockhart Gordon: Just as I said.


Marcel Joseph Aimé Lambert: To what extent? Certainly there are ways of getting around this. I do not know what purpose this provision will accomplish unless it is to invite retaliation. I hate to think the Royal Bank might have to close its agencies in New York, Chicago and Houston. Certainly in the oil business there is a tremendous contact through these agencies. I believe that we in Canada, especially as far as the Province of Alberta and the oil industry are concerned, would suffer very much if such a situation ever arose. If this policy is likely to invite retaliation we want to hear the Minister tell us more about it; in particular, why he thinks there may not be retaliation.
One of the last features of the legislation on which I wish to speak has to do with
Bank Act
new banking corporations. This, frankly, is a weird and wonderful thing which has been put before us. The Minister has said that the incorporation of banks should not be the subject of scrutiny, basing himself on abuses of procedure which he says have taken place in the past year or so. We are now to have a change. I believe this will merely be a change from the frying pan into the fire. Under clause 8 letters patent for a chartered bank may be issued by the Governor in Council. If this proposal does not possess all the trappings of patronage I do not know what does. It is certainly susceptible to patronage. I can easily imagine three or four groups applying at the same time for a charter for a new bank. We shall see what happens, particularly when the number of charters to be granted in the wisdom of the Government are less than the number of applications.
At the present time Parliament decides, and the Government exerts its influence with regard to the number of charters which come forward. I doubt whether Parliament or the Government should indulge in any paternalism, but I have placed on record-during the debate on the incorporation of the Laurentide Bank last session, I believe-the number of banks to which charters had been granted but which had never gone into business.
[DOT] (4:50 p.m.)
In any event, here we have a situation where the Government proposes that the Governor in Council shall issue letters patent and that these letters patent shall become effective on the fortieth sitting day of a session after having been laid before the House, unless the letters patent shall have been annulled. It is also provided that within 15 days after the issuance of the letters patent they shall be tabled in the House; and within 15 days thereafter a motion must be made according to form in the House of Commons, signed by at least ten Members, if the letters patent are to be annulled. A debate must then be initiated within four sitting days of the motion being made. But it does not say when the debate must terminate, and strangely enough it says that unless the letters patent shall have been annulled, they shall be in force.
In other words there is a built-in inducement for a Government filibuster. The motion would likely be from the Opposition. If the letters patent are issued by the Cabinet, certainly no ten Government Members are

June 14, 1965
Bank Act
going to stand in their places and put forward a motion to annul those letters patent. Therefore the motion would be from the Opposition side, and the way the Act is worded no decision on an Opposition motion is the equivalent of a negative vote on the motion and the letters patent shall not have been annulled and therefore shall become effective.
I am saying this is theoretical, Mr. Speaker. It may be that now under the rules an allocation of time order should be made, and all that; but there it is in the Act in section 8(5). This is all possible. Therefore I say this is an odd way of revamping the incorporation of chartered banks.
Of course the other place has nothing to do with it. The letters patent are issued from the Governor in Council; the House of Commons alone will have the power of annulment. There is nothing about the Parliament of Canada. In other words Parliament is being bypassed with regard to the control of banking. This Act, however, is going to be an Act of Parliament. This Act will ask the other place to forever set aside their rights respecting the control of banking and the examination of banking in so far as the incorporation of new banks is concerned.
I think we are going to require an explanation in this regard. Why was this formula chosen? Was it because of the temporary embarrassment over the formation of new banks? A few moments ago the Minister answered the Leader of the Opposition in regard to the possibility of Provincial Governments or their emanations investing in either non-voting stock or having bank stock for investment purposes in so far as university trust funds, etc., are concerned. With that part of it I would agree, and I hope we will see something instructive from the committee to this end. The Minister has been quite fair about this. But if that were the case, is it a certainty that there would be this continuing, shall we say partisan objection to the present bank charters because a certain Provincial Premier is not getting precisely what he wants and there is a certain pressure group here acting on his behalf? I do not think this should be so. I think Parliament still has the right to examine chartered banks, and what is being exchanged is going to work something like the old Biblical story of the man who had devils in his house. He left his house; it was swept clean. He returned to live with devils who were seven times more difficult. Frankly, Mr. Speaker, I think this is what is going to

happen, namely that the formula now proposed is going to be even worse than the present one, because there is no safeguard except the allocation of time within the new rules, and there is no guarantee that they will continue beyond the next ensuing session; but we are writing it into the Bank Act, putting it away for ten years.
I consider it a most dubious formula, and I would much prefer to be able to carry on under the present circumstances; because I can assure the Minister that if the same philosophy prevails and this Act goes through, say at the end of this year, and the applications for incorporation come in, the same ten people can stand up, put in their motion for annulment and start the battle all over again; and without any conclusion, either. Therefore I put it to the Minister that this provision in the Act will certainly stand a lot of re-examination.
Mr. Speaker, there are many other things which I could say about the Act that I think I would like to save for the committee hearings or later. I am glad to see that the Minister has recognized the facts of life. This is quite understandable; it could have been predicted months ago that there would have to be an Act extending the provisions of the Bank Act. The Minister has asked for this extension until December 31, 1965. Even that, I think, may be shaving it a little closely; and this is something the Government has to consider. It is all very well to say that this Act shall go to the Banking and Commerce Committee, but if the Minister looks at the calendar he will realize that if there is a summer recess and Parliament does not come back until after September 17, there is going to be precious little time for this voluminous Act to be considered in committee unless there is a special effort made with regard to the committee.
This, of course, is presupposing that the Minister is not going to insist that the committee sit during the summer recess. I realize that the Banking and Commerce Committee is not yet organized. It might be organized by next week, and everyone who wishes to appear will have to be given an invitation. We know what it is like during the summer months, and if the committee does not sit then it will be sitting in October and November, subject to the difficulties of debate in December. Perhaps the session would finish by the end of November, which I suppose is a fond hope.
In view of this, Mr. Speaker, I am just wondering whether the Minister might not
June 14, 1965

be wiser in having the extension to July 1 of next year. This is not to invite extended discussion, but I am looking at the practicalities of the calendar and the consequent limitations on discussion both in committee and in this House.
[DOT] (5:00 p.m.)


Reid Scott: Mr. Speaker, in participating during the second reading stage of this bill, let me say that it is not our intention to delay its passage at all, but that we are hopeful it will receive second reading today and be sent to the new committee, the name of which escapes me at the moment.
One of the things I want to suggest to the Minister for consideration deals with the manner in which the committee will handle this bill in its initial stages. I think an examination of the potential Members of the committee will indicate that there is only one Member who was here during the last revisions of the Bank Act in 1954, and that is my colleague the hon. Member for Nanaimo-Cowichan-The Islands (Mr. Cameron). With that exception, most if not all of the Members will be completely unfamiliar with this particular piece of legislation. Of course the bill has some 111 pages and many clauses, and I would urge the Minister to use the first week or two of the sittings of the committee as a real educational program for the Members of that committee. I am sure they would like to have the various officials of the department called to give them a complete background picture of the whole banking and monetary system in Canada. During later consideration, a great deal more headway could be made if at the preliminary meetings a reasonable number of witnesses could be called to lay before the committee a complete picture of the banking and monetary structure in Canada. It would be useful if this could be done before the committee got into detailed discussions of the Act itself.


Walter Lockhart Gordon: Mr. Speaker, I wonder whether my hon. friend would permit a question. Does he not think that perhaps the suggestion he has now made would be more appropriately made to the steering committee of the Committee on Finance, Trade and Economic Affairs when it is set up a little later this week?


Reid Scott: No doubt this suggestion will be made to that steering committee but, knowing the influence of the Minister and his genial disposition, we thought there would be no harm in putting the bug in his ear, particularly in view of his general disposition to
Bank Act
acquiesce in helpful suggestions made by Members of the Opposition.


Stanley Howard Knowles: And because of his powers of persuasion.


Reid Scott: Yes, and because of his powers of persuasion over his colleagues. In general, we hope a very clear picture will be given to the Members before they get into a detailed discussion.
We do not at this stage want to say too much about the various clauses of the bill, because they are voluminous and complicated but there are one or two matters that I want to comment on in passing. One of the main features of the bill is a provision permitting banks to get into the whole field of mortgage lending. This is a good move and one which I think will meet with general acceptance. There are, however, one or two aspects of this which we should like to refer to the Minister for his consideration, so that when he appears as a willing witness we will be able to go into these matters with him in greater detail.
We suggest to him for his consideration that the limitation of three quarters of the value of property is too low, and that some consideration might be given to permitting the banks to lend up to something closer to the 90 per cent figure of the value of the property that is being put forward. We have had various legislative items permitting this so far as private lenders are concerned, and we think it advisable to extend it to the banks.
Second, the total limit of 1 per cent per year deposit liabilities, which in actual figures would be about $160 million per year which the banks could put into mortgages, seems to us to be much too low to permit the banks to become a very significant factor in mortgage financing in Canada. Broken down, this might account for about 10,000 housing units; and it seems to us, having regard to the increase in housing requirements as forecast by the Economic Council, consideration will have to be given to raising this limitation so that banks can play a proper, adequate and influential role.
Third, there should be a requirement that a sizeable amount of funds invested in mortgages should go to financing ordinary housing. What is really needed, as the Minister is well aware, coming from an urban area, is a constant source upon which the housing industry can rely for housing financing. Previous governments tended to regard housing financing as largely a pump priming operation in respect of employment opportunities.

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Bank Act
We have never really had in the housing field a guarantee of a constant source of financing to which we could look, and this has to a large degree accounted for the imbalance in the whole housing picture. It seems to us that if there is a larger amount available, this will be of great assistance.
Fourth, some machinery should be set up for policing mortgage lending so that it will not be used merely to raise the level of interest which can be charged on business loans. In short, the banks should not be able to deem the real property put up as security on an otherwise commercial loan, just so it can charge more than 6 per cent.
We also suggest for consideration that the Government give some thought to the establishment of regulations to be put into the Bank Act so the banks cannot avoid the 6 per cent straight limitation by either adding on extra service charges, or demanding that borrowers keep certain minimum balances in their accounts. There is a lot in the Act about secondary reserves and cash reserves, but we should like to reserve our comment in that regard until a later date.
One important provision in the Act is the provision, inserted, I gather, at the insistence of the Minister of Finance (Mr. Gordon), which will in effect prohibit Provincial Governments from owning shares in commercial banks, and certainly from exercising any degree of control over them. Personally, this is a subject in respect of which I am open to persuasion. The first thing we should like to emphasize is that in consideration of this whole problem, we are of the group which feels that nothing should be done to interfere with the ability of the Central Bank to effectively conduct the monetary and fiscal affairs of the country, and that anything which would detract from that would be unwise.
Having said that, Mr. Speaker, I find it difficult at the moment to draw a distinction between the Act incorporating three Toronto financiers into a commercial bank, and permission for Provincial Governments, or the people of provinces through their elected Governments, to have the right to participate in a bank unless, as I have said, the Minister can show that there are other considerations which enter into this, and that the fact of a Provincial Government owning a bank or having a large degree of share participation in it, in some special way will enable that Government to persuade such a bank to interfere with Central Bank Policy. Of course all we have had to date is opinion evidence from the Minister. He has given us

bland assurances that this danger exists and that this legislation is necessary to overcome that danger. If the Minister can convince us that this is the case, again when he appears as a witness, we also suggest that he consider this proposition. If there are some such problems created by the special situation of a Provincial Government being involved in a bank, we might well in the committee consider whether the Bank Act could be so revised and strengthened as to overcome the danger. It might be better to direct our minds in this direction rather than to assume in the beginning that we should exclude Provincial Governments from any participation in banking activities.
As I have said, this is a very important principle of the bill. We are anxious to maintain the authority and prestige of the Central Bank and, at least for myself, we are open to persuasion on this particular aspect.
[DOT] (5:10 p.m.)
The other matter we want to comment on in passing deals with the new method of incorporating banks. I am quite prepared to concede that the present system is certainly somewhat ridiculous in that private Members, rightly or wrongly, can band together and talk out these various bank charter bills. It seems an unwise way of incorporating some of our main financial institutions. But at the same time it seems to us, subject to clarification, that the new method also raises dangers.
We have heard a suggestion that new charters will be granted by the Cabinet and we want to suggest that this lays the Cabinet open to the same problem of improper influence and improper connections in the granting of charters. Rather than creating that danger, which I suggest is a real one, it seems to us that we should give consideration in the committee to revising the procedures by which the House grants charters so that small groups could not, as has been done in the past, effectively blockade such bills. Even though I have participated in some of these debates, I am prepared to admit it is not a proper procedure and that there ought to be some form of revision.
I think we do not want to comment any further at this time because, in keeeping with the new spirit of haste and co-operation evident under the new rules, we would like to get the bill to the committee. But I do want to repeat the suggestion I made in the beginning that the Government give the committee a thorough briefing. The only other suggestion I would ask the Minister to con-
June 14, 1965

sider is that he investigate whether or not some form of insurance of safety deposit boxes against robbery cannot be established. So many people have lost their holdings in the past, because of the lack of such protection, that we would like to see whether legislation cannot be devised so that safety deposit box holders can be protected by insurance against the risk of robbery. Other than that, Mr. Speaker, we tentatively support the bill and urge that it go to the committee for careful study.


Horace Andrew (Bud) Olson: Mr. Speaker, we too would like to see the bill go to the Committee on Finance, Trade and Economic Affairs before the summer recess, and along that line we support the notice of a further extension of existing bank charters given a few days ago by the Minister of Finance. We want to ask a number of questions when the bill is before the committee and with regard to most of the proposed changes we will withhold our remarks until that time.
I see that the hon. Member for Edmonton West (Mr. Lambert) is still here, although he is near the curtain and not actually in the House. In his opening remarks he made the suggestion that I had been talking through my hat on a number of occasions with respect to the subject of banks and banking. I am not particularly interested, Mr. Speaker, in whether or not the hon. Member for Edmonton West agrees with me. What I said was that twice this Parliament has had to extend the charters of the existing banks because there was not sufficient time to deal with the required decennial revision of the Bank Act. He says now that I am talking through my hat because the report of the Porter Royal Commission was not even available to the House until February of 1964 and therefore it was impossible to do the necessary work in time to meet the deadline of June 30, 1964. It may be his opinion that there was not time, Mr. Speaker, but I suggest that if the Minister of Finance had not been preoccupied with getting his budget ready and a number of other very important duties it might have been possible for him and his department to prepare changes to the Bank Act and present them to Parliament before June, 1964. Possibly it might not have been, but what I said was that there is a requirement now that there be a deferment of two years. I stand by that, whether or not the hon. Member for Edmonton West agrees with me.
Bank Act
When it comes to talking through one's hat I think we all have to give the hon. Member for Edmonton West first prize because when the resolution preceding the bill was before the House on May 6 he said, as found on page 1001 of Hansard:
In so far as the Alberta Provincial Treasury Branches are concerned, certainly those of us who do not share the political views of the present administration in Alberta would like to see a great deal more light shed on their operations.
Then he went on to say:
The Provincial Treasurer merely brings in a record of the year's operations, showing either a loss or a profit. We do know that in the background there have been some rather odd things that have happened.
He went on to say that the report on the Treasury Branch system is never examined in committee, that the officers of the Alberta Treasury Branch system are not brought before a committee for examination, and so on. I have a letter here about this matter from the Provincial Treasurer of Alberta and this is what he says:
When the Public Accounts are being studied by the Public Accounts Committee of the Legislature at each session the members have every opportunity to ask all the questions they wish regarding the operation of the branches. At the 1965 session the opposition members asked that the committee give special attention to the branches, and several senior officials attended hearings of the committee until all questions had been exhausted and fully answered.


Marcel Joseph Aimé Lambert: That is this year.


Horace Andrew (Bud) Olson: This has been the standard practice for a number of years. Whenever any members of the Alberta Legislature wished to have senior officials of the treasury branches brought before the public accounts committee they were brought before that committee and remained there as long as members of the committee had any questions they wished to ask So, Mr. Speaker, maybe these hat tricks should be left aside for a while.


Marcel Joseph Aimé Lambert: Ask the opposition in Alberta about that.


Horace Andrew (Bud) Olson: If the hon. Member for Edmonton West had nothing constructive to say about the operations of the Alberta Treasury Branch system, I suggest he would have been better off to say nothing. The fact is that the Alberta Treasury Branch system is very popular. It is providing a service that is so much in demand throughout the Province that there is difficulty in keeping up with the demand for more and more branches. At the moment the limiting factor is the train-

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ing of personnel to keep up with the expansion that is being demanded.
To get back to Bill No. C-102 now before us, when the Minister of Finance made his opening statement on second reading of the bill on May 18 he said a number of things that are of very great interest to the Members of this party, and I am going to try to go over them very briefly in the same order in which he mentioned them in his statement. With regard to monetary policy he referred to the absolute size, power, control and influence of our banking institutions. We agree with that statement, but because this is so we say that the Bank of Canada and the Department of Finance ought to exercise a very large degree of control over their operations so that the Government will in fact have effective control of the monetary policy of the country.
Another point the Minister made was that while the Porter Commission recommended that the Bank Act be changed to bring under the umbrella of that legislation near banks and other institutions performing essentially the same functions as our banks are, the Government was not prepared to accept and adopt this recommendation in its entirety at this time.
[DOT] (5:20 pm.)
Well, Mr. Speaker, we believe there are some rather large tasks ahead for the Minister of Finance (Mr. Gordon) if he is going to enact Federal legislation that will require all of these deposit taking institutions to be brought under the Bank Act. First of all, on May 18, the Minister sugested that a bank has not been clearly defined. He said, in fact, that there are several definitions of a bank at this time. In so far as the Federal Government was concerned, for the time being, they were going to more or less confine the provisions of the Bank Act to those institutions that were actually chartered by the Federal Government. I feel that is wise because of the tremendous implications inherent in an attempt to bring these near banks under the Bank Act, until we have a clearer definition.
The Minister did, however, say that at a later date there may be some other improvements made in the Bank Act, involving other recommendations by the Porter Commission. The Province of Alberta, I think, is a little apprehensive about this statement because if the Bank Act itself should be broadened to include deposit taking institutions in addition to the chartered banks in the near future, then of course we would like to know what

further action the Government proposes to take in the direction of achieving these directives. We hope there will be sufficient discussion between the Federal and Provincial Governments, and perhaps in the committee that is to study this bill, so that more light will be thrown on the further action the Government intends to take. The Minister did not spell out how much further the Government intended to go. He did not say they were going to do it in this session, as a matter of fact. This is the reason for the apprehension, because he did indicate the Government intended to go farther at a later date.
In so far as allowing the banks to go into the conventional mortgage field is concerned and allowing the banks to charge what is referred to as the going rate of interest, which could be 1 per cent or 2 per cent above the 6 per cent limit, we do not have any serious disagreement with that. We feel there is a need in Canada for larger amounts of mortgage money to keep the pace of building going, in order to provide homes of a higher standard for Canadians. We agree wholeheartedly with the Minister's statement that the Government is not going to change the 6 per cent limit on interest rates during this revision of the Bank Act. The Minister stated also, as reported on page 1430 of Hansard for May 18, that it was the Government's desire, in fact it was the Government's policy to keep interest rates as low as possible. He suggested, too, that if they had allowed an increase from 6 per cent to any figure above that, there could have been an immediate increase in the rate of interest to small businesses. I agree with that statement. I am not sure that I agree the Government has done all of those things it ought to have done to keep interest rates as low as possible.
It seems to me it is unnecessary for the Federal Government to be offering substantially over 5 per cent rate of interest on its own Government bonds. After all, these offerings that are made by the Minister of Finance can be considered as prime interest rates, and other interest rates move in relationship to what the Department of Finance allows on these Government bonds. These bonds are certainly prime, gilt edged securities. I am pleased to note that according to the advertisement in today's newspapers Government offerings are at perhaps a slightly lower rate of interest. The offerings on a ten months basis are going to be at 3.5 per cent; the ones for 11 months at 4.5 per cent, and the one for a year at 5 per cent. I believe those rates are slightly less than some
June 14, 1965

of the previous issues. If there is a trend in this direction, I am pleased to see it.
The Minister referred also to the fact that there is a wider dispersal of the ownership of the shares of the chartered banks. This might be the case, but I believe the actual controlling interest in the eight chartered banks is not so widely dispersed as the Minister would like Members of this House to believe. I say that, because there are some trust and loan companies that have been set up and which hold very large blocks of the voting stock of chartered banks. Unfortunately, Mr. Speaker, these same trust and loan companies have large portions of their own stock held by banks. I am pleased to note the Minister said the Government is going to take some action to do away with these interlocking directorships between these trust companies and the chartered banks.
I have some charts before me which indicate there are large blocks of bank stock owned by certain trust companies and, in turn, the same banks own controlling stock of some trust companies. This is something therefore that the Government needs to look into very carefully. I just do not accept the argument that the small shareholders of the chartered banks in Canada have any say whatever in the policies being followed by these banks. It is these blocks of votes, even if they only amount to 10 per cent, that more or less control the policies of the banks. There have been times when I believe the banks have not had their fingers on the pulse of Canada; they have not adopted policies to meet the credit demands of the rank and file of Canadians.
We know that the banks have now moved into the field of small loans, term loans and so on. This has been very useful. Prior to the banks taking this action, they fail to recognize and meet the very legitimate demands for small loans, personal loans, term loans and things of that nature. The result was that there was a tremendous expansion of these small, consumer finance companies and they were allowed to charge exorbitant interest rates. I think it is well for the banks to move into this field and to be very aggressive in picking up this business, so we do not have these loan sharks doing the kind of business they have been doing over the past few years. I hope there will be other provisions, and that there will be some teeth in them, so that there will be a wide disposal of bank shares, and furthermore that something will be done to make sure that the
Bank Act
actual control of these banks is not restricted to an ever smaller group of people.
We note also that the annual reports of the chartered banks in Canada from now on will have to contain a great deal more information than they have in the past. This is something that is long overdue.
[DOT] (5:30 p.m.)
I note from an article in the Financial Post of May 15 that:
Canada's chartered banks, whose annual reports have long been the despair of financial analysts, will have to provide more information to their shareholders if the Government's Bank Act changes are passed.
I have the reports of the Bank of Montreal, the Canadian Imperial Bank of Commerce and several others in front of me. In all of them invariably some kind of figure is put down for profit, but it always goes something like this-"After transfers to inner reserves." If you look at these reports carefully sometimes you can find what the provision may be for taxes and depreciation, but you can never find out how much they transfer to the inner reserves. Then there is another figure below that which shows the net profit, or the amount to be distributed by way of dividends after transfers from the inner reserves."
As a matter of fact, up until now several of the figures in these bank reports have left one knowing less about their operations after reading them than before. Therefore I hope the new provisions will make mandatory the disclosure of a number of things. From now on it appears that a bank's annual financial statement will have to show the income it gets from loans, from other securities, and the amount involved in operating revenue. Thus there will be a greater breakdown of revenue than has been shown in the past, and as expenses there will be shown interest on deposits, salaries, property tax and other operating expenses. From all this, it will be possible to get a far clearer picture of the operation of banks than we have had in the past.
Concern has been expressed about the matter of provincial governments owning stock, especially common stock, in a chartered bank. There will be a difficult constitutional problem here because in essence the Federal Government is telling the provinces that they cannot invest their funds in that kind of security. Whether the Federal Government has authority to do so is questionable, but it seems to me that the influence, in fact the control that the Federal Government can exercise on the operations of the chartered banks

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Bank Act
through the Bank of Canada is sufficient, so that there would be no transfer of responsibility for monetary policy, despite who owns the common stock.
If the Minister of Finance argues that by allowing provincial governments to own common stock in banks they may be able to have an undue influence on national monetary policy, that is tantamount to arguing that the present shareholders in chartered banks could, if they wished, have a tremendous effect on national monetary policy. He cannot have it both ways. Either the present shareholders do in fact have a tremendous influence and do in fact exercise that influence on our national monetary policy, or else there is no danger in provincial governments owning this stock.
I personally believe that the provisions of the Bank Act, even as it exists today, are sufficient to retain full and complete authority over monetary policy in the hands of the Federal Government, and I do not accept the argument that there is any inherent danger in the provincial governments owning such stock.
In the case of British Columbia, in that rapidly growing industrial complex out on the west coast, it would be beneficial to that area to have a bank with its head office there, so that it would have particular concern for the industrial and commercial expansion of that area. What is more, I believe that if the provincial government were to subscribe part of the stock, be it 10 per cent or even less, it would give to other investors in such a bank the kind of confidence and assurance needed to make sure it succeeds. I think the Minister must agree that all the Premier of B.C. asked for was authority to buy 10 per cent or less of the common stock. In my opinion that is not an unreasonable request.
In Alberta, when the Alberta Gas Trunk Line was being incorporated and when Great Canadian Tar Sands was being incorporated the provincial government insisted that the shares be first offered to Alberta residents, and that was sufficient inducement to make certain both issues were tremendously oversubscribed. By having some kind of endorsa-tion from a provincial government it seems to add to the success of this kind of operation.
We will have an opportunity to discuss many of these matters in the committee. I hope that before the end of the week the Minister will introduce the bill to extend the bank charters for a further period. On this occasion he is asking for an extension of

six months. I think the committee might be finished within six months, but it might be just as well for the Minister to ask for a little longer extension in the event that committee discussions and investigations take longer than he anticipates at present. If the Minister wishes, we would be willing to extend the charters for a year. In such case the committee would be under no pressure whatever. It would be able to call all the witnesses it wanted and take all the time it felt necessary to debate and investigate the matter.
Though the charters be extended for a year I would hope the committee could finish its work by the end of 1965. I do not propose to speak any longer on this bill, since it is going to committee and since there will be a second bill to extend the charters for a further period.
[DOT] (5:40 p.m.)


Mr. Robert Beaule (Quebec East):: Mr. Speaker, the legislation under study, Bill C-102, allowing banks to carry on business for a further ten years, cannot be treated lightly, and this, on account of its significance, since the future of the economic blood of the nation is in question.
However, the Minister of Finance (Mr. Gordon) seems quite in a hurry; he would like this bill to be quickly referred to the committee on banking and commerce.
For more than 30 years now we have been fighting the present financial system. We are asking the Minister of Finance to be patient, because we wish to show him that the present banking system must be reformed from the ground up, and not only by means of minor amendments which, finally, would allow the banks to increase their wealth.
In his remarks, the Minister spoke about the cash reserve percentage the banks shall maintain with the Bank of Canada.
That is precisely the greatest imbalance of the banking system.
I should have liked the Minister to give us a description or to draw us a picture of the banking system.
At the same time that would have opened the eyes of many members of the house who do not understand the present system.
Since the Minister did not do so, I should like to make a few remarks now.
Today, in all civilized countries, there exists an institution whose function is to issue money. Such an institution is called a bank.
June 14. 1965

Since the beginning of the pastoral era- and even nowadays-exchange can be reduced to barter. The use of a third commodity which divides barter into sale and purchase is resorted to for utilitarian purposes.
If a farmer wanted to exchange a horse for bread, he could obviously not exchange his horse for the minimum quantity of bread required daily. He would therefore issue to the baker some leather tokens or any other conventional token of a certain value.
The baker would demand the horse when he would be in possession of a certain amount of tokens. This currency would be a means of exchange on settlement of a different quantity and quality of various goods. Money would be as it is today, a promise to pay in kind on request.
One is immediately aware that currency was then issued according to the production needs, the commodities and services to be exchanged. In other words, a person who disposed or hoped to dispose of $10 worth of goods could issue, at different intervals, $10 worth of money, while promising to pay in goods or services the party from whom he purchased goods or services.
At that time production did not issue currency under the form of an interest bearing loan, but normally under the form of a promise to render services for an appraised value equal to the services rendered.
There is only one step to take in order that this type of currency might be legal tender recognized by the state. The authorities, the government or the state, aware through its statistical services of the volume of production required to meet consumer needs, can issue a volume of currency equal to that production.
The state can issue currency and commit itself to reimburse its value to the people; such currency can circulate freely and be used as an instrument of exchange.
The issuing of money will keep pace with consumption and new issues will be made to meet requirements as production increases.
While today money is issued by private organizations as debts to producers, money must be issued by the state, without interest, directly to consumption and in sufficient quantity to buy goods and services produced.
We can therefore conclude with this definition of money: a means of exchange invented by man to exchange products and services against an equal value in products and services under the control and guaranty of the state.
22620-150J
Bank Act
In the circumstances the banker is in a unique position. He is probably the only man able to lend money without giving away anything and to make a profit on the transaction, since in the first place he gets his merchandise without cost.
What is the present machinery for creating credit? Here is an example:
Since the machinery by which money is created by the banks, is not generally understood, and since that subject is of course of the utmost importance, it would be a good idea to repeat what the hon. member for Lapointe (Mr. Gregoire) said during the debate on the resolution.
Let us take the case of a bank being formed; its social capital is immaterial. Ten depositors make a $100 deposit each in treasury bonds in that bank. Its responsibility toward the public amounts then to $1,000.
Those ten depositors do business with one another and find it more convenient, in many cases, to write notes or cheques to the banker informing him to adjust their account according to those business operations, rather than withdrawing each time legal currency to make their own payments.
After a short while the banker notices that only 8 per cent, or thereabouts, of his business is handled in legal tender-and today, according to the minister's statement, it seems that the percentage will be reduced to 7 per cent, since he tells us that hereafter the cash reserve will be 7 per cent.
As I was saying, the banker has noticed that only 8 per cent, or thereabouts, of his business was handled in legal tender, all the rest being mere bookkeeping entries. I am still talking about today's credit machinery.
At that time depositor No. 10, who is a manufacturer, receives an order. Before delivering the goods, he finds he will have to pay in wages, salaries and other expenses, far more money than is available to him.
Faced with this difficulty, he consults his banker who, after considering the above-mentioned situation, agrees to let him withdraw from his account, not only his own $100, but $100 more, a total of $200, in consideration of payment, within three months, of $106.
Such an overdraft of $100 is a credit in the account of depositor No. 10 who can now draw $200.
The responsibilities of the banker toward the public now amount to $1,100; none of the original depositors had their deposit reduced

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in the process nor were they consulted on this matter and it is quite correct to say that $100 worth of new money has been created with a stroke of the pen. Depositor No. 10, having fortunately secured his overdraft, distributes it to his employees in the form of salaries.
All the costs are included in the price the public pays for products and, consequently, when depositor No. 10 repays his banker with the $106 obtained from the public in exchange for the products, the banker, having placed in his profit and loss account the $6 of interest priorly created by him, compares the $100 received against the apparent credit priorly created and cancels both of them.
There is $100 worth more goods immobilized for which nobody, not even the banker, except potentially, has the equivalent in money.
Money, under its various forms, in bank or credit notes, as long as they are convertible, was defined by Professor Walker in his book entitled Money, Trade and Industry, as any medicine which has been accepted to such an extent that, no matter what it contains, no matter why the public wants it, nobody refuses it as a means of exchange for products.
As long as this definition holds, it is obvious that the possession of money or credit notes which are convertible establishes a direct link with services of others in direct proportion to the fraction of total stock controlled and, furthermore, the total financial wealth in the world, including credit, should, according to this definition, suffice to balance the total book values, material assets and potential production of the world.
Few people would think that monetary systems established in the world are perfect, and the number of those people is decreasing every day.
But when you ask for a definition of the various faults of the monetary system, it is interesting to note how the ideas of justice and value are referred to with monotonous regularity.
[DOT] (5:50 p.m.)
Possibly the most important basic idea which may be advanced at this time, as regards the monetary system, is that money is not in a true sense a measure of values.
The proper function of the monetary system is to serve through the exchange and distribution of goods and services.
It is, or should be, a system of order and not a system of rewards.

It is essentially an administrative system subjected to politics, and because it is above all other administrative systems, the international control of currency is extremely important.
To correct the situation created by the present banking system, a technique must be found to adjust, by means of credit, and to create a relationship between the average level of prices and the available purchasing power. Under present conditions, the banking system is responsible for making that adjustment.
Finance and taxation, nowadays, are but an ingenious system for the concentration of financial power.
One could say that almost any explanation that does not completely and accurately describe how the financial system operates has the curious effect of helping the supporters of the system.
If you take the system as a whole, it seems obvious that, sooner or later, the monopoly exercised by the powers of finance must be attacked and that taxes, far from attacking it, are doing a great deal toward consolidating its powers.
What do the Creditistes propose to improve the present banking system? Here is a brief description of a reform we are advocating.
The financial system is but a system of notes that should reflect the realities of production and not control them. Finance should assist industry and business and not dominate them. The means now available to produce wealth were created by geniuses and inventors now gone to their reward and they belong to everybody and everybody ought to benefit from the results of those inventions, because they represent the greatest factor of production there is today.
Therefore, it is a factor from which all should benefit equally.
But no drastic reform will be possible as long as credit and the banking system are controlled by the persons who now dominate them.
It must follow that a national authority, representing the people, should regain control of credit and of the financial system which now constitutes a monopoly in the hands of chartered banks. We already have that authority. It is the Bank of Canada.
To reform the system we must first of all resort to the following basic principles:
Money credits in the hands of the population must equal the sum of prices attached to consumer goods on sale, whatever those prices, and those money credits can only be recalled, rescinded or depreciated by the
June 14, 1965

purchase or the depreciation of these consumer goods.
The credits required to finance production must not come from savings, but from new credits issued for that production and they must be rescinded or recalled only in the proportion of the general depreciation with regard to general appreciation.
Distribution of monetary signs to individuals must become less and less dependant on employment. This means that the dividend will progressively replace salaries and wages as the man-hour production increases.
Thus, the following steps become necessary:
The setting up of a national accounting
system;
The setting up of an agency to create the necessary new credits;
The distribution of a national dividend to allow everyone to benefit from applied science and to solve the problems of automation and unemployment; this technique would finally be rounded out by the application of a compensated discount intended to maintain the equilibrium between the monetary signs and the available goods and services.
Now, let us turn to the new credit. At the present time any new credit is issued by the chartered banks which lend new credits to producers at a certain interest.
The new credit required for the financing of production should not be supplied by savings, but by new credit issued for this production. This new credit must be cancelled or recalled only in the proportion of the general depreciation to the general appreciation. Therefore, new credit must be used to mobilize industry toward new production. At first sight, the banks are the proper agencies to fill this role and grant the necessary credit toward production. But contrary to the situation which exists at this moment, this credit would not belong to them but to every citizen.
The Bank of Canada, the issuing bank, an agency of the government and of the people, would grant banks the necessary credit as industry required it. Moreover, banks are well equipped to play this part. They have branches everywhere, and well trained personnel able to evaluate local needs as well as the credit rating of borrowers.
For the service they would provide, surely banks should be entitled to a reward, a payment allowing them to discharge their responsibilities. Those credits could be obtained
Bank Act
at nominal cost from the Bank of Canada or at some other interest rate.
But banks should not demand a higher rate from borrowers. The increase of real credit caused by the increase of production would allow the Bank of Canada, by levying a part of this surplus to pay the banks for services rendered. And if banks refuse to act as agents of the community they should be forced to do so; refractory bankers should be replaced.
What is the function of chartered banks?
At present chartered banks can multiply their credit by 12.5, taking as a basis all the deposits they hold such as treasury bills and Canada bonds.
We therefore propose that the privilege of banks to multiply credit by 12.5 for their benefit be abolished and that they only be authorized to lend their own assets, especially the shareholders' investments, the deposits of small investors, to buy consumer goods or for personal purposes. What would be the result of such a policy?
I would like to point out that at the present time, according to the report of the Porter Commission, non financial companies had borrowed at the end of 1960, $2,901 million from banks and moreover, at the end of 1961, chartered banks were holding $470 million worth of company bonds.
Now, at the end of that same year, chartered banks held $3,371 million worth of Canada bonds, that is exactly the same amount invested by the banks in Canadian companies through bank loans or the purchase of their bonds. It is obvious that if the Canadian government redeemed its bonds held by banks, the latter would dispose of an equal amount for industrial or commercial loans.
We maintain that chartered banks could keep on granting loans but for personal purposes or the purchase of consumer goods. And if this currency proved insufficient, as is to be expected, the Bank of Canada would be authorized to make advances to chartered banks so that they might have available the necessary liquid assets to meet personal needs.
Now, if we consider social development, we notice that social needs, social development of the country, the building of roads, bridges, canals, waterworks, sidewalks, schools, hospitals, libraries, are financed by private capital, which deprives industries needing money for their development of the necessary capital and forces them sometimes
*2356

June 14, 1965
Bank Act
to seek it in foreign countries. This places our economy under foreign domination.
If the development or building of fiscal capital in our country were financed by new credit issued on behalf of society by the Bank of Canada or local banks at a nominal interest cost, by using the real credit of the country, this capital advanced by the Bank of Canada, at administrative costs, to finance the social development of the country, would not remain indefinitely in circulation and would be recalled at the depreciation rate of this social capital, thus eliminating the danger of inflation.
The issuance of this new credit would be made in relation to the needs for schools, hospitals, and so on.
National needs, actual needs, determine and regulate the scrip money projected by anticipation.
And this new money, this new credit should not bear interest, because it is used to build social capital which is non-profitable.
Such are the various methods suggested to put into force the Creditiste philosophy to ensure always a satisfactory balance between production and demand.
Those are, Mr. Speaker, the changes needed to reform the monetary system which the Minister of Finance (Mr. Gordon) should have presented to us if he really wanted the government to have a definite monetary policy and to control absolutely the creation of credit in Canada.


Mr. Deputy Speaker:: Order. I must interrupt the hon. member because it is six o'clock.


Jean Robert Beaulé: Mr. Speaker, I will be through in a minute.


Mr. Deputy Speaker:: Will the house allow the hon. member to continue for a minute?


Some hon. Members:: Yes.


Jean Robert Beaulé: A few days ago, I was listening, during a CBC television program entitled "Champ libre" to Mr. Jacques Ruef, a great French economist of international repute and Mr. Robert Triffin, a Belgian economist and expert in the field of international high finance, who both said in New York that the international monetary system was obsolete, silly and inflationary and that the great powers ought to find another means of exchange, otherwise we would experience a worse crisis than that 1929-39.
They stated also that the monetary system should be modernized just as industry and trade have been brought up to date.

Mr. Speaker the warning of those two great men, in the sphere of high finance, should make the Minister of Finance ponder while he still can revise the bill under consideration and bring in the necessary changes.


Mr. Deputy Speaker:: Is the House ready for the question? The Minister of Finance (Mr. Gordon). If the Minister speaks now, he will be closing the debate. Is this agreed?


Some hon. Members:: Agreed.


Robert Norman Thompson: Mr. Speaker, I wish to speak on this matter, but I believe that according to the new rules we go into private Members' hour at this time. Is that not correct?



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Deputy Speaker:: Order. It being six o'clock it is my duty, pursuant to provisional Standing Order 39A, to inform the House that the questions to be raised at ten o'clock this day are as follows: The hon. Member for Renfrew South (Mr. Greene)-Trans-Canada Highway-requested removal of unsatisfactory portion; the hon. Member for Danforth (Mr. Scott)-divorce-request for Royal Commission on Reform; the hon. Member for Port Arthur (Mr. Fisher))-forestry-removal of departmental laboratories to Sault Ste. Marie. [DOT] (6:00 p.m.)
Order, please. It being six o'clock, the House will now proceed to the consideration of private Members' business as listed on today's order paper, namely notices of motion.



EDUCATION


Mr. Gerald Laniel (Beauharnois-Salaberry) moved:: That, In the opinion of this House, the government should consider the advisability of undertaking a searching study of the youth problem in Canada, paralleling the possibility of setting up in the country a "National Training Service" for young people between the ages of 18 and 21 years, and
That, to this end, there should be appointed a Commission made up of representatives of the various bodies concerned with health, education, employment, and the Armed Forces, charged with reporting to this House on the advantages and
June 14, 1965	COMMONS
disadvantages of such a "National Training Service", particularly with regard to the following points:
1.	Discipline and respect for our institutions and for authority.
2.	The possibility of its complementing training and education.
3.	Improvement in health through physical education.
4.	A means of promoting bilingualism among the young.
5.	Strengthening of national unity through better knowledge of the country and its various ethnic groups.
6.	Co-ordination with the Emergency Measures Organization.
7.	Advantages in the Service being run by the Armed Forces or other similar body.
8.	Possible duration of such a service and particular application to students.
He said: Mr. Speaker, if I have introduced again this year, a new notice of motion concerning the setting up in this country of a National Training Service, it is because I am more convinced than ever that various benefits would be derived from such a decision on the part of the government, more so even, since the months gone by have enabled me to find out that Canadians as a whole, as well as the people from the province of Quebec, favour most the establishment in this country of such a national service for our young people.
Mr. Speaker, at this point, may I digress a moment to add that during the last 12 months, I have continually received correspondence from various persons across the country. Furthermore, during the year the French speaking Junior Chambers of Commerce of Canada have chosen as the theme for their annual debating contest: "Compulsory military service, for or against". The final contest will take place on July 2, at the Chateau Fron-tenac, in Quebec City. It is nevertheless significant to find that people are interested in discussing this matter.
During the debate last year, I found that too much emphasis was laid on the words "compulsory military service" or on the word "conscription"; and the same thing can be said about the publicity made through our media of information.
That is why I have elected this year to introduce my notice of motion in a completely different manner so that, by listing a few particular points to be considered, the most obvious advantages may be seen immediately. Furthermore, I wish to point out at the outset to the hon. members of the house that the motion now before us is not
DEBATES	2357
National Training Service asking the government to institute immediately such a service, but rather to suggest the appointment of a commission to examine all its implications and the advantages which may be derived therefrom.
Personally, I am convinced that such military training should come under the jurisdiction of the armed forces, but I thought I should leave the door open to other suggestions and that is why I suggest that representatives of groups of people interested in health, education, employment, the armed forces and, I would even add, social, rehabilitation and welfare services, should sit on that study commission.
Mr. Speaker, parents and educators are increasingly concerned about the future of our youth; and there is even apprehension in the minds of many of them. I would not want to give the impression of being an alarmist, a bogey-man and I am not saying either that there is no solution to the youth problem, but as head of a family I wonder about many things. I wonder about the same things which are bothering most parents, and I am trying to see what the future has in stock; I wonder what is lacking both within the family and our education system.
Some will say that youth must have its fling; others will add that we have all had ours. But do you not agree with me that we are nevertheless increasingly concerned about this unrestrained and free-thinking attitude?
Is this normal, this lack of respect for elders, this contempt for established authority and this tendency to do away with everything? It is disturbing to see how new doctrines and theories often talk about liberty as meaning licence and how basic democratic principles joining together liberty and responsibility are ignored.
You might say: "But what does a national training service have to do with all that?" Don't you fear, I do not think the creation of such a service would muzzle our youth in a discipled body where there would be no possibility of dialogue and where militarism would be used to crush the rebels. However, you know it is becoming always more vital to keep our young people busy, to allow them to know all the aspects of our society and to make them appreciate the things they often take for granted.
Many Canadians agree that a form of national service would constitute a wonderful instrument for helping our youth to develop both physically and intellectually in a dis-
2358	COMMONS DEBATES	June 14, 1965
National Training Service ciplined environment, giving them a sense ol values and respect for our institutions and for authority.
In a speech he made recently, His Excellency the Governor General of Canada expressed his regret that frontiers sometimes took on the aspect of barriers rather than meeting places. He invited people to open wide the provincial doors and windows, to look beyond the walls at what is going on outside.
"Let us become acquainted", he said, "because that is how we will learn to understand each other." He even suggested massive group travels between provinces in order to improve mutual understanding.
That is one of my main points, Mr. Speaker, in stating the advantages of the national training service in Canada, that is a means to enable our youth to know Canada and to visit the various areas of the country. I think it would be very beneficial to split such a service stage into four three-month periods so that the young men could alternately visit in the Maritimes, in the Eastern provinces, in the Prairies and finally on the Pacific Coast. To know one's country is to have exchanges with all those who live in it and in order to achieve this, I see nothing better than to use that national service as the most efficient school of language for young Canadians. The program could be organized in such a way that there would be a certain continuity as much in terms of education as in terms of physical training or anything else.
To those who would fear an interference from the federal government in the field of education-
[DOT] <6:10 p.m.)


Mr. Deputy Speaker:: Order. I regret I have to interrupt the hon. Member but I should like to bring to the attention of the hon. Member for Timiskaming, who I might say warned the Chair last week he might want to take drastic action after six o'clock today, that it is against the practice of this Chamber to consume foodstuffs while the House is sitting. I should like to refer the hon. Member to Standing Order 12 (1) which states that "Mr. Speaker shall preserve order and decorum". The Chair considers it to be against the decorum of the House to have lunch, dinner or supper at one's seat in the House. Therefore I would suggest to the hon. Member that he co-operate with the Chair,

and if he feels he should partake of food at this time he can do so behind the curtain.


Mr. Peters:: On the point of order, Mr. Speaker, with changes we made in the Standing Orders whereby we adopted new Standing Orders on a provisional basis I assumed that the old parts of the Standing Orders were rescinded. I would assume that the section Your Honour has just quoted is one of those sections. I am sure it is not the intention of the House to deny Members the right to participate in the debate. If we waive the supper hour I think something must be substituted for it, and I would hope Your Honour would not enforce that rule, which I believe was rescinded by the passing of the provisional orders.


Mr. Deputy Speaker:: The argument advanced by the hon. Member is very ingenious, of course, but I do not think he has the right to suggest that the adoption of new Standing Orders automatically repeals other Standing Orders. Standing Order 12 (1) to which I have just referred is certainly still in the Standing Orders, and I would ask the hon. Member to co-operate with the Chair at least in this instance by desisting from proceeding with what he had in mind to do.


Gérald Laniel: Mr. Speaker, so far as I am concerned, I am quite agreeable to letting the hon. member for Timiskaming (Mr. Peters) go, if he is that weak and cannot attend the debate.
Resuming my remarks, Mr. Speaker, I say to those who would fear interference by the federal government in the field of education that I have no objection to this being done in co-operation with the provinces. In my view, surely there is a way to preserve provincial autonomy while at the same time, co-ordinating efforts of the greatest advantage to our young people. One thing that has not been mentioned in the various points suggested for study is the possibility of relating to such an institution a world history course, and what may be even more important, a Canadian history course.
Speaking for myself, I feel that the best presently available vehicle toward that end is none other than the Department of National Defence; still, I remain open to any suggestion and would even be willing to see the government set up a body within which the various interested parties could work in co-operation with the Departments of Health, of Labour and of National Defence.
June 14, 1965	COMMONS
This agency, which I called in my notice of motion "National Training Service" could bear any other name; I might even suggest that of "Canadian Youth Service".
At the very time when a program is being launched with a view to creating a Company of Young Canadians, it seems to me we would be shirking our responsibilities by failing to give to the government this wonderful opportunity of making a comprehensive study of the youth problem in Canada. Let us set aside the bugaboo of conscription, let us forget momentarily military questions and the shadow of war, and let us study the whole problem in the Canadian context, with a view to fostering national unity, as a means to better training, better understanding and good will.
I would like to point out clearly my views as regards the objection of those who claim that all this would be detrimental to the educational program of our youth and could make them lose a year's studies. In my opinion, it is easy to settle this problem by not compelling anyone to complete his 12 months of service before he has completed his studies, for those who wish to do so at the secondary level after their technical studies. It would be advisable for those who pursue university studies or who specialize beyond secondary school, to complete the service by three month stages, during their holidays and over a period of three or four years. Thus every young Canadian would enjoy the same advantages-and I mean "advantages" because I sincerely believe in it, and no one could upbraid the government for having delayed his studies or hampered his future.
Mr. Speaker, I do not want to venture too far today in regard to the cost of this project, but I feel that there are enough advantages to justify such a government expenditure. I want to correct some statements made last year in this house with respect to a tremendous amount, which was far from reality.
Certainly, it would be in order to pay the young people in service a reasonable allowance which could compare to the amount a new recruit gets now, or at least $20 a week, that is a total of $1,000 for 12 months. On the basis of this amount of $1,000 and considering that the number of young Canadians in service each year would be 100,000,
I arrived last year at a maximum cost of $300 million, including maintenance and administrative expenditures, instructors and specialized staff. I did not invent those figures 22620-151
DEBATES	2359
National Training Service myself, and I can assure you that they are close enough to reality, and that it is perhaps possible to reduce them to $250 million.
It is true that here I do not take into consideration capital expenditures which should normally and gradually be incurred, especially if one considers that it would be advisable to erect, through the years, centres similar to our military colleges with permanent buildings which, by the same token, are much more attractive and help to create an atmosphere more suitable to study and training.
[DOT] (6:20 p.m.)
Although they would be expensive, those centres would always remain available to the government in case of conflict or emergency. Since this national service could easily make up for the militia and the armed forces reserve, almost $40 million would be saved each year and which would provide a substantial amount for the establishment of such a building program.
Last year some people were shocked when I said that this would also help to solve the problem of unemployment. I will not mention here some of the political arguments which were used, but I will say only: Can you deny the fact that such a project would free the labour market of 100,000 people, an equivalent of $150 million in unemployment insurance benefits? Personally, I would rather see this amount spent in a constructive way instead of paying people to do nothing.
Mr. Speaker, I would have much to say on the possibilities of such a national training service; the more I discuss the matter with people, the more arguments are put forward in favour of such a scheme, and the more I am convinced that we would do our country a great service by passing that resolution. I, therefore, appeal to all the members of the House to consider favourably my proposal and at least allow it to come to a vote before the end of this discussion.


Mr. Marcel Prud'homme (St. Denis):: Mr. Speaker, would the hon. Member permit a question?


Gérald Laniel: Certainly.


Marcel Prud'homme: When he spoke about those from whom he asked some advice, would the hon. Member be ready to consult-without expressing his detailed opinion on the merits of the matter, because he does not have the necessary time-the persons interested in this matter, certain authorities in the field of education, of employment, and especially, in
June 14, 1965

National Training Service youth organizations? I am thinking, tor instance, of the Association of University and Classical College Students, of the Catholic Youth Labour Organization, of the General Union of Quebec or Canada students?
If such a service were set up, would the hon. Member object to consulting those youth organizations, whether they be formed of students or workers, because most of our young people between 18 and 21 do not all have the opportunity to attend college, even though they lead an active life?


Gérald Laniel: Mr. Speaker, I entirely agree with the suggestion of the hon. Member for St. Denis. It is an excellent suggestion, more especially as most of the young people I know are in favour of such a plan.
I am convinced that the leaders of such movements would like to see the government form such a commission, since they wish to take part in this study.


Marcel Prud'homme: This is what I wanted to know, whether these people were interested.


J.-H.-Théogène Ricard: Mr. Speaker, I do not intend to delay the passage of the motion in question since the hon. member requested that his motion be voted on before the private members' hour has elapsed. Nevertheless, I wish I could make some remarks in order to help him, if possible, to get out of a dilemma.
The hon. member has made another try this year and introduced again a proposal that is not clear, even in his own mind. He is ready to give to such a project any name whatever, provided his proposal is adopted.
One fact in particular strikes me-though it is true that this proposal is his own; he suggests that this plan be implemented in co-operation with the provinces. I cannot help making the following remark, namely that it is a surprising thing to see such a project being proposed during this session when it has been suggested that the provinces should withdraw from many joint programs. While we are endeavouring to withdraw from joint programs, the hon. member is introducing a motion in order to emphasize another one.
I would not like to be unpleasant to my hon. friend, but the reason why he is coming back this year with an entirely amended project is that last year, following his "conscription" project, since he used the word himself, or "compulsory military training", there were some feelings of unrest and some objections which surely attracted his atten-

tion. He may have secured support from some people in certain quarters, but as regards newspapers, their remarks were diametrically opposed to the opinion of the hon. member, who referred to unqualified encouragement on the part of the people with whom he got in touch with the exception of a few.
I know that a number of young people of his constituency have expressed to him, rather clearly and conclusively, their objections to that proposal, and he is probably seeking a way out by submitting a completely new and different project from that of last year.
The remarks of my hon. friend have made me realize that he did not exactly know what he would like to propose. He did not even have a clear idea of what he wanted, and that is why he tried to enlist the aid of all members in this House to put his proposal through.
In a friendly gesture and to help him out of the awkward situation which he brought upon himself last year, I suggest he take this opportunity to withdraw his motion.
[DOT] (6:30 p.m.)
This would enable him to get out of an embarrassing situation, indeed to erase the wrong effects of the proposal he put forward last year and to regain, if possible his popularity with the young set in his constituency. In fact according to the information supplied to me the young people of his constituency will remember that when the time comes and I would not want my hon. friend to suffer from the statements he made although his intentions are good.
Furthermore it is important to note that the implementation of his proposal would call for an expenditure of $300 million which surely is a most imposing sum of money. In addition I am amazed to note that even by using the present method as an escape he gave other evidence of the little seriousness with which he considers the question because an expenditure such as that proposed should not be moved in a motion of a private member such as him and me, but should instead be moved by a minister of the Crown.
I feel that at the close of his observations, the hon. member for Beauharnois-Sala-berry revealed the purpose of his proposal. His only aim, and I congratulate him for it, is to do something to alleviate unemployment. It is common knowledge that the government members are interdependent, that they promised full employment upon acceding to power. It is probably to help his
June 14, 1965	COMMONS
colleague, the Minister of Labour (Mr. Mac-Eachen) who had promised to check unemployment, with the assistance of his team, in a very short time. I am quite sure that is the only reason for his proposal, and before resuming my seat I should like to remind him that the most gracious and efficient way of solving the predicament in which he has placed himself would be to withdraw the notice of motion he put before the house, which gesture would assist him in mending his reputation with his constituents.


Marcel Prud'homme: Mr. Speaker, may I direct a question to the hon. member for St. Hyacinthe-Bagot?


J.-H.-Théogène Ricard: Certainly.


Marcel Prud'homme: Can the hon. member tell this house if he is a Conservative to the extent of holding on to the past and fearing to examine the problems facing the youth of Canada? And note that I am not talking about the subject matter of the issue. I believe that is the objective of the hon. member for Beauharnois-Salaberry.


J.-H.-Théogène Ricard: Mr. Speaker, the hon. member for St. Denis wishes that I had said the words he is attempting to attribute to me, but for his information, I must tell him that I never mentioned that subject. On the contrary, I congratulated the hon. member for Beauharnois-Salaberry for his endeavours at helping our youth, and I never refused to examine the problems concerned.
On the other hand, the hon. member for St. Denis has been a student for a great many years, and I would not want him to abandon his studies because he apparently needs twice the tune needed by others to learn.
If his colleague from Beauharnois-Salaberry could help him in any way, I would commend him for any success he might obtain.


Marcel Prud'homme: Mr. Speaker, I rise on a question of privilege. The hon. member for St. Hyacinthe-Bagot talked about all kinds of things but he has not answered my question.


William Arnold Peters: Mr. Speaker, I would like to congratulate the hon. Member for Beauharnois-Salaberry (Mr. Laniel) for introducing this very novel and worth-while motion. It can be borne in mind that a motion by a private Member should probably be relegated to this period of the 22620-loll
DEBATES	2361
National Training Service evening when normally we would be having our supper, because obviously there is not going to be any government interest in the matter.
The hon. Member has had to couch his motion in such a way that he uses words like "possibility," "advisability," and "charged with reporting to this House on the advantages and disadvantages ..." He has had to do so because really he is suggesting consideration of the expenditure of money, and he has mentioned that the motion, if passed, could give rise to a potential expenditure of $300 million.
I am impressed also because the hon. Member is from the Province of Quebec. We have always been interested to see the lack of enthusiasm displayed by Members from that Province in the establishment of national programs geared to education. I have always contended that we should have a federal bureau of education or department of education, not to provide education but to provide co-ordination and equality of educational opportunities across the country. The hon. Member has taken this into consideration because he has said his proposal would provide employment in such a field.
I have always believed that if we are to have an effective national unemployment insurance office, particularly an effective employment commission, we must set standards that will enable the Federal Government to provide equal opportunities for retraining the unemployed in all parts of Canada. This has not been possible in the technical field to date, and I think the hon. Member probably has in mind that the solution of technical education is a national problem. I believe the Federal Government should establish a national educational code in the technical field, and for that reason I think the hon. Member has made a very worth-while suggestion. However, I doubt if the Government will consider it at length.
We can look back at the compulsory training program we had a few years ago. People were violently opposed to it, even though it was an emergency program, and I can foresee reluctance on the part of many Members to support such a type of program.
I am not familiar with all the pros and cons involved in the advantages of military training on a national basis. We all know the problem caused by lack of discipline in our young people, particularly those between the ages of 18 and 21. In passing, I mention the armed forces parade held in Ottawa on Saturday
June 14, 1965

National Training Service when, no doubt, those who saw it both live and on television were shocked to find how hard it was for some participants to march in line and keep step while marching. I was highly amused to see one chap in the back changing step continually. I do not know whom he was trying to get in step with, because nobody was in step.


Marcel Prud'homme: Maybe he was an N.D.P.


William Arnold Peters: Maybe he was. I always had the same problem. When I was in the services I always had to try to get into step with somebody else, but I do not think the hon. Member is really advocating military training. He is advocating some type of disciplinary training that would provide young people with equality of opportunity for employment, and thus allow them to make a greater contribution to the Canadian scene.
Most Members of Parliament know the sad state of affairs which exists when a young fellow of poor parents goes through high school, meets the academic standards but cannot continue his education, and has to be advised to go into the armed services to take advantage of the training provided there in the academic field.
[DOT] (6:40 p.m.)
This has been a sad commentary on the opportunities provided for our young people in the past. I am pleased this suggestion should come from a Member from the Province of Quebec, where no doubt the same problems have to be faced as are being experienced across Canada. I think this suggestion will receive much more favourable consideration from other parts of the country than he might have expected. He may also find it will receive a greater measure of support from some of his colleagues from Quebec, who hitherto have been fearful of the idea of education in any shape or form being provided by the Federal Government. The hon. Member has ably drawn attention to the experiences of areas in all parts of Canada and the necessity for a training period between the year when the student leaves high school and the year he finds employment in a suitable occupation.
We have all read in our newspapers recently about the increasing difficulty which college students find in obtaining summer employment at an income sufficient to enable them to provide for their continuing education. In many areas more than 50 per cent of those attending universities have this year been unable to find suitable summer employment. This situation is one which will get

worse before it improves. One reason for this is the large number of young people who are prepared to take on similar employment on a permanent basis.
I believe the motion before us deserves the support of the House. The hon. Member is not asking for specific action at this point, but for a feasibility study to provide information on the basis of which the Government may reach a decision. I hope the motion will get speedy consideration in this House and that the Government will undertake to give leadership in bringing about a study of this type in the interest of providing increased opportunities for these young people who are finding it increasingly difficult to obtain employment.


Robert Norman Thompson: I find this notice of motion most interesting. Last year when a similar motion was introduced, I had the privilege of speaking on it. It was interesting to note the correspondence which followed. Many of those who wrote to me were supporters of the motion; some of them were against it.
I notice that the hon. Member has made some changes in his motion this year. In principle-and I speak as a father of five boys-


Some hon. Members:: Hear, hear.


Robert Norman Thompson: -I think some kind of training program for our youth and for the good of the country is very desirable. I know there are those who oppose compulsory training; they think of it in terms of military preparedness and object to it on that basis. I do not think this is the purpose behind the present motion at all. It seems to me that in view of the circumstances in which some of our young people are growing up in this country it would not be an undesirable thing if they spent some part of their young lives in the service of their country under the type of discipline which would be necessary.
I do not necessarily support the suggestions made as to how this might be brought about in detail, neither do I pretend to know the answers to the various questions which would arise were such an idea translated into practical terms. Nevertheless I think it would be wise to let this motion go to a committee. Or, if that is not possible, we might well be given an opportunity for a fuller debate on this subject. Certainly I commend the hon. Member for having raised it at this time; the resulting publicity will no
June 14, 1965	COMMONS
doubt cause people to discuss this matter widely across the country.
Many of our young people are being raised today amid influences which seem to say to them: Do not ask how much you can give to your country but, rather, how much your country can provide for you. Training of the type suggested might well be of tremendous benefit in these circumstances. It would be an opportunity for beautifying our country and doing many of the things which we sometimes neglect in favour of more pressing commitments, while at the same time providing guidance of a type which would be good and wholesome for our young men. Therefore, without speaking at greater length I, personally, am pleased to support the intention behind this motion.
I use the word "personally" because I am not sure whether everyone in my party agrees with this. From my experience of many of the problems which face our young people in Canada I think the institution of such a program is worthy of our consideration and I congratulate the hon. Member for bringing this motion before the House.


Mr. Gerard Laprise (Chapleau):: Mr. Speaker, tonight we are again considering a motion similar to that introduced last year by the member for Beauharnois-Salaberry. A perusal of the motion, however, reveals that it has been drawn up differently but the purpose seems to be the same.
Last year the hon. member introduced a motion concerning compulsory service; this year, he changed this expression to "national training service".
No doubt next year, during another session, provided the hon. member is still with us, the terms of his motion will be altered so much that its purpose will be different.
Personally, I am not completely in agreement with the purpose of the hon. member's motion.
To a certain extent, I agree with him. Many of our young people do not always behave properly. In my opinion, the hon. member who introduced this motion tonight should rather ask his colleagues and his party -who are somewhat responsible for that situation, because they have run this country for many years without being able to find a democratic means of helping our young people-to give them a purpose, an ideal in life. They are the ones who are proposing such a measure today-he makes no mention of the fact this year, but it is the same thing he
DEBATES	2363
National Training Service was advocating last year-that is to say, the service would be compulsory and run by the army.
From this point of view, I think there is confusion among the Liberals, because if I am well informed, the purpose of the Minister of National Defence (Mr. Hellyer) is to cut down the total strength of the army, whereas the hon. member for Beauharnois-Salaberry wants to increase it by encouraging our young people to do some military service by offering them additional training in the field of health, etc., while giving them an opportunity to visit and know their country.
I wonder whether this motion is not brought forward in connection with the military demonstration that took place last Saturday in the streets of the national capital. I wonder whether we should not put together those two things aimed at influencing the young people and the public at large. They made a display of strength and greatness in order to influence them so that they would be interested in the motion brought forward tonight.
But I noticed something tonight. Last year the hon. member thought that he could fight unemployment which is rampant in Canada and that he could save the Unemployment Insurance Fund a few hundreds of thousands of dollars.
In my opinion, if the Liberals, the government or the Liberal party would make a sincere effort, they could find something better than a national training service for our youth. They could find something else to fight unemployment effectively.
If we wished to propose an objective, an ideal for our youth, a truly serious ideal, it would not be necessary to introduce such a measure.
I believe that the educational system of every province could be improved, but our governments should give parents the financial means to utilize the wealth of this country so they can give their children the training and education which they need in order to serve their country in every field.
[DOT] (6:50 p.m.)


Mr. D. W. Groos (Victoria (B.C.)):: Mr. Speaker, I very much respect the motives which prompted this notice of motion from our colleague the hon. Member for Beauharnois-Salaberry (Mr. Laniel). It is a notice of motion that has very far reaching effects.

June 14, 1965
National Training Service I have only two main points that I wish to make because I see that our time is very short.
; First of all, the operative part of the hon. Member's notice of motion is, I think, contained in the wording, "the Government should consider the advisability of undertaking a searching study of the youth problem in Canada". I thought initially that this reference to a "youth problem" was an unfortunate phrase and I was inclined to take mild exception to it; but I think it was perhaps due to the translation, because when I discussed it with the hon. Member I found that we do see eye to eye on this matter. No one knows better than he, and he admits it, that there is not very much wrong with the youth of today. The response to the Company of Young Canadians I think is a very good demonstration of that fact. But young people, moving today in such numbers as they are from the farms to the cities, have very much lost control over their destiny and environment and it is very difficult for them to provide for themselves in this twentieth century.
I think that youth is inclined today to question the old standards and the old values, but I see, like my hon. friend, nothing wrong with that. I think our standards and values are no good if they cannot stand up to this type of scrutiny. I think our young people seek very much today an outlet for their energies; they want to contribute and they want to be constructive. I think today there is an altruism in their attitude toward life which was not present in former years. Most of the young people I know certainly want to share the blessings of this land and the fruits of their labours with others both within this country and abroad, and I think this National Training Service might very well be a suitable vehicle for doing so.
These young people want to find out more about the Canada in which they live and more about other Canadians. I think we had an example in the Montreal Gazette of Saturday, I believe it was, from a very distinguished Canadian, a native son of British Columbia, Dr. Rocke Robertson, the Principal and Vice Chancellor of McGill University, who said that one of our main problems in Canada today is that we do not know enough about each other; that is, the two cultures that make up this country. I think this motion conjures up some memories of the United States Civilian Conservation Corps of depression years, and much good came of that. We see today

across the country many lasting evidences of the good work these people did.
I agree with the idea of a study, and I think perhaps this study would show the imprac-ticality of a scheme of such generous proportions as has been outlined by the hon. Member. But I know he would be prepared to lower his sights to within the realm of practicality, and perhaps a pilot program, something of smaller dimensions, would be what is necessary at this time; something small, something voluntary, something which would teach skills for specific projects on the frontiers, perhaps, of Canada-the west, the north, the far East-something which would lay down minimum and maximum periods of service within this program. There would be very many incidental benefits other than those mentioned in the hon. Member's notice of motion, of physical education, bilingualism and self-discipline.
I said I had two main points, Mr. Speaker. I am hoping you will allow two or three extra minutes in view of the time that was wasted by the hon. Member for Timiska-ming (Mr. Peters) when he produced a meal in the House shortly after six o'clock. The second point I wish to make is that with regard to the second paragraph of the notice of motion I think the operative portion is that "there should be appointed a Commission made up of representatives of the various bodies concerned with health, education, employment, and the Armed Forces". I would just like to say about this proposal that it would seem to me to be an ad hoc committee and I think we have seen many ad hoc committees-


William Arnold Peters: Question.


David Walter Groos: -and what we need today is perhaps-


William Arnold Peters: Question.


Donald Stovel Macdonald: Go and get your supper.


Some hon. Members:: Order.


David Walter Groos: Mr. Speaker, I wonder if you could call for order; there seems to be quite a lot of noise coming from the other side of the House.


William Arnold Peters: Question, Mr. Speaker.


The Acting Speaker (Mr. Batten):: Order. It being seven o'clock, the hour for the consideration of private Members' business has expired and the House will now resume debate on the second reading of Bill No. C-102,
June 14, 1965

an Act respecting banks and banking, which was interrupted at 6 p.m.



BANK ACT

[Stage Direction]
decennial revision and extension of

[Stage Direction]
The House resumed consideration of the motion of Mr. Gordon for the second reading of Bill No. C-102, respecting banks and banking.
[DOT] (7:00 p.m.)
Robert Norman Thompson: Mr. Speaker, resuming debate on the bill to provide for the revision of the Bank Act I would say at the outset that when I spoke at the resolution stage of this bill I outlined several of the main points that were apparent on a quick perusal of the proposed legislation. I also brought out a few of the details that seem to be unique in relation to our system of banking, as it is carried on in Canada today. I spoke of the definition of the purposes and functions of banks as they operate in our private enterprise economy.
I would just say that we in Social Credit are in no way opposed to a private enterprise banking system. We believe that the banking system which we have at the present time has been developed to a very high degree of efficiency. I do not think we ought to be concerned about interfering with the function of banks, by taking them over, any more than we should be concerned about the taking over of any other industry or commercial operation that is doing an effective job. However, we do believe there are certain changes that should be made in respect of our banking system, and that the place where these changes should be made is here, in this legislation which affects or controls the operation of the private banks. I think these changes are very essential if we wish the banking system to carry on in its present way, particularly in view of some of the problems facing banks which affect the economy, and the problems which might well arise if private enterprise banks are threatened with takeovers, such as have happened in some Communist countries which operate under an extreme form of socialistic Government.
This legislation is very important then not only to the banks themselves, but also to the proper functioning of the nation's economy and in some aspects to this bill with which we are concerned. We commend the Minister for some of the aspects contained herein, but generally speaking I think the bill is significant because of those things which have
Bank Act
been left out. Before commenting on these various aspects, I should like to make one or two observations about the remarks of the hon. Member for Edmonton West (Mr. Lambert).
The hon. Member, in prefacing his own speech, let fly at my colleague, the hon. Member for Medicine Hat (Mr. Olson) and accused him of talking through his hat. I do not know which hat he had in mind; perhaps he was speaking of the Medicine Hat which that hon. Member represents. In view of some of the remarks made at an earlier date by the hon. Member for Edmonton West, it is my feeling that he was talking through his hat, rather than the hon. Member from the city which carries that name.
I should like to refer to page 1001 of Hansard for May 6 where the following words of the hon. Member for Edmonton West appear:
We do know that in the background there have been some rather odd things that have happened.
The hon. Member was referring to the Alberta Provincial Treasury Branches. He made several charges in respect of that institution without giving any substantive support. That is the usual type of aspersion cast by political opponents of the Government of Alberta, but it is interesting that they are not made by business, industry or even the private banks themselves.
On June 5 of this year the Edmonton Journal carried an article which stated that 60 centres in Alberta have requested the establishment of Treasury Branch service. The specific part of the article to which I refer states:
Sixty communities have requested treasury branch services, says C. G. Davey, superintendent of the provincially-owned banking system.
He told The Journal this year's program will entail opening branches in three centres which do not have full-time service and modernizing premises in ten other communities.
Representations have come from boards of trade, chambers of commerce and other businessmen's organizations, he said.
I think that is proof that the Treasury Branches in Alberta are rendering a very necessary and important service. Are such institutions odd? I do not think they are odd at all. The hon. Member made another charge when he said:
There is no power to bring any of the officers of the system before a committee of the legislature. There is no committee examination, and there has not been any committee examination of the operations of the Provincial Treasury Branches.

June 14, 1965
Bank Act
That is absolutely wrong. The hon. Member was talking off the top of his hat. He may think he can justify his vagueness by such claims, but that is a sheer departure from the fact and he has not given correct information to this House. If he examined the 1955 report of the Public Accounts of the Province of Alberta, he would find that a committee dealt at length with the Treasury Branches and questioned the administrative heads of those branches. The only restriction placed on the question was the refusal to give public information in respect of individual accounts or loans. This is a practice followed by every chartered bank, the Porter Royal Commission and what we have known as the Banking and Commerce Committee of the House of Commons. Full particulars of the operation of the Treasury Branches are contained in the Alberta Public Accounts each year.
The services performed by the Treasury Branches of Alberta are not only in the field of banking, but also in the field of Government service generally, and these services were summarized by the Minister of Finance of Alberta in his first budget speech delivered to the Alberta Legislature a few months ago. I do not intend to deal with this at great length, but I think the record must be set straight.
The Alberta Public Accounts indicate that the Alberta Provincial Treasury Branches- and this was substantiated in the budget speech of the Minister himself-last year held a total value of deposits of $109,507,000. Total loans amounted to $65,873,000 with a total reserve for doubtful accounts as at March 31, 1964, of $3,388,000. I believe those figures indicate that these Treasury Branches are rendering a very important service to the public and to the commercial operations of that province. They also indicate a need for an extension of bank services presently being rendered to the people of Western Canada.
I do not understand the Minister of Finance in his action against Provincial Government investment in banks, and I refer not only to the application by British Columbia for a chartered bank, but to others, in view of the fact that the Governments of the provinces concerned are anxious that adequate banking facilities and services be provided to meet the needs of their citizens. For those reasons we support the applications for charters for the Bank of Western Canada and the Lauren tide Bank, as we will support others which indicate that they meet the requirements of the Bank Act.

Referring again to the legislation now before us, I should like again to state that it is significant more for what it does not contain than for what it does contain.
There are several points upon which we should like to commend the Minister. We commend him first of all for permitting an increase in the interest rate beyond 6 per cent for certain type of loans, which banks are presently not allowed to make. We commend him second, for bringing under the provisions of the Act some financial institutions, including near banks. I think this is necessary if we are going to have a financial policy on a national level. We also commend him for not tampering with credit unions or the Treasury Branches in Alberta, because we believe that both these institutions provide services which are essential to the economy and that they should be permitted to operate in this way. I trust there will be no attempt to deal with these matters either by amendment to the Bank Act or by secondary legislation such as the legislation dealing with the Quebec Savings Banks. Certain of these matters, of course, come within the exclusive jurisdiction of the provinces and any attempt to curtail or circumvent provincial jurisdiction can expect to meet with strong resistance from the provinces.
[DOT] (7:10 p.m.)
Thus certain features of this new banking legislation appear to be improvements. Others are of questionable value. Information will undoubtedly be obtained when the bill goes before the committee, and we hope we may get through with this stage of our discussions tonight. The hearings of the Finance Committee would in my opinion be very important, and certainly as a result a lot of information is going to be brought to light. Therefore I would concur with my colleague, the hon. Member for Medicine Hat (Mr. Olson), in hoping that the Minister will not delay the introduction of the legislation to extend further the present Bank Act, and at the same time I do not see why there should be any reason to shorten the length of time of that postponement. Let us have enough time so we can consider these things in the depth in which I think they should be considered.
However, there are certain features of the new Bank Act that we might discuss at this stage. For instance, there is the provision with respect to the cash reserve requirement in clause 72, subclause 1. It requires a bank to maintain a cash reserve in the form of notes of and deposits with the Bank of
June 14, 1965

Canada. Subclause 3, however, authorizes the Bank of Canada to require a bank to maintain a secondary reserve in the form of notes of and deposits with the Bank of Canada as well as other types of secondary securities. Why should a bank be required to maintain a cash reserve and then a secondary cash reserve, both in the form of notes of and deposits with the Bank of Canada? Could not the Bank of Canada under this type of provision defeat the very purpose of the provision in clause 78 (2) whereby the cash reserve percentage of 8 per cent shall be decreased progressively to 7 per cent?
There seems to be no sound reason at all to abandon the power to maintain a flexible cash reserve ration for the banking system, even though this power has not been fully used for some time. This clause institutes a new secondary reserve system of treasury bill holdings in addition to the 7 per cent cash ratio reserve also required. It is putting into law what has been done unofficially for some years. Nevertheless, I do not quite see the purpose that the Minister has in mind in introducing this into the legislation. Why could we not have carried on under the present practice?
From the point of view of the stability of the banking system it may be a good thing but, of course, John Q. Public is having to pay the interest on the treasury bills that the banks have to hold. I repeat that some similar requirements to this and relating to cash reserve ratios should really be required of any institution that is actually engaged in some form of banking, that is, in the acceptance of deposits which are trans-ferrable and repayable on demand, but not backed 100 per cent by legal tender.
There are other questions to which we might refer that are not answered in this legislation. For instance, what about the relationship between a bank and a wholly owned trust company subsidiary? The legislation makes some reference to this and it seems that it is rather effective in one direction; but is this arrangement to be terminated or is it going to be allowed to continue? If so, under what terms and conditions will it be allowed to continue, keeping in mind that the Porter Commission made no recommendation as to banks being allowed to enter into the trust business at the present time, although it did recommend that the Bank Act be applied to a wider group of deposit taking institutions, which would seemingly include trust companies.
Bank Act
Section 18 (1) also raises a point of particular interest. This allows the bank to open accounts in central banks abroad and to accept deposits from central banks in other countries and pay interest on them. I may be reading too much into this, Mr. Speaker, but I believe this could develop into a most valuable instrument to aid international trade and settlements. In fact, I found it of particular interest because it is very similar to the recommendations made in a private Member's bill recently sponsored by my colleague, the hon. Member for Chicoutimi (Mr. Cote), which would amend the Bank of Canada Act to allow that bank to hold nonconvertible currencies of other nations in its reserves. If this is what the new legislation intends, I think we could very well find the answer to many of our problems that are related to international trade and settlements, and certainly it might be used to expand our trade beneficially from the point of view of financing the sale of many of our surplus commodities.
Appropriate Bank of Canada deposits of dollars with countries abroad, or accepting deposits of "soft" currencies in Canada could make it not too difficult to stabilize currencies of nations needing such help, and at the same time provide funds with which to develop trade with many of the emerging countries. In my opinion the question of aid is not just something related to dollars or technical know-how such as we have in great abundance in Canada, but such action would help in a very material way to facilitate trade between Canada and some of the emerging countries which desperately need such trade.
There is another very interesting section which I might mention briefly. I refer to section 23, which is actually repealed. An honourable funeral is here given to the myth that the value of our currency is in any way determined by its convertibility into gold. I am reminded of a quotation. I do not know the author but certainly it applies here. This quotation states:
A fallacy prevalent yet
Is to think that the money we get
Is based upon gold.
It's not. What we hold Is deposit, created by debt.
Again, if possible hon. Members might be asked to ruminate on the question: If this be so, then what does back our currency, and why? This is a good question as we seek to understand what goes on in our own financial system and how our monetary system functions.

June 14, 1965
Bank Act
Our economic system has indicated tor some time that we are now tending to move toward an inflationary trend which may well need to be checked. I am going to quote a few paragraphs from an article entitled "Money Supply At New Peak" which appeared on the 18th of May. The article reads in part as follows:
...the money supply was $18,743 million as at May 5, a new high record. This figure was up $193 million for the week, widest weekly increase since the end of March. In the past year-
In the fiscal year 1964-65.
-the money supply has expanded by $1,691 million.
Apparently it was thought that the affluent situation of the economy in particular required this, but certainly it is a lot of new money to come into existence in one week.
The amount of coin held outside the chartered banks is shown as $232 million in the latest report, unchanged from the preceding week. The amount of paper money or notes amounted to $1,933 million, an increase of $44 million for the week.
It is interesting to note that on the same date the amount of notes held by the chartered banks was $405 million, so that the public held nearly five times as much in paper money as the banks did. Bank notes do not earn interest, and banks tend to keep their holdings of such paper money at a minimum consistent with their requirements. In the week ended May 5 their holdings of bank notes were reduced by $40 million.
[DOT] (7:20 p.m.)
Then, Mr. Speaker, the same article mentions that the chartered banks, on May 5, held $3,746 million in Government of Canada securities, Treasury Bills and other securities, only $58 million less than a year ago. The article mentions that, in addition, they held $1,186 million on provincial, municipal and corporate securities, or $20 million more than a year ago and that deposits in, and notes of the Bank of Canada amounted to $1,368 million or $122 million more than a year ago.
As has already been brought to the attention of the House, the Government picked up $75 million of the present issue of Treasury Bills which went on the market today. This all refers back to the statement I made during the Throne Speech debate, Mr. Speaker, with regard to the fact that the Bank of Canada today holds approximately 15 per cent of the national debt. This is something many of us do not realize. Nevertheless, on August 7 of last year the Minister of Finance (Mr. Gordon) himself mentioned the fact and it is recorded on page 6552 of Hansard that these holdings comprised 14.6 per cent of the total Government securities outstanding on

June 30, 1964. He stated also that the total income of the bank was $127,851,000 and the net income paid to the Consolidated Revenue Fund was $116,386,000. We are not protesting these facts. We are just pointing out that on this basis there is no reason why the Bank of Canada could not hold more of Canada's net debt, particularly since it is borne out that this is the policy of the present Government at this time. In other words, the Canadian people get the profit from the issues of this credit against their real credit; that is actually what is happening when the Bank of Canada buys up $75 million of these Treasury Bills. Instead of privately controlled financial institutions getting these profits, the people get them.
Well, Mr. Speaker, we will not continue talking about that. However, I should like to advance one proposal which I believe would be of great benefit to Canada. This proposal is not new. Members of this party have presented it before this House before, and my predecessor, Mr. Solon Low, referred to it during the bank legislation revision in 1954. We believe the Minister of Finance would be well advised to establish a permanent monetary commission composed of men who represent the Bank of Canada, the chartered banks, the Department of Finance and various aspects of our economy such as agriculture, labour, industry, and private business in general. Such a monetary commission might well be an extension of the board of the Bank of Canada, meeting regularly to consider all these matters related to financial and monetary policy of the Federal Government. This commission would not be silently responsible to some unseen power or authority, but would be able to answer directly to the representatives of the Canadian people sitting in the House of Commons. Likewise, they would be able to report through the Auditor General as the public accounts are reported today, making it possible to deal with financial and monetary matters before the Standing Committee on Finance, Trade and Economic Affairs.
It would be a means also of keeping Members informed about the Government's monetary policy, thus keeping the public informed as well. An informed public makes for a strong democracy as well as a strong Parliament. I am convinced such a permanent monetary commission would provide the answer to many of the problems we face in our economy today, problems which I do not believe are being given sufficient attention in our thinking to provide the answers. We
June 14, IS65



would get from such a commission an independent report periodically. In this way the Members of this House would be able to keep their fingers much closer on what was actually happening in the functioning of our economic system. The commission could be charged with overseeing the policy drafted and set up by the House of Commons; and overseeing and managing could include a very important point, one which I think is of tremendous importance to the people of Canada, and that is the decennial revision of the Bank Act which we are debating now.
In closing, Mr. Speaker, I would say that what we need in Canada today is a desirable economy. A desirable economy might be expressed as an economy which utilizes all modern methods of production, but which at the same time offers equitable employment for all. I suggest that there is a national inventory level of purchaseable production which, when maintained by an effective demand, would bring about the desirable economy. "Effective demand" is when the people of Canada would have within their own hands the necessary purchasing power to buy those things which are necessary to enable the standard of living of which we are capable and which, at the same time, would solve the problem of distribution that presently faces us. Certainly, our problem today in the economy is not one of production nor one of consumption, so long as there are people in Canada or in the world who need the things we can produce. As long as there are people who need what we can produce, there can be no surplus. What we need is an effective demand that will move the production of which we are capable into the hands of those who produced it and who wish to consume it. This should be the function of a desirable economy.
It is through the effective functioning of our banking system, it is through the policies that are laid down in the legislation regarding banking by this House, that such a desirable economy can be brought about. I just emphasize, therefore, that the meetings of the committee to which this legislation is going to be referred, this whole question of bringing about the proper type of legislation to control monetary policy through our banking system, should deal with this important matter connected with the welfare of the country.


Herbert Wilfred Herridge: Mr. Speaker, I have listened with interest to a portion of this debate. Unfortunately, I could
Bank Act
not be here all the time because of other duties in my office and elsewhere. I must say I have listened with great interest to the hon. Member for Red Deer (Mr. Thompson). I can never quite understand our Social Credit friends, Mr. Speaker, because if they were to give effect to the ideas they put forward in this House concerning Social Credit, we would have a socialist democratic form of Government. There is no question about it. I cannot understand why they want to socialize credit without accepting the full social responsibility of such action.


Robert Norman Thompson: May I ask the hon. Member a question? Does he not think it would be much better to consider socializing our credit to preserve and strengthen a private enterprise economy, than it would to turn it over to state ownership?


Herbert Wilfred Herridge: I am glad to answer that question. If we socialize our credit, then what we have actually done is to assume federal social responsibility over the economy, upon which could be based legitimate private enterprise which also recognized its responsibility to the community.
[DOT] (7:30 p.m.)
Mind you, Mr. Speaker, I realize these people have a germ of an idea in which there is a basis of truth. The only thing is that they will not come quite far enough along the road.
To the majority of people, banking has been a mystery every since the Rothschilds financed Wellington at the Battle of Waterloo, and Napoleon on the other side. Later they made a big profit as a result of a messenger going to Britain and informing the Rothschilds of the victory of Wellington, before the government knew.


Robert Norman Thompson: And the people of Great Britain are still paying the interest on that.


Herbert Wilfred Herridge: That is quite right. The people of Great Britain are still paying interest on debts incurred during the Napoleonic wars, and later.


Mr. Churchill:: Would the hon. Member permit a question?


Herbert Wilfred Herridge: Certainly.


Gordon Minto Churchill: I am sure the hon. Member would not want his statement to reverberate down through history about Rothschild financing Wellington at Waterloo. Was it not a fact that he got advance notice of Wellington's victory at Waterloo, and as a result of that made a fortune?

June 14, 1965
Bank Act


Herbert Wilfred Herridge: They financed both governments in the Napoleonic wars, but the House of Rothschild was substantially founded on the profits made as a result of Wellington's victory at Waterloo. I think we are both correct. Anyway, this question has always been a mystery to the average man.
The late former Prime Minister, Mackenzie King, recognized this fact when he said something to this effect in the House, recognizing as he did the power over the economy that was in the hands of those who control credit- "Give me control of the credit of any nation and I will control that nation." I am sure our present Minister of Finance (Mr. Gordon) has the same point of view, only he has not expressed it so forcefully. However, there will come a time in the not too distant future when the Members of our party will have allies in the Members of the Social Credit party and the Creditistes in the cause of social control of credit, and at some later date, possibly 25 or 30 years hence, we can expect to get allies from the Progressive Conservative party.
I give the Minister credit for having an appreciation of the responsibility of the banks to the nation as a whole. I understand that this bill is to be referred to a committee- I have forgotten its exact name.


Stanley Howard Knowles: Finance, Trade and Economic Affairs.


Herbert Wilfred Herridge: My hon. friend from Winnipeg North Centre (Mr. Knowles) says it is Finance, Trade, Economic affairs and what not. Anyway, I trust this committee will take every opportunity not only to inform its members but all Members of the House and the people of this country on how the banking system works.
I just want to place on record some ideas that have been given to me by a person who believes we can improve the service rendered the nation by the banks by a combination of public control through legislation and private operation. I think my friends in the Social Credit group would go along with his ideas, and I just mention them because I have had considerable correspondence with this gentleman and think he should be called before the committee to explain his ideas; he gives a program for mobilization of money under federal control in a five year plan.


Eldon Mattison Woolliams: What is his name?


Herbert Wilfred Herridge: Richard H. Babbage. Possibly he is known to the Minister. Anyway, his general idea is, and I quote:

An extended banking system supervised by the Bank of Canada pursuant to existing statutes enacted by the Parliament of Canada.
Designed to consolidate:
1.	Federal control of currency and credit:
2.	Provincial control of natural resources;
3.	Effective financial supervision of all organizations operating in public ownership.
Then he goes on to deal with the organization of this type of plan, and first he says:
1.	Establish in the Bank of Canada a separate account for each provincial government.
2.	Set up a national revolving fund as a federal government account in the Bank of Canada made up as follows:-
(a)	Revenues of all government agencies. Departments, Crown Corporations and Canadian Wheat Board.
(b)	All chartered bank reserves and rest funds.
(c)	Special payments received by the Government of Canada.
(d)	Reserves of Life Insurance Companies.
(e)	Revenues of all public utility corporations.
(f)	Pension fund holdings of federal government bonds.
(g)	General public holdings of federal government bonds.
(h)	Branch line rationalization fund.
All the foregoing deposits would remain in chartered banks as agents for the Bank of Canada.
Then he goes on to suggest:
Deposit accounts enumerated above would be designated "Special Account (Control)" in Bank of Canada ledgers. Expenditures debited to such accounts would require federal Cabinet Order in Council. This procedure is followed by the Canadian Wheat Board at present.
The national revolving fund, holding currencies of countries trading with Canada, could finance all foreign aid programs. Similarly, obligations to the United Nations and NATO could be serviced, as well as interest on the national debt which could be liquidated progressively.
I hope my friends in the Social Credit group are following me.
Forming a continuous flow of flexible money supply the national revolting fund would finance all projects for the good of Canada in keeping with special powers allotted to the provinces in the B.N.A. Act subject to Cabinet authorization.
Credit demands by private individuals and corporations would be serviced and provided by chartered banks, solely, under free competition as to interest rates.
All government grants, subsidies, subventions and state insurance for private profit enterprise would cease. Risk capital, unhampered by taxation on consumption by Government at three levels, would have fair administration subject to the rule of law.
Any doubt about the capacity of Canadian chartered banks to furnish loans (both long and short-term) for greatly stimulated activity in farm and factory, is dispelled by statistics, published recently, in American Banker Magazine, which rates two Canadian banks among the ten largest banks in the free world, judged by size of deposits.
How Canadian banks stood in that list appears as follows:
Royal Bank of Canada (8)	$4,686,339,000
Canadian Imperial Commerce (9)	4,529,904,000
June 14, 1965

Bank of Montreal (17 )	3,709,920,000
Toronto Dominion (44)	2,109,450,000
Bank of Nova Scotia (47)	2,037,221,000
These five banks hold liquid assets of Canadian depositors aggregating $17,072,834,000. Assuming an average cash ration of 8 per cent, that amount of liquidity would finance loan demands in excess of $213,000,000,000.
I mention this because I have had a lot of correspondence with this gentleman who, I think, has something for us to consider in the ideas he has put forward.
The more rapid and radical changes induced in our way of life by science, the greater is the need for social stability made possible by organized sharing of potential hazards.
More than two-thirds of income tax, collected by the federal Government at present, comes out of pay envelopes of all who earn salaries and wages. This represents the most acutely felt "potential hazard" afflicting the Canadian population today. Financing through a national revolving fund would pull deduction slips from pay envelopes.
Mobilization of money operating under federal control in compliance of laws of Canada would, at once, ensure absolute control of the public purse by the House of Commons, notwithstanding anything in any part of the constitution.
This is a very interesting idea and does provide an opportunity for the federal social control of credit, and yet do it through the chartered banks. In my opinion, a person with such a policy should have an opportunity to appear before the committee, express his views, and be questioned. I simply rise to suggest that this committee has an opportunity, if the committee majority agree to accept that opportunity, to call persons and witnesses before it to gather their ideas not only with respect to our banking system as it is now, but to the system as it might be amended or altered. In so doing they would inform members of this House as to the way in which the banking system operates and how it could be improved. The population of Canada generally would also be provided with important information on this subject. Not only could we amend the Bank Act, but in so doing we could give the people generally an understanding of the way in which credit is distributed for the development of our economy. If this committee undertakes its responsibility not only to the Government and to the House but to the people of this country generally we would have some knowledge of the effect of bank policies upon our economic health and future development. [DOT] (7:40 p.m.)
That is all I have to say, now. I think these ideas, as well as the ideas which have been put forward by others, should be given consideration. Even the ideas of the hon.
Bank Act
Member for Red Deer (Mr Thompson), should be considered. If he wishes to go before the committee and outline in detail how the program put forward by his hon. friends would affect our economic development, I think he should be given the opportunity to do so.


Walter Lockhart Gordon: It has been suggested recently that
clause 75(2)(g) is restrictive and unfair in its application to the Mercantile Bank of Canada. There seems to be considerable misunderstanding about the facts of the matter, which are as follows:
The proposed bill includes sections which:
(a)	will ensure that control of the Canadian banks-apart from the Mercantile-will be retained in Canadian hands;
(b)	will restrict non-resident participation to 25 per cent of the shares of any bank;
(c)	will restrict the holdings of any single shareholder or group of shareholders-foreign or domestic-to 10 per cent of the shares;
(d)	will not permit Canadian banks to control other corporations including trust and loan companies.
The Government is anxious to see a number of new banks incorporated. Therefore, in the initial stages in order to encourage this, it is not proposed that the limitation of shareholdings to 10 per cent will apply. However, such new banks will be subject to the provisions of clause 75(2)(g) which will limit their total resources to 20 times their authorized capital until such time as their shares are more widely distributed, and no single person or group holds more than 10 per cent.
The Mercantile Bank of Canada is a wholly owned subsidiary of the International Banking Corporation which, in turn, is owned by the First National City Bank of New York. I understand that International Banking Corporation also owns all the shares of International Trust Company, which is a Canadian trust company operating in Canada.
All this places the First National City Bank of New York in a preferred position on three counts:
(i)	It owns all the shares of a Canadian bank, something that no one else will be permitted to do.
(ii)	It owns both a chartered bank and a trust company in Canada, something no other bank or anyone else will be permitted to do.

June 14, 1965
Bank Act
(iii)	It is the only foreign bank which may conduct a banking business in Canada.
In these circumstances, the question arises whether the provisions of clause 75(2)(g) which will apply in the case of all other banks in Canada, should be applicable to the Mercantile.
It is argued on behalf of Mercantile that the application of clause 75(2)(g) will be restrictive and therefore that it is unfair to the owners of that bank. I cannot accept this suggestion of unfairness. This whole matter was very fully discussed with representatives of the First National City Bank of New York before they acquired the shares of Mercantile.
On July 18, 1963, Mr. James Stillman Rockefeller, President of the First National City Bank of New York, and Mr. Robert McFadden, an officer of that bank and now President of the Mercantile Bank of Canada, called upon me in my office here in the Parliament Buildings. Mr. R. B. Bryce, Deputy Minister of Finance, and Mr. Clayton Elder-kin, Inspector-General of Banks, were present during the discussion.
Mr. Rockefeller informed me that his bank had made an arrangement with the shareholders of Mercantile to acquire the shares of the latter bank but that no firm commitment had been made with them. I interpreted this to mean-or at least I did to begin with- that no commitment would be made to buy the shares in question if the entry into Canada of the First National City Bank was not looked upon with favour by the Canadian Government. I said I was glad to have an opportunity of expressing the views of the Government in this matter because, while we were aware of the size, importance and standing of the First National City Bank of New York, there would be some objections to the proposed purchase.
I said I quite realized it would be legally possible in this way for the First National City Bank to acquire a banking subsidiary in Canada. This rather unique circumstance amounted in effect to a loophole in the law which requires that bank charters be approved by Parliament. Because of this, First National City Bank could establish a subsidiary here which might be expanded into a large foreign-owned banking institution- unless subsequent action were taken when the Bank Act came up for revision.
I pointed out that if the First National City Bank entered the Canadian banking field in this way, it was probable that other United States banking corporations would wish to do

so as well-but in that case either new charters would have to be obtained or such other United States banking corporations would have to purchase a controlling interest in one of the existing Canadian banks. I said the latter course would not be looked upon with favour by the Canadian Government and I added that it was highly unlikely that a new charter would be granted by this Parliament for a bank that was to be nonresident controlled. I said the Government would not be in favour of any such action.
I emphasized that the situation then, that is, in mid-1963, was different from what it had been in 1953 when the Mercantile received its charter. Since that time, the Royal Commission on Canada's Economic Prospects had recommended that control of Canadian chartered banks should be held by Canadians. I said that following receipt of the report of the Royal Commission on Banking and Finance the Government would have to decide how the Bank Act should be revised, and in particular what should be done to ensure that control of the Canadian banking system remains in Canadian hands.
I informed the representatives of the First National City Bank that normally it would be unfair to apply retroactively any legislative restrictions on control of banks by non-residents. However, I said that since the First National City Bank were now aware of the Government's views, and had not at this time purchased control of Mercantile, the Government would not consider they were entitled to any special exemption from legislation in respect of foreign ownership that might be brought down in the future.
After a very full discussion, I advised the representatives of the First National City Bank of New York not to proceed with their proposed action until after the Bank Act was revised. There was no misunderstanding on the part of any of those present as to exactly what was meant. The representatives of the First National City Bank of New York were given clear notice of the Government's views. They were forewarned about the kind of legislation that might be expected when the Bank Act came up for review. I pointed out that Mr. Rockefeller and Mr. McFadden had sought an interview with me to ascertain the views of the Canadian Government before proceeding with a certain transaction. They had now been informed of the Government's views in categorical terms.


Eldon Mattison Woolliams: Would the hon. gentleman permit one question?
June 14, 1965


Walter Lockhart Gordon: Would you allow me to finish?


Eldon Mattison Woolliams: Yes.


Walter Lockhart Gordon: It is difficult to understand why the representatives of the First National City Bank of New York would have sought an interview with me as Minister of Finance if they had planned to go ahead with the transaction regardless of the views of the Canadian Government. Nevertheless, that is exactly what transpired. About 10 days after the interview referred to, the representatives of the First National City Bank informed me that, notwithstanding the Canadian Government's views, they had decided to go ahead with the acquisition of the Mercantile Bank shares. They did so with their eyes open.
[DOT] (7:50 p.m.)
It has been reported in the New York press that the First National City Bank entered into this transaction "in good faith" and therefore no action should be taken in revising the Bank Act that could in any way discriminate against the Mercantile. This is not a true representation of the facts. As I have said, the First National City Bank were quite aware of the Government's views before they purchased control of the Mercantile Bank. In these circumstances, if we were to treat the Mercantile differently from other banks now incorporated or which in the future may be incorporated in Canada we would be discriminating against everyone else-


Herbert Wilfred Herridge: Hear, hear.


Walter Lockhart Gordon: -including, incidentally, any other U.S. banking institutions which might like to purchase a controlling interest in the Canadian banking system but who will be prevented from doing so under the provisions of this Act.


Marcel Joseph Aimé Lambert: The Mercantile was already foreign owned.


Walter Lockhart Gordon: For some time I have been looking forward to the opportunity of replying to some of the arguments and opinions put forward by Social Credit Members relating to our banking system and our banking legislation.


Kenneth Hamill (Ken) More: What about those of the hon. Member for Kootenay West (Mr. Herridge)?


Walter Lockhart Gordon: The revisions which we now propose making to the banking legislation do not represent any departure from the
Bank Act
principles on which our monetary system has been established, so they raise no new questions of this nature. However it is natural that hon. Members who feel strongly on these matters should wish to take this occasion to advance in detail some of the views they have expressed in the past, and which are founded on the belief that there are fundamental defects in our monetary and financial system which need to be remedied.
Let me say first of all that I believe the general understanding of economics up until about 30 years ago was inadequate for the task of analysing the working of the financial system. It was understandable, therefore, that various monetary reform movements, including Social Credit, should arise. In the past 30 years, however, great progress has been made in analysing the working of our economy, thanks very largely to the basic ideas developed by John Maynard Keynes, and since applied widely throughout the world.
As a consequence of the progress made in the last three decades, it is not necessary to be a Social Crediter these days to understand that the supply of money occupies an important place in our economy, or that its proper management is essential if we are to achieve our economic objectives. I mentioned these objectives, hon. Members may remember, in the third paragraph of the budget speech, which can be found on page 427 of Hansard.
Our economic objectives are essentially in terms of real things-real goods and services -and the way they are distributed among Canadians. The essential purpose of our monetary system is to enable the economic system, as a whole, to produce the goods and services Canadians want, and to distribute them.
If we are to secure a high and sustainable level of economic growth, the money supply must grow along with our other economic magnitudes. This is well recognized both by the Government and by the Bank of Canada. In this connection I might refer hon. Members to what I said in the Budget speech in regard to monetary policy and liquidity, and to what the Governor of the Bank said in his annual reports; for example, on the first page of the report for 1964. Our present monetary system is one which enables this growth in the money supply to be brought about fairly and sensibly under the careful day-to-day management of the Bank.
There is, I think, no question in any of our minds now of the necessity of this growth

June 14, 1965
Bank Act
in the money supply, or of the need to manage it, in order to achieve our economic objectives. The preamble to the Bank of Canada Act constitutes an early statement by Parliament a generation ago of the desirability to establish a bank to carry out this management of the money supply to promote the economic and financial welfare of the nation. Where we and most other people differ with the hon. Members who espouse Social Credit doctrines is in the causes for the necessity of the expansion in the money supply, in the means by which it should be brought about, and in the degree to which it should and can safely take place.
Social Credit theory, as I understand it, argues that there is an inherent deficiency in our economic system which leads always to an insufficiency of the supply of money. There have been, I know, a number of arguments of various degrees of sophistication as to what gives rise to this deficiency. These were fashionable a generation or so ago, and some hon. Members may recall them in connection with the "A plus B" theorem. I have never been convinced that there was such an inherent deficiency. I have been convinced, however, that management of the money supply was necessary both to enable the economy to reach its full potential at any particular time and also to enable it to achieve a high and sustainable rate of growth.
However, I do not believe there is any point in going into this theoretical question of inherent deficiencies at this time. What we need to ensure is that we have a monetary system which enables the money supply to be properly managed and to be expanded or restrained from time to time in the degree that is desirable in the public interest.
Our present monetary system does permit an effective, flexible control over the money supply to be achieved. This control is exercised by the Bank of Canada in varying the amount of cash in the banking system. The main method by which the Bank of Canada affects the amount of cash in the system is by buying and selling Government securities from and to the public. The sale of securities reduces the supply of cash, since purchasers of the securities pay for them by turning over cash in their bank accounts to the Bank of Canada. The purchase of securities by the Bank of Canada increases the supply of cash, since the Bank pays for those securities by handing over cheques drawn on itself which are then deposited mainly in the chartered banks.
The chartered banks must maintain minimum cash reserves with the Bank of Canada -8 per cent of their deposit liabilities under the present law, and 7 per cent under the law as now proposed. This requirement is, as it were, the first call on the increase in their deposits resulting from Bank of Canada purchases of securities from the public. When that requirement is met, the banks may increase their loans and buy securities themselves, up to the point where the resultant increase in the deposit liabilities requires a further increase in their minimum reserve deposits with the Bank of Canada.
It is thus the combination of open market operations by the Bank of Canada and the minimum reserve requirement which essentially determines the volume of deposits in the chartered banks. And it is the volume of deposit liabilities of the chartered banks which essentially determines the supply of money, the supply of bank credit, and indirectly, through the complicated market mechanism described in the report of the Royal Commission, the volume and terms of other credit in our financial markets. I might refer hon. Members, who have not had an opportunity of reading it, to chapter 6 of the Royal Commission's report which deals with this. The nature of the system permits a day-to-day control to be exercised and the effects of any adjustments to be noted and assessed when subsequent changes are under consideration.
[DOT] (8:00 p.m.)
Mr. Speaker, Social Credit critics claim that the control of the money in the economy rests with the private banking system. Moreover, it is claimed that the private banks can increase the amount of money in the country at will, and without cost to themselves. These claims are entirely wrong. The control of the amount of money in the economy rests with the public monetary authorities, that is, the Bank of Canada and the Federal Government. I might mention in parenthesis that the proposed amendments to the Bank of Canada Act, relating to the powers of the Bank of Canada and the Federal Government, spell out in greater detail than hitherto exactly where the power does reside. The money supply can only be increased in so far as the Bank of Canada supplies the necessary cash which flows into the chartered banks and increases their deposits. The banks can only increase the money supply within the scope given them by the Bank of

June 14. 1965

Canada and they must maintain the confidence of the public in order to attract and retain deposits.
If the amount of cash in the system is increased the banks compete for their share of it. This they do by inducing individuals to deposit with them any additional cash they may have. These deposits represent a liability of the bank to the depositor on which interest may be paid by the bank to the depositor and in respect of which services must be rendered. If a bank's cash reserves are increased by the action of a depositor the bank is in a position to increase its earning assets by making loans or buying securities. Indeed, a bank must increase its earning assets if its deposits increase significantly, since deposits involve a cost to the bank. In the process of increasing its assets the banking system's total deposit liabilities will increase up to the point where its cash reserves, which are controlled by the Bank of Canada, are equal to the required cash ratio-or nearly so. The banking system's total deposit liabilities and its total assets cannot exceed the limit thus established. Any individual bank can increase its loans and investments only to the extent that it has attracted and can retain deposits. So that if for any reason an individual bank's depositors decide to reduce their balances with that bank it must to that extent draw on its assets, first by running down its cash and then by making good the loss of each through liquidating other assets in order to maintain the required cash ratio. The success of an individual bank depends on its ability to induce the public to hold its liabilities.
I turn now to the question of the degree of monetary expansion, which is the third source of our difference with Social Credit. While the difference here is of great importance, it may be fair to say it is one of emphasis and degree. Many exponents of Social Credit imply that large increases in the supply of money can safely be made, and indeed should be made, except perhaps at times when clearly the economy is at full employment and under strain. We believe, on the other hand, that the increase in the supply of money has to be carefully controlled and determined after careful economic analysis and the application of good judgment to appraisal of the economic situation. If the increase in the amount of money is too little, credit stringency may inhibit the desirable economic expansion of growth. But if, on the other hand, the increase in the money supply is too much, it will lead to
Bank Act
price and cost increases and to balance of payments difficulties. If such increases in the money supply and consequent increases in the pressure of expenditure in the economy should persist, we can expect that ultimately they will lead to inflation and, in a country such as ours, to an exchange crisis.
I do not believe that the proponents of Social Credit feel that price increases and inflation constitute a serious danger; indeed, in their view it is better to run these risks than to suffer a deficiency in expenditure for purposes either of employment or of social justice. In my view they greatly underrate the dangers inherent in such attitudes. This is the chief weakness in their approach to our financial problems.
Quite apart from the effects on the balance of payments and the exchange position, inflationary pressures are highly undesirable. In the first place, they produce an unstable situation which cannot last. They lead to speculation, to efforts to anticipate further price increases and to expenditures on many things both of a capital and current nature which are not justified by the long-run prospects of the economy. Moreover, these excesses are apt to be reversed in time when the public is unwilling any longer to accept the consequences of inflationary conditions and when the economic actions to which they have led have proven to be ill-founded.
Second, we must recognize that inflation is fundamentally unfair. It confers great benefits on the economically strong and sharp. Those who can quickly see what is going on, and can manoeuvre and bargain to take advantage of it will undoubtedly gain. They are not to be found only in one particular class in the community, but include many of those with strong economic bargaining power. They gain at the cost of the weak, the innocent and the uninformed. It is true that nowadays governments, under such circumstances, frequently come to the aid of the weak or the innocent. But there are always some whose plight is overlooked, who will not or cannot seek to protect themselves. It is these poeple who bear the burden of inflation. It is this unfairness in the distribution of benefits and costs which leads to the political and social trouble to which serious inflation almost inevitably brings nations, whether they be advanced industrial societies such as some in Europe after the First World War, or developing countries such as some in Latin America in more recent years.
The other chief danger arising from excessive expenditure associated with an ex-

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Bank Act
cessive increase in the money supply is the effect on the balance of payments. Naturally, much of the excessive expenditure will create demands for imports as the limits of domestic production are approached or exceeded. These imports must be paid for by the use of foreign exchange from a nation's reserves or by borrowing abroad, or by setting in motion forces that will check other imports or increase exports. The solution of borrowing from abroad is not likely to be available if a country is clearly permitting excessive expansions in its money supply and expenditures to create the kind of situation I have discussed. The use of reserves can only go on for a limited period as nations cannot normally afford to hold sufficient reserves to finance a lengthy spree.
Consequently, the likely result of a prolonged period of excessive expenditure is apt to be a depreciation of the currency involved. We have before us the example of the United Kingdom now having to take stern action to meet the situation created by a moderate excess of expenditure in an economy operating at full stretch. Our own history affords two examples since the end of the war, arising out of different causes, of the necessity to meet serious shortages of foreign exchange by unpleasant emergency action.
When a country gets into balance of payments difficulties as a result of excessive expenditure, it is apt to find itself confronted by a crisis arising from the anticipation of further difficulties. The expectation that it will be forced to permit its currency to depreciate naturally leads people to take whatever action they can to protect themselves, either by delaying the acquisition of that [DOT]country's currency or expediting its sale, in carrying on commercial transactions. Moreover, both the residents of the country and others outside it who have invested in it are likely for reasons of ordinary prudence to want to protect themselves by moving their capital out of that country to somewhere else. It is this which gives rise to the need for vast sums to meet these capital movements under conditions where currencies appear threatened. This in turn calls for demonstrably effective measures to ensure that the excessive expenditures are being checked, unless of course the nation is prepared to see its exchange rate forced to a lower level.
[DOT] (8:10 p.m.)
If by any chance it should ever appear that a Canadian Government was going to

apply Social Credit policies in a wholehearted way, I believe we could expect Canadians and others with investments here to move their capital out of Canada. I say this because those favouring Social Credit principles have given great emphasis to the increases in the money supply to which their doctrines lead. They have stressed the size of the programs they feel can be achieved by the application of these doctrines. Almost certainly this would undermine confidence in the currency on the part of all those who were in a position to protect themselves. In other words, as I have said before, any prospect of Social Credit theories being applied in practice would lead to a financial crisis in which the little fellow would be bound to suffer.
I should like to turn now to a number of specific points that have been brought forward by hon. Members favouring the Social Credit doctrine.


Eldon Mattison Woolliams: You are doing a good job.


Walter Lockhart Gordon: I have been interrupted by my hon. friend, but may I say I am only doing this because hon. Members of the Social Credit party and the Creditistes have asked me to comment on their theories. I promised to do so and I am just fulfilling that promise.


Mr. Patterson:: We appreciate it.


An hon. Member:: But we disagree.


Walter Lockhart Gordon: First of all, I should like to comment on the implications of the proposal that banks should be required to hold 100 per cent cash reserves. Let me describe as briefly as I can the kind of situation which could be expected to prevail if the banks were required to match their deposit liabilities with assets held only in the form of cash, which earns nothing. That is what is meant when people suggest that the banks should be required to keep 100 per cent cash reserves against all deposit liabilities instead of holding, as at present, 8 per cent in the form of cash and 92 per cent in the form of interest bearing assets.
In these circumstances no bank could make a loan to a customer except from the relatively small amount of its own capital. It could not use savings deposited with it to finance business stock in trade, for example, or to buy seed grain. It could not assist a municipality to operate efficiently through the year when its tax receipts come in irregularly. It could not assist the private citizen to budget his major expenditures by providing funds when
June 14, 1S65

they are needed so that he can pay for the "big ticket" items over a period of time out of his current income. Because the bank would not be earning interest by making loans, it would not be able to provide the other services which people look for, except at greatly increased cost to the customer. The cost of paying a bill by cheque, for example, could increase to many times the present bank charge for handling a cheque.
Then, too, the citizen who placed his savings in the bank would quickly find that he was losing money. If the bank could not use deposits to make loans, it could not make interest payments to its depositors. Instead, it would have to charge customers with the full cost of safekeeping and maintaining accounts. The bank would be required to lend the savings of Canadians which had been deposited with it to the Bank of Canada without interest, to be lent in turn without interest to the Government for its purposes. Whether these purposes were good or bad, the arrangement would not be a fair deal for those who deposited their funds in the banks.
This is the essence of the proposed 100 per cent reserve system. It is a way for the Government to get the use of people's savings, their capital, deposited in banks without paying them interest on it. I do not believe that such a system could work to the advantage of the people of Canada. Moreover, if it ever should be tried in practice, people would keep only the barest minimum on deposit with the banks and invest their money in other institutions or in securities.
I should now like to comment as briefly as I can on the subject of interest on the public debt and whether it does indeed represent a burden or a loss of purchasing power, as some hon. Members have suggested. It is true that interest payments are an expenditure by Government. They must be provided for in the budget and we raise money by taxation to meet these costs. But almost all of Canada's national debt is held by Canadians. The interest payments made by the Government are a form of income in the hands of those Canadians who receive them. Government bonds provide a secure means of investment for the savings of the people, either directly in the form of Canada Savings Bonds or other Government obligations or indirectly through savings in pension funds, insurance companies, trust companies and similar institutions which invest substantial amounts in Government bonds. Thus the country as a whole does not lose
Bank Act
purchasing power as a result of the interest paid on the debt. A writing down of this debt or arbitrary reduction of interest payments would represent a loss of savings and of income to those who have saved for their old age or for emergencies. It would represent a loss, for example, to people who have protected themselves and their families through life insurance policies.
I had hoped the exposition of the working of the present monetary system given by the Royal Commission would have lifted the level of the debate on monetary theory to a discussion of modern issues based on a better understanding of the system. It is now generally accepted by those who understand the working of our economy that our monetary system must be well managed, and that is the case today. To try to convert our banking system to a 100 per cent cash reserve system, to try to create money to be lent to governments without interest, would be an irresponsible interference with the rights of millions of Canadians who save their money and keep part of it on deposit with our banks.
Canada is fortunate to have a good banking system that uses the savings deposited with it to help other Canadians to produce and sell what we need, or to finance purchases for later repayment. We can improve it in detail as we are now proposing to do. But we must not be deluded into thinking that all bank deposits can or should be diverted to Government purposes without interest. That would not only be grossly unfair to depositors but would destroy the essential role which the banks play in financing primary producers, consumers and businesses of all kinds.
As I said a minute ago, I have made these remarks because I promised, and have been promising to do so, and this seemed to me a good opportunity. I felt that hon. Members of the Social Credit parties had spoken not infrequently on this general subject and that they were entitled to a careful reply, which is what I have tried to give them this evening. In conclusion I should like to urge my friends in the two Social Credit parties to abandon theories that are obsolete and are based on clearly demonstrated misconceptions.


Herbert Wilfred Herridge: Would the Minister permit one question?


The Acting Speaker (Mr. Batten):: Order.


Herbert Wilfred Herridge: The Minister mentioned that the present banking system provides the

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Bank Act
credit necessary lor the economy on a flexible and almost day to day basis. Can he explain why firms in my district in 1960, when there were credit restrictions and they wanted to borrow $10,000 from the bank, were told by the bank managers that they were restricted. They had bonds to cover the loans, but they were advised to go to the Canadian credit unions to get the credit, and did so. Can he inform the House why that was necessary?
[DOT] (8:20 p.m.)


Walter Lockhart Gordon: Well, Mr. Speaker-


The Acting Speaker (Mr. Batten):: I should point out to the House that the House is advised the Minister was closing the debate on second reading. According to the Standing Orders-


Thomas Clement (Tommy) Douglas: The hon. Member is asking a question, and the Minister has agreed to reply. He asked the question before the Minister sat down. Surely there is no objection to the Minister's answering.


The Acting Speaker (Mr. Batten):: I just hope the Minister can answer this question without generating further debate at the close of second reading.


Walter Lockhart Gordon: I would be glad to answer this question, and then I should like to make one other comment in reply to a question raised earlier by the hon. Member for Nanaimo-Cowichan-The Islands (Mr. Cameron).
In reply to the question raised by the hon. Member for Kootenay West (Mr. Herridge) I can only say that, like him, in 1960 I was not altogether happy with the way monetary policy was being conducted. I believe that I am on record to that effect.


Thomas Clement (Tommy) Douglas: Is that why the Minister voted
for debt free money?


Walter Lockhart Gordon: The hon. Member for
Nanaimo-Cowichan-The Islands, one of the more serious Members of his party when it comes to banking and finance, raised a point about the provision in the proposed bill having to do with the granting of charters. He wanted to know if an applicant for a new charter were refused, would there be any provision for appeal. I might, of course, point out that there would be no reason at all in such circumstances why an applicant could not try to prevail on some hon. Member of the House to introduce a private bill. Whether or not such a private bill would have any more success than some of the private bills have had recently, I am not in a position to

say. However, that would be an obvious resort for people in that position.


Eldon Mattison Woolliams: The Minister agreed to answer one question for me when he was speaking. My question certainly is not a political one.


The Acting Speaker (Mr. Batten):: Order,
please. I must advise the Minister that his time has expired. If it is the wish of the House, the Minister may answer the question.


Some hon. Members:: Agreed.


Eldon Mattison Woolliams: My question briefly was this: Was the Mercantile Bank the only bank at that time owned by foreign interests that could be acquired by United States interests?


Walter Lockhart Gordon: It was the only one owned by foreign interests. As I have reported or announced on another occasion in this House, there was an attempt, or a proposal, to acquire control of a Canadian owned bank, but that was prevented by the announcement which was made in this House on September 23 last, when we said that legislation was going to be introduced to prevent that sort of thing and it would be made retroactive.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.


Walter Lockhart Gordon: that the House go into committee to consider the following resolution:
That It is expedient to introduce a measure to amend the Bank Act and the Quebec Savings Banks Act to extend to December 31, 1965, the authority to carry on business for the banks to which these Acts apply.
Motion agreed to and House went into committee, Mr. Batten in the Chair.


Walter Lockhart Gordon: Mr. Chairman, the resolution before the committee proposes that the charters of these banks be extended for six months, until the end of December, 1965. It was thought that this should provide ample time for the committee on Finance, Trade and Economic Affairs to deal with the proposed revision of the Bank Act, to report back and have the bill revising the Bank Act passed. I still hope there will be plenty of time. It is certainly my hope that this bank legislation would be dealt with expeditiously.
June 14, 1965

Some hon. Members of the Official Opposition, and some of the other Opposition parties have suggested to me it would be acceptable to them if, instead of extending the charters until December 31, 1965, we were to extend them until July 1, 1966, that is for a full year. I am in the hands of the committee. The hon. Member for Edmonton West, who has held a rather exalted position in this House, has mentioned to me, as I was about to point out, that this would be an unusual amendment to suggest. I am advised that it could be passed if there were unanimous consent, but I am not sure of this. I am looking at my friend opposite, who put me up to this in the first place. If there is any question about it, Mr. Chairman, I will just forget about the whole thing. I believe we should be able to get the revision of the bank legislation through by the end of this calendar year.
I apologize for these remarks which I was making at the suggestion of some of my hon. friends opposite. If there is some question about it, we should forget about it. I hope that since this is a rather straightforward, small bill, it can be passed. If there are any questions, I would be glad to answer them.


Marcel Joseph Aimé Lambert: I was pointing out this afternoon to the Minister of Finance the difficulties that might ensue as a result of a prolonged summer recess, depending upon the length of the committee deliberations. However, regardless of whether we have unanimous consent or not, there is one minor difficulty. We do not have the recommendation of His Excellency the Governor General on the amended resolution which, I am informed, would be required. I agree, therefore, with the Minister, that we should leave it at that.


Horace Andrew (Bud) Olson: We also made the suggestion that perhaps it would be better to extend these charters for one year. We have no real concern, however, that the revision cannot be dealt with by December 31, 1965.
[DOT] (8:30 p.m.)
As has been pointed out, if there is a reasonably long summer recess and the committee deals with it after the recess, we do not want the committee to be under the pressure of a time limit. We want it to have ample time to interrogate the officials of the Department of Finance and of the Bank of Canada, and anyone else it wishes to call before it. If it were possible to find a way to provide an extension for 12 months, rather than six months, I would hope it would be entirely feasible to have the work completed by the end of the year.
Quebec Savings Banks Act
Resolution reported and concurred in.
Mr. Gordon thereupon moved for leave to introduce Bill No. C-116 to amend the Bank Act and the Quebec Savings Bank Act.


[Stage Direction]
Motion agreed to, bill read the first and second times, and the House went into committee thereon, Mr. Lamoureux in the Chair.
On clause 1.
Marcel Joseph Aimé Lambert: Mr. Chairman, what is the number of the bill now before us?


Lucien Lamoureux: There is no number assigned to this bill yet.


Marcel Joseph Aimé Lambert: No?


Lucien Lamoureux: No.


Stanley Howard Knowles: Mr. Chairman, I simply rise to offer a solution to a problem. I realize it might not be very popular, but I will try it anyway. There seems to be some concern as to whether the ten year revision will be got through before the end of December. Perhaps the simplest thing to do is do what we did with the Canada Pension Plan, have the committeee meet during the recess.


Walter Lockhart Gordon: I am very grateful for that suggestion.


Mr. Cameron (Nanaimo-Cowichan-The Islands):: I hope the Minister will hold firm against this very subversive suggestion.


Horace Andrew (Bud) Olson: Mr. Chairman, this bill provides for an extension of the existing bank charters. Very briefly I want to take advantage of this opportunity to say to the Minister of Finance that we in this party appreciate the statement he made a few minutes ago respecting Bill C-102, the Bank Act that is before the House, which has not yet been passed and therefore makes this extension necessary.
While we agree with almost all of what he had to say respecting the way the monetary system operates in Canada today, we are in very serious disagreement with his conclusions about what would happen, and what some of the consequences might be of making certain of the changes we advocate.
The Minister took the trouble to prepare a very detailed statement in reply to a lot of the representations we made over the past few months. We appreciate this. It is very interesting because to my knowledge there have not been many ministers of finance who have taken our arguments seriously or replied to them in an objective way. We appre-
June 14, 1965

Quebec Savings Banks Act ciate the effort and the manner in which he responded to us.
His statement deserves vary careful scrutiny by the Members of this party and, I suggest, by Members in all parts of the Chamber, and we will answer those parts of it with which we do not agree when we go into further debate on Bill C-102.
We notice that the Minister agrees that it is necessary for the health of our economy that there should be an ever-increasing money supply and that this increase in the money supply should take place in direct proportion to the expansion of the economy. This is precisely the argument we have advanced over the years. We have also argued that part of this increase in the money supply should come from its actually being created by the Bank of Canada.
We note that during the last few hours there has been an additional acquisition of something like $75 million of Canada's national debt by the Bank of Canada. We agree with this, and we also agree with the Minister that there cannot be an irresponsible increase in the money supply, that this has got to be something that is based on sound judgment and in keeping with what the economic conditions of the day require.
We have also noted that during the last few days some $75 million worth of Canada's national debt was paid off from cash out of the Federal treasury, and an additional $75 million was acquired by the Bank of Canada. This means that $400 million worth of Canada bonds that are coming due are going to be replaced with only $250 million worth of bonds that will be re-issued to the financial institutions in the country. This is a desirable and important step, because the interest on that $150 million will no longer be required to be paid to the financial institutions that previously held this debt.
I want to say very clearly to the Minister that we do not believe we can have an irresponsible expansion of the money supply. It has to be in line with the expansion of the whole economic structure, but we think that gradually it will be possible for the Bank of Canada to acquire more and more of the public debt, so that eventually we may reach the stage where we pay the interest charges to an institution owned entirely by the Minister of Finance for and on behalf of the people of Canada.
I am not going to spend a lot of time at this stage answering in detail what the Minister said. We are going to study his statement

carefully. Again I wish to say it is commendable for him to have taken the trouble to make such a clear and objective reply to the representations we have made over the past months and years.
[DOT] (8:40 p.m.)


Mr. Barnett:: I do not rise for the purpose of continuing the discussion which was initiated by the hon. Member for Medicine Hat, but when I entered the Chamber a few moments ago I heard some references to a subversive suggestion which came from this corner of the Chamber. Well, I had a little conference with a couple of my hon. friends behind the curtains and as a result I think I can tell the Minister of Finance that the hon. Member for Nanaimo-Cowichan-The Islands might be prepared to consider favourably that suggestion with respect to carrying on the meetings of the committee, provided the committee could arrange to sit on Vancouver Island. Indeed, he went so far as to offer to provide some of the facilities which the committee might require. I thought the committee might be interested in that proposition. As a Member from an adjacent constituency I may say that if we could agree to those arrangements I would be happy to show some of the Members of that committee during the leisure hours some of the glories of Comox-Alberni.


Herbert Wilfred Herridge: I was interested in the arguments advanced by the Members of the Social Credit Party and the Creditistes. I should like the Minister to explain to us what in his opinion is the difference between a provincial savings bank, as dealt with in this bill, and a provincial savings agency.


Walter Lockhart Gordon: About 125 years. That would be the simple way of explaining the difference. The Quebec Savings Banks were incorporated a long time ago, certainly over 100 years ago. They have been dealt with under this particular legislation ever since Confederation or thereabouts. The Treasury Branches of the Province of Alberta and the Ontario Savings Bank have been set up under provincial legislation, and are not covered by the Acts which are now before the committee.


[Stage Direction]
Clause agreed to.
Clause 2 agreed to.
Title agreed to.
Bill reported.
Mr. Deputy Speaker:: When shall the bill be read the third time?


Some hon. Members:: By leave, now.
June 14, 1965


Walter Lockhart Gordon: the third reading ot the bill.
Motion agreed to and bill read the third time and passed.



QUEBEC SAVINGS BANKS ACT


Walter Lockhart Gordon: the second reading of Bill No. C-103, respecting Savings Banks in the Province of Quebec.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.

[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,
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
Income Tax Act
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.
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.
[Stage Direction]
June 14, 1965
Income Tax Act
(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 on 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
(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 efforts 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 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.
(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 of readers 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 or news 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,
June 14. 1965
[Stage Direction]
(1) 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 license 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,
(iii)	an association or society of which at least 3 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."
Walter Lockhart Gordon: There are two main points I should like to cover in opening the debate on the resolution to amend the Income Tax Act. First I should like to deal with the cut in personal income taxes which is to become effective on July 1. Then I should like to discuss briefly the proposal dealing with periodicals and newspapers.
Perhaps the most important section of this resolution deals with the tax cut to become effective on July 1, 1965. Understandably, this has been very well received by the public. Also understandably, there have been 22620-152
Income Tax Act
those who have suggested the cut might have taken some other form. I should like to say something about this.
As I explained in the budget speech, the total amount of the cut took into account the economic consequences resulting from the change and also the condition of the Budget. I pointed out that there is no precise mathematical formula that can be applied-it is a matter of judgment. It is our judgment that taking all considerations into account, we should plan for a tax cut of $250 to $275 million for a full year and that this should begin half way through this calendar year, which will be on July 1.
Having decided upon the amount of the cut, we then had to decide where it should be applied. I would like to quote what I said about this in the budget speech as reported at page 440 of Hansard.
In choosing the nature and form of the reduction, I have been influenced by the fact that we are expecting to make a thorough revision of our tax structure after receiving the report of the Royal Commission on Taxation and discussing the whole situation with the provinces. While we can count on none of our taxes being unaffected by such a revision, I have concluded that we should leave both the sales tax and the corporation income tax largely as they are pending this review.
In other words, we decided to apply the full amount of the cut to personal income taxes.
The Presidents of the Canadian Manufacturers Association and the Canadian Chamber of Commerce have expressed the view that cuts should have been made in corporation income taxes. However, neither of these gentlemen has indicated how in his opinion such a cut in corporation income taxes should be applied. The present rate of Federal tax after the abatement to take account of Provincial tax, is 12 per cent on the first $35,000 of taxable income, and 41 per cent on everything above that amount. The rate on the first $35,000 is a relatively low one by any comparative standard, even when the 9 per cent abatement for the provinces is included.
It is not clear if business spokesmen who have advocated immediate reduction of corporation income taxes have in mind a cut both in the rate on the first $35,000 of income, or only in the top rate of tax. We expect the Carter Commission will have a lot to say about the corporation income tax. And quite frankly, the Government did not wish to prejudge the case by taking action in advance of their report.
Moreover, it is well known that corporation profits, both before and after taxes, are

June 14, 1965
Income Tax Act
running at an all-time high. Corporation cash flows are also at an all-time high, thanks in large measure to the very generous provision for capital cost allowances provided for in the 1963 budget and extended in this recent budget. I mention these facts because they also have a bearing upon decisions in this field.
Some of those who favour a reduction in personal income taxes felt it should have taken another form. Mr. Gordon Sinclair, a well known broadcaster and an old friend of mine-he and I think we are about the only two people left who were not only born in Toronto but who have lived there ever since -advocated increasing the basic exemption to $2,000 for a single person and to $4,000 for married persons. The effect of this would have been to reduce federal and provincial revenues together, not by $250 million to $270 million but by $1,700 million. All I can say is that to have done this would have been highly irresponsible. I wrote to Mr. Gordon Sinclair about this and he was kind enough to read my letter over the air. I find that he has a very wide audience, judging from the comments that I received. He also wrote back and said that was fine, that I was entitled to my opinion but he was inclined to go at these things emotionally rather than statistically. That is his privilege, but I am not in that happy position when it comes to tax cuts.
[DOT] (8:50 p.m.)
I might point out that the present exemptions in Canada are considerably higher than those in either the United States or the United Kingdom. In the United States the basic exemption plus standard deductions for single persons is $200 less than it is in Canada, and for married persons it is $500 less. In the United Kingdom the basic exemption is $225 less than it is here for single persons, and $740 less for married persons. I put these figures on the record because I think some people have felt that the exemptions in Canada were less generous than in other countries, and this just is not the case.
The New Democratic Party proposed that personal income tax exemptions be raised by $500 for single persons and $1,000 for married persons, and in addition that the old age security payment should be increased to $100 a month.


Colin Cameron: Mr. Chairman, could I ask the Minister if he has read the amendment that I pre-

sented to the House, because I did not make any such proposal.


Walter Lockhart Gordon: Mr. Chairman, if my hon. friend will contain himself for about three minutes, I hope to deal with him.


Some hon. Members:: Oh, oh.


Colin Cameron: Please don't do that.


Walter Lockhart Gordon: As my Parliamentary Secretary, the hon. Member for Brant-Haldimand (Mr. Pennell), pointed out on April 29, as reported at page 744 of Hansard, this would have cost some $1,150 million per annum. Under present conditions, if it were proposed that this huge sum should be added to the deficit it would clearly be inflationary and would result in a general round of higher prices.


Colin Cameron: Mr. Chairman, could the Minister tell me if somebody did make such a proposal?


Walter Lockhart Gordon: Mr. Chairman, if my hon. friend would only contain himself for just a minute or two, I will deal with that.


Colin Cameron: I do not mind being misrepresented once, Mr. Chairman, but to be misrepresented twice in less than two minutes is a little too much.


Lucien Lamoureux: Order, please. The Minister of Finance has the floor.


Walter Lockhart Gordon: It may be that the N.D.P.
amendment was just badly worded. In an attempt to justify an untenable position, a spokesman for that party later suggested that if the words were taken literally, they meant the increase in the exemptions would only apply to the lowest bracket. According to this interpretation, a single man earning $1,500 would pay no tax because of the proposed increase in the exemption. But a single man earning $1,501 would not be entitled to any increased exemption. He would have to pay a federal tax of $51 plus a provincial tax of $9, as he does at present, or a total of $60. I cannot imagine anything more foolish than a result like this.


Some hon. Members:: Hear, hear.


Walter Lockhart Gordon: The second man, having
earned one extra dollar, would be $59 worse off than his next door neighbour whose earnings were slightly less than his.


Mr. Moreau:: Explain that.
June 14, 1965


Walter Lockhart Gordon: I suggest that the efforts of my hon. friends to avoid a charge of irresponsibility have produced something which on the face of it appears to be extremely foolish.


Mr. MacEwan:: Outside experts, I guess.


Walter Lockhart Gordon: The fact is that the form in which the proposed reduction in personal income tax is to be made was chosen for a number of reasons. We wanted to ensure that the reduction would confer the same benefit on people with similar incomes no matter where they resided in Canada, and that it would not disrupt the financial plans of the Provinces. This led us to the conclusion that the reduction should be in the form of a flat percentage of what is known as basic tax, rather than in the form of an increase in exemptions or a change in the rate schedule.
At present all the provinces impose a personal income tax, and in all provinces except Quebec the provincial tax is a percentage of the federal basic tax. Thus a decrease in the federal basic tax resulting from an increase in exemptions or a change in the rate schedule would have automatically reduced the amount of the provincial personal income taxes in all provinces except Quebec. It would also have automatically reduced the abatement allowed from the federal basic tax on acount of provincial tax. Because of this, a tax reduction of say $100 for a resident of a typical province other than Quebec would have turned out to be a federal tax cut of $76 and a provincial tax cut of $24. For a resident of Quebec, for whom the abatement would be larger under the opting-out arrangements, an intended reduction of $100 would have turned out to be a federal tax cut of only $53. There would have been no provincial tax cut, since the Province of Quebec levies its tax without reference to the federal tax.
It follows that a tax reduction in these forms-that is, an increase in the exemptions or a change in the rates-would have resulted in different amounts of reductions for taxpayers residing in different provinces but whose circumstances were otherwise the same. It would also have seriously disrupted the financial plans of the provinces.
Of course the nine provinces could, in such circumstances, have raised their rates to avoid a decrease in their personal income tax revenues, but this would have been difficult for them and especially difficult for those provinces that had introduced their budgets before the Federal Budget was 22620-152J
Income Tax Act
presented. Similarly, the Province of Quebec could, at the cost of a considerable reduction in its revenues, have lowered its rates so that the income tax position of a resident of Quebec, taking both federal and provincial personal income taxes into acount, was the same as that of a resident of other provinces. We did not believe that federal action that would have necessitated such changes in every province could be justified when the method chosen was available to us. Under it, the whole of the tax reduction will be borne by the Federal Government, and under it the benefits to taxpayers all across Canada will be the same. I wanted this opportunity, Mr. Chairman, to make that explanation, especially to those who have had some misunderstanding as to the reason we proposed the cut in this way.
The second point that I would like to discuss at this stage is the section of the resolution which deals with periodicals and newspapers. I would like to review briefly the events which have led up to the measures which are designed to engure that control of our periodicals and newspapers will be retained in the hands of Canadians. Hon. Members will recall that a Royal Commission was created by the previous Government to examine the position of Canadian periodicals. This was the O'Leary Commission, whose chairman is a respected Canadian editor known for his strong views on many subjects including, as one would expect, fiercely held convictions about the vital importance of maintaining freedom of the press.
[DOT] (9:00 p.m.)
The Commission, which reported in 1961, stressed the importance to the country of Canadian self-expression through Canadian ownership and control of periodicals. It recommended as a practical way of securing such control that those directing advertising to Canadian readers should use Canadian publications as a condition of the costs being recognized as a business expense for tax purposes.
The previous Government accepted this recommendation, though with the qualification that it should not apply to foreign owned periodicals already published in Canada; that is, to Time and Reader's Digest. That Government fell, however, before these proposals were approved by Parliament.
This Government, after giving the matter further consideration, decided that the measure proposed by our predecessors was a sound

June 14. 1965
Income Tax Act
one. This decision was announced in the Throne Speech of February, 1964. My recollection is that while the announcement in February, 1964, and the earlier announcement by the previous Government aroused some controversy, most of such controversy was centred on the exemption provided for Time and Reader's Digest. The principle of disallowing advertising costs as deductions for tax purposes was not challenged, as I remember, in the press or elsewhere.
In explaining the proposal in the House on February 20, 1964, the Prime Minister pointed out that the problem of Canadian ownership of periodicals applied also to other media of communications. In particular, he mentioned "signs that metropolitan newspapers in Canada may, before long, be in danger of coming under foreign ownership and control". The Prime Minister stated that the Government would give careful consideration to this problem.
Hon. Members will remember that the 1964 session was an extended one-to put it mildly-and we did not have time to deal with the resolution on periodicals. In the meantime, further consideration was given to the broader problem, especially to the question of ownership and control of Canadian newspapers. This included informal discussions with a number of newspaper publishers.
As a result of this further consideration and discussion, it was decided that the same principle which had been recommended by the Royal Commission and put forward first by the previous Government and then by this Government in the February, 1964, Throne Speech, should be applied to newspapers as well as periodicals.
As I said, 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.
The Government's proposal asserts no control whatever over newspapers or other publications. It does not alter in any way the complete freedom of businesses to advertise in any way they choose in existing publications or in any future publications owned by Canadians. It provides no precedent for any

kind of Government interference in the complete freedom of the press.
The proposal does make it highly unlikely, however, that the ownership of Canadian newspapers will be transferred to foreigners. Some few people may not think it matters whether control of Canadian communications media is retained in Canadian hands. The Government believes this does matter, and the majority of newspaper publishers have indicated that they share this view.
Hon. Members will recall that in the early days of radio, following the report of the Aird Commission, approval was given to legislation providing that control of Canadian radio stations-and later television stations- must be held by Canadians. If this had not been done, it is safe to assert that many Canadian radio and television stations would now be controlled by absentee owners.
There are, of course, similar laws in the United States respecting the ownership of U.S. television and radio stations, as an exCanadian, Mr. Jack Kent Cooke discovered.
As I say, the majority of newspaper publishers have not objected to preventive measures being taken against the transfer of Canadian newspapers to non-residents. The controversy seems to arise over the timing and the method chosen to prevent this being done.
As to the timing, let me say the obvious. There is no point in locking the stable door after the horse has been stolen. Hon. Members will recall that last September I announced that legislation would be proposed in due course preventing the acquisition of any of our chartered banks by non-residents of Canada, and that this would be made retroactive to the time of the announcement; that was, to September, 1964. I was asked why it was necessary to make an announcement at that time when, as far as most people knew, no takeovers of Canadian banks were in contemplation. Shortly after making the announcement, however, I discovered that a foreign institution had planned to acquire a controlling interest in one of our principal Canadian banks. We would have been faced with a fait accompli if it had not been for my announcement.
The same thing could be true in the case of some Canadian newspapers. I do not think we would like it very much if we woke up one morning to find, for example, that control of the Toronto Globe and Mail had been acquired by certain United States interests who wished to exert a direct influence on
June 14. 1965

Canadian public policy. Nor do I think we would like it very much if we woke up one morning to find, for example, that control of La Presse had been acquired by certain European interests who wished to exert a direct influence on Canadian public policy. These are eventualities the Government believes we should guard against in time.
In essence, the objections boil down to the particular measure which is proposed to accomplish an objective with which most people agree. The fact is that no practical alternative has been found, despite careful thought and much discussion with the people concerned. In practical terms, we have the alternative of proceeding with the measure which is before the House or of dropping the question altogether. If we were to do the latter, and one or more of our more important newspapers or chains of newspapers were to fall into foreign hands, neither the Government nor Parliament could shirk responsibility for having allowed this to happen.
Let me say another word about the freedom of the press, or to put it in broader terms, the freedom of the communications media. First, measures which have prevented control of Canadian radio and television stations being acquired by non-residents have been generally accepted. Second, the present proposal with respect to Canadian periodicals has not been challenged, Third, clearly there is not and could not be any question of interfering with the press in so far as the dissemination of news and opinion is concerned. Fourth, the proposal interferes with one freedom and one freedom only. It means that a Canadian publisher wanting to sell his newspaper will have to accept the best bid he can get from other Canadians. The whole point is to establish a safeguard to prevent foreigners from outbidding Canadians in this field.
[DOT] (9:10 p.m.)
I can understand the objections of publishers who may wish to expand their operations to other countries. Obviously, if this same approach were adopted elsewhere, such expansion would not be possible unless the parties concerned were prepared to apply for citizenship in such other countries as was done by Mr. Jack Kent Cooke. But this is an objection which should be stated clearly for what it is: fear that businessmen or wealthy financiers may be discouraged from acquiring the communications media of other countries and, having done so, perhaps attempting to influence public opinion in those
Income Tax Act
countries. That kind of objection should not be confused with freedom of the press.


Herbert Wilfred Herridge: Quite right.


Walter Lockhart Gordon: I do believe, Mr. Speaker, that the discussion which has arisen over this issue has had its uses. The very proper concern of the press about its freedom has been vigorously stated. I cannot believe that after this discussion any Canadian Government at any time would ever contemplate any measure which could seriously be construed as interfering with the freedom of the press. I know that no Liberal Government would ever think of doing so. I am sure the same would be true of any Government composed of any of the other parties represented in this House.


Marcel Joseph Aimé Lambert: Mr. Chairman, in dealing with this resolution we are faced with quite a compendium of bits and pieces having to do with various sections of the Income Tax Act. Some of them are as usual hole plug-gers, or perhaps it might be better to say "pluggers of holes". Then there is the particular section dealing with newspapers and periodicals on which the Minister has spoken for the last several minutes. It is not my intention tonight to deal with that latter aspect but rather with some of the other features of the resolution.
First of all, with regard to the income tax reduction I think personally that one is not being overly cynical if he says that this was devised and timed as part of a voting gimmick. Let me say why it seems to be a voting gimmick. When "10 per cent" is said quickly it sounds like a lot to people who are taxpayers, but it means nothing to nontaxpayers. It does not do anything for people not classed as taxpayers.
There have been other tax reductions in the past. In 1957 or 1958 the Minister's pred-esessor but one brought in a tax reduction which greatly increased the number of nonincome taxpayers. I think that what happened was that the Minister had about $250 million to $275 million to play with and he said to himself, "How am I going to put that to the best use politically"?


Miss Jeweit:: Huh.


Marcel Joseph Aimé Lambert: It was straightforward political thinking. First of all, we know there were limitations in the case of some of the provinces, so far as the basic tax is concerned. I put it to the Minister and to the House that the tax proposal is discriminatory in a number of ways. First of all, as I said

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Income Tax Act
it does nothing for the non-taxpayer of whom there are many in this country either by reason of limited income or because they have varying exemptions. I do not think the Minister of Fisheries will shake his head when by reason of exemptions a person becomes a non-taxpayer, and there are thousands in this category. Either by reason of the number of dependants or otherwise potential taxpayers become non-taxpayers. In other words, they are cleared by their exemptions. Ten per cent of nothing means nothing to such a person so he gets no gain.
For the person who pays a small amount of tax a 10 per cent reduction is a very minute amount. I am not going to go into the varying scales. These were adumbrated by my late colleague, the former Member for Digby-Annapolis-Kings, and also by others. References have been made to a cup of coffee a day and so on. But then there is a further category, and this is perhaps the main reason I consider this reduction political. Perhaps the hon. Member for Northumberland may not have thought about this.
I am thinking of those people whose incomes are above the level of incomes that will benefit from this reduction. In other words, on the average the limitation of $600 means that anyone with an income above $20,000 will not benefit. Some people will say that $20,000 is a lot of money and anyone with such an income is in the higher brackets in this country. But I put it to hon. Members that in so far as economic development and commercial impact are concerned taxpayers in this category are very important, because in the main most of those who earn over $20,000 are people who are perhaps a little more industrious.


Colin Cameron: A little luckier.


Pauline Jewett: Less than 1 per cent of the population.


Marcel Joseph Aimé Lambert: They are, shall we say, more energetic. Somebody says "a little luckier". I do not know that there are many people who are prepared to work 16 or 18 hours a day, who have considerable ingenuity-


Pauline Jewett: The right father.


Marcel Joseph Aimé Lambert: -and have not inherited wealth but have been very industrious people. They are not limited to any part of the country and they are somewhat restricted in number. I am sure that the official thinking goes this way: There are a certain number of these people who are dyed in the wool Lib-

erals, so no matter what we do they will still vote Liberal.


Some hon. Members:: Hear, hear.


Marcel Joseph Aimé Lambert: I have said there is a proportion. Then an equal number are Conservative and this action will only reinforce them in voting Conservative. But the overall number is not large. Then there is a third segment comprised of people who may have voted Liberal but will now vote against the Liberals because of this action. However, politically speaking, their number is small. I am sure the political thinking is: What is their political impact in votes? An analysis shows that in numbers right across the country throughout the constituencies their impact is not very great.


Pauline Jewett: How many are there between $10,000 and $20,000?


Marcel Joseph Aimé Lambert: There are more between $10,000 and $20,000 than there are over $20,000. But I would suggest this is an area of discrimination. It is not the only one, but it is an area of discrimination just as one might say that a progressive income tax is discriminatory. In other words, you just grin and bear it because you can bear it a little better if you are in a higher income bracket, even though your contribution is quite as much and in fact may be considerably more than the person whose income is somewhat less. The Minister indicated that it was not possible to do anything about corporation income tax, of which the Federal share is 12 per cent of incomes under $35,000 and 41 per cent on incomes above $35,000, because the provinces have a 9 per cent vested interest in corporation income taxes. He preferred to wait for the report of the tax structure committee.
[DOT] (9:20 p.m.)
Well, I do not care how you slice a loaf of bread, lengthways or crossways, it still comes out bread. I think the Minister would agree with me, as would the hon. member for Northumberland, that the majority of corporate income tax is passed on to the consumer. It is still John Q. Citizen who pays the tax. Now, as to whether that tax cut should be an incentive or not, I subscribe to the view that corporate income tax would have much more impact than personal income tax, in so far as stimulation of the economy is concerned. After all, if I may say so, part of the political thinking behind this tax cut was to partially soften the impact of the premium that will be paid under the Canada
June 14. 1965

Pension Plan. The Minister was quite frank about this. There will be up to $79, and perhaps $158.40 payable by the self-employed person, under the Canada Pension Plan starting in 1966. This provision will, therefore, go toward softening the impact of this compulsory levy under the Canada Pension Plan.
I am just wondering if there would not have been more effect, in dealing with the $250 million or $275 million-the Minister's advisers may be able to help us in this regard -if there is that much available as a result of the growth of the gross national product, if we were to straighten up our corporate income tax structure and get away from this wholly artificial division between small business and big business, under which you get this 21 per cent and 50 per cent differentiation. I think it is wholly artificial.


Walter Lockhart Gordon: Would my hon. friend permit a question?


Marcel Joseph Aimé Lambert: Yes.


Walter Lockhart Gordon: Is he recommending that this change should be made, that there should be this evening up? If so, does he think it should be done now or does he think we should wait for the Carter Commission report?


Marcel Joseph Aimé Lambert: I am asking the Minister to see whether, within this field, there is not an area in which to work. After all, if we look at the motivation for the stimulation of the economy through a tax cut, we find it would do the most good in the field of corporate income tax. Is the Minister reinforcing my contention that this had a great deal of political gimmickry-


Walter Lockhart Gordon: I thought I was asking the question, Mr. Chairman.


Marcel Joseph Aimé Lambert: All right, I am coming back to it. I will answer by asking a question.


Walter Lockhart Gordon: That is the trouble with you lawyers.


Marcel Joseph Aimé Lambert: If there is this $250 million or $275 million, I would have felt that an evening up of the two categories, with greater earnings withdrawn from a corporation in the shape of dividends, as is done in other jurisdictions, might help solve the problem of what I believe is an artificial distinction and would leave money-if the Minister will kindly bide with me-


Walter Lockhart Gordon: You intrigue me.


Marcel Joseph Aimé Lambert: This is not the first time I have made this suggestion. I made it last year,
Income Tax Act
the year before, and the year before that. As a matter of fact, my colleagues used to wonder if I was ever going to get off it. No one has as yet satisfactorily answered this point. It seems to me fundamentally unsound to set at $35,000-it used to be $25,000 and earlier it was $20,000-the distinction between small businesses and what is not really big business, especially if you go just $5,000 over the $35,000.
After all the Minister and his colleague, the Minister of National Revenue, from the experience I had with the Department of National Revenue, went through the greatest torture to plug up holes in the administration of the Income Tax Act, in so far as related companies were concerned. Certain types of industries and certain types of operations lend themselves to proliferation of departments or small companies. For some time certain corporate taxpayers were really in clover because they were able to break down their operations into a whole series of small businesses. Then we came along, again with an artificial restriction, and attempted to eliminate the related companies. Every year, as a result of the ingenuity of the taxpayers, the tax officials must come along and try to plug other holes. In my opinion the administration of the Income Tax Act in this particular sector would be a great deal easier and we would not have the expense on the part of the taxpayer trying to devise ways and means of alleviating the tax load-certainly at 50 per cent the tax load is heavy on corporations- if my suggestion were followed. I may be ahead of the Carter Commission, but I still believe that if there were $250 million or $275 million available for the full 1964-65 taxation year, something could have been done in the field of corporate income tax which, from the point of view of stimulating and maintaining the growth of our economy, would have been preferable to a personal income tax cut.
Then, we come down to the next paragraph of the income tax resolution and we see changes made which make allowances for the support of nephews and nieces, not all nephews and nieces, but those who may be infirm in certain categories either mentally or physically or, if they are over 21 years of age and attending a full time course of study at school or university, provided the mother of the niece or nephew is divorced or separated and is not in receipt of alimony or a similar payment.

June 14, 19G5
Income Tax Act
[DOT] (9:30 p.m.)
This may introduce a complication. If a separated mother receives alimony, and separate maintenance for her child, is it a lump sum? There is imprecision in the Act, and there is also the question if the father of the niece or nephew is deceased, or mentally or physically infirm.
This deals with a certain number of hardship cases, and I think generally Members will accept that there are always some of these fringe cases to which one feels one should be able to give relief, providing they do not cost too much money to the treasury. I can think of other categories which are equally deserving, but the numbers in them are too great and therefore they would be too costly to the treasury.
The fourth paragraph of the resolution deals with the famous amendment in the second half of the Canada Pension Plan, where a change was made in the old age security to those persons between 65 and 70 over the period until 1970, and the disallowance, as one became eligible for old age security, of the $500 allowance for being over age 65.
I must confess that on one occasion when I was commenting on this I said the Government was only giving something with the right hand and taking something back with the left hand, that the $500 not only covered the taxpayer but his or her spouse. I must confess I was temporarily in error and misled some people, and I must apologize for that. In any event this is part of phase 2 of the fourth version of the Canada Pension Plan, granting the old age security to persons over age 65.
So far as the fifth paragraph is concerned, this gives an extension of membership dues in either trade unions or professional societies, putting them outside of the $100 general allowance. In other words, full credit is being given for them.
Paragraph 6 deals with residence qualifications for persons in international service engaged in the development assistance programs of the Government of Canada. I dare say this is some inducement for persons engaging in this type of activity and it may also cover the Company of Young Canadians and people in it who may go abroad in the future.
So far as the seventh paragraph is concerned I would like to get a clarification from the Minister that any contributions made toward the Canada Pension Plan, or under

a provincial pension plan, may be deducted in computing the income of the persons making them. Is this within the limitations of any pension plan contributions, such as the $1,500 ceiling? We need some clarification on this point so that we may tell our constituents whether the introduction of the Canada Pension Plan will now be caught by the ceiling on retirement savings plans. There is a limitation within the framework of the Income Tax Act with regard to these contractual obligations that a taxpayer may enter into. Is this contribution to the Canada Pension Plan going to be in addition to that? The Minister nods his head, so I will take that as his answer.
In paragraph 10 there are a number of, shall we say, exemptions of expenses that heretofore have always proven somewhat thorny. I do not know why they have been brought in this year, as there are any number of others that are quite as difficult to handle, and it would be interesting to get a rationale from the Minister for the picking out of the five subparagraphs in paragraph 10 of the resolution.
The first one that comes to my mind is that if a payment is made by a taxpayer to a person who is a lessee of a property to induce that person to cancel the lease, then the taxpayer may claim that amount as a deduction or as an expense against that year's income, provided of course the lessee and the taxpayer are dealing at arm's length.


Walter Lockhart Gordon: Which number?


Marcel Joseph Aimé Lambert: Number 10 (a) on page 12 of the resolution. The first question that comes to my mind is why "dealing at arm's length"? Is this going to eliminate related companies? Is it also going to eliminate any personal relationship between the owner of the property, the taxpayer, and the lessee?
One example was quoted to me this way. A father has a shopping centre. One unit of the shopping centre he has leased to a son who is in independent business, and the other units are leased to strangers. The father is able to sell the shopping plaza, provided he is able to give vacancy. In other words, he must buy out the leases. The money that he has paid to the strangers he is able to claim as a deduction but the money he has paid to his son, who is in business independently, he cannot claim as a business expense, and to that extent I would say that this provision of dealing at arm's length is discriminatory and unrealistic, in the same way that I think there will be some difficulty in determining
June 14, 1965

the corporate relationships. What will be the criteria to determine whether two companies are at arm's length?
Also, what of the taxpayer who is a lessee and he buys off the term of his lease by a lump sum payment to his lessor? Is he not able to claim that? Surely to goodness the two positions should be treated the same way? For example, say I am renting premises under a long term lease and I have three years left, and because of expanding business conditions -I am sure the Minister would appreciate this-I feel I have got to go to bigger and better premises. Suppose I wish to buy out the balance of the term of the lease under which I hold the first premises, and I enter into an agreement with my landlord whereby in return for a lump sum payment I can bring the leasing agreement to a term. Certainly I should be able to claim that as a business expense. But I cannot do so under this provision.
[DOT] (9:40 p.m.)
There is a second paragraph dealing with landscaping property used by the taxpayer for the purpose of gaining or producing income. If I landscape a house in which I live I cannot get any allowance under this provision. But if I own the house across the street I can claim the landscaping as an expense.


Mr. Horner (Acadia):: And move in yourself, the following year.


Marcel Joseph Aimé Lambert: And, of course, as the hon. Member for Acadia says, I can move in myself the following year.
Then a deduction may be claimed in respect of clearing land or laying tile drainage for the purpose of carrying on a farm business. I think there is a good deal which could be done, here. It all depends, of course, on what the interpretation of "clearing land" is to be. Paragraph (d) is one which may lead us into a wilderness. It says-
-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.
What limitations are there to be? Is there to be an element of reasonableness? If there is, here is another point at which discretion is introduced on the part of the Minister. Will a taxpayer be able to bring forward all his expenses incurred in connection with, say, making representations to the Government of Canada for the purpose of obtaining a licence or a permit even if his efforts are 22620-153
Income Tax Act
unsuccessful and the proposed business cannot function? Take the case of a group of businessmen who get together to form a broadcasting company and apply for a television licence. They may spend a good deal of money toward obtaining a television licence and in the end they may not be successful. The expenses would be those of the corporate body which, in many instances, would have no income. To whom would the allowance be granted in such a case? Would it be set against the personal incomes of the individuals in the company? I think we shall need to obtain clear answers on points such as these, because there is a great deal of uncertainty attached to the resolution as presently written. As to expenses, does it mean a man would have to stay at a second rate or third rate hotel-or could he go down to the Chateau in Ottawa and live there like a visiting potentate? Is the Minister going to say expenses must be reasonable and, if so, who is to determine what is reasonable? Is this, too, to be left to ministerial discretion? These are questions which must be asked.


Herman Maxwell Batten: I must interrupt the hon. Member to remind him that the time allotted to him has expired.
Does the committee give leave to the hon. gentleman to continue?


An hon. Member:: Ten minutes.


Marcel Joseph Aimé Lambert: I will not take that long.
Then I think we shall need some clarification of paragraph (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.
Would this permit a man operating a business in Vancouver to travel to Montreal, all his expenses being deductible. Suppose the man says: I was investigating a site for a building which I may use; I am thinking of branching out. I trust these are questions to which the Minister will give us concise answers.
As I said earlier, I do not wish to deal with this matter of newspapers and periodicals except to say this: With regard to the periodicals, we heard a great deal of complaint from the Canadian periodical press that they were being starved to death because of what they alleged was unfair competition by two United States giants which had established operations in Canada, and which for technical reasons were able to acquire their editorial content at a much lower price than Canadian concerns. These two giants, it was

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Income Tax Act
said, were syphoning off the great bulk of the advertising revenue available to magazines and other periodicals in Canada.
Well, the proposals contained in this resolution will only enshrine this situation because the two magazines in question, Time and Reader's Digest are specifically exempted. This resolution puts down in black and white the situation which has existed for a considerable time. From time to time the periodical press has activated discussion on this subject; at other times it has laid low. What is the future of Canadian magazines? Either they have been able to extricate themselves from this situation which existed prior to the appointment of the Royal Commission on press and periodicals, or they have resigned themselves to it and are, nevertheless, continuing to live.
I hope they are finding a means whereby they can survive-and not only survive, but expand. I do not know what provisions here can help them at all. They are not complaining about competition from periodicals published and printed abroad; the chief difficulty lay with publications printed in Canada but enjoying certain advantages because their editorial content and other facilities were supplied by the parent organization. This situation is to continue. As I say, there will be further discussion in this regard.
[DOT] (9:50 p.m.)
I wish to thank the committee for having allowed me these few extra minutes. I will not abuse the generosity of hon. Members. As I indicated earlier, this budget resolution is composed of bits and pieces. There are items on which I have not commented, for example paragraph 13 which merely plugs loopholes. I should like to say something about item 15 which I think may discourage joint ventures by companies searching for oil and gas in the Western Provinces or even on the northern islands. I say this because it is no longer possible, as exploration goes further and further afield, for exploration to be carried out by an individual company. Even the largest one is now participating along with associates or competitors in their business in joint ventures to try to find a new field. Certainly under the regulations which apply in the Province of Alberta this is an eminently sound way of doing it, because if a new field is discovered and it is on only one Crown reserve, then the whole area may be parcelled out in leases and everbody gets a crack at it.
This certainly will contribute to the companies getting together, which is, again, a

sound point. But I am just wondering what the implications of paragraph 15 are going to be, because apparently the cost of acquiring the lease or licence cannot be passed back to the shareholder corporation, which frankly is the only one that is earning income; because the development syndicate or the development corporation that goes in to prove this particular well is not an income earner. I therefore rather suspect that what is going to happen is that the cost of acquiring leases which have been granted in previous years is going to be taken away this year under another form. We will discuss this further, Mr. Chairman, when the bill comes forward.


Colin Cameron: Mr. Chairman, having only five minutes at my disposal I shall just have to start to insert my knife in the ribs of the Minister of Finance and complete the evisceration at a later date. I may say that I was rather surprised that the Minister displayed such, shall I say disingenuousness, to give it no harder name, by repeating tonight the figures that he, I understand, provided his innocent and unfortunate Parliamentary Secretary who I am sorry to see is not in the House tonight, I am perfectly well aware that this is an honest misapprehension on his part. I suspect he had been misled by the Minister of Finance, who had not I am afraid at that time-in fact I am quite sure-read the amendment which was presented to the House on behalf of this party. In fact, Mr. Chairman, I recall meeting the Minister of Finance in the elevator and he was still hurling these ridiculous sums at me, and I pointed out that in fact there was another flaw in my amendment as it was written, and that anybody who earned $1,501, as he pointed out tonight, would have to pay on the $500 above $1,000.
However, tonight the Minister again produced these fantastic and astronomical figures which he provided for his unfortunate Parliamentary Secretary, and I am rather surprised that the Minister would stoop, again, to this disingenuousness instead of dealing with what was-and I admit it quite frankly -a shortcoming in my amendment; but a shortcoming made necessary by the fact that one cannot spell out all the consequences of action proposed in an amendment. What the Minister is telling us now is really this, that he is too incompetent to devise the graduation changes in the incomes just above the level of those whom I am proposing to remove altogether from the income tax
June 14, 1965

brackets. Many of us have suspected this, but what I find quite disturbing is the implication that not only is the Minister incompetent but that his officials, his advisers, his experts are also incompetent and are not able to make those minor adjustments in the income tax rates that would naturally, I would have thought-


Walter Lockhart Gordon: Mr. Chairman, I wonder if my hon. friend would permit a question?


Colin Cameron: Yes, do. I am always hoping you will dig yourself in deeper. Let us have it.


Walter Lockhart Gordon: Is the hon. Member attempting now to say that he was not irresponsible and he was not even sloppy? Nobody can, surely, excuse him from one or other or both those charges.


Colin Cameron: Mr. Chairman, I am suggesting to the Minister that in an amendment-and perhaps if he had a little more experience in this House he would know this-presented in the middle of a debate in this House one does not spell out everything in detail.


Walter Lockhart Gordon: Mr. Chairman, I wonder if my hon. friend-


Colin Cameron: Perhaps the Minister can wait until I get through.


Stanley Howard Knowles: He can contain himself.


Colin Cameron: Yes, he can contain himself. He asked me to contain myself. I contained myself until this moment, and look what happens. I found the Minister disingenuously repeating figures which were based, as he knew quite well this evening even though he was unaware of it the first time he persuaded his Parliamentary Secretary to produce them, on a gross misreading of the implications of my amendment.


An hon. Member:: You grossly misrepresented it to the public.


Colin Cameron: I suggest that it should have been obvious to anyone that the proposal which I made, which was to remove certain people altogether from the Minister's tax rolls, would necessitate some minor adjustments in the graduated income tax above that level to avoid the particular disabilities that the Minister pointed out tonight. Here is what he is telling us, that we are stuck forever 22620-1531

Proceedings on Adjournment Motion with this formula; that if we want to raise the income tax exemptions in this country, if we want to remove some other sections of the community from the Minister's tax rolls, we have to grant that exemption all the way up the scale. This is what he is telling us, in effect, this evening; that because you are going to eliminate certain people from the income tax rolls, therefore the result will be even more consideration for those in the higher income brackets.
I suggest to you, Sir, that this is either a revelation of incompetence on the part of the Minister or it is a revelation of the fact that he is not concerned with such matters as equity in the distribution of our income and the distribution of the burden of taxation for public services in this country.
May I call it ten o'clock, Mr. Chairman, and complete my evisceration of the Minister at a later date.
Progress reported.



BUSINESS OF THE HOUSE

Mr. MacNaughl:: Mr. Speaker, tomorrow we will continue with the discussion of the budget resolutions.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Mr. J. J. Greene (Renfrew South):: Mr. Speaker, I rise at this time to complain, in the brief time allotted to me, of the condition of Highway No. 17 immediately west of the City of Ottawa, which is designated as part of the Trans-Canada Highway and which I respectfully submit is a very long way from coming up to the standards which are generally accepted as satisfactory with regard to the Trans-Canada Highway. I may say that it causes me some considerable embarrassment, as a Member from that part of the country, to be reprimanded by my fellow Members from such generally reputed poor provinces as Nova Scotia and Newfoundland, when they complain to me that this highway is far from the calibre of the Trans-Canada highway that they enjoy in their provinces.
This matter has been drawn to my attention by resolutions from the elected representatives of many of the municipalities in the
June 14, 1965

Proceedings on Adjournment Motion constituency I have the honour to represent, namely the Town of Amprior, the City of Renfrew, the Township of McNab, and the Township of Admaston. Also the Eastern Ontario Development Association has drawn this deplorable situation to my attention, and this prompted me to raise the matter in the House during the question period the other day, and to complain further here at this time.
[DOT] (10:00 p.m.)
I quite appreciate that highways generally are within the provincial field of responsibility, but I do suggest that when a highway is part of the Trans-Canada Highway, this Government, this House, and in particular the Department of Public Works cannot suggest that they do not have some responsibility for its condition.
There is one very heartening thought about the sad condition of the highway, or tortuous trail, which I think has been properly referred to as a goat trail. As a boy, among my herolike movies was King of the Khyber Pass and, subsequently, The Lives of the Bengal Lancers, both motion pictures which were very popular in my day among young people. I understand that certain Hollywood people intend to make another movie of the Lives of the Bengal Lancers and, inasmuch as the roads in the Khyber Pass have been considerably improved since the 1930's, they feel that this stretch of No. 17 highway would be most adequate for the filming of the new version of the Lives of the Bengal Lancers. Therefore, there must be some modicum of benefit to the people in this regard. However, I think we would sooner have this part of the road brought up to the standard we expect for our Trans-Canada Highway.
Mind you, it is nothing new for the Ottawa Valley and, in particular, Eastern Ontario in general, to get the short end of the stick. As a matter of fact, when one talks about the short end of the stick, I suggest that in that part of the country we have not yet got the butt end of a good toothpick as our share in respect of matters such as roads, to which both the federal and provincial authorities contribute. In other areas we are used to being despoiled, just as Georgia was when Sherman marched through it. We have been despoiled of our rights to water resources as a result of the transmission of power to other locations instead of having industry come to the power source, as is the case in more enlightened provinces. We have, of course, the most expensive energy-electrical,
[Mr. Greened
petroleum and natural gas-of any part of the Province of Ontario, so we are used, as
I say, to being shortchanged in many ways. We do expect, however, to be able to get out of this part of the country with our produce, and to have some easy access to markets in order that we may share somewhat in the general bountiful advantages of this great province.
We are aware of the great metropolitan City of Toronto which received $50 million in regard to the Gardiner expressway, and $50 million in respect of the subway. In Toronto these days they have reached the point where on top of their roads, they have superhighways, and on top of the superhighways they have super, superhighways, and beneath it all they have a subway. The people I represent do not mind contributing to this great development in the metropolitan City of Toronto, as it is a wonderful area and we are very proud of its progress. Judging by the representation it sends to this House the people of Toronto are very wise politically. However, we would like to share somewhat in the bounties of this great province and we feel we can better do so if this section of the trans-Canada Highway is brought up to standard, so that we might have access to the great metropolitan markets.
I do suggest that the Federal Government has considerable responsibility in this regard. I understand that in the first instance highway No. 17 was designated as a main artery of the Trans-Canada Highway, but subsequently for some mysterious reason the main artery was diverted through Lindsay. There was a very eminent gentleman in the Provincial Government at that time who came from the Municipality of Lindsay, hence the main branch of the Trans-Canada Highway went through Lindsay, and our section of the highway for political reasons was designated as a second branch of the Trans-Canada Highway. That designation carried with it little green signs with little green maple leaves; but apart from that, no construction was to be observed.
So I suggest that the maple leaf is now the proud symbol of this nation and that it should only designate highways which are in fact of Trans-Canada standards. In the short time allotted to me I have but this to say: May we bring this highway up to Trans-Canada standards. As a Federal Government may we insist that if it is to be a Trans-Canada Highway it be brought up to Trans-Canada standards. Otherwise the vigilantes of the Ottawa valley will have little choice but
June 14, 1965
to tear down those little green maple leaves, because we know it is not in fact a trans-Canada Highway.


Mr. G. Roy McWilliam (Parliamentary Secretary to Minister of Public Works):: Mr. Speaker, the remarks of the hon. Member for Renfrew South (Mr. Greene) were listened to with a great deal of interest and I am sure they will be noted. However, I am informed by the officials of the Department of Public Works that this matter does not come within the jurisdiction of that Department or of any other Department of the Federal Government.
The section of highway 17 to which the hon. Member refers is not part of the official Trans-Canada Highway for which the Federal Government shared any costs. The maple leaf signs on this section of highway No. 17 were placed there by the Provincial Department of Highways with the Province bearing the cost. The object of these signs, I am told, is to indicate a provincial northern route connecting with the official Trans-Canada Highway. The Department takes the position that repairs and improvements to this section of highway 17 are entirely a provincial matter as the Federal Government did not share in the cost of the highway.


John James Greene: Will the Parliamentary Secretary permit a question?


Mr. Deputy Speaker:: Order, please. The hon. Member for Port Arthur.



FORESTRY-REMOVAL OF DEPARTMENTAL LABORATORIES TO SAULT STE. MARIE

Mr. D. M. Fisher (Port Arthur):: Mr. Speaker, I regret I have not got the capacity for understatement of the hon. Member for Renfrew South (Mr. Greene) to assist me in raising a matter about which I am rather irked. I see that the Parliamentary Secretary to the Minister of Agriculture is here to answer, I suppose, for the Minister of Forestry (Mr. Sauve). It would have been too much for that great man to give us his presence this late in the evening. He is probably away in Quebec making the world safe for the Minister of Justice (Mr. Favreau).
The problem I want to touch on was raised in a question when I asked the Minister of Forestry if, when his estimates went before the appropriate committee of the House later this session, he would support a thorough investigation, including the calling of outside witnesses, with regard to the decision to put the regional forest research headquarters at
Proceedings on Adjournment Motion Sault Ste. Marie rather than retain them at Richmond Hill or Maple where they are now. This particular issue may seem rather small, but I think this action is the most outrageous blow struck at forestry science and forestry research in a long time. It is indefensible; it is stupid.
The Minister's answer was no, he would not support the calling of outside witnesses. I am going to be on the committee and I am going to try to see they are called. In any event, as a member of that committee I hope to interrogate the Minister and his officials so as to reveal that this great hero of cleanup in politics has been as guilty of pork barrel politics and patronage as any minister I have ever heard of. I have a letter here from a Mrs. K. C. von Althen of Richmond Hill who is close to the foresters there. She says in part:
While it may be too late to change the Minister's original decision, I sincerely believe that, for the benefit of the Department of Forestry, it should be pointed out in the House of Parliament that such a move is contrary to the best interests of future forest research in Ontario. In other words, if the old pork barrel approach is to be used, please say so and let the blame for future shortcoming be placed with the Minister rather than the practising scientists of the Department of Forestry.
[DOT] (10:10 p.m.)
Who was it that the Minister of Forestry could not say no to? Was it the Prime Minister, whose constituency is close to Sault Ste. Marie? Was it the hon. Member for Algoma West (Mr. Nixon), who has been here so long and so quietly? Was it the Attorney General of Ontario, Mr. Wishart, who is the Member for Sault Ste. Marie and seems to have convinced the Provincial Department of Lands and Forests it should take a completely negative attitude on this question and not say yea or nay to this move?
I wanted to turn to the Minister's original announcement on February 18, and I quote from the press release:
"To establish our regional headquarters near the centre of major forest activity is, I feel, a sound decision," Mr. Sauve said. "All the various factors were carefully weighed and we consulted with all those involved."
There are lies in that statement. Consultation was inadequate. Sault Ste. Marie is not the centre of forest activity in Ontario. It is quite apparent that the factors that were looked at were partisan politics and superior pressure, if you want to put it that way.


Mr. Deputy Speaker:: Order; the hon. Member, I am sure, would expect the Chair to intervene when he says that a statement

June 14, 1965

Proceedings on Adjournment Motion made by a Minister is a lie. This, obviously, is unparliamentary. Perhaps the hon. Member has an explanation.


Douglas Mason Fisher: Well, I will just say that they are misstatements of the truth, Mr. Speaker, because obviously Sault Ste. Marie is not in the centre of forest activity, and certainly not of research in Ontario. It became apparent as things developed after this announcement that a great many people were not consulted, including the forestry school at Toronto, the forestry school at Port Arthur, the professional foresters and almost everybody who had a professional interest in this. You cannot blame me, therefore, for suggesting that there are some misstatements in the Minister's approach.
Later on, in a speech on March 23 to the Canadian Forestry Association, the Minister said:
In deciding on appropriate locations for our regional headquarters, we are guided by several important considerations, namely, the seat of Provincial forest authority-
That is in Toronto, not in Sault Ste. Marie, and Sault Ste. Marie is not even a regional headquarters.
-the presence of universities-
There is not even a technical college established at Sault Ste. Marie.
-and the proximity of forest industries.
Well, I cannot think of a more isolated part of Ontario, in a transportation sense, and one that has a smaller variety of corporations concerned with forest activities than the immediate Sault Ste. Marie area. Therefore, according to the Minister's own standards, the decision is wrong.
Later on, in this same speech, the Minister says:
In Ontario, we were faced with a particularly difficult situation, and we reached the decision that our regional headquarters should be in Sault Ste. Marie, which has the advantage of being geographically near the centre of the province and close to the forest industry.
He is getting a little bit closer to the truth. Sault Ste. Marie is close to the geographical centre of the Province and it is close, in terms of hundreds of miles, to the forest industry. The main point is that most of the research, research scientists, laboratories, library facilities, forestry associations, corporation headquarters, provincial headquarters and all their staffs are in the Toronto region, particularly at Richmond Hill and Maple.

I do not want to say anything more, other than that this move is going to lead to the resignations and loss to Canada and to the Government service, of some of the best people v/e have managed to get in the forestry service. I put the responsibility upon the Minister. I do not want an answer from the Parliamentary Secretary to the Minister of Agriculture (Mr. Beer). I just want to put on the record a warning that this whole matter is going to be investigated in detail in the Estimates Committee when the Forestry Estimates come before us.


Mr. B. S. Beer (Parliamentary Secretary to Minister of Forestry):: I wish to thank the hon. Member for bringing up this important matter. I am sure he will appreciate it if I bring to his attention the fact that I am not only Parliamentary Secretary to the Minister of Agriculture but also to the Minister of Forestry, and have a perfect right to answer this question on behalf of the Minister of Forestry.
I am of course grateful to the hon. Member for putting on the record the statement made by the Minister of Forestry (Mr. Sauve) on February 18. If the hon. Member had read my statement on March 4, in answer to a question put by the hon. Member for York North (Mr. Addison) he would have had much more information than he gave. On that occasion, on behalf of the Minister of Forestry, I stated that 87 per cent of the productive forests in Ontario are located in this general area and provide 93 per cent of the wood cut in the province.


Douglas Mason Fisher: That is nonsense; misstatement.


Bruce Silas Beer: I also stated that, in addition, 18 of the 27 pulp and paper mills in Ontario are located north of Lake Superior and Lake Huron.
I stated that present capital investment in land and buildings by the Department of Forestry is already extensive in the Sault Ste. Marie area. Total federal investment since 1950 amounted to $1,200,000. In addition the Federal Government has access to the insect laboratory which is owned by the province, with a capitalization of $950,000. Therefore we do have substantial investments in the Sault Ste. Marie area.
I also want to place on record that on May 12 the Minister of Forestry had a meeting with municipal officials and departmental
June 14, 1965

officials in Richmond Hill, and I have here in my hand a letter expressing appreciation for the courteous meeting which was held on that occasion, and for the understanding view which was taken by the Minister.
Then, to conclude my remarks, I refer to the answer which the Minister of Forestry gave on June 10, which said that there is no
DEBATES	2397
Proceedings on Adjournment Motion change in the announcement made on February 18. That places the whole matter clearly on the record and states the decision of the Minister of Forestry and the Government.


Douglas Mason Fisher: Rotten, pork barrel record.
Motion agreed to and the House adjourned at 10.19 pjn.

June 14, 1965



APPENDIX &quot;A&quot;


[Stage Direction]
ministIre des affaires extSrieures
For Release Monday, June 14, 1965, at 08.00 hours E.D.S.T.
[Stage Direction]
The Prime Minister of India, Mr. Lai Bahadur Shastri, paid an official visit to Canada June 10-14 at the invitation of the Canadian Government. During his stay in Canada the Prime Minister visited Ottawa and Niagara Falls and will spend June 14 in Montreal.
While in Ottawa, the Prime Minister of India visited the House of Commons and officially opened the Commonwealth Room in the Parliament Building. He laid a wreath at the War Memorial.
In Montreal, the Prime Minister of India will address a special convocation at McGill University at which an honorary degree will be conferred upon him. He will also call on the Mayor of Montreal at the City Hall.
The Prime Minister of India had discussions with Prime Minister Pearson, and the Secretary of State for External Affairs, the Hon. Paul Martin; with the Minister of Finance, the Hon. Walter Gordon; with the Minister of Trade and Commerce, the Hon. Mitchell Sharp; and with the Minister of Industry and Defence Production, the Hon. Charles M. Drury. The High Commissioner for Canada to India, the Hon. Roland Michener, and Canadian officials attended the discussions. The Prime Minister of India was assisted by the Indian High Commissioner to Canada, Mr. B. K. Acharya, Mr. L. K. Jha, Secretary to the Prime Minister, and Mr. R. Prasad, Joint Secretary to the Prime Minister.
In the course of their talks, the two Prime Ministers dealt with the wide range of relationships between India and Canada, with questions expected to arise at the forthcoming meeting of Commonwealth Heads of Government, and with the main international problems of the day. The talks disclosed understanding and respect for each other's point of view and a wide area of agreement on many world issues.
The two Prime Ministers expressed satisfaction with the friendship and cooperation which have at all times marked relations between India and Canada. They looked forward with confidence to the continuation of this warm relationship in the future.
Cooperation between the two countries extends to many fields, particularly the economic field. The Prime Minister of India expressed appreciation for the assistance extended by Canada to India under the Colombo Plan and for the cooperation between the two countries in promoting the economic development of India. The Prime Minister of Canada reiterated Canada's deep and continuing interest in the economic development of India and in the success of India's Five-year Plans.
Both Prime Ministers agreed on the urgent need to raise the standards of living of the peoples of developing countries. They recognized the responsibility of both the developed and developing countries to cooperate in this task and welcomed the establishment of the United Nations Conference on Trade and Development as an organization which could make a vital contribution toward the elimination of disparities in economic conditions through more rapid economic growth.
The two Prime Ministers re-affirmed their support for the United Nations and their desire to see the world organization develop into an effective instrument for the maintenance of international peace and security and for the promotion of understanding and co-operation among nations. The Prime Min-
June 14, 1965
[Stage Direction]
isters noted that the present year marked the 20th anniversary of the United Nations and was being celebrated as International Cooperation Year. They hoped that it would usher in an era of increased United Nations activity and better international co-operation in the cause of world peace and prosperity.
They noted with concern and regret the difficulties that stood in the way of the functioning of the 19th Session of the General Assembly. They expressed their sincere hope that these difficulties would be overcome as a result of the discussions now going on in the Special Committee on Peacekeeping Operations and that the world body would emerge the stronger after the crisis.
It was also noted that both governments shared the desire to strengthen practical arrangements for United Nations peacekeeping. Both have been major participants in United Nations peacekeeping operations and continue to provide contingents of their armed forces for service in the United Nations Emergency Force in Gaza as they had done throughout the United Nations peacekeeping operations in the Congo. An Indian delegation participated in the discussions between military experts on the technical military aspects of United Nations peacekeeping which took place in Ottawa last November. The Prime Ministers agreed that, whatever the constitutional and other difficulties which stood in the way of collective responsibility for United Nations peacekeeping, it was imperative that a solution be found which would enable the United Nations to continue to fulfil this essential role in future.
The two Prime Ministers re-affirmed their support for the attainment of general and complete disarmament under effective international control. They discussed the great danger of proliferation of nuclear weapons and agreed that the 18-Nation Disarmament Committee should devote itself, as a matter of priority, to finding a solution to this problem. They called upon all states to abide by the spirit and provisions of the Treaty Banning Nuclear Weapons Tests in the Atmosphere, in Outer Space and Under Water. They emphasized the importance of taking early steps for the conclusion of a comprehensive Test Ban Treaty so as to cover underground tests as well.
The Prime Ministers expressed their deep regret and concern over the series of nuclear tests to which the People's Republic of China has devoted itself in defiance of a world opinion which strongly opposes the continuance of tests in any environment. These tests represent a setback to current efforts to achieve non-proliferation of nuclear weapons. The Prime Minister of Canada expressed particular satisfaction at India's decision not to use nuclear energy for other than peaceful purposes, despite India's technical capability to produce nuclear weapons.
They further expressed their satisfaction at their mutual association in the International Control Commissions in Indochina during the last eleven years. They recognized the difficulties in the functioning of the Commissions in the present circumstances.
While recognizing that it had not always been possible for Canadian and Indian views to coincide on every aspect of the consideration of the difficult problems arising before the Commissions, both Prime Ministers agreed that their mutual association in the Commissions had been useful, and re-affirmed their desire that their representatives in the Commissions should make every effort with a view to encouraging implementation of the Agreements, which it is the task of the Commission to supervise.
The Prime Ministers examined the situation in Vietnam and considered the measures open to them to try to bring peace to that country. They reviewed their efforts to try to interest the powers directly involved in a cease fire, in unconditional negotiations, and in greater international participation in and responsibility for bringing about and guaranteeing a cease fire and any agreement which might accompany or succeed it. They expressed their regret that lack of respect for the Cease Fire Agreement, as reported by the Commission in 1962, had led to the present higher level of hostilities. They were convinced that a purely military solution was neither practicable nor desirable.
They hoped that it might still be possible for the combatants to curtail hostilities or to initiate periods of cease fire which might become permanent; they also expressed the hope that their earlier proposals for negotiations without preconditions would still yield results. They agreed to work for a solution to the Vietnam problem which will enable the people of Vietnam to enjoy freedom and independence. Any settlement should be suitably guaranteed by the international community.
Both Prime Ministers expressed concern at the increasing tendency to use force for the settlement of disputes, and the Prime Min-
[Stage Direction]
June 14, 1965
ister of Canada reiterated Canada's sympathy and support for India in her border conflict with China. He expressed the hope that the problem will be resolved peacefully and that China would agree to talks with India on the basis of the proposals of the six non-aligned countries formulated in Colombo in December 1962 which India had accepted.
The Prime Minister of India expressed his pleasure at visiting Canada and establishing contacts with Canadian leaders and people. He expressed deep appreciation of the warm hospitality extended to him and members of his party. He extended an invitation to the Prime Minister of Canada to visit India. The invitation was accepted with pleasure.
June 14, 1965


[Stage Direction]
Ordered,-1. (a) That detailed examination of estimates, saving always the right of the Committee of Supply, be undertaken by Standing Committees and that not more than 30 days of the time of the House be allocated to the business of supply in each session. For the purpose of this order, the business of supply shall consist of main estimates; interim supply; and supplementary or additional estimates excepting supplementary or additional estimates introduced after the main estimates have been approved, and excepting always the final supplementary or additional estimates:
(5)	That the number of supply motions be reduced from six to four; and
(c)	That a Special Committee of the House, consisting of twenty-four members, to be designated later by the House, be instructed to prepare and to submit to the House forthwith the changes in Standing Orders consequential upon these orders, including any means of giving to the opposition an opportunity to select the departmental estimates to be discussed.
2. That the orders of this House under numbered paragraph 1, and the changes in Standing Orders consequential upon this Order, be continued in effect until the end of the next ensuing session, unless this House otherwise orders.
Ordered,-Standing Order 6
6. (1) At 6:00 o'clock p.m. on Wednesdays and Fridays and at 10:00 o'clock p.m. on Mondays, Tuesdays and Thursdays, unless provided otherwise in these Standing Orders, Mr. Speaker shall adjourn the House without question put until the next sitting day.
(2)	A motion that the House continue to sit after the hour specified in Section (1) may be made at any time without notice. If any member objects to the motion, Mr. Speaker shall request those members who object to rise in their places and if ten or more members then rise, the question shall not be put on the motion. If no member objects or if fewer than ten members rise in their places, the motion shall be deemed to be carried. No debate or formal vote shall
be held on such a motion to extend a sitting. During an extended sitting, as provided under the provisions of this Section, no Order shall be called for consideration unless such Order was under consideration prior to the normal hour of adjournment. An extended sitting under the provisions of this Section, unless a closing time has been specified, shall not be terminated except by the adoption of a motion to adjourn and Mr. Speaker shall not deem that a motion to adjourn the House has been made by virtue of the operation of any other Standing Order.
(3)	If any member objects to the taking of a vote at any time between 1:00 o'clock and 2:30 o'clock p.m. or between 6:00 o'clock p.m. and 8:00 o'clock p.m., Mr. Speaker shall request those members who object to rise in their places and if five or more members rise, the taking of the vote shall be postponed. At 2:30 o'clock p.m. or at 8:00 o'clock p.m., as the case may be, Mr. Speaker shall interrupt the proceedings then before the House and shall put, or shall cause to be put, the question on any postponed vote. The House shall be deemed to have reverted to private members' business for such time as is necessary for the taking of any vote postponed from the time provided for private members' business.
(4)	When it is provided in any Standing Order or in any order of the House that the business under consideration at the ordinary time of adjournment be forthwith disposed of or concluded. Mr. Speaker shall not adjourn the House until the specified proceedings be completed.
Standing Order 12
12 (1) Mr. Speaker shall preserve order and decorum, and shall decide questions of order. In explaining a point of order or practice, he shall state the standing order or authority applicable to the case. No debate shall be permitted on any such decision, nor shall any such decision be subject to an appeal to the House.
Standing Order 15
15 (3) Except as otherwise provided in these Standing Orders the order of business for
[Stage Direction]
June 14, 1965
the consideration of the House, day-by-day, after the daily routine shall be as follows:
(Monday)
Questions.
Government Orders.
(From six to seven o'clock p.m.-Private Members' Business)
Notices of Motions.
(Tuesday)
Government Orders.
Questions.
(From six to seven o'clock p.m.-Private Members' Business)
Private bills.
Public bills.
(Wednesday)
Questions.
Notices of motions for the production of papers.
Government Orders.
(From five to six o'clock p.m.-Private Members' Business)
Notices of motions.
Public bills.
(Thursday)
Government orders.
Questions.
(From six to seven o'clock p.m.-Private Members' Business)
A.	On the first and each alternate Thursday thereafter:
Notices of motions (papers).
Private bills.
Public bills.
B.	On the second and each alternate Thursday thereafter:
Private bills.
Notices of motions (papers).
(Friday)
Government Orders.
Questions.
(From five to six o'clock p.m.-Private Members' Business)
Public bills.
Private bills.
(4) When a debate on a motion "That Mr. Speaker do now leave the Chair" for the House to go into Committee of Supply is in progress at 6:00 o'clock p.m. on either a Monday or a Tuesday, the order for private Members' Business on that day shall be suspended.
Standing Order 15-A
15-A (1) There shall be a Business Committee to which the leader of each party in the House from time to time by written notice to the Speaker may appoint one member.
(2)	During routine proceedings a Minister of the Crown may propose that the question of allocation of time for any item of business, unless otherwise provided for, be referred to the Business Committee, and upon such proposal being made that question shall stand referred to the Committee.
(3)	The Business Committee shall report back to the House on or before the third sitting day following such reference.
(4)	If the Chairman of the Business Committee reports that the Committee has unanimously recommended an allocation of time for the item of business or stage thereof, a Minister of the Crown may without notice propose a motion, to be decided without debate or amendment, for concurrence in the report, and, if agreed to, the motion shall have the same effect as if it were an order of the House.
(5)	If the Chairman of the Business Committee reports that the committee has been unable to reach a unanimous agreement or if the committee fails to report within the time specified by Section (3) of this Standing Order, a Minister of the Crown notwithstanding the provisions of Standing Order 41, may give notice of motion that at the next sitting of the House, provided that day is not a Wednesday, he will move that an order be made allocating the time for the item of business or stage thereof.
(6)	A motion of which a Minister has given notice under Section (5) of this Standing Order shall be made during routine proceedings. Unless the debate on the motion has been previously concluded, Mr. Speaker shall at fifteen minutes before the expiry of the time provided for Government business in such sitting, interrupt the proceedings and forthwith put every question necessary to dispose of the main motion. A motion requesting allocation of time if agreed to shall have the same effect as if it were an order of the House.
(7)	No motion made by a Minister under Sections (5) and (6) of this Standing Order shall provide for the allocation of a period of time less than two days for the second reading, two days for the committee stage, and one day for the third reading of any bill. For the purpose of this section, third
June 14. 1965
[Stage Direction]
reading shall be deemed to have been considered for one day provided the order for third reading is called as the first item under Government Orders on a Monday, Tuesday, Thursday or Friday, and provided it is continued, if necessary, until the normal time of adjournment on any such day. Such an order having been called on any Monday, Tuesday, Thursday or Friday, it shall have precedence over all other business until the time of adjournment on that day, unless it is disposed of earlier. Under any other circumstances, a total of five hours shall be deemed to be the equivalent of one sitting day.
(8)	During debate on any item of business or stage thereof for which an allocation of time has been made under this Standing Order, if an amendment is proposed which in the opinion of Mr. Speaker raises any issue for which in the opinion of Mr. Speaker there has not been or otherwise will not be an adequate opportunity for discussion, Mr. Speaker may announce an extension of not more than two days to the allocated period of time.
(9)	When a debate on third reading of a bill is under a time allocation order, under this Standing Order, Mr. Speaker shall have the authority to extend the sitting of the final day under such allocation order for a period not to exceed four hours, provided he has received written notice, given at least one hour prior to the normal time of adjournment, from any member or members indicating their desire to speak and provided such member or members have not spoken and there is no opportunity for such member or members to speak prior to the normal time of adjournment. Any speech made in such extended time of sitting, unless it is being made by the representative of a party which had not had a speaker during the normal sitting hours, shall be limited to twenty minutes. No member shall be allowed to speak during such an extended sitting unless he has given notice as herein provided, and no member speaking during an extended sitting shall move any amendment or sub-amendment. At the request of any five members, any vote or division called for during an extended sitting shall be postponed until the next sitting day, and shall be taken as the first item under Government Orders on the said next sitting day without any further debate.
(10)	The term "allocation of time", wherever used in this Standing Order, may include the allotting of time to any item of
business, to any stage thereof, or to any part thereof, and may include the fixing of limits for the length of speeches.
(2)	That the proposed Standing Order 15-A be continued in effect until the end of the next ensuing session, unless this House otherwise orders.
Standing Order 18
18 (2) Except as provided in Standing Orders 43 and 56, Government Orders may be called in such sequence as the Government may think fit.
Standing Order 31
31. (2) When the business of Private Members is being considered, no member shall speak for more than twenty minutes at a time.
Standing Order 39
39. (5) Before the Orders of the Day are proceeded with, questions on matters of urgency may be addressed orally to Ministers of the Crown, provided however that if in the opinion of Mr. Speaker a question is not urgent, he may direct that it be placed on the Order Paper, provided also that the time allowed for a question period prior to the calling of the Orders of the Day shall not exceed thirty minutes, except on Mondays when the time allowed for a question period prior to the calling of Orders of the Day shall not exceed one hour.
A member who is not satisfied with the answer given to a question asked on any day at this stage, or a member who has been told by Mr. Speaker that his question is not urgent, may give notice that he intends to raise the subject-matter of his question on the adjournment of the House. The notice referred to herein, whether or not it is given orally during the question period before the Orders of the Day must be given in writing to Mr. Speaker not later than 5.00 o'clock p.m. the same day.
Standing Order 41
41-A. Unless notice of motion has been given under Standing Order 41, any member proposing to raise a question of privilege other than one arising out of proceedings in the Chamber during the course of a sitting shall give to the Speaker a written statement of the question at least one hour prior to raising the question in the House.
Standing Order 43
43. (2) When the debate on any motion made under Standing Order 15 (2) is adjourned or interrupted the order for resump-
[Stage Direction]
June 14, 1965
tion of the same shall be transferred to and considered as the first Order under Government Orders.
Standing Order 44
44. When a questionn is under debate no motion is received unless to amend it; to postpone it to a day certain; for the previous question; for reading the orders of the day; for proceeding to another order; to adjourn the debate; to extend the sitting of the House; or for the adjournment of the House.
Standing Order 59
59. (4) The Chairman shall maintain order in the Committees of the Whole House; deciding all questions of order subject to an appeal to Mr. Speaker; but disorder in a committee can only be censured by the House, on receiving a report thereof. No debate shall be permitted on any decision.
Standing Order 65
65 (1) At the commencement of each session, a special committee, consisting of seven members, shall be appointed, whose duty it shall be to prepare and report, within ten sitting days after its appointment, lists of members to compose the following standing committees of the House:
(a)	on Agriculture, Forestry, and Rural Development to consist of 45 members;
(b)	on Broadcasting, Films and Assistance to the Arts, to consist of 24 members;
(c)	on Crown Corporations, to consist of 24 members;
(d)	on External Affairs, to consist of 24 members;
(e)	on Finance, Trade and Economic Affairs, to consist of 24 members;
(f)	on Fisheries, to consist of 24 members;
(g)	on Health and Welfare, to consist of 24 members;
(h)	on Housing, Urban Development and Public Works, to consist of 24 members;
(i)	on Indian Affairs, Human Rights and Citizenship and Immigration, to consist of 24 members;
(j)	on Industry, Research and Energy Development, to consist of 24 members;
(k)	on Justice and Legal Affairs, to consist of 24 members;
(l)	on Labour and Employment, to consist of 24 members;
(m)	on Miscellaneous Estimates, to consist of 24 members;
(n)	on Miscellaneous Private Bills, to consist of 24 members;
(o)	on National Defence, to consist of 24 members;
(p)	on Northern Affairs and National Resources, to consist of 24 members;
(q)	on Privileges and Elections, to consist of 24 members;
(r)	on	Public Accounts,	to	consist	of	24
members;
(s)	on	Standing	Orders,	to	consist	of	24
members;
(t)	on	Transport	and Communications,	to
consist of 24 members; and
(u)	on	Veterans	Affairs,	to	consist	of	24
members.
(2)	The Special Committee shall also prepare and report with all convenient speed, lists of members to compose the following standing committees:
On Printing, to act as members on the part of this House on the Joint Committee of both Houses on the subject of the printing of Parliament, to consist of 23 members;
On the Library of Parliament, so far as the interests of this House are concerned, and to act as members of the Joint Committee of both Houses to consist of 21 members;
Provided that a sufficient number of members of joint committees shall be appointed so as to keep the same proportion in such committees as between the memberships of the House of Commons and Senate.
(3)	A majority of the members of a standing committee shall constitute a quorum unless the House otherwise orders;
Provided that, in the case of a joint committee, the number of members constituting a quorum shall be such as the House of Commons acting in consultation with the Senate may determine.
(4)	The Standing Committees shall be severally empowered to examine and enquire into all such matters and things as may be referred to them by the House; to report from time to time their observations and opinions thereon; to send for persons, papers and records; and to print, from day to day, such papers and evidence as may be ordered by them, and Standing Order 66 shall not apply in relation thereto.
(5)	Any member of the House of Commons who is not a member of a standing committee, may unless the House or the standing committee otherwise orders, take part in the deliberations of the standing committee, but shall not vote or move any motion or any amendment or be counted in the quorum.
June 14. 1965
[Stage Direction]
Standing Order 68A
68-A. In any standing or special committee of the House questions of order shall be decided by the chairman, subject only to an appeal to the committee.
Standing Order 99
99. No Bill for the incorporation of a railway or canal company, or for authorizing the construction of branch lines or extensions of existing lines of railways or of canals, or for changing the route of the railway or of the canal of any company already incorporated, shall be considered by the Committee on Transport and Communications, until there has been filed with the committee, at least one week before the consideration of the bill, a map or plan drawn upon a scale of not less than half an inch to the mile, showing the location upon which it is intended to construct the proposed work, and showing also the lines of existing or authorized works of a similar character within, or in any way affecting the district, or any part thereof, which the proposed work is intended to serve; and such map or plan shall be signed by the engineer or other person making the same.
Standing Order 105
105. Every private bill, when read a second time, is referred to one of the standing committees as follows: bills relating to banks, insurance, trade and commerce and to trust and loan companies, to the Committee on Finance, Trade and Economic Affairs; bills relating to railways, canals, telegraphs, canal and railway bridges, to the Committee on Transport and Communications; the bills not coming under these classes, to the Committee on Miscellaneous Private Bills, and all petitions for or against the bills are considered as referred to such committee.
That the said amendments to the Standing Orders be continued in effect until the end of the next ensuing session unless this House otherwise orders.
[Stage Direction]


Tuesday, June 15, 1965