1965-06-29

COMMITTEES OF THE HOUSE


Mr. J. T. Richard (Ottawa East):: Mr. Speaker, I have the honour to table the first and second reports of the Standing Committee on Transport and Communications.
With the consent of the house, I intend to move that the first report only be concurred in.
[Editor's note: The text of the said report appears in today's Votes and Proceedings.]


Mr. Alexis Caron (Parliamentary Secretary to Postmaster General):: Mr. Speaker, I
cannot support the motion for concurrence in the first report of the Standing Committee on Transport and Communications, because I object to the fact that the committees sit at the same time as the house, as I did when I was in opposition.
I therefore ask that the vote be taken on division.


Mr. Real Caouelle (Villeneuve):: Mr. Speaker, it does not often happen that I agree with the hon. member for Hull (Mr. Caron), but under the circumstances I fully agree with him. We do not want this report to be concurred in because we have already been blamed by the member for Saint-Maurice-Lafleche (Mr. Chretien), who is not in the house at the present time-


Mr. Gregoire:: He is never here.


David Réal Caouette: -for not attending sittings of the committee, when the committee was sitting at the same time as the house.
That is why we object to the report being now concurred in.


Mr. Speaker:: As there is not unanimous consent I cannot at this time permit the motion.


EXTERNAL AFFAIRS-CONCURRENCE IN SECOND REPORT OF STANDING COMMITTEE
[Stage Direction]
Mr. John R. Matheson (Leeds) presented the second report of the Standing Committee on External Affairs, and moved that the report be concurred in.
Motion agreed to.
[Note: Text of the foregoing report appears in today's Votes and Proceedings.1
[Stage Direction]
Mr. James Forgie (Renfrew North) presented the first report of the Standing Committee on Veterans Affairs, and asked for unanimous consent to move that the report be concurred in.
Mr. Speaker:: I understand that the House gives the hon. Member consent to present his report. Is it agreed?


Some hon. Members:: Agreed.


Alexis Pierre Caron: Mr. Speaker, is the house prepared to concur in this report?
I should like to say once again that the committee should not be allowed to sit at the same time as the house. I was against that when I was in the opposition and I am against it now; the report will be concurred in on division, because I am against it.


Mr. Speaker:: There is no motion before the House at the moment.


Mr. Forgie:: Mr. Speaker, if the House gives consent I move, seconded by-


Mr. Speaker:: Order, please. There is no motion before the House due to the lack of unanimous consent.
[Note: Text of the foregoing report appears in today's Votes and Proceedings.1



ADMINISTRATION OF JUSTICE


Right Hon. L. B. Pearson (Prime Minister):: I wish to table two copies in English

June 29, 1965
Commonwealth Conference Report and two copies in French of the report of the Commissioner, Hon. Frederic Dorion, Chief Justice of the Superior Court of the Province of Quebec.
Mr. Speaker, I received this report on my return from London last evening. I have been examining it with my colleagues. With the consent of the House I would like to make a short statement in connection with it, if the House would give me permission, at the end of private Members' hour at seven o'clock this evening.


Mr. Speaker:: The House has heard the request of the Prime Minister. Does the House agree?


Some hon. Members:: Agreed.



COMMONWEALTH CONFERENCE


Lester Bowles Pearson: Mr. Speaker, I would like to table two copies in English-1 regret that it has not been possible yet to translate it into French- of a communique of the meeting of the Commonwealth Prime Ministers which has just concluded in London. This is a long communique covering a variety of subjects, because there were a variety of subjects on the agenda. I could, of course, make quite a lengthy statement on the communique. Perhaps it would be the wish of the Members of the House that this report appear as an appendix to Hansard so that all hon. Members would have an opportunity to study it. There might be an opportunity later for a discussion of the communique in the Committee on External Affairs or in the House.
Perhaps at this moment I could say only this, Mr. Speaker. There were two subjects which dominated the discussions. One was the proposal made by the Chairman of the Conference, the Prime Minister of the United Kingdom, on the opening day of the Conference, that the Commonwealth should choose certain of its members to initiate, if they could, by visits to the countries and the interests concerned, negotiations for a peace settlement in Viet Nam. That caused a good deal of discussion. Eventually there was agreement with regard to the personnel of the mission and the terms of reference of the mission.
I do not know whether this mission will be able to accomplish what it has in mind. It was an initiative taken by the Commonwealth, I think a valuable one and a timely one, par-

ticularly in view of the fact that it is not possible, at this time at least, for the Secretary General of the United Nations to take an initiative, or indeed any other international organization. Even if the mission itself is not able to accomplish what it hopes to accomplish, I do believe that the effort was well worth making.
The other major matter, major only in the sense that it caused a great deal of discussion and indeed some controversy, was that part of the communique which deals with Rhodesia. After long and very vigorous discussion the paragraphs on Rhodesia included in the communique were agreed to by all the members of the Commonwealth except one, who made reservation in connection with this particular section.
The importance of the Rhodesian paragraphs is that the Commonwealth members themselves, all of them without exception, came to the conclusion that there could be no final solution of this very difficult problem except on the basis of majority rule. The difference was over the timing of the processes which would lead to that final settlement. The United Kingdom Government, which have the responsibility of leading the people of Rhodesia to independence and majority rule, have accepted these principles in theory, and they have agreed-and this represents, I think, a pretty courageous advance on the part of the United Kingdom Government-if direct negotiations break down, to consider a constitutional conference, which is what the African members of the Commonwealth have been advocating.
I can only say, Mr. Speaker, that this was not only the largest of the Commonwealth Conferences, there being 21 members, but we learned at this Conference that at the next meeting, whenever it will be held, there will be four or five new Commonwealth members. It was a very difficult Conference, and in view of the difficulties and importance of the subject matters which were discussed we can take some satisfaction from the fact that this meeting was able to agree on a communique of this kind and, more important, was able to discuss such difficult and controversial matters in that spirit which characterizes Commonwealth meetings, even in respect to subjects on which it is not always easy and indeed is sometimes impossible to find unanimous agreement.


Mr. Speaker:: Does the House give unanimous consent to the printing of the communique as an appendix to Hansard?
June 29. 1965


Some hon. Members:: Agreed.
[Editor's note: For text of communique referred to above, see appendix.]


Right Hon. J. G. Diefenbaker (Leader of the Opposition):: Mr. Speaker, I have not yet had an opportunity of reading the communique; the excerpts which were in the press were not complete. However, there are one or two references that I should like to make.
The first is to welcome the Prime Minister back to the House after a long and arduous meeting. No one who has participated in Prime Ministers' Commonwealth Conferences can forget that they are periods of very strenuous effort and work; and the fact that a communique was able to be determined upon is a further compliment to the Commonwealth and its representatives. The Prime Minister has said it was the largest Commonwealth meeting that has ever taken place. In 1957, as I recall it, there were nine members. Today there are 21, the large majority of whom are of another race, colour and religion to those ordinarily associated with the white continents.
I say at once that while the Prime Minister of the United Kingdom has spoken of the success of this Conference in rather eulogistic terms, my own feeling is that this Conference indicates once more the tremendous power of the Commonwealth and its membership in being able to achieve agreement in those larger things of life, while at the same time maintaining a sense of independence on the part of each of those who belong thereto. That it is a flexible institution is again revealed in the fact that the communique which has been issued illustrates that out of disagreement they have been able to arrive at a reasonable consensus.
While I did feel that in the intervening years between 1957 and 1962 there was among certain sections of the United Kingdom a diminishing belief in the mission of Commonwealth, recent events of the last session do indicate that much has been achieved. One has only to compare the meeting of the Prime Ministers with the collapse of the Algerian conference on the tenth anniversary of Bandung to realize that something of first importance to peace and the world brotherhood has been achieved by this Conference, a continuation of the results that were achieved at the previous Conferences. On the other hand, when you realize that after the war there were five white Christian nations and that today the membership of this unex-
Commonwealth Conference Report plainable institution consists overwhelmingly of those of other religious faiths, the ability to bring them together under the Crown, whether as monarchies or in the capacity of heads of the Commonwealth, is a triumph of statesmanship in the British tradition.
It is hard to explain that institution and I suppose no one will ever be able to do so; that is, how to bring together people with so many dissimilar views who are able to achieve something in the nature of a communique. Indeed, I was of those who felt that the day of communiques on the part of the Commonwealth Prime Ministers' Conference was over. I thought the general attitude of the various nations making up the Commonwealth would lead to a condition of affairs that would at best be exemplified by discussion rather than by agreement.
The Prime Minister did not go into very much detail today. He told us in a sketchy way something about the peace mission. I do not want to be critical in that connection but, if my information is correct, I think the Prime Minister of the United Kingdom, before having launched this plan, should have discussed it in advance through diplomatic communications with the various nations of the Commonwealth. I am told that until the opening of the Conference or shortly before the commencement of the first session the only Prime Minister who had information thereon was Sir Robert Menzies, Prime Minister of Australia. That is not the way to make effective, strong and positive Commonwealth initiatives.
In its composition 1 think the mission failed in advance because of the refusal of the various capitals to accept the suggestion that an Asian representative should be invited. Without an Asian representative the potential authority of any such mission was materially reduced. It is apparent that during the course of discussion the original concept, which was that of a mission of inquiry, was changed, and that substituted therefor was the proposal for certain guidelines to solve the ever more serious situation that is developing in Viet Nam. The guidelines included, first, cessation of military action by both sides and, second, recognition of the Viet Cong as one of the parties to be considered and recognized as an entity.
I would be interested to know what the reaction of the United States President was to this proposal. Apparently it was discussed by him and the Prime Minister of Australia prior to the conference opening. Does the Government of the United States agree now
June 29, 1965

Commonwealth Conference Report that any conference that may be called for the purpose of discussing the matters in issue shall include the Viet Cong?
I think too that the mission was weakened in advance by having chosen as its Chairman the Prime Minister of the United Kingdom who, while entitled to every eulogy for having brought about something in the nature of a plan, in my opinion ought not to have been chosen as Chairman of such a mission. Indeed, I doubt very much that he should have been a member of the mission, in view of the strong stand he had taken in the Parliament of the United Kingdom in favour and in support of the stand taken by the United States in Viet Nam. There was a realization on his part that those who glibly criticize what the United States is doing have no alternative to offer, and that the withdrawal of the United States from South Viet Nam would mean danger to all of us who believe in freedom everywhere in the world. That has been the view of the socialist Government of the United Kingdom, and it is a view that is generally shared, I think, throughout the world.
Where do we go from here? I had hoped that the Prime Minister would give the House some lead in this connection. Is this peace mission dead or is it merely in a state of suspended animation? What further course is contemplated to meet the ever worsening situation? In the last few days the United States has added to the number of its men in the force there and yesterday, apparently for the first time, went on its own initiative against the Viet Cong. That can only lead to more serious developments, and I would have hoped the Prime Minister would not have been so careful in the number of words he used so that we might have had some idea of the viewpoint of the Prime Ministers of the Commonwealth regarding a situation that shows no sign of improvement. Indeed, in the last few days it has revealed potentially dangerous steps which can only lead to an escalation in the face of which the world stands in awe and fear.
So far as Rhodesia is concerned, we are not very clear as to what was the viewpoint advanced by the Government of Canada. The Prime Minister said there was general agreement that a conference should be convened, apparently on the basis of universal suffrage. Was that Canada's viewpoint? What are the hopes that this problem will be capable of solution before it brings about in its wake frightening possibilities in all of Africa? What 

of last year's grandiloquent words in the communique regarding Rhodesia?
Everything seemed to have been reasonably and basically solved by last year's communique, but now we are in a position where the British government is back in the picture as fully as it always was. But there is nothing in this year's communique to make most clear and definite that the Rhodesian problem will be solved in a way that is fair and reasonable to white and black alike.
There are other matters to which reference could have been made, but I say with the greatest frankness to the Prime Minister that those two matters, Rhodesia and the peace mission, lack on his part the information that should have been given to Parliament so that we in this House may not have to depend entirely on press releases or communiques.
Because of other events of this day, such as the bringing down of the Royal Commission report, I can only hope that so important a matter as the position of the Commonwealth in the world of today should not receive the scant consideration which it did on this occasion on the part of the Prime Minister.


Mr. T. C. Douglas (Burnaby-Coquiilam):: Mr. Speaker, we all welcome the Prime Minister back from what I am sure must have been a very strenuous and difficult conference of the Commonwealth Prime Ministers.
I must say I am disappointed that he did not give us more information in tabling this communique, but it may be his intention on interim supply, or some time during the next few days, to elaborate further on what took place at the Conference. I certainly wish he had been less casual and less uncommunicative on a number of matters which are of great interest to this House and to the people of Canada, such as the matter of Commonwealth trade, the matter of the Commonwealth secretariat, and further elaboration about Rhodesia.
We certainly ought to have some statement from the Government before the House recesses, with respect to the situation in Viet Nam. The mission set up by the Prime Ministers' Conference was, in my opinion, a bold and imaginative step. It is to be regretted that the Prime Minister of Ceylon, because of ill health, was not able to be a member of that mission, and I trust it is the intention of the Commonwealth Prime Ministers to invite one of the Asiatic Commonwealth Prime Ministers to act on the mission.
Mr. Speaker, I had hoped the Prime Minister would not only elaborate on the role
June 29, 1965	COMMONS
of this mission to deal with the Viet Nam situation, but that he would make some ringing affirmation regarding Canada's position in this very difficult and dangerous situation. The guidelines which have been set down in the communique are a great step forward, and certainly go much further than anything the Prime Minister has said here in the House or that the Secretary of State for External Affairs has expressed before the House or before the Committee on External Affairs. This communique recognizes something which the Government of Canada has constantly failed to recognize, namely that President Johnson's reiteration of the fact that he is in favour of unconditional peace negotiations has always been qualified, first by the fact that he was not prepared to sit down and negotiate with the Viet Cong, and second that he was not prepared to accept the basic tenet of the Geneva agreement which said that the boundary between North and South Viet Nam is provisional and that if the people want to express their opinions in free vote there is to be the opportunity to unify Viet Nam.
This communique at least recognizes those two important provisos which the President of the United States has always interposed When talking about unconditional peace negotiations. I would have like to see the Prime Minister say today that the Government of Canada espouses and supports the guidelines that have been established at the Commonwealth Prime Ministers' Conference.
As hon. Members well know, the Prime Ministers suggested that the ultimate objective of this mission on the Viet Nam situation was threefold; first, a suspension of all United States air attacks on Viet Nam; second, to get North Viet Nam to undertake to prevent all movement of military forces and assistance to South Viet Nam; and third, a cease fire on the part of all parties pending a conference.
They also set forth four objectives for such a conference; first, the end of the war in Viet Nam; second, the withdrawal of all foreign troops in Viet Nam and the neutralization of the area; third, an international peace force set up under the Geneva accord powers to safeguard the peace in Viet Nam; and fourth, the eventual unification of Viet Nam through free and internationally supervised elections. These, Mr. Speaker, are the kind of guidelines and objectives which are realistic. They are the kind of guidelines that ought to appeal to both sides in this conflict.
I think before this recess the Government of Canada and if possible the Parliament of Canada ought to endorse these proposals. I 22620-190
DEBATES	2991
Commonwealth Conference Report think the Government of Canada should make a special appeal, either on its own behalf or by a resolution of this Parliament, asking the United States to take the first step which is a prelude to all the other steps, namely to suspend all bombing of North Viet Nam. There cannot be any hope for discussions or negotiations with a country which day after day is watching its towns, cities and installations being bombed and its people being killed. The other night over the C.B.C. someone who had been in Viet Nam gave it as his opinion that three out of every four persons being killed in North Viet Nam as a result of the bombing were women and children; civilians. If this is true, the resentment which must be building up in that country will in my opinion make it impossible to get any peaceful negotiations. If as a precedent to the rest of the objectives set down by the Prime Ministers' Conference the suspension of the bombing of North Viet Nam is placed first, I think the Government ought to say so and this Parliament ought to say so.
I am sure we all wish the Prime Ministers' mission on Viet Nam every success. I think we should recognize that the chance of their succeeding is very small unless they receive co-operation from both sides. It seems to me that the first step in this co-operation must come from our good friends and neighbours in the United States; it must be to discontinue the bombing as suggested by this communique.
I hope before we recess there will be further opportunities to refer to this subject so the Prime Minister can tell us something more about the Conference and, above all, so he can state categorically his own position in support of this communique, to the end that the world, and particularly the United States, may know that the Canadian Government and the Canadian Parliament are in support of these objectives, without which there seems to be little prospect of a solution being found. The fact that the Prime Ministers' Conference recognized the danger of escalation; the fact that it stated there seems to be no hope for a military solution; the fact that it concluded there must be a cease fire and a conference, all constitute a recognition that some breakthrough must be made. And the first step, it seems to me, is to get a cessation of the bombing as a prelude to a cessation of hostilities.


Mr. R. N. Thompson (Red Deer):: We join in welcoming the Prime Minister back in our midst. We have followed with great interest
2992	COMMONS
Commonwealth Conference Report the reports which have come to us of the proceedings at the Commonwealth Prime Ministers' Conference. We are pleased that Canada is continuing to play a distinguished role as senior member of the Commonwealth and continuing to hold the respect of the newer members of the Commonwealth, as has been the case through recent years.
We are glad to have this copy of the communique. We wish a more detailed report could have been made with regard to what was accomplished and what went on during the deliberations of this Conference. I was disturbed to read in the press, and to hear over radio and television, speculation by some of our Commonwealth leaders about whether the Commonwealth could be held together. Indeed, there was a program broadcast by the C.B.C. on Sunday night, I believe, in the course of which the Prime Minister was interviewed, and the right hon. gentleman was reported to have said it would be a difficult task to prevent the Commonwealth from disintegrating. Remarks such as these characterize the situation which is prevalent in the world today.
I think there is something we should all realize when we try to define and understand just what the Commonwealth is; that is, when we think of the basic ingredients which brought the Commonwealth into existence and which account for the influence it exercises among its members and in a wider field. I am convinced that the reason the Commonwealth came into existence, and the reason it will continue to play a vital role, is simply that it is founded on the greatest heritage that we in the Commonwealth enjoy, namely the concepts of parliamentary government, British justice and freedom.


Mr. Herridge:: That is true.


Robert Norman Thompson: These characteristics of responsible, representative Government are the very warp and woof that go to make up the Commonwealth. While in the present world situation we may well be concerned about the problems we face, we should take courage from the fact that these principles will apply, on our part, to the solution of these problems.
We have listened with interest to the statements made by hon. Members who have spoken, particularly as they relate to the decision to form a Commonwealth Viet Nam peace mission. I think the Commonwealth has been courageous in moving forward on this issue. I join the hon. Member for Burnaby-Coquitlam in doubting whether much will

DEBATES	June 29, 1965
be accomplished by this mission. Certainly not very much can be achieved until there is a willingness on both sides to come together around the negotiation table. I do not know to what extent the prospects of the mission will be improved by lengthy expressions of opinions in this House, but I am sure it is the desire of all of us that it should achieve great success even though the prospects at the present time are not promising. Whether or not the peace mission succeeds, I am sure the effort itself will prove worth while. As such it will be one of the most important results of this recent Conference.
I think I should also refer briefly to the Rhodesian problem. It is encouraging to see that the communique again endorses without hesitation those basic principles which guarantee the rights of human dignity and respect to every person regardless of the colour of his skin or the creed in which he believes. This is a good thing. We recognize that the problem in Rhodesia is not a simple one. We recognize that its solution will not depend upon the wishes of the Commonwealth members alone, because the Government of Rhodesia is obviously determined to carry through the policies it has so definitely announced.
It is important to note that the Conference spent some time discussing economic affairs. One of our greatest responsibilities in the Commonwealth today is to exercise leadership in assisting the emerging nations to raise the living standards of their people. Certainly this is one of the great challenges which we face, and it is in this field of economic development that the Commonwealth has a tremendous, positive responsibility.
There is something in this communique that we have not had time to discuss in detail which I think is worthy of mention. Neither the Prime Minister nor any of those who have spoken have mentioned it. I refer to the agreed memorandum regarding the Commonwealth Foundation. I think each one of us ought to take this part of the communique and study it carefully, because here is one of the very positive programs with which the Commonwealth Prime Ministers dealt. I think it represents one of the most vital programs as far as the Commonwealth is concerned and certainly is of tremendous importance as we seek to raise the standard of economic development and of living in general for those people who live in what we tend to define as underprivileged areas.
This leads me to raise the question of the Commonwealth Secretariat. I think Canada
June 29. 1965

should be commended for understanding that the Commonwealth of the future may have a different form than the Commonwealth of the past, and for having taken the lead in offering one of our most distinguished diplomats to serve as Secretary General of that Secretariat. I commend the Government and the Prime Minister for being willing to part with the services of such an important man as Mr. Arnold Smith has been in our own area of external affairs-I am sure the Secretary of State for External Affairs understands this as well as anybody-in seconding him to an even greater service, one that will serve not only Canada but every part of the Commonwealth. We wish him all the success possible in this very difficult assignment as he plows forward into new ground, developing new policies and laying out a new foundation that I am sure is going to be the heart throb of the Commonwealth in the future. I think we have something to be proud of in this regard, and when I say that I wish Mr. Smith well I am sure all hon. Members of this House heartily ascribe to those good wishes.
So, Mr. Speaker, while we would like to have had a more detailed report from the Prime Minister, and I think it is important that such a report be given, we are grateful for what has been done and for receiving this communique, and we look with confidence to a future that is not all clouds and problems and does hold hope for something better.


David Réal Caouette: Mr. Speaker, we have not had too much time to review the press release just distributed by the Prime Minister (Mr. Pearson). However, I want to express to him my greatest and best wishes on his return from London.
He has stated Canada's views over there and those views were highly appreciated by all the prime ministers attending that meeting of Commonwealth leaders.
When the Canadian Prime Minister took a stand on the Viet Nam conflict, for instance, he was appreciated not only in his own country, but by other Commonwealth prime ministers as well, because the logical position to take was to request a cease-fire in Viet Nam.
Now, according to the communique we have just received, we see the Prime Ministers discussed several matters: Malaysia, the Cyprus situation, Africa, Guinea, the West Indies, disarmament, Rhodesia, the territories belonging to the British Empire or the commonwealth. The economic situation not only 22620-1901
International Labour Conference within the commonwealth but throughout the world was also dealt with.
Mr. Speaker, I believe the United States err, as we of the British Commonwealth also do, when giving assistance to underdeveloped nations, in that while providing help we try to impose our way of life, our habits and customs upon them. And that is a gross error. I have often said that you cannot make white out of black or black out of white, but it is easy to respect both. Here, in Canada, there is talk about biculturalism, bilingualism, two cultures, etc. I often had the opportunity of saying across Canada that you cannot make a French Canadian out of an English Canadian or an English Canadian out of a French Canadian, but that you can make two good Canadians out of those two elements forming our country.
Now, when helping underdeveloped countries, a monumental error is committed in trying to have those people live according to our own way of life. If we give them technical assistance, technical knowledge, education, means to live their own lives, they will then have become our friends. I sincerely believe that the present Prime Minister shares that opinion, for he has made many statements in Canada along those lines in western as well as in eastern Canada, and I believe he shares the view that we must give those people, while letting them be themselves, the means to live decently, to rely on themselves as much as they are able to and to develop according to their own aspirations.
Then, the individual, the human person is respected from the economic standpoint. And while helping those countries we shall help ourselves.



INTERNATIONAL LABOUR CONFERENCE


Hon. A. J. MacEachen (Minister of Labour):: Mr. Speaker, in accordance with article 19 of the constitution of the International Labour Organization, I wish to table the texts in English and French of the instruments adopted at the 48th International Labour Conference held in Geneva, Switzerland, in June and July, 1964. The instruments consist of three international labour conventions and three recommendations.
The constitution of the I.L.O. requires a member state to bring conventions and recommendations "before the authority or authorities within whose competence the
2994	COMMONS
Inquiries of the Ministry matter lies tor the enactment of legislation or other action". In the case of a federal state there is the further obligation to refer instruments which are wholly or partially provincial in legislative jurisdiction to appropriate provincial authorities "for the enactment of legislation or other action", and to arrange for periodic consultations with a view to promoting co-ordinated action to give effect to the provisions of the instruments.
The opinion of the Minister of Justice, a copy of which I am tabling, is that each of the six instruments adopted last July is partially within federal legislative jurisdiction and partially within provincial jurisdiction.
The instruments include a convention and a recommendation on hygiene in commerce and offices, designed to protect the health of workers in commercial establishments and offices, and a convention and a recommendation on benefits in the case of employment injury. Although these matters are well covered in Canadian legislation and practice, there is not complete compliance at present in all jurisdictions with every article in the two conventions. Steps are being taken to explore with the provinces what action might be taken to ensure that all Canadian legislation and practice comply with the conventions, in the hope that they may then be ratified.
The remaining instruments are a convention and a recommendation on employment policy. On the basis of policies followed within the federal and provincial jurisdictions, we believe it is both possible and desirable for Canada to ratify the Employment Policy Convention. We are consulting with the provinces with a view to taking action on this convention at an early date.
As regards the three recommendations adopted by the conference, the question of ratification does not arise, since the I.L.O. constitution does not provide for ratification of recommendations. These instruments set forth standards as a guide for member countries. They will be referred to the appropriate authorities, and I am sure will be studied and found useful at both the federal and provincial levels.



REPORTED STATEMENTS RESPECTING FALL ELECTION

[Stage Direction]
On the orders of the day:
['Mr. Speaker, surely this question should not be taken as notice, on a matter affecting the administration of justice in Canada that has been played around with for so long by the Minister.']
John George Diefenbaker: Mr. Speaker, now that the Prime Minister is back in the House and we are approaching the last day or days before
[Mr. MacEachen.l
DEBATES	June 29, 1965
adjournment, in view of statements which have been made by the Minister of Finance and other lesser luminaries to the effect that an election is to be called this fall, will the Prime Minister now let the House and the country know, as did the Prime Minister of the United Kingdom in the last couple of days, exactly what the position of affairs is going to be in this relationship?


Lester Bowles Pearson: Mr. Speaker, I hope the situation is such that we will be able to embark upon a very well earned recess very shortly. I hope the situation remains such, and that we will be able to come back in September and finish the work we have on the agenda for this session.


John George Diefenbaker: Mr. Speaker, is it the intention of the Prime Minister, as apparently implied by the Minister of Finance, that an election is to be called before redistribution is put into effect?


Lester Bowles Pearson: Mr. Speaker, the right hon. gentleman knows that it would not be proper or normal for me to give expression to my intentions in reply to questions on orders of the day, and I do not think that I can add anything to elucidate this answer.


John George Diefenbaker: I would ask the Prime Minister, are these lesser luminaries, in the statements they are making, justified in so doing, bearing in mind the fact that various presidents of Liberal associations across Canada have been advised to get ready for an election early in October?


Lester Bowles Pearson: Mr. Speaker, I should have thought that my right hon. friend, who has been a Prime Minister, would understand that Cabinet Ministers do make interesting statements and at times even take interesting actions. But I should have also thought that my right hon. friend, who has been claiming that the time has come for an appeal to the people, would be very pleased at emanations of opinion of that kind. I would point out to my right hon. friend that it is not entirely within our control because yesterday, according to information which I received in London, there was an indication that all the Opposition groups were going to defeat the Government, in which case we might have been into an election campaign today.


John George Diefenbaker: I am not unmindful of the fact that the right hon. gentleman referred to a statement made by the Minister of Finance as an emanation. I like that expression. But is it the Prime Minister's intention
June 29. 1965

during the summer recess to call an election so as to prevent the operation of redistribution?


Lester Bowles Pearson: Mr. Speaker, I said I hoped that conditions would be such that we could come back in September and complete our work.


Mr. Stanley Knowles (Winnipeg North Centre):: May I ask a supplementary question, Mr. Speaker. Does the work we will complete when we do come back in September include the Canada Assistance Plan and medicare?


Lester Bowles Pearson: Mr. Speaker, we already have a lot of matters on the program. My hon. friend knows that the particular question he has asked and the particular subjects about which he has asked many questions are extremely important, and we want to make progress in respect of both of them. The extent and the timing of the progress, at least with respect to one of them, will have something to do with the forthcoming federal-provincial conference which opens in a couple of weeks.


Stanley Howard Knowles: A supplementary question, Mr. Speaker. In view of the fact that one of the items I mentioned, the Canada Assistance Plan, was specified in the speech from the throne, will this matter be put on the order paper for action at this session?


Lester Bowles Pearson: I certainly hope we will have completed parliamentary action on this very important matter before the end of the session.


David Réal Caouette: I should like to put a supplementary question, Mr. Speaker.
The Prime Minister held some sort of referendum among the Liberal members not long ago in order to know whether or not an election would be advisable before redistribution. We learned earlier that the redistribution would probably take place before the election if parliamentary business were resumed in September. But I feel the Canadian people would be interested in knowing whether the government intends to call an election before or after the electoral redistribution.


Lester Bowles Pearson: Mr. Speaker, I do not think I can add anything to what I have already said on this very important subject. I am grateful to my hon. friend for taking soundings among
Inquiries of the Ministry the Liberal party. Perhaps he would let me take a poll among the Creditistes.


Gilles Grégoire: Mr. Speaker-


Mr. Speaker:: Order. We have had an extended discussion on this very interesting and important subject. Perhaps we should allow one or two more supplementary questions and then terminate it.


Mr. Lambert:: How about some of the answers, Mr. Speaker.


Mr. Starr:: I wish to direct a question to the Minister of Labour-


Mr. Speaker:: The hon. Member for Lapointe.


Gilles Grégoire: Mr. Speaker, I wish to ask a supplementary question about redistribution.
Can the Prime Minister tell us if it is true that the members of his party are so displeased with the redistribution that they want an election before it becomes effective?


Lester Bowles Pearson: No, Mr. Speaker, I cannot answer that, but I can tell my hon. friend that some of my Commonwealth Prime Ministerial colleagues were very surprised that the Prime Minister of Canada would go off to such an important conference and then find that his seat had been taken from underneath him.



[Stage Direction]
On the orders of the day:
Thomas Clement (Tommy) Douglas: Mr. Speaker, I should like to ask the Prime Minister whether we may now assume that the guidelines and the objectives with reference to a solution to the situation in Viet Nam have been fully endorsed by the Government of Canada and now constitute the foreign policy of the Canadian Government.


Lester Bowles Pearson: Mr. Speaker, my hon. friend probably has not had a chance to examine the communique in the press form in which it was circulated this afternoon, but if he looks at page 3 he will see at the bottom of that page in respect of this particular matter that the meeting, which included Canada, ap-
June 29, 1965

Inquiries of the Ministry proved the statement from which he quoted a few moments ago. We do approve it.


Thomas Clement (Tommy) Douglas: I have a supplementary
question. I congratulate the Prime Minister for this position the Canadian Government has taken, but to be sure that I am perfectly clear about it, does this mean that the Canadian Government is now asking the United States to discontinue bombing North Viet Nam, and that we are in favour of the withdrawal of all foreign troops from Viet Nam and the eventual unification of Viet Nam by free election, under the supervision of a peace keeping force established under the Geneva accord powers?


Lester Bowles Pearson: No, Mr. Speaker. Let me read exactly what the communique says. This is the statement in respect of guidance, and it includes the guidelines for Commonwealth action:
Bearing in mind these considerations and also the purpose of the Mission, it should be guided by the following ultimate objectives during its consultations with the parties principally concerned:
The first two of these should be taken together. Indeed, they were discussed together, and it was agreed that they were very definitely related to each other.
(a)	a suspension of all United States air attacks on North Viet Nam;
(b)	a North Vietnamese undertaking to prevent the movement of any military forces or assistance or material to South Viet Nam.
It was hoped that both these objectives could be achieved simultaneously.


[Stage Direction]
On the orders of the day:
Robert Norman Thompson: Mr. Speaker, I should like to direct a question to the right hon. Prime Minister. In view of the fact that he must have had consultations with the Prime Ministers of other Commonwealth countries such as Malaysia, Australia and New Zealand, can he inform the House whether the reports are true that Canada has been requested to give arms or other forms of material assistance in the struggle of Malaysia with its neighbouring country of Indonesia?


Lester Bowles Pearson: Mr. Speaker, no request was made to the Canadian Government through me at this Conference by the Prime Minister of Malaysia. He did, however, express gratitude to me, and at the Conference itself, for the aid Canada has given his country.
[Mr. Pearson.)


David Réal Caouette: Mr. Speaker, I wish to direct a question to the Prime Minister-


Michael Starr: Mr. Speaker, I rise on a question of privilege. You have recognized the Leader of the Official Opposition for one question, and you are now recognizing, for the purposes of asking a question, the seventh member of an opposition party.


Some hon. Members:: Oh, oh.


Michael Starr: In view of the fact that we are limited to half an hour, I feel that we are entitled to our fair share of that time.


Mr. Speaker:: Order, please. Anyone who has followed the order will realize that as usual we have proceeded down the opposition ranks, starting with the right hon. Leader of the Official Opposition, if I am not mistaken, followed by the leader of the N.D.P., the leader of the Social Credit Party and now the leader of the Creditiste Party.


Michael Starr: Sheer nonsense.


Mr. Speaker:: The leader of the Creditiste Party did rise on a supplementary question, which I believe was his right. It is my belief that the order has been strictly followed.


John George Diefenbaker: I rise on a point of order, Mr. Speaker. I do not wish to become involved in a controversy with Your Honour under any circumstances, but this attitude is not in keeping with Parliament. This is a recognition that these various opposition parties have an equality with Her Majesty's Loyal Opposition, and that is not in accordance with parliamentary procedure.


Some hon. Members:: Hear, hear.


Mr. Maclnnis:: I rise on a point of order. [Translation]


Gilles Grégoire: Mr. Speaker, on the point of order-


Mr. Speaker:: Order, please. I should like to settle this matter at this time. It is the understanding of the Chair that at the beginning of the question period the leaders of each party, beginning of course with the Leader of the Official Opposition, then proceeding to the leaders of the other groups in this House, should be recognized. That
June 29, 1965

has always been my understanding, and if I am in error I should like to be so informed.


Malcolm MacInnis: I rise on a point of order, Mr. Speaker.


Some hon. Members:: Oh, oh.


Mr. Winkler:: That's the stuff; shout him down.


Mr. Speaker:: Order, please. I recognize the hon. Member for Cape Breton South.


Malcolm MacInnis: Mr. Speaker, I rise on a point of order, drawing your attention to the fact that the hon. Member for Ontario was on his feet, was recognized and had started to ask a supplementary question before the hon. Member for Lapointe was recognized. The hon. Member for Ontario was recognized before surrendering the floor for the purposes of a supplementary question.


Mr. Speaker:: Order. I recognize the hon. Member for Villeneuve.


[Stage Direction]
On the orders of the day:
Malcolm MacInnis: Mr. Speaker, I have a question for the Prime Minister. Having been unable to confirm press rumours that the Prime Minister was asked to lead the Prime Ministers' mission with regard to the Viet Nam crisis, I would ask the Prime Minister if such an invitation was made, in what form it was made, and by whom.


Lester Bowles Pearson: Mr. Speaker, the conference agreed on the personnel of the mission as established. The Prime Minister of the United Kingdom was put forward as Chairman on the first day, and when the mission was agreed to on the last day I had the pleasure of supporting his chairmanship.


Malcolm MacInnis: A supplementary question, Mr. Speaker. Do I take it from the Prime Minister's answer that the rumours we have read in Canadian newspapers to the effect that he was invited to lead this mission were false?


Lester Bowles Pearson: Mr. Speaker, I was approached in this connection.


Malcolm MacInnis: That brings me back to my original question. In what form was the Prime Minister approached and by whom?

Inquiries of the Ministry ADMINISTRATION OF JUSTICE


[Stage Direction]
On the orders of the day:
David Réal Caouette: Mr. Speaker, it is a great thing to hear the leader of Her Majesty's loyal opposition always-


Some hon. Members:: Order.


Mr. Speaker:: Order, please. Will the hon.
Member ask his question.


David Réal Caouette: -complain that he is illtreated in this house, while his party has all the advantages over everyone.
Mr. Speaker, I should like to direct a question to the Prime Minister.
Has Hon. Frederic Dorion been commended for submitting his report to us, in both English and French, the same day?


Lester Bowles Pearson: Mr. Speaker, I have not had an opportunity of communicating with the Chief Justice, but I agree that it was a very happy situation that this report was presented in both languages at the same time.


Mr.  R. Gordon L. Fairweather@Royal: Mr. Speaker, now that the Dorion report has been tabled, is it not true that the information contained in the alleged Southam News Publishing Company leak is true? It was a leak, but is it not a fact that what it stated is in fact true?


Lester Bowles Pearson: Mr. Speaker, my hon. friend is in as good a position as I to compare the leak with reality. I have not been able to do that.


Mr. Speaker:: I recognize the hon. Member for Ontario.


Michael Starr: No, pass me by.


Some hon. Members:: Oh, oh.


[Stage Direction]
On the orders of the day:
John George Diefenbaker: Mr. Speaker, I should like to ask the Minister of Justice a question with reference to the Dorion report. As my reading of that report indicates that the bribe of $20,000 offered by Raymond Denis to Mr. June 29, 1965

Inquiries of the Ministry Lamontagne for the purpose of obstructing justice has been established, is the Government going to proceed with a prosecution in this connection?


Hon. Guy Favreau (Minister of Justice):: Mr. Speaker, I shall take that question as notice.


John George Diefenbaker: Mr. Speaker, surely this question should not be taken as notice, on a matter affecting the administration of justice in Canada that has been played around with for so long by the Minister.



AGRICULTURE


[Stage Direction]
On the orders of the day:
Hon. Paul Mariineau (Poniiac-Temisca-mingue):: Mr. Speaker, I should like to put a question to the Minister of Forestry in his capacity as Acting Minister of Agriculture. He promised yesterday that the Minister of Agriculture would report on the discussions held between the federal Minister of Agriculture and the provincial Ministers of Agriculture of Ontario and Quebec, with regard to the special assistance for Ottawa valley farmers.
Can the minister make this report right now?


Hon. Maurice Sauve (Minister of Forestry):: Mr. Speaker the parliamentary secretary to the Minister of Agriculture will now make this report to the house on behalf of the minister.

I think the Parliamentary Secretary is going to answer.


Mr. B. S. Beer (Parliamentary Secretary to Minister of Agriculture):: Mr. Speaker, I am grateful to the hon. Member for bringing this important matter to the attention of the House. The Minister of Agriculture for Canada met with the Ministers of Agriculture for Ontario and Quebec for two and one half hours yesterday, and I understand that those discussions were very fruitful.
Preliminary estimates indicate that some 14 countries are affected in Ontario and about 10 in Quebec. Agreement was reached as to the seriousness of the situation, and as to the

need for assistance to farmers who have suffered losses as a result of the dry weather.
In view of the fact that there are several possible approaches that can be taken to meet this problem, it was not possible to work out all the details of an assistance program at this first meeting. As a result it was agreed that a committee headed by the Deputy Ministers of Agriculture of the three Governments should meet within the next few days to iron out a detailed approach.
Among the possibilities they will be considering is a suggestion that the program when it has been fully developed should be administered by a special drought agency with membership from the three governments concerned. Once the proposals have been presented by the committee of Deputy Ministers they must then be submitted to the respective governments for approval.


Mr. Marcel Lessard (Lac-Saint-Jean):: Mr. Speaker, I should like to ask the Minister of Forestry, in his capacity as Acting Minister of Agriculture, a supplementary question following the report made just now by the Parliamentary secretary to the Minister of Agriculture.
Is the minister in a position to tell us whether or not, during the discussions that took place yesterday on this subject, here in Ottawa, there was any discussion with Mr. Courcy about the assistance to be given to the farmers of the Saguenay-Lac-Saint-Jean area who submitted a brief on March 19, which seems to have remained unanswered?


Maurice Sauvé: Mr. Speaker, I must say that I attended only the first part of the meeting before coming into the house.


Mr. J. J. Greene (Renfrew South):: A supplementary question, Mr. Speaker. In view of the critical situation at the present time, can the Parliamentary Secretary give us any indication when some final decision will be made by the Federal Cabinet in this regard? Can he also give us some indication of the extent of the program, the amount of money involved in the program of aid?


Bruce Silas Beer: I am unable, of course, to provide the detailed information requested by the hon. Member. I know the study is proceeding with all due haste, and an adequate program will be presented to the House in the very near future.
June 29, 1965


Mr. A. D. Alkenbrack (Prince Edward-Len-nox):: Mr. Speaker, I have a supplementary question to that asked by the hon. Member for Pontiac-Temiscamingue. I have received information by mail this morning that hay for shipment to the United States is being purchased in certain areas of Ontario where there is at least some crop, will the Minister consider taking steps to restrict and prevent the export of hay from Canada to other countries during this period of emergency and scarcity?


Bruce Silas Beer: Mr. Speaker, I will be happy to bring this matter to the attention of the Minister.


John George Diefenbaker: Mr. Speaker-


Mr. Speaker:: One more supplementary.


Mr. Gerard Laprise (Chapleau):: Mr. Speaker, I would like to direct a supplementary question to the Parliamentary Secretary to the Minister of Agriculture. During yesterday's talks between the various Ministers of Agriculture, was there any mention of crop insurance between the Federal Minister of Agriculture and the Quebec Minister of Agriculture?


Bruce Silas Beer: Mr. Speaker, in the two and a half hours that the meeting lasted it did range over a wide area of subjects, and crop insurance may have been mentioned.



BRITISH COLUMBIA-LOSSES SUFFERED BY FRUIT GROWERS

[Stage Direction]
On the orders of the day:
Bruce Silas Beer: Mr. Speaker, while I am on my feet I should like to reply to the hon. Member for Okanagan Boundary, who expressed some interest in the serious losses to fruit growers in British Columbia. I should like to draw the attention of the House to the fact that the Minister of Agriculture today met with the Minister of Agriculture for British Columbia regarding assistance to the B.C. fruit industry for crop losses and damage to trees from frost and other weather conditions. It was agreed that some B.C. fruit producers are faced with serious problems and that they must have some help.
2999
Inquiries of the Ministry EXPO '67



INVITATION TO RED CHINA TO PARTICIPATE

[Stage Direction]
On the orders of the day:
Herbert Wilfred Herridge: Mr. Speaker, I wish to direct a question to the Secretary of State for External Affairs which is a follow-up to a question I asked the Minister of Trade and Commerce a week or two ago.
In view of the Prime Minister's anxiety to get China to attend disarmament talks, and in view of the fact that both the Commissioner General and the Deputy Commissioner of the World Fair are on record as favouring Chinese participation in the Fair, would the Minister now consider extending an invitation to the government of mainland China to participate in our World Fair regardless of any opposition to such an invitation that may be expressed by the United States or Formosan governments?


Hon. Paul Martin (Secretary of State for External Affairs):: Mr. Speaker, it is true that the Prime Minister's declaration indicated that Canada did support the summoning of a conference of all the nations, including China, on the matter of disarmament. However, these are unrelated subjects and the question of substance has already been dealt with by my colleague.


Herbert Wilfred Herridge: A supplementary question, Mr. Speaker. Do I take this to mean that the government of mainland China is not going to receive an invitation to participate in the World Fair?


Paul Joseph James Martin: Mr. Speaker, for the reasons given by the Minister of Trade and Commerce that is the situation.



EMPLOYMENT OF SECRETARIAL STAFF DURING RECESS

[Stage Direction]
On the orders of the day:
Mr. Jack A. Irvine (London):: Mr. Speaker, I should like to address a question to the President of the Privy Council as spokesman for the Commissioners of Internal Economy. In view of the prospect of a lengthy summer adjournment, has a decision been taken as to the employment of Members' secretarial staff during the adjournment and, if so, what is the decision?


Hon. G. J. Mcllraith (President of the Privy Council):: Mr. Speaker, I believe this is the type of question which, under citation 438,



June 29, 1965
Inquiries of the Ministry I think it is, should be asked of Your Honour in writing. In any event, I will try to get the information and make it available to hon. Members later in the day.



FINANCE


[Stage Direction]
On the orders of the day:
Mr. Henri Laiulippe (Complon-Fronienac):: Mr. Speaker, I would like to direct a question to the Prime Minister.
In view of the fact that family allowances began in July 1945, that we will be celebrating their 20th anniversary in July 1965 and that all other sectors of the economy have experienced eightfold, tenfold or even twelvefold increases since that time, can the Prime Minister state whether or not he intends to increase family allowances to make them truly representative, recognizing the family as the basis of society?


Lester Bowles Pearson: Mr. Speaker, I just want to say it is nice to be back home, but I am afraid I cannot answer that question.



CANADIAN APPLICATION TO HOLD 1968 WINTER OLYMPICS

[Stage Direction]
On the orders of the day:
Mr. Heward Grafftey (Brome-Missisquoi):: Mr. Speaker, my question is directed to the Secretary of State for External Affairs and is related to the question I asked yesterday, with regard to which he said he would make an investigation. Has Canada still got a chance to act as host for the 1968 Olympic games?


Hon. Paul  Marlin@Secretary of Stale for External Affairs: Mr. Speaker, the hon. Member will recall that France was selected as the site for the Olympic games. I have made inquiries, and I know of no reason to warrant any belief that there might be a change in the decision to have the games in France.


William Heward Grafftey: A supplementary question, Mr. Speaker. Is there no possibility of France not being able to act as host because of the problem of recognition of East Germany; and would this consideration apply to Canada also?


Paul Joseph James Martin: It would apply to any country that did not recognize East Germany.



INDUSTRY


[Stage Direction]
On the orders of the day:
Mr. Reid Scott (Danforth):: Mr. Speaker, may I direct a question to the Minister of Labour. In view of yesterday's action by the United Automobile Workers in completely opposing the auto parts agreement because of the lack of proper safeguards for the workers displaced as a result of the agreement, is the Minister prepared to reconsider the legislation to provide adequate safeguards and at least bring it up to parity with the provision made in the United States?


Allan Joseph MacEachen: Mr. Speaker, the hon. Member refers to parity with the United States. The fact is that no final determination has yet been made of the level of benefit that will prevail in the United States, and it may be some months before any level of benefit is determined as the result of a decision of an arbitrator who will make a determination under the SUB plan in the United States. But supposing that the present level of benefit proposed in the United States is accepted, I am prepared to argue that the proposal made yesterday by this Government is at least as good as the proposal under consideration in the United States and, in at least one or two instances, is definitely superior and gives greater protection to the Canadian auto worker.
I am hopeful that when Canadian auto workers are fully informed as to the level of benefits they will conclude that in the circumstances adequate benefit has been provided, in view of the fact that the maximum level of benefit provided is approximately $75 in comparison with the maximum level of benefit provided under the unemployment insurance fund, namely $36.


Reid Scott: I wish to pose a supplementary question related to the first part of my previous question. In view of the fact that all the locals in Canada of the United Automobile Workers have now come out in flat opposition to the plan, in order to provide adequate examination of the plan and perhaps launch it with the support of the trade union movement instead of its opposition, would the Minister be prepared to refer this whole agreement to a committee of the House
June 29, 1965

where it could be fully studied and witnesses called?


Allan Joseph MacEachen: In the circumstances no, Mr. Speaker. There is a lay-off at present in Windsor. We expect there will be a further lay-off in August, and the purpose of this plan is to provide immediate benefit to the auto workers. I do not believe that a committee set up for this purpose would be able to do a better job than the committee of the whole which will examine this proposal when the supplementary item comes before the House.


Mr. A. D. Hales (Wellington South):: Mr. Speaker, my question is directed to the Minister of Industry, following his announcement yesterday with regard to assistance to the automotive industry. Has the adjustment board been established and, if so, what are the names of the members of the board? If the board has not yet been appointed, from what field will its members be selected?


Hon. C. M. Drury (Minister of Industry):: Mr. Speaker, the board has not been selected as yet, and if the hon. Member wants further details perhaps he will wait until the supplementary estimate is under discussion later this day.


Alfred Dryden Hales: As a supplementary question, would the Minister give consideration to providing a better interest rate to the manufacturers in the automotive industry than the 6 per cent he announced yesterday, in view of the fact that they can obtain a 6 per cent interest rate from any lending institution? The Government is not providing them with any great assistance in a 6 per cent rate.


Charles Mills (Bud) Drury: Mr. Speaker, I do not want to argue this point now. I think the hon. gentleman's question is a little argumentative, but the fact of the matter is that my information from the industry shows that the problem is not the interest payable or chargeable, but the general difficulty in getting a loan at a reasonable interest rate.



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

[Stage Direction]
On the orders of the day:
John George Diefenbaker: Mr. Speaker, I wish to ask the Prime Minister whether he can give the House any information on the question of the resolution passed by the Legislative Council 22620-1911
Grants to Designated Areas of the Province of Quebec relative to the amendment of the British North America Act respecting the powers of the Legislative Council. Has such a resolution been received? At the same time, when he replies would he say whether the Government will hold up any approval of the address from the Legislative Assembly of the Province of Quebec being sent to Her Majesty the Queen until the House of Commons has had an opportunity to discuss this matter?


Lester Bowles Pearson: Mr. Speaker, in reply to the first part of my right hon. friend's question, no communication has been received from the Government of Quebec. In reply to the second part of the question, there may be an opportunity on interim supply later today to deal with this matter.


Paul Raymond Martineau: Mr. Speaker, will the Prime Minister give an assurance that the Assembly address will not be forwarded until that opportunity has been provided?


Lester Bowles Pearson: Any request from the Legislative Council, before it could be forwarded, has to come from the government of Quebec, but it has not come yet.



VETERANS' LAND ACT


Hon. Roger Teillef (Minister of Veterans Affairs) moved: the third reading of Bill No. C-128, to amend the Veterans' Land Act.
Motion agreed to and bill read the third time and passed.



INDUSTRY


Charles Mills (Bud) Drury: that the House go into Committee to consider the following resolution:
That it is expedient to introduce a measure to provide for the payment of development grants to assist the establishment of new manufacturing or processing facilities and the expansion of existing manufacturing or processing facilities in order to improve industrial employment opportunities in designated areas in Canada; for this purpose to establish in the Consolidated Revenue Fund an Area Development Account to which shall be credited an initial amount of fifty million dollars; and to effect certain related amendments to the Income Tax Act concerning the definition of a manufacturing or processing business and the application of section 71A of that Act in any case where a
June 23, 1965

Grants to Designated Areas development grant has been authorized to be paid under the said measure.
Motion agreed to and the House went into Committee, Mr. Lamoureux in the Chair.


Charles Mills (Bud) Drury: Mr. Chairman, the House will recall that on June 7 the Prime Minister proposed certain major changes in the program of incentives for area development designed to broaden it and make it more effective.
The present measures for area development were introduced almost two years ago in recognition of the fact that certain areas of Canada had not achieved the measure of economic progress obtaining in the country as a whole. In these areas employment opportunities and levels of income are well below those enjoyed by most other Canadians. It is the policy of the Government in its campaign against poverty and inadequate opportunities to bring the benefits of industrial development to such areas in so far as it is possbile to achieve this.
As hon. Members know, the incentives provided under the present area development program take the form of accelerated capital cost allowances and a remission of income taxes. This program has had a substantial measure of success, and 1 would hope to have an opportunity during the discussion of the new legislation to describe some of its positive results.
Experience has shown us that a tax holiday is of benefit mainly to those firms which were able to reach a profit position at an early date in their operations. Other firms have to provide for market development and other settling-in costs during their first years of operation. Accordingly their profit position in the early years is such that tax benefits provide only a limited incentive. Moreover, we found that smaller firms in particular of a type well adapted to these areas experienced difficulties in initial financing.
For these reasons the Government is proposing to offer cash grants to new manufacturing and processing firms establishing in designated areas, as well as to firms expanding their existing facilities. The amounts of these grants are to be directly related to the total investment in fixed assets made by these enterprises. A firm which qualifies for a grant may elect to take it in the form of a credit against its income tax liabilities.
[DOT] (4:10 p.m.)
The legislation will provide funds for the payment of development grants. It will establish a formula to determine the amount of


grant to be provided to individual enterprises. It will provide that such grants will not be taxable income and will not be deducted from capital costs for tax purposes. It will amend certain provisions of the Income Tax Act concerning the definition of a manufacturing or processing enterprise, and the application of that act to development assistance. There is also provision for close liaison between the firms receiving development grants and the National Employment Service to ensure that the new employment opportunities are fully exploited and the appropriate training facilities established.
Finally, the Act will provide for regulations which will define in more detail the conditions and procedures for the payment of development grants.
Mr. Chairman, I hope to have a further opportunity to speak on this subject when the bill is before the House. My brief remarks at this time on the resolution will, I hope, indicate our firm belief that it is through positive measures of this kind that we will help to ensure that the employment and income opportunities generated by our expanding economy will be shared by all Canadians.


Alfred Dryden Hales: We listened with interest to the Minister's introductory remarks concerning this resolution preceding a bill to be introduced asking that this house approve the setting up of a fund amounting to some $50 million in the consolidated revenue account from which the Department of Industry will be able to pay various amounts to industries which agree to establish themselves in designated or depressed areas.
As the Minister told us, it is only a little over a year ago that he introduced legislation designed to entice industry to locate in such areas. I think we all recall the problems which this legislation created in various areas of this country. I have no difficulty in recalling the problems created in my area. We were only 20 or 30 miles from a designated area, and the designated area began stealing our industries. In other words it became a matter of moving jobs from one area to another. I think the hon. Member for Renfrew had a similar experience; he had a designated area just across the border. The hon. Member for Brant-Haldimand also had a similar experience.
As a result this legislation did not meet with any large degree of approval. The Minister told these industries, we will give you certain concessions; we will not collect
June 29, 1S65

taxes for three years. Fifty per cent of the capital cost of machinery and equipment was to be forgiven, along with 20 per cent of the cumulative capital cost of all buildings. These arrangements did not work out satisfactorily. Now the Minister wants to put another patch on this patchwork quilt he began in December, 1963, but this time he is ready to hand out cash; this time a giveaway program, by means of outright grants.
I do not think that we as guardians of the Queen's purse have any right to give money in grants in this way. I would be in favour of making loans with interest. Making outright grants is a most unusual way of inducing industries to settle in depressed areas. We support the resolution in principle. We realize there are areas in Canada where economic growth is slow and that some assistance has to be provided. Nevertheless, I think we should ask ourselves whether this is constitutionally sound. Is it the business of the Federal Government to be in this particular field, or should this be an area in which the provincial authorities or the municipalities should operate? In connection with the former legislation there was often serious confusion and overlapping. There was uncertainty about who had the constitutional right to work in this particular sphere.
I could give many examples of the way in which provinces have gone all out to attract new industry. A heading in this week's Financial Post reads "Manitoba tosses more dollars into its pot to lure industries". The first paragraph says:
A five year plan to lure new industries, backed by government guarantee of an additional $100 million for the Manitoba Development Funds has been announced by Premier Roblin.
Ontario has embarked upon an extensive program to attract industry. And so it goes. I think this proposal before us is just another case of overlapping, another case of duplication. It is a means of spending the taxpayers' money in a way in which it should not be spent. I sometimes think it is a means of finding work for the 300-odd people who have been hired to staff the Department of Industry, one of the policies which have been dreamed up by the Department for that purpose.
This area development program is not original. It is nothing more than another program which has been copied from the United States. The Liberal Government has come out with a war on poverty, copied from the United States. The Minister of Labour went down to see U.S. Secretary Wirtz to
Grants to Designated Areas discuss with him how the problem of the displaced auto workers could best be handled. He came back with the program announced in this House yesterday. It seems to me Members opposite have copied one idea after another from the United States. Let us have Canadian policies for Canada; let us have policies for Canadians and draft them here, instead of going south of the border to get ideas. I am convinced that this legislation will come back to haunt the Minister in the years to come.
One of the things we can do as an opposition is to call the Minister's attention to some of the pitfalls which have been revealed in this program as it was instituted in the United States four years ago. As a matter of fact it was one of the first policies to which the late President John Kennedy put his signature in his war against poverty when he signed the legislation known as ARA; the letters stand for "area redevelopment administration". Today the Minister has introduced similar legislation, only he calls it "area development". The ARA as it was instituted in the United States four years ago contained some deep pitfalls into which the Americans have fallen. We in Canada under our program will find ourselves in the same situation. I have in my hand an article which appeared in the Reader's Digest of May, 1964.
[DOT] (4:20 p.m.)
The heading is "Is this the way to fight the war against poverty?" Then it says:
The Area Redevelopment Administration was set up lor a highly worthy purpose. But look at the way this U.S. agency is squandering taxpayer dollars-and callously ignoring the rights of individual citizens.
The article goes on to say:
For the ARA has. in the name of helping the poor, become the spearhead of one of the most outrageous government encroachments on private enterprise in United States history.
All we need to do is substitute "ARA" by "area development" here in Canada, and five years from now I am quite sure this article will fit the situation in this country. This article continues:
-ARA has uncoiled into a monstrous complex of co-operating bureaucracies. These agencies have dragooned or enticed a third of the nation's counties and 42 million of its citizens into accepting the label of poverty-
The article goes am
-ARA is riddled with bungling, political pressures and untold finagling.
I can just see it happening here, Mr. Minister. Then the article says:
June 29, 1965

Grants to Designated Areas
New installations are being financed by ARA in industries already beset by overcapacity, thus jeopardizing existing jobs.
It goes on to say that ARA is financing by means of a loan the expansion of the Howard Johnson chain of restaurants, and is thereby putting a great many private individuals out of business. It has loaned money for the building of new hotels, motels and so on. Another passage in this article is:
Areas that are far from "depressed" are getting help.
So through political finagling we find areas getting help when they are really not depressed. This article goes on to say:
Jobs constitute the only excuse for ARA's existence, but the agency provides brazenly inaccurate figures about the employment it generates.
I think we could apply these words to some of the figures and statements that have been made in this House as to the improvement that has taken place in the so-called designated areas here in Canada. To conclude these quotations, Mr. Chairman, I will quote what was said by two Senators of the United States, in which country they have had a plan similar to the one introduced by the Minister in respect of which he is now asking us to provide $50 million to support this program. Senator A. Willis Robertson of Virginia said this:
ARA Is an unsound spending scheme through which bureaucrats may make or break cities and towns all over the country by granting or withholding federal money.
Senator Frank J. Lausche said this:
This program is not economically sound. It is not fair to the taxpayers. It is a vote-buying device.
Oh, Mr. Chairman, I can see it happening here in Canada as I read those words. I can just see these depressed areas in which industries have moved in, and a big sign put up by the member of that riding saying "I brought this industry here. Vote for me in the next election". I can see the political implications of this program in respect of which the Minister is asking us to put up $50 million; and the next time he comes to Parliament with the program he will be asking for $100 million, not $50 million.
I mention this, Mr. Chairman, because it is bound to happen here. It happened there. This designated area program as it is set up is based on the N.E.S. office areas, and as hon. Members know these areas have certain boundaries. They are rather small, and the adjoining N.E.S. area may not be designated. There is still nothing in the legislation to change this overlapping and this proximity

of one area to another, or to take care of the great problem that we experienced before in this regard. I think the Minister should give consideration to using the Dominion Bureau of Statistics figures instead of N.E.S. areas as the basis of designation.
As I said before, this matter of grants is a bad principle. I am the first to admit that when we were in power as the Government we gave an outright grant to the Britannia Copper Mine in British Columbia. A very, very sincere plea was put forward at that time by the former Minister of Fisheries, Mr. Sinclair. I can see him yet, as I sat over there and he stood up with an envelope in his hand on which were written a few notes. He made a tremendous plea for a grant to the Britannia Copper Mine. Our Government gave this outright grant to the Britannia Copper Mine, and the result is that today the mine is closed. The outright grant proved to be not the proper thing to do.
I say again, Mr. Chairman, that I am not in favour of outright grants. We are in favour of loans with interest, and a personal stake by industry with regard to assistance. This resolution provides for the expansion of existing plants. It does not say whether the expansion of existing plants means that they can relocate in another area. This might be one method of expansion. They could exist in town A and expand by moving over to town B. If this were the case it would be just a transfer of jobs from one area to another.
Another thing I think should be mentioned here is that only in cases where private financing is not available should these grants be made. Then there is the matter of a community accepting the label of "poverty" or "depressed". I do not think any community wants to be labelled a poverty area. In my opinion this is bad terminology. I am one of those who believe that when you create the proper environment industry will move in and expand. I would say to this Government that they could go a long way toward creating a proper environment if they would remove the 11 per cent sales tax on production machinery.


Some hon. Members:: Hear, hear.


Alfred Dryden Hales: This is the first step they should take. This would create a better environment for industries in these areas. I think you could give industry pie in the sky yet they will not locate in a depressed area, because industries do not operate in that way. Industries that are going to locate in given areas call in experts and say to them "We
June 29, 1965

are interested in locating in Canada. Will you make a survey and give us the whole story as to whether we should locate there". They study such things as transportation costs, closeness of raw materials and many other factors. In other words, Mr. Chairman, if you can prove to industry that they can make a dollar they will be there before you can catch them; but you have to create that environment. If they can make a dollar, they will be in there.
Take any industry for example. Take, for instance, Canada Dry. Suppose you wanted Canada Dry to come into a depressed area. You could give them all these things the Minister wants to give in the way of grants, and so on; but unless the water in that locality is of the kind they need to make their product, they will not go to the area. The policy which the Minister put before us earlier has not been working properly, and I see little improvement.


An hon. Member:: It is a case of putting the cart before the horse.


Alfred Dryden Hales: It is another example of poorly thought out legislation. This Government are working in reverse; they back up, take a step forward and then two steps back. This was a patchwork quilt program that was introduced and the Minister is putting another patch on the quilt and is asking us to vote $50 million for outright grants to be given to industry to move into these designated or depressed areas.
[DOT] (4:30 p.m.)
I conclude, Mr. Chairman, by drawing to the Minister's attention once more the facts and conditions that existed in the United States when they introduced such a program in their war against poverty. We should pay particular attention to the results of that program in the United States. I hope when he produces the bill and the regulations accompanying the bill this will be spelled out in much greater detail, but I sincerely hope the Minister will give this matter second thoughts and the consideration it should have so that he will not have to ask the House to change legislation again in the short period of a little over a year, as is the case today.


Mr. Saltsman:: Mr. Chairman, until the bill comes before the House it will not be possible for us to take a definitive stand on the proposed legislation. But unless the bill offers something a little more worth while than what we have seen so far, I for one, and I

Grants to Designated Areas think many in this party, would be opposed to it.
Two years ago the Department of Industry made provision for area development, and with disastrous results. I think there is something to be learned from this legislation, which is still in existence. It shows that the isolation of one community, it being declared a designated area, simply does not work. I hope when the bill is brought in it will indicate that the Government has taken another look at the experience of the past and that entire areas, perhaps entire provinces, will be declared designated areas so the faults that exist, or which existed in the previous legislation, will not reappear in the new legislation.
South Waterloo was very badly hurt by the old legislation, despite the Minister's assurance to the people of South Waterloo that he was hopeful that the program would be more beneficial to places like Galt than if there were no program. That hope did not materialize. As the Minister knows, industries moved out of Galt into an adjacent area. All those in the area from which I come feel that the designation of an area of that type was a grave error. It accomplished nothing. I think the basis on which the designation was made was wrong, and I am afraid the Minister is considering this criterion in the new legislation.
Galt had gone to a great deal of trouble and made many plans to develop an industrial section. It prepared municipal services in anticipation that its industries would stay and would grow and develop, only to find that some of them moved out, and moved out with impunity. The important thing to new industry in a municipal area is the pool of labour available, the skilled and necessary labour needed by industry for its operations. In this particular circumstance industry was able to move out and draw its labour, while the municipality which had lost the industry had to pay for the cost of the services and of looking after the schools.
The Minister is fully aware that residential assessments do not cover the cost of municipal services, and that the municipalities require industrial assessments as well. To operate the legislation as the Minister did in the past, when he encouraged industry to move from a municipality, with the Minister telling the municipality that the people were still going to live in the municipality, is no help at all, because municipalities need industrial assessments to underwrite the residential assessments.
3006	COMMONS
Grants to Designated Areas
One change which is going to be made will be of some help, and it is an acknowledgment that the previous legislation was not particularly effective. The Minister says these measures were of great benefit to companies in a profit position but were less helpful to new and smaller firms. These new proposals hope to obviate that difficulty. Nevertheless the same basic fault exists in this new legislation which existed in the old. The grants are still being made on the basis of capital investment.
If it is the Minister's and the Government's intention that this legislation be part of a campaign against poverty and inadequate opportunity, and if it is the purpose of the legislation to help cure unemployment, then I cannot see how giving grants based on capital investment relates to the problem of curing unemployment. I think there are instances where this may be the case but there are other instances where it will not be the case. If a grant is based on capital expenditure only it will encourage industries of the automated type, industries which do not require much labour, to take advantage of this situation.
In our opinion if incentives are to be offered they should be on the basis of increasing employment opportunities, and grants should be made on the basis of how much employment will be offered. Grants should be given to industries of a labour-intensive nature rather than to industries which are going to use them to write off large capital investments. If these large capital investments involve labour-intensive employment, fine; but if they do not, then I hope the Minister has an answer to that particular problem.
In this regard, on the second page of his statement I see the Minister has a slightly different criterion for existing plants. He speaks of the help which will be given to existing plants in designated areas provided the expansion contributes appreciably to improving incomes and employment opportunities in such areas. This makes a great deal more sense than his first statement that the grant will be based on the size of capital investment. I hope he will follow this through and make it a uniform provision in the bill.
There is also the acknowledgement that this type of legislation is not going to be enough, that other programs will have to be devised in conjunction with this legislation. We hope a sincere effort will be made to do this. Educational facilities must be provided. Industry will not go where there is not a pool of

DEBATES	June 29, 1965
skilled labour. Industry needs this pool of skilled labour. Industry needs assurances that there are schools and training projects in the area so as to ensure that its requirements for skilled labour will be met. I certainly hope that such a program will be brought in with this suggested legislation.
The Government proposes to establish four guidelines for the designation of areas, and again I think the Government is making a mistake in relying on statistical evidence only. This mistake was made in the area surrounding my riding.
[DOT] (4:40 p.m.)
I think part of the error arises because of the statistical method of determining what should be a designated area. The Minister referred to areas where unemployment is severe, and no one will argue with that idea. I hope the Minister will also look into the reason for that situation. If the severity of unemployment is related to a statistical fact, in that there are seasonal workers in the area, then his statistics will be completely wrong and his assumption that an industry will locate in that area will be incorrect.
The Minister speaks about areas where there has been a large and persistent decline in the number of people employed. We must do something more than simply say that if that is so we should designate this area. If there are root causes there for unemployment, such as that the area in question has no natural attractions and never will have for industry, by forcing industry into such an area we will only be inviting bankruptcy. The Minister will have to take a very close and careful look at this type of situation.
In respect of areas where unemployment is substantially above the national average, and the rate of increase in employment is substantially lower than the national average, here again this cannot be judged by statistics. A close look must be taken in respect of this area with some common sense exercised to determine whether the area has a future for industry and can sustain industry. We will not be doing anyone any favour by moving industry into such an area simply as a good short term solution, because we may wind up being shortsighted, playing a hoax on the people in this area, and leading them to believe that theirs is an area that can sustain and support an industry over a long period of time, particularly if that area has no natural advantages to offer an industry which must compete with other industries. If the Minister insists on doing this sort of thing
June 29, 1965	COMMONS
in a situation of this kind, then he and his Government must be prepared to continuously subsidize industry located in areas improperly prepared for them.
I am disappointed that in all these indications regarding designated areas the Minister has left out what to me is probably the most vital thing to be examined. Can industry prosper and sustain itself? These programs are fine and the kind that most people will not argue against in principle. I am sure every Member of this House wants to do something about chronic unemployment, but we must be careful that in our attempt to cure chronic unemployment, which could perhaps be cured much better and more adequately by other measures, we do not force industry into a position where it cannot compete so that in the long run this nation will not advance and prosper in all areas.
In order that all areas of this country can prosper we must assure ourselves that our competitive and productive position is good. We must not do anything which puts chains on industry. We must be very careful that this kind of legislation, even with the best of intentions, will not create a monster which will require permanent subsidization and will result in lower productivity and, in the long run, a lower standard of living for Canada.
When the bill following this resolution is presented to this House we must consider it to see whether the long run problems have been considered, whether it will do something to increase our productivity, and something to foster a higher standard of living in Canada. We must look to see whether this legislation fits into some kind of national plan, or whether it is only a sop for those who are making loud noises in certain areas. We must look to see whether it is going to be political or based on a carefully considered objective. We must look to see whether it embodies ideas which will really assist municipalities, or whether it will impose difficulties upon municipalities which become designated areas. Let us not forget that by forcing industry into these areas we could create a series of problems for the municipalities which they never dreamed they would have to face, as the result of an increased demand for services. In that event, instead of helping the municipalities or areas we might effectively destroy them by raising their tax rates as a result of forcing them into the position of having to supply services which were not required in the past and may not be required in the future, except in anticipation of growth that may never
DEBATES	3007
Grants to Designated Areas develop. All we will have done then is to have supplied a sop rather than a long range solution to this kind of problem.
Some excellent reports have been made available recently in respect of this subject. I have had the opportunity of reading the report prepared by the Atlantic Finance Research Board, under the direction of Professor T. Wilson of the University of Glasgow, about the Atlantic provinces. I was greatly impressed with what that report had to say about this situation, and particularly impressed with the argument advanced for regional designation as opposed to local designations accompanied by the location of small factories in this town, that own and another town.
The report suggests that that is the worst possible thing that could happen. It points out that what should be done is designation on a regional basis, so that people of the same background and historical attitude, without having to move far from their families, could become employed in the central area. Surely that is the way to improve and increase the total performance and standards of areas of high unemployment.
In this regard I am sure my colleagues will be a little more specific, and will relate their remarks to particular areas. We all look forward to the bill itself in order that we may ascertain those things included in the bill which will be of real help to Canada instead of just words without meaning.
[DOT] (4:50 p.m.)


Mr. Leboe:: Mr. Chairman, first of all I should like to say categorically that I am not greatly impressed by the legislation anticipated by this resolution. If there ever was a situation where we were mistaken I think this is it, because even a novice taking one glance at the legislation can see that we are not being consistent and are not achieving anything so far as policy is concerned. In other words we are not doing anything really constructive.
I was interested in hearing the Minister state that these grants could apply against income tax liabilities. When the Minister gets up to reply I should like him to tell us why we should be interested in granting money to people who are in an income tax bracket. It does not make sense to me. Why should we be in the position of giving a grant to somebody who is in an income tax bracket? If they are going to pay a large amount of income tax they do not need these grants. People have their own methods of seeking out places to locate sound and good businesses.
June 29, 1965

Grants to Designated Areas
In this connection I might put in a plug for the City of Prince George. In the next few years $400 million is going to be spent within a radius of five miles of Prince George. Business people know a good place to go to establish and build up a business. We do not need this type of provision at all. For instance,
I think we might look into the action taken by the Town of Arnprior some years ago. I remember being in the railway committee room when an official from Arnprior explained what they had done. There are Members of the House of Commons who come from that area. The municipality itself established certain incentives to induce business firms to establish there on a permanent basis and thus provide the type of employment and expansion of business needed by the Town of Arnprior. When we were given this information in the railway committee room I was very much impressed with the way the municipality had undertaken to overcome the difficulties facing it. I say to the^ Minister that if there is any place where the Government should start giving assistance across Canada it is to the municipalities. This is where the Government should be giving assistance.
I was much impressed by most of the remarks of the last speaker. I think he showed he had a very good grasp of the whole situation with regard to this legislation. The purpose of industry in Canada or anywhere else is to produce goods and services, not to provide jobs. If the purpose of industry is to provide jobs then we had better revert to the situation that obtains in undeveloped countries. This morning I was talking to a newspaperman on the street and he said that in a country he had visited not long ago there would be perhaps 50,000 men working on a project that would be handled by five or six dozen men in Canada or the United States. If we want to reverse the trend and start to provide people with work for work's sake, then I say there should be an over-all policy in the Department of Forestry and other departments to clean up our forests and provide access roads for fire protection and so on. There are many places where people can be put to work.
The fact remains that if an industry is induced to move into a certain area there is no guarantee that the people of that area are going to get the jobs. I have a very clear recollection of a fairly large highway operation where the local people in the area were not hired to work on the highway at all. There
[Mr. Leboe.l

were many good catskinners and gradermen available who could have been used, but the unions had unemployed members in Vancouver, Winnipeg and other places. Because the contract specifically stated that union members would be used, these people were shipped in from other provinces and given first chance at the available jobs.
I am not complaining about that. These are the facts. But what guarantee has the Minister that if an industry is established in a particular area the people of that area will get the jobs? There is no guarantee whatsoever that the people of the area will benefit in that regard.
In addition, while we have not a very large population in Canada and while I maintain we should have a much larger population, the fact is that our population is large enough that there is great flexibility in the movement of the labour force. This has been proven to be so in the Province of British Columbia. In that province the labour force is growing and growing but so is unemployment. Why? Because people are moving there to get jobs. They know there are jobs available, but if two people go out there for every job available there is still going to be plenty of unemployment. It is a fact of life that people move to places where jobs are available. All people are not tied by their apron strings to one place. Certainly an emotional factor enters the picture when a family wants to stay together in the area where they are now living, but I say there is enough flexibility in the labour force that tremendous movement can take place.
The last point I should like to mention is the economic factor, which I believe is paramount. I do not think we should induce industries to locate in places where it will not be economically sound for them to operate and survive. If an industry is artificially stimulated to locate in a particular area, it is obvious that the death knell of that industry is a foregone conclusion. It will fail eventually.
Although I have not consulted other members of my party, I am sure they will agree with me when I say that this legislation is a piecemeal, patchwork approach to overcoming unemployment in depressed areas. Because of automation and the changes that are taking place the need arises for workers to move and, as was mentioned yesterday, we must have an over-all policy that will take care of any contingencies that may arise in the case of individuals. We must do this and forget about the business of trying to stimu-
June 29, 1965

late industry to locate in a place where economically it does not belong.
[DOT] (5:00 p.m.)


Henry P. Latulippe: Mr. Chairman, I feel I must enter the debate on the motion before us because it concerns industry. Canada experiences major problems in this field.
I wonder if the proposal to distribute $50 million in loans will increase industry in Canada to the extent of providing work for all people in designated areas. Is the distribution of money in designated areas intended to displace industries?
If we take industries out of Montreal and relocate them in a designated area, while people are already out of work in Montreal, this will not solve the unemployment problem. If the Montreal industries relocate in designated areas of the province, will there be work for present employees of such industries? Can the minister tell us whether, at this time, there is plenty of production in Canada, or whether there is a lack of it? If there is a lack of it, why do industries not produce?
You will reply that perhaps it is because they do not have the money. Why does the Canadian industry lack money? Well, I will tell you right now, Mr. Chairman, it is that instead of financing consumption, we finance production. I am sure that the fault is not with production, but with consumption, because at this time, in 1965, our total gross production will top $50 billion. Now, in 1964, we barely disposed of $35 billion worth of products. This means that the balance is in warehouses.
We have lots of needs in Canada. We have an abundance of needs and they are flagrant. But consumers do not have the money to buy the production. If production is increased, what problem will that solve? Will that production be held in storage or will it be used to serve the needs of Canadians?
Well, if the needs of the Canadian people are to be served, let us organize the Canadian economy.
Our economy is not balanced. There is a lack of equilibrium between production and distribution. So long as we fail to solve the problem of equilibrium between the two, it is useless to put amounts of money at the disposal of manufacturers and to pay excessive rates of interest on those amounts.
Who are we going to protect in doing so? Those who manipulate high finance, to the detriment of the consumer.

Grants to Designated Areas
At this time we already have excess products in storage, and such consumers as might buy them do not have the money to do so; they would have to borrow.
Therefore, we borrow to manufacture products and we also borrow to consume them. Where are we going with this sort of unbalanced economy? If we are unable to find a way to balance this system which is beyond the reach of the Canadian people, it is useless to try to administer the country.
If war were declared tomorrow, all kinds of means would be found to balance the budget; necessary steps would be taken so as to put the production on the market, because we would know that everything that is destroyed would have to be replaced.
But, at present, if you want to replace production by other products, you have to work in order to sell products for the welfare of human beings. Canadian families have needs. There are still, in many constituencies of Canada, families that do not have bathroom in the house. This does not mean they do not need them. The needs exist, but the people are unable to obtain the goods they need.
It is essential to find a way to stabilize this economic factor which has been lagging for years, in fact, ever since confederation. In the past we could say that we had production problems. But those problems have been eliminated; today we have no production problem, nor any transport problem, but we have some tremendous financial problems.
If we wish to finance production and try to give a new impetus to the economy in designated areas, this can not be done with loans, because they would only be another burden on the taxpayers' shoulders who would have to pay more interest. This would contribute to increase the cost of goods to such an extent that individuals would no longer be in a position to buy them.
What is the use of producing in that case? If we want to be logical, let us set up our economy on a balanced, scientific and businesslike basis. This will not be done through loans. Loans have been known for a long time; they are as old as the world. They should never have come into existence, yet they do exist. Some people insist that money should yield profits, whereas money does not bear returns. This explains the imbalance, and this problem must be solved.
Several areas of the country are going through a recession. Finance is to blame rather than producers, consumers or workers.
June 29, 1965

Grants to Designated Areas Let us solve the problem of finance and we shall then settle practically all problems. But the matter is being overlooked.
I asked earlier for an increase in family allowances in order to provide taxpayers with purchasing power. Some Liberal members laughed. You will laugh, you Liberals, in the face of families, in the face of those who are starving, at the next election.
You can go and laugh at them in their own countries. You have already done so. I do not know who did, but I heard about it. That is what goes on, Mr. Chairman. Some are satisfied with their salaries, are content to eat their fill, while others starve in Canada, starve in the Province of Quebec. To prevent them from starving, we need reforms, monetary reforms.
We shall get such reforms if you are willing to open your eyes and ears, to put your fingers on the evil that festers in our shaky economy, on the business failures that occur throughout the land. There are bankruptcies everywhere. Why are there so many? Because there is not enough money in circulation. People are unable to buy and industries cannot sell.
I am the owner of a small industry myself. The problem is not one of manufacturing but of sales. The problem in this country, as far as sales are concerned, is one of getting paid; that is the trouble and you refuse to settle the problem. The problem cannot be settled by loans.
If you want to settle the problem of the Canadian economy there is overstocking of real products on shelves-then why not give an adjusted discount on these products. This will result in products being sold at reasonable prices.
It is not interest on money that is needed. The sole purpose of the administration is to arrange for loans. The government has become a lending institution, it endorses loans, it endorses financiers, so that the latter may obtain 6, 7 and 8 per cent. That the people be taken unfair advantage of, that they be throttled, is not important, but interest on money must be maintained at any cost; governments must be endorsers and take their responsibilities toward the whole of Canada, they must endorse all those loans in order to organize the Canadian economy a little.
Some small industries are head over heels in debt even before they start operating. They cannot even go on operating because production is overtaxed-there are direct, indirect, provincial, municipal and school taxes, so

that production is taxed up to 50 per cent of its value. When you buy a piece of equipment or a piece of furniture, if the latter costs $100, taxes account for $50.
That is the kind of economy we would like to reform. It is not with the system advocated by the government that the present system will be corrected. A solution can be found. I said so a moment ago, it is by means of a compensated discount on products that this problem can be solved and, of course, with money from the Bank of Canada. There is surplus of production which the people need, which they should have and which they should be able to purchase.
In industries automation has now replaced the worker to a great extent. Where 100 men were employed before, only 10 are required now with automation. Industries are modernizing as never before.
Who is going to buy the production? I am asking you? Who is going to solve the problem of consumption in Canada? Production is financed, but nobody thinks about financing consumption. Consumption is a necessity of life and, consequently, first consideration should be given to financing the consumer not by indirect but by direct means, not by letting him be exploited by financiers but by helping him by direct means, so that the individual consumer can satisfy his own needs, for there is an abundance of production.
But production should be controlled by the consumer and not only by producers, because what is the use of producing if you cannot sell.
I would have a lot more to say, Mr. Chairman, but I will confine my remarks to what I have said. I am asking all those who are controlling the economy, ministers of the government, for instance, to introduce the necessary remedy in order to improve the lot of the Canadian people.
If Canadians do not get that, communism will spread in Canada. In fact, it is already permeating everywhere in Canada. Why? Because there is hardship in the country and the people have lost all hope of a better lot. The only thing which our citizens have are new troubles and new taxes. They are discouraged, they are no longer even interested in politics. At the last election, only 30 per cent of Montreal's electors voted, which shows how disenchanted citizens are with politics.
There are also urgent economic factors. The problem will not be solved only by setting up new industries to create more jobs. I am for new industries indeed, but I want us to
June 29. 1965	COMMONS
keep those we already have. The existing industries fight in a mess of problems. Only big industries and large capital get excessive profits. They suit large finance interests by borrowing money, but they have to charge prohibitive prices for their goods in order to pay the interest demanded by financing interests.
I thank you, Mr. Chairman. Once more I want to assure you of my appreciation. I would like to see the government take a positive step from an economic standpoint, from the standpoint of industry in Canada and from the standpoint of consumption in this country. Something needs to be done. We are not after power, because we are not here for that. We are for improvement. If those who preside over the destinies of this country make the improvements asked by the people, we will be the first to congratulate them. If they do not, we will continue to tell the people that there is no improvement and that the present government protects only a small group of society to the disadvantage of ail the others.
[DOT] (5:10 p.m.)


Mr.   Olio@: Let me say at the outset that I support the principle of this legislation. Some hon. Members have criticized the advisability of proceeding by means of grants as against tax incentives or tax reductions. Let me point out, having been in business, that there is a difference between the two: Before you get tax credits you must make a profit. The purpose of this legislation is in part to share the risk. It has been said on many occasions that the Government is a partner in the profits-why not in the risk?
Having said this, may I add that I find the resolution something of a paradox. I understand from the definition the Minister gave that these provisions only apply to manufacturing or processing facilities. I put it to the Minister that most of the areas designated are four-square with the tourist industry. Nevertheless, the tourist industry is not included in the definition. I am afraid we regard the tourist industry as not being an industry at all. Mr. Deutsch of the Economic Council has indicated that new jobs will have to be found in the service industries rather than in the manufacturing industries. I put it to the Minister that there is some help already available for manufacturing industries, while no help is available to the tourist industry of this country, to bring it up to date.
DEBATES	3011
Grants to Designated Areas
We should consider the fact that Canadians and Americans will have more time and more money to spend. Despite the many natural attractions of this country they will be reluctant to spend more of these dollars here until our facilities have been improved and brought up to date. Our operators do not have the money to make the necessary improvements. Consider the facilities which are available in New York State where the tourist industry has now become an important full time industry. To cater efficiently to the needs of tourists, local help is necessary, and this is a field which can probably be developed to even more profitable advantage than the relocation of manufacturing and processing.
I have no criticism to make of this measure. I think it will help the general economic situation. But I should like to call attention to the fact that the Government has neglected to include the tourist industry in its definition, and with great respect I suggest the Department of Industry should take another look at this industry, bearing in mind that it may be comparable in employment opportunities to the manufacturing and processing industries in the areas concerned.


Mr. Ricard:: Mr. Chairman, the resolution under study gives me the opportunity to express my opinion and that of two so-called independent bodies, with regard to this measure. I hope the information I shall provide to the minister will help him correct, if possible, the inadequacies of this legislation. But before starting my remarks, I must say that I sympathize with the minister, because it must certainly be most distressing to be criticized by one's own political colleagues. I commend the previous speaker for his objectivity and I trust that the minister, contrary to what he has always done up to now, will take heed of his advice and act accordingly.
Mr. Chairman, I entirely support the opinion expressed a few moments ago by my colleague, the hon. Member for Wellington South (Mr. Hales). I think that, because of other similar measures taken by various governments, the present measure is only a duplication of what has been done by other governments; in fact, it is not entirely lacking in political sense and shows some understanding of what patronage can do for a government. In any case, I submit that this initial amount of $50 million seems very impressive and I am of the opinion that the
June 29, 1965

Grants to Designated Areas minister would be well advised to take note of any advice given him, particularly from this side of the house.
If you take a quick look at the various designated areas, you are bound to come to the conclusion that the Liberal ridings, especially those represented by cabinet ministers, are particularly well treated, and in that regard I will bring evidence only from people with nothing at stake in this matter, namely the mayor of St. Hyacinthe and the provincial Minister of Industry and Commerce, Mr. Gerard Levesque.
I cannot help notice that, to a similar extent, the government gives quite a special treatment to big companies and does not give the necessary consideration to small ones.
In my province, handicraft, small industry, family industry play a very important part and I believe that the minister should give particular consideration to that sector of industry. Small industry has played a very important role in the past and, because of the lack of consideration and support by the government, and because of competition on the part of big industries, those small local family companies find themselves in a very precarious position. Therefore, I beg the minister to grant this situation a special consideration in order to rectify, if necessary, the deficiencies of this resolution.
I was saying a moment ago that I would like to convey to hon. members the appreciation of the mayor of St. Hyacinthe and of the Quebec Minister of Industry and Commerce. I should like to quote part of an article published in Le Courrier on February 4, 1965:
If the city of St. Hyacinthe is in such a had state as far as industrial development is concerned, even though it is financially and administratively sound and in a position to provide many services to individuals as well as to institutions, the federal government at Ottawa is indirectly to blame because of the various areas it has considered as designated areas.
It goes on to say:
In short, that is the opinion expressed by His Honour Mayor Jacques Lafontaine, on Monday, to city council in connection with the annual brief presented by the central council of national unions and following his trip to Quebec City where he met, last Thursday, Mr. Gerard-D. Levesque, Minister of Industry and Commerce, to discuss the impossible situation of a city such as ours.
Everybody knows that our city lost several new industries to other municipalities, such as St. John and Shawinigan, to mention only those two.
Now, those cities are in so-called designated areas because of their high rate of unemployment, and their administrators are now able to give

extraordinary advantages to industries wishing to settle within their limits-
That is the opinion of the mayor of the City of St. Hyacinthe. But what is the opinion of the provincial minister of Industry and Commerce? Here it is:
The Quebec Minister of Industry and Commerce stated that normal cities are getting a poor deal but that the provincial government is not responsible, because it was not consulted in any way by the federal authorities which, on their own initiative, decided which were the designated areas in our province.
And the minister concluded:
As long as this deplorable state of affairs is maintained, the chances for industrial development in the province will be small, and the federal state is the only one to blame.
Mr. Chairman, in quoting the Quebec Minister of Industry and Commerce, I feel that I am repeating the remarks of a person who is not a political enemy of the federal Minister of Industry and I find it odd that a provincial Liberal minister should speak in such strong language about this federal Liberal government. It is surely because the Quebec Minister of Industry and Commerce felt justified in doing so when he visited St. Hyacinthe and also when the mayor of St. Hyacinthe went to Quebec City, and made the statement I have just quoted.
I wish the minister would devote a little more attention to the development of trade and commerce in our province and a little less attention to political patronage, which is beneficial only to his party.
I do hope that these words will give the minister food for thought and allow the municipalities in the province of Quebec, and more particularly the city of St. Hyacinthe, to obtain their fair share.
[DOT] (5:20 p.m.)


Mr. Peters:: Mr. Chairman, representing a large area of northern Ontario where this type of legislation was considered to be very advantageous because of particular factors, I am very unhappy with the operation of this Act and with the whole operation of the Department of Industry which has administered the Act. It is a fact that there are areas of Canada that are in need beyond all others of government assistance in developing industry. You will remember, Mr. Chairman, the hue and cry that went up when the Prime Minister's area was hard hit with unemployment a year or two ago when they closed down the uranium industry as such. You will remember, also, that at that time
June 29, 1965

the Government had spent millions and millions of dollars in regard to that particular affair, for which the Liberal Party can take absolutely no credit but have to bear a great deal of blame, in the development of that industry.
[DOT] (5:30 p.m.)
Remember the community of Nickel Belt which supplied uranium to the United States. The town almost disintegrated overnight when this industry was no longer needed and Parliament was asked to designate it a distressed area. I think everyone in Canada agreed with this action because a large number of people were displaced and a terrific amount of capital wasted and squandered on the expectation that this mining community would continue for a number of years.
A number of people objected this afternoon to things which had happened in the past. I am aware that this type of incentive does produce anomalies in areas it is meant to help. We are all familiar with the situation in Brantford. Some of us are aware of the situation in the Waterloo area. We are aware of the fact that this legislation has caused many unpleasantries and much unhappiness between communities which have taken advantage of this legislation, and others which have not. Kirkland Lake is a good example of the type of area not considered. Renfrew is in no different position, as are a number of other locations in every province in Canada. These are communities which died slowly over a long period of time.
The industrial commission in Kirkland Lake went to see some government officials in Ottawa on two occasions on the question of assistance to develop secondary industry. The first time they were surprised that the Department of Labour did not have sole jurisdiction over deciding what should be the criterion, what the incentive program would be and how the designated areas were decided. They were surprised that the Department of Labour considered Kirkland Lake to be fairly well off because of two factors. One was that there was no unemployment, which is fairly easily understood. The other was that the total wealth per person in the area is not very great. I am wondering whether the township I live in is one of the most wealthy townships in the country, if that is the kind of statistic used. I may be one of the few taxpayers in my area, but because of the income I receive these statistics may indicate that this is a wealthy taxpaying area. Certainly the farmers in my area do not pay
Grants to Designated Areas much tax, so if this sort of criterion is used the situation becomes ridiculous. This may be happening with regard to Kirkland Lake.
With regard to the question of unemployment, we have an unemployment insurance office which several years ago was divided into branches, owing to the diversity of industry in the area covered. I thought this was fair and reasonable and worked to the advantage of the people it served. But it meant that the bush working population, which is a seasonally employed population, joined with the agricultural population and was transferred to the new unemployment insurance office at New Liskeard. The office at Kirkland Lake has been left with a stable work force, and therefore there is no unemployment.
You may be surprised to know that no young people register for employment at Kirkland Lake. This is because there are no jobs in Kirkland Lake available. These people know when they graduate from the institute in the area or from the vocational school or high school that if they are going to work, then they have to go to Toronto. Therefore they move to Toronto and get a job. They never register at Kirkland Lake. Perhaps we should have had everyone unemployed at Kirkland Lake register, and if this were done the unemployment figure would certainly triple immediately. These people are not stupid. They are well aware which jobs are available and they do not apply for jobs which do not exist. They do not want to become part of this statistic in which I see no sense.
Less than a year ago there was a bad accident in one of the mines in my area. These mines are over a mile in depth and have reached the economic limit of their productive capability. As soon as two men were killed last fall at one of the mines, it was closed. Two weeks ago there was a very bad bump at the Lakeshore mine and it was closed, except for salvage operations. This means that 600 people have been laid off. I have not been able to check the figures because I do not know where the figures will be found, but I bet that these 600 employees are probably one third of the total number of unemployed which Kirkland Lake had during the worst period over the last two or three years. I will bet that these 600 people do not register anywhere for employment, because the average age of the miners working in the gold mines at Kirkland Lake is 54. So where would they get a job? They have worked for 35 to 40 years underground in gold mines. Are they going to work on a farm or pick up a chain
June 29, 1965

Grants to Designated Areas saw and go into the bush? Are they going to become truck drivers or work on the railways? What kind of jobs can they apply for? So they do not register and become part of the statistics. Yet this Government is not smart enough to find some way to accommodate the people in that area who are not able to take advantage of employment in manufacturing industries and join the numbers who go to make up these statistics.
If any of these officials are in the galleries, there may be among them some of the smart young people who travel around, and I have met many of them. The Minister of Industry should be quite proud of the number of people he has been able to assemble, but they have not done a damned thing for places like Kirkland Lake. One official became quite interested in Kirkland Lake and I should like to read part of a letter which he wrote to the Kirkland Lake Industrial Commission after he returned to the Department. This young fellow was lent to the Prime Minister to help in the war on poverty. I do not know what that will mean, but there are many people in my area who would not consider Kirkland Lake to be a rapid growth area. They are well aware of the fact that Kirkland Lake, since its peak period between 1937 and 1942, has gone steadily downhill. This is what this official says:
Upon my return from Kirkland Lake, I conducted an Inquiry into the possibility of designating the territory administered by the National Employment Service Office of Kirkland Lake for the financial incentives program of the Area Development Agency and, as we had foreseen during our discussions last September, I found that there was no possibility of obtaining designation at that time. Moreover you will no doubt recall that I had indicated to you, during the same discussions, that the Area Development Agency Program for Designated Areas had been under review and that we would have to await the results of this review before further discussions along these lines could be entertained. This situation still exists. I do hope, however, that within a relatively short time we shall know whether or not the program, as it now exists, is to be modified.
At a further meeting we have had with them we were informed that it is not, and that this situation will not be corrected.
I believe that we should be more interested in people than in property. This is a capital incentive program. This program assists capital investment. It helps give to capital; but it really does not give to people. This is one of the most advantageous capital bolsters we have had for a long time, but it does not help the people to become employed in industry. We are merely adding incentive to capital; it is not given to people.

I am well aware there are other programs which do assist people, but this one does not. This program is a bolster to capitalists, something to which I have never dedicated myself, and I have never felt strongly about the capitalist system. Yet this Government gives $50 million to aid capital, having no regard for people or for communities which have been built up at terrific expense.
We have hospitals, schools, technical institutions, vocational schools, a dozen or more primary schools, a fire and police department equivalent to that employed by a community of 50,000 people, all paid for by 800 miners who are employed in that community. What is to be done about this situation? All the Minister suggests is that industry be located elsewhere, and we know that once industry is located in the suggested areas there will follow these increased demands for social capital. As one Member suggested, we are going to build these communities on the golden horseshoe basis.
[DOT] (5:40 p.m.)
Let us remember that we must keep industry close to the area of consumption. We all know, including the officials of the department, that there is not going to be a mill established to process the iron ore of northern Ontario because it is uneconomical. I do not think many people have complained about that fact, or about the fact that Jones and Laughlin is exporting the product to the United States, yet unable to build a steel mill in the Timiskaming area. Let us not forget, however, that we are not getting one red cent in royalties in this regard, but rather wages for 200 people. Has the Department of Industry given us any consideration because 300 people have been laid off this month? We have not been designated as a distressed area-hell, no. Instead of that, other areas where wages are 30 or 40 cents per hour higher have been so designated.
Timmins has been designated as a distressed area and the situation there is no different from that of Kirkland Lake, in spite of the fact that the situation in Timmins has changed considerably since the stock market took a jump. There are those who say we are not going to have a smelter in Timmins, but let me assure you that the people in the Timmins area will not continue to mine or sell their Texas-Gulf for export to the United States. We are interested in getting benefits equal to those received by other areas, and Kirkland Lake is not receiving equal benefits.
June 29, 1965

There is no justification for anyone who has half an eye, driven through that area and observed the situation there, wanting to create another Cobalt there.
Throughout northern Ontario and northern Quebec communities the people are having to provide increased capital services such as roads, sewers, sidewalks, police and fire protection. The people of those areas have provided the capital which has built and maintained the services to this time, and they deserve some assistance in the maintenance of those social capital expenditures, particularly when industry no longer exists. Other countries like Sweden have been able to develop initiatives in this field in deciding where industry should be located. They have been able to sit down and plan their economy.
You know yourself, Mr. Chairman, as a result of driving in the Toronto area that the many factories there this month which were not there last month require greatly expanded social capital services, and that this expansion of industry will require an equivalent expansion in transportation. These problems are always magnified by increases in industrial locations in an area.
Who was it provided the capital for the development of Elliot Lake? The federal Government provided $90 million for that area in the form of cash and tax exemptions for mining companies over a three-year period. Some of these companies did not spend one red cent in the development of this area. The Canadian Government supplied the money to build these plants. The situation has not proved economical so far as the miners are concerned. They spent their savings, worked there for a period of a few years and then had to move out, losing everything they had invested. Has the Department of Labour or the Department of Industry taken this into account?
The Minister of Industry and the Minister of Labour are well aware of the circumstances surrounding these mining areas, and every official of those departments knows of the situation that now exists. I refer to areas in the proximity of Renfrew, the head of the Lakes, particularly around Port Arthur, as well as other areas developed in the north because of an abundance of primary products, whether utilized by the forestry or mining industries.
If we are going to check this developing problem, it must be done now rather than wait for 150 years as was the case in the Maritime Provinces. Let me warn this House now that if there is any intention to pass
Grants to Designated Areas this legislation by July 1 without some consideration being given to the areas I have mentioned, if I can find any way to stop it, there will not be an adjournment for the summer recess for at least a month. The people of northern Ontario are worried about the situation and feel that steps should be taken to make their conditions at least equal to those of other similar areas.
Within the next two years there will be no gold mines left in northern Ontario. Surely the Minister cannot say that he is not interested in that fact. The Government of Canada has paid $10 million per year toward assisting the gold mining industry in these northern communities. Are they now to be abandoned? If that is the attitude taken by this Government, then what they are doing is honouring only the financial interests of the gold mining industry, the shareholders and others connected with this development, and disregarding the interests of the people who work in the industry. Is the Government prepared to say that? If it is not prepared to do so, then I suggest some change be made so that these areas of northern Ontario can be designated as depressed areas, small growth areas, distressed areas or designated areas. Let them be called by any name, but let them receive some assistance instead of being penalized by the attitude of this Government. They should receive treatment at least equal to that afforded other communities which have more advantages.
If the Government took the attitude I suggest it might not cost one red cent because, while I know of no industry which has gone into the designated areas of Timmins or Rouyn, I do know of several industries that will locate in the Timiskaming area when it becomes a designated area so that they can take advantage of that situation. Surely the Minister is fair enough to give the people of Timiskaming the opportunity of having a pulp mill or some other enterprise locate in that area. He can do so by treating them on an equal basis with those people of the areas to be designated.
The program as outlined by the Minister is not fair because the criteria set down by the Department of Labour are not adequate to take into consideration slow growth areas which, a few years ago, grew rather rapidly but then began to deteriorate. I am not suggesting for one minute that this Government should not consider those small towns which exist as a result of the agricultural industry, but I do feel that there has been a
3018	COMMONS
Grants to Designated Areas trend to ignore the rural communities in favour of the urban centres. This has in part led to the urbanization which has taken place in Canada.
[DOT] (5:50 p.m.)
But we are talking about communities with a population of 20,000 which have all the necessary facilities already paid for. In many of these towns that have been built on the mining industry the municipal debt was paid off 10 or 20 years ago. We have the facilities but we do not have the growth and development that other communities have experienced.
We do not want to wait until the situation gets as bad as in the Maritimes. I do not want to represent an area that has died and for which we are trying to bring about some kind of rebirth. I want our area to be given assistance now, so it can continue to participate in the same way as the rest of Ontario. In that regard I would refer to this statement by one Ontario Government department:
The Department of Economics and Development stands ready at all times to help in this development-*
The development of northern Ontario.
-confident that by the proper utilization of our natural and human resources, by faith in the unity of our people, northeastern Ontario can play a most vital role in the fulfilling of Ontario's destiny.
We have helped to maintain Canada in the past. When citizens from every riding in Canada came to the gold mining areas of northern Ontario looking for work they received work and thus were able to maintain their families and help to maintain communities throughout Ontario, Quebec and many other parts of Canada. Now we are asking for equality of opportunity so that we can take advantage of the assistance given to other areas. If we are given this opportunity we will continue to play our part. I can assure hon. Members that there will be no cost to Canada in the end because the contribution we will make will be much greater than any assistance that may be extended to us through this legislation. If this is done we are prepared to support the legislation. If this kind of concession is not made I am prepared to fight the legislation in any way I can until it is made.


John James Greene: Mr. Chairman, in listening to the hon. Member for Timiskaming I was reminded of how often, in listening to economic questions being debated at provincial political conventions over the years, I have heard northern Ontario representatives

DEBATES	June 29, 1965
threaten to secede from the Province of Ontario and of how often I have heard eastern Ontario representatives say:	If you are
leaving, for God's sake take us too.
I think the tragedy of the Province of Ontario lies in the fact that development has been centralized in the metropolitan area and in western Ontario and that generally speaking eastern Ontario and northern Ontario have been left as "the poor South" of this great and rich province. In his criticism of the results of the legislation I think there was inherent in the remarks of the hon. Member for Timiskaming the fact that the approach to the economic problems of the nation embodied in this type of legislation is a sound one. What he was complaining about was the fact that the interpretation of the legislation did not suit the particular needs of his people and, in line with his duty as a Member representing these people, he objected in the strongest possible terms to the application of the rules of the legislation. But in principle I think that he and the people of eastern Ontario would agree that the approach of providing a Federal incentive to areas of slow growth, high unemployment and a low rate of growth of employment is a sound one.
This is the first time in the history of this Dominion that this approach has been taken. As we are in many other areas, we in this country have been behind countries such as Italy, the United Kingdom and Sweden with regard to the decentralization of industry.
The hon. Member for Waterloo South said that the emphasis on decentralization should not be negative. In other words, it should not render the economy of the country inefficient in its application. I certainly think that none of us would wish to make Canada's economy inefficient. I take exception and disagree most violently with those ivory tower university economics professors who sit there in their shelter and say that the only way we can be efficient in this nation is to build two or three little Japans from one end of the country to the other, and that this is the only way we can compete in world markets. I say that economists who argue in this fashion negate the entire Canadian challenge. We have a great land mass and a small population and the challenge is: Can we in fact derive the social benefits of that great land mass and still be efficient economically? I think we can do so and I believe that for the first time the Government has recognized that principle by bringing in area development legislation under the Department of Industry.
June 29, 1965

We have not hidden our heads in the sand and said: Let the Japans grow and leave the rest of the land to lie fallow, because in that way we will be efficient. As I said, for the first time the Government of this country has said that this nation should be permitted to grow with some equitable distribution of the sources of production and the sources of employment so that there will not be first and second rate citizens as there are today, and so that we will at least try to minimize the gap between the mountains and the valleys in our economic picture.
I am one of those who disagree with the application of the program in its first stage. I think that the Government deserves credit for bringing in the program and for accepting this philosophy which will lead to the equalization of opportunity across this land, but I do think that we need to become more sophisticated in our approach to the problem. We need to approach it from a proper base and above all we need the courage to approach the problem, if need be, from a basis of common sense, on an ad hoc basis, if you like, on the basis of economic principles, yes, but not on the basis of political patronage at all.
I do not think any set of statistics, no matter how comprehensive they may be, can possibly determine whether a certain area (a) can usefully and economically assimilate industrial growth and (b) whether incentives will contribute to that useful economic growth. I do not think any set of figures, no matter how sophisticated and complex they may be, can provide the perfect answer. In the Ottawa valley there is a saying which I believe has spread throughout a considerable part of the country. It is that "figures don't lie but liars can figure". It may be we need to do a little more figuring in this particular area.
I think the problems of eastern and northern Ontario are similar and unique. I believe we must admit that the statistics and the criteria as they were evolved do injustice to those areas of slow growth in eastern Ontario and northern Ontario. In all fairness I must say that our unemployment picture and our lack of growth of employment are not as critical as in areas such as the Gaspe, part of the eastern townships and a great part of the Maritime Provinces.


The Chairman:: Order. It being six o'clock, pursuant to the provisions of subsection 3 of Standing Order 15 it is my duty to leave the Chair so that the House may proceed to the consideration of private Members' business.
Private Bills


John James Greene: May I call it six o'clock, Mr. Chairman?


Mr. Deputy Speaker:: It being six o'clock, the House will now proceed with the consideration of private Members' business as listed on today's order paper, namely private bills, public bills.
[DOT] (6:00 p.m.)



PRIVATE BILLS

Hon. J. Watson MacNaught (Solicitor General):: Mr. Speaker, I understand that the Standing Committee on Transport and Communications has referred two bills back to the House for consideration, Bill S-4 and Bill S-5. Could we have unanimous consent to deal with the committee stages of these two bills?


Some Hon. Members:: Agreed.



CONSIDERED IN COMMITTEE-THIRD READINGS

[Stage Direction]
Bill S-4, respecting Algoma Central and Hudson Bay Railway Company-Mr. Nixon.
Bill S-5, respecting Great Northern Railway Company and Great Northern Pacific and Burlington Lines, Inc.-Mr. Wahn.

[Stage Direction]
The House in Committee on Bill S-9, to incorporate Principal Life Insurance Company of Canada-Mr. Lambert-Mr. Lam-oureux in the Chair.
On clause 1-Incorporation.
Norman Platt Lambert: Mr. Chairman, I simply wish to make a brief statement. A week ago three of the petitioners, Messrs. Forster, Stewart, and Patrick, accompanied by its counsel and parliamentary agent, appeared before the Standing Committee on Finance, Trade and Economic Affairs. They were examined at length. The Superintendent of Insurance, Mr. Humphrys, appeared and was questioned in some detail by members of the committee. The committee accepted the bill in its entirety without amendment. The Chairman of the Committee has reported back and I would now ask hon. Members to approve the bill clause by clause.


[Stage Direction]
Clause agreed to.
Clauses 2 to 8 inclusive agreed to.
Preamble agreed to.
Title agreed to.
Bill reported, and read the third time and passed.
[Stage Direction]
June 29, 1965
Private Bills

Mr. A. J. P. Cameron (High Park) moved: the second reading of Bill S-10, respecting the Trustee Board of the Presbyterian Church in Canada.
He said: Mr. Speaker, I should like to say a few words before the motion for second reading is adopted, in order to explain the purposes of the bill to the Members of the House.
The Trustee Board of the Presbyterian Church in Canada was incorporated by chapter 64 of the Statutes of Canada 1939, for the purpose of acquiring, taking and holding and dealing with real and personal property of the church. There was only one amendment, and that was by chapter 23 of the Statutes of Canada 1962-63, which widened the field of investments to include investments in which a Canadian insurance company might invest, and granting power to establish plans for gratuities, pensions, superannuation, etc., for ministers or former ministers of the Presbyterian Church in Canada, and section 23 was added clarifying the references in the Act to the board of administration or the administrative council.
With respect to the purpose of the proposed legislation, at the present time the board consists of seven members established by act of incorporation. It is now desired to make provision for enlarging the number to a maximum of 15, and to provide that until otherwise determined by the general assembly of the church, the board shall consist of eight members.
It has been the practice to appoint the chairman of the administrative council and treasurer of the church to the board. It is desired to make these appointments mandatory, but if the treasurer of the church might at some future time become a permanent paid position, or alternatively might cease to exist under that name, then in either of these two events it is desired to appoint the person holding the position of chairman of the finance committee of the administrative council to the board in place of the treasurer, if that position were not a paid position.
[DOT] (6:10 p.m.)
The proposed legislation deals, first, with the membership of the board. In the second place it grants power to combine and consolidate in the hands of the board-to receive the income therefrom and to apportion the net income therefrom pro rata according to the respective interests therein among such

trusts, institutions, organizations, schemes and funds, provided that no such moneys or investments shall be consolidated, if by the terms of the instrument under which they are held they are specifically directed to be administered separately. It also gives power to employ investment counsel or other professional advisers.
In the third place it provides for the enactment and repeal of bylaws, regulations, etc., the power of the general assembly to delegate power and revoke such delegation.
Motion agreed to and bill read the second time.


Mr. Deputy Speaker:: Pursuant to Standing Order 105 the said bill is now referred to the Standing Committee on Miscellaneous Private Bills.



EVANGELISTIC TABERNACLE INCORPORATED

Mr. Eric Stefanson (Selkirk) moved: the
second reading of Bill No. S-ll, to incorporate Evangelistic Tabernacle Incorporated.
He said: This bill is in standard form and is similar to many others which have been passed incorporating other religious bodies. The petitioners are five residents of the City of Winnipeg. This religious organization has congregations in Ontario, Saskatchewan and British Columbia as well as Manitoba. It also maintains a missionary in the Philippines. It carries on certain charitable and educational work.
The Evangelistic Tabernacle was established first in Canada in 1956. It has affiliations with a similar religious organization in the United States. The scope of its activities has now developed to the point where this body must become incorporated if it is to continue to be effective in the spreading of the Christian gospel. I understand that this bill will be referred to the Standing Committee on Miscellaneous Private Bills. A representative of the organization will, of course, appear before the committee if the bill is referred there, and be in a position to provide detailed information to hon. Members.


William Arnold Peters: I have one comment to make at this point. The hon. Member has told us that this bill, if passed, will be referred to the Standing Committee. I suggest the committee might give some consideration to a problem which to my knowledge has arisen in a case of certain of the non-charitable organizations established by statute. It concerns the liability incurred by
June 29, 1965

the main body in relation to acts by one of its subsidiaries.
The Order of Elks was recently involved in a difficulty of this kind. The charter we granted took away certain responsibilities from individuals without giving a right of redress to the corporate body. When representatives come before the committee in future perhaps they would be prepared to indicate what provision should be made in this respect. It is a matter which might be considered in the light of the clause under which the organization in this case is seeking to hold property and community wealth.
Motion agreed to and bill read the second time.


Mr. Deputy Speaker:: Pursuant to Standing Order 105, the said bill is now referred to the Standing Committee on Miscellaneous Private Bills.



CANADIAN INSTITUTE OP MINING AND METALLURGY

Mr. M. J. Moreau (York-Scarborough) moved: the second reading of Bill No. S-12, respecting the Canadian Institute of Mining and Metallurgy.
He said: This is a very simple bill dealing with the Canadian Institute of Mining and Metallurgy which was incorporated in 1898. The purpose is to change the constitution so as to enable the Institute to change the location of its head office more easily. At the present time this can only be done by a favourable vote of two thirds of the entire membership. Membership of the society is very far flung and it has proved to be virtually impossible to get a vote of two thirds of the membership at any one casting. The present bill asks that the incorporation be changed so as to permit a change in the situation of the head office by a two thirds majority of the votes cast, rather than by two thirds of the entire membership.
If the purpose of the bill is agreeable to the House I would ask for unanimous consent to move third reading at this sitting.


Mr. Deputy Speaker:: Is it the pleasure of the House to adopt the motion?
Motion agreed to and bill read the second time.


Mr. Deputy Speaker:: We need the unanimous consent of the House to suspend Standing Order 102 so as to allow this bill to go to the Committee of the Whole rather than to the Standing Committee on Miscellaneous Private Bills. Is this agreed?
Private Bills


William Arnold Peters: Was it the intention that this bill should be referred under the Standing Order to a committee? The effect of the amendment proposed would be to disfranchise all those who do not have an opportunity to participate in a vote on any proposal to change the address of the head office. The obvious question to ask is whether this proposal has ever been opposed in the past.


Maurice John Moreau: No. It has not been opposed. Members vote by mail, but the ballots returned never amount to two thirds of the membership. They have an opportunity to vote but do not exercise it. I think this is understandable in the light of the far-flung membership that this would happen.


Mr. Deputy Speaker:: Does the hon. Member have the unanimous consent of the House?


Some hon. Members:: Agreed.
The house in Committee on Bill No. S-12 respecting the Canadian Institute of Mining and Metallurgy-Mr. Moreau-Mr. Lamou-reux in the Chair.
On clause 1-Repeal.


Reid Scott: I gather the purpose of the amendment is to change the method by which the head office can be moved around.


Maurice John Moreau: Basically, that is the purpose of the bill. We are asking for a change in the incorporation so that the head office of the Institute can be moved by a two thirds majority of the votes returned rather than by a majority of the entire membership. The Institute has a large membership; I am sorry I am not able to inform the Committee as to the precise number but it is probably in the thousands, and some of the members are outside the country. It has proven practically impossible to get a two thirds vote returned when any vote is taken.


Mr. Ormiston:: Will the hon. Member tell us where the headquarters is at present? If this bill should pass is it intended to move it to some other area?
[DOT] (6:20 p.m.)


Maurice John Moreau: The head office is now in Montreal. I think it may be desirable to move it elsewhere depending on the residence of the president and head officers in any given year. It may be something that could be considered by the membership, at least in the future, as to moving the office rather than having it fixed in one spot.


[Stage Direction]
Clause agreed to.
[Stage Direction]
June 29, 1965
Private Bills
Preamble agreed to.
Bill reported.
Mr, Deputy Speaker:: When shall the said bill be read the third time; now?


Some hon. Members:: Now.


Maurice John Moreau: the third reading of the bill.
Motion agreed to and bill read the third time and passed.



THE PACIFIC COAST FIRE INSURANCE COMPANY

Mr. Grant Deachman (for Mr. Basford) moved: the second reading of Bill No. S-14, respecting the Pacific Coast Fire Insurance Company.
He said: Mr. Speaker, the purpose of Bill No. S-14 is to change the name of The Pacific Coast Fire Insurance Company to the Century Insurance Company of Canada in English, and in French to La Compagnie d'Assurance Century du Canada; and to provide for an increase in the capitalization of the company from $1 million to $2 million. The Pacific Coast Fire Insurance Company is well known on the Pacific Coast in the Vancouver, B.C., area. It was initially incorporated as a provincial company, under the laws of British Columbia, in 1890. In 1908 the company applied to Parliament and received a statutory charter. Since 1920 the Pacific Coast Fire Insurance Company has belonged to "The Century Group" of insurance companies which has its head office in England.
The head office of The Pacific Coast Fire Insurance Company is in Vancouver, B.C. The company at the present time carries on business in every province of Canada except Prince Edward Island, and also writes contracts of insurance in the United Kingdom and the United States. In addition to its offices in Vancouver it has branch offices in Calgary, Edmonton, Winnipeg, Toronto and Montreal. The company has a staff of 93 employees in its Canadian offices.
In 1964 the company, which writes all classes of insurance except life insurance, earned net premiums totalling $3,096,300, of which $1,486,000 were earned in the United Kingdom and $392,000 were earned in the United States. The balance of $1,218,300 was earned upon the company's Canadian business. The aggregate of sums insured in Canada in 1964 was $140,548,600.
Motion agreed to and bill read the second time.


Mr. Deputy Speaker:: Pursuant to Standing Order 105 the said bill stands referred to the Standing Committee on Finance, Trade and Economic Affairs.


Mr. Ian Grant Wahn (St. Paul's):: Mr. Speaker, may I ask the unanimous consent of the House to consider in Committee of the Whole, Bill No. S-7, relating to Interprovincial Pipe Line Company, which bill was reported from the Transport and Communications Committee, without amendment, earlier today.


William Arnold Peters: Mr. Speaker, I am not aware that it was reported. In any case the hon. Member has not unanimous consent.



IMMIGRATION ACT AMENDMENT


James Norris Ormiston: the second reading of Bill No. C-12, to amend the Immigration Act (Foreign Intervention in Industrial Disputes).
He said: Mr. Speaker, I hope that bringing this bill before the House will accomplish some of the things which previous bills have done in bringing matters of interest before the House for discussion. It seems, Sir, that from time to time facts are brought to our attention which indicate that there is an ever-increasing American influence on the Canadian way of life. This has been pointed out on several occasions by the Minister of Finance (Mr. Gordon), who has endeavoured by legislation and other means to rectify this situation and who has stressed the need to give Canadians the opportunity to buy back their own heritage and their own resources. That is only one aspect of this question; the other concerns the influence of American culture on the Canadian way of life.
We know that by legislation the programming of our national television and radio is restricted to a certain American content in order that Canadian producers and artists are able to make their mark in their own chosen professions. However, Mr. Speaker, there is one aspect of Canadian life which seems to ignore the American influence, and that is in the field of labour and management relations. That is the reason the bill is before the House at this time.
Specifically, the purpose of this bill is to keep Canadian the disputes, negotiations and settlements that occur in Canada between employer and employee, and to prevent

June 29, 1965

foreign fomentation and fermentation of these disputes into test-tube experiments for the benefit of foreign power groups without regard to Canadian employer-employee interests. We have had many instances of foreign participation in our labour relations. As a matter of fact it has been so marked that not so long ago the C.B.C. or some of those who participate in presenting the programs found it advisable to present to the Canadian public a documentary on what happens when there is undue influence brought to bear in a strike in which labour and management are concerned. I refer to the C.B.C. program which caused a great deal of interest several months ago, namely "This Hour has Seven Days", which related to the strike between the Toronto newspapers and the printers.
Here was a situation where we had almost reached agreement between labour and management. However, because of the participation of American strike promoters, who fomented some discord, the strike was kept going; in fact, I believe it is going at the present time. In Canada we have had newspaper strikes where theoretically some of the staff have been on strike for 17 or 20 years. But it takes on a very dangerous aspect when we find that the relations between labour and management are adversely affected by the participation of people from outside this country.
We realize, of course, that there is a very close relationship between Canadian trade unions and those in the United States.
[DOT] (6:30 p.m.)
Many of the unions in this country are of the international type with headquarters in the United States. This, of course, is advantageous to Canadian unions in the event of a prolonged strike because they have the benefit of the finances which are enjoyed by unions across the line, making it possible to finance strikes when they go for long periods.
The situation also arises wherein Canadian unions enjoy the support of the international unions when negotiations are carried on and the pension funds are all disbursed from the United States. However, this did not prevent some of the C.B.C. staff from bringing to the attention of the public some of the injustices in this dispute. If we review the script we are caused to wonder why the Canadian public stand idly by and see this type of intervention continuing. It is interesting to examine the
Private Bills
research done by the C.B.C. staff and realize that much of the material which they produced was in fact very factual. The strike in question drew comment from people all across Canada, for the simple reason that it was a strike which neither the publishers nor the union really wanted. But it was a strike which neither the publishers nor the union could afford to lose.
Some classic statements have been made in connection with this strike because it seemed on the verge of settlement so many times. It is interesting to note that those who had done so much research on the topic discovered that three times the officials of the local union No. 91 of the I.T.U. had reached agreement with the newspapers on the issue. However, three times the agreements were rejected by the headquarters of the printers union in Colorado Springs. This, Mr. Speaker, is a sad commentary, because it shows that while we have Canadian labour and management agreed on a settlement, there was this interference and participation by an international union across the line which deprived the newspapers and the others involved of the privilege of reaching a satisfactory settlement.
It is unfortunate that this situation should take place in light of the fact that those involved on this side of the border were quite in agreement as to what should take place. However, the commentary by the C.B.C. investigators went on to say that local 91 struck because its international headquarters in Colorado Springs could not afford to give way to automation, or so it believed.
Again the question could be asked: Why did the Toronto printers strike? Why did they accept the dictation of their U.S. headquarters, turning down three pretty genuine offers from the publishers? One reason, of course, is that the I.T.U. in Colorado Springs controls the pension fund. This is unfortunate because it is the financial aspects of the situation which seem to be the key to the whole problem. This is a challenge, I imagine, to Canadian unions to produce some type of pension plan which will be satisfactory to the membership and make them independent of forces across the border.
It is not only the C.B.C. which was interested in bringing this aspect of Canadian labour and management relations to the attention of the Canadian public. It is more than interesting and timely to note what the Premier of Quebec said about this arrangement between international unions with headquarters across

June 29, 1965
Private Bills
the line and local unions in Canada. He had some difficulty with legislation regarding pension plans which were controlled on the other side of the border. According to the Ottawa Citizen for July 16, 1964 he said:
We cannot touch the international unions. There would be a risk of a general strike of all the locals of the international unions in the province until we gave way...
The great misfortune in Quebec province is that strikes by international union locals can never be settled unless the little local pawns received permission by telephone from their bosses in the United States...
This is the truth. Why bury your head in the sand and refuse to recognize the truth for the truth?
Many of us, Mr. Speaker, have been independent of labour unions and of management, but we feel that the time has come to give some serious study to this whole problem. I do not suppose there is any other country in the world which has its local union with headquarters in a foreign country to the same extent that Canada has. It seems to me that if Canada is going to be able to control its own destiny, promote its own ideas and enjoy its own culture, then something should be done in the not too distant future to make certain that we do achieve a certain amount of independence from our neighbour, friendly though they are. It is for this reason that this bill is brought before this House, simply, as it says in the explanatory note, to keep Canadian those disputes which concern only Canadians.


Mr. Hubert Badanai (Parliamentary Secretary to Minister of Citizenship and Immigration):: Mr. Speaker, this bill would amend section 7 of the Immigration Act, which reads as follows:
The following persons may be allowed to enter and remain in Canada as non-immigrants, namely, persons engaged in a legitimate profession or occupation, or who, having entered are in Canada for the temporary exercise of their respective callings.
The hon. Member would add the following:
-no person so engaged shall be allowed to enter Canada or to remain in Canada as a non-immigrant where there is a dispute, collective bargaining, lockout or strike, as defined in the Industrial Relations and Disputes Investigation Act, in the profession, trade or occupation of that person anywhere in Canada.
It seems to me that this is an attempt to use immigration legislation to solve what is essentially a labour problem. From the hon. Member's explanation it seems quite clear that this bill was inspired by the strike against the three Toronto newspapers which began a year ago, and is still unsettled.
[Mr. Ormiston.l
In the course of this strike we allowed the temporary admission or organizers of the International Typographical Union from the United States. Unfortunately this brought about criticism against the three Toronto newspapers involved in the strike as well as some unfavourable comment, on the ground that the American union officials, by their activities and presence in Canada, were prolonging the dispute and preventing a settlement between the publishers and the local union. This is precisely what the hon. Member is trying to convey to the House. At the same time we allowed the admission of a handful of American printers to take on work for the publishers, and this generated more criticism from the union involved.
[DOT] (6:40 p.m.)
Our position in respect of the union organizers is clear enough. The Act provides for the temporary admission of such persons and we would no more be justified in refusing their admission than we would be in refusing the admission of consultants to management or key supervisory personnel coming for a specific purpose and period of time.
Moreover, the Act does not provide us with the authority to refuse the admission of these advisers. This bill is apparently designed to overcome that, although in a statement attributed to the hon. Member, as reported in the Toronto Telegram of April 9, 1965, the bill is intended only to "keep out United States union officials seeking to make trouble in Canadian labour disputes".
Our position in respect of the printers is less clear. They applied for permanent admission to take work with the Toronto publishers and were, in all respects, considered eligible for admission under the terms of the Act and the Regulations. The law makes no provision for the exclusion of an immigrant solely on the ground that his prospective place of employment is not to the liking of government, management or labour.
It may be desirable to have such a provision in immigration law, but it is not there now and as a result we are forced to rely on such grounds as lack of visa or other instruments of admission, if we want to refuse a would-be immigrant who is acceptable on all counts except that he is going to work at some job where a strike is in progress. The Immigration Act provides for refusal on these grounds, but their validity has never been tested in the courts; in any event, they are difficult to justify in the public's eye and are themselves a focal point of criticism.
June 29, 1965

In all these questions the Department of Citizenship and Immigration has tried to maintain a neutral position. We do not hinder the temporary admission of anyone coming in a purely advisory or consultative capacity to labour or management.
Aside from the question of its application to Canadian immigration legislation, the bill has a serious technical defect. It would exclude from Canada any person coming temporarily for any purpose relating to his profession, trade or occupation as long as a labour dispute of any kind existed anywhere in Canada in that person's profession, trade or occupation. This would include technicians coming to repair or service foreign machinery or equipment, administrative personnel, business consultants and professional advisers, whether or not a labour dispute was in progress at the plant or in the area to which they were destined.
There is much to be said on the surface for the proposition that labour-management disputes occurring in Canada, or in the United States for that matter, should be settled in each country without foreign intervention, but a close examination of the facts of industrial life as they have developed over the past 100 years or more does not reveal that this bill can make any contribution to support such a proposition.
There are a large number of transportation operations that run between Canada and the United States, and periodically seniority arrangements compel employees and trade union officials to change their country of residence. In certain circumstances, this bill could prevent such interchange even though there was no connection with a dispute, or collective bargaining, or a strike. There are U.S. rail lines running through southwestern Ontario on which Canadians are employed.
A U.S. railway official could not run into Canada on these lines or on any other rail line running into Canada while a Canadian dispute was in progress, if this bill became law. We would need to station immigration officers in every airport in Canada to turn back air lines personnel, if the international unions they were members of were merely engaged in collective bargaining in Canada.
The hon. Member is mistaken also in supposing that all labour relations advice and guidance that goes both ways across the Canadian and U.S. border through the medium of travelling representatives in "foreign fomentation", would be stopped, as stated in the words of the explanatory note to the bill:
Private Bills
-to prevent foreign fomentation and fermentation of these disputes into test-tube experiments for the benefit of foreign power groups without regard to Canadian employer-employee interests.
Most of this interchange across the border is helpful and constructive and is sought after by employers and trade unions alike, even though for publicity purposes some employers and trade unions in Canada decry the intervention of U.S. unions and companies during disputes. At other times each accepts the fact without question.
Most of the provinces of Canada have somewhat different labour relations and disputes legislation and have mediation services that are designed to deal with disputes. The provisions of this bill would merely add one more complication where enough already exists.
In short, this bill will not achieve its apparent purpose of keeping out of Canada all foreign intervention in Canadian labour troubles. If it is intended to interrupt communication between Canadian and foreign interests during a dispute, a prohibition against the entry of foreign representatives would only be an unfair attitude, since nothing can be done to prevent the exchange of ideas between Canadian and foreign industrial interests and Canadian and foreign labour organizations.
In so far as the actual functions carried out by these representatives are concerned, no doubt persons already in Canada are available, if needed, to perform these functions with the advice and guidance of the foreign interests concerned in the outcome.
I may also add that the immigration White Paper, when presented to Parliament, could result in a complete overhaul of immigration legislation at which time these and all other questions relating to the application of the law would receive the most intensive review to eliminate any deficiencies and inconsistencies which may now exist, and for that reason I would suggest that action on Bill C-I2 be not taken at this time.
[DOT] (6:50 p.m.)


Mr. M. L. Klein (Cartier):: Mr. Speaker, I am ready to admit that every sovereign nation wants to emphasize its own independence, but with respect to the question of labour unions we have to consider the whole matter on balance, and on balance there is a definite advantage in having international unions. I think I can best illustrate that by this fact. I am not suggesting that the hon. Member for Melville (Mr. Ormiston) is opposed to labour unions, but the basis of a healthy

June 29, 1965
Private Bills
democracy is a strong and independent labour movement. I do not mean by that that an independent labour union must not have its headquarters in the United States or be open to outside influence.
The hon. Member said that he knows of no other country whose labour unions have their headquarters outside the country. We all know that, in Argentina, Peron used the labour movement for the purpose of suppressing the people. I am of the belief that if there had been international labour unions in Argentina which could have influenced the labour movement of that country, or if there had been international labour unions in the Dominican Republic or even in Cuba, we might not have had the spectacle of Peron, Trujillo and Castro because the international unions would have exerted influence on the labour movements in those countries, which would have kept those countries democratic and would not have allowed dictatorships to rise. This is my viewpoint.


James Norris Ormiston: May I ask the hon. Member a question? Were there democratic labour unions in the European countries when they were taken over by dictators?


Milton L. Klein: I do not know which countries the hon. Member is referring to. They had labour unions, but they did not have international labour unions which would have given the local unions the strength to oppose dictatorships. This is the point. It was the international labour unions that carried the fight in democratic countries to see to it that dictators did not take over those countries. It is only in countries where the labour movement is strong that democracy is strong.
Labour unions are the foundation and roots of democracy. If a labour union in our country can be given added strength by having the support of a labour union in the United States where international unions were born, then I am all for it, because I am in favour of a strong labour movement in Canada and in every other democratic country in the world.
Let us examine for a moment the facts of industrial life as they exist in Canada and the United States and as they have developed over the last 100 years. I am sure our findings would not reveal any need for such a bill. Let me give another example of why I think it is important to have these connections with international labour unions. Canada and the United States have probably the highest standard of living in the world but it is
[Mr. Klein.l
becoming increasingly more difficult for us to compete in foreign markets with those nations that do not have strong labour movements controlled internationally, because in those countries slave labour can be engaged with the result that they are able to produce more cheaply the same kind of articles that we produce. In addition, the cost of living is much less in those countries. The result is that it is becoming increasingly more difficult for us to compete in foreign markets with countries where labour unions are not strong.
One can only come to the conclusion that the purpose of the bill runs counter to our economic history and geography and that its provisions are unworkable and indeed unenforceable. In essence it may deprive certain individuals of their basic civil liberties even in excess of the rights denied in the famous Sibley immigration case. For example, it is conceivable that disputes, grievance procedures and collective bargaining could be taking place constantly in such a widespread resource as the forest industry. Finally, Mr. Speaker, I should like to repeat what I said at the outset, that international unions have a place in strengthening democracy and they have a place in maintaining the competitive market that Canada and the United States are so sorely in need of throughout the world.
May I call it seven o'clock.


Mr. Deputy Speaker:: Order. The hour
appointed for the consideration of private Members' business has now expired. Pursuant to agreement reached earlier this day the House will now revert to motions.
[DOT] (7:00 p.m.)



ADMINISTRATION OF JUSTICE


Lester Bowles Pearson: Mr. Speaker, I am grateful to the House for reverting to motions so I can make a short statement on the matter which I mentioned this afternoon in tabling what is now known as the Dorion report. Normally, Mr. Speaker, after receipt of a report of a royal commission which has been examining matters involving questions of policy or controversy, a government may take some days or even weeks to examine the recommendations or conclusions before having the report publicly released, so that the government at the time of release may give an indication of its own policy in respect of these recommendations or conclusions when that policy has
June 29, 1965

been decided. In the case of the present report, however, it was not submitted to the Government until my return from the Conference of Commonwealth Prime Ministers at 7.40 last night. It was placed before the Cabinet for its information at a meeting at eleven o'clock this morning.
Because of the very great interest in this matter and the degree to which Parliament very properly feels concerned over the conclusions that the Commissioner has reached, the Government felt that the report should be released immediately, and it was for that reason I tabled the report this afternoon. Because of the speed with which action has been taken, the House will understand that the Government has not had an opportunity fully to consider what action it should take with regard to all the conclusions that have been reached by the Commissioner.
Pending this further consideration, after which an announcement will be made, I should like to remind the House at once that the Commissioner in his report has given the opinion that there is prima facie evidence of an offence under the Criminal Code in one case; and conspiracy to obstruct the course of justice in certain others.
The Government has today referred these conclusions to the Deputy Minister of Justice with instructions to examine them at once and advise what action with respect to criminal proceedings should be taken.
There is one other matter arising out of these developments which I wish to announce to the House. The Minister of Justice (Mr. Favreau) this morning submitted his resignation to me. After discussing the matter twice with him, I have no course but to advise His Excellency to accept it. I do so with very deep regret.
My hon. friend remains a man and a Minister of unimpeachable integrity-


Some hon. Members:: Hear, hear.


Lester Bowles Pearson: -and unsullied honour. He is a devoted and unselfish servant of Canada and of his own province. He entered political life only because he was persuaded-and I had something to do with the persuasion- that he could make a contribution to his country's unity and welfare.


Some hon. Members:: Hear, hear.


Lester Bowles Pearson: I have, therefore, asked him to continue that contribution by considering the acceptance of another post in the administration which would be offered to him. He has written me on this point as
Dorion Commission
follows, and perhaps, Mr. Speaker, I may conclude by reading his letter which I received just a few moments ago:
My Dear Prime Minister:
Since our talk this morning when my offer of resignation was discussed, I have given very serious consideration to your request, supported by our colleagues, that I continue in the Government.
As I have already stated to you, it is my view that the conclusions of the report, as far as I am concerned, are tantamount to no more than a statement on the part of the Commissioner that, had he been in my place, he would have exercised his discretion in a different fashion.
I wish to repeat that my resignation was tendered, not out of a feeling that I had done anything wrong, but because of the feeling that my usefulness as Minister of Justice had been impaired by the situation which has developed.
I need not say how deeply moved I am at the confidence which you, Mr. Prime Minister, and my colleagues have shown me in suggesting that I carry on.
Therefore, while I must insist that my resignation be accepted as Minister of Justice, I would be willing to continue to serve in some other capacity.
May I take this occasion to say how very grateful I am for your kindness and consideration and for your unfailing support during difficult and, at times, even cruel days.
Yours faithfully Guy Favreau.
Mr. Speaker, that is the statement which I wish to make to the House at this time on motions, and after further consideration has been given to the conclusions of the report, as I have said there will be further statements to be made by the Government.


Mr. Erik Nielsen (Yukon):: Mr. Speaker, we have listened to the announcement by the Prime Minister (Mr. Pearson) with interest, and I with a degree of personal regret.
One of the concomitants of political life, particularly in the case of Ministers of the Crown, is that those Ministers who are by selection entrusted with the high degree of responsibility which they have to discharge, must discharge that responsibility with an accuracy of judgment and an unimpeachability which can never be questioned.
The administration of departments such as those of-and I select these at random- Fisheries, Industry, Agriculture, perhaps Northern Affairs, do not carry that same high degree of responsibility that the portfolio of Justice does. The government of the day, whichever government it is, cannot expect the continued absolute confidence of the people of this country unless there is that absoluteness of confidence in the administration of justice in Canada.

June 29, 1965
Dorion Commission
One only has to place oneself in the shoes of an ordinary citizen when reading the report of Mr. Justice Dorion to come to the conclusion that serious doubts exist as to the ability of the present Minister to carry on in that portfolio. I find this personally regrettable because I find myself in agreement with the words of the Prime Minister, where he has made reference to the honour and integrity of the Minister concerned. But having said that, the portfolio of Justice is no place for any individual occupying that portfolio to have any lack of judgment such as that which would cast doubt on the administration of justice in Canada.
I think the course the Minister has followed is the only honourable one he could follow, and the course of the Prime Minister in accepting that resignation and making the recommendation to the Governor General that he intends to make, is the only course which he could follow.
The Minister has my commiseration in that I believe his own Prime Minister let him down seriously in the conduct of his responsibilities in the portfolio he occupied.
[DOT] (7:10 p.m.)
The report of Mr. Justice Dorion is nothing less than a serious blot on public life in Canada because it not only affects the Minister of Justice in the manner in which the Prime Minister has expressed, but it affects others in public office. It affects the hon. Member for Dollard (Mr. Rouleau), about whom the Commissioner had some very pertinent observations to make, observations which if made in terms of broader terms of reference might have carried more serious consequences indeed in terms of his findings. I imagine this is one of the considerations the Government will have in mind when giving further thought to what should be done.
I take no particular relish-indeed, I take none-in the product of the report of Mr. Justice Dorion. When on November 23, I first raised this matter in the House I did so because I thought it was my responsibility to do so. Members will forgive me if I recall to their minds the comments, not too kindly, from the other side of the House accusing me of a smear, innuendo and MacCarthyism when I was placing these serious matters before hon. Members-matters which have now been given the official sanction of finding by an honoured and able Justice.


Some hon. Members:: Hear, hear.


Erik Nielsen: It is an emotional moment for me, and it makes me rather sad to think of

the image the administration of justice in this country must have because of the events which have transpired. I cannot refrain from mentioning here the conclusions of Mr. Justice Dorion with respect to Mr. Letendre, who has continued in office throughout the investigation and who, I understand, still continues in office, and whose conduct was described by Mr. Justice Dorion as reprehensible. It seems to me that the least decision the Government could reach, and forthwith, is that Mr. Letendre should be suspended from any further connection with the Department of Justice. He is a gentleman who now has access to secret, top secret and confidential files. Having regard to the conclusions made in regard to him by Mr. Justice Dorion it seems the Government should have made an announcement tonight that the services of this gentleman are terminated forthwith.
I might also express at this moment my personal satisfaction with respect to the findings of Mr. Justice Dorion regarding the conduct of Mr. Lord, conduct which I described on November 23 as that of an innocent dupe. This is borne out by the findings of the Commissioner. I believe the immediate course of the Government in referring the recommendations of the Commissioner with respect to the finding of a prima facie case against certain involved individuals and of the recommendation for the laying of information under the conspiracy sections of the Criminal Code-the reference of these matters to the Deputy Minister of Justice-is one which should have been taken in the first instance. No doubt now that the able and talented officers of the department, have been given the green light to bring their talents to bear on these matters, the appropriate conclusions will be arrived at.
As the Prime Minister has said, between the production of the report at 2.30 and the present moment, very little time has elapsed in which to study these findings. The Official Opposition has had even less time than the Government to consider its ramifications. It is therefore not possible to make recommendations in full as to all the conclusions which have been reached by Mr. Justice Dorion. But no doubt we shall have further observations to make when announcements are made by the Prime Minister on this subject in due course.
My last remaining comment on this whole matter has to do with a question which was introduced into the inquiry by the side door, as it were. It affects one individual who had
June 29, 1965

given 14 years of devoted service to the Government and another who was his assistant in the Indian Affairs branch of the Department of Citizenship and Immigration. I speak of Mr. William Grant and Mr. Joseph Armi-shaw. Mr. Grant and his trial have been the subject of editorials in the western press. Mr. Armishaw, I am informed, was acquitted last week of charges of forgery laid against him. I think I can find no better comment to recommend the services of these two devoted civil servants to the administration than that uttered by the Supreme Court Justice who tried both these cases when he said, in the case of Grant: "If I were in Grant's shoes I only wish I had the courage to do as he did."
I urge the Government to reconsider both these cases, since they seem to have been involved with the raising of the matters which gave rise to this inquiry in the first place. I am not attributing any motives whatsoever in this respect, but I suggest to the Government that amends must be made to these civil servants in order that justice may be done.


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


Some hon. Members:: Order.


John Carr Munro: I just wonder whether the hon. Member would permit a question.


Mr. Deputy Speaker:: Order. There are no questions permitted at this time.


Mr. Andrew Brewin (Greenwood):: The report of Chief Justice Dorion which we have just read, or seen, reveals in our opinion a very grave situation, and the Prime Minister has failed so far to discuss in any way the serious implications of the report. I hope that before this part of the session is over we shall be given a detailed account of just what is to be done about this situation.
The fundamental fact is that the Commissioner has accepted the evidence of Mr. Lamontagne that he was offered a bribe of $20,000 by the executive assistant to the Minister of Citizenship and Immigration in order to influence him to consent to bail for one Rivard, whose extradition was sought by the Government of the United States on narcotics charges. The key sentence of the report is to be found at page 11:
He (Mr. Lamontagne) there met Mr. Denis who offered him a sum of $20,000.00 if he would agree to have Rivard released on bail, pointing out that the Liberal Party would receive a substantial amount should such bail be granted.
Dorion Commission
In other words, to put it plainly, organized international crime was able in Canada, as it has done in so many other parts of the world, to reach into the circles of Government in order to pervert justice with bribery and corruption.
Perhaps the most serious question of all which faces this House is the adequacy of the reaction of those primarily responsible for the administration of justice. The report of the Commission has freed the Minister of Justice from any imputation of personal impropriety. As far as I know, no one has ever suggested there was any personal impropriety on his part. I want to say that many Members of this House, including some on this side, will have heard of his resignation with a great deal of personal regret. We have admired both his courtesy and his integrity.
[DOT] (7:20 p.m.)


Some hon. Members:: Hear, hear.


Francis Andrew Brewin: But, Mr. Speaker, in our opinion it would have been quite impossible for the Minister to have taken any other course than that which he has taken, and quite impossible for the Prime Minister (Mr. Pearson) to have taken any other course than to accept the resignation presented to him. I do not think this would be a proper occasion to go into the points that we might have chosen to make if we had not heard of this resignation tonight. I do not intend to do that. I think one thing has to be pointed out, though, that is not part of this report and which is one of the most extraordinary things, in my view. It is the fact that the hon. Member for Dollard (Mr. Rouleau), Parliamentary Secretary to the Prime Minister of Canada, was known by the Minister of Justice to be implicated. Indeed, at one stage the officers of the R.C.M.P. reported that they believed the Member for Dollard to be the kingpin in the whole sorry mess. Although this view was not supported by the evidence, and I notice that it was not found by the Commissioner to be so, the Commissioner has nevertheless found that the hon. Member for Dollard attempted to influence Mr. Lamontagne with a view to securing Rivard's release on bail and this, the Commissioner said, constituted a reprehensible act. The Minister of Justice was fully informed of the details of the involvement of the Member for Dollard, and it appears that not a word was said to the Prime Minister, whose Parliamentary Secretary the Member for Dollard was. We find this failure to be quite incredible. Surely the Minister

June 29, 1965
Dorian Commission
of Justice owed it to his senior colleague to tell him of the implication in a matter of this sort of the Prime Minister's own Parliamentary Secretary, and to tell him promptly and fully.
I do not choose to go into other aspects of the matter at this time, because they are in the report which we have here, and it is not our intention to castigate the Minister in any way-that is out of place at this time. But, Mr. Speaker, it must be remembered that this was no ordinary matter of routine dealing with the criminal law. The allegations involved persons intimately associated with the process of government. An executive assistant such as Mr. Denis was clearly in a position, as confidential adviser and close associate of his Minister, to make important decisions. He appears to have been a young man with many important political connections. Mr. Denis was able to introduce another political associate, one Mr. Masson, to other executive assistants. This associate of Mr. Denis is described by the Commissioner on page 64 of his report as coming into the game perfectly willingly, surmising in all probability that he stood to gain a very substantial reward, and decided to exploit his relationship with Mr. Denis to the full. In these circumstances, Mr. Speaker, the people of Canada and this House are entitled to expect that the Prime Minister will take vigorous and determined action.
The evidence indicates the view of the Commissioner that there was a prima facie case against Mr. Denis of a criminal act, namely the offering of a bribe to obstruct the course of justice. What action is to be taken on that? We would like to hear the answer. The Commissioner's report indicates that the Member for Dollard while a Member of this House was guilty of a reprehensible act which was in conflict with the normal course of justice. In this connection, Mr. Speaker, I want to refer to page 109 of the Commissioner's report, where he is dealing with the memorandum of Inspector Reed of the R.C.M.P. which said:
It would appear Letendre, Lord and Denis were all approached by Mr. Guy Rouleau, M.P., to make representation on behalf of Rivard so the latter could be released on bail. It appears Rouleau's brother may have approached him to see if he (the M.P.) could influence any persons in the Government with respect to the release of Rivard on bail. On the basis of our enquiries to date, we can only show this, and such an approach is not unusual in political circles.
Those words "and such an approach is not unusual in political circles" are underlined

in the report of the Commissioner, quoting Inspector Reed. The Commissioner goes on to make this comment:
If it is true that representations such as those made to Mr. Lamontagne are not exceptional in political circles, it is impossible to admit that when such representations are made with a view to obstruct the course of justice, they should be either permitted or tolerated.
If I may add a comment, Mr. Speaker, I would say that politics is indeed in a sorry state when senior police officers accept as a matter of course that improper political interference may be made in the affairs of the administration of justice.
What action is to be taken, then, in respect of the Member for Dollard? I think we will want to know the answer to this question. The evidence, again, indicates that in the view of the Commissioner a group of witnesses, namely Mrs. Rivard, Eddy Lechasseur, Robert Gignac and Guy Masson, conspired to obstruct the course of justice. What action is to be taken against these people? I suggest, Mr. Speaker, that this report will have to be studied very carefully to see whether all is well in the higher levels of the R.C.M.P. It would appear that the Commissioner had serious doubts as to whether the advice apparently given to the Minister of Justice by the Commissioner and Deputy Commissioner of the R.C.M.P. was adequate, or the inquiries as vigorous and effective as they ought to have been.
All in all, Mr. Speaker, the people of Canada will not be satisfied, and this Parliament should not be satisfied, with anything less than full and vigorous action by the Prime Minister in respect of every aspect of this report. The people of Canada will not be satisfied to have the resignation of the Minister of Justice treated as a sort of sacrificial offering which makes it unnecessary to deal further with these matters. The system which produced this unhappy mess requires radical revision.
[DOT] (7:30 p.m.)


Mr. Gerard Chapdelaine (Sherbrooke):: Mr. Speaker, the members of our party regret that the Dorion report has brought about the resignation of the Minister of Justice (Mr. Favreau) who, by his noble gesture, has recognized that politics does not allow any margin for error. We hope, however, that other members who, in my opinion, are a lot more guilty, will do likewise and I will not hesitate to mention, among others, the chief commissioner of the R.C.M.P. who has
June 29, 1965

made gross mistakes during the inquiry which has produced the report on this scandal. I will not name all the officers under his supervision who would deserve the same fate, but it is easy to suspect all the others who are condemned by the Dorion report.
It seems, when reading this report, that everyone made mistakes in this matter, beginning with the Minister of Justice, including the chief commissioner of the R.C.M.P., down to the guard at the Bordeaux jail.
One can hardly require that human beings never make mistakes and I think that in politics it must be recognized that, in similar circumstances, a mistake results in such disastrous consequences. We are satisfied that charges will be laid against the culprits, against those who committed perjury, against those who performed their duties improperly or exerted undue influence, and we shall wait anxiously for the outcome of those charges.
However, we must point out that the hon. member for Yukon (Mr. Nielsen), who started all this, does not seem very honest by failing to pay tribute to hon. Rene Tremblay who was entirely exonerated from blame. The Dorion report states textually:
Evidence shows that the conduct of Mr. Tremblay is absolutely beyond reproach.
And yet, if I remember rightly, the first attacks were made expressly against that minister who also had the courage to resign when he felt that his reputation was in danger. The hon. Member for Yukon would have been well advised to quote the good words Mr. Justice Dorion had about the people mentioned in this report. Allow me to mention among other things the following conclusion:
The Minister of Justice was justified, at that time, in believing that a charge laid against a person or persons involved would have been difficult to prove before the courts.
I mention this fact because the hon. Member for Yukon himself, when he made those charges, made insinuations; yet he had the same information as the Minister of Justice because he had the same file, and he dared not make charges himself, he simply made innuendos.
I say that because in his conclusions, Justice Dorion complains that his powers were not broad enough. I have personally asked in the house for broader terms of reference for the Dorion royal commission so that it could find out the sources of the hon. Member for Yukon. In my opinion, the administration of justice is quite an important matter and it
Dorion Commission
must be above suspicion at all levels. If we cannot be assured that secret investigations made by the R.C.M.P. will not fall into the hands of anyone at any time I believe that it is of the utmost importance to hold an inquiry as soon as possible to determine where the hon. Member for Yukon got that information.
If such information can cause a minister, a member of parliament or a senior official to resign, then I think the people are entitled to know how the said information, causing such serious damage, leaked. On the other hand, Mr. Speaker, I should like to point out since the Dorion inquiry started, newspapers have always had information which the Members of the house did not have and which, today, are found to be true, because they coincide with the conclusions of the Dorion inquiry report.
I think the government should make an investigation in order to find out how such information could be divulged before we knew about it.
In conclusion, I wish to say that we are satisfied with the steps which the government proposes to take in order to correct what has to be corrected.
Following this report I should like to draw to the attention of the right hon. Prime Minister (Mr. Pearson) and the cabinet that the French language is treated in a most revolting way within the R.C.M.P. and that reforms should be undertaken within that organization, considering the attitude taken by its officers toward the French language.
[DOT] (7:40 p.m.)


Gilles Grégoire: Mr. Speaker, first of all, I wish to congratulate Mr. Justice Dorion for his report drafted in an intelligent, impartial, brief and precise manner. I believe Mr. Justice Dorion deserves the congratulations of the house for the manner in which he discharged his duties and prepared the report which is being tabled today.
Then, I would also like to quote an extract from Mr. Justice Dorion's report, on page 137, concerning the Postmaster General (Mr. Tremblay) which states:
Evidence shows that the conduct of Mr. Tremblay is absolutely beyond reproach.
I believe that this deserves to be mentioned, and especially after the numerous innuendoes made in the past in this connection. I should like particularly to refer to the last sentence on this page:

June 29, 1965
Dorion Commission
If Hon. R. Tremblay has suffered consequences from statements or certain published comments, it is to be hoped that the persons responsible will now recognize his honesty and integrity.
Mr. Speaker, I still remember, because it struck me, the question directed to him by the hon. member for Yukon, namely:
"Where were you on the 14th of August, at 8.30"?
That was a bit strong.


Mr. Robichaud:: It was dirty.


Gilles Grégoire: I expected that the member for Yukon would be the first to mention the following words:
-it is to be hoped that the persons responsible-
This being said, let us deal with another matter. The most striking thing in this report is that the international underworld has succeeded in worming its way even within the federal government. That is most disturbing for those who uphold justice and legality.
How could members of the underworld manage to find their way into the very waiting rooms of our ministers, without the latter knowing about it? The matter is serious indeed, and I feel that upon reading the Dorion report the Prime Minister (Mr. Pearson) should order a complete inquiry, to straighten things out.
It is easy to see-it is obvious right through the evidence-that the electoral funds of the Liberal Party, which on two occasions was able to pay high amounts for advertisement on television or through other media, has been fed too long a time by members of the international underworld. Today we have proof of this. And what is serious is that upon perusal of the findings of the Dorion inquiry, we find that too many members of the underworld have infiltrated the party through the electoral funds, and I am wondering whether the Minister of Forestry (Mr. Sauve) is not entirely right when he condemns this attitude and whether his colleagues of the Liberal party should not listen to him a little more than they do at present, and that for the benefit of the Liberal party and of all Canadians.
The former Parliamentary Secretary to the Prfme Minister (Mr. Rouleau), perhaps out of naivety, maybe without full knowledge of the facts or simply in order to do a service to his constituents, did certain things but I am of the opinion that in matters of this kind, one has to be cautious.
I now come to the case of the Minister of Justice (Mr. Favreau). Pie made a tour of my

constituency over the week end to organize the Liberal party, but that did not bother me too much. However, I was very affected when I learned he had tendered his resignation and that it had been accepted.
Like many of my colleagues in this house, I am of the opinion that the Minister of Justice was one of the most sympathetic members, and as I have already stated on television, on the French network of the C.B.C., I would not hesitate to grant him a certificate of integrity and honesty. In fact, I still have no hesitation to do so.
He may have acted in this way because he had too many occupations. It has been mentioned that he was the parliamentary leader of his party and party organizer for the province of Quebec. This gave him too much work and he lacked the time to look after everything. Anyway, through an unhappy turn of events, he has handed in his resignation and it has been accepted.
Mr. Speaker, I must say that I am immensely sorry, as I had a deep liking for the Minister of Justice. I should like to be considered as one of his friends and I deeply regret his resignation.
Mr. Speaker, I would say that he is not necessarily the one who is responsible. Eight or nine months ago-and the Minister of Justice is witness to what I am now saying- indeed, before all this happened, I told him that the R.C.M.P. wanted his head and that they would have it. They have been successful, Mr. Speaker.
Mr. Speaker, in reading the findings of this report, one notes everywhere that if the Minister of Justice has acted the way he did, it is because he was ill-advised and ill-directed by the R.C.M.P. We can find evidence of that everywhere in the report. It is stated on page 127 of the English version that when the R.C.M.P. presented the file on September 18, it was not even complete. We can also read the following:
On the other hand, he had not read Mrs. Pierre Lamontagne's statement. Neither had he read the highly important reports of Inspector Drapeau on his interviews with Mr. Denis. He had not seen the reports on the interrogations of Masson, Gi-gnac, Mr. Raymond Rouleau, lawyers Daoust and Cohen. Nor had he read another most important report, dated September 3, prepared by Inspector Reed.
Consequently, on September 18, the minister did not have sufficient knowledge of the file to reach the proper decision and he was under the impression that the R.C.M.P. officers had explained to him all the facts that were relevant to the case.
And on September 18, the Minister of Justice was asked to take a decision. But the
June 29, 1965

R.C.M.P. had not even provided him with all the facts.
The Minister of Justice is the victim of the R.C.M.P.'s doings. That is why I repeat what I told him, eight or nine months ago: They wanted his head and they got it.
How many times did we not note the R.C.M.P.'s doings during the whole course of the inquiry? In my opinion, this fact has to be noted in connection with the report.
For instance, many of you will be taken aback by what appears on page 103 of the report:
Superintendent Fraser was asked whether, at the the time he decided to appoint sergeant McLeod to conduct the investigation and later to assist inspector Drapeau, he would not have thought it wiser to have appointed a bilingual officer since most of the persons to be interrogated were French speaking. His reply is worth noting: "I never gave it a thought".
We then read the judge's comment:
Not only the reply itself, but the manner in which it was given shows an offhand attitude which is certainly not to be expected from a senior officer of the Royal Canadian Mounted Police. He certainly gave the impression that he was a man to whom the French speaking population of Canada are a negligible factor.
The judge goes on commenting the appointment of inspector Drapeau:
This was an excellent choice, for it has been shown that inspector Drapeau had all the qualifications needed for the post he holds and there is no doubt that had he had complete freedom of action, as we shall see later, the results would have been quite different.
It is clear that the Minister of Justice could have taken another decision and that today, he would not be in serious trouble as he is now.
On page 104 of the report, it is said:
The subsequent decision to appoint sergeant McLeod as assistant to inspector Drapeau was not a fortunate decision either. How could sergeant McLeod have corroborated statements, made by French speaking persons to inspector Drapeau in the course of an interrogation if he did not understand French? The fact he is unilingual does not in any way affect sergeant McLeod's efficiency, but since a decision was being taken to appoint an assistant to the inspector, obviously the person appointed had to be able to understand what was stated in the course of the interrogations. Moreover, commissioner McClellan frankly admitted that sergeant McLeod could not give evidence in a court because he does not speak French.
I will read a little further to show that throughout that investigation, which took place during August and September, before the R.C.M.P. submitted its report to the Minister of Justice, the report prepared was not clear enough to enable the minister to 22620-193
Dorion Commission
take a decision. I quote another paragraph from page 105 of the report:
Inspector Drapeau told our commission that under ordinary circumstances, when an officer is charged with the conduct of an investigation, he plans his interviews and his interrogations on his own initiative. But in this case, he said (translation) "I went nowhere without first requesting permission from Ottawa because this was not an ordinary case-
This is what happened, Mr. Speaker. And here is what Mr. Justice Dorion says of some conclusions of the report submitted by Inspector Reed, in which the latter seems to say that there was no way to establish proper evidence:
Inspector Reed seems to have forgotten a rule of evidence which we are obliged to apply daily in the courts; where the version given by one witness is contradicted by the version given by another witness, obviously, we must have recourse to circumstantial evidence to determine where the truth lies and frequently that circumstantial evidence constitutes a much more convincing proof of what actually occurred than are testimonies given by witnesses, particularly where the witnesses have an interest at stake in the litigation.
But there is no mention of that in Inspector Reed's report.
Mr. Speaker, I say and I repeat that the conduct of the R.C.M.P. in all that was the first element which prompted the Minister of Justice to make a false or erroneous decision.
On page 111 of the English version of the report, Judge Dorion says:
The R.C.M.P. investigation might have been conducted with a great deal more celerity. More than a month elapsed-between August 14 and September 18-in completing the interrogation of several of the parties involved. It is obvious that all of these interviews could have been conducted much more swiftly and with a higher degree of security. Obviously, this delay enabled some parties involved to get in touch with one another before they were interrogated.
And we read on page 112 what Judge Dorion says when the R.C.M.P. report was handed to the Minister of Justice on September 18:
On that occasion, the complete R.C.M.P. file was handed to the minister. The only missing element in the file at that time was the report on the interview with Mr. Guy Rouleau, which had taken place on the previous day, but the commissioner gave the minister a substantial summary of it.
That is why, Mr. Speaker, we can say that the R.C.M.P. has a large share of responsibility in everything that is happening today.
In closing, the Prime Minister says the report will be studied by the deputy minister of justice in order to assess the responsibilities. Well, I maintain that one of the main responsibilities must rest with the R.C.M.P. and Commissioner McClellan. Because they

June 29, 1965
Dorion Commission
have made this investigation without due consideration and they have handed to the Minister of Justice a report that was not complete and did not permit him to make a wise decision in the circumstances.
I will now read an excerpt from page 119 of the Dorion report:
During the course of our inquiry, we also took note of a method used in their work by the R.C.M.P. which leaves much to be desired. French speaking inspectors question people in French and then have to draft their reports, for the attention of their senior officers, in the English language. This method may have very serious consequences. First of all, as we found during the course of the inquiry, the method leads to errors from which the person interrogated suffers; this method enables anyone who has been questioned in French by the R.C.M.P. to claim, when an attempt is made to point out contradictions when he is again interrogated, that what he said to the R.CJV1.P. was not properly translated.
On page 120, one can also read:
It is only fair, in this regard, to point out a statement made by commissioner McClellan at the end of his testimony:
"A. There is no directive that I know of but- and I want to be quite clear on this so that there will be no misunderstanding-the working language of the force is English."
. . . evidence of commissioner McClellan, quoted by the commissioner, Mr. Justice Dorion.


An hon. Member:: Right.


Gilles Grégoire: There are fanatics in that comer, in the Conservative corner, to be more accurate, those who say "Right", but I believe that the house as a whole does not accept that.
Mr. Speaker, I repeat what I was saying at the outset: For eight or nine months now- and we are aware of that because we heard about it, and I feel this is very serious-the R.C.M.P. has been after the head of the Minister of Justice. Today, it is the duty of the Prime Minister, if the feelings he expressed a moment ago with regard to the Minister of Justice are really sincere, to look into the doings of the R.C.M.P. in that case. I think also that it is his duty to inquire into the activities of some of his members- the Dorion report named one but there are others-who are too closely related to big financiers who subscribe to the electoral funds, members who are more interested in obtaining funds than in serving their riding. An investigation within the Liberal party is imperative in that respect because, there are many of them.
To conclude, and I believe it is a proper way to do so, I want to express once again my

sympathy, my respect and my admiration for the Minister of Justice, saying once again that I do not believe he is so much responsible; it is rather the R.C.M.P. with which he was not firm enough while there was still time.
[DOT] (7:50 p.m.)


Mr. Speaker:: The House will now revert to the business that was being considered at six o'clock.



INDUSTRY


[Stage Direction]
The House resumed consideration in Committee of the following resolution-Mr. Drury -Mr. Batten in the Chair:
That it is expedient to introduce a measure to provide for the payment of development grants to assist the establishment of new manufacturing or processing facilities and the expansion of existing manufacturing or processing facilities in order to improve industrial employment opportunities in designated areas in Canada:	for this purpose to
establish in the Consolidated Revenue Fund an Area Development Account to which shall be credited an intial amount of fifty million dollars; and to effect certain related amendments to the Income Tax Act concerning the definition of a manufacturing or processing business and the application of section 71A of that Act in any case where a development grant has been authorized to be paid under the said measure.
John James Greene: Mr. Chairman, at six o'clock I had reached the point in the presentation I wish to make to the House where I had commended the Minister and the Government by virtue of the fact that for the first time in the legislative history of this country they have taken pervasive methods to encourage the decentralization of industry or, more specifically in economic terms, to encourage industry to locate in areas of high unemployment and a low rate of growth of employment. At the same time I suggested that it was impossible in one fell swoop to determine criteria which would effectually and perfectly determine which areas (a) could sustain industrial growth usefully and economically and (b) which areas would acquire that industrial growth by virtue of the use of incentives.
In saying this, Mr. Chairman, I do not think I am being in any way critical of the Government's policy in this regard. I think they took a giant step in the first instance. It was not perfection in one fell swoop but certainly it was a giant step in the right direction. It is my hope, as I am sure it is that of all Members who support whole-
June 29, 19SS

heartedly this legislation and the motivations behind it, that as time evolves we will devise a more perfect method of finding the proper areas which should receive incentives and thus contribute not only to the growth of those areas but to the general health of the Canadian economy.
I would point out that the hon. Member for Wellington South, who spoke for the Official Opposition on this matter, spoke with a forked tongue as the Official Opposition so often does. I wrote down his words verbatim, I believe. I understand he is the official spokesman for the Official Opposition on matters of industry. At one stage he said, "We are in favour of the principle of this legislation", but with the other side of his tongue he said, "We are against grants". He also said they are against the federal Government entering this field and that it should be left to the municipalities and provinces.
[DOT] (8:00 p.m.)
I do not know whether he is for or against. He is walking up both sides of the road at once, but I think the position of the Official Opposition in this regard should be made crystal clear. Unless it is refuted by some higher authority than the alleged official spokesman, the hon. Member for Wellington South, then the people of Canada, and of Ontario in particular, can take it that the Official Opposition is against this type of legislation which will lead to the decentralization of industry.
I take it that the hon. Member for Wellington South has put his party on record as being for the continuation of centralization of industry in Ontario and in the Dominion generally. Such being the case, we see here a very distinct division between the Government and the Official Opposition, because through these policies we are clearly on record as favouring the decentralization of industry and the location of industry in designated depressed areas.
Another spokesman for the Official Opposition, the hon. Member for St. Hyacinthe-Bagot mumbled something about patronage and political motivation behind this legislation. Mr. Chairman, this is another area where the Official Opposition, in their ill-fated days in office, timidly dunked their toes into the waters of potential decentralization of industry, but apart from a lot of political jargon and big talk, accomplished very little.
I would point out that the very limited incentives they provided, which incidentally proved just as ineffective as their administra-
22620-193^
Grants to Designated Areas tion generally, were by way of double depreciation or speeded up depreciation, and were entirely inadequate. The ill-founded plan which they adopted just did not work. But as is customary with that party, they made sure that whatever they were doing was politically well founded and that the pork barrel principle would be foremost in this legislation, even through it did not work. The legislation was so ill-conceived that not even the pork barrel would work.


Michael Starr: Keep that up and you will be here until July the 10th.


John James Greene: There were no specific criteria that the government of that day used in propounding the depressed area formula. It was purely and simply a Cabinet decision. I can think of no more effective pork barrel than that, that the Cabinet in its great wisdom-and Lord knows it had little in those days-could decide what areas qualified. If the government of that day decided that a particular community or a particular application merited designation, then for any reason it pleased it could designate that area for double depreciation. If that is not good, practical, pragmatic politics I do not know what is, because obviously it could make the designation purely and simply by reason of the fact that some good Tories had applied for designation. There were no rules, so let us not have the hon. Member for St. Hya-cinthe-Bagot get up on his high horse and talk about political motivation and political practices in this legislation. The legislation his government passed was pragmatically political, but unfortunately so ill-conceived that it was of no earthly use.
I commend the present Government for using economic motivations in the legislation it has presented. The hon. Member for Wellington South takes umbrage at the fact that this legislation in some fashion resembles legislation passed south of the border. Well, Mr. Chairman, if it is in the best interests of the people of Canada, and specifically in the best interests of my constituents, I do not care whether it resembles legislation passed in Mozambique. I am very pleased to have it on the legislative record of this Government.
Maybe the hon. Member for Wellington South has not heard, but if I listened correctly to the views of the Leader of the Opposition on the Viet Nam crisis, he is now solidly proAmerican. Maybe the hon. Member has not kept up with the gyrations of his leader on this issue. It seems communications over there
June 29, 1965

Grants to Designated Areas are not too good, and the hon. Member for Wellington South is still anti-American in his economic views, even though his leader is now strongly pro-American in his views on foreign affairs. I reiterate that so far as I am concerned I do not think it matters who thought of it first. The only question should be, is it in the best interests of our people?
Again the hon. Member for Wellington South raises the old bogey of encroachment upon private enterprise. What a sacred Tory song this has been over the years. It is the same song the traditional Tories raised when children were taken out of the coal mines. They said it was an encroachment upon private enterprise, and it seems to me when they abolished capital punishment for stealing a loaf of bread or a shilling, the good old Tories said, "My goodness, what an encroachment on private enterprise." It is nice to see that the hon. Member for Wellington South, their official spokesman in the sophisticated area of industry, is still singing that same old Tory song, that it is an encroachment on private enterprise.
If this legislation will contribute to the equalization of economic opportunities across this land, if it will mean there will be far less of second class citizens economically across this land, whereby second class citizens have less social and educational opportunity, then if it is an encroachment upon private enterprise it is a proper encroachment upon it.
It has been the history of this party that we have been able to choose and to discriminate between improper encroachments and encroachments which were in the public interest. For that reason, over the years since the industrial revolution, this party has had the support not only of the people generally but of those who believe in the private system of economic production.
I would like to speak for a moment on the question of the selection of the areas to be chosen for these incentives. I have said as forcibly as I can that the general aim and purpose of the legislation are admirable. Surely anyone who has been in these unfortunate areas, which have not shared in the growth of this land, cannot doubt that legislation of this type was badly needed. I have seen areas in this land, some in my own constituency, where wages were as low as 85 cents an hour within the last two years. This may be inconceivable to those who live in the great golden horseshoe of the metropolitan area in this province, but it is a fact.


I have seen many areas where, because of lack of assessment, children up to the age of entering high school were in one room, from kindergarten right up, and under one teacher. Surely to goodness, in a land that last year had the second highest per capita income in the world, this is not good enough. I have seen areas where there is no high school and no possibility of children going to high school because the assessment would not support a high school.
[DOT] (8:10 p.m.)
I should not have to say more.


Some hon. Members:: Hear, hear.


John James Greene: Members who have studied these problems are in general support of this legislation. I can see a number across the way. There are Tory members who are apparently not riding the ancient horse of free enterprise at any price but who support the principle of this legislation. The question is the definition whereby these areas will be designated. I think no one disagrees with the hon. Member for Waterloo South who urged that this legislation should be made on economic principles. It would be the height of folly to locate industry by offering financial incentives in a place where it would perish after the incentives had been withdrawn. There is no point in locating industry in the middle of a wilderness. But in these days of rapid communications people in my part of the country would be happy to travel 20 or 30 miles a day to work, if they could find work within that distance. There are obvious growth centres, and growth must be accentuated within those growth centres. Whatever formula is involved it must take account of these centres, which will bring in the people from areas of high unemployment, low income and slow rates of growth.


Lucien Lamoureux: I have to interrupt the hon. Member. His time has expired.


Michael Starr: He is making a very good speech, even though we don't agree with it. I think he should continue.


Lucien Lamoureux: Is it agreed that the hon. Member may continue?


Some hon. Members:: Agreed.


Michael Starr: Go ahead. Take as long as you like.


John James Greene: I thank the hon. Member for Ontario for his courtesy. I will not be too long.
June 29, 1965	COMMONS
The original criteria certainly did the job to some extent, and the legislation marked a bold first step. It is my hope, with the experience the officials of the department have had, that a more meaningful set of criteria can be developed, criteria which will make it possible for smaller pockets which are currently lagging behind the general economic development of a province, to make economic progress.
A new theory with respect to these incentives may be brought into being at this time.
I agree it is almost impossible to find a set of criteria to provide a perfect answer. But I do believe there should be some distinction, and I will make my point in this way: In the area I have the honour to represent and, in particular, in the great part of the constituency of South Renfrew there used to be a prosperous and economically sound lumbering industry. It has now been largely cleared. The people living there are able. They are self-sufficient, or they would not have survived for as long as they have. They do not have the highly sophisticated skills which are required in the metropolitan centres today, but there is no question about their ability to support useful economic growth. Industries which located there in the past have proved to be among the most efficient, the most productive and the most lasting in our entire economy. The productivity of these people has been proved.
While the over-all problem is the problem applicable to great areas such as the Maritime Provinces, the difficulty is to find a set of standards in a generally rich province such as Ontario which will be applicable to those small pockets where help is so badly needed. I do not look upon this as a handout. Consider the hundreds of millions we are pouring into urban redevelopment in the great metropolitan cities to remedy the problems created by growth over the years. Communications in these centres cost a great deal-subways, highways, throughways on top of all this. And soon we will need parachutes to ride on the top layer of the highways. A lot of public money is being spent in these areas.
In the area I speak of, our natural resources have been exploited; not manufactured on the spot but removed for use and manufacture in the metropolitan centres. Water resources, the natural asset of these people, have been taken away for use in the large metropolitan cities, and hydro rates are far higher near the sources of power than they
DEBATES	3035
Grants to Designated Areas are in the metropolis itself. I uo not think these people are looking for handouts; they are looking for economic justice. I grant that the brigands-I am talking about the removal of hydro and natural resources-were not federal brigands but provincial brigands. More enlightened provinces provided for processing at the source, but in this case it was the province which took away from these people the natural assets which the good Lord had given them. I think it is a fine thing that the federal Government has seen fit to take steps which would give some measure of economic justice to these areas and, as I have said before, it may be that as a result of their experience the departmental officials will be able to work out a formula whereby designation might be made of these large areas which obviously need assistance, while at the same time being flexible enough to provide assistance in areas of the Ottawa Valley and similar areas which, possibly, are in no need of the long term aid which is required in the case of the Mari-times.
Many of us have worked for years to encourage industry to take root in the area of which I speak. Competition for industrial development is keen, today. The difference between an area getting an industry and not getting one can be very slight. A nudge will decide the issue one way or another. These capital grants are likely to prove an effective incentive. And, of course, of what use are incentives unless they are effective? There is little point in providing incentives, such as double depreciation allowances, if industry is not interested in them. But even when incentives were far less effective than they are now likely to be, areas such as those I have in mind found it difficult to attract new industries in competition with those to which some assistance was provided. If they are placed further behind, because other industries will get grants while they cannot, they will be condemned for all times to be second class citizens, and I am sure the Government would not wish this to happen.
[DOT] (8:20 p.m.)
In the Ottawa Valley and in the west end of the riding of South Renfrew, of which I speak in particular, I think the natural growth centre is the Town of Renfrew. This is within 30 miles of most of the highly depressed area. Industry locating there will bring people from this area of unemployment and slow growth into that town for employment. Three or four industries in this area would solve all the
June 29, 1965

Grants to Designated Areas problems. Therefore it may be that these programs can be approached differently and made more flexible in areas such as the Mari-times as compared with these smaller pockets of slow growth in provinces such as Ontario.
It is my hope and purpose in speaking on this measure at this time to urge the departmental officials to see if they cannot work out criteria that will be effective in the broad sense in areas where there are large land masses which need progress, but which will also be applicable in a different sense, if you like, in areas such as the generally wealthy Province of Ontario where small pockets have fallen behind in the general growth prosperity which is to be found across most parts of this land.
May I again commend the Minister, his officials and this Government for this far-seeing and I think highly progressive measure, and may I on behalf of the constituents who sent me here plead that they find methods and criteria whereby these plans may be made applicable to smaller areas of slow growth such as exist in the Province of Ontario.
Mr. Winkler? Mr. Chairman, I am very pleased to follow the hon. Member for Ren-few South. He sounded this evening as though he were preaching for a call. I do not know whether there will be something available for him, but he has preached for that call before and has not been very successful. It may be that he has been accepted on a greater and wider basis by the Government than I would think to be the case. I am also very pleased that he was able to take advantage of the request of the Opposition to continue his speech beyond the time allotted, because I believe it was the Government who wanted to streamline the business of the House by eliminating or reducing speeches on different stages of measures brought before the House. However, Mr. Chairman, that being the case we will carry on with some of the arguments the hon. Member put forth and I will then advance some thoughts of my own.
I must admit that I found some of the points made by the hon. Member acceptable, and I have some area of agreement with them. But when he castigates the Conservative Party when in power for their failure to deal with the situation on the tax incentive basis in regard to write-offs, I must say that he was castigating us on the basis of our considering the whole matter from the point of view of slow growth. Then later on in his address he pointed out vehemently that this is the


way it must be considered and one of the points in the criteria that must be taken into account is the growth rate of the different communities particularly, as he pointed out, in the Province of Ontario. So we have, again, the hon. Member for Renfrew South creating quite a paradox in the course of his speech. It seems that he is putting his argument across quite sensibly until you examine his words.
I also listened to him as he developed his argument with regard to the failure of the Conservative Government in this connection. I can recall very well, not too many years ago, in the light of what has happened in this House this evening, the present Prime Minister demanding that the Government resign and pass the reins of government over to his party. Unless the Government is prepared to meet some of the requests made by the hon. Member for Renfrew South and some other Members in this House, who know what this legislation will mean if properly applied, I think the day is here when the Liberal Party should consider passing the reins of office back over here where they properly belong.


John James Greene: Poor Canada.


Eric Alfred Winkler: Reference was also made to the words spoken by the hon. Member for St. Hyacinthe-Bagot in his concern regarding patronage, and so on. I must remind the Committee of the previous method the Government established in this respect, because of which we recognize that this practice exists. The hon. Member also spoke very vehemently, and I must admit in a disparaging way, about the hon. Member for Wellington South and the way he presented the case with regard to our legislation. The hon. Member for Wellington South knows better than anybody that when the Government created Brantford as a designated area-and I have nothing against that-and gave them that advantage, cities such as Guelph and others in the immediate vicinity did not have that advantage. I wonder whether the hon. Member would call that patronage. Is that a bit unfair? Is that a bit of the pork-barrel stuff? We know very well where these Members get their financial support from. In view of this, Mr. Chairman, the hon. Member should look at his words this evening. I think it is high time that he recognized who is responsible for this situation. He was speaking out of both sides of his mouth; he was congratulating the Minister for having come
June 29, 1965

forward with this measure, and he was stating what in his opinion should be the criteria applied to it. What is he going to say if the criteria applied are not what he wants? He will stand up, like every other Grit on that side of the House, and vote for the measure. That is exactly what will happen. This is the course of events that his party has foDowed, and he will act no differently in this particular case. We do not criticize this legislation too severely if it is carried out in these terms in the bill, and the Government acts with common sense, because then this program will be implemented effectively and fairly across this country.
No reference has been made with regard to the position of the more wealthy provinces in this country in relation to those who want a more equitable share of the growth that has taken place and is about to take place.
I have no argument on that particular point, because I think everyone in this House knows that the Maritime Provinces are one area of this country that need support and should receive special consideration. I also think that because of the past history of the Province of Saskatchewan this is another area which should be considered, because we know the growth rate of the population and the trends, and so on, which have taken place there in the past. This province, too, should be eligible for a considerable degree of consideration when the criteria are set up and the designations are being made.
If we read all the words contained in the resolution that is under discussion at the present time I do not think anyone in this House would wish to argue about the points that are promoted in it. With regard to the actual implementation of the legislation, we believe that this is the area in which the Government should move to bring about the fulfilment of the ideas that are our interpretation of what is required, and what in actual fact should be done. I would refer at this moment, Mr. Chairman, to the words of the Prime Minister on June 7, as reported on page 2023 of Hansard, when he referred to this matter. These words are to be found in the left-hand column, and the Prime Minister put it this way:
The purpose of this program is to provide a broad improvement in the incentives to industrial development-
He also uses the word "underemployment" in another context, although I believe these purposes may be associated. Then he went on to say this:

Grants to Designated Areas There are many more specific measures that can assist industrial development, and provincial governments are developing such measures in regional development plans within their provinces.
[DOT] (8:30 p.m.)
I believe that the thoughts expressed by the Prime Minister at that time are good ones. This is one way in which the Government can satisfy the needs of the provinces, even the needs of the Province of Ontario.
Long have I felt that there should be some method of redistributing the industrial wealth of this nation in such a way that, where practicable, some measure of growth and development can sensibly take place. We know the Government has been very effective at redistribution in another sense and, although as I have said on other occasions, this does not particularly bother me, I do want to make my point before it is too late. An area such as the one from which I come, for example, could use such support, and the Minister knows full well the importance of my words and what is meant by them, though I will elaborate in a moment.
Nevertheless, we find ourselves being redistributed politically so that our voice will become considerably less in this House. Yet we have found in the past that there has been no activity on the part of the Government to redistribute some of the wealth of the people who have seen fit to stay in that part of the country, wealth which has increased at the rate which has been established, particularly since World War II. I believe that as the natural resources of North America are depleted, particularly in the area south of us, then unquestionably the trend economically and industrially will, I believe, in due course be to the north, and thus of great advantage to Canada.
In order to make a proper plan I believe that the terms of such a resolution as this and the legislation to follow can effectively be used to this end. I believe that as we sit here representing this great country of Canada from one sea to the other sea, tremendous opportunities for development will appear if the benefits and incentives which will be created from this legislation are properly and sensibly applied.
Let me return again, Mr. Chairman, to my own constituency. In this regard I should like to refer to the Ontario Statistical Review, which is available to anyone who wishes to consult it. The figures found therein are rather important. They would indicate that the Minister and his officials would find
June 29, 1965

Grants to Designated Areas the report useful in considering the criteria for the designation of the areas he intends to establish. I am aware, Mr. Chairman, that the County of Bruce, which is an area into which I have presently been moved rather forcibly, is one of these areas. The County of Grey, in which I actually live, is also one of these areas. You will find generally, Mr. Chairman, that all the counties in the vicinity of Georgian Bay made strong representations to the Minister, before this legislation was introduced, to be considered under the terms of this new legislation. I mentioned the county council of the County of Bruce. I must also mention the county council of the County of Grey. I must mention too some of the municipalities therein and the Georgian Bay Development Association, which also has made representations to the Minister. I did not intend to speak in any manner prejudicial to any one of these counties, or indeed to the entire economic area, but I do hope the Minister will pay attention to the figures in this review, in relationship to the resolution before the Committee, and to the interpretation which I and others are inclined to place upon them.
I will have to read a few words from this resolution to make my point clear. The resolution is:
That It is expedient to introduce a measure to provide for the payment of development grants to assist the establishment of new manufacturing or processing facilities and the expansion of existing manufacturing or processing facilities in order to improve industrial employment opportunities in designated areas in Canada;-
Then it goes on to mention the amount of money to be credited to the area development account in the Consolidated Revenue Fund.
I would take it that in using the words "to improve industrial employment opportunities" the Minister is referring to those areas which need these opportunities and which would benefit the most from them. Inasmuch as the counties to which I have made reference are usually considered rural counties, and on the basis of the facts and figures placed before the Minister and the representations made to him some time ago, I believe that my county is one deserving consideration.
I have before me the percentage figures of change in the County of Bruce from 1951 to 1961. For the County of Bruce it is 4.2 per cent, and it rates 51st out of the 53 areas selected in the Province of Ontario. The figures for Grey County in this same regard are 5.2 per cent, rating 50th in the province

out of 53 such areas. The next set of figures indicate, as the hon. Member for Renfrew South was obviously aware, that young people seeking the advantages which exist in the larger and more prosperous areas in the Province of Ontario to the south of us leave their homes and communities in order to participate in the economic advantages open to them. The figures indicate that 31.5 per cent of persons between 20 and 49 years of age, living in the County of Bruce in 1961, expressed as a percentage of the population, fell into the above category, the county ranking 51st out of the 53 areas. The figure for Grey County is 33.6 per cent, ranking 44th.
There are also other figures in this review, for example relating to incomes, which are important to the Minister in considering the areas to be designated and which back up my request, and the request of the people who have been in touch with him, to consider the entire Georgian Bay development area as a designated area.
Although this is not contained in the report, I became aware early this spring, when the income picture of the farmers in these areas became critical, that the agricultural office in the Village of Markdale had conducted a survey to find out what was the net return of a selected group of ten farmers. I was absolutely amazed to find that six out of the ten showed a minus net return. Therefore it is easy to see why the young people in the families occupying these farms will not be able to continue on in occupation very long, unless the Government extends the provisions of such legislation as this to the areas I have mentioned.
I do not want my words to prejudice to any degree the communities to which I have referred. I ask the Minister to do nothing more than give further consideration to the areas, and to any area in the entire Dominion of Canada which finds itself in this situation. We certainly do not hold this particular case in abhorrence, but we are afraid that in the final analysis the Government will return to the old form, under which certain areas will receive a thumbs-down treatment, for various reasons. I should not want the Government generally or the hon. Member for Renfrew South specifically to think for one moment that anyone on this side of the House is in support, to any degree, of centralization as opposed to the benefits which may flow from this legislation. The hon. Member for Renfrew South again used his ability to twist the words to suit his own purposes and, I might add,
June 29, 1965	COMMONS
that is characteristic of his attitude and the attitude of his colleagues.
[DOT] (8:40 p.m.)
We have no argument against benefits which might flow from this legislation to those areas where an economic advantage exists. However, the hon. Member does not have to deride the educational system now in existence in Ontario because, as he is well aware, it is a very excellent system and is improving rapidly in excellence in our rural areas. I might add that this is the direct result of many of the policies adopted and forwarded by the hon. Member for Ontario when he was the Minister of Labour.
If we use the advantages inherent in this legislation and direct industries, which we know would be of benefit to certain communities, to establish in a location, a great deal of benefit will be gained, and I am sure this is true of the two counties to which I have referred. The hon. Member for Grey North will agree with me in this regard. With the advent of the St. Lawrence Seaway, tremendous economic advantages were lost to the people of the surrounding areas, and particularly the area in the neighbourhood of Owen Sound.
Mr. Chairman, we are particularly anxious to support this legislation, provided we are given some assurance that it will be administered properly and in a way advantageous to the people of the areas affected, and to the people of Canada as a whole. There are certain economic advantages which can be gained as a result of the adoption of this measure, but there are inherent dangers which must be avoided. Having regard to certain market areas of southern Ontario and the incentive provided industry to locate there, let me assure the House and the Minister that we will take advantage of any benefits provided by this legislation in order that the sorely needed industry will locate there. I am sure the people of the area will work endlessly toward this goal.
I urge the Government and the Minister once again to give serious consideration to the terms of this legislation and the economic effects inherent in it. I hope that due consideration will be given to a review of the circumstances which exist in those areas which may well benefit from a proper administration of this plan.


Mr. Martin (Timmins):: Mr. Chairman, I was very interested this afternoon, as I am sure all hon. Members were, to hear the
DEBATES	3039
Grants to Designated Areas very unusual and interesting speech of the hon. Member for Renfrew South. Of the 35 minutes during which he spoke on this subject, and I was pleased that he was given an extra 15 minutes over and above the allocated time for speeches at this stage of the legislation, he spent 20 minutes pointing out that the problems of this country have arisen during the last 97 years of Liberal and Conservative Governments. It is true that he jumped back and forth from one subject to another, but he placed special emphasis on that fact. He spoke extensively about the difficulties which now face the people who live in the valley which he represents, that valley which 100 years ago was one of the most beautiful places the people of the world have ever seen. Unfortunately that area does not look so beautiful today. The hon. Member spoke of water pollution, and other associated problems, and the possible solution to those difficulties.
To make a long story short, I am pleased that a Member on the Government side has finally realized and recognized the problems this country is faced with today. He devoted his first 20 minutes to a discussion of these problems, and possible solutions. However, in the final 15 minutes he attempted to defend this measure as a complete solution to these problems. I am afraid that this measure will provide no more of a solution to these problems than the measure adopted by this Government not too long ago. Incidentally, the Conservative Government also adopted a program which, to all intents and purposes, was to solve these problems but, like the Liberal Government, it had to be dropped as a failure. It is our feeling that this measure will likewise prove to be completely insufficient as a solution to our present day difficulties.
The hon. Member mentioned also that this measure would work toward decentralization of industry and help solve some of our growth problems of today. In view of the fact that the trend today is for young people to leave small communities and farming areas to go to the more populous areas of Canada to seek employment, I am wondering whether this measure will help to decentralize industry, or will in turn attract the young people from our rural areas to these designated areas and in effect worsen the situation. That seems to be one of the fundamental weaknesses of this measure. That was also a fundamental weakness of a similar proposal which was presented to this House some years ago.
June 29, 1965

Grants to Designated Areas
In view of past experiences of governments in efforts to designate areas and decentralize industry, I believe the Minister and his Government should now take a long look at this proposal. I am sure if they do so they will realize that this is the wrong approach. They should take a thorough look at the problems which now face thousands of people in this country, before adopting any policy of this kind. The employment situation in this country is becoming worse and worse every day, and sooner or later the Government will have to adopt sound policy.
At this time I should like to take the opportunity of pointing out some of the dangers inherent in the presently proposed scheme. I feel that I am in a position to talk about these dangers because of my experience, coming from a designated area. The area from which I come was designated two years ago. Immediately prior to its designation a meeting was held, at which a great deal of enthusiasm was developed for the then proposed plan.
[DOT] (8:50 p.m.)
But when all the interested people who were gathered there started to examine the matter a little more closely there was not one single application made under that scheme. So it just did not fit the bill.
There is another reason I feel qualified to speak on this particular subject and to point out the dangers inherent in it. Ever since the big mineral strike in the Timmins area last year, ugly rumours have been floating about that certain other areas of Ontario are out to try to steal the Timmins smelter. One area mentioned in this regard is the constituency of the Prime Minister. Having this in mind, it is no wonder that we look at this particular scheme with a great deal of apprehension and suspicion.
We have not seen the bill, but judging from what I have heard so far all of the present designated areas will become undesignated as of the 1st of July-I hope the Minister will correct me if I am wrong-and effective immediately on that date we will have a whole new group of designated areas. Some of them may be the same, some may be new and some of the old ones will be dropped. In view of the rumour that has been raising its ugly head from time to time in the Timmins area, how easy it would be for the Government under this scheme to arrange to remove the Timmins area from the designated list and to designate the Elliot Lake area. It is true that

someone could go ahead and build a smelter in Timmins, but they would be faced with competition from a smelter built in the other area, with regard to which federal taxpayers would be paying 22J per cent of the cost. This is one of the reasons we are looking at this matter very closely. The people of the Timmins area are fully aware that if things are decided on a purely economic basis the only sane and sensible place for the smelter to be built is in the Timmins area and that if it is built anywhere else it will be because of either political or financial pressure.
Some hon. Members may think that the hon. Member for Timiskaming was rather brash this afternoon when he spoke about the temper of the people of the north, but I should like to assure the House that he was not. Feelings are running very deeply in that area. The people of northeastern Ontario are sick and tired of being the milk cow not only for the Province of Ontario but for the whole North American continent.


Mr. Fairweather:: You are copying a phrase of Maritimers when you refer to milk cows.


Murdo William Martin: Our milk cows are much fresher than the ones in the Maritimes. The people of northeastern Ontario are sick and tired of seeing our resources shipped south to the golden horseshoe, while we watch the situation in that area becoming critical because of low water levels and pollution. We will soon be faced with a situation where we will have to send fresh water down there to process the materials we have sent there. The people of the north are getting sick and tired of the situation. There are people there who are saying openly that if this scheme is tried again they will use whatever physical force is necessary to put a stop to it, and I cannot say that 1 blame them.
It is bad enough to see that area bumbling and Stumbling along because of mistakes that governments have made over the last 97 years, from which they have learned nothing, but on top of that the resources of the region are shipped right out from the area. With regard to finding solutions for these problems, if the Government were to announce today that its policy was that the resources of the country should be developed, where possible and feasible, in the areas where they are found, this would do far more good for the particular designated area that 1 represent at the present time than the scheme being introduced today or the one introduced two years ago, or the one brought
June 29, 1965

in by the previous government prior to that. This is the type of thinking that the Government is going to have to adopt if they do not want to have to bring in a new scheme two years from now and scrap this one, just as they have scrapped the one they brought in two years ago. If a new approach is not taken to these problems we may find that we are once again dipping into the taxpayers' pockets to subsidize a scheme that is going to increase the problem and not help alleviate it one single bit.


Mr. Lloyd:: Mr. Chairman, at this point in the debate I should like to bring to the attention of hon. Members that much of the principle reflected in the resolution is also contained in recommendations made in a report by Professor T. Wilson of the University of Glasgow to the Atlantic Provinces Research Board. Indeed, reference was made today to this report by the hon. Member for Waterloo South. He expressed, and I believe quite properly so, interest in this very excellent presentation which was the result of an agreement between four Atlantic Provinces to secure the services of a competent authority in this field to guide their footsteps with regard to the expansion of industrial development in the Atlantic region. It is interesting to note that on page 71 of the report there is this recommendation:
It is therefore recommended that the Federal Government should provide grants toward the cost of fixed capital in the Atlantic Provinces in preference to the remission of corporation tax.
We learned today from the Minister's explanation in support of the resolution that the Government is proposing to offer cash grants to new manufacturing and processing firms, etc. Also on page 71 of Professor Wilson's report we find the following:
The value of the grants should not be reduced by a corresponding deduction from the amount a firm can claim in subsequent years against depreciation.
By way of contrast, the Minister's statement pointed out that the legislation will establish a formula to determine the amount of grant to be provided to individual enterprises and it will provide that such grants will not be taxable income and will not be deducted from capital costs for tax purposes. So there we have two parallel recommendations. The Minister's resolution reflects an objective analysis made at the instigation of four Atlantic Premiers, and certainly under these circumstances I am sure nobody will quarrel with the claim I make, that this legislation

Grants to Designated Areas is an objective and certainly non-partisan attempt to resolve a rather serious problem.
We also find that in the Wilson report reference is made to the subject of employment in these words:
It is therefore recommended that, for a limited period of, say, three years, a direct grant should be made in respect of every worker employed in a firm new to the area.
The legislation does not contain exactly the same thing, but it has been suggested in the Minister's statement that there is also provision for close liaison between the firms receiving development grants and the National Employment Service, to ensure that the new employment opportunities are fully exploited and the appropriate training facilities established.
It is my submission, Mr. Chairman, that what we have really been talking about this evening is a resolution which reflects a very comprehensive, independent study made on behalf of and reported to four Atlantic Province Premiers. Actually I am in agreement with the previous speakers. The hon. Member for Timiskaming wants to be assured that the Kirkland Lake area is given a fair opportunity. I too want to see that Sheet Harbour in Nova Scotia gets a fair opportunity.
0	(9:00 p.m.)
The hon. Member for Timmins wants to be assured that the formula will not unnecessarily subtract from existing established industries and cause unemployment in one area in order to achieve employment somewhere else.
It is my submission that no intelligent analysis can be made without an immediate reference to the bill itself, and therefore I hope we shall move on to first reading, because the bill will enlighten us on the details which we require in order to make an intelligent appraisal of the measure.
As a Member from the Atlantic Provinces
1	am anxious to see the bill, to see if it contains what I suspect it does, namely the kind of measures recommended for the Atlantic Provinces. The sooner we reach the bill, the more enlightenment we will achieve on the subject.


Mr. Olson:: Mr. Chairman, the Minister advanced some interesting arguments as to why this kind of program would be more effective to deal with areas of unemployment than the plan initiated last year respecting designated areas. I agree with his contention that it will be easier to expand employment opportunities in an area when direct cash
June 29. 1965

Grants to Designated Areas grants can be made available for the establishment of new industry. I also agree with him that there is a problem in achieving industrial expansion on the basis of income tax or corporation tax holidays, or accelerated depreciation, when it is necessary for industries to earn an income, shortly after their establishment, which would be taxable. Many types of industry require several years to become established and reach the point of substantial income that can be used for accelerated write-off or tax holidays.
Notwithstanding that those arguments are valid, I want it to be abundantly clear I am generally opposed to the kind of program envisaged in this resolution, and for that matter to the kind of government action taken under the old designated area type of assistance. I say so because I am reasonably sure that under the old program some industrial establishments were misplaced so far as economic soundness is concerned, particularly after the expiration of the incentive period, and 1 feel this program of direct cash grants from the federal treasury will have the same effect. When industries established under it come face to face with the economic realities of competing without incentives, they will find themselves unable to carry on because of location.
This is more detrimental to the communities involved than if no industries had been established in the first place. In other words, what I am saying is that if a new industry establishes in an area and employs X number of employees, it places a great load on the municipality concerned, to provide for those people when the industry can no longer compete without incentives. This is something which will have to be carefully considered, else there will be many groups of people who will find their jobs in jeopardy at the expiration of the incentive period.
We shall then be faced with two alternatives, having to continue to subsidize these industries where it is uneconomically feasible for them to compete, or else having the municipalities support the unemployed workers, should they close down. I do not believe that we can assist the weak by pulling down the strong. If we take the tax dollars we collect from the strong economic sectors of our country, and use them to set up industries in competition with the industries providing those tax dollars, it will be a very serious matter and one we need to consider carefully.
At present there is a redistribution taking place of the corporation and income taxes

coming into the federal Government and going out to the provinces by way of grants and the equalization formula. This provides a distribution of tax income to those areas lagging behind the more buoyant sectors of the country. Further, provision is made by certain provinces to attract industry to them through tax concessions and other incentives. The provincial governments are using the additional funds made available to them by the federal Government to provide these incentives, but I do not think anyone objects particularly to that.
We are a nation of many regions, and we are our brother's keeper to a point-to the point that we should provide some inducement to areas that are lagging behind, enabling them to catch up and maintain a decent standard of living. But you reach a point of diminishing returns in this matter of establishing industries in areas where they cannot compete without subsidization. The Government ought to be very careful in penalizing the prosperous areas through additional taxation in order to establish uneconomically feasible misplaced industrial establishments in other areas.
If the Government is going to go ahead with this kind of program it should be very careful to take into account the criteria that will be used to designate a development area. We are informed that there will be such things in the formula as the level of income, and factors respecting low employment opportunities, low growth opportunities, and things like that. I do not disagree with these factors being introduced, but I notice there is an addition to what were the criteria when designated areas were first established.
[DOT] (9:10 p.m.)
But the income levels should be considered together with the cost of living in the local national employment service area. To reach the same standard of living in different areas may require a different level of income. Compare the cost of living in Toronto with the cost of living in some areas in Saskatchewan or the Maritimes or even in certain parts of Alberta. We would find that the cost of living in Toronto is substantially higher. What we should be concerned with is the standard of living. These two factors are closely related.
Perhaps by way of experiment we could vote $50 million to see what effect it has. But we should not go too far. If this goes further and further, the Government will get into the business of attracting industry by way of offering incentives, as some of the provinces
June 29, 1965

have already done. We are going to get into the rat-race where every province tries to outbid the other in attracting industry. We have already had experience of this-municipal governments outbidding their neighbours in offering tax concessions and the like. The point will be reached where some of the richer provinces will be forced in self-defence to set up incentive and concession programs. Then where does the balance go? The Province of Alberta has made its position very clear. It has been trying to resist this kind of Government intervention, this method of attracting industry by offering subsidies. If Saskatchewan, Manitoba, and, now, the federal Government, insist on using public funds to attract industries into areas other than Alberta, then I think Alberta will find it necessary in self-defence to use the vast resources and reserves of that province to set up its own incentive program. Then we would find ourselves in a position where one offer of incentives balanced out the other. At this point, I suggest, some of the richer provinces, which are in a far stronger position to offer incentives, would be forced to do so. I hope the Minister will be careful to see that a program of this kind does not discourage the natural location of industries, which because of sound economic reasons place themselves in proximity to markets and raw materials, natural advantages enabling them to build up enterprises capable of continuing in the face of competition, without need for incentives. If we go too far in the direction now proposed we shall weaken the whole economic structure of the nation and I am sure the Minister would agree that this is not desirable.


Mr. MacEwan:: I have a few remarks to make on the resolution stage of the bill which the Minister will be presenting in due course. I hope the hon. gentleman will present the bill at an early date so that we may study its contents carefully and be in a position to go into full detail.
I listened with interest to what the hon. gentleman had to say. If I understood him correctly he told us that the benefits so far, tax concessions and accelerated depreciation allowances, have been limited benefits only.
I do not intend to repeat what I said during the budget debate. It is on record in Hansard. Some hon. Members like to go back to these things, but I would prefer to let the record speak for itself. At that time I said I did not believe the tax concessions, or the accelerated depreciation allowances,

Grants to Designated Areas were sufficient incentive to induce industry to go to the designated areas. It has been suggested that two new plants in my own area, the Scott Paper Company and the Clairtone Company were put there as a result of the incentives offered by the Government. It has been maintained that the Scott Company will perhaps gain some $14 million as a result of these income tax concessions. This was suggested in the press. Clairtone, it was said, would benefit by a couple of million dollars. However, I think these figures can only be an approximation as both companies must make a profit in the first three years. These firms have not yet set up their plants; they are just getting into operation. We are happy to have them with us, but the amounts which have been mentioned can only be approximations, even though apparently, they were given to the press. I think they are on the optimistic side, because these plants must make a profit in the first three years in order to gain any benefit.
I am glad the Minister is bringing forward this bill which will provide for assistance to the designated areas. While speaking in the budget debate I mentioned a submission by the Atlantic Provinces Economic Council to the Atlantic Development Board setting out what the council felt should be brought forward. I know the Minister has studied these submissions before submitting the resolution and the bill which is to come, because the resolution has some of the features which were recommended by APEC to the Atlantic Development Board. I hope these proposals will be of benefit to the designated areas.
It has been suggested that existing industries can benefit by this legislation. The criterion seems to be that they should contribute appreciably to employment in the area-that is, their extension. I hope the Minister will spell this out clearly in the legislation because a clear definition would be appreciated. I think especially of one industry in my area, the Trenton plants, the biggest employer in the constituency, where formerly as was pointed out to me the existing industry could derive no benefit from the former legislation. I hope the provision now proposed is not a meaningless one and that the criteria set out in the Prime Minister's original statement will not be so narrow as to prevent assistance being given to established industries such as I have mentioned.
June 29. 1965

Grants to Designated Areas [DOT] (9:20 p.m.)
When the hon. Member for Wellington South spoke earlier today he urged that some safeguard should be attached to these grants. I agree with him. The Department of Industry should look into this matter and when making these grants it should satisfy itself that the industry which is to benefit is not likely to be a fly-by-night concern. An industry which set up in an area, took advantage of all the benefits it could receive from federal, provincial and municipal levels and then took off suddenly, would do an area more harm than good. I think there should definitely be very strong safeguards in the matter of grants before they are given to any industry.
Mention was also made by the Prime Minister, on page 3 of the statement which he originally gave, of the following:
The purpose of this program is to provide a broad improvement in the incentives to industrial development in those parts of the country where underemployment is most serious. There are many more specific measures that can assist industrial development and provincial governments are developing such measures in regional development plans within their provinces.
Then he said:
As those plans are elaborated it will be the Government's policy to seek the fullest harmonization between its action and provincial programs.
I would hope that the Prime Minister means that this program will go along, as he stated, in seeking the fullest harmonization between the action of the Government and provincial programs. I am thinking especially of the Province of Nova Scotia and Industrial Estates, a Crown corporation set up by the present provincial government to get industry into the area. Suggestions have been made through the years that the Atlantic Development Board, which was set up by the former government and continued by this one, should give funds to Industrial Estates to help them in their work. I know, going back a few years to when Industrial Estates was but an infant, that there were difficulties in the work of this organization. I spoke to an official and one of the businessmen of Industrial Estates, who is still in that capacity, and he said, "We have so much money to induce industry to come to Nova Scotia, but there are certain things which are just a little beyond our ability because they are just too costly for us to look after. We believe there should be federal help in this regard".
Suggestions were made that the Atlantic Development Board should funnel some of
IMr. MacEwan.]
their funds into bodies such as Industrial Estates. I hope the announcement of the Prime Minister means that in this bill the Government will come forward with some method of achieving the fullest harmonization with Industrial Estates of Nova Scotia. I think this measure could do a great deal for that Province and indeed for the whole Atlantic area. I believe that New Brunswick has set up a Crown corporation, something along the lines of the corporation set up by the Province of Nova Scotia, and I hope New Brunswick will be successful in this regard. But I do hope that the bill brought forward by the Minister will point out in detail how this harmonization can be achieved.
Other Members have spoken on this measure. We will have to get the bill before us, of course, to understand its details in full. However, Mr. Chairman, perhaps I could point out briefly that suggestions have been made, one of which is that subsidies should not be provided to industry and should not be given for an indefinite period. I agree with that argument. I believe that subsidies should be on a temporary, interim basis to give a chance to an industry to get on its feet, and from there on it should be able to handle its affairs. The grants should be going to industries which, as I said originally, are set up by substantial companies and which will remain in the area and make a home in which they can settle.
The hon. Member for Renfrew South spoke this evening. I am always glad to hear him. I do not intend to enter into a debate on what government did what, that the former Government did nothing, and so on. Before he was here a few things were done by the former Government for the Atlantic area in particular, and certainly for the whole of Canada. Among them was the Atlantic Provinces Power Development Act, which has been a godsend to an area such as mine, especially where we have a thermal power plant where subsidies are paid to these consumers of electricity in the Atlantic area who take electricity which comes from a thermal power plant which uses coal. This has helped us a great deal. There were other ways in which the Atlantic Provinces were helped. There was the decentralization of industry, and providing naval work for the Atlantic area. This sort of help was given to a great extent.
The Minister perhaps has some knowledge of these things. He was not concerned with the particular industry I had in mind at the
June 29, 1965

time, but in the days of the former Government there was projected the move-and the former Government went along with and encouraged this proposal-whereby at the time Canada Car was closed in Montreal, the machinery and facilities were moved from there to the Trenton plants. This was a godsend to the constituency I represent. The former Government was under much pressure not to move this plant and to let it carry on where it was. But the move was made and it has helped a great deal in that area, it being the biggest industry there.
I hope that the bill the Minister will bring forward will spell out in detail what these grants will mean so far as co-operation with Industrial Estates and other provincial bodies throughout Canada are concerned. At that time we will be able better to tell just what this measure will mean. But, Mr. Chairman, I do hope that these grants will go further than the original legislation, which was to give a tax free holiday for three years and the accelerated depreciation, and will assist getting industry into designated areas.


The Deputy Chairman:: Shall the resolution carry?


Some hon. Members:: Carried.


Mr. Nasserden:: Mr. Chairman, I have just a few words I would like to say before the resolution carries. I must say that I am as curious as other hon. Members to see the bill, in order to ascertain whether the Government has learned anything from its experience in the past. We in the Province of Saskatchewan have failed to benefit from any of the legislation the Government has brought forward along this line in the past. In view of recent representations made by our Premier and his Minister of Natural Resources, I am very hopeful that when the bill is introduced it will reflect that measure of co-operation and understanding on the part of the Government and the Minister concerned that will give a truly national outlook to this legislation and its application to industry.
I would be remiss in my duty if I did not go back to the period of the Second World War and point out what took place at that time with regard to the centralization of industry. I do not want to criticize the Government of that day for what it did then; but if this legislation is to reinforce the mistakes that were made at that time and perpetuate a situation in which industry was centralized in certain areas of this country,
Interim Supply
to the detriment of other areas where perhaps some natural resources were more readily available than in the area that was affected, then I would think the legislation would be lacking in the respect that we in western Canada would like to see corrected.
I cannot help but think of my own Province of Saskatchewan and the loss of population there; perhaps I should not say the loss of population altogether, but the limitation of growth that has resulted from what happened during the last Great War and the period immediately following. We have failed to achieve an increase in population of approximately half a million people, in a period when other parts of the country have been growing, largely because of the centralization of industry that was encouraged during that particular period. I hope that the bill will be broad enough to take into consideration the truly national needs of our country in this regard, and will restore to the prairie region in western Canada some of the incentives that have been lacking during the past many years. Therefore, Mr. Chairman, without saying anything further in this regard at this particular time I will await the introduction of the bill. [DOT] (9:30 p.m.)


Herman Maxwell Batten: Shall the resolution carry?


Some hon. Members:: Agreed.


Herman Maxwell Batten: Shall I report the resolution?


William Arnold Peters: On division.
Resolution reported and concurred in.
Mr. Drury thereupon moved for leave to introduce Bill No. C-129, to provide incentives for the development of industrial employment opportunities in designated areas in Canada, and to effect certain related amendments to the Income Tax Act.
Motion agreed to and bill read the first time.



INTERIM SUPPLY

[Stage Direction]
The House resumed consideration in Committee of the following resolution-Mr. Gordon-Mr. Batten in the Chair.
Resolved, that a sum not exceeding $1,651,292,282.42, being the aggregate of:
(a)	four twelfths of the total of all the items set forth in the main estimates for the fiscal year ending March 31, 1966, laid before the House of Commons at the present session of Parliament, except external affairs item 15, mines and technical
[Stage Direction]
June 23, 1965
Interim Supply
surveys item 70; and external affairs item 20 for which the proportion is three twelfths, $1,456,413,323;
(b)	an additional four twelfths of the amounts of agriculture items 25 and 45, legislation item 15, and loans, investments and advances item 130 (Schedule A) of the said main estimates, $4,664,625;
(c)	an additional two twelfths of the amount of northern affairs and national resources item 15, (Schedule B) of the said main estimates, $2,258,500;
(d)	an additional one twelfth of the amounts of agriculture items 5 and 60, fisheries item 10, mines and technical surveys items 10, 15, 25, 45 and 60, national film board item 1, northern affairs and national resources item 45, (Schedule C) of the said main estimates, $9,566,025;
(e)	seven twelfths of all the items set forth in the supplementary estimates (b) laid before the House of Commons at the present session of Parliament, $162,394,142.75;
(f)	an additional four twelfths of the amounts of agriculture items 17b, 25b and 35b, mines and technical surveys item 70b, and loans, investments and advances item L78b, (Schedule D) of the said supplementary estimates, $7,245,666.67.
(g)	an additional three twelfths of the amount of finance item 15b, (Schedule E) of the said supplementary estimates, $8,750,000,
be granted to Her Majesty on account of the fiscal year ending March 31, 1966.
["I trust that the Minister of National Revenue is making note of all these things and that replies will be given tomorrow.\nI call it ten o'clock, Mr. Chairman.\nProgress reported.\nAt ten o'clock the House adjourned, without question put, pursuant to Standing Order.", 'June 29, 1965']
Robert Gordon Lee Fairweather: Mr. Chairman, there are one or two points which I think should be covered before the House proceeds to take an adjournment, and I can think of no better time than at 25 minutes to ten on a warm summer evening, after other dramatic events have taken place, to share with the Committee my views on such matters. One portfolio which any New Brunswick Member would be proud to discuss at this time of night is that of public works.
There are two points I wish to make here. One is that the Government has failed to complete roads to resources projects which have been started during the last few years. This is a co-operative scheme between the Government of Canada and the governments of the provinces. Yet the location of the various roads and whether or not they are to be completed is decided at the whim of the provincial administrations. I should like to bring to the attention of the Minister of Public Works two projects which, by a strange coincidence, happen to be located in my constituency. One of them is popularly known as the Kingston peninsula trail. This road has been under way for the past six years. In answer to an inquiry of mine directed to the Ministry I find that no steps are being taken this year to finish the remaining 12 miles of this tourist attraction.
Then there is a very important road to resource between the communities of Chip-man in the County of Queens, in the constituency of Royal, and the community of

Doaktown. The Parliamentary Secretary to the Minister of Public Works would have just as much interest as I in the completion of this road, which is very much needed by the lumbering community.
The second point with regard to public works which I should like to make concerns the absence of any announced Government policy of assistance to marinas and other boating facilities along navigable waters. The Minister of Northern Affairs on the radio last night spoke of water as being the most important of our resources. I am one who believes that this is the fact, and in this regard I am saddened to think of the great Saint John water system. Some years ago, in the thirties, we had a program of construction of public wharves. In those days it used to be thought that these wharves should have a commercial use, in the narrow sense of the word. I regret to say that I have been unable to persuade the Government, in these days when so many people have the use of motorboats and other pleasure craft, that this type of use should also be regarded as commercial use.
The Saint John River system has some 60 public wharves owned by the Queen in the right of Canada, and I think that it is tragic that a vigorous policy of exploitation has not been embarked upon by the Government to enable people with leisure, among whom I should like to think Members of Parliament may soon fall if events take their proper course, to enjoy the unmatched beauties, if I may be chauvinistic, of the Saint John River system.
These two matters are very close to the constituency of Royal, Mr. Chairman, but I should like to move to another area to which I think the Government should pay more than lip service, namely the subject of university education. This subject has been the pet of a great many Members and I should like to say that the interest is not restricted to Members of this party. As a matter of fact, I think it has been almost a backbench crusade, with one exception, and that exception was the late hon. Member for Digby-Annapolis-Kings, who made many important speeches on the subject of the negligence, which is what it was really, of the Government in failing to provide any increase in assistance to Canadian universities.
The Minister and his Parliamentary Secretary have replied to questions of mine and of other hon. Members by saying that the Government is awaiting the results of the Bladen Commission before announcing policy.
June 29, 1965

This of course is the typical answer of a Government which does not wish to take any responsibility; it finds some commission and hides behind it, not announcing any policy. This Government, which came into office on votes gained by promises of bold and daring acts for all our people, has really shown a curious lack of policy in connection with higher education in this country. Those of us who like not only to fight politics at the constituency level but also like to stand back once in a while and philosophize about politics, find it curious that here we have a party which prides itself on its appeal to the intellectual levels of the country and which tosses about fancy phrases, yet when the issue is joined no government in recent Canadian history has done less-in fact this Government has done nothing-for higher education in Canada than this one. At least there has been no increase in assistance. Yet the Government has received briefs from the Canadian Universities Foundation, one as early as May, 1963 and another as of December, 1963. During the intervening period of time other submissions have been made.
[DOT] (9:40 p.m.)
It is also a curiosity in this country that there is no one on the staff anywhere in the ministry of Canada, at the federal level- I want to be fair, but I think this is a fair statement-who really has the responsibility for enunciating or recommending policy to the Government of Canada about higher education. For a short while the Government had the benefit of the services of Mr. Kenneth Taylor but, if my memory serves me correctly, this individual has not been part of the public service for at least a year.
So here we have a Government that spends I think not quite four tenths of 1 per cent of the national budget on higher education, and coupled with this shocking figure is the absence of any spokesman for higher education in the public service.
The university students of my province staged a wonderful democratic protest, in the best traditions of a public protest, in front of the legislature in our province following the announcement that the fees of the provincial University of New Brunswick were to be raised because of the lack of action on the part of the federal Government. I am also aware of the complaints of the undergraduates at Mount Allison University, and at many of the universities of Nova Scotia.
There are several persons adorning the Government benches, some of whom are in the Ministry, who have had a role to play as
Interim, Supply
teachers and professors in our Maritime universities. Yet, to use a well worn cliche, they sit idly by with a smile on their faces while this problem is allowed to deteriorate. Mari-timers should be glad to know that the Prime Minister of Canada intends to travel to one of our Maritime universities, in mid-July I think, to receive an honorary degree. I hope in his statement, comments or speech, if he is to make one-or at least in his dialogue which is another well-worn current cliche- he will bring about a change of heart in university circles, which has existed for the last few years, which will make them believe that this Government is the able and daring Government which publicity emanators promised it would be.
The serious thing is that undergraduates are getting ready now-this is the time of year- to enter our universities; yet this Government has done nothing upon which university administrators or the young people of this country can pattern themselves or plan for the forthcoming academic year. I should like to ask the Minister of Finance whether he has received any protests from student university groups about the increases of fees that have been announced, not only in my own part of Canada but also in western Canada, where there has been general objection taken. Has the Minister received any representations from university presidents or representatives of university administrators, respecting the policy of the Government, to upgrade the per capita grant to the very minimum of the often suggested three dollar figure in time for the next academic year? This would be a dramatic gesture that could take place and which would receive the general approval, I am sure, of all Members, before we go home to our constituencies.
Mr. Chairman, if the Minister is about to make such an announcement, I will be glad to yield the floor so that he can capture some of the drama of this day, by doing something that he should do for Canada.


An hon. Member:: He is not even listening.


Robert Gordon Lee Fairweather: Of course he is not listening, but I know that tomorrow he will have a precis of this compelling speech placed on his desk, so that he will be able to formulate a reply to appease the people of this country, so in turn they will know that the Government has not been negligent in respect of higher education.
Now that the universities have had a comment or two from me, I have one last comment to make on interim supply which has

June 29, 1965
Interim Supply
to do with the truly extraordinary things that are going on in the City of Montreal in relation to Expo '67. I am astounded by the concept of Expo '67, and I think that many of the events that are planned for that great exposition will be really wonderful evidence of the progress that Canada has made. I must confess, however, that I am one of those who derive neither aesthetic nor any other thrill from the strange projection the Mayor of Montreal is going to erect into the skyline of that city, provided President de Gaulle still wants to co-operate in this strange misuse of public funds. I hope the funds of the Government of Canada are not going to be spent in this attempt to reach for the stars, that is being planned for that city. Surely there are many other things that we can plan which may be useful, on a permanent basis, to the general population of Canada.
Someone suggested that perhaps the facilities could be used for a university campus. I am not able to make any judgment as to whether or not that is a sensible suggestion, but I think 1 am as competent as anybody else to judge whether or not this strange thing that is going to be projected into the sky is a waste of money. I suppose I will receive a slick comment from the Expo officials telling me exactly what this projection-I cannot use the word I intended to use-has to do with Man and his World in 1967.
I was somewhat upset by the appeal made by Mr. Kniewasser-I hope I have pronounced his name correctly, but it does not matter because it will be transcribed in Hansard correctly-for $30 million from private industry, as was announced in the Montreal Gazette of June 23. Apparently he wants this amount of money from private industry so that Expo '67 can carry on its plan. Mr. Kniewasser in his appeal said that this amount was necessary because of the reluctance of some major industries to come forward with donations. I am sure the reluctance on the part of industry is the result of the unusual nature of this clause.
[DOT] (9:50 p.m.)
I do not, of course, expect that it will be possible to do so before we adjourn for the summer but certainly when we return after the summer recess a great many people will want to have the opportunity to look at a very detailed report of costs, to date. I had hoped that this would be possible earlier so that the upset industry is experiencing about Expo '67 could be somewhat allayed by this

information. If Expo '67 is not to become a white elephant it should have the very diligent and vigilant scrutiny of Treasury Board, for instance, and all the other manifestations of good government accounting practices.


Mr. Sharp:: May I ask the hon. gentleman a question?


Robert Gordon Lee Fairweather: I would be delighted to have a question.


Mitchell William Sharp: I know the hon. Member would not want to misrepresent the situation or do any harm to the cause of Expo. Is he aware that what Mr. Kniewasser was talking about was not the rising costs of Expo in the sense in which the hon. Member was speaking, but the rising costs of construction?


Robert Gordon Lee Fairweather: One of my colleagues suggests that if we did not have the 11 per cent tax on construction material and equipment-


An hon. Member:: Imposed by the Government.


Robert Gordon Lee Fairweather: I am getting lots of advice at this late hour of the night from my colleagues-construction costs might not be as great. I do not think it really matters, to my argument, whether it is construction costs that are rising or what is rising. All I know is that the Montreal Gazette of June 23 last had this headline: "Expo Searches For $30 Million To Keep Three Projected Pavilions". Over one story there is a subheading, "M.P. Renews Demand For Probe" and over another story by Bill Bantey there is the subheading "Kniewasser Appeals to Canadian Business". The story follows and hon. Members can read it to their own satisfaction.
But I think there is some public concern about Expo, and just because we stand here and ask questions we should not be considered to be against the project. I for one think it is a most imaginative project but, like any other project, I think we should be able to know roughly, within say $20 million or $30 million, what the eventual cost of Expo '67 will be. I do not think this is an unrealistic or unparliamentary request for one to make.
I have covered various facets of interim supply and I hope that tomorrow afternoon there will be some answers from the ministry with regard to some of the problems I have posed. Most important to Canada as a whole, of course, is the problem facing our universities. Because I have a great interest in my own constituency I should also like to think
June 29, 1965

that the Minister of Public Works will answer my questions about the roads to resources program and also an imaginative program for the use of the Saint John River. Because I should like to think that Expo '67 has the wholehearted approval, understanding and sympathy of the business community as well as all Members of Parliament, I am sure the Minister of Trade and Commerce will want to calm the fears of a good many people about this project. We will leave it to the President of France to decide whether a tower will be constructed to spoil what is otherwise the rather lovely skyline of the great City of Montreal.


Norman Platt Lambert: Mr. Chairman, I wish to add a postscript to the remarks I made yesterday on interim supply when I raised the question of William Grant, former Yukon agent of the Indian Affairs Department. I received the news today that his colleague, Joseph Armishaw, who was also charged, has been found not guilty on all charges. This man was suspended as of September, 1963. The charges were only laid on November 4, 1964. He too has been without salary and has had to fall back on whatever resources he could scrape up. One can readily understand how difficult it would be for a civil servant to obtain interim employment when he is under suspension.
Some people seem to think that undue influence was used in regard to these cases. I want to say again that I am amazed at the humanity expressed in certain cases but which did not apply in regard to these two cases. Therefore I trust that before we conclude interim supply we will get an answer with regard to Grant and Armishaw.
I received today a news item from Edmonton stating that Jean Dastous, director of administration in the Department of Indian Affairs, has said in reply to an inquiry that William Grant cannot be returned to his previous job because there was a separation. Does this mean that the man has been fired? To me the word "separation" means only
Interim Supply
one thing, that he has been dismissed from the service or has been pressured into resigning.
We want to know precisely what is happening in this regard, in the light of the comments by the judge and in the light of the comments by the people of the community. We are not content with just being given the decision of some man here in Ottawa far removed from the scene. We know there have been very strong comments by the Justices of the Northwest Territories and the Yukon Territory with regard to the bureaucratic machine that has to do with northern administration, and certainly I should not like to be in the shoes of those people who are the butt, shall we say, of the criticism of these two Justices, both of whom know the north country and both of whom are eminent lawyers. One was appointed by a former Liberal administration. I refer to Mr. Justice Sissons who used to be a Member of this House. Mr. Justice Parker had a long career in the Northwest Territories before appointment. Surely these men know what they are talking about. Yet it seems that the words of these men and the words of other people in that area fall on deaf ears when they strike Ottawa.
It had also been my understanding that the Minister of Justice was going to reply to remarks made by the Leader of the Opposition concerning a Justice of the Province of Ontario and one in the Province of Quebec whose positions are under review. A statement was promised. Are we going to have it before supply is granted?


Some hon. Members:: Ten o'clock.


Norman Platt Lambert: I trust that the Minister of National Revenue is making note of all these things and that replies will be given tomorrow.
I call it ten o'clock, Mr. Chairman.
Progress reported.
At ten o'clock the House adjourned, without question put, pursuant to Standing Order.

June 29, 1965



[Stage Direction]
At the Meeting of Commonwealth Prime Ministers, which ended today, Pakistan, Ghana, Tanzania and Zambia were represented by their Presidents. Britain, Canada, Australia, New Zealand, India, Malaysia, Nigeria, Sierra Leone, Trinidad and Tobago, Uganda, Malawi, Malta and The Gambia were represented by their Prime Ministers. Jamaica was represented by the Acting Prime Minister; Ceylon by the Minister of Justice; Cyprus and Kenya by the Ministers of External Affairs.
This was the first Meeting at which Malta, Zambia and The Gambia were represented as Members of the Commonwealth; and the other Commonwealth Heads of Government were pleased to welcome them. The Prime Minister of The Gambia informed the Meeting that it was his country's desire to continue her membership of the Commonwealth after introducing a republican form of Constitution and to accept The Queen as the symbol of the free association of the independent member nations and, as such, the Head of the Commonwealth. The Heads of Delegations of the other Member countries of the Commonwealth assured the Prime Minister of The Gambia that they would be happy to recognise The Gambia's continued membership of the Commonwealth.
The Prime Ministers took note that their Meeting was being held during the International Co-operation Year which itself stemmed from a proposal by the former Prime Minister of India, the late Mr. Nehru. They recorded their sympathy with its objectives and their desire to assist in its success.
The twentieth anniversary of the foundation of the United Nations fell on the last day of the Meeting. The Prime Ministers sent a message of greetings and of good wishes to the Organisation to mark this occasion.
The Prime Ministers recognised that the Commonwealth, as a multi-racial association, is opposed to discrimination on grounds of race or colour; and they took the opportunity of their Meeting to re-affirm the declaration in their Communique of 1964 that, "for all Commonwealth Governments, it should be an objective of policy to build in each country a structure of society which offers equal
opportunity and non-discrimination for all its people, irrespective of race, colour or creed. The Commonwealth should be able to exercise constructive leadership in the application of democratic principles in a manner which will enable the people of each country of different racial and cultural groups to exist and develop as free and equal citizens."
In the course of a comprehensive review of the major current international issues, the Prime Ministers noted with concern that, despite the efforts of many countries to promote peace and stability throughout the world, dangerous conflict, or the threat of conflict, persists in several areas. They expressed their conviction that in these circumstances all possible steps should be taken to reinforce the authority of the United Nations Organisation; and they discussed in this context the question of China's representation in the Organisation. They also reaffirmed their belief in the importance of the peace-keeping operations of the United Nations; and they renewed their support for the efforts now being made by a Committee of the United Nations to establish just and equitable principles for authorising, organising and financing peacekeeping operations. They considered it essential that the General Assembly, when it reconvened, should be able to function normally. They welcomed the voluntary and unconditional contributions which had been made to the United Nations in order to help towards relieving it of its financial difficulties; and they expressed the hope that, as a result of these and other actions, the United Nations would be able to discharge its functions. The Prime Ministers pledged their loyalty to the United Nations, the success of which they considered to be essential to the maintenance of world peace.
The Prime Ministers expressed serious concern over the grave situation in Vietnam and the danger of its developing into a major international conflict. They reviewed the various efforts which had been made to achieve a peaceful solution to the problem; and, bearing in mind that the Commonwealth, by virtue of its wide membership, represented a very broad spectrum of opinion in the world and that their Meeting was taking place
June 29. 1965
[Stage Direction]
at a time when the peril to world peace was rapidly increasing, they considered, on the first day of the Meeting, a proposal for a new attempt to move forward to a peaceful solution. To this end a Mission was established to make contact with the parties principally concerned with the problem of Vietnam.
The Mission is composed of the Prime Minister of Britain, the President of Ghana and the Prime Ministers of Nigeria and of Trinidad and Tobago. The Prime Minister of Britain, as Chairman of the Meeting, was appointed Chairman of the Mission. Its object is to explore with the parties principally concerned how far there may be common ground about the circumstances in which a conference might be held leading to a just and lasting peace in Vietnam and, having ascertained such common ground, to seek agreement on a time, place and composition of a conference. The Mission will report progress from time to time to the Prime Ministers by whom they were appointed. The Meeting approved a statement of guidance to the Mission, a copy of which is attached to this Communique, together with copies of two statements issued by the Mission.
Malaysia
The Prime Ministers reviewed other developments in South-East Asia. They noted, with concern, that tension still persisted between Malaysia and Indonesia, thus disturbing the peace and security of the area, despite the interval since they had last collectively considered the matter and had stated in the Communique issued at the end of their Meeting in 1964, that "they assured the Prime Minister of Malaysia of their sympathy and support in his efforts to preserve the sovereign independence and integrity of his country and to promote a peaceful and honourable settlement of current differences between Malaysia and neighbouring countries". They recognised and supported the right of the Government and people of Malaysia to defend their sovereign independence and territorial integrity, and expressed their sympathy to the Prime Minister of Malaysia in his country's efforts to this end. They looked forward to the establishment of peaceful, friendly and mutually advantageous relations between Malaysia and Indonesia on a just and honourable basis.
Cyprus
The Prime Ministers expressed concern about the situation regarding Cyprus. They
reaffirmed their full support for the U.N. Security Council resolutions on the subject. The Prime Ministers asserted that the Cyprus problem should be solved within the framework of the U.N. and its Charter and in accordance with the principles of democracy and justice and in conformity with the wishes of the people of Cyprus.
They appealed to all countries concerned to act in accordance with the Security Council Resolution of the 4th March, 1964, and to refrain from any action which might undermine the task of the United Nations PeaceKeeping Force to which a number of Commonwealth countries are contributing. They also expressed their appreciation of the work and persistent efforts of the United Nations Mediator.
Africa
The Meeting took note of the widely expressed regret at the failure of the Portuguese Government to give due recognition to the legitimate political aspirations of the peoples of the Portuguese territories in Africa. The Meeting expressed support for the application of the principle of self-determination to the inhabitants of Angola, Mozambique and Portuguese Guinea. The Prime Ministers reaffirmed their condemnation of the policy of apartheid practised by the Government of the Republic of South Africa and unanimously called upon South Africa to bring the practice to an end.
Caribbean
In discussion of Caribbean problems the Prime Ministers took note of the situation in the Dominican Republic. They expressed the hope that peace would be restored there and a final settlement reached within the framework of the Charter of the United Nations on the basis of self-determination and in accordance with the wishes of the people of the Republic.
Disarmament
The Prime Ministers reaffirmed the aim which they had expressed in their Statement on Disarmament on 17th March, 1961, namely to achieve total and worldwide disarmament, subject to effective inspection and control. They commended the thorough and useful work which had been done in furtherance of that aim by the 18-Nation Disarmament Conference since it first met in March, 1962, both on general and complete disarmament and on preliminary measures to build international confidence. They recognized that the
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non-aligned members of the Conference, byplaying a constructive and intermediary role, had contributed to the progress already achieved and had increased world understanding of the importance of disarmament.
The Prime Ministers believed that there was an urgent need for further progress in the disarmament field, both in the interests of world peace and in order to enable the nations of the world to devote their resources to more fruitful purposes. They considered that the problems involved in the elaboration of an agreement for general and complete disarmament should be re-examined, in the light of their Statement on Disarmament of March 1961, by the 18-Nation Disarmament Committee at Geneva. They considered that, in order to create the optimum conditions for the success of their efforts to achieve general and complete disarmament, the 18-Nation Disarmament Committee should resume its detailed negotiations at Geneva with a view to reaching agreement on the next steps to disarmament which could be submitted to an eventual World Disarmament Conference which should be open to participation by all States.
They welcomed the various proposals which had been put forward for measures to reduce tension and build up international confidence. They hoped that early progress would be made towards an acceptable agreement on some of these measures, including the limitation and reduction of stocks of nuclear weapons and delivery vehicles and a phased reduction in conventional armaments, as steps towards a world agreement for general and complete disarmament. They emphasized the urgency of arms control and, recognized that in appropriate areas agreement on nuclear-free zones could assist such control. In this connection the hope was expressed that in the preparation of the appropriate Treaties the declarations by the Organisation of African Unity and certain Latin American States regarding the establishment of nuclear-free zones in their own geographical areas would be respected.
The Prime Ministers emphasized that ways and means should be found for associating the People's Republic of China with future discussion on disarmament. Indeed they felt that the importance of a solution of the disarmament problem had been underlined by the fact that, since their last Meeting, the Government of the People's Republic of China had exploded two nuclear devices and had clearly demonstrated their intention to develop nuclear weapons.
The Prime Ministers wished to record their firm conviction that the continuing spread of nuclear weapons had created a serious danger to mankind. They believed that the development of new national nuclear weapon capabilities might jeopardise further efforts to bring about general and complete disarmament. Moreover, the prospects for achieving a fair settlement of disputes would suffer as international tension increased and there would be a growing risk that nuclear proliferation might cause a local conflict to escalate to a nuclear exchange into which the major nuclear powers might be drawn.
Accordingly, the Prime Ministers, fully aware of the gravity of the situation and of their responsibility to each other and to other members of the international community, expressed their determination to give urgent and wholehearted support to measures to prevent the spread of nuclear weapons. To this end they reaffirmed their willingness to join with other countries in signing as soon as possible any appropriate international agreement which would halt the proliferation of nuclear weapons.
They expressed the hope that efforts to extend the Treaty Banning Nuclear Weapons Tests in the Atmosphere, in Outer Space and Under Water should be extended to cover underground tests as well. They called on all nations to abstain from actions which might make agreement on general and complete disarmament or preliminary measures more difficult.
Dependent Territories
Britain made the following statement to the Meeting about the progress of British Colonial dependencies towards independence. The independent Members of the Commonwealth now amounted to no less than 21, including a population of more than 750 million: Britain had 31 remaining dependencies with only 10 million inhabitants, of whom over half were in Hong Kong and the South Arabian Federation. Nineteen of these dependencies contained less than 100,000 people and 6 less than 10,000. It was hoped that many of these remaining dependencies would reach independence in the next three years, including Basutoland, Bechuanaland, British Guiana, Swaziland and the South Arabian Federation; and also some or all of the territories in the East Caribbean, wither in a federation or separately.
The Prime Ministers of the other Commonwealth countries noted with approval the
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further progress of British territories to independent membership of the Commonwealth since their last Meeting. They welcomed the assurance of the Prime Minister of Britain that it remained the objective of his Government to lead to independence, on the basis of democratic government and the principle of universal adult suffrage, such of the remaining territories as desired it and could sustain it; and that the British Government would continue to seek to devise the most appropriate alternative arrangements for such smaller territories as were unable, or unwilling, to proceed to full independence.
In relation to Basutoland, Bechuanaland and Swaziland the view was expressed that such economic assistance and guarantees of territorial integrity as were necessary to maintain the territories as independence states should be given.
As regards British Guiana, while differing views are held on the constitutional arrangements best suited for the country, the Prime Ministers welcomed the British Government's intention to hold a conference later this year, one of the tasks of which would be to devise a constitution, and to fix a date, for independence. The Prime Ministers noted the British Government's recognition of the need for adequate machinery to ensure human rights and due judicial processes.
As regards the countries of the Eastern Caribbean the Meeting expressed the hope that the assistance urgently required to strengthen their economies and ensure their viability so as to enable them to sustain the obligations of independence would not be delayed by the discussions on political arrangements.
Rhodesia
The Commonwealth Secretary informed the Meeting of the attempts which the British Government had made in recent months to resolve the problem of the further constitutional development of Rhodesia. He explained the considerations by which they were and would continue to be guided in their approach to the question of Rhodesian independence and emphasised that central to these was the necessity to provide guarantees that future constitutional development should conform to the principle of unimpeded progress to majority rule, together with an immediate improvement in the political status of the African population and the progressive elimination of racial discrimination. As they had repeatedly made clear, the British Government would only recommend to Parliament
the grant of independence to Rhodesia if they were satisfied that this was on a basis acceptable to the people of the country taken as a whole. He emphasized the dangers of the use of force or unconstitutional methods by any party; and he reaffirmed in this connection the policies of the British Government as indicated in their statements of 27th October, 1964, and 29th April, 1965.
The Heads of Government of the Commonwealth took note of the Commonwealth Secretary's statement. They reaffirmed their previous statement that they were irrevocably opposed to any unilateral declaration of independence by the Government of Rhodesia, and further reaffirmed their insistence on the principle of majority rule.
While the Prime Ministers reaffirmed that the authority and responsibility for leading her remaining Colonies, including Rhodesia, to independence must continue to rest with Britain, they also reaffirmed that the question of membership of the Commonwealth by an independent Rhodesia, or by any other newly independent territory, would be a matter for collective Commonwealth decision.
The British Prime Minister was urged by other Prime Ministers to convene a constitutional conference at an early date, say within three months, which all the political leaders in Rhodesia should be free to attend. They reaffirmed that the object of such a conference should be to seek agreement on the steps by which Rhodesia might proceed to independence within the Commonwealth at the earliest practicable date on a basis of majority rule. In this connection they welcomed the statement of the British Government that the principle of "one man one vote" was regarded as the very basis of democracy and this should be applied to Rhodesia.
An appeal was made for the immediate release of all the detained or restricted African Leaders as a first step to diminishing tensions and preparing the way for a constitutional conference. A further appeal was made that the death sentences passed on persons now awaiting execution for offences under the Law and Order (Maintenance) Act should be respited.
It was further urged that, should the Rhodesian Government refuse to attend such a conference and to release the detainees, the British Government should introduce legislation to suspend the 1961 Constitution and appoint an interim Government, which should repeal oppressive and discriminatory laws and prepare the way for free elections.
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The British Government said that they were actively engaged in discussions with the Government of Rhodesia; and they undertook to take full account, in relation to these discussions, of all the views which had been expressed during the Meeting. In this process of seeking to reach agreement on Rhodesia's advance to independence a constitutional conference would, at the appropriate time, be a natural step. If the discussions did not develop satisfactorily in this direction in a reasonably speedy time, the British Government having regard to the principle enunciated by the Commonwealth Secretary of unimpeded progress towards majority rule would be ready to consider promoting such a conference in order to ensure Rhodesia's progress to independence on a basis acceptable to the people of Rhodesia as a whole.
The Prime Ministers renewed their call to all leaders and their supporters in Rhodesia to abstain from violence and to co-operate in the work of fostering tolerance and justice, as the basis of a society in which all the inhabitants would be assured that their interests would be protected.
Economic Affairs
The Prime Ministers then turned to consider problems of aid and development. They recognised that economic and social development constitute a long-term co-operative enterprise in which all countries can work together. The importance of economic planning in relation to development would call for an increased supply of experts; and concerted measures would therefore be required in order to enlarge and mobilise resources of this kind by means of adequate facilities for education and training.
The Prime Ministers appreciated the importance of programmes of economic aid to the developing Commonwealth countries. They took note of the contributions made to such programmes by Commonwealth countries both collectively and individually; and they agreed that these programmes should be maintained and expanded as far as possible. They endorsed the concept of co-operative forward planning of development aid which would apply not only to matching the assistance provided by the developed countries with the needs of the developing countries but also to the supply of personnel for schemes of technical assistance, to which they agreed that high priority should be given. They welcomed the establishment of the British Ministry of Overseas Development together with the decision of the British Government to provide loans free of interest in appropriate cases; they also expressed their appreciation of the similar loans already provided by the Government of Canada and of the fact that the Government of Australia makes its aid available wholly on the basis of grants. It was suggested that, in those cases where financial assistance would remain unused, or give rise to serious internal problems, because of the inability of some recipient countries to finance local costs, donor countries should consider making financial contributions to cover a proportion of such costs. The Prime Ministers recognised the importance of the flow of direct investment to developing countries and expressed the hope that, insofar as economic circumstances permit, the minimum restriction would be placed in its way.
The Prime Ministers recorded their satisfaction at the constructive outcome of the Third Commonwealth Education Conference in Ottawa last August; they looked forward to an equally successful result for the Commonwealth Medical Conference which is to be held in Edinburgh in October 1965.
The Prime Ministers agreed that effective development is promoted not only by aid but even more by trade. Moreover, they were convinced that an expanding exchange of goods and services, by emphasising the interdependence of the countries of the world, was one of the most effective ways of promoting the growth of international understanding and the elimination of the causes of friction.
In further discussion of economic development in the Commonwealth, emphasis was laid on the importance to the economies both of Britain and of certain other Commonwealth countries of emigration to Britain from those countries. The Prime Ministers recognised that the extent of immigration into Britain was entirely a matter for the British Government to determine. The hope was expressed that in operating such immigration controls as they might think necessary, the British Government would continue to give preferential treatment to Commonwealth citizens; and they welcomed the assurance of the British Prime Minister that there would be no differentation in any restrictions on account of colour or creed.
The Prime Ministers welcomed the work which had been done since their last Meeting in carrying forward the initial impetus to the expansion of trade which was provided by the United Nations Conference on Trade and Development; and they pledged themselves
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afresh to press for more outlets for the trade of developing countries.
They stressed the importance to the development of the economies of member countries of the Commonwealth of the prices obtained for their primary commodities, particularly where the prices of primary produce fell in relation to prices of manufactured goods. The low levels to which the prices of cocoa and some other commodities have fallen are a matter of serious concern to producers. The problem of commodity prices extended beyond the Commonwealth and the Prime Ministers endorsed the need for consideration of the strengthening of existing international commodity agreements, where appropriate, and stressed the urgent need of negotiating further agreements of this kind.
The Prime Ministers agreed on the desirability of exploring means by which Commonwealth trade might be encouraged and expanded. One possibility would be to enable Commonwealth Governments, in planning their economic development, to take into account each others' plans. An exchange of information of this kind might enable production to be more effectively matched to requirements in the Commonwealth and thus increase trade between Commonwealth countries.
The Prime Ministers accordingly agreed on the following measures designed to further these objectives, while at the same time reaffirming their support for the Kennedy Round of tariff negotiations now proceeding at Geneva, which these measures will not affect. They agreed to arrange discussions between officials of Commonwealth Governments in the first instance, with the help of the Commonwealth Secretariat, in order to examine these issues further and to prepare for an early meeting of Commonwealth Trade Ministers. These official discussions could also pay special attention to problems of individual commodities of particular interest to Commonwealth countries, in order to see how far policies could be co-ordinated within the Commonwealth with a view to appropriate further action, whether on a Commonwealth or international scale.
They also agreed that subsequently the appropriate Ministers or officials in Commonwealth countries should meet to consider the extent to which each country's production and plans, as foreseen, could meet requirements in other Member countries.
Ministers decided to consider through the medium of the Commonwealth Air Transport Council means of promoting a closer understanding of the basic civil air transport requirements of Member countries.
In addition the Commonwealth Secretariat will examine the possibility of arranging for the results of research to be shared more widely among Commonwealth countries.
Commonwealth Foundation
At their previous Meeting in 1964 the Prime Ministers considered that it might be desirable to establish a Commonwealth Foundation to administer a fund for increasing interchanges between Commonwealth organizations in professional fields; officials were instructed to consider this proposal in greater detail. At their present Meeting the Prime Ministers approved a report by officials and an Agreed Memorandum on the establishment and functions of the Foundation which is attached to this Communique.
Commonwealth Secretariat
At their 1964 Meeting Prime Ministers saw a Commonwealth Secretariat as being a visible symbol of the spirit of co-operation which animates the Commonwealth and instructed officials to consider the best basis for establishing a Commonwealth Secretariat. At their present Meeting the Prime Ministers had before them a report by officials which they approved and an Agreed Memorandum on the establishment and functions of the Secretariat is attached. As already announced, they have unanimously approved the appointment of Mr. Arnold Smith as the first Secretary-General.
COMMONWEALTH MISSION ON VIETNAM Statement of Guidance
1.	To enable the Mission to approach its assignment meaningfully, there should be certain broad areas of agreement regarding the requirements for ending the conflict in Vietnam peacefully.
2.	There is already general agreement on certain basic considerations:
(a)	there is an inherent risk of the conflict in Vietnam escalating into a wider war.
(b)	for this reason there are grave doubts as to an early or final solution by military means.
(c)	a comprehensive cease-fire and a conference of all the parties directly involved in the situation seem to provide the essential precondition to the solution of the problem.
3.	Bearing in mind these considerations and also the purpose of the Mission, it should
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be guided by the following ultimate objectives during its consultations with the parties principally concerned:
(a)	a suspension of all United States air attacks on North Vietnam;
(b)	a North Vietnamese undertaking to prevent the movement of any military forces or assistance or material to South Vietnam.
(c)	a total cease-fire on all sides to enable a conference to be convened to seek a peaceful solution.
(d)	the objectives of such a conference might be to:
(i)	end the war in Vietnam;
(ii)	secure the withdrawal of all foreign military presence from Vietnam and the neutralisation of the area;
(iii)	establish, for a period, an international peace force, under the auspices of the Geneva Agreement, to safeguard peace in Vietnam;
(iv)	establish principles for the eventual unification of the country through free and internationally supervised elections.
Commonwealth Mission on Vietnam
The following statement was issued by the Mission on 19th June, 1965:-
'The mission appointed by the Commonwealth Prime Ministers' Meeting is to explore the circumstances in which a conference might be held to end the fighting in Vietnam.
Meanwhile, in order to create the conditions in which the mission can carry through its work, the mission is appealing to all parties concerned to show the utmost restraint in military operations as a step towards the total cease-fire which the mission hopes will be established at the earliest possible opportunity. The mission would wish to meet all the parties concerned.'
Commonwealth Mission on Vietnam
The following statement was issued by the Mission on 24th June, 1965: -
Because of certain misunderstandings which have gained currency during the last few days, the Heads of Government of Britain, of Ghana, of Nigeria and of Trinidad and Tobago wish to clarify the basis on which they agreed to form a Mission in connection with the problem of Vietnam.
The Mission was appointed by the London meeting of the Heads of Government of the Commonwealth and on behalf of the Commonwealth as a whole.
The Commonwealth as such is in no way committed to either side of the conflict in Vietnam and has formed no collective view except on the urgency of re-establishing conditions in which the people of Vietnam may be able to live in peace. Although within the Commonwealth there is diversity of opinion on the Vietnam problem, there is complete unanimity as to the need to find a peaceful solution.
In the discharge of the task entrusted to it the Mission will be guided by the views of the Commonwealth as a whole and not by the views of any individual member of the Commonwealth.
It is in this context that the Commonwealth is satisfied that its Mission must make direct contact with all the Vietnamese parties. It is re-iterated that positive steps should be taken by all outside parties to exercise restraint in military operations while the Mission is carrying out its task.

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A Commonwealth Foundation will be established to administer a fund for increasing interchanges between Commonwealth organizations in professional fields throughout the Commonwealth. It will be the purpose of the Foundation to provide assistance where it is needed in order to foster such interchanges.
2.	The Foundation will be an autonomous body, although it will develop and maintain a close liaison with the Commonwealth Secretariat. Like the Secretariat, the Foundation will be accommodated at Marlborough House.
3.	Within the broad purpose indicated above, the Foundation will include among its aims the following objects:
(a)	To encourage and support fuller representation at conferences of professional bodies within the Commonwealth.
(b)	To assist professional bodies within the Commonwealth to hold more conferences between themselves.
(c)	To facilitate the exchange of visits among professional people, especially the younger element.
(d)	To stimulate and increase the flow of professional information exchanged between the organisations concerned.
(e)	On request to assist with the setting up of national institutions or associations in countries where these do not at present exist.
(f)	To promote the growth of Commonwealth-wide associations or regional Com-
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monwealth associations in order to reduce the present centralisation in Britain.
(g)	To consider exceptional requests for help from associations and individuals whose activities lie outside the strictly professional field but fall within the general ambit of the Foundation's operations as outlined above.
4.	The Foundation could usefully develop informal contacts with the Commonwealth Parliamentary Association. To avoid the risk of duplication with the activities of existing organisations concerned with cultural activities and the Press, the Foundation should not initially seek to assume any functions in these fields.
5.	The policy of the Foundation will be directed by a Chairman, who will be a distinguished private citizen of a Commonwealth country appointed with the approval of all member Governments, and a Board of Trustees who should be expected to meet at least once a year. The Board of Trustees will consist of independent persons, each subscribing Government having the right to nominate one member of the Board. These nominees, even if officials, will be appointed in a personal capacity. The Commonwealth Secretariat will be represented on the Board of Trustees by the Secretary-General or an officer appointed by him.
6.	There will be a full-time, salaried Director who will be appointed, initially for a period of not more than two years, by Commonwealth Heads of Government collectively acting through their representatives in London. He will be responsible to the Board of Trustees.
7.	The Director will require a small personal staff: general office services will be provided by the Commonwealth Secretariat.
8.	It is hoped that Commonwealth Governments will subscribe to the cost of the Foundation on an agreed scale. Payment of the first annual subscriptions will be made as soon as the Director has indicated that a bank account for the Foundation has been opened. It is hoped that, in addition, private sources may be willing to contribute to the funds of the Foundation.
9.	The accounts of the Foundation will be audited annually by the British Comptroller and Auditor-General, whose report will be submitted to the Board of Trustees. The financial year of the Foundation will be from 1st July to 39th June.
10.	The budget of the Foundation will be subject to the approval of the Board of Trustees.
11.	The British Government will draw up the necessary documents to set up the Trust and take any further steps needed to constitute the Foundation as a legal charity.

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I.	Establishment of the Secretariat
Pursuant to their decision announced after the conclusion of the Commonwealth Prime Ministers' Meeting in July 1964 the Commonwealth Prime Ministers have decided to establish forthwith a Commonwealth Secretariat. As envisaged in the communique issued at the close of the 1964 Meeting, the Commonwealth Prime Ministers see the Secretariat as being at the service of all Commonwealth Governments and as a visible symbol of the spirit of co-operation which animates the Commonwealth.
II. Site of the Secretariat
2.	The British Government will arrange for the Secretariat to be accommodated in Marlborough House.
III.	Functions of the Secretariat
3.	The Commonwealth Prime Ministers have given further consideration to the role of the Commonwealth Secretariat, and the following paragraphs record the functions which they have agreed it should perform.
4.	The Secretary-General and his staff should approach their task bearing in mind that the Commonwealth is an association which enables countries in different regions of the world, consisting of a variety of races and representing a number of interests and points of view, to exchange opinions in a friendly, informal and intimate atmosphere. The organisation and functions of the Commonwealth Secretariat should be so designed as to assist in supporting and building on these fundamental elements in the Commonwealth association. At the same time the Commonwealth is not a formal organisation. It does not encroach on the sovereignty of individual members. Nor does it require its members to seek to reach collective decisions or to take united action. Experience has proved that there are advantages in such informality. It enables its members to adapt their procedures to meet changing circumstances; conversely there would be disadvantages in establishing too formal procedures and institutions in the association.
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General considerations
5.	Both the Secretary-General and his staff should be seen to be the servants of Commonwealth countries collectively. They derive their functions from the authority of Commonwealth Heads of Government; and in the discharge of his responsibilities in this connection the Secretary-General should have access to Heads of Government, who will indicate the appropriate channels of communication to them.
6.	The Secretariat should not arrogate to itself executive functions. At the same time it should have, and develop, a relationship with other intra-Commonwealth bodies.
7.	The Secretariat should have a constructive role to play. At the same time it should operate initially on a modest footing; and its staff and functions should be left to expand pragmatically in the light of experience, subject always to the approval of Governments.
8.	Against this background and in the expectation that, as its contacts spread, the Secretariat could expect to receive increasing calls on its resources, the various functions which it will exercise fall under the following broad headings: international affairs, economic affairs and general and administrative functions.
International affairs
9.	Consultation is the life blood of the Commonwealth association. At their Meeting in July 1964, the Commonwealth Prime Ministers expressed the view that on matters of major international importance a fuller exchange of views could very appropriately be promoted on an increasingly multilateral basis through the agency of the Secretariat. They were particularly anxious to ensure that there should be opportunity for fuller participation by all member countries in the normal processes of Commonwealth consultation. At the same time they showed themselves conscious of the importance of maintaining the unwritten conventions which have always determined those processes. The Secretary-General will observe the same conventions and act in the same spirit.
10.	In so far as Commonwealth Governments agree that the Secretariat should discharge any specific task, it will be fully at their disposal. In general, however, its purpose will be to serve them by facilitating and promoting consultation on matters of common concern. To this end, subject to the general principles set out in paragraphs 12 and 13
below, the Secretary-General will arrange to prepare and circulate papers on international questions of common concern to all Commonwealth Governments where he considers it useful to do so. It may also prove helpful if, in consultation with the Governments concerned, he arranges occasional meetings of officials of member Governments for the exchange of information and views on agreed subjects. Such meetings might on occasion, if member Governments agreed, take place in various Commonwealth capitals or elsewhere.
11.	The general principles which the Secretary-General will observe are set out in the following paragraphs.
12.	The functions of the Secretariat are envisaged as being inter alia the dissemination of factual information to member countries on matters of common concern. "Factual" information cannot be precisely defined; but, provided that the Secretary-General proceeds with circumspection in the exercise of this function, he is authorised, where he thinks it useful to do so, to prepare and circulate, either on his own initiative or at the request of a member Government, papers on international questions of common concern, provided that these papers do not propagate any particular sectional or partisan points of view, contain no policy judgments or recommendations by the Secretariat and do not touch upon the internal affairs of a member country or disputes or serious differences between two or more member countries. In addition, the Secretary-General will, on the request of a member Government, circulate papers submitted by that Government on international questions of common concern, provided that, if these touch upon the internal affairs of member countries or disputes between two or more member countries, they will not be circulated without prior concurrence of the country or countries concerned. The Secretary-General has discretion to refuse to prepare or circulate any paper, whatever its origin, which in his view propagates any sectional or partisan point of view or would for any other reason be liable to be offensive to any member country or countries.
13.	The position of the remaining dependent territories within the Commonwealth is one matter which continues to command lively interest among member countries. The Secretariat could play a role in this field; and it might circulate to member Governments balanced papers on the constitutional advance of the remaining territories or on
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their progress towards independence, on the understanding that the responsible member Governments would always be closely consulted in the preparation of the papers.
14.	The Secretariat will be guided by the principles outlined in the preceding paragraphs because it is important that it should develop as a unifying element within the Commonwealth. But, provided that it begins modestly and remains careful not to trespass on the independence and sovereignty of the member Governments whose servant it will be, it will be possible for it to grow in the spirit of the Commonwealth association itself. All Commonwealth Governments wish to contribute to this process and will be ready to assist the Secretary-General in every possible way. In particular the Secretary-General will from the outset establish close relations with Commonwealth Governments and with their representatives in London; and Governments will arrange to keep the development of the Secretariat's functions under regular review, by means of an annual report on its work. By these means the Secretariat will gradually accumulate, with the passage of time, a body of knowledge and experience which will contribute to an even closer understanding among member Governments on those major international issues which are of common and continuing concern to all the members of the Commonwealth.
Economic Affairs
15.	The Secretariat will discharge several valuable roles in the economic field, the more important of which are outlined in the following paragraphs. Several intra-Commonwealth bodies are already actively at work in this field, and their relationship to the Secretariat is to be examined in accordance with the arrangements set out in paragraphs 23 to 26.
16.	The Secretary-General will initiate, collate and distribute to member Governments material bearing not only on economic problems, but also on social and cultural issues in respect of which the potential value of his work could be considerable. He is authorised to follow up the specialised factual reports of the various agencies already at work in these fields by promoting wider ranging studies on, e.g., the inter-relationship of agricultural and industrial growth in the new Commonwealth. In this connection the Secretary-General may implement such tasks by commissioning, within the limits prescribed by his approved budget, specialist
studies from outside expert sources rather than by engaging additional permanent staff.
17.	Apart from servicing meetings of the various Commonwealth economic bodies, the Secretariat may, as appropriate, be represented at meetings of these specialised agencies in order to keep in close touch with their activities; and it will also keep in touch with the various United Nations agencies whose work in Commonwealth countries will on occasion be of direct concern to it.
18.	In connection with the general economic aspects of the Secretariat's work, the proposals advanced at the last meeting of Commonwealth Prime Ministers for the initiation of joint Commonwealth Development Projects in individual Commonwealth countries are relevant. The passage from the 1964 communique read:
"In particular they considered a proposal that development projects might be launched in individual Commonwealth countries, which would be implemented by various members acting in close collaboration and contributing whatever resources-in men, money, materials and technical expertise-they could most appropriately provide. Such projects, which would be additional to the support which Commonwealth countries already provide to the United Nations Special Fund and Expanded Programme of Technical Assistance, could be directed to a number of different purposes-the improvement of agricultural production and the development of natural resources through extension services, training and research; the enlargement of professional and technical training; the development of new industries; and so forth. But they would all be inspired by the common purpose of promoting the development of the Commonwealth by a co-ordinated programme of joint or bilateral projects. The British Government said that they would be prepared to make a substantial contribution to projects of this kind within their expanding programme of development aid. The other member Governments expressed support for the objective of the proposal and agreed that further consideration should be given to the basis on which such a programme might be established."
18. As regards the Secretariat's general functions and, in particular, its activities in the economic field, it is important that nothing should be done which might disturb the existing channels of economic and technical assistance to member countries or duplicate the present bilateral and multilateral links.
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The functions of the Secretariat in connection with the Commonwealth Development Projects are therefore expert and advisory and will not detract from the right of member countries to determine their own aid and development programmes.
20.	Subject to these basic considerations the Secretariat will be able to play a valuable part in assisting member Governments, at their request, in advancing, and obtaining support for, development projects and technical assistance in a variety of fields on a multilateral Commonwealth basis, as appropriate. It will also help in the expeditious processing of requests for such assistance made by one Commonwealth country to another. In this connection, it will prepare and make available to Commonwealth Governments up-to-date information on the possibility of securing aid and technical assistance in various fields from individual countries of the Commonwealth.
21.	Thus the Secretariat, by accumulating a reliable body of knowledge on the aid potential of the Commonwealth to which member countries can usefully have recourse for the purpose of promoting their own development, will enable Commonwealth countries generally to co-operate to the maximum extent possible in promoting the economic development of all.
22.	In general, the Secretary-General, in discharging his functions in this field of economic and related affairs, will be guided by the principles set down in paragraphs 12 and 13.
Proposed Review of Intra-Commonwealth Organisations
23.	A comprehensive review of existing intra-Commonwealth organisations concerned with economic and related affairs will be carried out, in view of the changing nature of the Commonwealth and of the fact that the multiplicity of organizations working in these fields has created problems of staff and finance.
24.	The main purpose of this review will be to examine whether existing work on economic and related affairs is being unnecessarily duplicated; how far the activities of the Specialised Agencies of the United Nations now supersede those of existing intraCommonwealth bodies; what Commonwealth bodies might usefully be absorbed within the Secretariat; which have functions so specialised that they cannot profitably be so absorbed; and how close co-operation between these latter and the Secretariat, particularly in the light of the needs of the changing Commonwealth, can most effectively be achieved.
25.	In order to secure an impartial appraisal and to protect the future relationship between the Secretariat and other Commonwealth organisations this review will be carried out by a small committee, appointed by Commonwealth Governments, under an independent Chairman. In order to safeguard the Secretary-General's position he will not be a member of the Committee. Nevertheless, he will have the right to be present or to be represented throughout the proceedings of the Committee and to participate in its discussions. The Commonwealth organisations concerned will, of course, have the right to submit evidence to the Committee.
26.	Pending the outcome of the review the Secretariat and the Commonwealth Economic Committee will work in the closest consultation. Again without prejudice to the review, the Secretariat will take over from the Commonwealth Relations Office as soon as convenient the secretarial functions which that Department at present carries out on behalf of the Commonwealth Liaison Committee.
Servicing of Commonwealth Meetings
27.	The Secretariat, operating as the visible servant of the Commonwealth association, will carry out the task of servicing future meetings of Commonwealth Heads of Government and, where appropriate, other Ministerial and official meetings open to all members of the Commonwealth. The Secretariat will be able to rely on the host country for such secretarial help as it cannot itself provide and for assistance in matters of accommodation, hospitality, transport and the like.
28.	The Secretariat will service the annual conferences of the Commonwealth Economic Consultative Council and meetings of the Commonwealth Liaison Committee. The more technical or specialised organisations, e.g., the Commonwealth Education Conference, the Commonwealth Education Liaison Committee or the Commonwealth Telecommunications Board will, pending the proposed review of Commonwealth organisations, continue to organise their own meetings.
29.	As regards Meetings of Prime Ministers the Secretary-General will henceforth serve as Secretary-General to each Meeting. Subject to the principles set out in paragraphs
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12 and 13 above, his duties will include the preparation, collation and circulation of papers on agenda items, together with such background papers as appear appropriate; the production of minutes; and, with the assistance of the host Government, the general organisation of the Meeting.
30.	As to the preparation of the agenda itself, the Secretary-General will be responsible for co-ordinating this process in the light of such direct discussions as Commonwealth Heads of Government may find convenient. Heads of Government will maintain the practice whereby the provisional agenda is drawn up, after consultation among themselves, in the form of a list of broad headings for discussion and they also reserve to themselves decisions on the timing and location of their Meetings.
IV.	Administrative Arrangements
31.	In consonance with the above functions of the Secretariat, its administrative organisation will be as follows.
32.	The Chief Officer of the Secretariat will be the Secretary-General, and all members of the staff of the Secretariat will be responsible only to him.
33.	The Secretary-General will be appointed by Commonwealth Heads of Government collectively. He will be a man of high standing, equivalent in rank to a Senior High Commissioner. A significant part of his duties will be visiting member countries of the Commonwealth.
34.	The Deputy Secretaries-General will be appointed by Commonwealth Heads of Government acting through their representatives in London. One Deputy Secretary-General will have the necessary qualifications and special responsibilities for economic matters and should deal, on request, with development projects. As the work of the Secretariat expands, it may become necessary to appoint a second Deputy Secretary-General who will be primarily concerned with the other functions of the Secretariat.
35.	The paramount consideration in the selection of staff and in the determination of conditions of service will be the necessity of securing the highest standards of efficiency, competence and integrity, due regard being paid to the importance of recruiting the staff on as wide a geographical basis as possible within the Commonwealth. The Secretary-General will have discretion, in the light of the above considerations, to appoint senior staff to the service of the Secretariat from among panels of names submitted by the Commonwealth Governments, who need not feel themselves limited to Government servants in submitting nominations.
36.	The Secretary-General has authority to make appointments of junior staff, subject to the approved budgetary limitations.
37.	All persons appointed to the staff of the Secretariat must be subject to clearance to the extent that their own Governments raise no objection to their suitability for employment. All members of the Secretariat, whatever their origin, must be strictly impartial in the discharge of their functions and place loyalty to the Commonwealth as a whole above all other considerations.
38.	Senior officers, including the Secretary-General and Deputy Secretaries-General, will be appointed in the first instance for not more than five years and preferably not less than three in order to ensure continuity of administration. In determining the period of tenure of other individual officers, the Secretary-General will no doubt wish to have regard to the need to stagger appointments in order to avoid a complete change of senior staff at any one time.
39.	The British Government will introduce legislation in order to give the Secretariat a legal personality under United Kingdom law and to accord to the Secretariat and its staff the immunities and privileges which are set out in Annex A.
40.	Other Commonwealth Governments will take steps to accord corresponding immunities and privileges to the staff of the Secretariat when visiting their territories, subject to whatever constitutional processes are required.
41.	The cost of the Secretariat will be borne in agreed shares by Commonwealth Governments; the scale of contributions is set out in Annex B.
42.	The annual budget will be considered by the Commonwealth High Commissioners in London or their representatives, together with a United Kingdom representative, meeting as a Finance Committee. The budget will then be submitted to Commonwealth Governments for their approval. The Senior Commonwealth High Commissioner in London or a representative of the British Government will be responsible for convening the Finance Committee as necessary.
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June 29, 1965

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COMMONWEALTH SECRETARIAT Proposed Scale of Immunities and Privileges
1.	Secretariat
(i)	To have a legal personality and immunity from suit and legal process except-
(a)	when expressly waived:
(b)	in respect of motor accidents and motor traffic offences;
(c)	when arbitration proceedings are taken in relation to written contracts (this implies the insertion of a compulsory arbitration clause in all contracts entered into by the Secretariat).
(ii)	To have inviolability of premises, archives and communications.
(iii)	To have relief from non-beneficial rates out of the United Kingdom Treasury Vote.
(iv)	Goods imported for official purposes to be exempt from all Customs dues.
(v)	To have immunity from direct taxes.
(vi)	Indirect taxes on substantial purchases for official purposes to be reimbursed, out of the Commonwealth Relations Office Vote, e.g., on furniture and furnishings, office supplies, and British motor cars and road fuel duty on petrol used for official purposes. It is intended that the same treatment should be accorded to the Secretariat as is accorded to the Office of a High Commissioner.
2.	Staff
(i) High officers
The Secretary-General, the Deputy Secre-taries-General and other senior staff, to enjoy (provided they are not citizens of, or permanently resident in, the United Kingdom) the privileges and immunities appropriate to a diplomatic agent of comparable rank, appropriate arrangements being made in respect to British income tax.
This implies full personal immunities extending to the family of the High Officer, inviolability of private residence, continuing Customs privileges, relief from non-beneficial rates (out of the United Kingdom Treasury Vote), and reimbursement of purchase tax on British motor cars, and of excise duty on reasonable quantities of British spirits (both out of the Commonwealth Relations Office Vote).
In accordance with Article 38 of the Vienna Convention, diplomatic agents who are either citizens of the receiving State or permanently resident there enjoy only immunity from jurisdiction and inviolability in respect of official acts performed in the exercise of their functions. High Officers of the Secretariat who fall within the ambit of this Article would be treated accordingly; but they would not have their immunities and privileges restriced in this way solely and account of dual citizenship.
(ii) Other staff
(a)	Any other staff recruited from Commonwealth countries other than the United Kingdom to enjoy first arrival Customs privileges-i.e., the right to import duty-free their furniture and personal effects, including a motor car (or refund of purchase tax from the Commonwealth Relations Office Vote if a British car is purchased), at the time of first taking up their post.
(b)	All staff, including United Kingdom citizens, to enjoy immunity from suit and legal process only in relation to their official acts and inviolability only in relation to their official papers and documents. This official immunity will not extend to motor car accidents or motor traffic offences.
3.	Income tax
The United Kingdom Government to repay to the Secretariat an amount broadly equivalent to the amount of income tax levied on the salaries and emoluments of Secretariat staff.
Annex B

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Scale of Contributions
Australia	Per cent 10.4
Britain	30.0
Canada	20.8
Ceylon	1.5
Cyprus	1.5
The Gambia	1.5
Ghana	1.5
India	11.4
Jamaica	1.5
Kenya	1.5
Malaysia	1.5
Malawi	1.5
Malta	1.5
New Zealand	2.5
Nigeria	1.5
Pakistan	2.4
Sierra Leone	1.5
Tanzania	1.5
Trinidad and Tobago	1.5
Uganda	1.5
Zambia	1.5
100.0
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Wednesday, June 30, 1965