1965-06-25

JAPAN-VOLUNTARY RESTRAINTS ON EXPORTS TO CANADA

Hon. Waller L. Gordon (Minister of Finance):: Mr. Speaker, with the permission of the House I should like to table a copy of a letter dated June 25 from the Ambassador of Japan, informing me of the voluntary restraints which the Japanese Government is applying on the export of certain products to Canada during 1965.
These decisions were taken by the Japanese Government following consultations which began in December, 1964 between representatives of the Japanese and Canadian Governments. The levels of restraint which Japan is maintaining during 1965 provide generally for orderly increases over the 1964 levels. These increases, with but a few exceptions, are in the order of 3 to 5 per cent, and for virtually all products these increases are not greater than the expected growth in the market for the products in question.
With the approval of the House, I suggest that the Ambassador's letter be printed as an appendix to Votes and Proceedings.
I should like to inform hon. Members that I received representations from textile producers some time ago about the sharp and substantial increase within the cotton fabric quota in Japan's exports of converted broadcloth. The question has been raised with the Japanese Government and discussions on this matter are continuing.
I should also mention that representations were received from the textile industry about the impact of Japanese man-made fibre fabrics on the Canadian market. As a result of these representations we have drawn to the attention of the Japanese Government our concern about the way certain lines of manmade fabrics are being marketed, and we have asked that they examine this situation in order to ensure that a policy of orderly marketing is followed for these products.
As Members of the House may recall, a number of products have been freed from restraint during the last few years. This year, continuing this Government's policy of not asking for restraints when disruDtion to the 22620-1811
Canadian market is no longer threatened, we have agreed that five items should be freed from restraint. These are spun rayon blouses, spun rayon shirts, canvas footwear, waterproof footwear, and dish towels. I have no doubt that the Japanese Government will interpret this as concrete evidence of the willingness of the Canadian Government to work toward the orderly expansion of two way trade between our two countries.


Mr. Deputy Speaker:: Is it agreed that the document tabled by the Minister of Finance be printed as an appendix to Votes and Proceedings?


Some hon. Members:: Agreed.


Hon. Marcel Lambert (Edmonton West):: Mr. Speaker, of course detailed comment on this matter is impossible until one reads the correspondence and the actual documents tabled by the Minister of Finance. However, it is instructive to see that the procedures which have been in use for some time are being continued, and that the aims of these procedures which were outlined by a former Minister of Finance, Mr. Fleming, are being achieved, notwithstanding that a goodly number of the Minister's colleagues were bitterly critical about such procedures when they were on this side of the House; and in this connection I am looking particularly at the Secretary of State for External Affairs (Mr. Martin). I am very pleased to see that responsibility of office has rather matured the thinking of the present administration, if such a step is possible in certain sectors.
I hope Canadian industry, and generally the country at large, will understand the aims, certainly the impact, of quotas, even though these are not the same in various parts of the country, and one may hear some rather sharper comments from western Canada which, of course, has a different slant with regard to trade with Pacific nations than has the rest of the country.



OTTAWA TERMINAL RAILWAY COMPANY


Hon. J. W. Pickersgill (Minister of Transport) moved: the first reading of Bill No. S-3 (from the Senate), to incorporate the Ottawa Terminal Railway Company.

June 25, 1965
Veterans' Land Act
Motion agreed to and bill read the first time.



WAR VETERANS ALLOWANCE ACT


Hon. Roger Teillel (Minister of Veterans Affairs) moved: that the House go into committee at the next sitting to consider the following resolution, which has been recommended to the House by His Excellency:
That it is expedient to introduce a measure to amend the War Veterans Allowance Act, 1952, to incorporate into the Act Schedule A as authorized by the Appropriation Act No. 10, 1964; to allow for further exemptions in property and income; also to provide for certain changes in connection with the administration of the Act.


[Stage Direction]
Motion agreed to.


Roger-Joseph Teillet: that the House go into committee later this day to consider the following resolution, which has been recommended to the House by His Excellency:
That it is expedient to introduce a measure to amend the Veterans' Land Act:
To establish a revolving fund for certain capital receipts and expenditures to be called the Veterans' Land Act fund;
To provide authority for the Director to pay certain debts incurred by veterans to make improvements to land;
To give the Director greater discretion in varying the payment terms of an agreement between the Director and the veteran entered into under subsection (1) of section 10;
To change the basis for determining the maximum limit of financial assistance that may be given to a veteran under subsection (3) of section 10;
To allow a veteran to lease premises occupied by him under a contract under section 10 after the expiration of a period of ten years;
To authorize the Director, with the consent of the Minister, to enter into a contract with a veteran who is in default in respect of a contract previously entered into under the Act;
To require the Director to accept the amount of a contract debt as the cost to the Director before the expiration of ten years from the effective date of the contract under certain conditions;
To extend the purposes for which the proceeds of sale of land, improvements, livestock or farm equipment may be used;
To extend the purposes for which funds may be advanced by the Director to a veteran under subsection (1) of section 15;
To authorize the Director to grant assistance to veterans who have received assistance under the

Veterans Rehabilitation Act or the War Service Grants Act under certain conditions;
To extend the purposes for which a grant may, pursuant to sections 38 or 39, be used;
To increase the maximum home construction assistance from twelve thousand dollars to eighteen thousand dollars;
To increase the maximum loan available under section 64 from twenty thousand dollars to forty thousand dollars and to extend the purposes for which a loan, pursuant to this section, may be
used;
To extend the purposes for which a loan may, pursuant to section 64A, be used, to increase the maximum loan available thereunder from twelve thousand dollars to eighteen thousand dollars and to vary its provisions under certain conditions;
To reduce the deposit payable by a veteran under section 65, to extend the purposes for which a loan made thereunder may be used, to increase the maximum loan available under this section from four thousand eight hundred dollars to ten thousand dollars and to provide for adjustment on loans partially advanced at the coming into force of the amendment;
To provide for consolidation of all outstanding farm improvement assistance loans between a veteran and the Director in one agreement and, for the purposes of such consolidation, to authorize appropriate variation of the repayment period specified in each of the outstanding agreements;
And to provide further for certain changes in consequence thereof and also in connection with the administration of the Act.


Mr. Deputy Speaker:: I understand that by unanimous consent this motion is to be considered later this day.


Roger-Joseph Teillet: On a point of order, my understanding was that both resolutions would be considered later this day.


Mr. Deputy Speaker:: Is it agreed that the first motion also be considered later this day?


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.

[Stage Direction]
On the orders of the day:
Right Hon. J. G. Diefenbaker (Leader of the Opposition):: I direct my question to the Acting Prime Minister. It concerns the issue or grant of an undersea exploration permit by the Federal Government in respect of areas adjacent to the Gaspe and the statement by Mr. Levesque that the grant constitutes a coffin nail for Confederation; also the criticism by the Premier of Quebec that what took place was most improper.
Has the Government given consideration to discontinuing the granting of permits of this kind, in view of the fact that it has sub-
June 25, 1965

mitted to the Supreme Court of Canada the British Columbia claim to such rights? I thought I would address this question to the Acting Prime Minister because this is a matter which covers several departments. I notice he indicates that he wants to hear from the Minister of Northern Affairs, but I am directing my question to him because of his all-pervasive and comprehensive knowledge of these matters. I ask him whether the Government will reconsider the undertaking given by the Prime Minister that this whole question should be considered at the Dominion-Provincial Conference to be convened in July rather than permitting it to become an interprovincial-Federal squabble which could certainly do nothing toward a solution of this problem and which might bring about further disunity within this country.


Hon. Paul  Marlin@Acting Prime Minister: I am sure that on my right hon. friend's return to the House he would not want his first question to be one which would disturb the happy waters which now exist. I want to congratulate him on the apparent success of his non-political fishing trip.


John George Diefenbaker: The political one was even more successful.


Mr. Martin (Essex East):: Mr. Speaker, I think this matter comes within the purview of my hon. friend the Minister of Northern Affairs and National Resources, and he might care to make a reply.


Hon. Arthur Laing (Minister of Northern Affairs and National Resources):: Mr. Speaker, in anticipation of this question being asked today I have reviewed the facts. I would like to advise the House that Canada oil and gas permits have been issued for a period of years, under the Canada Oil and Gas Regulations, since the Convention on the Continental Shelf agreed to at the United Nations Conference on the Law of the Sea in 1958 confirmed that rights to these submerged resources belong to Canada.
The Minister responsible should not and does not select on the basis of discretion which bona fide applicants are to receive grants of exploratory permits and which applicants are not allowed to obtain permits. Pan American Petroleum Corporation made regular application for exploratory permits in the Gulf of St. Lawrence on June 9, 1965. It is the view of the Federal Government that as the seabed resources of the Gulf of St. Lawrence do not lie within the boundaries of any province,
Inquiries of the Ministry they are subject to the administration of the Federal Government.
The right hon. Leader of the Opposition raised the question of the reference to the Supreme Court of Canada in respect of the Province of British Columbia. The House is aware that this Government has referred the question of the jurisdiction over submerged resources on the Pacific coast to the Supreme Court of Canada. This action was taken because of the position of the Province of British Columbia that it held exclusive jurisdiction to control the exploitation of these off-shore resources, a position which the Federal Government does not accept. It was our hope that the issues raised by this first reference would give a clear indication of the respective rights of the Federal Government and the Provinces in this particular question.
I do not think I need to say any more at this time. We have been issuing these permits, on the basis of the Canada Oil and Gas Regulations, to bona fide applicants in the normal procedure and the normal way.


John George Diefenbaker: A supplementary question, Mr. Speaker. May I come back to the source of all information-I did not say of wisdom-and ask the Acting Prime Minister whether the Federal Government will carry out the promise it made that this question of underwater rights would be discussed at the Federal-Provincial Conference on July 19, rather than following the haphazard, uncertain course that is being followed now, to which the Minister has made reference. Is this dispute going to be settled, rather than through this course, through the instrumentality of that so-called new federalism that has brought about so much division?


Paul Joseph James Martin: Mr. Speaker, this question is on the agenda.


John George Diefenbaker: An agreement can be reached at that meeting on July 19 without regard to any submission to the Supreme Court of Canada?


Paul Joseph James Martin: No. As my right hon. friend knows, Mr. Speaker, a reference has been made to the Supreme Court of Canada in the case of the British Columbia situation. However, this general question is on the agenda for discussion at the Federal-Provincial Conference and I would hope that as a result a solution satisfactory to all parties could be found.

June 25, 1965
Inquiries of the Ministry [Translation]


Mr. Marcel Lessard (Lac-Saini-Jean):: Mr. Speaker, I should like to direct a supplementary question to the Minister of Northern Affairs and National Resources concerning the permit he issued to Pan-American Oil for the development of underwater natural resources in the Gulf of St. Lawrence.
Did the minister get the Prime Minister's authorization before granting this permit? The point is that the premier of Quebec told the legislative assembly Wednesday that the Minister of Northern Affairs and National Resources was not supposed to issue a permit without the authorization of the Prime Minister of Canada. Did the minister discuss the matter with the Prime Minister and is the latter aware that a permit has been issued?


Arthur Laing: Mr. Speaker, I know of no undertaking having been given by the Prime Minister that we would desist from the issuance of permits, either for any period or until a decision in respect of the Pacific offshore question was brought down by the Supreme Court.


Hon. Paul Marlineau (Pontiac-Temiscamin-gue):: Mr. Speaker, I have a supplementary question for the Minister of Northern Affairs. In his statement a few minutes ago he said that as these submerged resources do not lie within the boundaries of any province they therefore belong to the Federal Government. Does that mean the Government now prejudges the coming decision of the Supreme Court of Canada on this matter, the question having been referred to that body?


Arthur Laing: Mr. Speaker, the fact that we have referred the matter to the Supreme Court of Canada is an indication of the position taken by the Federal Government; we want a judgment in this regard.


Paul Raymond Martineau: Then what is the basis for the Minister's statement that these resources do not belong to the provinces but to the Federal Government? I am asking the Minister, is this not what the Supreme Court of Canada must now decide?


Arthur Laing: Mr. Speaker, my hon. friend will of course understand that the regulations under which we issue these permits are based on the convention on the Continental Shelf in respect to which Canada as a nation is party along with a number of other nations. Until such time as a decision is made as to where the responsibility in Canada lies and a judg-

ment brought down by the Supreme Court of Canada, we can take no other stand.
Mr. T. S. Barnett (Comox-Alberni)r Mr. Speaker, I have a supplementary question for the Acting Prime Minister. This matter is on the agenda of the Federal-Provincial Conference. May I ask when it is going to be on the agenda of the House of Commons so that the Members of this House may have the opportunity of discussing this very important question?



INQUIRY AS TO EMPLOYMENT OF BILINGUAL GUIDES

[Stage Direction]
On the orders of the day:
Mr. Gerard Laprise (Chapleau):: Mr. Speaker, I should like to put a question to the Acting Prime Minister.
Could the minister tell us why bilingual guides have not been hired to escort visitors through the parliament buildings during the
holiday season?


Paul Joseph James Martin: Well, Mr. Speaker, I am not aware of the situation, but I shall look into it without delay in order to have the required changes made.



AGRICULTURE


[Stage Direction]
On the orders of the day:
Mr. G. H. Doucett (Lanark):: Mr. Speaker, I should like to ask the Minister of Agriculture or the Acting Minister a question. In view of the drastic drought situation and the need of the farmers to know where they stand, will the Minister of Agriculture immediately announce a policy of federal action to provide hay for the drought stricken farmers of the Ottawa valley in order that they may carry on without being forced to sell cattle at fire sale prices? Will the Minister of Agriculture, without waiting for the provinces, immediately make representations to his colleague the Minister of Public Works so that large areas of hay on property belonging to the National Capital Commission may be cut and made available as quickly as possible?


Hon. Maurice Sauve (Minister of Forestry):: Mr. Speaker, following the debate we had Wednesday afternoon I am pleased to announce that the Minister of Agriculture for Ontario, Mr. Stewart, and the Minister of Agriculture for Quebec, Mr. Courcy, and their
June 25, 1965



officials will be here on Monday to discuss this very serious situation. As to the suggestion concerning federal property, I will bring this to the attention of the Minister of Public Works.


Mr. H. W. Herridge (Kootenay West):: A supplementary question, based on a news report concerning a recent press conference held by the Minister during what Mr. Arthur Blakely calls his recent visit to Ottawa. In view of the confusion caused by various reports of this Conference and the Minister's philosophical and oral approach to the rainmaking proposal of the Government of Ontario, is the Minister now in a position to inform the House of the policy of the Government with respect to that rainmaking proposal?


Maurice Sauvé: Mr. Speaker, if was the Minister of Agriculture who held the press conference. I understand this matter will be discussed on Monday when Mr. Stewart will be here in Ottawa.


Mr. R. A. Webb (Hastings-Fronlenac):: supplementary question, Mr. Speaker. In view of the limited opportunity to observe the drought stricken areas north and west of Ottawa on the Montreal-Ottawa Air Canada flight, will the Minister of Agriculture, now that he has once more got his feet on the ground, take the occasion to personally visit the affected areas of eastern Ontario and western Quebec so he can view conditions at ground level?


Maurice Sauvé: Mr. Speaker, I would point out that on June 10 the Minister of Agriculture announced in the House of Commons that he had taken the occasion of a visit to Toronto to discuss the problem with the Minister of Agriculture of Ontario, and it was not until a few days ago that the Government of Ontario decided to request the help of the Government of Canada for rainmaking purposes.


Paul Raymond Martineau: A supplementary question, Mr. Speaker. When will the Minister of Agriculture be present personally in the House to make a statement on this question?


Mr. Maclnnis:: He was here on June 10. What are you squawking about?



FEED GRAIN-INQUIRY AS TO EASTERN MARKETING BOARD

[Stage Direction]
On the orders of the day:
['Mr. Speaker, there has been a change in the direction of the bombing, but there has been no intensification of it.']
John George Diefenbaker: Mr. Speaker, because we
Inquiries of the Ministry have to get information from the Minister of Agriculture second hand, possibly the Minister of Forestry will be able to tell the House of Commons whether the new policy with regard to feed grains, to which the Minister of Agriculture made reference yesterday during his stopover in Ottawa, will embrace the eastern livestock feed board proposal that was placed on the order paper by the previous government on February 4, 1963, and recently adopted as suitable by the Minister of Forestry?


Maurice Sauvé: Mr. Speaker, this is a matter of Government policy which will be announced in due course, but I am very pleased to learn that we will have the support of the official opposition for any good policy that we put forward.


John George Diefenbaker: Mr. Speaker, there has always been support for the good policies we have advanced, but that is not the question. Why should we in Parliament have to wait for an announcement of policy when outside the House the Minister of Agriculture has announced a policy with regard to feed grains?


Maurice Sauvé: Mr. Speaker, I have not read the transcript of the press conference of the Minister of Agriculture, but I am very doubtful that he would have made any announcement of Government policy.



[Stage Direction]
On the orders of the day:
Mr. R. N. Thompson (Red Deer):: Mr. Speaker, my question is addressed to the Acting Prime Minister. Can he tell us whether he has any information as to the identity of the killers or the circumstances surrounding the murder of the Canadian priest, Rev. James McKinnon, and also what precautions are being taken to ensure the safety of other Canadian nationals who may be in the Dominican Republic at this time?


Paul Joseph James Martin: Mr. Speaker, all Canadians regret very much, of course, the circumstances of the death of Father McKinnon, just as we regretted a few months ago the murder in the Congo of Canadian missionaries of other denominations. Father McKinnon, a priest with the Scarborough Foreign Mission Society, was shot and killed on a road leading from Monte

June 25, 1965
Inquiries of the Ministry Plata, a Town near Santo Domingo, on the evening of the 22nd June. An investigation is now being conducted by staff members of the Inter-American Commission on Human Rights of the Organization of American States. Our mission, with whom I was in touch by telephone this morning, tells me that they are not yet in a position to determine the full circumstances of the unfortunate death of Father McKinnon. I am sure I express the feelings of all Members of the House when I extend our deepest regrets to the Fathers of the Scarborough Foreign Mission Society and to the members of Father McKinnon's family.


Robert Norman Thompson: A supplementary question, Mr. Speaker. I asked a second question regarding the safety of other Canadian nationals now in the Dominican Republic.


Paul Joseph James Martin: I should have answered that question too; I apologize to my hon. friend. Most of the Canadians who were in Santo Domingo have been evacuated. There are comparatively few left, and these include some Canadians who wish to stay and to discharge their missionary obligations.


[Stage Direction]
On the orders of the day:
Mr. W. B. Nesbitt (Oxford):: Mr. Speaker, I should like to direct a question to the Secretary of State for External Affairs. Are the reports over the Canadian Broadcasting Corporation this morning correct when they indicate that the Government of North Viet Nam at Hanoi and the Russian Government in Moscow are now prepared to receive the Commonwealth peace mission? I ask this question in view of the fact that reports yesterday indicated that the Russian Government would not receive the peace mission. The reports over the Canadian Broadcasting Corporation this morning were that Moscow had reversed its policy, and that Hanoi had also agreed to receive the peace mission.


Paul Joseph James Martin: Mr. Speaker, notwithstanding what may be the attitude of certain countries involved in the Viet Nam crisis, it is now possible that the mission will proceed to carry out its purpose some time within the course of the next 10 days or so. The Government of the United States through its Secretary of State has clearly indicated that it will be happy to see the mission and approves of the initiative taken. It is also unclear if the

remarks attributed to the Premier of Communist China amount to a flat refusal to receive the mission. It is hoped that the statement made by the Soviet Union indicates that the Government at Hanoi may yet find it desirable to meet the mission. It is not clear whether the Soviet Union will ultimately refuse to receive the mission. I think there are good grounds for believing the Soviet Union may not be opposed to receiving it at some stage.


Wallace Bickford (Wally) Nesbitt: May I ask a supplementary question. I thank the Minister for his lengthy answer. I ask directly, therefore, are the reports over the C.B.C. this morning correct when they say both Hanoi and Moscow will now receive the peace mission; or are these reports incorrect?


Paul Joseph James Martin: I have already made my reply.


Mr. Barry Mather (New Westminster):: May
I ask a supplementary question in connection with the attempts made to negotiate a peace in Southeast Asia? Has the Minister any further report or comment to make on the reports of today and yesterday as to the bombing within a very few miles of the border of China by jet planes?


Paul Joseph James Martin: Mr. Speaker, there has been a change in the direction of the bombing, but there has been no intensification of it.



AIR TRANSPORT


[Stage Direction]
On the orders of the day:
Mr. Gerard Laniel (Beauharnois-Salaberry):: Mr. Speaker, I wish to direct a question to the Minister of Transport.
During Wednesday's sitting the minister announced the inauguration of a direct air service between Montreal and Guadeloupe. Since there was no question period on that day, I wonder if he could tell us now on what date that new service will begin.
In my opinion that question is quite urgent since hon. members hope to be on holiday soon and some of them might want to enjoy that island's famous French hospitality.


John Whitney Pickersgill: Mr. Speaker, I am afraid the service will not be inaugurated in time for hon.
June 25, 1965

Members to spend their summer holidays in Guadeloupe, though if that would hasten the adjournment of the House perhaps I might get Air Canada to speed up the matter. It is expected that the service will be inaugurated in the early autumn, and I should like to say how grateful I am to the French Government for the wonderful co-operation they have given us in this matter.



NATIONAL REVENUE


[Stage Direction]
On the orders of the day:
Hon. Michael Starr (Ontario):: Mr. Speaker,
I wish to address a question to the Minister of National Revenue. Has the Department of National Revenue informed the National Dairy Council of the Government's intention to apply the 11 per cent sales tax to a number of products in the ice cream industry, including popsicle sticks and ice cream spoons?


Hon. E. J. Benson (Minister of National Revenue):: Mr. Speaker, there is a question on the order paper dealing with this matter which I will answer at greater length, but I should like to point out to my hon. friend now that it is not the intention of the Department of National Revenue to tax any dairy products produced by the dairy industry.


Michael Starr: Mr. Speaker, I asked about two specific items. Would the Minister answer with regard to them and will he give consideration to not taxing these small items, unless the Government is now augmenting its war on poverty with a war on children?


Edgar John Benson: Mr. Speaker, the allegation is ridiculous, of course. The hon. Member has referred to popsicles, which are produced both by the dairy industry and by independent operators. Popsicles consist of sugar, food colouring, flavouring and water which are combined and frozen. In their other form, as soft drinks, they are taxed. The question of their being taxable when frozen into popsicle form by the dairy industry is now under review by my Department.



CANADIAN COAST GUARD


[Stage Direction]
On the orders of the day:
Mr. Lloyd R. Crouse (Queens-Lunenburg):: I should like to direct a question to the Minister of Transport. In view of the high un-
Inquiries of the Ministry employment in the Atlantic Provinces will the Minister advise if the report is correct that the Department at present is hiring deck officer personnel for the Canadian Coast Guard directly from the United Kingdom, without first advertising those positions in the Atlantic Provinces' newspapers?


John Whitney Pickersgill: I did not hear the first few words of the hon. gentleman's question, but from what I heard I would think it most unlikely that any personnel would be hired from anywhere outside Canada without prior consultation with the National Employment Service, because that is the usual policy of the Government. I would not like, in a Department such as mine, to say I am aware of everything that is going on at every hour of the day. I think I would be prudent to inquire before being too categorical.



OLD AGE SECURITY


[Stage Direction]
On the orders of the day:
Mr.  M. W. Marlin@Timmins: I have a question for the Minister of National Health and Welfare which arises out of a speech the hon. lady gave at Fredericton on Tuesday of this week, of which she was kind enough to send copies to all Members. Can the Minister inform the House which region of Canada or which group in Canada she was contemplating when she mentioned that an old age security payment of $75 per month would be too high?


Hon. Judy V. LaMarsh (Minister of National Health and Welfare):: I would be glad to discuss it with my hon. friend at any time.



EXPO '67 INQUIRY AS TO PROVISION FOR AGRICULTURAL EXHIBITS

[Stage Direction]
On the orders of the day:
Hon. D. S. Harkness (Calgary North):: received an answer last week from the Minister of Trade and Commerce with regard to what agricultural expenditures were planned for Expo '67. The answer was to the effect that no provision had been made in the capital budget for any expenditure for an agriculture pavilion, since it was envisaged it was possible this would be sponsored by interested parties throughout Canada. According to Wednesday's Gazette the general manager of the exhibition has stated that

June 25, 1965
Inquiries of the Ministry they will have to scrap three projected pavilions, namely those dealing with better living, food and agriculture unless Canadian business is able to raise a further $30 million for the purpose of these pavilions. Under these circumstances, is it not planned to have any agriculture building if business does not take action; or what action is to be taken?


Hon. Mitchell Sharp (Minister of Trade and Commerce):: It is our hope and our expectation that there will be sufficient sponsorship for exhibits of this kind, because they do provide an opportunity not only for the educational and the entertainment values that are inherent in an exhibition of this kind but also provide an opportunity for Canadian companies to show their contribution to agriculture. However, and I do not think this is at all likely-if sponsorship were not to come forward in the required amount, the situation would be reviewed, and I can assure my hon. friend there will be an adequate representation of the agriculture industry at Expo '67.



UNITED NATIONS


[Stage Direction]
On the orders of the day:
John George Diefenbaker: I should like to ask the Secretary of State for External Affairs whether the Government of Canada has now reversed the stand it took earlier that defaulting members of the United Nations should, under the charter, be denied the right to vote. Has the Government altered its view in this regard, and does it now intend to support the action to assure that the U.S.S.R., France and other defaulting nations shall not be denied the exercise of their full rights under the charter by reason of their default?


Paul Joseph James Martin: The Canadian Government, of course, has not changed its view about the application of Article 19 to a situation where a member is in default for an amount greater than its assessment for the two previous years. Earlier this year the Canadian Government made its stand known when Albania moved for the resumption of the normal business of the Assembly. We said we did not regard our vote on that occasion as in any way prejudicing the position which we felt should legally be taken with regard to Article 19.
But the Canadian Government now thinks, this question having been affected by the vote on that occasion, it would be regrettable

for the future integrity and usefulness of the United Nations if we were to have a repetition of the stalemate which attended the deliberations of the United Nations last December and January. The British Government, the Scandinavian Governments, New Zealand, Iceland and Canada have made voluntary payments toward the financial situation facing the United Nations. We hope this will help create a climate in which it will not be necessary for the Assembly to meet next September faced with the frustrating circumstances that attended the last Assembly. I think the wise course would be to seek to proceed with substantive business, and to regard the application of Article 19 as having been resolved for this situation alone along the lines of the statement made by Canada last February.


John George Diefenbaker: In this situation it is difficult for me to follow exactly what the situation is, using the words of the hon. gentleman. Does this mean that Canada's position now is that regardless of the default on the part of the U.S.S.R., its puppet nations and France, when the session opens this fall Canada will give support to deliberations being continued and votes taken, regardless of whether contributions have been made by the defaulting nations?


Paul Joseph James Martin: Yes, Sir.


EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, I have a question for the Acting Prime Minister, notice of which I gave him this morning. However, there has been a change. I indicated to the Acting Prime Minister this morning that I would ask him if the Canadian Government had made inquiries concerning the imprisonment at Jackson, Mississippi, of a Canadian civil rights worker, Mr. Robertson Wood. I understand that in the meantime Mr. Wood has been released but that Mr. Paul Saltzman, son of C.B.C. weather man Percy Saltzman, has been arrested at Jackson, Mississippi, on a similar charge. Will the Government make inquiries concerning this matter?


Hon. Paul  Marlin@Acting Prime Minister: I am not aware of the circumstances so far as Mr. Saltzman is concerned, but I will make immediate inquiries. It is reported that Robert Wood, a young Canadian citizen associated
June 25, 1965	COMMONS DEBATES	2849
Income Tax Act
with the Student Non-Violent Co-ordinating On clause 2-Transfer of superannuation Committee, was recently arrested in Jackson, benefits and retiring allowances.
Mississippi, and detained there because it was Mr>
Knowles: With respect to the part not possible to arrange bail. Yesterday that provides income tax deductibility for instructed our consul-general in New Orleans, contributions made to the Canada Pension who has jurisdiction in the State of Missis-	is this deducibility over and above
sippi, to look into this situation and to see any Qther deductibility that is allowed for what assistance that would be warranted he	ion plans of various kinds?
could give to this young Canadian national.


Walter Lockhart Gordon: Yes, Mr. Chairman, it is quite Mr. Deputy Speaker: Orders of the day. separate from everything else.


Stanley Howard Knowles: As a supplementary question-


Mr. Deputy Speaker:: Order. May I bring to the attention of the hon. Member that we have already gone about two minutes beyond the time, and that he just got in under the wire. Therefore I suggest we call orders of the day.


[Stage Direction]
The House resumed, from Tuesday, June 22, consideration in Committee of Bill No. C-118, to amend the Income Tax Act and the Federal-Provincial Fiscal Arrangements Act -Mr. Gordon-Mr. Lamoureux in the Chair.
Lucien Lamoureux: Order. When the committee rose on Tuesday last clause 1 of the bill was being considered.
On clause 1.


Marcel Joseph Aimé Lambert: What is the allocation within the taxation year 1966, or any subsequent taxation year, so far as the residence of any person described in the amendment is concerned, if there is a posting abroad say five months after the beginning of the taxation year? Is it on an aliquot basis by months, or what would be the effect of the amendment? Does living abroad for a portion of the year qualify a person described in the amendment to exemption for the whole year, or is it on an aliquot basis?


Walter Lockhart Gordon: He would get it for the whole year.


Mr. Monteith:: I take it that people on government assistance programs who are out of the country for a period will be in the same category as ambassadors and others for taxation purposes?


Walter Lockhart Gordon: That is correct.


[Stage Direction]
Clause agreed to.
Jay Waldo Monteith: Would the Minister indicate whether there could be any possibility of using this as an additional remuneration for an individual?


Walter Lockhart Gordon: The only reason I hesitate to give a categorical answer is that people are ingenious and do find loopholes in the law.
I can assure my hon. friend there is no change that would make the situation different from what is was previously. I do not think there is any opportunity here to take advantage of this particular clause. Certainly the amendments would not add to the pension.


Jay Waldo Monteith: The hon. Member for Winnipeg North referred to subsection (2) (x) and I agree with this provision. Then provision is made for certain leasehold payments and landscaping costs. At present it is not possible to qualify for depreciation on these. They are not allowed as an expense, but now I understand the Minister is providing that these be deductible.


Walter Lockhart Gordon: That is correct, Mr. Chairman.


Mr. Patterson:: As I followed the discussion during resolution stage I understood the bill did not cover land levelling. My colleague from Medicine Hat dealt with this aspect of the matter at some length, because of its importance in irrigation areas. It is important to my province, and I want to express appreciation to the Minister for including this recommendation of my colleague with respect to the levelling of land.


Walter Lockhart Gordon: I thank my hon. friend for his kind remarks. As he says, the matter was raised by the hon. Member for Medicine Hat, and it was also brought to my attention by the Minister of Agriculture who, as one would expect, watches these matters closely.


Herbert Wilfred Herridge: I endorse the remarks made by the hon. Member for Fraser Valley. As the Minister knows, I have urged this course for 15 years, and I can assure him this pro-

June 25. 1965
Income Tax Act
vision will mean a great deal to many of the farmers in B.C. and other parts of Canada.


Walter Lockhart Gordon: I thank my hon. friend for his remarks. It has always seemed to me that in this particular area, while incorporated businesses were entitled to write off their capital investments in machinery, equipment, buildings and that sort of thing, the farmers were at a disadvantage because there was no provision in their case for them to claim any part of these costs. I think Members on all sides are pleased with the solution which has been found.
[DOT] (12:00 noon)


Marcel Joseph Aimé Lambert: Subclause (2) covers a number of so-called "nothing" items, as chartered accountants call them. I made some remarks during a previous stage in reference to paragraphs (y), (aa) and (ab). In particular, I referred to (y) and suggested there was discrimination, inasmuch as the exemption is only granted to the property owner who has to pay an amount of money to cancel a lease held by a person or business at arm's length. I raised the question of the lessee who would have to pay an amount to get rid of a lease because, shall we say, he is moving into larger premises. In addition, I criticized the arm's length provision because it appeared to me there can be definite arm's length relationships even though persons may be related, within the same family.
I cannot see why such a limitation as this should be imposed. Blood relationship or related interests may be involved when we are dealing with a corporate taxpayer, yet this item is being granted only to a very limited class of taxpayers. I suggest to the Minister that arrangements be made to cover any payments made to cancel a lease if they are made within the class of business provided for in paragraph (y).


Walter Lockhart Gordon: I am informed that similar payments made by a lessee would be allowed as a deductible expense under the existing law.


Marcel Joseph Aimé Lambert: That is the law as it exists today?


Walter Lockhart Gordon: Yes. As to the second part of the hon. gentleman's comments, without question there are difficulties in administering the law as it applies to transactions between associated groups and family concerns. We were afraid that if this was not limited to transactions made at arm's length there would be abuse.


Marcel Joseph Aimé Lambert: Suppose there is a family relationship of say father and son, between a taxpayer and a lessee. In the event that the father controls the company which is the lease owning company and the son controls the corporate entity which leases the property, would this arrangement attract to it a classification as one which was not at arm's length and not therefore entitled to relief?


Walter Lockhart Gordon: Under the law they would not be dealing at arm's length, so any transaction would be examined very closely.


Marcel Joseph Aimé Lambert: That is pure discrimination.


Walter Lockhart Gordon: Maybe.


Mr. More:: I am not sure whether this is directly relevant to the item we are now discussing, but I wish to ask whether the Minister has given consideration to the problem I raised concerning mechanics and the tools they have to purchase to carry on their employment. It seems to me there is discrimination here, and I should like to know whether the Minister is considering dealing with the matter.


Walter Lockhart Gordon: I can assure the hon. Member that a great deal of consideration has been given to this particular matter he brought to the attention of the committee, as well as to a number of similar or related matters about which arguments can be made one way or the other. We have moved with respect to a number of items here where we felt we could safely move. As to the others, we have decided we should wait for the Carter report.
In this matter of the mechanics tools, there are complications. In some cases the remuneration of a mechanic is based on the fact that he must provide his own tools; he is paid a higher wage or price than he would normally be paid, or would normally be able to negotiate through the market place. These are complications through which we have not seen our way clear as yet, but we are hoping the Carter Commission will be of assistance.


Kenneth Hamill (Ken) More: May I point out that the fact a mechanic may receive higher remuneration after providing his own tools makes him eligible to pay higher taxes. The boss can write off costs of tools and machinery, yet we discriminate against his employees.


Walter Lockhart Gordon: I do not think I can accept that argument in quite those terms. I do not believe people should object too much to
June 25, 1965

paying higher taxes if they earn more money. That is the whole principle of our income tax structure.


Kenneth Hamill (Ken) More: But why the discrimination?


Walter Lockhart Gordon: I must say I quite agree. I think this is a difficult case. But it is not black and white; the argument is not all on one side. That is why we decided to defer dealing with it until we have heard from the Carter Commission.


Mr. Muir (Lisgar):: I wish to express my appreciation of the relief afforded to farmers in respect of drainage and land clearance. However, I should like the Minister to clarify certain of these provisions. No mention was made here of any deduction in respect of open drains. In my part of the country tile drainage is not used but ditching is used extensively. I would expect that any expenses in connection with open ditching would be treated in the same way as if the taxpayer were draining by tiles.


Walter Lockhart Gordon: Large projects would be
covered by the general description "clearing land". If the work were done by an individual farmer it would, I am informed, be allowed as a deduction.


Marcel Joseph Aimé Lambert: With regard to the proposed paragraph (aa) dealing with expenses, I believe the Minister has a laudable object in mind in dealing with legitimate expenditures, but I am wondering what yardstick of reasonableness is being used with regard to the interpretation of this paragraph. It seems to me a considerable area of discretion is opened in deciding which expenses are to be considered legitimate. Does one come to Ottawa to see the Minister of National Revenue on a tax matter, take the most expensive suite at the Chateau and eat at all the more expensive restaurants in the city? What limit is to be placed on this expense account living? The words of the paragraph are very wide ranging; they practically bring in the kitchen sink.
[DOT] (12:10 p.m.)


Walter Lockhart Gordon: I suppose the same broad tests of reasonableness will apply to these expenses as to any other business expenses. I think it does raise this question, because the assessor must make up his mind whether any expense is a reasonable one to be charged against the business. In this particular case there is, of course, an added check. If a client retains a lawyer and the lawyer charges excessive fees, or his expenses are unreasonable in the opinion of the client, then perhaps
Income Tax Act
the lawyer might not be retained again. I do not know how you can lay down a hard and fast rule unless you say that lawyers or other professional men are only worth so much a day, and that they shall not be allowed expenses of more than so much. This would be getting down to the kind of detail that would make it impossible for the department to administer the law, I would think.
As my hon. friend knows, before this section was available many people used to include these expenses under some other heading or under some general heading. A lot of people, I presume, claimed them as deductions and probably were allowed them, and others were not. If they were noted separately on a bill,
I presume they were excluded. So it is pretty hard to say where the line should be drawn. Many of these representational expenses are just as much a cost of doing business as almost anything else, and that is why the section was included. As to the point raised by the hon. Member, I am afraid I have not a specific answer.


Marcel Joseph Aimé Lambert: Perhaps I may give this example, Mr. Chairman. It may be a case of persons coming to Ottawa to make representations with regard to a private bill that is going through the other place and this House. Would it be deemed reasonable that all the provisional directors or all the petitioners should come here assisted by a battery of counsel or what have you? This is a hypothetical example, I must say, but I realize it might be a temptation to send everybody down here on a junket of this type. How can the officials of the Department of National Revenue actually establish that in the case of a private bill it was only necessary for one or two of the petitioners to come here accompanied by counsel, when it might have been just as reasonable for say five of the petitioners to come here?


Walter Lockhart Gordon: Mr. Chairman, in the particular example my hon. friend raises, any preincorporation costs would not be allowed anyway. That would take care of that problem. If it was an amendment to some existing statute and the company felt that all their directors should be on hand to help, I would expect that this would be allowed because the decision would be made by the company itself. It would be a pretty expensive thing for the company to do and would sound pretty silly in most cases. We get into an area where conceivably there could be abuses, and if there were and they were discovered, the Department would disallow the expense.

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Jay Waldo Monteith: Mr. Chairman, my question is under paragraph (4). There is a new section to Section 11 of the Act and deals with the application of clause 2 (aa) of the amendments. I am just wondering what would be the position of a corporation which by the end of the year had run into part of an expense described under subparagraph (aa) but was not sure how much further expense would be involved in this particular undertaking. If at the end of the year they had not decided whether they would like to have it all charged up in one year or spread over ten years, what would be the situation?


Walter Lockhart Gordon: They would have to make up their mind before they filed their return, Mr. Chairman.


Jay Waldo Monteith: Let us assume, for the sake of argument, that they had undertaken this expenditure in one year and decided to charge it up as an expense in that year, and then had an additional amount the next year. They could elect to divide that latter part over the next ten years?


Walter Lockhart Gordon: Yes, they could.


Kenneth Hamill (Ken) More: Mr. Chairman, I would like to ask the Minister whether he considers the deduction of expenses for lobbying and making representations more urgent than the plight of the mechanic in connection with these matters. If one has to await the report of the Carter Commission, surely the uncertainty of the application of the law in this regard raises some doubts about abuses, and so on. Cannot this provision be extended on a basis that will allow a deduction with regard to the tools with which a mechanic has to carry on his work? What is the Minister's answer in this respect?


Walter Lockhart Gordon: Mr. Chairman, I appreciate my hon. friend's argument about the mechanic and his tools. I have tried to answer him and there is nothing further I can say. I have sometimes been on the receiving end of lobbying and general representations. I think there is one going on at the moment, if I am not mistaken. I am rather sympathetic to the point of view the hon. Member has just put forward.


Jay Waldo Monteith: The Minister is not by any
chance using this as a way out because of not being able to allow the requests of certain lobbyists?


Mr. Soulham:: Mr. Chairman, I am just wondering whether the Minister has given consideration to the representations made tc

the Royal Commission on Taxation last year by the Saskatchewan Wheat Pool Employees' Association on behalf of the employees of the Saskatchewan Wheat Pool engaged in the construction and repair of country grain elevators, annexes and cottages, and made with the full knowledge and support of the employer, the Saskatchewan Wheat Pool.
The Minister will recall that I have a private Member's motion on the order paper dealing with this matter. Apparently the complaint is that there is an anomaly in the Act with respect to the repair gangs that during the summer travel across the breadth and width of Saskatchewan to repair country elevators. The anomaly comes in because apparently the foreman of the gang who makes arrangements or contracts with the Wheat Pool, or any elevator company for that matter, for these repair jobs is exempt for income tax purposes with regard to food and other incidental expenses in the matter of travelling about the country, but the people he employs are not.
A foreman and any members of his gang are, in my estimation, in exactly the same capacity. This has been a complaint of long standing. There was a very lengthy submission made to the Royal Commission on Taxation on this matter, and I wonder whether the Minister has any observations to make in this respect.


Walter Lockhart Gordon: This is another of those difficult questions, Mr. Chairman. Expenses are allowed in the case of construction workers, and the fact that I think has got the Department into difficulty is that they are not allowed for some other kinds of workers. Not all the people my hon. friend has just mentioned come under the category of construction workers. I am not satisfied with the present divisions. I have not been able to come up with a clearcut answer that will be satisfactory in all cases. Again it is one of those things that I know is being studied by the Carter Commission. I do not know whether they have found a satisfactory answer. I hope their report will be available within a few months.


Richard Russell Southam: Mr. Chairman, might I suggest that the solution to this question would be just to include all members of these work gangs in the same category.
[DOT] (12:20 p.m.)
I think the answer is simple, but it is something that has been overlooked. More specifically, it is covered under section 11 (9) of part A of the Income Tax Act. I think
June 25, 1965

this would be the simple answer, if the Department would take the necessary action.


Marcel Joseph Aimé Lambert: Mr. Chairman, it appears to me, though I am subject to correction here, that there may be some difficulty in the drafting. Subclause (2) says:
Subsection (1) of section 11 of the said Act is further amended by striking out the word "and" at the end of paragraph (v) thereof and by adding thereto the following paragraphs:
I have an office consolidation for 1964 in my hand, and I find that a new paragraph
(w)	had been inserted in 1964. I would agree that the word "and" might have to go out, but what happens to "(w)"? Are there not some consequential changes which will have to be introduced in order to bring in the
(x)	(y) and (z), if (w) is to remain and we are to have continuity? The drafting is complex, but it does appear to me that a small error may have been made in the drafting here.


Walter Lockhart Gordon: Mr. Chairman, my officials assure me that everything is in order and that paragraph (w) does remain. Paragraph (v) remains, and these various other paragraphs are added after (w) which follows after (v).


Jay Waldo Monteith: The "and" follows the (aa).


Walter Lockhart Gordon: That is right.


[Stage Direction]
Clause agreed to.
Clause 3 agreed to.
On clause 4-Limitation re advertising expense.
John George Diefenbaker: Mr. Chairman, unfortunately I was absent when the vote took place with reference to this clause, but I want to make clear the stand I took on behalf of this party, which was unanimously accepted. Clause 4 is one of the most serious potential invasions of freedom that this country has ever seen. I also want to emphasize that while the press generally places the responsibility in this regard on the Minister of Finance, this is a Government measure for which the Government must accept responsibility.
On the last occasion I spoke I made a plea for further consideration of this question, and that it be held back by the Government; and I am going to repeat it. Indeed, I will go further and state that apparently the Prime Minister of Canada, according to information I have secured from those who have been strong supporters of this Government, has
Income Tax Act
misled the representatives of the Canadian Daily Newspaper Publishers Association and given them an impression which is not borne out by the facts.
It is not the first time that we on this side of the House have seen under this Government deceptive and untrue statements made in the House of Commons, but this particular incident took place outside the House. I am going to refer to a statement made by the president of the Canadian Daily Newspaper Publishers Association which reveals a condition of affairs which cannot be condoned. In other words these representatives of the Association have been deceived, and deceived as the result of a statement made to them by the Prime Minister of Canada. I would say more were he present. I am going to refer to this statement because it shows an attitude of mind on the part of this Government that is not in keeping with parliamentary tradition or the ordinary principles that should prevail. On June 23 Mr. Graybiel said:
Last night-
That was the 22nd.
-I was asked to comment on the government's action in proceeding with press control legislation although the CDNPA had requested that such legislation be deferred until possible alternatives had been studied. My reply was "We are disappointed. We asked for time and we didn't get it".
I have been questioned as to why the CDNPA should expect the government to delay its legislative program.
He goes on:
On May 4, executives of the Canadian Daily Newspaper Publishers Association met Prime Minister Pearson and Finance Minister Walter Gordon-
The Minister was present, and he will get the opportunity to answer whether or not the statement of Mr. Graybiel represents the facts.
-to protest that the government's proposal was "a fundamental violation of long-established press freedom in Canada".
Following that meeting I wrote to Mr. Pearson: "You indicated to us yesterday your belief that there is some urgency in preventing foreign takeover of newspapers. Any immediate danger has, of course, been met by Mr. Gordon's announcement of the government's intention in his Budget address. No potential foreign investor will proceed with acquisition of a Canadian newspaper in the face of the government's stated intention to make advertising in such a newspaper taxable as of January 1, 1966. Presumably, that intention could be implemented by legislation at any time before the end of the year. Thus a breathing space of some eight months has been gained. That time can be devoted to exploration of alternative methods of achieving the government's objective.
That was a letter written to the Prime Minister setting out what had taken place.

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What we are witnessing in the absence of the Prime Minister, who is in the United Kingdom, where he should be at this time, is that this legislation is being pushed through so the Government will be able to say "Well, really, the Prime Minister did not have an opportunity of making himself clear in this regard."
We want to know, Mr. Speaker, which newspapers are in danger of being taken over. The Minister of Finance has stated that the terrible danger of Canadian newspapers being taken over is imminent. While fearing for Canada's national identity, Time and Reader's Digest are placed in a position where they are set apart, given a kind of honorary Canadian citizenship wherein they are absolved from any of the dangers of which the Minister spoke. This legislation is just like bringing in law to prevent speeding on the highways because of the danger, and then restricting the law to those who go over 60 miles an hour. That is in reality what the situation is today, with $4 million of advertising going to these two companies.
[DOT] (12:30 p.m.)
So far as Time magazine is concerned, one has only to read the Canadian edition week by week to realize the change in view in the last few months so obviously in favour of the Government. It has been very clear and very definite. No Liberal newspaper dedicated to Liberalism couid be so unobjective as Time magazine has been. Apparently this is the pay-off. I want to make it very clear that while it may be that this legislation is going to be put through, this is not going to be the last of the story. I read on:
Neither then nor since then did the Government question that assumption.
That is the assumption that nothing would be finally done for several months so as to enable the Canadian Daily Newspaper Publishers Association to make its representations and provide its alternatives.
On May 12 Mr. Pearson wrote me and, in fact, invited the publishers to suggest such alternatives.
The Prime Minister said this in his letter, as quoted by Mr. Graybiel:
"We will be more than glad to give further thought to any alternative which the Canadian Daily Newspaper Publishers Association would submit...I will be only too happy to give the fullest and most sympathetic consideration to any alternative method of expressing the same principles which your Association can recommend."
Mr. Graybiel goes on to say:
On May 14 I replied to the Prime Minister, accepting on behalf of the C.D.N.P.A., Mr. Pearson's request for alternative solutions.
[Mr. Diefenbaker.l
The following is in quotations:
"A meeting of the executive committee.. .has been called for June 15 to give further consideration to this matter. In the meantime I forwarded copies of your letter to each of the 104 members of the C.D.N.P A. requesting them to send me their comments and suggestions so that the executive committee may consider them."
Thus Mr. Pearson knew that the publishers were studying alternative proposals, knew that they believed they had eight months to achieve an effective alternative solution, knew that the next stage in the study was a meeting of the C.D.N.P.A. executive committee on June 15.
What a travesty of an agreement. The views of the C.D.N.P .A. conformed exactly with the views of the Prime Minister as set out in his letter. Mr. Graybiel went on to say:
In the face of that knowledge, the Government introduced its legislation in the House of Commons on June 14.
What is behind all this? Why this haste? Why not wait until the Prime Minister gets back so we can ask him, if we cannot get any information from the Minister of Finance, whether this is true? Mr. Graybiel goes on:
When I protested this hasty action, the officers of the C.D.N.P.A. were invited by the Acting Prime Minister, Hon. Paul Martin, to meet with him and Mr. Gordon in Ottawa on June 18. We pointed out that if the Government denied us the time to carry out the Prime Minister's invitation to supply alternatives, and proceeded with the legislation, the achievement of any alternative solution would be virtually impossible. The study which the C.D.N.P.A. had undertaken at the Prime Minister's request would be meaningless. Following this meeting the Government went ahead and the bill received second reading in the House last night.
Then he goes on to say:
I think this statement of facts makes it clear why the C.D.N.P.A. asked that action be deferred and why we were disappointed that our request was not granted. We were only trying to do what we had been invited to do by the Prime Minister and only requesting the time for our study which we had been led to believe was available to us.
That is the way the last line appears in the statement, but it has been suggested to my office that the last line should read "which we believed was available to us".
What is the rush? Are these newspaper proprietors parasites? Are they not Canadians entitled to the consideration which it was agreed should be given to them? Why this rush? What is going on? Who is going to benefit? What is behind this? Are certain American magazines forcing action at this session? Is that the reason? Is one of the reasons, if you do this we will do that? It is difficult to understand what is behind this.
I am not going to go over the facts I have dealt with on previous occasions, but over the
June 25, 1965

years I have never seen the Winnipeg Free Press, which has supported this Government, take such a stand. I do not want to see the Minister of Finance pilloried and placed in this disgraceful assortment of people whose pictures appear here. The whole Government should be there.


Mr. Moreau:: Yellow journalism.


John George Diefenbaker: Did someone over there say "yellow journalism"? Where is the person who said "yellow journalism"?


Maurice John Moreau: I did.


John George Diefenbaker: The hon. Member for Scarborough speaks of yellow journalism in regard to the Free Press which has always supported the Government. Is it yellow journalism that would cause the Free Press to take this stand? Does he say that the Toronto Globe and Mail is guilty of yellow journalism?
I am asking him, does he say that?


Maurice John Moreau: No.


John George Diefenbaker: No; he lives in Toronto, where he wants votes.


Maurice John Moreau: On question of privilege, Mr. Chairman, I referred to the article which the Leader of the Opposition was holding in his hand at the moment, and I suggest that it was an example of yellow journalism. I referred to no other.


John George Diefenbaker: Mr. Chairman, the hon. gentleman has had to back up. He always runs, sometimes to Hull. If he wants particulars I can give him a little more on that score. He speaks of yellow journalism. I have before me the Free Press which contains an article headed "Press Control Has A Long History". There is a picture of George III with the words underneath "He taxed advertising", a picture of Hitler with the words "He jailed editors", a picture of Benito Mussolini with the words "He built a subservient press", a picture of Joseph Stalin with the words "He made the press a government mouthpiece", a picture of Juan Peron with the words "He closed down newspapers", a picture of Fidel Castro with the words "He exiled editors". The hon. Member says I am looking at a yellow press. I am glad he said that, since it gave me the opportunity to ask whether the Globe and Mail was a yellow press. He would not say so. He would rather get out of Ottawa and go to Hull.


Mr. Byrne:: What is wrong with going to Hull?
Income Tax Act


John George Diefenbaker: I refer now to the Globe and Mail, and I would ask the hon. gentleman whether this too is yellow journalism. On June 24 the Globe had an editorial headed "To Serve His Obsession". I do not like this because it identifies the Minister of Finance as being the perpetrator of this scheme. He is not. They sit around him. It is these seven or eight former bureaucrats and civil servants who have thought this through. So far as the newspapers are concerned, nobody asked for it. Nobody has requested it. What is the reason? The Globe and Mail says:
Finance Minister Walter Gordon, wielding the big stick "pass this legislation or we'll take you to an election" has forced through second reading in Parliament the bill which will introduce censorship of the press through control of its advertising.


Walter Lockhart Gordon: Mr. Chairman, I wonder
whether the right hon. gentleman would allow me to raise a question of privilege.


The Acting Chairman (Mr. Tardif):: The
Minister of Finance on a point of order.
[DOT] (12:40 p.m.)


Walter Lockhart Gordon: No, a question of privilege.
I am sure the right hon. gentleman would want the statement from which he has been reading to be correct, so perhaps he might be kind enough to table it.


John George Diefenbaker: Oh, yes.


Walter Lockhart Gordon: Perhaps, at the same time-


John George Diefenbaker: I will not only table it, I will make it an exhibit if the hon. gentleman wishes.


Walter Lockhart Gordon: Perhaps at the same time, Mr. Speaker, I may have permission to table a telegram which I have just received from Mr. Richard Graybiel, who asks that a correction be made-


John George Diefenbaker: What is going on?
The Aciing Chairman (Mr. Tardif): Order. The Leader of the Opposition has the floor, and so far as I know that is not a question of privilege.


John George Diefenbaker: This gives you an idea of the disregard of the hon. gentleman for parliamentary rules. He has asked me if I would table this document. I should like to table it, and I should like to ask that it be appended to Hansard, but I know that would not be proper. I cannot believe that anything would be more beneficial in showing up this Government than that document. If the hon. Member wants it tabled I am going to ask, at the conclusion of my remarks, that his request be granted.

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I was reading a moment ago from the Globe and Mail which says that Mr. Gordon has two obsessions which are most dangerous for Canadians. They say he is obsessed with a fear of United States domination of the Canadian economy to the point where he may well, with ill judged, punitive measures, force the United States to assert that dominance and reduce Canada either to a dependency or a depression. The editorial says he is obsessed with the idea that he alone knows what is good for Canadians. I cannot accept that statement on the part of the Globe and Mail. It is not he alone but those who sit around him, those former bureaucrats. They are the ones who know what is good for Canada.
We only have to read what is happening according to the latest financial statements issued by the Government to illustrate this point, and to understand the effect of this tinkering with United States investment in Canada. The Dominion Bureau of Statistics reports reveal a reduction in investment capital for the first quarter of this year to $188 million as compared with $337 million last year. One has only to realize that as a result of this kind of tinkering, this kind of obsession-not on the part of the Minister because he does not have an obsession, just a brainstorm-they are bringing about a situation dangerous to the Canadian economy. According to the Dominion Bureau of Statistics reports the current account deficit for the first quarter is 19 per cent above last year, the highest first quarter deficit in the 1960's. These are things with which the Government should be dealing. Imports are increasing at a fabulous rate and exports at a much lower rate.


Walter Lockhart Gordon: I rise on a point of order, Mr. Chairman. The right hon. gentleman was kind enough to point out that I am not very familiar with the rules. May I point out to him that we are dealing with clause 4 of this particular bill.


John George Diefenbaker: The hon. gentleman was talking to the Minister of National Revenue and was not following me. I was pointing out that these are the effects of the tinkering this Government is doing; that is what I was pointing out. As a result of the policies of this Government we are placing our trade position in a very serious light.
I am going to ask the Minister whether or not a complaint was received from the United States, directly or indirectly through the External Affairs Department, that if this legis-
lation goes into effect, it discriminates in favour of two United States magazines and constitutes a contravention of GATT. I want to get an answer as to that, because it certainly took place in 1964. The United States treasury secretary, Douglas Dillon, when he attended the Canada-United States ministerial conference in Ottawa on April 30, reportedly suggested that the Canadian magazine protective proposal was discriminatory, that it was discrimination in trade policy in violation of GATT, and that the United States may seek equivalent concessions in other tariffs.
We have stood against this. We made a very reasonable request that the matter be held up. The Prime Minister gave his undertaking to the Canadian Daily Newspaper Publishers Association, and the Minister of Finance was present. They are breaking that undertaking, and we ask why. What is the reason for this, can you tell me? I quote some of the headlines in the daily newspapers: The Winnipeg Free Press, "Freedom of Press Now in Danger in Canada"; the Guelph Mercury, "Press Throttling to Injure Canada"; the Windsor Star of June 17, "Please, Mr. Gordon, Stick to the Facts". Another article in the Windsor Star of June 23, which throughout the years has given such support to the Liberal Party, has a headline "Arrogance and Hypocrisy". Lest anybody misunderstand to whom these words were directed, it was the Government of Canada of today. The article reads, in part:
In 1957, a Liberal Government in Ottawa fell because it had become too arrogant.
Then the article goes on to deal with the present situation and says:
That is why the Publishers Association, whose president is Richard Graybiel of the Star, appealed to the Government not to proceed with the Bill. Prime Minister Pearson asked the publishers to suggest an alternative solution to the problem. All they asked in return was time to study possible alternatives. It wasn't much to ask when so vital an issue as freedom of the press is at stake.
I repeat those words, that it was not much to ask when so vital an issue as freedom of the press is at stake. I continue quoting:
That request has been denied. Disregarding the sincere desire of the publishers to find a method that would achieve the Government's objective without endangering press freedom, Mr. Gordon is forging ahead with his legislation.
It is not Mr. Gordon who is doing it, it is this whole Government.
That is arrogance.
The reason advanced by Mr. Gordon for his haste in pursuing the measure is hypocritical. He
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Income Tax Act
says that if the Government doesn't act now, some Canadian newspaper may be bought by foreign interests, and then it will be too late to act.
Does he know of any? The Moose Jaw Times-IIerald, not a newspaper which gives us support, has a headline which says, "Opposition Leader Right in Opposing Tax Law". The Oshawa Times has a headline which reads "Bureaucratic Bumbling can Jeopardize Freedom". The editorial states:
-Mr. Gordon's latest gimmick must be protested strenuously by all Canadians and opposed most vigorously by our representatives in the House of Commons. Despite his facetious flare for knowing what's best for us, Mr. Gordon has made grave mistakes since assuming the finance portfolio. Canadians can ill afford to permit him to bumble into another which at any time could endanger our freedom of information.
[DOT] (12:50 p.m.)
Why not, even now, keep the word that was given to these publishers, so called the yellow press by the hon. Member for Scarborough.


Maurice John Moreau: Mr. Chairman, on a question of privilege, I made it perfectly clear on an earlier point of privilege that I referred to the article which was in the Winnipeg Free Press, and which the Leader of the Opposition was waving, as yellow journalism. I think that was an example of yellow journalism. I made no reference to any other editorial comment in any other newspaper, and I want to make that perfectly clear. The hon. gentleman knows that.
As to his references to my personal conduct, when he referred to my going to Hull, as he knows perfectly well my personal conduct was not in question at all. I think that is pretty disgusting on the part of a man who was a former Prime Minister.


Some hon. Members:: Hear, hear.


John George Diefenbaker: Well, Mr. Chairman, I must say that the hon. gentleman feels most keenly. That was one voyage for discovery that he wants us to forget. I do not know what he is talking about. He apparently knows of something I am not fully aware of which causes him to be so aroused over that visit to Hull.


James Allen (Jim) Byrne: Cheap.


Julia Verlyn (Judy) LaMarsh: You cannot get much lower.


John George Diefenbaker: The hon. gentleman makes his best contributions in this House while still sitting down.


James Allen (Jim) Byrne: I certainly make a better contribution than you. That is a cheap interjection on the part of a former Prime Minister.


Paul Tardif: Order, please.


John George Diefenbaker: What was said in the Winnipeg Free Press was described as yellow journalism. That was the article headed "Press Control has a Long History." I have read from various papers that have come to hand in recent days. The Standard-Freeholder of Cornwall says, in an article headed "Threat to Freedom of the Press in Government's Proposed Law":
Thinking Canadians from coast to coast have expressed justifiable concern over finance Minister Gordon's proposed legislation on foreign ownership of Canadian newspapers and magazines. Any suggestion of government control over the freedom of the press is viewed with dismay and alarm. Regress instead of progress.
It ends up by saying:
Freedom of the press is everybody's right, everybody's privilege to enjoy. It is cherished and must be guarded zealously.
The Canadian Government must not disregard its citizens' rights; rights won in long-fought battles. The newspaper ownership proposal could be the first break in the solid freedom front.
I doubt the constitutionality of this legislation. I doubt that the courts would uphold it; for when we brought in the Bill of Rights for the first time in Canada's history freedom of the press, recognized as being within the jurisdiction of the federal Parliament, was provided for as basic. I would certainly consider that this legislation, if passed, would be a contravention of the Bill of Rights, which continues to be in effect not only in respect of legislation passed prior to its enactment but of all legislation that will be passed so long as it is on the statute books.
I have made my appeal for reconsideration of this matter. I have asked the Government to carry out its pledged word, that is all. It did not give the word to me. It gave the word to the Canadian Daily Newspaper Publishers Association. No harm will be done because, as was stated in one of the articles, if the matter is allowed to remain in abeyance no U.S. corporation or any other foreign corporation would think of coming in to make purchases during the next eight months, with a matter like this hanging over for further consideration.
I have made my appeal. I can do no more, but I regard what is being done in this case as potentially the grossest invasion of freedom that has ever been before this House since 1867.

June 25, 1965
Income Tax Act


Some hon. Members:: Hear, hear.
The Acling Chairman (Mr. Tardif): The
hon. Member for Nanaimo-Cowichan-The Islands.


John George Diefenbaker: Before the hon. gentleman speaks may I point out that the Minister of Finance asked if I would table this, and I want to do that if I may have consent.


Some hon. Members:: Agreed.


Paul Tardif: Actually the formal tabling of the document would have to take place when the Speaker is in the Chair. I think it should be proposed at that time.


John George Diefenbaker: All right.


Mr. Cameron (Nanaimo-Cowichan-The Islands):: Mr. Chairman, we have heard a great deal about the freedom of the press in the last half hour. I notice that the freedom of the press has been exercised latterly in reporting the expedition of the right hon. gentleman to the beautiful part of the country from which I come. I believe it was reported that he caught a cod, but no one told us he also brought back a whole bucket full of red herrings.
There seems to be some confusion as to what the meaning of freedom of the press is. I have always taken it for granted that the freedom of the press involves the right of a Canadian citizen to publish news that is not obscene and that is not libelous, to publish opinions on public affairs that are not obscene and not libelous, and that it has nothing whatsoever to do with the question of the ownership of the means by which these views are disseminated.
We have before us a measure which does attempt to curb, shall we say, some of the business freedom of those who own the properties of mass communication. Nowhere that I can see is there any suggestion whatever that powers are being conferred upon the Minister of Finance, or any other dignitary, to dictate the editorial policies of any paper. But the Minister is taking steps to try-I think rather ineffectively-to prevent these organs of public opinion falling into the hands of non-Canadians and thereby being at their disposal to disseminate views, ideas and opinions that may not be in the best interests of Canada but may be in the interests of some other part of the world.
This does not seem to me to be any intrusion into the freedom of the press. It seems to me to be merely a wise precaution to make sure that if we are going to have opinions widely

disseminated, they will be disseminated by fellow Canadians.


John George Diefenbaker: Then what about Time magazine?


Colin Cameron: I am coming to Time magazine and I am going to give you an opportunity, Mr. Leader of the Opposition, to state your position quite clearly on Time magazine later, to go on record about it at least in this Chamber. I am coming to that in a few minutes but I suggest, Mr. Chairman, if the Leader of the Opposition had really been concerned about freedom of the press he would have criticized the Minister and the Government, not for precisely this measure that is before us but because they have not brought before us some comprehensive legislation to deal with the increasingly important question of mass communications in the modern age.
I myself would criticize this legislation, and have already done so, on the ground that it is too narrow; that while it may prevent Canadian advertisers advertising in U.S. owned newspapers and periodicals, except the two mentioned by the Leader of the Opposition, it makes no provision whatever to prevent advertising of that sort over U.S. television and radio stations, and I suspect one of the results of this legislation will be to cause a great many Canadian advertisers to make even more pronounced use of U.S. television and radio than they do at present. This is one of the points on which the legislation can be criticized.
[DOT] (1:00 p.m.)
But we should not confuse the issue by bringing in preposterous nonsense about it being an intrusion on the freedom of the press, because it is not. There is no question of that at all. I have spoken to many working newspapermen-I have not spoken to any publishers, because I do not know any; I do not move in those circles-but the working newspapermen to whom I have spoken snort derisively at the suggestion that the proposals put forward by the Minister of Finance constitute in any way interference with the freedom of the press. On the other hand, they say to me "If you want to do something about the freedom of the press, why don't you do something to prevent these wholesale amalgamations of newspapers? Why don't you use the Combines Investigation Act to halt a process which leads to the same views appearing in newspapers from coast to coast?" Newspapermen who know the side on which their bread is buttered are
June 25, 1965

very careful before writing stories which conflict in any way with the known views of their publisher. It is situations such as these which in reality affect press freedom.
The Leader of the Opposition suggested there was great danger in this legislation, and that we could see the results of this danger in this morning's papers which contained the D.B.S. figures on the increase in the current deficit account. I had intended to ask the Minister of Finance to comment on this matter today, but so much of the time available during the question period was taken up by the Leader of the Opposition that I had no opportunity to ask the question. I thought it was a very serious matter. Apparently the Leader of the Official Opposition did not, because in spite of his numerous opportunities to ask questions, opportunities which those of us in much inferior positions lack, he did not ask the Minister of Finance to comment on this disturbing development, as I consider it to be. But to suggest that this has been brought about by the possibility that a United States publisher who might have wanted to buy a Canadian newspaper now finds he cannot do so, is utter nonsense.
The Leader of the Opposition has asked "What about Time and Reader's Digest?" What, indeed? I have already spoken twice on this matter, suggesting that attempts to free Canada from the dissemination of editorial opinion and slanted news coming from outside this country are utterly useless-and I suppose that is the purpose of the present legislation as a whole-if at the same time we are to make special provision for the two foreign periodicals which have the largest circulation in Canada. I propose to give the Leader of the Opposition the opportunity to record his objection to this policy and his deprecation of this dereliction of duty on the part of the Minister of Finance. In fact I intend to move:
That clause 4 be amended by deleting subparagraph (2) from the proposed new Section 12-A, and by renumbering the succeeding subparagraphs.


Walter Lockhart Gordon: A similar motion was moved at the resolution stage and was ruled out of order. I would merely like to submit that if it was out of order then, it is out of order now.


Stanley Howard Knowles: Mr. Chairman, the situation at this moment is not exactly the same as it was at the resolution stage, despite the remarks made by the Minister of Finance. At the resolution stage we were dealing with the budget resolution preceding the Income
Income Tax Act
Tax Act amendments. We had before us at that time a resolution which consisted of 19 paragraphs. Those paragraphs in their entirety covered all the proposed amendments to the Income Tax Act. We were told we had to deal with that resolution at one fell swoop. We tried to amend that resolution to strike out a limited portion of one of these 19 paragraphs. We were told we could not do this because the resolution stood or fell in its entirety.
Now we have before us, not 19 paragraphs but just the one subject set out in clause 4 of the bill. It is the question of the deductibility for income tax purposes of advertising in periodicals and newspapers. We feel we should have the right to deal separately with separate aspects of this one question. The one question-I will identify it again-is advertising in periodicals and newspapers. But this one question is complicated. It has a provision for deductibility for advertising in periodicals. Then it has an exception to that rule. Further, it has a provision for deductibility for advertising in newspapers, and later there are certain qualifications. We feel we should have an opportunity in committee of the whole to register our views on these separate aspects of this one question.
There is a rule, Mr. Chairman, of which I am fully aware, Standing Order 78(1), which says:
In proceedings in Committee of the Whole House upon bills, the preamble is first postponed and then every clause considered by the committee in its proper order; the preamble and title to be last considered.
That Standing Order has been slightly amended on a provisional basis, but the point I am making is not altered. I am recognizing the fact that when a clause is put to us we have to vote on the clause as a whole. We do not have the right to ask Your Honour to call a clause in its separate parts.
But though it may be difficult to make an appeal of this kind, I do appeal to common sense. Surely if there is before us a matter which has several aspects, we should have the right to register our opinions on those several aspects. Let me narrow them to two and leave out for the time being the question of advertising in newspapers. Let us deal solely with the question of advertising in periodicals. Subsection (1) of the proposed new section 12A provides for non-deductibility for advertising in foreign owned periodicals. Subsection (2) provides for an exception to that rule so it does not cover Time and Reader's Digest. We feel that in

June 25. 1965
Income Tax Act
terms of common sense we ought to be able to vote separately on the question of the nondeductibility of advertising and on the question whether or not this special exception should be made in the case of the two magazines I have mentioned.
[DOT] (1:10 p.m.)
I said, Mr. Chairman, that I was making an appeal to common sense, but I make one other appeal. I remind you, Sir, of citation 200, paragraph 4, of Beauchesne's Fourth Edition, which is to be found on page 168:
A motion which contains two or more distinct propositions may tbe divided so that the sense of the House may be taken on each separately.
I am sure that to you, Sir, that citation will have a familiar ring. It reminds you, as it reminds all of us, of a rather lengthy debate that we had in the House last session on the question of a national flag. You will remember, Sir, that the Government brought in one resolution in which it proposed at one and the same time a national flag for Canada and the recognition of the Union Jack as our Commonwealth flag. You will recall the point of order that was raised with respect to this matter and that that point of order was based essentially on this very citation. I read it again:
A motion which contains two or more distinct propositions may be divided so that the sense of the House may be taken on each separately.
Mr. Speaker-we were in the House at the time-after listening to considerable debate, and after showing that he had done considerable homework on the matter himself, was of the opinion that the House had the right to vote separately on those two propositions. Related though they may have been, because they were distinct the House had the right to vote on them separately. Therefore the one resolution that had been placed before the House was, by Mr. Speaker himself, divided into two.
I submit that if it was possible for the House to be given the common sense right to vote separately on those two propositions, we should have the same common sense right to vote separately on the proposition, on the one hand that there should be a general rule regarding the non-deductibility of advertising in foreign owned magazines, and on the other hand on the exception to that rule that is set out for Time and Reader's Digest.
This is what we feel should be done. If it were at all possible for us simply to ask you to call clause 4 in its constituent parts,

taking (1), (2), (3), (4), (5), (6) and (7), of course that would be very simple; all we would have to do would be to vote against subclause (2), the one that provides for the exception. But there they are, seven different clauses, each with a distinct and separate idea. Yet we are told by the terms of Standing Order 78(1), and by implication in the position taken by the Minister of Finance, that we have to vote on all these things at once; that we have to vote for the bad because we want the good, or vice-versa. We submit that there should be a way for us to have the right, the common sense right that is set out in citation 200(4), the common sense right that was given to this House by Mr. Speaker in the flag debate, the common sense right to vote separately on these distinct propositions.
It is a complicated question; there is no doubt about that. We have magazines on the one hand, newspapers on the other, and with respect to magazines the general rule and then the exception. To ask grown up men and women in the House of Commons to vote on all of this as one deal, without the right to express our opinion on the separate portions of it, we submit just does not make sense at all. That is why we have submitted this amendment asking that there be the opportunity to vote on the deletion of the portion of clause 4 of which we do not approve. We are not suggesting any change in the taxation rates; we are not suggesting any change in the principle that the Minister of Finance as a Minister of the Crown has brought down. We are just proposing a procedural means of getting the chance to vote separately on this one question, namely shall Time and Reader's Digest be exempted from the general rule that the Minister has brought in? That is the reason for the amendment moved by my colleague the hon. Member for Nanaimo-Cowichan-The Islands, which simply asks that subparagraph (2) of the proposed new section 12A be deleted and that the succeeding paragraphs be renumbered accordingly.


Mr. Pennell:: Mr. Chairman, unless I misconstrued the position respecting the amendment that was proposed earlier during the debate on this income tax bill, it was my understanding that it was rejected then because it would upset the balance of ways and means. The intent of the amendment proposed today would have the same effect. If the proposed amendment was rejected the other day, when we were dealing with the
June 25, 1965

resolution stage, because it would upset the balance of ways and means, surely the fact that we happen to be in the clause by clause discussion of the bill does not upset that principle. The same principle applies. If it upset the balance of ways and means at the resolution stage, surely it upsets the balance of ways and means when we are now in clause by clause discussion.
The other point which I wish to put very shortly is this, and it has in fact been made by the hon. Member for Winnipeg North Centre. Under Standing Order 78(1) every clause shall be considered by the committee in its proper order. The hon. Member puts forth the proposition that this clause now contains various aspects and hon. Members should be entitled to consider each aspect by itself. Surely when Standing Order 78(1) was drafted the House was aware of the fact that from time to time clauses might have several aspects in them, but they drafted the order to say that every clause shall be considered as a whole. Therefore in my submission, Mr. Chairman, the amendment is out of order.


Stanley Howard Knowles: Mr. Chairman, I wonder whether I may ask the Parliamentary Secretary a question. My question relates to the first part of his argument, namely about upsetting the balance of ways and means. Is it not a fact that if the Committee were to vote against clause 4 as a whole, thereby defeating it, we would be upsetting the balance of ways and means? So what difference is there between upsetting the Government's balance of ways and means by defeating the whole measure and defeating a portion of the measure?


Mr. Orlikow:: He wants to get off the hook of voting. That is the real point. It is simple.


Lawrence T. Pennell: Mr. Chairman, when the amendment was moved at the resolution stage we considered every aspect of this particular clause and in essence considered the identical question being posed today. I suggest that the same principle applies as far as the intent of this amendment is concerned.


Stanley Howard Knowles: Mr. Chairman, does the Parliamentary Secretary not recognize that at the resolution stage we had a 19-paragraph resolution with all the income tax changes in it, whereas all we have now is one clause dealing only with taxation in respect of advertising in newspapers and periodicals.


Kenneth Hamill (Ken) More: On a point of order, Mr. Chairman, could we have the business conducted
Income Tax Act
by the Chair and through the Chair, rather than this private dialogue that is going on now?


Stanley Howard Knowles: I object to that, Mr. Chairman. I was addressing the Chair and asking through you, Sir, a question of the Parliamentary Secretary.


Lucien Lamoureux: This is the way the Chair understands the situation. An objection to the amendment was made by the Parliamentary Secretary to the Minister of Finance, and the hon. Member for Winnipeg North Centre tried to find a way out of the rather strong argument posed by the Parliamentary Secretary. If there are no other contributions to the point of order, the Chair believes that it is in a position now to make a ruling.


Mr. Barnett:: Mr. Chairman, if I may I
would like to address a question to the Parliamentary Secretary. I was quite alarmed by what I understood to be a remark he made just a moment ago, and I would like to be sure that I understood him correctly. As I understood it he suggested that having dealt with this question at the resolution stage, we could not deal with it when we were in committee of the whole. My question is, is the Parliamentary Secretary trying to suggest that all there should be to the passing of legislation in the House is that we pass a resolution, and that is the end of it; that we abolish second reading, committee of the whole and third reading; that every time the Government puts a proposition before us and we talk about it in a vague way at the resolution stage, we then either accept it or reject it and that is the end of it?
[DOT] (1:20 p.m.)


Lawrence T. Pennell: With all respect to the hon. Member, he is putting an extravagant interpretation upon my words. I merely said-


Lucien Lamoureux: Order.


Lawrence T. Pennell: -that it was my respectful submission that a certain principle-


Lucien Lamoureux: Order, please. There is not very much added to the subject matter under discussion by the exchange which has taken place between the hon. Member for Comox-Alberni and the Parliamentary Secretary.
The argument advanced by the hon. Member for Winnipeg North Centre in support of the amendment proposed by the hon. Member for Nanaimo-Cowichan-The Islands is very interesting, but I suggest that it does not go to the substance of what is now before us. As the hon. Member knows very well,

June 25, 1965
Income Tax Act
when a similar amendment was previously introduced during the course of this debate it was ruled out of order by the Chair, as reported in Hansard for June 15 at page 2468. With great respect I suggest that the principles referred to by the Chair at that time apply equally at this time, and perhaps I might be allowed to quote myself at this stage. I said:
I believe it Is well known to hon. Members that when an amendment proposes to set aside a measure designed to provide relief, that amendment in effect imposes a tax and should not be accepted by the Chair. Citation 265 (1) of Beauchesne is relevant :
"No Member other than a Minister of the Crown may introduce a Bill for the reduction of duties".
Actually this clause with which we are dealing at the moment provides an exemption from taxation. By adopting the amendment proposed by the hon. Member for Nanaimo-Cowichan-The Islands we would indirectly be restoring this tax. I suggest to the hon. Member that this is not allowed by the standing orders and rules of the House.
I would also refer hon. Members to citation 270 (2) of Beauchesne's Fourth Edition:
An amendment to enlarge a class of articles on which duties are levied cannot be moved to the Tariff Act by a private member
For these reasons, with great respect I must rule that the amendment proposed by the hon. Member cannot be accepted by the Chair.


Colin Cameron: With the very greatest respect, Mr. Chairman, and under the provisions of Standing Order 59 (4), I beg leave to appeal your ruling to Mr. Speaker.
Mr. Deputy Speaker resumed the Chair and put the question as follows:
According to the new standing orders to which the hon. Member has alluded, an appeal now lies from the Chairman to the Deputy Speaker.
While in Committee of the Whole the Committee considered clause 4 of Bill No. C-118, an Act to amend the Income Tax Act and Federal-Provincial Fiscal Arrangements Act.
In amendment thereto the hon. Member for Nanaimo-Cowichan-The Islands proposed:
That clause 4 be amended by deleting subparagraph (2) from the proposed new section 12A and by renumbering the succeeding sub-paragraphs".
The Chair ruled that the amendment could not be accepted and referred particularly to the ruling of the Chair made on June 15, 1965 as follows:
"I believe it is well known to hon. Members that when an amendment proposes to set aside a measure designed to provide relief, that amendment in effect imposes a tax and should not be accepted by the Chair."
Citation 265 (1) of Beauchesne was referred to by the Chair at the time and it reads as follows:
[The Chairman.]
"No Member other than a Minister of the Crown may introduce a Bill for the reduction of duties".
The decision of the Chair in Committee of the Whole was that clause 5 provides for an exemption from a tax, and that by adopting the amendment proposed by the hon. Member for Nanaimo-Cowichan-The Islands we would indirectly be restoring a tax. From this decision an appeal was made to the Speaker.
I am sure the hon. Member will understand that it is very difficult for the Deputy Speaker, under the present circumstances, to rule against the good judgment of the Chairman of the Committee of the Whole. Therefore he must confirm the decision reached by the Chairman of the Committee of the Whole.


Stanley Howard Knowles: Does Your Honour not think you should take the matter under advisement?


Mr. Deputy Speaker:: The Chair has
declared the ruling confirmed.


John George Diefenbaker: Mr. Speaker, Solomon in
all his glory never equalled that.
And the House having resumed in Committee:
On clause 4-Limitation re advertising expense.


Walter Lockhart Gordon: Mr. Chairman, before clause 4 is put to the vote I should like to reply very briefly to two points which were made by the Leader of the Opposition in his remarks. I say very briefly, because this matter was fully debated at the appropriate time when the bill was before the House on second reading.
The first point made by the Leader of the Opposition was in regard to Time and Reader's Digest. I sometimes wonder whether the right hon. gentleman's memory is as good as it should be. He was complaining about the exemption and yet, as I recall it, it was his Government which was the first to propose an exemption for Time and Reader's Digest. It was not exactly the same as the present exemption; nevertheless the principle was the same. He is now taking another tack. He is almost standing on his head, if I might put it that way. If I were tempted to ask the kind of rhetorical questions in which he sometimes indulges, I might ask him why this change of tune.
The point I wanted to make seriously- because while the other is serious we have covered it before-is in reply to the statement issued by Mr. Richard Graybiel, the president of the Canadian Daily Newspaper Publishers Association. Perhaps I might be
June 25, 1965

permitted to remark that Dick Graybiel is a very old personal friend of mine.


David Orlikow: He was.


Walter Lockhart Gordon: We are the kind of friends who remain friends despite honest differences of opinion about this or any other matter. I can say that on my part and I am equally sure I can say it on the part of Mr. Graybiel. It is a friendship which I happen to value very much.
The Leader of the Opposition, to my surprise, said that the Prime Minister had deceived-and he used the word "deceived"- the Canadian Daily Newspaper Publishers Association. If I may say this to him, I think he makes these loose charges too frequently. If there is any excuse for him on this particular occasion it may be in the wording of the last sentence of Mr. Graybiel's widely distributed statement, particularly in the last clause in that sentence. The sentence reads:
[DOT] (1:30 p.m.
We were only trying to do what we have been invited to do by the Prime Minister and only requesting the time for our study-
Then there is this phrase: "which we had been led to believe was available to us". I was surprised at that last phrase. I think there is always room for misunderstandings but I thought that the use of those words was perhaps going farther than was justified, and I may say I was present at the meeting. Mr. Graybiel is an honest and very fairminded man. During the course of the right hon. gentleman's remarks I received a telegram from Mr. Graybiel which I tried to get permission to read at the time and in the context of the other statement. The telegram is addressed to me and reads as follows:
Correction. Please alter last line of statement attached to my letter-
He sent the statement to me with a letter.
-to read: "which we believed was available to
us".
He requested that these words be substituted for the words I have already mentioned, "which we had been led to believe was available to us". I suggest that there is every difference in the world between those two phrases. I acknowledge that there is always room for misunderstandings in a verbal conversation which takes place over the period of an hour. I regret very much the fact that the representatives of the Canadian Daily Newspaper Publishers Association went away with an impression which differed from mine. However, I hope I have cleared up this 22620-182
Income Tax Act
point or rather that Mr. Graybiel has cleared it up. There was certainly no deception. It was a misunderstanding which I am sure both sides will regret. Apart from that, Mr. Chairman, I do not think there is anything I need to add to what has been said.


John George Diefenbaker: Mr. Chairman, I want to point out immediately that when I read the Graybiel communication into the record I read it with the change in question. I said it has been altered. But, Mr. Chairman, there is no difference except in verbiage. The fact still remains that the whole body of the statement indicates that there was never a clearer revelation on the part of anyone as to the understanding which the Canadian Daily Newspaper Publishers Association had. The only deviation is in the last line and there is not very much difference between the two phrases. But I did use the altered form when I read the statement into the record.
When the hon. gentleman says that I am standing on my head I do not want to enter into competition with him. He has established a record in that regard that makes me quite concerned that he should ever suggest that I would be guilty of the same thing, because from the day he became Minister of Finance he has shown an aptitude in that connection that has never merited comparison in the House of Commons throughout the last 25 years. The only difference between those who do this as a profession is that they are actually on their heads while he is standing on his feet when he utters these views. But that is an aside.
The Minister says he cannot understand the change of front. There has been no change of front. We set up a Royal Commission for the purpose of looking into a cause of complaint, but not from the newspapers of Canada. The newspapers have never asked for this legislation. They do not want it. They are being forced into a strait-jacket by a Minister who along with the Government must have some reason for doing something which has not been requested by the newspapers across Canada with the exception of not more than one or two.
Why is this being done? The Minister says he explained it earlier. I have read every line of his explanation and at no time has he placed the reason before the House or the Canadian people. Strong representations were made by Maclean's magazine and by other Canadian magazines that it was impossible for them to compete against masquerading Canadian magazines whose material was

June 25, 1965
Income Tax Act
prepared outside the country and then brought into Canada. They asked for some measure of protection against an invasion that could not be justified, an invasion of those from another country who, pretending to be Canadian, are actually placed in a category that denies fair competition.
The O'Leary Commission said that action would have to be taken if we were to maintain a Canadian quality, a Canadian identity. Evidence was heard for a lengthy period of time and finally the recommendation was made that advertising in these magazines should not be credited in determining income tax by Canadian advertisers. That went a long way. We looked into the matter, discussed it from every angle and concluded that the only way to preserve Canadian magazines against this unjust competition would be to make changes in the credit, and I think the credit arrived at was to be 50 per cent.
What is being done now is to place these magazines on an equal basis with all Canadian magazines. Do not tell me that Time magazine looks at the Canadian scene as a Canadian magazine. All you have to do is to take the international edition of Time distributed round the world and see how often Canada is mentioned. I doubt that there has been more than a passing reference to Canada in the last 10 issues of international Time. Canada receives less attention than does a republic with 300,000 population. Yet Time is able to bring in all this material against which Canadian magazines cannot compete. In order to preserve the Canadian identity we took this course to protect Canadian magazines in Canada against an impossible situation.
But what is being done now? Time and Reader's Digest are being placed in the top category. They are being given honorary Canadian citizenship. They are being placed above all other magazines that may come into Canada. In addition, the newspapers of Canada are to be under the domination of a law that says you shall not dispose of your interest in any Canadian newspaper. Nobody asked for it. Why is it being done?
I conclude my remarks by saying that in a period of two years and two months we have had more fancy, socialistic tinkering going on on the part of the Government than any socialist government could ever have thought of, had it been in office.


David Orlikow: Mr. Chairman, I rise to say a few words on this matter, partly because of the ruling you made with regard to the amendment proposed by the hon. Member
[Mr. Diefenbaker.l
for Nanaimo-Cowichan-The Islands. I do not want to be critical of the Chair because we on this side have found you, Mr. Chairman, to be eminently fair, and I am sure the ruling you made was made on the basis of your consideration of the rules as you understand them. But I want to say that I think your ruling was a very happy one for Members on the other side. Members like the hon. Member for York-Scarborough, the hon. Member for Carleton and the hon. Member for Northumberland like to consider themselves as being Liberals with a small "1". They will be very happy with the fact there is no need for them to put themselves on record in support of this fantastic and completely irresponsible recommendation made by the Minister of Finance. They are happy about that because nobody will be able to point to Hansard and say that on such and such a date these Members voted for making Time and Reader's Digest honourary Canadian citizens. Your ruling, therefore, was a very fortunate one for them.
[DOT] (1:40 p.m.)
Some of us knew the Minister of Finance before he came to this House. It seems to me that when he was the president of the Canadian Institute for International Affairs and when he wrote that famous book which he probably wishes now he had never written, "Troubled Canada", when he expressed concern about keeping Canada for Canadians, while we may not have agreed with everything he said, he at least showed some concern with some of the major problems, and attempted to come up with some answers. What we have today, Mr. Chairman, I submit is a complete capitulation on the part of the Minister of Finance to the political needs and desires of the Liberal Party. How could anyone who has read the O'Leary Commission report possibly introduce this type of legislation to establish laws whereby Canadian publications will be owned and controlled by Canadians when, in fact, Time and Reader's Digest have taken over a major portion of the magazine industry in Canada? What the Minister is doing is locking the barn door after the horse has been stolen.
Now, Mr. Chairman, this may be fine for the Liberal Party which is great on words but so lacking in action, but it certainly is not going to satisfy anybody else. The Minister gets angry when we discuss this and I suppose he gets angry because he knows he is in such a weak position. The leader of this party tells a story about the sexton of the church who was cleaning up the church when
June 25, 1965



he found some notes left by the minister on the lectern. He saw that in the margin there was a notation: Raise your voice at this point because the argument is weak. This is exactly what the Minister is doing. He has no defence of his action on behalf of Time and Reader's Digest, so he thinks if he ignores the situation it will go away, that people will forget it. Perhaps the people will forget it, but I suggest the Minister will remember it for a long time because he knows what he is doing is wrong and indefensible.
I want to say that I never saw a person more uncomfortable than the Minister was the other night when the hon. Member for Port Arthur was analysing the Minister's position. The Minister knew in his heart that everything the hon. Member for Port Arthur was saying was true and correct.


An hon. Member:: Why did you not vote for him?


David Orlikow: The hon. Member asks why we did not vote with him. The Government made sure we could not vote with him-


Some hon. Members:: Oh, oh.


David Orlikow: Hon. Members can say, "Oh, oh" all they wish. I have lots of time. I do not want to go home today or Monday. If hon. Members like the hon. Member for York-Scarborough, who say, "Oh, oh," want to get up and defend Time and Reader's Digest why do they not do so? They sit in the back row and yell, "Oh, oh". I can take all their "Oh, oh's"; I have lots of time. They just do not have the courage to put on the record how they feel about it. We have been sitting here patiently throughout this debate waiting for some of these so-called small "1" Liberals. They like to say to the people in the cities, do not vote for the N.D.P. because, after all, we are going to do all the things they are talking about. Where are these people? Why do they not get up and explain their position on this situation?


Maurice John Moreau: Will the hon. Member permit a question?


David Orlikow: I would be glad to permit a question because every time the hon. Member asks a question he puts his foot in it.


Maurice John Moreau: I was just wondering if the hon. Member who was asking, where are they, could answer this question: Where is the tiger from Port Arthur?


David Orlikow: The record of the hon. Member for Port Arthur for attendance is as good 22620-1821
Income Tax Act
as 95 per cent of the hon. Members on the other side.


Lucien Lamoureux: Order; may I remind hon. Members that we are on clause 4, I believe, of Bill No. C-118.


David Orlikow: I do not mind being reminded that we are on clause 4, Mr. Chairman. I wish that when Members like the hon. Member for York-Scarborough get up and ask these inane, useless questions, you would remind them that we are on clause 4. Then, I would not have to try to answer his stupid questions.
Let us just put on the record what the O'Leary Commission said about Time and Reader's Digest. I must admit that I am not in this chamber all the time, but I have looked through Hansard very carefully to see if the Minister ever tried to give an explanation of what the situation is. The O'Leary Commission points out that between the years 1950 and 1959, the gross advertising revenue of Reader's Digest went up from $1.5 million to $4.5 million, an increase of 194.1 per cent. The advertising revenue of Time magazine went up from just over a million dollars to over $3.5 million, an increase of 207.7 per cent. The gross advertising income of Canadian magazines went up just 57 per cent in this period.


An hon. Member:: Where is your spirit of competition?


David Orlikow: The hon. Member asks,
where is my spirit of competition? It is not competition when a magazine like Maclean's has to pay for the writing and editing of every word which appears in the magazine, while Time magazine is only paying for the editing of four pages of that magazine. I am glad I am not a Liberal because if there ever was a failure to appreciate support which has been given, it is found in the Liberal Party. If there ever was a magazine which was more strongly Liberal than Maclean's, I do not know of it. I like Blair Fraser, but if Maclean's magazine pays him, then they are foolish because the Liberal Federation ought to pay him his whole salary. I have never seen him write anything critical of the Liberal Party.
However, that does not enter into this matter, the policy of the magazine. What concerns us as backbenchers is to find out how a magazine like Time can get to the Minister of Finance. If they cannot, then, as they could not last year, they get to the Prime

June 25, 1965
Income Tax Act
Minister. Some day, we may find out how this is done.
Let us go to what the O'Leary Commission says about the so-called Canadian editions. I do not know whether or not the Minister has read this, but he can find it on page 39 of the report, and I quote:
Two "Canadian" editions, Time and Reader's Digest have been getting over 40 per cent of the total spent on magazines in Canada...
In the case of Time, this consists of its taking the bulk of the Time (U.S.) editorial content and prefacing it with four pages on Canadian affairs.
I should like to interject that one might at least expect that for the privilege of making the millions they do in Canada they would run those four pages, biased as they generally are and pro Liberal as they usually are, in their United States edition so their United States readers might know something about Canada. But that would cost them a little money, so they do not.
[DOT] (1:50 p.m.)


Wallace Bickford (Wally) Nesbitt: They would not learn much, reading Time.


David Orlikow: Whether they would learn something or not, I do not know; but the Minister of Finance might learn something, although that is expecting a good deal.
Reader's Digest draws exclusively from the central editorial pool created by the United States edition, but employs an editorial staff in Canada to provide boxes and footnotes, explaining the Canadian aspects of the editorial material obtained from this central pool.
The unfairness of this competition may be measured in two ways:
The actual cost of obtaining and preparing the editorial material made available to these 'Canadian' editions is far beyond what they or Canadian magazines could possibly afford-


Some hon. Members:: Carried.


David Orlikow: Mr. Chairman, hon. Members can call carried all they want, but this is the first time I have spoken on this subject, and I do not think I have to apologize.


Some hon. Members:: Read on.


David Orlikow: I will read exactly as much what will suit me.
-bearing in mind the size of the Canadian magazine-reading population. An estimate is that Time of Canada pays its parent company less than 2 per cent of the actual cost of the editorial material thus coming to it; while Reader's Digest's total editorial costs, including the editing carried on in Canada, is a fraction of the total amount spent by the parent organization in obtaining and preparing it. Clearly, these publications have the advantage of being able to use high-cost editorials to obtain large circulations.
The argument is clear and so unanswerable that the Minister of Finance and the
IMr. Orlikow.]
trained seals behind him, when they spoke, ignored the recommendations in the O'Leary Commission Report. One can only conclude from reading the debate and looking at the legislation that this measure is deliberately designed to let those two publications remain in Canada, and to be classified as Canadian which, I suggest, is completely unprincipled and dishonest.
Some days ago the hon. Member for Burnaby-Richmond asked whether these so-called Canadian organizations are prohibited from buying and operating radio and T.V. stations, and the Minister answered that they are. But for him to say they are is not good enough. We would like to know how they are prohibited from owning radio and T.V. stations. What clause in the legislation prohibits them?
Suppose Mr. Luce or the owners of Reader's Digest decided they would like to buy into a Canadian daily newspaper, what part of this legislation will prohibit them from doing that? Like so much other legislation proclaimed by the Liberal Party before attaining office as designed to help to meet the needs of the Canadian people this, when it is analysed, demonstrates it will do little if anything.
Speaking of the newspapers, I suppose no government has had such unanimous opposition to any proposal at any time as this Government has had with respect to its proposal regarding the newspapers. I usually find myself disagreeing with the editorial positions of Canadian newspapers, and there is not a newspaper which I disagree with as often as the Winnipeg Free Press, in my own city. However, the Minister should have agreed to stand this part of the measure until the newspapers had an opportunity to make proposals to him for alternative means of ensuring that Canadian newspapers will not be owned by foreign interests.
I agree with the principle that Canadian newspapers should not have foreign owners. We have not had difficulty in that respect in Canada as yet, but anyone who has read the history of Europe will remember that before World War II many French newspapers were owned or subsidized by foreign groups from Nazi Germany, and they were very, to say the least, chary of being critical of Hitler.
I have always felt that in Canada the communications industry, comprising radio, T.V., magazines and newspapers, should be operated by Canadian owners. Therefore I am not too critical of that part of the Minister's
June 25, 1965

Income Tax Act
proposal; but I say, as I said when I began, there can be no justification or excuse for what the Minister proposes to do with regard to Reader's Digest and Time, except that it will be to the political advantage of the Liberal Party. If that is going too far, if that is thought unfair-


An hon. Member:: Explain.


David Orlikow: I don't have to explain it. One has only to read Time magazine. If there is any other explanation, then the Minister owes it to the House and the people of Canada to tell us what it is. Otherwise I contend the decision to classify Time and Reader's Digest as Canadian organizations is immoral and completely unjust.


[Stage Direction]
Clause agreed to.
Clause 5 agreed to.
On clause 6-Niece or Nephew.
Jay Waldo Monteith: Apparently the requirement is that the niece or nephew must be resident in Canada. What would happen in the case of a person working on an assistance program outside Canada, who is to be treated in the same category as an ambassador, if he has a niece or nephew covered by this clause? Must they reside in Canada?


Lawrence T. Pennell: The hon. Member for Perth has posed an interesting and unusual problem. I understand his question concerns a person who goes outside Canada and wants to maintain a niece or nephew outside Canada at the same time. It is my understanding that this clause does not provide relief in the circumstances cited.


Jay Waldo Monteith: A niece or nephew is supposed to be in the same category as a dependant child, but in this instance that is not going to be so. Is this not right?
[DOT] (2:00 p.m.)


Marcel Joseph Aimé Lambert: I am wondering whether we could not clarify this by reference to clause 6(2) where the wording may be more felicitous. Paragraph (da) says the aunt or uncle of the taxpayer must be resident in Canada. That is the test. Nothing is said about the taxpayer's residence, and this is the point the hon. Member for Perth has in mind. The residence in the case of the nephew or niece need not be that of the taxpayer. The person who is posted abroad is deemed to be a resident of Canada. I think the true intent of the clause is to refer to the niece or nephew rather than to the taxpayer or his spouse,
although the language is not as felicitous as that used in paragraph (da)-
-was the aunt or uncle of the taxpayer or his spouse and was
(i)	resident in Canada, and
(ii)	dependant upon the taxpayer for support by reason of mental or physical infirmity.
I would say that in the case of a nephew or niece the test should be that of the nephew or niece being resident in Canada rather than the taxpayer or his spouse. After all, as the hon. Member for Perth indicated, this is to place a nephew or a niece in the same category to all intents and purposes as a dependant child, and surely it is the dependant child who must be resident in Canada, though in the case of ambassadors and so forth the children may be with them and deemed to be fully resident. In this case I suggest the test should be the residence of the nephew or niece as clearly indicated in respect to the aunt or uncle.


Lawrence T. Pennell: I believe my answer to the question asked by the hon. Member for Perth carried that inference. I said I doubted whether a nephew or niece outside Canada could claim. It was my understanding that the hon. Member for Perth was suggesting that the intent of the legislation was to put nephews and nieces in the same category as dependant children. I think it does, except for this one distinction, the distinction raised by the hon. Member in his question.


Jay Waldo Monteith: Does not the Parliamentary Secretary feel that this distinction is one which should be removed?


Lawrence T. Pennell: I would draw the hon. Member's attention to section 139 of the Act where provision is made for persons who have custody and control in law and in fact of persons entirely dependant on them for support. Let us apply this provision to the present situation. Where a nephew and a niece are living with an ambassador, outside this country, let us say, and the ambassador has custody and control over them in law and in fact, then they may be claimed as dependant children rather than in accordance with the provisions dealing with nephews or nieces. The situation would cause no difficulty and this, I suggest, would be the most likely situation to be encountered.


Jay Waldo Monteith: As long as the Parliamentary-Secretary can assure me that the exemption would be granted I will not pursue the matter further.

June 25, 1965
Income Tax Act
X should like to ask a further question with regard to clause 6 subclause (3). In subclause (3) (f) we find the following amendment:
$500 in the case of a taxpayer who, before the end of the year, has attained the age of 65 years but has not attained the age of 70 years, if no pension under the Old Age Security Act has been authorized to be paid to him for any month in the year.
I have not worked this out in as much detail as I should, but apparently this means that if a taxpayer has reached the age of 69 in November 1966, and has collected old age security benefit for December only, he cannot claim any part of the extra $500 exemption.


Lawrence T. Pennell: The interpretation placed upon these words by the hon. Member for Perth is correct. May I add this, however. The taxpayer would have an option. He would not be bound to take the one month's benefit and he could then claim the $500. It would be open to him to weigh his tax return to see which would give him the greater advantage.


Jay Waldo Monteith: That does not seem to be altogether fair to the taxpayer. It does not seem equitable to me that because a person has collected benefit for one month he should not be allowed some portion of the $500 exemption.


Lawrence T. Pennell: I have nothing to add to what I have said. I have given the interpretation of the section. The hon. Member for Perth has expressed his opinion. It is one I respect, but the interpretation of the Act is the one I have placed upon it.
[DOT] (2:10 p.m.)


Marcel Joseph Aimé Lambert: I am returning to the subject matter of the provision dealing with allowances in respect of nephews and nieces and the reference of the Parliamentary Secretary to section 139 (8) which gives an extended meaning to the word "child". If the extended meaning of the word "child" has direct application to a nephew or a niece, then in the circumstances indicated by the hon. Member for Perth what was the purpose of bringing in the amendment to the Act? I can understand that custody and control may not be actually in the taxpayer, although the care and maintenance of the child, the nephew or niece, may be. The child may be at a school and the taxpayer is maintaining the child in that school. I do not think the solution put forward by the Parliamentary Secretary covers all cases. It may cover some of them, but I do not think it is as all-embracing as he might have suggested.


Lawrence T. Pennell: Mr. Chairman, may I say that the hon. Member for Edmonton West had correctly stated the intent of the section. As I understand it, the amendment was brought in to cover those situations where a taxpayer is supporting a nephew or niece in Canada but does not have in fact or in law the care and control of that nephew or niece.


Stanley Howard Knowles: Mr. Chairman, I would like to say a few words about the part of this clause that takes away the $500 exemption in certain instances for persons between the ages of 65 and 70. The hon. Member for Perth has already pointed out a particular unfairness, namely the case of one who turns 69 in November of next year and therefore gets only one month of the pension and loses the $500 exemption; but I should like to press the point that there is an even more fundamental unfairness in this arrangement. I do so by asking the Minister to anticipate the time when old age security will be generally available at age 65. When that time comes there will be thousands of Canadians drawing old age security-indeed, all Canadians who have the residence qualification and are 65 years of age or over. Those between 65 and 70, if they are single, will be entitled to only $1,000 income tax exemption, whereas those who are 70 and over will be entitled to $1,500 income tax exemption.
Frankly, Mr. Chairman, I think this is unfair and that the Minister, instead of moving in the direction of taking away this extra $500 exemption from some people, should have moved in the direction of extending it across the board. The minute I say that, Mr. Chairman, there is brought to mind the two arguments that the Minister of Finance used with respect to the amendment that was moved some time ago by my colleague the hon. Member for Nanaimo-Cowichan-The Islands. He moved, as the Minister will recall, that there be no tax payable by single persons earning less than $1,500 or by married persons earning less than $3,000. At first there was a misinterpretation of that amendment by the Parliamentary Secretary, who thought this was raising the $500 exemption generally and that it would produce huge reductions in taxation in the upper income brackets. When we straightened the Government out on that point, the Minister of Finance then saw the difficulty of people earning just over $1,500 as compared with people earning just under $1,500.
Surely there is another way to do it. Surely one does not solve this problem only by
June 25, 1965

raising the exemption levels to $1,500 and $3,000 for everybody, giving the greatest bonanza to the Gordon Sinclairs and those people who are propagandizing this idea in its simplest form. Surely you do not have just to run into a notch problem. Surely it is possible to start a new schedule of rates, to start at $1,500 for a single person and $3,000 for a married person and change the rates so that those in the lower and middle income brackets save a little, or at least do not pay any more income tax, but those in the upper income brackets do not get any reduction. Surely, Mr. Chairman, that is the kind of thing that ought to be done with the money the Minister has to apply to this purpose.
I realize that in effect I am speaking both to the question of withdrawing the $500 exemption for people between age 65 and 70 and the proposal that comes later to give a 10 per cent reduction in income tax itself. Surely the better way to have solved this problem would have been to raise the income tax exemption levels to figures like $1,500 and $3,000 and then to adjust all the rates right from the first $1,000 of taxable income up, so that the desired objective would be achieved. Surely the desired objective is to lessen the burden on those in the lower and middle income brackets without any necessity of lowering the burden on those in the upper income brackets. I mentioned our mutual friend Gordon Sinclair a minute ago because the Minister of Finance mentioned correspondence he has had with him. I had the experience of meeting this gentleman a few weeks ago on a television program and I found that he was particularly concerned, at least he seemed to be, in raising the income tax exemption level; but when I suggested that along with that there should be an adjustment of rates so that wealthy people- and I thought Mr. Sinclair might be one of them-would not get a terrific advantage at the top, I found that the interest was not quite as keen.
As I say, Mr. Chairman, there are not just one or two ways to do this. There are various ways. The income tax people over the years have been able to change the schedules, to change the rates, to change the progression. Surely the time has come to recognize that $1,000 and $2,000 are not sufficient exemption levels in the light of today's cost of living and today's standard of living. Surely common sense calls for higher exemption levels. We have been saying for a long time that the exemptions should be set at $1,500 and $3,000.
Income Tax Act
If we do not win this point soon, we are going to have to start asking for higher levels, perhaps $2,000 and $4,000. But surely we do not balk at this and do nothing about it because it creates problems at either end of the scale. The job, surely, is to decide what is a proper exemption level and then to adjust the percentage rates so that you collect a fair amount of tax, but not too much, from those in the lower and middle income brackets and collect what they can afford to pay from those in the upper income brackets.
I am glad the Minister is back in the chamber. When I was getting to my feet I was going to say that the Minister had the right to go out and have his lunch and I would have to keep talking until he got back; but he has had his lunch and is back in the chamber. I would like to hear what his thinking is on this question and what led him to take away this $500 exemption from people between age 65 and 70, instead of extending it across the board. Also, could he tell us now that the Government will consider, if not this year then certainly next year, doing this in a better way by raising the income tax exemption levels and changing the rates accordingly.


Lawrence T. Pennell: Mr. Chairman, the Minister intends no discourtesy to the hon. Member for Winnipeg North Centre and pays a courtesy to me by suggesting that, inasmuch as I heard the commencement of the arguments on this particular section, perhaps I could reply to it, particularly in view of the fact that the reply is a broad one. The hon. Member for Winnipeg North Centre pointed out that we will soon reach the stage when all those aged 65 will be drawing old age security. We hope that before this eventuality the Carter Commission will have reported. The Minister stated in the House that he will review thi whole taxation structure when that report is handed down. That is the short answer I tender to the hon. Member for Winnipeg North Centre.
[DOT] (2:20 p.m.)


Stanley Howard Knowles: The only difficulty with that answer is that it is the same kind of answer I have been getting during all the years I have been in the House. We are always waiting for a review. It is not always the Carter Commission, but it is one Commission after another. For the good of the country, the Government could act on a few of these reports from Commissions which are sitting around now. It seems to me that if the Minister had money which he felt he could

June 25, 1365
Income Tax Act
afford on tax reductions this year, he should have used it more intelligently than he has.


Marcel Lessard: Mr. Chairman, I have a very short question for the Minister of Finance. It relates to part (2) of clause 6 under which it is possible to claim $550 for contributions-
... during the taxation year for the support of a person who, during the year, was the aunt or uncle of the taxpayer or his spouse-
I would ask the minister to state whether a taxpayer will be entitled to claim for the support of one person or also for that person's spouse, as may often be the case. Will I be entitled to claim for the support of my spouse's mother and father, or of my father and mother, or will I be able to claim for one person only?


Lawrence T. Pennell: Mr. Chairman, if I caught the translation correctly, the answer is that a taxpayer would be able to claim for an aunt and an uncle if they were brought within the provisions of the clause.


[Stage Direction]
Clause agreed to.
On clause 7.
Stanley Howard Knowles: Mr. Chairman, clause 7 is a welcome clause. I suppose the Minister is thinking that the Member for Winnipeg North Centre will say it does not go far enough, and the Minister is right. What clause 7 does is to remove trade union dues, as well as dues to professional bodies, and so on, from the $100 general exemption that is available to everybody without the necessity of producing receipts. This is a good idea and, in the case of many trade unionists, it will make real the right to deduct their trade union dues. I am referring to ihose who in the past did not have sufficient receipts for charitable donations, and others, to get over the $100. As I say, it is good to have trade union dues removed and put on their own feet so far as deductibility is concerned.
However, Mr. Chairman, I regret that the Minister has not gone further with regard to trade union dues. I must remind him that on previous occasions when I raised the question which is now in my mind he has asked me each time to wait until the next year. That was his request during the debate on his first budget, and he repeated it during the debate on his second budget; and I suppose I will now be told to wait for the report of the Carter Commission.

I have in mind that trade union dues and dues to professional organizations and others are granted deductibility by section 11 (10) of the Income Tax Act. But then certain qualifications are applied in subsection (12). Those qualifications among other things provide that the only portion of trade union dues which may be granted deductibility is that portion that is directly related to the ordinary operating expenses of the association or trade union to which they were paid. The fact is that many of these bodies, both trade unions and others, have building funds and other causes into which they put money, and the members of these unions or associations are required to pay the total dues that they are assessed in order to maintain their membership in these organizations. Members have the right to say whether or not these assessments will be made, but they are part of the dues that are necessary to maintain the status or position necessary for their employment.
It has been my feeling right from 1948, I believe it was, when this provision was first introduced, that the Government has been too narrow as to what it allows as trade union dues. I am not trying to suggest something that may be in some people's minds here: I am not trying to suggest that this is a back door for getting in deductibility for political contributions. I think that contributions to political parties ought to be allowed deductibility, but I think that that ought to be a general provision. I am not trying just to slip it into the trade union dues portion. But there are other items which are disallowed, when trade union dues are submitted for deductibility.
As I say, the Minister of Finance both two years ago and last year listened with interest to my plea that something be done about this, and on both occasions he asked me to possess my soul in patience. No, I am wrong-it was his colleague the Minister of National Health and Welfare who asked me to do that; the Minister just asked me to wait until next year. The next year has now arrived and nothing has been done about it. I should like to ask the Minister now what is his answer.


Walter Lockhart Gordon: Mr. Chairman, the hon. Member for Winnipeg North Centre referred at the end of his remarks to the portion of any dues that might be for political purposes, and he suggested that he was not thinking of this primarily. Whether he was thinking of it primarily or was not, it is a factor. If the principle of allowing deductions is sound, then presumably it applies to the deductions for the amount of contributions which go to the
June 25, 1965

purposes which are related to the work and working conditions of the people concerned. We are on delicate ground when we talk about the portion, or any portion, that may go for other purposes, because there is this question of the political contributions.
As my hon. friend knows there is a committee, upon which a former member of his party is a very distinguished representative, which is going into this whole question of political contributions, and when they report it could be that they will come up with the suggestion that any contributions for political parties would be deductible for tax purposes. But I fancy that when that is done it will apply to all political parties and not to any particular party. I do not even know, however, whether they are going to recommend this. In the meantime I did suggest last year and the year before that my hon. friend wait. He has now waited and has found out that we have produced something. However, I do not think I would be prepared to recommend to this Committee that we go further than we have at this time.
[DOT] (2:30 p.m.)


Stanley Howard Knowles: First of all, Mr. Chairman, may I make it clear-I thought I had before but apparently I had not-that I was not raising this question in order to bring up the matter of political contributions. I mentioned it so that the Government would not say that that was what I was trying to do. But I realize it is there in the picture. As a matter of fact, one particular union that has been in touch with me a number of times about this matter is a union that does not make any contribution to any political party, not even to mine, so that particular union is not thinking of that at all. It is thinking of special funds that are set up for building purposes, strike purposes and various other purposes apart from the so-called office, salary and other expenses. Let me make it very clear that I am quite content that any contributions to political parties should be separated until that question is settled on the broad, general basis, but I do feel that all other expenses that members of unions and professional bodies have to meet in order to maintain their membership should be allowed, and not just a portion as is now the case.


Marcel Joseph Aimé Lambert: Mr. Chairman, one must recognize certain limitations. If members of certain professional bodies have to make a con-22620-183
Income Tax Act
tribution by way of special levy to an insurance fund I do not know that this should be necessarily covered under income tax exemptions. In the same way one can recognize that these various slices of union dues may go toward purposes which really have nothing to do with the operational expenses involved in the gaining of income by the members of the union. Sometimes questions have been raised by constituents of mine with regard to why there should not be a deduction of that portion of their union dues which is remitted to places outside the country for the payment of the salaries of corporate officers of some international union. Incidentally, these salaries are far in excess of those of officials in Canada holding public office, and there have also been some rather odd disclosures with regard to the conduct of some of these people. Therefore the situation is not quite so clearcut.
Personally I feel that where, for instance, there has been a deficiency in some insurance fund of a law society because of defalcation on the part of some member of the profession and a special levy has been assessed, such payments should not necessarily be deductible for income tax purposes, and I take the same position with regard to a special levy on the part of a union for the purpose of making a contribution to the strike fund of another union. These are not operating expenses and therefore I think there are definite limitations in this regard.


Stanley Howard Knowles: Was that answer given on behalf of the Minister?


Marcel Joseph Aimé Lambert: No, that is my opinion.


Walter Lockhart Gordon: No, it was not. I think Members on this side of the House, as my hon. friend knows, are very sympathetic to the legitimate aspirations of all trade unions and take their views very seriously.


Stanley Howard Knowles: Sympathy is wonderful.


Walter Lockhart Gordon: My friend is an ex-official of a trade union organization. Therefore we naturally take his views very seriously, though perhaps not as sympathetically in his present position as we did in his previous one. But I think this measure has gone a long way. I think it has been very well received and I should like to see how it works out in practice.


[Stage Direction]
Clause agreed to.
Clause 8 agreed to.
[Stage Direction]
June 25, 1965
Income Tax Act
On clause 9-Tax deduction.
Jay Waldo Monteith: I should like to ask one question. Does the Minister wish to make a statement?


Walter Lockhart Gordon: I did wish to make a brief statement on clause 9. The reduction in personal income tax provided by clause 9 is in a form that will not reduce the base on which the provinces impose their taxes or affect their revenues in any way. There is, however, one technical point which I should mention for the benefit of the few individuals with income from outside Canada who may be affected.
All the provinces that have collection agreements, with the exception of British Columbia, have a provision in their Income Tax Acts to allow a credit against their tax for the appropriate portion of foreign tax imposed on income received from outside Canada. This provision of the provincial acts will have to be amended to change the present reference to "Section 33 of the Federal Act" to have it refer to "Subsection 1 of section 33 of the Federal Act."
This change is necessary in order that the provincial credit for foreign taxes will not exceed what was intended. The provinces will be asked to amend their Income Tax Acts at the earliest convenient time to make this slight change in wording with effect for 1965 and subsequent taxation years.


[Stage Direction]
Clause agreed to.
On clause 10-Payments out of pension fund, deferred profit sharing plan or as retiring allowance.
Marcel Joseph Aimé Lambert: There is one point I am concerned about with regard to clause 10, subclause 1, whether in attempting to close one door other doors are not actually being opened. I am wondering whether the provision for the transferring of a lump sum into a pension plan or deferred profit sharing plan or registered retirement savings plan will not actually open up another method of setting up a deferred compensation plan for employees. This is something I think the Minister may have to look at in the operations this year because in my view there is an area in which there is uncertainty in this regard. It is a very complicated and technical point. 1 think the Minister will see the implications.


Walter Lockhart Gordon: I thank my hon. friend for this suggestion and we will look into it very carefully. I am sure he apppreciates that within the last year or two section 36 was,
[Mr. Gordon.!
I think it is fair to say, being abused or was at least being used very widely throughout the country to provide a means for individuals to get relatively large sums of money out of companies at relatively low rates of tax. The practice really became widespread in 1964 and we thought that the loophole should be closed. I am grateful to my hon. friend for this point and we will look into it.


Marcel Joseph Aimé Lambert: I want it clearly understood that in saying this I am not trying to penalize anyone. I simply feel that all taxpayers should be treated in much the same way.


Walter Lockhart Gordon: Right.


Marcel Joseph Aimé Lambert: Under certain circumstances peculiar to a corporate body or a type of employment there can be this sort of nice, easy way out for additional low taxed remuneration which is really a deferred salary.


[Stage Direction]
Clause agreed to.
Clause 11 agreed to.
On clause 12-Payment authorized.
Jay Waldo Monteith: This is a new clause which has to do with tax transfer payments. With regard to section 3 of the new subsection 47A I am wondering what the application is of the words used, namely:
Where, pursuant to an agreement entered into under subsection 1, an amount has been transferred by the Minister to the government of a province with respect to an Individual, the amount shall, for all purposes of this act, be deemed to have been received by the individual at the time the amount was transferred.
I do not understand the application of that provision.


Walter Lockhart Gordon: It really means that transferring it, say, from the federal Government to a province, which is then responsible for transferring it to the individual, has the same effect as if the transfer was made directly to the individual.


[Stage Direction]
Clause agreed to.
[DOT] (2:40 p.m.)
On clause 13.
Some hon. Members:: Carried.


Marcel Joseph Aimé Lambert: Mr. Chairman, I might enter a caveat at this point. There is a chorus of "Carried" by people who have no bill before them and who have no interest in the bill.
They are creating some difficulty for the Chair, and for Members who have annotated sections of the new Act and are desirous of raising questions. We are getting carried through the bill rather at a gallop. If those people who are interested in the measure are
June 25, 1965

the ones who call "Carried" then perhaps we will get along a little better.


[Stage Direction]
Clause agreed to.
Clauses 14 to 19 inclusive agreed to.
On clause 20.
Marcel Joseph Aimé Lambert: This clause takes into account the change in respect of corporations who have some interest in the business of oil, gas and mining. I do not know whether there has been a practice that has been found to be improper by exploratory and development syndicates and their relationship between parent companies with regard to oil and gas rights, but apparently there is a suggested loophole in the operation of the Act since the amendments back in 1962 or 1963. It seems to me that it is under these amendments that the Minister proposes to close the loophole. I should like to have clearly enunciated by the Minister the type of loophole he is trying to close and why the present provision must come into effect.


Walter Lockhart Gordon: Well, the loophole applies in a case where an oil or gas right can be acquired by a joint exploration corporation, but its cost can be divided by its parent corporations. A joint exploration corporation is a special kind of company defined in section 83 (a), (d) and (e), which was passed in 1962. It is a company whose principal business is the production or marketing of petroleum products or natural gas, or exploring or drilling for petroleum or natural gas, or mining or exploring for minerals. Such a company must not have more than ten shareholders and those may be companies that are in the oil, gas or mining business. These shareholder companies provide the joint exploration company with the funds to carry out the exploration. The joint exploration company may then divide these exploration expenses amongst its shareholder companies. The joint exploration company renounces its right to deduct the exploration expenses it has incurred and each of its shareholder companies acquires the right to deduct its share of these expenses.
It has become apparent that the joint exploration rules can be used as a loophole if an oil company wishes to dispose of its oil and gas properties and not bring the proceeds into income as required by section 83(a). The method is that a subsidiary is set up to qualify as a joint exploration corporation, even if the parent is the sole shareholder. The properties or rights are sold to the joint exploration corporation, and the cost which 22620-1831
Income Tax Act
by definition is an exploration expense, is then renounced back to the parent for such amount to be included in its income. It seems that the joint exploration corporation can then be sold by the parent, if a buyer can be found who is not interested in obtaining a deduction for the cost of the property it has acquired.
The same general procedure can be used to divide corporations and maximize the 33J per cent depletion allowance. Production properties can be transferred to the subsidiary and the net operating profits would enjoy full depletion without being reduced by the parent company's exploration expenses, including the cost of the properties transferred.


Marcel Joseph Aimé Lambert: There is one question that comes to mind as a result of the Minister's explanation. How is it that a joint exploration subsidiary or company is allowed to have only one corporate shareholder? I believe this is where the mistake arises. There is no such thing as a joint exploratory corporation if there is only one shareholder. The definition, by itself, immediately knocks it out.


Walter Lockhart Gordon: Perhaps my hon. friend is right, Mr. Chairman, but this is permitted under the law.


[Stage Direction]
Clause agreed to.
Clauses 21 to 24 inclusive agreed to.
On clause 25-Pension communication authorized.
Paul Tardif: The
hon. Member for Comox-Alberni.


Marcel Joseph Aimé Lambert: I rise on a point of order, Mr. Chairman. I must again protest against flipping through the sections. We have made notes on this complicated bill and the cries of "Carried, carried", are coming from people who are not participating in the debate. I say the same thing to you, Mr. Chairman, as I said to your predecessor a few moments ago, that we are not out to set a time record.


Mr. Caron:: Any Member has the right to say "Carried" as well as the hon. Member for Edmonton West.


Paul Tardif: I presumed that hon. Members had studied this bill before, and I was under the impression that when clauses upon which they wish to make remarks came forward they would draw this to the attention of the Chair.

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Income Tax Act


Jay Waldo Monteith: I think the only point at Mr. More: It may affect income tax because issue is that we seem to be racing through the firm will not get the deduction and so the bill rapidly. It is a complicated bill, and will pay a higher income tax. That is the if the pace were slowed down a bit every- reason why I raised it on this clause, but I body would be satisfied.	will write to the Minister.


Paul Tardif: The
Chairman has taken note and the pace will be slowed down.


Kenneth Hamill (Ken) More: What section are we dealing with now?


Paul Tardif: Clause 25.


Kenneth Hamill (Ken) More: I should like to refer to clause 23, for a moment, if the Committee has no objection.


Paul Tardif: Does the Committee agree to revert to clause 23?


Some hon. Members:: Agreed.


Kenneth Hamill (Ken) More: I may be ruled out of order, but I do not see any other place I can raise this matter with the Minister. If I am out of order, the Chair will guide me.
[DOT] (2:50 pm.)
I want to refer to what appears to be discriminatory double taxation in regard to heavy machinery. This clause provides for appeals. Does it provide an avenue whereby people can make an appeal regarding denial for tax exemption?
The case I have in mind had to do with the construction of the South Saskatchewan dam. The contract was obtained by a company in Rexdale, Ontario. They purchased their machinery in Ontario, moved it out to the dam, and under the terms of the deal the dealership in Saskatchewan was required to provide service and parts for the machinery if it broke down. I understand that the dealership in Ontario, under licence had his parts exempted and as it turned out the Saskatchewan dealership the Tobin Tractor Company, had to supply some $6,000 worth of repairs. The machines were identified as being tax free because of the work they were on, and the broken parts were identified and were shown to the taxation people, but because the company were termed unlicensed they were denied any consideration. This seems to be discriminatory.


Walter Lockhart Gordon: Would my hon. friend write to me about this matter. I have a feeling it is not concerned with any clause in the bill but relates to tariffs, excise taxes or sales taxes.
[The Acting Chairman (Mr. Tardif).]


Thomas Speakman Barnett: Returning to the discussion of clause 25, the explanatory note simply says this authorizes the Minister of National Health and Welfare to give information to the Minister of National Revenue about the amount of old age security pensions paid to taxpayers, but it does not say why this change is being made or what is the reason for this exemption from section 9(1) of the Old Age Security Act.


Walter Lockhart Gordon: The Department of National Revenue will need this information, and unless this authority is granted the Minister of National Health and Welfare would be precluded from supplying it.


Thomas Speakman Barnett: The Minister has not said why the Minister of National Revenue needs it.


Walter Lockhart Gordon: The whole of the income of an individual is taxable, including the amount of his old age security pension. In a relatively short while my hon. friend and I can look forward to receiving old age security pensions and, if we are still Members of the House, or still earning a living in some way or another, we will have to pay tax on our total incomes, including the amounts we receive as old age security pension. I do not suggest my hon. friend will reach that stage as soon as I, but it will happen to everybody eventually.
In order to administer the Income Tax Act properly and fairly the Minister of National Revenue seeks information from various sources, and one of the sources he needs is the Minister of National Health and Welfare.


Thomas Speakman Barnett: Old age security pensions are not something which just came into effect during the current fiscal year. What is the reason for the change at this time?


Walter Lockhart Gordon: To tidy up the situation.


Marcel Joseph Aimé Lambert: The Minister indicated the reason why this was being done; but to repeat what I have said over the years, both on that side of the Chamber and on this side, all too often we find innocuous looking provisions being brought forward to amend taxation statutes for administrative convenience, but which are in many ways a derogation of the rights of individuals. I shall have much more
June 25, 1965

to say about this on clause 26, but under clause 25 there is again a cross reference between Ministers with respect to information which has always been held to be confidential.
One has to take the over-all picture to see just how far the machinery of government in its inter-play, one department with another, and its relationship with the individual citizen, is able to get matters so complicated that there is a complete breach of the relationship between the individual and the Ministry involved.
This is one of the areas on which the Committee on Delegated Legislation undoubtedly would have had something to say with respect to the transfer of information. I do not want to belabour the point, but I must register a caveat against this so-called administrative convenience because it is so easy to slip into the philosophy that the end justifies the means. So long as we have the Bill of Rights and have respect for the rights of the individual in our society, the end does not justify the means; but all too often the administrative means are both the ends and the means.


[Stage Direction]
Clause agreed to.
Jay Waldo Monteith: I would ask permission to revert to clause 22 for a moment.


Paul Tardif: Is it
agreed that the hon. Member may revert to clause 22?


Some hon. Members:: Agreed.


Jay Waldo Monteith: Under this clause I understand mortgage companies, real estate and trust companies are going to be allowed to double the charge against annual income and set this up as a reserve. What is the justification for this doubling of the charge against income in any one year?
[DOT] (3:00 p.m.)


Walter Lockhart Gordon: There is no change in the reserve. There is just a change in the rate at which it can be accumulated. One of the reasons was that representations were made that under the old rate of accumulation they could never reach the contemplated ceiling.
Clause 25 agreed to.
On clause 26-Solicitor-client privilege.


Marcel Joseph Aimé Lambert: With regard to this clause, what the Minister says may be so, but I am not necessarily bound by some of the things the Bar Association may have said. I am not sure that all Members of the Bar Association
Income Tax Act
would share this view. There is a definite privilege attaching to relations between a solicitor and his client and this provision is an intrusion upon that privilege. It may be used in another context, a modern context, as a launching pad from which further intrusions can be made upon the privilege of communications between a solicitor and his client.
We know that all communications between solicitors and their clients are privileged. However, this amendment to the Income Tax Act says that the accounting records of a solicitor shall not be deemed to come within the privilege covered. I should like to know why this amendment is being made. The burden is on the administration to explain to our satisfaction why it is making this derogation from a right which has been long established in law. If the Minister can advise us which bodies he has consulted on this question, and the stand they have taken, it may be satisfactory. But on the face of it I would certainly be opposed to this type of amendment which, again, is all part of the administrative convenience against which I must, as always, protest.


Walter Lockhart Gordon: The Act already contains in section 126 a number of provisions designed to protect solicitor-client privileges when tax investigations are carried out. These were introduced in 1956 at the suggestion of representatives of the Bar Association. I must agree with the hon. Member that though this was the source of the representations, the government of the day had to take responsibility for recommending them. In the past year it became evident as a result of a court decision that the definition of solicitor-client privilege was deficient. Representatives of the Bar Association produced this particular amended wording. There is nothing more I can usefully add.


Marcel Joseph Aimé Lambert: I think it would be a good idea to indicate for the record just what is the present provision contained in the Act. Section 126A(l)(e) now reads:
"solicitor-client privilege" means the right, it any, that a person has in a superior court in the province where the matter arises to refuse to disclose an oral or documentary communication on the ground that the communication is one passing between him and his lawyer in professional confidence.
The following words are now added:
except that for the purposes of this section an accounting record of a lawyer, including any supporting voucher or cheque, shall be deemed not to be such a communication.

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Income Tax Act
I am wondering to what extent members of the Bar Association were acquainted with the proposed wording of this amendment. It may have been indicated in discussions with the Association that accounting records would not be deemed to be within the area of solicitor-client privilege. But what about exact wording? This is what the courts will have to interpret. I am afraid this exception will be used as a launching pad for further attacks upon solicitor and client privilege, which is something that exists, I believe, for the benefit of the individual and ought to be protected as far as possible.


Walter Lockhart Gordon: I would agree immediately with the general proposition put forward by the hon. gentleman. As he and other members of his profession will appreciate, I approached this particular amendment with considerable timidity as a mere member of the accounting profession.
When this matter first arose I discussed it with the departmental officials concerned and suggested I would be unhappy about proposing any amendment of this kind if it did not have the full support of the representatives of the legal profession. I am not sure when they were consulted; it was some months ago. But the matter was gone into carefully with representatives of the Bar Association and they suggested this particular wording as being wording which would be satisfactory to the Bar as a whole- and they were speaking as representatives- and which would cover the point they agreed should be covered.


[Stage Direction]
Clause agreed to.
On clause 27-Idem.
Marcel Joseph Aimé Lambert: This again constitutes a change or extension of the means by which prosecutions for offences may be carried out. I would ask the Minister to explain why-
-an affidavit of an officer of the Department of National Revenue, sworn before a commissioner or other persons authorized to take affidavits, setting out that he has charge of the appropriate records and that an examination of the records shows that an amount required under this Act to be remitted to the Receiver General of Canada on account of tax for a year has not been received by the Receiver General of Canada, shall be received as prima facie evidence of the statements contained therein.
There is one point which, in passing, the Minister could clarify. I would suspect there are, within the Department of National Revenue itself, notaries or others capable of taking affidavits, so it would be a case of

swearing oneself, almost-a case of an interested party obtaining an affidavit from one who is himself an interested party.
Again this is a change proposed by the Government and I think the burden rests with the Government to explain why this particular step should be taken. Once more this seems to be a move in the interest of administrative convenience.


Walter Lockhart Gordon: There are similar provisions in the Act already. There is section 136(5) dealing with the receipt of documents sent by mail, documents served in person, returns and so on.


Marcel Joseph Aimé Lambert: But this is a horse of a different colour. It goes much further.


Walter Lockhart Gordon: The purpose is merely to establish a procedure for proving that certain sums of money had not been received. I am not attaching major importance to this but I think it would assist the general administration.
[DOT] (3:10 p.m.)


Marcel Joseph Aimé Lambert: Why is it felt that this provision is necessary? Is there a requirement from the courts that there shall be evidence given that payment has not been received? Has the Department of National Revenue been hampered in any way in this regard? No case has been made for this particular change. What is the reason for making the change? Have there been important prosecutions lost because of the inability to show that moneys which should have been received were not received, and have some courts criticized the procedures of the Department? What is the purpose of introducing this amendment?


Walter Lockhart Gordon: The Department of National Revenue have had cases-I cannot give the details because I do not have them here- where they have had to start proceedings by stating that certain amounts were received, and this section is designed to make it easier for them to do this.


Marcel Joseph Aimé Lambert: Have they been hampered in the past by the practice they had to follow? Could they not give a personal statement, like anyone else?


Walter Lockhart Gordon: The representatives of the Department have informed me that they have been hampered in the past.


Marcel Joseph Aimé Lambert: I suppose somebody has had to appear in court. But I do not like it.


[Stage Direction]
Clause agreed to.
June 25, 1965
[Stage Direction]
On clause 28.
Marcel Joseph Aimé Lambert: Mr. Chairman, is the Minister satisfied that the wording of this amendment is actually going to clear those persons who entered into contracts of employment under these international agreements prior to April 26, 1965; in other words, the date of the budget? I assume that they would not be taxed as Canadian residents. Will those persons who entered into a contract of service under these international assistance agreements prior to April 26 be covered by the present agreement, or does it apply only to post-April 26 agreements?


Walter Lockhart Gordon: Mr. Chairman, the operation of this clause will not apply until next year and it will not apply to the people who entered into contracts prior to the date of the budget.


Marcel Joseph Aimé Lambert: The Minister says "next year", Mr. Chairman, but the effective date was April 26, 1965, which was the date of the budget. If my memory serves me correctly, the original provision said "for the taxation year 1965 and subsequent years".


Walter Lockhart Gordon: Subclause (5) reads:
Subsections (1), (2) and (3) are applicable to the 1966 and subsequent taxation years-


Marcel Joseph Aimé Lambert: Yes, it is for the year 1966. But I am concerned about the person who entered into an employment contract prior to April 26, 1965. I take it from the Minister's answer that the date of the employment contract has no bearing.


Walter Lockhart Gordon: As I say, Mr. Chairman, this will only apply to individuals beginning next year, 1966. If there is somebody who is now under contract with the external aid office and who entered into the contract prior to the budget date and the contract carries on for a period, the external aid office will have to make a new deal.


Marcel Joseph Aimé Lambert: In other words, they are not
exempt?


Walter Lockhart Gordon: Yes.


[Stage Direction]
Clause agreed to.
Clauses 29 and 30 agreed to.
Lucien Lamoureux: Shall the title carry?


Thomas Speakman Barnett: Mr. Chairman, before the title of this rather omnibus sort of bill carries I would like the Minister to tell me what consideration he is giving to an amendment to section 5 of the Income Tax Act. If I recall correctly, when I raised this matter last year the Minister said he would consider
Income Tax Act
it in the interval, but it is not dealt with in the bill which we have before us.


Stanley Howard Knowles: The same old story.


Thomas Speakman Barnett: I raised this matter in the discussion we had at the resolution stage of the bill and did not receive any reply from the Minister at that time. I know we had a rather broad, far-ranging discussion at that time, a good deal of it about newspapers and periodicals; but before the title of this bill carries I would like to know what the Minister is going to do in his next year's budget which he has not done in this year's budget with respect to the allowance of expenses for people whose incomes come from wages and salaries and where those expenses are necessarily incurred in the course of earning a living and are in the nature of what one might consider to be extraordinary. In other words, Mr. Chairman, I am not talking about those of us who may use a little gas driving from our home to the shop, or bus fare or something like that; I am talking about the kind of expenses to which, as the Minister well knows, some consideration is given in respect of a rather restricted group of work people in the country, namely those in the construction trades. I hope the Minister will be able to indicate that his consideration has been lengthy enough so that when his next budget comes before the House an amendment equivalent to that proposed in Bill No. C-42 which is on the order paper, standing in the name of the hon. Member for Skeena, will be included.


Walter Lockhart Gordon: Mr. Chairman, as I said in reply to a similar question put by the hon. Member for Regina City-I will try and amplify it a little-in reviewing the various proposals that had been put to the Department prior to the last budget, we went through all the various suggestions and points that had been raised, certainly all the points that had been raised by hon. Members in last year's debate and all the points that had been put to the Department in the form of submissions subsequent to that debate. We singled out a number of items which we felt could be dealt with in the budget this year, and some of these have been dealt with in this bill. There are a number of others that I think all hon. Members would like to see dealt with in one way or another but which create more difficulties.
[DOT] (3:20 p.m.)
I am sure my hon. friend knows that once you start moving in any particular

June 25, 1965
Income Tax Act
direction it is a good thing, before you stop, to see what other difficult borderline cases there are ahead which will have to be taken into account. We felt that we had gone as far as we could this year. As I said to the hon. Member for Regina City, we should not attempt to go any further until we had the benefit of the report of the Royal Commission on Taxation. I dare say that when the time comes to discuss the budget proposals next year my hon. friend will be able to remind me of these remarks. Also he or I will be able to quote the report of the Carter Commission on one side or other of the discussion. This is a commission which has had a very large and competent research staff, and I cannot believe that they will have overlooked a pretty thorough examination of a point that is as important as the one my hon. friend has just raised.


Thomas Speakman Barnett: Mr. Chairman, I wish to thank the Minister for the remarks he has just made, though 1 would have been happier had he gone a little further than he has. I would simply say that I hope that the implementation or discussion of the pros and cons of the Carter Royal Commission report will not be dragging around as long as has the discussion of the Gill Commission report in relation to the Unemployment Insurance Act.


[Stage Direction]
Title agreed to.
Bill reported.
Walter Lockhart Gordon: the third reading of the bill.


Stanley Howard Knowles: Mr. Speaker, I rise to speak very briefly on third reading, but also to move an amendment. The purpose of my moving an amendment at this time is to try to get a vote of the House on a specific issue. At least we should like to get as close to that specific issue as we possibly can.
As all hon. Members are aware, we have found it rather preposterous that this assembly of grown men and women has not found a way in which to register its opinion on the proposal of the Minister of Finance (Mr. Gordon) to exempt certain publications from a rule which he has brought in, as set out in clause 4 of the bill. There have already been two or three votes which have been interpreted in different ways by different media. It is understandable that there has been this mininterpretation, because when a vote is taken on a rather large package it is hard to say whether a favourable

vote is either for or against the items in the package that one may not like.
A good deal of the debate on the budget resolutions and on the Income Tax Act amending bill has centred around the Minister's proposals regarding foreign-owned periodicals and the foreign ownership of newspapers. We in this party agree with the attempt of the Minister to prevent the foreign takeover of newspapers. Perhaps "prevent" is not the word because the legislation does not prevent it but merely discourages it. We also agree with the general rule that he has proposed regarding foreign-owned periodicals. The one point where we think that the Minister is being inconsistent is in the special exemptions that he makes for certain periodicals. Those exemptions are spelled out in subsection (2) of the proposed section 12A of the Income Tax Act, which is to be found in clause 4 of the bill now before us.
At the resolution stage we tried to get a vote on this specific point but were unable to do so. On second reading we had hoped we would get a chance to vote on this specific point but it was not possible. We tried again today when we were in committee of the whole on clause 4 of the bill but again it was not possible. But we think it is now possible, least if we state our case clearly, to have a vote of the House on this specific issue.
One right that is enshrined in the rules is the right on third reading to move that a bill be referred back to Committee of the Whole. In years gone by there used to be amendments that included rather specific instructions as to what should take place in the Committee of the Whole, but the tendency in recent years on the part of the Chair has been to find fault with amendments that included instructions. However, even in recent years, in fact in this Parliament, amendments that merely sought a reference back for the consideration of a particular clause have been allowed.
Therefore, Mr. Speaker, in order to have an amendment placed before the House which will be in order, we have drafted an amendment in precisely the terms of amendments which have been allowed in this Parliament. Accordingly, I move, seconded by the hon. Member for Comox-Albemi (Mr. Barnett):
That Bill No. C-118 be not now read a third time, but that it be referred back to the Committee of the Whole House for the purpose of reconsidering clause 4 thereof.


An hon. Member:: Carried.
June 25, 1965


Stanley Howard Knowles: I thought I caught the word "carried", and it sounded as though it came from the Government side of the House. The amendment, as we have placed it before the House, asks, as I say, for the reconsideration of clause 4 of the bill. If it were possible we would have asked for a reconsideration of only subclause (2) of clause 4 of the bill, but that might have produced a procedural argument, so we put it in these more general terms. What we are concerned about in asking for a reconsideration of clause 4 is that the House be given a chance to say that it wants subclause (2) of clause 4, namely the special exemptions for certain publications, removed from clause 4. That is what we will be voting for when we vote on this amendment, and we ask the House as a whole to support it.


Mr. Deputy Speaker:: Is the House ready for the question?
[DOT] (3:30 p.m.)


Walter Lockhart Gordon: Mr. Speaker, I am not disputing whether the amendment is in order, but I should like to point out at this time that the House spent three weeks trying to develop a set of rules which would speed up our procedure. All hon. Members participated in that discussion, and so far as I know we all took a great deal of satisfaction in the fact that grown men and women, to use my hon. friend's phrase, managed to come up with a set of rules which we thought would streamline and speed up the procedures of the House.


Thomas Speakman Barnett: We did not know the Minister of Finance was going to be so stubborn.


Walter Lockhart Gordon: My hon. friend is making some gratuitous remarks which I am sure he will regret on reflection. The House has now dealt with this matter on four separate occasions, the debate on the budget, the debate on the budget resolution dealing with the income tax bill, the debate on second reading of the bill and the debate on clause 4. I wonder how many times grown men and women need to discuss any particular subject in order to arrive at a decision?
There are differences of opinion about this clause. They have been aired by those who wished to air them. They have been repeated. Surely by this time we know how almost every Member of the House feels about this particular clause and its various subclauses. In those circumstances it seems to me that surely we should have arrived at the stage where we can agree to disagree and get on with the business of the country.
Income Tax Act


Marcel Joseph Aimé Lambert: Mr. Speaker, having listened to these rather remarkable words of the Minister of Finance (Mr. Gordon), I must say I am astounded that he should dare to suggest that it is improper on third reading even to question this action. The hon. Member for Rosedale (Mr. Macdonald) is saying something, Mr. Speaker, but he is one of those impatient juniors who feel that once he has spoken or tapped his desk a couple of times everything is in order and nothing further need be said. He feels that all the wisdom of the Almighty as given to man has now been exposed and that the question really needs no further discussion. This is an attitude, of course, that is more than ever exemplified in the opening paragraph of the editorial in the Windsor Star of last Wednesday which was referred to by the Leader of the Opposition (Mr. Diefenbaker) this afternoon. I would commend the words of that editorial to the hon. Member for Rosedale, because I think they apply to him and the mentality he exhibits.
I am sorry to see that the Minister of Finance has been rather overcome by contagion with this disease. If the Minister had spent time in the Opposition, as he might have and may yet do-


Mr. Walker:: He will not live that long.


Marcel Joseph Aimé Lambert: Mr. Speaker, I will say to the Liberal Whip that the higher you ride the lower and farther you fall, and the bump is that much harder.


David James Walker: Are those remarks personal?


Marcel Joseph Aimé Lambert: I would say to the Minister of Finance that even with the rule changes to which he referred, there is no reason why there should be great silence on third reading on the part of the Opposition. It was at the request of the backbenchers of his own party that an additional gap was opened on third reading. This is the odd part about it. The Minister was blown by the petard of his backbenchers. They brought forward an allocation of time provision, but there is an opening at the end. Even if there is no allocation of time, there can be a debate on third reading for at least a day plus four hours. The Minister attacked the validity of a discussion on third reading.


Walter Lockhart Gordon: The sensibility, not the validity.


Marcel Joseph Aimé Lambert: Well, the rules are there. Certainly there was agreement as to the sensibility of the provision and there are undoubtedly points to be raised. After all, the

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Income Tax Act
Minister is quite well aware that in the past the Government's own backbenchers have come to their senses as a result of repeated assertions on the part of the Opposition that something was wrong and the Government has modified its position. This is what we are trying to do now. We are trying to get the Government to modify its position in regard to the provisions in clause 4 of the bill. After all, enough voices have been raised to show that there is fundamental opposition to this idea of the Government. I am not going to traverse the reasons.
Certainly I support the hon. Member for Winnipeg North Centre (Mr. Knowles) as to the reasons and the procedure that has been adopted, and I would say that we will support the amendment so we can have another look at clause 4 and all the implications thereof. While there may be some validity in what the Minister is trying to do with regard to the ownership of Canadian newspapers, I think he has gone down the wrong lane in trying to do it. With regard to the question of nationalization, not in the public ownership sense but in the sense of the Canadianization of Time and Reader's Digest, I think the Minister is all wet.


Robert Norman Thompson: Mr. Speaker, certainly an issue as important as the matter of foreign publications is one for which the fullest opportunity for debate and discussion should be provided. I can well understand that there are many Members of the Opposition parties and, if the truth were known, many Members on the Government side of the House as well, who are not satisfied with how this matter has been presented in the omnibus bill before us. I would agree with the mover of the amendment that there has not been an opportunity for Members of the House to express their opinions specifically on this issue and I believe it would be a good idea to refer the bill back to the Committee of the Whole House.
This issue is so vital that it not only strikes at the freedom of the press but at the very heart of private enterprise itself, and it is one on which we certainly ought to be able to have the opportunity of expressing our fullest opinions. I think it would be a good thing for the bill to go back to the committee. I am not sure at this point just what we can hope to accomplish, but certainly we should not allow the legislation to go through without having given it the very fullest consideration.
I would also say that the manner in which the whole question has been presented has not been one which has permitted consideration of the particular issue as it should have been. The inclusion of this provision in a larger bill has prevented us from directly dealing with the matter as we should have. On the other hand, this issue has been before us for five or six years now. The Royal Commission has made its recommendations. In addition, I have listened with interest to some of the remarks made by Conservative Opposition of the House and I find myself continually wondering how they can express such opposition at this point in view of the fact that they did not face up to the issue when they had the opportunity to do so. What we need in this country is not only a free press but a press that is Canadian, and for that reason the issue is very important.
[DOT] (3:40 p.m.)
Without prolonging the debate, I would suggest to the Minister that it would be a good gesture on his part if he agreed to the recommendation contained in this amendment and allowed the matter to go back to Committee of the Whole House.


Thomas Speakman Barnett: Mr. Speaker, part of what I was going to say has already been said by the hon. Member for Edmonton West (Mr. Lambert), so I will not repeat it. I am not referring to his remarks to the effect that the higher you rise the harder you fall. I should like to express agreement with his view that he was astonished that the Minister of Finance (Mr. Gordon) would make the remarks he did when he tried to give us a lecture on the matter of over-extending the debate. Certainly they were the kind of remarks that were calculated, as anyone who has been in this House should know, to precipitate debate. I was astonished that he should make remarks of this sort, particularly since my colleague the hon. Member for Winnipeg North Centre (Mr. Knowles) had made a brief statement when he presented his amendment. He simply made clear the fact we had had an extended debate on the subject, but had no opportunity of testing the views of the House by means of a vote. It was for that reason he was presenting his amendment so that we could vote on this specific issue. So far as we were concerned, we were willing to let the matter go to a vote without any extended debate.


Lawrence T. Pennell: I believe the Minister of Finance (Mr. Gordon) made it

June 25, 1965

clear we were not challenging the validity of the amendment proposed by the hon. Member for Winnipeg North Centre (Mr. Knowles). The point we were raising was that we felt a reference back to the Committee would only be for the purpose of introducing an amendment. The hon. Member for Winnipeg North Centre and others have, with great ingenuity, offered two amendments and both of them have been ruled out of order as affecting the balance of ways and means. It seems to me it is only reasonable to believe that if the matter is referred back, an amendment will be moved and this would once again affect the balance of ways and means.


Thomas Speakman Barnett: Would the hon. Member permit a question?


Lawrence T. Pennell: Yes.


Thomas Speakman Barnett: Would the hon. Member not agree that if the House, by a vote, sent this clause back for reconsideration that would be an indication that in the opinion of the House those who have the responsibility and authority to introduce a change which would alter ways and means would be directed to do so by the House?


Lawrence T. Pennell: I think it might involve more serious consequences than that. If I may continue, the hon. Member for Red Deer (Mr. Thompson) made a point rather effectively. As I understood him, he said he was supporting the amendment but then he stated he could not see what would be accomplished by referring it back. That is exactly the position put forward by the Minister of Finance. For these reasons, I ask that the amendment be reconsidered.


Mr. Mcllrailh:: I wonder if it would better meet the wishes of the House if I were to move the adjournment of the debate?


Some hon. Members:: Agreed.
On motion of Mr. Mcllraith the debate was adjourned.


Roger-Joseph Teillet: the second reading of Bill No. C-125, to amend the Children of War Dead (Education Assistance) Act.
He said: Mr. Speaker, when we were dealing with the resolution the other day I under-
Children of War Dead Act took to supply additional information to the House. I have a very brief statement here. It was suggested also to me that some of the purposes of the Act and some of the statistics be placed on Hansard for the benefit of hon. Members and veterans organizations.
First, this Act was assented to on May 14, 1953 and came into force on July 1, 1953. The purpose of the Act is to assist the children of members of the forces who lost their lives while on service during wartime, or afterwards, from a cause deemed to be related to their service in wartime, that is a 50 per cent pensioner or over, or from a cause directly attributable to peacetime service, to gain the advantages of an advanced education. For this purpose, the action in Korea is deemed as "wartime". It was hoped that the Act would provide the advantages of education that the fathers, had they lived, would have tried to give their children. The basic allowance of $25 per month was established in 1953 and has remained unchanged. The proposed increase to $34 will keep the allowance in line with the increased cost of university students. The additional allowance, paid only when pension ceases at age 21, was commenced in 1958 and the proposed change will keep it at a level equal to that paid as pension prior to age 21, at the present time $60 per month.
I have here, Mr. Speaker, a few figures and some tables relating to the number of students that have been approved for assistance. The number of students approved for assistance was 3,559, with 118 students approved for extension. The cost of the program to date has been $2,386,237, and the cost of fees and costs amount to $2,325,977 for a total of $4,712,214.
One bit of information which is not included, in the list with which I will be dealing in a moment, is that there have been 98 children of deceased members of the Canadian forces approved under the Act. I have here three tables, one of which I have partly read into the record, dealing with the (applications approved for training, 195364 and estimated to 1968. The second table deals with the number of students in training at the year end 1953-54 to 1964-65 and estimates to 1971-72. Table No. 3 deals with expenditures 1953-54 to 1963-64 with estimates to 1971-72. I should like to ask the House for permission to have these tables, along with graphs showing the actual conditions up until now with projected estimates, printed in Hansard.
2882	COMMONS
Children of War Dead Act


The Acting Speaker (Mr. Batten):: Does the House agree to have these tables printed in Hansard?


Some hon. Members:: Agreed.
[Editor's note: For text of tables referred to above see appendix.1


Herbert Wilfred Herridge: I rise to speak very briefly on the second reading of this bill. First of all, we were glad the Minister placed some figures on the record concerning the total number of students who have taken advantage of this legislation, and the total cost. I am sure when we have an opportunity of reading the tables put on the record we will have a fairly good picture of what has been accomplished by this legislation.
In conclusion, Mr. Speaker, I simply say that I am confident the Parliament of Canada has never extended such a small sum of money with such beneficial results as have been attained under this Act.
[DOT] (3:50 p.m.)


Marcel Joseph Aimé Lambert: The other day when we were discussing the resolution I had a second series of questions about which the Minister was intending to speak. They concerned the children of men who were on peace keeping operations. There is a whole area of compensation and pension not covered by war service pension, though if a man is killed in the line of duty there are provisions for his dependants.
I raised the question as to whether there was an extended definition of service under this bill to take care of such cases, and what was the Government's intention with regard to that. It may be that the Minister would prefer to go into this at length when the estimates are discussed by the Veterans Affairs Committee.


Roger-Joseph Teillet: The hon. Member is quite right and I apologize for not dealing with this matter. At the moment, allowances under this act are governed by the Canadian Pension Commission; and the other matter he raised, and which he and I discussed previously, is now being studied by an interdepartmental committee. The Department of National Defence has a large responsibility in this area. The suggestion about the Committee on Veterans Affairs is useful and I hope we will have conclusions or tentative conclusions to offer to that committee.


Alexander Bell Patterson: As
stated by the hon. Member for Medicine Hat

DEBATES	June 25, 1965
(Mr. Olson) on resolution stage, we support this measure because we all realize that society can do no less than provide in this way for those whose fathers were killed in the service of their country.


Mr. G. L. Chatterton (Esquimalt-Saanich):: I am in favour of the proposed amendments, but I suggest to the Government that whenever questions of allowances come up it might make an arrangement, as was done under the Canada Pension Plan, for an automatic index increase, provided the correct index is used. The index should be one based on the increase in average earnings and this would obviate amendments to Acts from time to time.
Under the regulations the Minister should also consider the matter of recognizing the institutions which some of these people would be allowed to attend. I know of one case where permission was refused to attend a certain institution in Vancouver. The chap involved was a young artist and this year his work is being displayed in the National Gallery. The question involves the institution he should have been allowed to attend.


Mr. Grant Deachman (Vancouver Quadra):: Mr. Speaker, apropos of the remarks made by the hon. Member for Esquimalt-Saanich (Mr. Chatterton) with regard to the use of a cost of living index, student costs are more directly related to university fees and housing at universities. It would be of more assistance to students if these costs were reviewed from time to time.


Roger-Joseph Teillet: I just want to point out-


The Acting Speaker (Mr. Batten):: Order. I should advise the House that if the Minister speaks now he will close the debate.


George Robson Muir: Clause 1 (a) refers to an amount equal to one twelfth of the annual rate of pension. Would the Minister tell us the annual rate?


Roger-Joseph Teillet: I assume the annual rate would be 12 times the monthly rate, but if the hon. Member waits until we reach committee stage I will have the full answer for him.


[Stage Direction]
Motion agreed to, bill read the second time and the House went into Committee thereon, Mr. Batten in the Chair.
On clause 1.
George Louis Chatterton: I think the Minister was going to say something with reference to the remarks made earlier.


Roger-Joseph Teillet: Yes, Mr. Chairman, and I can assure the hon. gentleman we are very con-
June 25, 1965

scious of the point he has made. I would point out that the allowances for fees were increased last fall from $500 to $800, and these things are continually under review. We are now in the process of having talks with veterans organizations in order to establish a more adequate basis for pensions to disabled veterans, and which would have a result as applied to the children of war dead. The purpose of this amendment is to assure that when a student continues at school after the age of 21 and the pension has ceased, the same amount of money will be made available to him.


George Robson Muir: The old act provided $25 and an additional $54. Is this additional amount of money being withdrawn?


Roger-Joseph Teillet: In effect it would be $60 with the added amount provided for.


George Louis Chatterton: Under the Canada Pension Plan there is an allowance of $25 per month for each of the first four orphans, and $12.50 per month for each orphan above that. In most cases the people who would qualify under the Children of War Dead (Education Assistance) Act would not qualify for payments under the Canada Pension Plan, and I hope the Minister will keep this in mind when considering the question in future, that income from pension or from any source but earnings does not entitle one to a pension under the Canada Pension Plan. Therefore in relation to the Canada Pension Plan these people are actually worse off than they were previously.


Roger-Joseph Teillet: I will certainly undertake to have a close look at that.


[Stage Direction]
Clause agreed to.
On clause 2.
Herbert Wilfred Herridge: I presume this means that the act is retroactive to September 1, 1964?


Roger-Joseph Teillet: That is correct, to bring it in line with the adjustment in pension as of that date, and so that students in school during this year would have the benefit of this additional amount.


[Stage Direction]
Clause agreed to.
[DOT] (4:00 p.m.)
Title agreed to.
Bill reported.
The Acting Speaker (Mr. Batten):: When shall the bill be read the third time? By leave, now?


Some hon. Members:: Agreed.
Army Benevolent Fund Act


Roger-Joseph Teillet: the third reading of the
bin.
Motion agreed to and bill read the third time and passed.



ARMY BENEVOLENT FUND ACT


[Stage Direction]
Hon. Roger Teillet (Minister of Veterans
Affairs) moved the second reading of Bill No. C-126, to amend the Army Benevolent Fund Act.
He said: I must correct certain of the information I gave to the hon. Member for Fraser Valley (Mr. Patterson) the other day in answering a question as to rates of interest. Reading the statement I had in front of me, I skipped a line and told him the rate was now 3 per cent. The actual figure will emerge from the brief statement I now wish to make.
The Fund was established by the Army Benevolent Fund Act in 1947. The original net worth of the fund was $9,293,477. The original interest rate was 2| per cent. The plan for the fund was that there would be prospective beneficiaries for 50 years and that payments for the first 30 years would average $473,000 a year, with much smaller payments during the remaining 20 years. During the last ten years disbursements have averaged approximately $520,000 a year. The net disbursement in the fiscal year 1964-65 was $451,544.
The Act was amended in 1952 to increase the annual interest rate to 3i per cent on the first $5 million, and 2| per cent on the excess. In 1961 interest rates were again increased to 4 per cent on the first $5 million and 3 per cent on the excess. These rates are still in effect.
The fund has decreased more rapidly than was originally intended and on March 31, 1965 it amounted to $5,552,078. During the fiscal year 1964-65 the fund assisted in 3,085 cases. Because it is considered important that the fund continue to operate in accordance with the original plan, and because interest rates have tended to increase, the bill proposes a rate of 4| per cent per annum for a period of five years, and provides for further quinquennial adjustments in the rate by the Governor in Council. This proposal will result in increased interest payments of approximately $34,000 a year during the first five year period.
Herbert Wilfred Herridge: wish to ask the Minister a question. I presume

June 25, 1965
Judges Act
this is one of those adjustments which have to be made in respect to interest rates under the capitalist system, which would not be required under a socialist system.


An hon. Member:: They would go up and down like a yo-yo.


Alexander Bell Patterson: May I point out that it was my colleague from Medicine Hat (Mr. Olson) who asked the questions to which the Minister has replied.


Roger-Joseph Teillet: That is correct. I apologize.


[Stage Direction]
Motion agreed to, bill read the second time and the House went into Committee thereon, Mr. Batten in the Chair.
Clause 1 agreed to.
Title agreed to.
Bill reported.
The Acting Speaker (Mr. Batten):: When shall the bill be read the third time?


Some hon. Members:: By leave, now.


Roger-Joseph Teillet: the third reading of the bill.
Motion agreed to and bill read the third time and passed.



JUDGES ACT


Hon. J. Watson MacNaughi (for the Minister of Justice) moved: that the House go into Committee to consider the following resolution:
That it is expedient to introduce a measure to amend the Judges Act to provide salaries for two additional judges of the Supreme Court of Ontario, one additional judge of the Supreme Court of New Brunswick and one additional judge of the County Court of Ontario.
Motion agreed to and the House went into Committee, Mr. Batten in the Chair.


Mr. Macdonald:: As hon. Members know, the proposed resolution to amend the Judges Act will provide compensation for two additional High Court judges in Ontario and one additional judge of the County Court of Ontario-in this case a third County Court judge for Middlesex County-and one additional judge for the Supreme Court of New Brunswick.
The appropriate legislation has already been passed by the provincial legislatures. The Ontario Legislature has acted to provide for the expansion of their courts to accommodate the required number of judges by an amendment to the Judicature Act which received Royal Assent on April 14, 1965 and by the
[Mr. Herridge.)
County Judges Amendment Act which received Royal Assent on April 2, 1965. The Judicature Act of New Brunswick has been amended by the Legislature of New Brunswick, which amendment received Royal Assent on April 3, 1965.
In all cases the necessity for additional judges has been created by the heavy volume of litigation at the Supreme Court level which is perhaps the product of the affluent society in those two provinces. I have been supplied with some figures which indicate the extent to which litigation has grown in recent years. In Ontario there was a notable increase between 1953 and 1965. In 1953 there were 9,929 writs issued and in 1965 there were 18,546 writs issued, an increase of 87 per cent. Of cases set down for trial, in 1953 there were 4,407. This had increased in 1965 to 7,134, an increase of 52 per cent.
[DOT] (4:10 p.m.)


John George Diefenbaker: Mr. Chairman, could the Parliamentary Secretary give the increase year by year?


Donald Stovel Macdonald: I would have to apologize to the right hon. gentleman, Mr. Chairman. These figures were supplied by the Chief Justice of the High Court of Ontario and I do not have them on a detailed, year-to-year basis.


John George Diefenbaker: I was wondering whether there had been a recent increase.


Donald Stovel Macdonald: I regret that I cannot answer the right hon. gentleman in that respect, Mr. Chairman. A more detailed comparison of the figures might be of some assistance. In regard to litigation in the City of Toronto, in January, 1965, of cases set down for trial in the non-jury, defended category there were 374. By 1965 in this category the number of cases had risen to 1,142, an increase of 205 per cent. Of nonjury, undefended cases, in 1955 there were 512 and in 1965 this had increased to 1,011, an increase of 97 per cent. Of jury cases there were 154 in 1955 and 660 in 1965, an increase of 329 per cent.
I might say, Mr. Chairman, that the present Chief Justice of the High Court of Ontario is actively engaged in trying to reduce the list of cases outstanding, and the Registrar of that court, who has had very considerable experience in litigation, has said that the past eight months have been perhaps the busiest in the history of that particular court. The figures for the period January 1, 1965, to May 31 of this year indicate some improvement in
June 25, 1965

this regard. For example, the number of divorce cases disposed of in this period exceeds by 122 those set down for trial. In the same way, the number of jury cases disposed of in this five-month period from January 1, 1965, show that there were 880 cases set down for trial, and at the present time there are 632 outstanding, indicating a net disposal of 248 cases.
The figures do, however, indicate both a continuous increase in litigation and a considerable number of cases outstanding. In Toronto and Ottawa in the Province of Ontario, for example, there has been an expansion of actual courtroom facilities. In the City of Ottawa there is now room for two High Court judges to be sitting in Assizes at the same time. It is to meet the requirement for additional judges that these amendments are being put before the House.


John George Diefenbaker: Mr. Chairman, would the hon. gentleman give us the figures as to the number of trial judges of the High Court of Ontario in 1955 and today. Would he also let us know whether there is a lag between trials and the actual handing down of judgments. We had an example some years ago in the Exchequer Court where judgments were delayed so long that only the litigants had not forgotten that they had a case. Has the Parliamentary Secretary any record regarding the delays between trial and judgment which have resulted from the fact that judges have been unable to write their reserved judgments because they have been called back to duty to take trials elsewhere? Has he any record of that at all?


Donald Stovel Macdonald: Mr. Chairman, I have no record with regard to the second question. I think the general opinion of the profession, which is perhaps the best measure I can give, is that on the whole the High Court of Ontario does have a very good record of disposing of matters, once they are brought to trial. There may be individual instances where judgments have been long delayed, but on the whole I think it has moved along quickly.
With regard to the first question, the right hon. gentleman inquired as to the number of judges as between 1955 and 1965. In 1955 there were the Chief Justice of the High Court and 18 trial judges. At the present time there are the Chief Justice, of course, and 22 High Court judges. If this amendment passes the House there will be 24 judges at the trial level in addition to the Chief Justice.


John George Diefenbaker: There is just one other question I want to ask, Mr. Chairman. Per-
Judges Act
sonally I think it is very necessary that the courts be able to carry out their responsibilities expeditiously. There are some parts of our country where judges are not overworked in certain divisions, but in the High Court of Justice, having regard to the great increase in litigation which in large measure I think would be damage litigation arising out of automobile accidents, there has been made necessary a substantial increase in the number of judges.
While normally I thoroughly disagree with the situation whereby a Parliamentary Secretary, however qualified and able the particular hon. gentleman may be, introduces a resolution in the absence of the Minister, in this case on a Friday afternoon and being in a benevolent mood I am not going to raise this objection. But there is one other question that occurs to me. We want to be assured that our judiciary shall continue to be above reproach. They will not always be right, otherwise there would not be courts of appeal. But they have to be men of honesty, integrity and ability. Sir John A. Macdonald once said, when asked what the qualifications of a judge were in his opinion, "A man who is honest and willing to work, and if he knows a little law that would be no particular detriment". This is true. So often outstanding counsel are appointed to the bench and do not make the judges that others with less forensic experience make. However, in the field of honesty and integrity of judges we Canadians have been unusually fortunate. There has been one blot on the record in the last year or so, but that judge's conviction is still before the courts and therefore I will make no reference to it. However, there is a case in the Province of Ontario that I think deserves a full explanation by the Department of Justice. I mentioned the case of the High Court Judge who was convicted and sentenced to two years imprisonment and whose appeal is pending. I say no more about that. The very fact that there are so few of these cases causes wider publicity being given to those that do occur than would otherwise be the case. We not only expect honesty and integrity in the judiciary but we also have the right to expect, and demand, that judges shall not only be honest but shall have the appearance of being honest.
There is a case that has been before the courts. The judge in question was acquitted after preliminary hearing. I refer to Mr. Justice Landreville. I would like to know what is being done in connection with this

June 25. 1965
Judges Act
case. We have tried to get information but it has not been vouchsafed us. I am in no way judging the merits of the case; I am simply pointing out that what was revealed in the press does not contribute to that feeling of certainty with regard to the judiciary that we, in the British tradition, have a right to insist upon. I would like to know whether the judge has been asked to resign and what his reaction has been to any such suggestions that have been made.
[DOT] (4:20 p.m.)
If he has refused to do that which I think, in the interests of justice, he ought to do, then what action is going to be taken by way of setting up a Commission to look into the case and make a recommendation to the Minister of Justice? I am being very restrained in the expression of my viewpoint, but certainly with that shadow which is cast over the Justice, litigants appearing before him would not be subject to too great criticism if they were to conclude that they would sooner be tried by another judge.


Mr. Winch:: Mr. Chairman, could I just put a straight question; I am not making a speech. Could I ask the right hon. gentleman who has just spoken whether he would include in his remarks the situation of Judge Meunier, who was sentenced to two years for perjury and is still drawing a salary from the federal Government?


John George Diefenbaker: I did not mention that he was one of our colleagues in the House of Commons who went to the bench when a vacancy arose to provide an opportunity for Mr. Chevrier to come back to the House of Commons. I did not refer to the Meunier case because it is still before the court; but if what the hon. Member says is correct, that the Justice is still getting his indemnity as a judge, then that is a revealing circumstance. I could scarcely credit that that would be so.


Harold Edward Winch: It is so.


John George Diefenbaker: Well, I appreciate that when the hon. gentleman, as an experienced parliamentarian, says it is so, I know it is so.


Harold Edward Winch: It was said in answer to a question put down by one of the right hon. gentleman's own Members that this judge was still drawing his salary, having been sentenced to two years.


John George Diefenbaker: That, Mr. Chairman, indicates that the Department of Justice, which of course at the moment is not an issue before the House, must assure that justice is done.

I am referring to the case of a judge of the High Court of Ontario, a court which, according to the Minister, is overworked. I was wondering whether or not in addition to these two judges to the court there should be a third vacancy as well.


Harold Edward Winch: Mr. Chairman, along that same line of principle my point is this. How is it that a Supreme Court judge, who can only be appointed by the Government of Canada can be sentenced to two years for perjury, who appeals, and although he is not serving as a judge is paid his salary by the Government of Canada? To me that is an extraordinary situation. If a man is guilty of perjury, then by all means let him appeal. But why a man who is a judge should be paid by Parliament is, to me, a most ridiculous situation.


John George Diefenbaker: It is a shocking thing.


Mr. Peters:: Mr. Chairman, not being a lawyer I show some reluctance to get into this particular debate. However, I think justice affects not only the lawyers either in Parliament or the country but also those who are considered to be in court the peers of either the jurors or those persons who are accused. I endorse the remarks made by the Leader of the Opposition in relation to Mr. Justice Landreville, and may I say I come from northern Ontario, where this judge lives. This matter is a disgrace. It is one which would not be allowed in any other calling, and would not have been allowed here had this man not been a judge. It is all very well to refer the case to the Bar Association, who themselves have said that this man should be removed from the bench; but I think it is a disgrace to ask anybody to go before this judge to obtain justice in view of the indication that his own hands may not be clean and that he may have abused the highest trust given to him by the people of Sudbury, who elected him to serve them in another matter.
I fail to see why this man has not been removed by the Government, and I think this failure raises with the layman a number of questions. The first question flows from the fact, as the Leader of the Opposition has just said, that the appointment of a judge may call for a man who has worked either in the legal field or other fields. It is not absolutely necessary that you have legal training to be a good judge, but-


An hon. Member:: What?
June 25, 1965


William Arnold Peters: Well, I hope I have not misinterpreted him, though I may have done.


John George Diefenbaker: I never made that suggestion.


William Arnold Peters: I assumed that what he was saying was that you do not need legal training. I do not know whether this is true or not, but I think it is.
To make my point quite clear, there was recently appointed to the Supreme Court of Ontario a man I have had the privilege of knowing for many years, a lawyer in the Town of Timmins, Gregg Evans. This gentleman prior to his appointment did not go through the process of being Crown Attorney, nor did he go through any of the lower courts such as the Magistrate's Court or County Court. But I am sure that Gregg Evans will be one of the best Supreme Court judges that we have in Ontario, and I predict that he will have a long and illustrious future in this field. I say that because I know that as an individual he is a very honest, temperate and very fair man. For this reason Gregg Evans will make an excellent judge even though he has not been through some of the other avenues.
As I say, I was of the opinion that people who were not lawyers could be appointed judges, although I may not be correct about that. But let us make no mistake about it- political appointments are the usual type of appointments which are made. They have been made on many occasions. The one just mentioned was, I think, an occasion when a party needed a seat and a man was promoted to the bench to make room for another candidate. I can see the present holder of the seat for that particular riding being reluctant to do something about the situation in the province, for the very simple reason that a contribution was made in the political sense which, to some extent at least, warrants a certain amount of sympathy from those who had the benefit of the change of seat.
I think that the situation involving Judge Landreville is a disgrace of justice in the Province of Ontario. I believe that the Department of Justice must exercise some jurisdiction in this field. Even the Bar Association are now reluctant to have this judge try cases. I know of several other judges in other areas who are not considered acceptable. I know of one magistrate in Timmins who is not acceptable to me because I know of his prejudice; and certainly I would not accept him as a trial judge if I were charged with an offence before him. I think I could legiti-
Judges Act
mately make a very good case as to why he should not sit on my case.
[DOT] (4:30 p.m.)
This matter affects a large number of people. It is the Government that really is responsible in this field and I do not think they have discharged their responsibility, although I may not fully understand the division of responsibility between the province and the federal Government with regard to who has supervision of the judges, and some of the other factors involved.
The Parliamentary Secretary referred to the delay in justice. This is something that is very apparent, of course, to everyone. I understood him to say that there is a backlog of 660 cases in Ontario. I wonder who is responsible for directing cases to the different judges? On a number of occasions I have been in lawyers' offices when they have been trying to find a judge to sit and hear a particular case, and have had great difficulty in doing so. This is particularly true in the months of July and August when all the judges want to go on holidays. It is true they are not considered to be the peers of average persons, but it seems odd to me that a judge should take a couple of months off in the summer while he makes up his mind whether he wants to hear a case and when he wants to hear it. It would appear to me that if the Bar Association in the province is going to be the disciplinary body, they are going to have to make a decision with regard to what outside work judges can take, because the taking of such work often results in delaying regular court cases.
I should like to hear the Parliamentary Secretary explain to us what results have flowed from the discussion we had a year or two ago. At that time I believe everyone was of the opinion that while outside work could be very lucrative to judges, it was not going to be necessary for them to do such work because we had increased the salaries of the judges considerably. I know that at that time it was left to the discretion of the judges to decide whether or not they would take outside work and whether or not it would interfere with their regular duties, but from my slight knowledge I know that the judge still controls whether or not he will sit on a case and when he wants to sit. It is the judge who makes this decision. Quite often it is unfair that a person involved in litigation should chastise his lawyer for not making proper arrangements and speeding up the hearing of the case when the fact of the

June 25, 1965
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matter is he cannot find a judge to hear it, and is having difficulty in bringing the case before the courts. I think the House should have some explanation of how far we got in asking the judges to co-operate and discipline themselves in return for the large increase in their indemnity provided by Parliament.
The fact that there is a backlog of 660 cases warrants in my opinion not only the appointment of two new judges but action by the House in the very near future to try to get rid of the backlog of cases. If the two new judges are energetic young fellows and do not do anything else, it is quite possible that in one year they could handle the 660 cases. However, some of these cases may very well be very heavy because, as the Leader of the Opposition mentioned, they fall in the field of civil litigation and require the production of a great deal of evidence. This is a very time consuming thing and I would think that these two judges are not really going to solve the problem of the backlog of 660 cases in Ontario. I think it would be much better if we could get all of the other 22 judges to take their fair share of the load.
If the Parliamentary Secretary would indicate to us the case load of each of these 22 judges I predict that we would find a great disparity. Some judges work and some do not do a darn thing. I would be interested in knowing, for instance, how many cases Mr. Justice Landreville has dealt with in the past year. I should like to know how many cases there were in which those involved did not want to go before this judge, who has been morally found guilty of an offence. If it had been anyone else except a judge that person would have found himself paying the penalty that the president of the company involved paid. They were both accused of exactly the same thing, one on one side of the fence and the other on the other, but the man who offered the bribe received a sentence and the one who accepted it did not. To me this is discriminatory.
I like the phrase lawyers use that justice delayed is justice denied. I know of cases involving the unsatisfied judgment fund, which I presume fall largely within the jurisdiction of the County Court judges in Ontario, that have been in process for three to four years. People are screaming blue murder because they have not got a motorcar. There is no way they can get the kind of transportation allowance that would be allowed in other types of cases, and so the penalty being paid by these people is very great. Their situation has been vastly aggravated

by the fact they have not been able to get their cases before the courts.
I would have much preferred it if the Minister of Justice had been interested enough to be here this afternoon to pilot this measure through the House. I think the Parliamentary Secretary will agree with most of what I say because he comes from Ontario, but the Minister of Justice may not be aware of some of the factors involved in the administration of justice in that province, although the Province of Quebec may have different problems. I believe the Minister should be prepared to come before us and tell us the recommendations that have been made by the Province of Ontario, who these two judges are going to be and what qualifications they have. This might at least be of interest to us.
I should like the Government to be prepared to come before Parliament before long and indicate that some thinking has been done with regard to the appointment of judges and the loads they carry. Although I am not prepared to document it, I believe there is a great disparity between the work done by some judges and the work done by others. I say this because for some time I had considerable experience with Ontario judges in relation to arbitration and conciliation boards. We found there were certain judges who were always available, and quite often they were the ones we did not want. There were others we wanted and who were much more acceptable to us but they were involved in handling other legal matters. I could name some of them but I will not do so.
I can remember one who had a little English car and who came to Timmins one time. He charged us something over $200 for transportation, but if he put $5 worth of gas in that car to get to Timmins I would be very surprised. We paid the amount under protest, but when he charged the company involved in this particular case the same amount he had charged us they said it was an unreasonable charge, refused to pay and took him to the Bar Association. That is an aside.
The point I want to make is that the Minister of Justice must be aware of the disparity in work loads. I think we should find some way of distributing the loads much more evenly, and we must also find a better way of choosing new judges. The judges are supposed to discipline themselves. So are Members of Parliament. If you look around you can see those who are always here and those who are never here. We are supposed to discipline ourselves too, but this does not always work.
June 25, 1965


An hon. Member:: Explain.


William Arnold Peters: Well, you can look around and see the empty seats. I say the case loads are not being evenly distributed and that there is no discipline in this regard. I know personally that some judges in the Province of Ontario are greatly overworked. They are handling cases because someone asks them to do so and they know full well that they have more work than they should be undertaking. At the same time there are other judges who are carrying very little of the load.
[DOT] (4:40 p.m.)
I am quite pleased that we are adding two new judges but I would be much more pleased if I knew who they were going to be. I would also be much more pleased if there was an obligation on the Chief Justice of Ontario to come before a committee of the Justice Department and indicate which judges he wanted removed because they were not doing any work. I should like the Chief Justice to exercise some authority and report to the Government on this aspect of the matter. The lawyers are going to laugh and say it cannot be done, that it has never been done. I think it is a disgrace, and every person in Ontario will think it is a disgrace that Judge Landreville continues his appointment, and nothing can be done.
We are surprised also that people have to wait four years for settlement of cases under the unsatisfied judgment fund, not because the lawyers have failed to do their job but because there are no judges available to hear the cases. I think much more has to be done in this field than merely having an opportunity every year or so to say something on this subject when we appoint another judge or two. I think the Government has a responsibility, if they really want to see justice done, to find some way of making all the judges work. It might not be by asking the Chief Justice to report, but some way could be found. Those who do not want to do the job could be retired. We would be better off to pay them a good pension because they are only deadwood, and we would be well rid of them.
We have been able to maintain a very high standard of judges in Ontario. I do not believe there is anyone in Ontario who will not say that justice is on a high level. We are prepared to admit also that there are some who do not want to maintain these high standards, and we would like some method of assuring that the standard is maintained.
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I hope the Parliamentary Secretary will pass on to the Minister the desire of some people in this country to have a much more effective way of disciplining judges and maintaining high standards. We probably should have a much better way of appointing judges than for Parliament continually to ask for one or two more. This may not be enough to even meet the backlog, when you take the load off the judges who are sitting now.


Herbert Wilfred Herridge: I rise briefly to say that I listened to some of the interesting and eloquent remarks made by the hon. Member for Timiskaming. I must also bring to the attention of the House that the circumstances he so graphically described do not apply to the judges of British Columbia.


Harold Edward Winch: I spoke recently, but there was one point I omitted and which I should like to raise now. A few days ago I was interested in reading that a judge who had been found guilty of perjury and sentenced to two years still holds his appointment, although he has not been sitting as a judge. He is still drawing his money. The point I want to raise is that I read in the newspaper that the Minister of Justice said he cannot discharge this judge who has been found guilty of perjury.
I should like to make it clear that, under the circumstances. I believe there is a responsibility on the Minister of Justice to introduce the required motion in the House of Commons. I understand that only the House of Commons can discharge a judge. For the Minister of Justice to say he has no authority to discharge a judge is a statement which I find-I do not know what words to use-picayune, uncourageous and despicable. In other words, it is completely irresponsible. I say it is the responsibility of the Minister of Justice, when a judge has been found guilty of perjury, to introduce the required motion in the House of Commons to discharge him, so he will not sit in judgment on others.


Donald Stovel Macdonald: Perhaps I may reply to some of the observations that have been made by hon. gentlemen. Perhaps I should hasten to reply, first of all, to the misquotation of the Leader of the Opposition by the hon. Member for Timiskaming. The hon. Member for Timiskaming may have been thinking of a situation in Ontario in which it is not mandatory for magistrates to have legal training. In so far as Superior Court or County Court judges appointed by this Parliament are concerned, it is mandatory

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that they have legal training. What the Leader of the Opposition was actually saying was that there were circumstances, not infrequently, where a man is appointed to the bench who has not been in active practice in the courts but has conducted the business of a solicitor. Very often the solicitor, who has not been actively practising in the courts, turns out to be a better judge than some of the leading counsel. I think that is the point the right hon. gentleman was making.
The hon. Member also made reference to the distribution of the work load. He observed particularly that during the months of July, August and part of September the court is on vacation. In so far as the question of whether or not there should be such a lengthy vacation, I can only speak for my own Province of Ontario and say that the question has been raised as to whether the vacation is too long, particularly in connection with criminal matters. It has been stated Superior Court judges should be sitting all year round to deal with criminal matters. I believe I am correct in saying that it is not for this Parliament to decree whether the court calendar is run the year round or not; that is a matter of the administration of justice and is for the province. I am sure the hon. gentleman's observations will be noted and given the appropriate consideration.
He made some reference to the statistics I quoted with reference to the case load and referred to the fact that judges at certain levels are entitled to engage in non-judicial activities. I point out to him that High Court judges in Ontario are not entitled to do so, but County Court judges are. County Court judges can take outside work such as to act as arbitrators in labour disputes or as members of local police boards. Supreme Court judges are required to confine themselves to judicial business, except such business as a commissioner under the Inquiries Act to which position they may be appointed by the Governor in Council or the Lieutenant Governor in Council. The case load to which the hon. Member referred has not come about by reason of the fact Supreme Court judges are not attending to their duties. I am sure the Chief Justice would be the first to support me in that remark.
Perhaps the hon. Member does have a valid observation, and it is relevant here because we are considering the position of an additional County Court judge in Ontario, as to whether or not the bench at this level

should engage in non-judicial activities. I point out to him that perhaps there is ground for imposing some limitation on the activities of County Court judges. However, there is recognition of the fact County Court judges perform distinct services within particular communities. I think many people within the labour arbitration field would feel that conciliation would be hampered if it were not possible to get County Court judges to act on arbitration boards.
[DOT] (4:50 pjn.)
Perhaps the hon. Member does not agree with that. I certainly know that that view is held by some people both on the side of labour and of management. Under Ontario legislation County Court judges perform duties as members of local police commissions, and a County Court judge is in some respects almost more an administrative officer within a county than acting in another capacity as a judicial officer. The question is not one without merits on both sides.
With respect to the case load of each judge, I am not in a position to tell the hon. Member that, but with respect to High Court judges the calendar which they are to follow is drawn up by the Chief Justice who, merely from the standpoint of personnel relations, will do his best to equalize the load. But inevitably with justices who are trying cases both in a large metropolitan area like Toronto, and who go out on circuit to small urban or rural communities, there is inequality in the load they have to meet.
I also know it is the practice for the Chief Justice to rotate the work of justices so that they take on the heavy and the light alternately. However, here again there is an inherent inequality, due to the factor of experience and being specialized in certain fields of law. Very often you will find in commercial cases it is desirable to appoint a judge to hear them who has had experience in a large commercial practice.
With respect to County Court judges you have a different situation, in the sense that they are appointed for each county, and in this respect and as a basis of comparison I point out that the County of Dufferin has only about 11 members of the bar while the County of York has I believe over 4,000 members of the bar. There is an essential inequality in the case load, but I would like to take this opportunity to pay tribute to Chief County Court Judge Willmott, who was appointed by the previous government, who has attempted to try to distribute judicial talents on a basis of equality so that in
June 25, 1965

those counties where there is a heavy volume of work judges may be brought in from other areas to assist in coping with the volume.


Mr. Churchill:: In conclusion-


Donald Stovel Macdonald: As prompted by the hon. Member for Winnipeg South Centre, in conclusion I would like to make reference to the remarks of the hon. Member for Vancouver East who appeared to suggest that in the case of a Superior Court Justice in the Province of Quebec the Minister of Justice should have suspended his salary. In the answer which I gave to the House on behalf of the Minister, as recorded at page 2667 of Hansard, I pointed out that in the opinion of the Department of Justice, under the existing provisions of the law it is not possible to suspend remuneration. I suggest to the hon. Member that this may not be by accident in the existing status of the law.
This is also related to the provision in section 99 of the B.N.A. Act which states that judges shall not be removed from office except on an address from both the Senate and the House of Commons, and this I add in my own words, in order to ensure the independence of the judiciary. Again, there are merits on the other side of the question. We should always be sure that the judiciary under any Government will have its independence maintained, save with the exception of the House of Commons and the Senate acting together on a joint address for the right of removal.
May I suggest to the hon. Member that to suggest in this case that a judge should be removed before the appeal of his conviction is determined is, in essence, prejudging that appeal. Whatever may be the ultimate consequences of the case it would not be judicious-and I think the hon. Member would agree with me under the circumstances -to remove him before the Court of Appeal in the Province of Quebec had the opportunity of declaring itself on the validity of the conviction.


Harold Edward Winch: I agree with the Parliamentary Secretary that when a judge is found guilty of perjury and sentenced to two years he should not sit on the bench during the period his appeal is pending. But, Sir, when a judge has been found guilty and sentenced to two years I do not believe that he should be paid his salary by the Federal Government during the time his appeal is pending. I'm darned if I can understand why the taxpayers of Canada have to pay a judge who is not
Judges Act
sitting as a judge, who is appealing a two-year sentence for perjury.
While I am on my feet may I ask the Parliamentary Secretary, in what way does the House of Commons operate to discharge a judge? Recently the Minister of Justice said he had no power to remove a judge.


John George Diefenbaker: To suspend him.


Harold Edward Winch: I would like to ask the Parliamentary Secretary, does he not think it is the responsibility of the Minister of Justice to move in the House of Commons to discharge any judge whose name, reputation and honour come into question?


Donald Stovel Macdonald: Did the Minister not say he had no power to suspend the judge without salary rather than in reference to outright removal?


Harold Edward Winch: That is right, but I would like to ask the Parliamentary Secretary whether it is his view that a private Member of the House should have to move such a motion and, if so, would it be in order? I think that more than one judge should have been removed from office for being incomptent.


Donald Stovel Macdonald: The hon. Member has been a Member of the House for very much longer than I, and I do not know that I should be advising him on questions of order. I think he would find there has been no precedent in the House for removal.


Harold Edward Winch: I am grateful to the Parliamentary Secretary for this statement, because it confirms my belief that no private Member can move a motion to this effect, because it must be a joint motion of the House and the Senate. It has to come from the Government side of the House and it must come from the Minister of Justice. In other words, to sit as a judge you can be infantile, you can be senile and you can be a criminal. Unless the Minister of Justice moves a joint motion, then you can have senility, imbecility and criminality on the bench, and the House of Commons cannot do anything about it unless the Minister of Justice moves a motion. Would the Parliamentary Secretary like to deny that statement?
[DOT] (5:00 p.m.)


Some hon. Members:: Carried.


Mr. Alkenbrack:: I have a question for the Parliamentary Secretary. If the circumstances we have heard described are true, then I think it is the duty of the Minister of Justice to make this motion at the earliest

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possible opportunity. I should like to ask the hon. gentleman-


Lucien Lamoureux: Order. The discussion has been allowed to continue to some extent but I am wondering whether we are not going beyond the terms of the resolution before the Committee at the moment. The hon. Member refers to the possibility of the Minister of Justice making a motion. It seems to me this has nothing to do with the resolution at issue.
I should also like to caution hon. Members about the language they use when referring to judges and the courts of justice. In particular I would draw their attention to the Fourth Edition of Beauchesne, citation 152(4):
All references to judges and courts of justice and to personages of high official station, of the nature of personal attack and censure, have always been considered unparliamentary and the Speakers of the British and Canadian Houses have always treated them as breaches of order.
I am making this reference for the general guidance of Members during the course of the discussion.


Almonte Douglas Alkenbrack: Thank you, Mr. Chairman. I submit I made no direct reference to the judges personally. I ask the Parliamentary Secretary by comparison whether or not a Member of Parliament can continue to draw his salary after being convicted of an indictable offence. Would he still be permitted to serve his constituency here in the House? The Government and the Department is carrying out a shocking policy and I think there is something political running through it. It is a sad commentary on the nation's affairs. Members opposite talk about the independence of the judiciary. I think that in the present case his independence is certainly preserved far beyond anything which needs be related to justice in this country.


John George Diefenbaker: I am interested in the degree to which the hon. gentleman failed to answer the question as to the judicial situation in the Province of Ontario. I am interested in this as one who has been made an honorary bencher and I am interested, naturally, as a member of the Bar of Ontario, in finding out why it is that the number of judges has to be increased.
This immediately brings before us the question of Mr. Justice Landreville. While it is perfectly true, as Your Honour has pointed out, that attacks on the bench are not made in the House of Commons, this is not an attack on the bench. It is a reference to a matter which is public property, and the benchers of Ontario have asked the Govern-

ment to act. Surely the Government will give us an answer and tell us why a judge who was condemned in the report of a commission should continue to sit and dispense justice?
This leads one in turn to the case of a former Liberal Member of this House, whose name I did not mention but which has now been mentioned. What manner of administration of justice is this, when a judge is convicted of perjury; he appeals immediately- and sometimes appeals take a long time to be heard. He cannot be suspended, under the law, but he can be given leave of absence? Would this not have been a case for granting leave of absence without pay? Just imagine. This is the man who made way for the entry of Mr. Chevrier into Parliament. He went to the bench. And he draws $12,700 as a justice after his conviction. And the only answer we get from the Government is silence. We want to know what is happening, here. This is not a criticism of the bench; it is a criticism of a Government which allows things like this to happen.
I should like to know what would have happened if the Secretary of State for External Affairs, now removed from politics, was sitting over here and we were in office. Suppose this kind of thing happened. The ferocity of his verbosity would have been justified. We want to know all about this. We are anxious to keep the bench at a high level. But $12,700 is too much to be paid to a convicted justice to act the part of judge while he awaits his turn to go into jail.
I am amazed at this. I saw a question on the order paper. I could not believe it could be possible. Yet somebody told me it was so.


George James McIlraith: That is what the law provides. Do you want the law broken?


John George Diefenbaker: Ah, "what the law provides," what political considerations determine.
I recall a case in Manitoba in the days when Mr. Bennett was Prime Minister. A District Court judge was involved. I think the course followed at that time was to set up a commission to look into the matter. I know the judge subsequently ran for Parliament and was almost successful. But I wonder where the administration of justice is going in this country when you have one judge sitting in judgment, with a record such as was determined against him, without successful answer, by a Royal Commission and another who, merely as a coincidence, happens to have been a member of this House of Commons for
June 25, 1965

a long time and who today receives-what is it?-$1500 a month? He will not worry about when the appeal is called. It will not disturb him. He is getting $50 a day for waiting.


George James McIlraith: Would the right hon. gentleman permit a question? Is he arguing that it is legal to withhold the pay of this man as long as he is on the bench? I am talking about the latter case?


John George Diefenbaker: I am sure the hon. gentleman did not choose those words very carefully. If he is on the bench the Government should be on the penitents' bench in this regard. If ever there was a case for giving leave of absence without pay, this is one.


George James McIlraith: The law does not permit the withholding of his pay.


John George Diefenbaker: I ask the hon. gentleman this. Does he say in his capacity as President of the Privy Council that no such limitation can be made when granting leave of absence?


Mr. Mcllrailhr  Yes.Mr. Diefenbaker@: I seem to recall a judge asking for leave of absence for some personal purpose. He asked to be relieved of his responsibilities as a judge in order to fill a certain public position and he was granted that leave of absence without pay.


George James McIlraith: Because he asked for it. But it is a statutory right which cannot be taken away arbitrarily by a government. That is the point.


John George Diefenbaker: If the hon. gentleman's memory on this question is no better than it was a moment ago, I am not going to accept that.


George James McIlraith: I would pit my memory against the imperfection of the right hon. gentleman's memory at any time.
[DOT] (5:10 p.m.)


John George Diefenbaker: I know it hurts. Instead of getting up like this, the hon. gentleman should be doing something to uphold justice in this country, rather than having a man paid as a judge while he waits for the opening of the prison gates. I want to see the correspondence to find out why leave of absence was given. I am going to have that correspondence asked for.


George James McIlraith: Good.


John George Diefenbaker: I shall do this to ascertain whether, when he applied for leave of absence, there was any suggestion that while
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he was on that leave of absence he should not be receiving his pay. It should be interesting to see. I will be very surprised if he is sitting-


Harold Edward Winch: Mr. Chairman, could I ask the Leader of the Opposition a question? With his experience as Prime Minister, Leader of the Opposition, and as an honourable member of the Bar, can the right hon. gentleman inform this House whether he has ever known of a judge who has been convicted, with an appeal pending, obtaining leave of absence with pay provided by the taxpayers of Canada? Does the right hon. gentleman have any record or knowledge of such a thing happening before?


John George Diefenbaker: Mr. Chairman, I would hope under heaven that it never happened before.


Harold Edward Winch: You mean it has happened now?


John George Diefenbaker: I know of no such incident. All I do know is this. I am waiting for the facts-the hon. gentleman was quick to interrupt-to ascertain whether the fact is that this justice asked for leave of absence so that he might wait around for the airing of his appeal and receive his pay during the interim. I would like to see the documents in that connection, because it is a terrible commentary on justice and one that naturally arouses one's feelings. After all, the bench is something set apart. I have appeared on hundreds of trials before judges who people sometimes said were appointed because they were politically fit, and I never knew a case in which that justice did not discharge his responsibility free of any suggestion of partisan bias.
We are not going to disqualify people from the bench because they are politically inclined, because they are going to give part of their lives to the public service. But once a judge, having been an outstanding politician, is convicted of an offence surely we should not anoint him by making payment to him of his salary, if there is any way in which it can be got around; and if there was not any way, when he asked for leave of absence it should have been subject to qualifications, one of those qualifications being, "You are not going to get your indemnity". Why give him leave of absence? Why not have him sit on the bench? The leave of absence is simply because he asked to be freed of the responsibility to dispense justice to others. This matter has to be subject to fuller examination than it has been given.

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In so far as Ontario is concerned, I come back to this. What about Mr. Justice Landre-ville? Is he carrying on as a judge now; and is it in keeping with our traditions of justice that a judge against whom allegations were made should be dispensing justice? What do you think of litigants appearing before a justice under those circumstances?
What about Mr. Justice Meunier? Can you imagine appearing before him? Yet if you accept the principle that he can get the pay, why should not he also carry out his responsibility? It is so utterly preposterous that it is shocking. We will have more to say about that, Mr. Chairman, but I would like to hear about the Mr. Justice Landreville case, because as a Member of the Bar of Ontario the President of the Privy Council must know that the Benchers want to know why this extraordinary consideration was given a member of the court of justice in allowing him to sit after the condemnation that was levelled at him. And they have given a great deal of study to it; it is not a question of the Benchers coming to a determination on the basis of hearsay. All experienced lawyers are desirous of upholding the bench and the bar, and all have asked for action in Mr. Justice Landreville's case. Yet in the face of that he sits and dispenses justice. What about that? Is he doing his job well? Is he carrying out his responsibilities? Will there be an early retirement in his case so that there will be another appointment to the High Court of Justice of Ontario?


Lucien Lamoureux: Order, please. We have passed five o'clock without reporting progress on the resolution. Perhaps that should be done at this time and then the House may decide, with the Speaker in the Chair, whether it wants to further consider this resolution in Committee.
Progress reported.


John Watson MacNaught: Mr. Speaker, I think it is the desire of all hon. Members' that the private Members' hour be waived for this day.


Mr. Deputy Speaker:: Is it agreed to waive the private Members hour at this time?


Some hon. Members:: Agreed.




[Stage Direction]
The House resumed consideration in committee of the following resolution-Mr. Favreau-Mr. Lamoureux in the Chair:

That It is expedient to introduce a measure to amend the Judges Act to provide salaries for two additional judges of the Supreme Court of Ontario, one additional judge of the Supreme Court of New Brunswick and one additional judge of the County Court of Ontario.
Harold Edward Winch: Mr. Chairman, I would like to ask the Parliamentary Secretary to the Minister of Justice if he would be kind enough to give the Members of the Committee a little more detailed information. The motion we now have before us has to do with providing salaries for additional judges in certain courts. When we are considering the appointment of additional judges I think we have the right to ask the kind of questions that we have been asking for a little while now. I would like to ask the Parliamentary Secretary to the Minister of Justice if he will kindly tell us, in view of the fact that we have a motion before us to appoint additional judges, what is the basis in legality and morality whereby, not one judge in Ontario, not one in Quebec, but any judge who has been found guilty under the law may still draw his pay. May I also ask, because we are now asked to appoint additional judges, whether those judges who have been found guilty under the law are going to be entitled, as criminals, to receive their pension under the Judges Act. [DOT] (5:20 p.m.)
These are some of the things which are important when you consider the question of asking the authority of the House of Commons to appoint additional judges. I am still awaiting the answer to my question, Mr. Chairman. I asked a little while ago whether or not the Department of Justice will introduce measures to remove judges because of imbecility, lunacy, or criminality, or does the Government expect the private Member to do this? I should like an answer to these three questions.


Donald Stovel Macdonald: Mr. Chairman, the hon. Member has inquired about the statutory authority for continuing these payments. I would point out that the receipt of a salary is a statutory right conferred by the Judges Act. I have referred to the fact-


Harold Edward Winch: You mean, he has that right even though he has been found guilty of perjury?


Donald Stovel Macdonald: May I point out to the hon. gentleman that under our concept of law, while he has been found guilty at the trial level, he has the right of appeal against his conviction. I would suggest that before the judge is condemned by the hon. Member
June 25, 1965

and by other hon. Members as being a criminal he should at least have had the final judgment of the court in that regard.


Harold Edward Winch: I do not want to be misunderstood. He has a right of appeal; but my question is this-and it is also directed in this regard to the President of the Privy Council: Is it the policy of the Government that anybody, whether judge or civil servant, who is found guilty of a criminal offence shall, on appeal, be suspended with salary? If that is the case with a judge, I would ask the President of the Privy Council whether it applies to others in the civil service. I will say right now, Sir, that I know of some civil servants in the Post Office Department to whom it has not applied, and I should like to know why. If it is the policy of the Government that a judge, who has been found guilty of perjury, sentenced to two years and who has appealed, shall not work as a judge but be paid as a judge, I want to know why it is that someone not a judge, but a civil servant who is charged before the courts, is immediately fired and does not receive salary pending appeal. Is there one policy for a judge and another for a member of the working classes?


Donald Stovel Macdonald: Perhaps I should point out again to the hon. gentleman that this policy is enshrined, first, in the British North America Act, which indicates the circumstances under which a judge can be removed from office, and second in an Act of this Parliament, the Judges Act, which defines the remuneration which judges receive and the circumstances under which a judge may retire from the bench. I think the Chair would probably rule me out of order if I attempted to give the hon. gentleman a legal opinion on the circumstances which might exist in the hypothetical case the hon. gentleman has put.


Harold Edward Winch: It is not hypothetical at all.


Donald Stovel Macdonald: Then in that case may I point out that the hon. gentleman is commenting adversely on the conduct of a judge.


David Orlikow: May I ask the Parliamentary Secretary a question. If we are dealing not with a hypothetical case but an actual case, then the Parliamentary Secretary is, of course, correct when he says that this judge is appealing his case, and that it is possible that he will win his appeal. Therefore he should not be judged guilty until his appeal has been decided by the court. If the appeal 22620-184
Judges Act
court upholds the decision made by the court in Montreal, would the Government be returned the money which this judge has received from the time of his conviction? The point made by the hon. Member for Vancouver East is a good one. I, and I am sure along with other hon. Members, have had representations made to me-I am glad to see the former Postmaster General is here- regarding cases which are in the process of being fought on appeal. They concern postal employees who, in the opinion of their superiors, have done things they were not supposed to do. They have been suspended or dismissed, their pay stopping at that very minute.


Lucien Lamoureux: Order, please. It seems to me that this discussion is getting more and more away from the resolution before the Committee. There should be some respect for the rule of relevancy. The rule of relevancy provides that discussion should be limited, particularly in committee, to the very strict matter under consideration. The Chair has allowed a discussion which, to some considerable extent, goes beyond the terms of the resolution. However, when the hon. Member for Winnipeg North and the hon. Member for Vancouver East begin a line of questioning which has reference to the general policy of the Government regarding civil servants other than judges, I would respectfully submit that this line of questioning and argumentation is beyond the terms of the resolution before the Committee. I would ask hon. Members to try to limit their contributions to the resolution.
I should like to refer again to citation 152 of Beauchesne's Fourth Edition, particularly to paragraph (4), which reads in part as follows:
The proper course for persons who feel called, upon to attack the conduct of a judge is to proceed by way of a petition in which, all the allegations are specifically stated so that the person accused may have full opportunity to answer the charges presented against him.
The understanding of the Chair is that much of the discussion that has gone on during the last half hour or so with reference to the conduct of judges is rather irregular. I would again suggest that hon. Members bear that in mind.


David Orlikow: I defer, of course, Mr. Chairman, to your ruling. I do not think I was questioning the particular case involved; I was asking questions about the payment which has been made to the judge and was making the observation that, in my opinion, judges

June 25. 1965
Judges Act
are really no different from anybody else and should be treated in the same way as anybody else. I think the hon. Member for Vancouver East has raised a very good point.
I should like to return for a moment to the question raised by the Leader of the Opposition in regard to Mr. Justice Landre-ville a matter which has been raised a number of times. It seems to me that the hon. Member for Greenwood raised it when the former Minister of Justice, who is now High Commissioner to the United Kingdom, was still in the House. He raised it several other times as well. Some weeks ago he raised it when reports appeared in the press that the Benchers of the Bar Association of Ontario had made a submission to the Minister of Justice. Speaking from memory it seems to me that the Minister of Justice replied that he had received a communication from the Bar Association of the Province of Ontario and that he was considering the matter. I cannot think of a better time to get a report from the Minister on this matter than now, when we are considering the question of new appointments to the Supreme Court Bench of the Province of Ontario. I hope we will get some reply from the Parliamentary Secretary, or failing that that we will leave this matter over until a day when the Minister of Justice could answer some questions in this regard.


Robert Norman Thompson: Mr. Chairman, I just want to refer back to the topic under discussion, before we leave it, if you will give me permission to do so. Did I understand the Parliamentary Secretary to say that certain judges of the court who have had charges made against them and who are still receiving remuneration, are doing so because of certain existing statutory regulations? Do I take it this is apart from any Government policy, and that it is a regulation which permits this to happen?


Donald Stovel Macdonald: I must apologize to the hon. Member. I was momentarily diverted.
[DOT] (5:30 p.m.)


Robert Norman Thompson: Is the Parliamentary Secretary stating to the House that statutory regulations are the reason for this situation existing whereby these judges now before the courts are receiving their salaries and that it is not a matter of Government policy?


Harold Edward Winch: May I ask a more direct question? Will the Parliamentary Secretary give the Committee the statutory authority whereby judges under sentences which have been

appealed are paid their full remuneration? Where is that authority?


Donald Stovel Macdonald: Mr. Chairman, I would point out that section 9 of the Judges Act, which sets out the judicial structure, or rather the salaries of the judges of the Province of Quebec, provides a statutory right in the judge to receive a payment. The opinion which I have advanced, and which was advanced in answer to the question on the basis of the Department's advice, is that there are no provisions now in the Judges Act which would entitle the Government to suspend payment to that particular judge while his appeal is pending. The status of the matter is that there is an absolute right in the judge under these circumstances to receive a salary. There is no right in the Crown-I am tendering a legal opinion here- to withhold payment of all or any part of that salary until the matter is determined.


Harold Edward Winch: Does this apply in Ontario?


Donald Stovel Macdonald: I would say that the general provisions of the Judges Act would apply equally to all the provinces of Canada, and to the territories.


Harold Edward Winch: Does that mean then that when a judge has been found guilty of a charge and has appealed but is not now sitting as a judge, the law of Canada is that he has the right to draw his full salary as though he were sitting? In other words, under these circumstances there is no provision in the law of Canada to grant leave without pay? Is the Parliamentary Secretary saying that the law of Canada says that if a judge is in the position that two judges are, one in Ontario and one in Quebec, he can be granted leave but he cannot be granted leave without pay? Is that the situation?


Donald Stovel Macdonald: The opinion of the law officers, which I have advanced several times today and in answer to the question the other day, is that there is no right to suspend payment under these circumstances.


David Orlikow: Mr. Chairman, it is not surprising that this is so because, speaking from memory, this is the first case of this kind that we have had in Canada. However, having had one case it seems to me there is the possibility that we may have another similar case at some time in the future. Therefore I suggest that when the Government was bringing in this resolution it should have brought in another, or at least included a provision in this resolution to
June 25, 1965
provide for holding the salary payment in trust until the case is finally disposed of.
In my view the Government and the people of Canada are going to be in an extremely difficult and somewhat ridiculous situation because, as we all know, it can take six months, a year or two years before the case is ruled on by the highest court of appeal, and if that court rules in the same way as the initial trial court, where will we be? This person will have drawn a pretty healthy salary for all these months and years and so far as I can see there will be no way of recovering the money. I do not think we can fault the Government for not foreseeing something that has never happened before, but now that it has happened it seems to me the Government should have taken steps to protect the people of Canada in the future.


Harold Edward Winch: I have one more question, and it is not hypothetical but direct. If a judge is found guilty of perjury and the verdict is confirmed, will the Parliamentary Secretary tell me whether that judge, be he from Quebec, Ontario or anywhere else, will then be entitled to a pension as though he were not a criminal?


Donald Stovel Macdonald: I think the hypothesis that the hon. Member has stated has just disabled his question. In any event, he has asked me for a legal opinion which I do not think it would be appropriate to give in general terms at this time.


Gordon Minto Churchill: Mr. Chairman, I have a suggestion to make. We have been dealing with a problem which has far reaching consequences. The Minister of Justice really should be here to answer questions, although the Parliamentary Secretary has been dealing with them very ably. Perhaps the Acting Prime Minister will agree that in view of the time element the Committee should rise and report progress on this matter and let it stand until the Minister of Justice is here. We could then resume in committee to deal with the two resolutions on veterans affairs, and endeavour to pass those so we will have the bills to study over the week end. If this is agreeable to the Acting Prime Minister I think the Committee generally will agree to rise and report progress.


Paul Joseph James Martin: Mr. Chairman, I think we all agree that the Parliamentary Secretary has handled the matter very well. However, I agree to the suggestion.
2897
War Veterans Allowance Act


Gordon Minto Churchill: I therefore move that the committee rise, report progress and ask leave to sit again.


Lucien Lamoureux: Is the motion going to be submitted formally or is there agreement that we should rise?


George James McIlraith: Yes, there is agreement.


Lucien Lamoureux: I am sorry; I did not realize that and I apologize.
Progress reported.



WAR VETERANS ALLOWANCE ACT


Roger-Joseph Teillet: that the House go into Committee to consider the following resolution:
That it is expedient to introduce a measure to amend the War Veterans Allowance Act, 1952, to incorporate into the Act Schedule A as authorized by the Appropriation Act No. 10, 1964; to allow for further exemptions in property and income; also to provide for certain changes in connection with the administration of the Act.
Motion agreed to and the House went into Committee, Mr. Lamoureux in the Chair.


Roger-Joseph Teillet: Mr. Chairman, in accordance with requests from some hon. Members and of the veterans organizations and their officials I propose to take a moment or two to place on the record a brief history and some facts pertaining to the proposed bill.
The War Veterans Allowance Act, now in its 35th year of operation, has been amended 12 times since it was first passed in 1930. These amendments from time to time have broadened the scope of the Act which has become one of the most rewarding Acts contained in the Veterans Charter. Originally known as the "bumt-out" pension, it has been designed to help qualified veterans who, by reason of age or infirmity, are no longer able to make their way in earning their living, and to provide maintenance to widows and orphans of recipients of the allowance. The importance of this Act and the expansion of its benefits since 1930 have been substantial, so that at the end of this last fiscal year 84,213 veterans, widows and orphans were recipients under the War Veterans Allowance Act at a cost of approximately $91,500,000.
[DOT] (5:40 p.m.)
Due to the passage of time, only one veteran of the Northwestern Field Force Campaign of 1885 remains on the War Veterans Allowance rolls. For the second year

June 25. 1965

War Veterans Allowance Act in succession, also due to the ravages of time, the number of approved applications from the veterans of World War I has been less than the number of approved applications from veterans of World War II. However, the number of recipients has steadily increased. I feel you will agree it is a source of pleasure to know that our aging veteran population has this security provided for them as they reach the end of the road, either by reason of failing health or age.
In the bill which the Government proposes to bring before you, you will be asked to increase the maximum equity in real property which is allowed a recipient. At the present time, when a recipient enters hospital, a small deduction from his allowance is mandatory under the Act. You will be asked to consider an amendment to abolish any reduction of the allowance when a recipient is hospitalized. This I know will be a welcome amendment for many of our veterans who from time to time enter hospital.
The bill will ask also for amendments granting certain additional discretionary powers to the War Veterans Allowance Board and to improve the administration of the Act.
The substance of the amendments that will be presented in the bill will in effect be a corollary to the increases in the rates and the substantial increases in the ceilings, that were passed by the House last December, these increases being retroactive to September 1, 1964. At that time, I would remind you, the single rate was increased from $84 to $94 per month with the single ceiling being raised, on a monthly basis, from $108 to $133; the married rate at that time was raised from $144 to $161 per month and the married ceiling, on a monthly basis, was raised from $174 to $222; orphans rates were also increased proportionately. Veterans organizations and veterans at large have expressed their satisfaction with those increases which are now enjoyed by approximately 90,000 recipients of the allowances.
It has been the history of this House that improvements in veterans legislation have always received wholehearted support and I am sure that the bill, which stems from this resolution, coupled with the very recent retroactive increases in the rates and ceilings granted last December, will improve the War Veterans Allowance Act which is designed to benefit that portion of our veteran population now advanced in years.


Gordon Minto Churchill: With this explanatory statement on the record, I think it is agreeable to the Members of our party to postpone discussion until we have the bill in front of us. Therefore we, without debate, would pass the resolution and first reading.


Herbert Wilfred Herridge: Mr. Chairman, this group agrees to take the same course of action. I am glad the Minister made the explanation in respect of the bill. If we can get first reading of the bill this evening, we will have an opportunity to read it over the week end, and then I presume deal with second reading early in the week. If we have any comments to make, they can be made at that time.
Resolution reported and concurred in.
Mr. Teillet thereupon moved for leave to introduce Bill No. C-127, to amend the War Veterans Allowance Act.
Motion agreed to and bill read the first time.



VETERANS' LAND ACT


Roger-Joseph Teillet: that the House go into committee to consider the following resolution:
That it is expedient to introduce a measure to amend the Veterans' Land Act:
To establish a revolving fund for certain capital receipts and expenditures to be called the Veterans' Land Act Fund;
To provide authority for the Director to pay certain debts incurred by veterans to make improvements to land;
To give the Director greater discretion in varying the payment terms of an agreement between the Director and the veteran entered into under subsection (1) of section 10;
To change the basis for determining the maximum limit of financial assistance that may be given to a veteran under subsection (3) of section 10;
To allow a veteran to lease premises occupied by him under a contract under section 10 after the expiration of a period of ten years;
To authorize the Director, with the consent of the Minister, to enter into a contract with a veteran who is in default in respect of a contract previously entered into under the Act;
To require the Director to accept the amount of a contract debt as the cost to the Director before the expiration of ten years from the effective date of the contract under certain conditions;
To extend the purposes for which the proceeds of sale of land, improvements, livestock or farm equipment may be used;
To extend the purposes for which funds may be advanced by the Director to a veteran under subsection (1) of section 15;
To authorize the Director to grant assistance to veterans who have received assistance under the
June 25, 1965

Veterans' Land Act
Veterans Rehabilitation Act or the War Service Grants Act under certain conditions;
To extend the purposes for which a grant may, pursuant to sections 38 or 39, be used;
To increase the maximum home construction assistance from twelve thousand dollars to eighteen thousand dollars;
To increase the maximum loan available under section 64 from twenty thousand dollars to forty thousand dollars and to extend the purposes for which a loan, pursuant to this section, may be used;
To extend the purposes for which a loan may, pursuant to section 64A, be used, to increase the maximum loan available thereunder from twelve thousand dollars to eighteen thousand dollars and to vary its provisions under certain conditions;
To reduce the deposit payable by a veteran under section 65, to extend the purposes for which a loan made thereunder may be used, to increase the maximum loan available under this section from four thousand eight hundred dollars to ten thousand dollars and to provide for adjustment on loans partially advanced at the coming into force of the amendment;
To provide for consolidation of all outstanding farm improvement assistance loans between a veteran and the Director in one agreement and, for the purposes of such consolidation, to authorize appropriate variation of the repayment period specified in each of the outstanding agreements;
And to provide further for certain changes in consequence thereof and also in connection with the administration of the Act.
Motion agreed to and the House went into Committee, Mr. Lamoureux in the Chair.


Roger-Joseph Teillet: Mr. Chairman, the proposed amendments to the Veterans Land Act will update its provisions to serve the needs of veterans already settled on farms, small holdings and other properties across Canada. They will also make available increased loan amounts for those veterans who wish to be established under the provisions of the Act. Some new concepts leading to improved administration are incorporated as well.
Land settlement legislation for veterans has been a feature of Canadian agriculture for 47 continuous years. Experience under the Soldier Settlement Act after World War I and the Veterans Land Act, after World War II has led to the development of policies, particularly in the field of farm credit, that have had a major impact on Canadian agriculture. Once again, the proposals outlined in the resolution will encompass the application of new techniques which may serve as a pattern for a fast changing Canadian picture.
Realizing the great desire of most veterans to remain under the Veterans Land Act, the farm financial amendments will be brought in line with those of the federal Farm credit Act. Not only is it proposed to increase the maximum loan ceiling for farms to $40,000, but the purposes for advancing assistance will be broadened. Consistent with the pattern of a changing farm community,
where new sources of income are developing largely from the tourist and summer recreation trade and other non-farm sources, financial assistance will be provided to assist a small farmer to develop a small business which may not be related to farming. He may utilize an appropriate part of his farm for tourist or recreational purposes or he may engage in some activity connected with agriculture and forestry development. Evidence indicates that the small farmer must supplement his income from sources other than farming. Admittedly, the land belonging to some small farmers will be absorbed by others, but for the majority of that group who will remain on their farms there is merit in providing an opportunity to take advantage of this new source of off-farm income.
It is anticipated that when the qualifying period is ended as of October 31, 1968, there will exist about 20,000 veterans who will be eligible to take advantage of the Act. Nearly all of this number will apply as small holders, officially classified as part-time farmers. The maximum loan ceiling for this group and for commercial fishermen will be increased to an amount comparable to that available from the Central Mortgage and Housing Corporation. It will be possible to have $18,000 to buy a property and repay reestablishment credit for a $2,600 down payment. Veterans who wish to be established after the cut-off date of October 31, 1968, must have been issued a V.L.A. qualification certificate. Those who are qualified in this manner need not have repaid re-establishment credits at that date since it will be possible, if desired, to have this amount incorporated in the subsequent agreement of sale with the Director of the Veterans Land Act.
Among the changes which might be classed as administrative, greater flexibility will result and I would like to mention a few of these proposals. They are, the establishment of a Veterans Land Act revolving fund of $380 million for supplying capital loan expenditures, which will facilitate the lending functions; arrangements to permit the payment by a veteran of interest only during adverse crop periods or sudden periods of long illness; arrangements to reduce the minimum amount of group life insurance to 50 per cent of the. debt and to permit the veteran's spouse to be covered. Then, proposals will be made which will make the veteran responsible for maintaining insurance on his buildings. A further change will widen the purposes for a grant on Dominion, Provincial and Indian land settlements, and en-

June 25, 1965
Business of the House
sure all veterans are treated in a like manner when their property is taken for public purposes.
[DOT] (5:50 p.m.)
In order to motivate qualified veterans to ultilize the provisions of the Act without undue delay after 1968, applications for financial assistance must be made by March 31, 1974. Applications for additional loans from any established veteran will not be accepted after March 31, 1977. By this late date the average age of veterans will be approximately 62 years. As a consequence of inserting these dates in the Act the Director can retain and utilize his trained staff to the best possible advantage.


Gordon Minto Churchill: Mr. Chairman, so far as our party is concerned we propose to follow the same course on this resolution as on the other one-pass it now and get first reading, and then make our comments on second reading when it comes before the House again, and in Committee of the Whole. We have the Minister's statement, and if we have time to study the bill over the week end, this will be satisfactory.


Herbert Wilfred Herridge: This is a very important amending bill and has been necessitated by changing circumstances. We in this party are quite willing, having heard the Minister's statement, to support the passing of the resolution and have first reading, so that we can have his statement and the bill to examine over the week end, and make our contributions on second reading and in Committee of the Whole.
Resolution reported and concurred in.
Mr. Teillel thereupon moved for leave to introduce Bill No. C-128, to amend the Veterans Land Act.
Motion agreed to and bill read the first time.



BUSINESS OF THE HOUSE

George James McIlraith: Mr. Speaker, in indicating the business for Monday I may say it had been the intention of the Government to move to go into Committee of Supply on Monday, to give hon. Members an opportunity to express their views on the course which the Government has followed with respect to the Address to the Queen concerning the Legislative Council of Quebec. The representatives of
the parties opposite have indicated that they do not wish to use that opportunity for that purpose. Since the interim supply debate will give an opportunity for any hon. Member who wishes to express his views on that question, the Government has decided to call interim supply on Monday, as soon as we have disposed of the third reading of the Income Tax bill.
With regard to the passage of other legislation yet to be disposed of, perhaps it would be better if I were not too rigid at the moment as to the sequence in which it will be presented.


Gordon Minto Churchill: May I first say with regard to the early part of the Minister's statement that we never accept the situation, here, where the Government suggests to us what we will do in the time at our disposal. If we want to move amendments on interim supply they will be amendments of our choice.


George James McIlraith: That is what I sought to make clear.


George Louis Chatterton: Will the bill respecting veterans legislation be available?


Roger-Joseph Teillet: It is available now.


William Arnold Peters: Is it the intention of the House Leader to have Wednesday as a target date for adjournment for summer recess?


George James McIlraith: Well, Mr. Speaker, I hesitate to be very dogmatic about these things because I find I get into trouble if I indicate a specific date for adjournment; but it was the hope that we could come to adjournment for the recess possibly late on Tuesday night. There are just the veterans legislation, interim supply, supplementaries, and the bill indicated in the Prime Minister's statement having to do with incentives to designated areas, to be dealt with.


William Arnold Peters: With respect to the new incentives to designated areas, is it the intention of the Government to proceed only with the resolution stage? This is a fairly extensive measure.


George James McIlraith: No; it is the intention to proceed with the bill. I think when hon. Members see it they will find that that is the desirable course, and will commend itself to them.
At six o'clock the House adjourned, without question put, pursuant to Standing Order.
June 25. 1965



APPENDIX


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Table I

[Stage Direction]
Applications Approved For Training 1953-1964 and Estimated to 1968
	Cases	Projection of
	Approved	New
	For	Cases
Year	Training	Anticipated
1953-54	306	
1954-55	187	
1955-56	186	
1956-57	193	
1957-58	234	
1958-59	300	
1959-60	330	
1960-61	367	
1961-62	448	
1962-63	374	
1963-64	354	
1964-65		275
1965-66		240
1966-67		180
1967-68		160
1968-69		130
Note: The projection in this table is based upon known potential students in secondary schools.
Approved
for
Training
400
200
i I I I 1 ! I I I i I I I I I i 1
2902	COMMONS DEBATES	June 25, 19G5
June 25, 1965
[Stage Direction]
Table II

[Stage Direction]
Number of Students in Training at the Year-end 1953/54 to 1964/65 and Estimates to 1971-72.
	No. of Students	Estimate of Active Training Strength
	In Training at	at
Year	Year-end	Year-end
1953-54	281	
1954-55	348	
1955-56	411	
1956-57	462	
1957-58	475	
1958-59	579	
1959-60	696	
1960-61	821	
1961-62	942	
1962-63	955	
1963-64	1,014	
1964-65	920*	
1965-66		840
1966-67		790
1967-68		700
1968-69		600
1969-70		500
1970-71		450
1971-72		420
* Based upon figures at December 31, 1964 -estimated to March 31, 1965.
Note: The estimates in this table are based upon current trainee load, estimated intake and a course length of 4 years for university and 3 years for nursing and technology courses.
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8 at
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3 at
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at CO at
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at
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2904
[Stage Direction]
COMMONS DEBATES
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June 25, 1965
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June 25, 1965
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Table III
CHILDREN OF WAR DEAD (EDUCATION ASSISTANCE) ACT Expenditures 1953/54 to 1963/64 with Estimates to 1971/72
		(to nearest $100)		Estimated Total
	Cost of			Cost (Including
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Year
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Fees
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Allowances
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Total
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Proposed Arndts.)
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$
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$
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$
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$
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1953-54
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59,600
[Stage Direction]
47,200
[Stage Direction]
106,800
[Stage Direction]
1954-55
[Stage Direction]
78,400
[Stage Direction]
76,500
[Stage Direction]
154,900
[Stage Direction]
1955-56
[Stage Direction]
97,800
[Stage Direction]
84,700
[Stage Direction]
182,500
[Stage Direction]
1956-57
[Stage Direction]
109,600
[Stage Direction]
97,900
[Stage Direction]
207,500
[Stage Direction]
1957-58
[Stage Direction]
113,400
[Stage Direction]
102,700
[Stage Direction]
216,100
[Stage Direction]
1958-59
[Stage Direction]
143,000
[Stage Direction]
145,800
[Stage Direction]
288,800
[Stage Direction]
1959-60
[Stage Direction]
181,000
[Stage Direction]
196,600
[Stage Direction]
377,600
[Stage Direction]
1960-61
[Stage Direction]
229,600
[Stage Direction]
234,600
[Stage Direction]
464,200
[Stage Direction]
1961-62
[Stage Direction]
294,600
[Stage Direction]
265,700
[Stage Direction]
560,300
[Stage Direction]
1962-63
[Stage Direction]
316,500
[Stage Direction]
331,800
[Stage Direction]
648,300
[Stage Direction]
1963-
[Stage Direction]
64 1964-
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65
[Stage Direction]
345,200
[Stage Direction]
386,700
[Stage Direction]
731,900
[Stage Direction]
845,000*
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1965-66
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756,000
[Stage Direction]
1966-67
[Stage Direction]
711,000
[Stage Direction]
1967-68
[Stage Direction]
630,000
[Stage Direction]
1968-69
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540,000
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1969-70
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450,000
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1970-71
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405,000
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1971-72
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378,000
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* Approximately $20,000 of the increase due to increased fees and balance due to proposed increase in allowances.
Note: Estimates of costs are based upon basis of 1964-65 levels of fees and proposed levels for allowances.
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2906
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COMMONS DEBATES
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Monday, June 28, 1965