1966-06-23

[Stage Direction]
A message from His Excellency the Governor General transmitting supplementary estimates A for the financial year ending March 31, 1967 was presented by Hon. E. J. Benson (Minister of National Revenue), read by Mr. Speaker to the house, and referred to the committee of supply.

Right Hon. J. G. Diefenbaker (Leader of the Opposition):: Mr. Speaker, if I may be
permitted the leave of the house, I should like to make reference to a dual event which is taking place today, namely the celebration of the birthdays of the Secretary of State for External Affairs (Mr. Martin) and the Minister of Transport (Mr. Pickersgill). Their relationship through the years has been one of such closeness as has not been personalized since the days of Damon and Pythias. I am sure all of us will extend to them the warmest of congratulations. As far as the Secretary of State for External Affairs is concerned, the dean of the house, my hope is that he will take instruction at the hands of the Minister of Transport from this time on as to the manner of answering questions.
[DOT] (2:40 p.m.)
May I also, while on my feet, extend congratulations to two other hon. gentlemen, both excellent parliamentarians, namely the Minister of Agriculture (Mr. Greene) and my hon. friend the member for Perth (Mr. Monteith) who will be celebrating their birthdays tomorrow. Speaking for all four, this is one occasion on which we can pay our tribute to good parliamentarians and gentlemen.


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, may I be permitted to associate the rest of us on this side of the house with the warm greetings which have been extended to the Secretary of State for External Affairs and to the Minister of
Transport on their birthdays today, and to the other hon. gentlemen who will be celebrating their birthdays tomorrow. It would have been appropriate for the deputy leader of this party to offer these congratulations, but I happen to know that this is his birthday, too. I thought I should like to add his name. Let us make it a trinity.


Some hon. Members:: Hear, hear.


Mr. Pearson:: Mr. Speaker, could we inquire whether there are any other birthdays?
1Translation]


Mr. Real Caoueite (Villeneuve):: Mr. Speaker, it is with pleasure that my group and myself join with the Leader of the Opposition (Mr. Diefenbaker) as well as with the representative of the New Democratic Party to extend our best wishes for a long and happy life to those who are celebrating their birthdays.
It has been given to us over the last four years to appreciate at their true worth the two ministers, namely the Minister of Transport (Mr. Pickersgill) who always says yes; appreciation for a man is not based on the number of times he can say yes. In any case, we are happy about his open-mindedness. With regard to the Secretary of State for External Affairs (Mr. Martin), I think that in this house he has only friends, people who know how to appreciate him. Even if his answers to our questions are sometimes doubtful, the Secretary of State for External Affairs is certainly a credit to Canada throughout the world and I am happy to offer him my best wishes on his birthday.


Some hon. Members:: Hear, hear.


Mr. R. N. Thompson (Red Deer):: Mr. Speaker, I too would associate myself and the members of our party with the good wishes that have been extended by the Leader of the Official Opposition and the representatives of the other parties in birthday greetings to the two senior ministers in the house who celebrate their birthdays today, and also with respect to the other three gentlemen who have been mentioned as having birthdays today and tomorrow.

June 23, 1966
Committee of the House
May I just add, in this spirit of birthday good will, that it is our hope that this same spirit of good will may extend through the balance of the first half of this session, as we look forward to a recess.


Hon. Paul  Marlin@Secretary of Stale for External Affairs: Mr. Speaker, I have the permission of my colleague the Minister of Transport to speak on his behalf. I am sure the hon. member for Perth, the Minister of Agriculture and the hon. member for York South (Mr. Lewis) would also permit me to speak in their behalf in anticipation of their event tomorrow.
I have noted with gratitude and appreciation what the right hon. Leader of the Opposition has said, particularly about the Damon and Pythias relationship between the Minister of Transport and myself. Of course, as the older in experience but the younger of the two I greatly appreciate what has been said.
[Translation1
I greatly appreciate what the leader of the Ralliement Creditiste said about me and about my colleague. I also want to thank him for his warm wishes and his friendship, a friendship which, of course, owes nothing to politics but comes from the heart.

This is one of these occasions when we can sink our political differences. May I express the belief that the friendship prevailing among all of us, regardless of political affiliations, gives an added opportunity to serve our country more effectively in this chamber. I may say with pride, Mr. Speaker, that while I am by no means the oldest member of this house, I am very proud to have been here longer than anybody else.



COMMITTEES OF THE HOUSE

[Stage Direction]
Second report of standing committee on industry, research and energy development- Mr. Cashin.
Third report of standing committee on agriculture, forestry and rural development

Mr. Whelan.
Fourth and fifth reports of special joint committee of the Senate and the House of Commons on the public service-Mr. Richard.
(Text of fo egoin'y report appears in today's Votes and Proceedings1.


Hon. A. J. MacEachen (Minister of National Health and Welfare):: Mr. Speaker, yesterday I promised to make a statement in connection with the anti-cancer hormone treatment developed by Doctors V. A. and V. V. Mirko-vich.
The Department of National Health and Welfare has received an interim report from the Ontario Cancer Treatment and Research Foundation on their investigation of the clinical use in Mexico of a product designated as an anti-cancer hormone developed by these two doctors. During the last week in May two senior consultants of the Ontario Cancer Treatment and Research Foundation visited Dr. A. G. Andrade, of Vera Cruz, Mexico, who was reported to have administered this material to a number of patients. The physicians from the foundation examined available records and diagnostic materials. They have extracted and reported on the available data, but since this was inadequate to establish the purported claims for the anti-cancer hormone they have requested additional data from Dr. Andrade. This will include photographs, pathological slides and x-ray plates for evaluation to confirm the reported diagnosis and reported clinical responses.
During 1963 and 1964 Dr. Andrade treated a total of five patients with a product designated as anti-cancer hormone supplied personally by the Doctors Mirkovich. Of the five patients two have died, two were examined by the Canadian consultants, and the fifth person was reported to be alive but was not seen by the Canadian physicians. Of the two patients who died, one child was reported to have been suffering from lymphocythic leukemia and the other patient was reported to have been suffering from osteogenic sarcoma.
Of the two patients examined by the Canadian consultants, one child who was reported to have a neuro-fibrosarcoma of the mouth had been treated with radiation and a chemotherapeutic agent in addition to the anti-cancer hormone. The reported response could have been due to the radiotherapy and the known chemotherapeutic agent. Additional data have been requested in this case.
The second patient seen was a woman who was reported to have a malignant lesion of the tibia. Specimens from this patient had also been examined by two pathologists in Mexico, one from the National Cancer Institute of Mexico, both of whom diagnosed the
June 23, 1966	COMMONS DEBATES	6785
Inquiries of the Ministry
lesion as a benign giant cell tumor of the CANADIAN NATIONAL RAILWAYS
tibla'	PROVISION FOR CONSTRUCTION OF BRANCH
[DOT] (2:50 p.m.)	LINES IN WEST
The data supplied in the interim report have been reviewed by the medical staff of the food and drug directorate. In their opinion the scientific information available to date has failed to demonstrate any curative or palliative action of A.C.H. in the treatment of cancer. I should add that Dr. Matthew Dymond proposes to include the following paragraph in the statement he is making in Toronto today:
My advisers agree that the evidence so far obtained is insufficient at the present time to justify the claims of the Drs. Mirkovich that A.C.H. is of value in cancer treatment. They submitted the interim report and are collecting the additional information in order to complete this document.
The Doctors Mirkovich have been advised by the food and drug directorate, Department of National Health and Welfare, of the information required under the regulations relating to the distribution of drugs for clinical testing. They have not supplied any of the required data, including the composition of the drug or the degree of hazard involved in its clinical use in humans. When such information is supplied the directorate is prepared to undertake the scientific evaluation of the data immediately.


Mr. P. B. Rynard (Simcoe East):: Mr. Speaker, I am sure we are all disappointed at this report. We all have high hopes that some day a curative treatment will be discovered. This report is discouraging because, as I say, we did have high hopes that people in Canada and all over the world who are suffering from cancer would have the benefit of this treatment. I sincerely trust that, if the science research department and the cancer foundation get the co-operation of the Doctors Mirkovich and Dr. Andrade, the matter could be pursued further, and this is our hope.



LABOUR RELATIONS


Hon. J. R. Nicholson (Minister of Labour):: Mr. Speaker, I wish to table copies in English and French of the appointment of Dr. Laurent Picard, under the Industrial Relations and Disputes Investigation Act, as a commission to investigate and report on certain outstanding matters arising out of the industrial dispute that involved longshoring operations and related trades in the ports of Montreal, Trois-Rivieres and Quebec.


Hon. G. J. Mcllrailh (Minister of Public Works):: Mr. Speaker, today there appears on the notice paper a government notice of motion that the house go into committee of the whole to consider a resolution providing for the construction of two branch lines by the Canadian National Railway Company, one to the Osborne Lake district of Manitoba and the other at Watrous in Saskatchewan. If I might have the unanimous consent of the house I would ask to have the motion brought forward for consideration later this day.


Some hon. Members:: Agreed.


Hon. J. W. Pickersgill (Minister of Transport) moved: that the house go into committee later this day to consider the following resolution, which has been recommended to the house by His Excellency:
That it is expedient to introduce a measure to authorize and to provide for the construction by Canadian National Railway Company of a line of railway in the province of Manitoba from the vicinity of Stall Lake on the Chisel Lake subdivision of Canadian National Railways in a northeasterly direction for a distance of approximately 12 miles to a point in the vicinity of Osborne Lake in The Pas mining district of that province, and of a line of railway in the province of Saskatchewan from the vicinity of Watrous on the Watrous subdivision of the said railways in a northeasterly direction for a distance of approximately 18 miles to a point in the vicinity of Guernsey in the Regina mining district of that province, at a total expenditure of $3,400,000, not to be exceeded by more than 15 per cent, and to authorize and to provide for temporary loans to the company out of the consolidated revenue fund toward the cost of construction.


[Stage Direction]
Motion agreed to.


[Stage Direction]
On the orders of the day:
John George Diefenbaker: Mr. Speaker, I wish to direct a question to the Minister of National Revenue. Earlier this month I asked him a question regarding salary adjustments for members of the civil service in group B, and the minister made no mention of those falling in the administrative category.
According to the information I have received, those civil servants who are in that category will find themselves, when the normal processes are followed, in a position of
June 23>
1966

Inquiries of the Ministry no decision being made respecting salary increases until the end of this year and even the beginning of 1967. That is the view of Mr. Barnes, executive director of the professional institute of the public service of Canada. In view of the fact that the delays in so far as class B, the administrative category, are simply administrative delays, will the government hasten the determination of the matter so these people may be assured of justice at a very early date?


Hon. E. J. Benson (Minister of National Revenue):: With regard to group B generally the recommendation of the Civil Service Commission is expected to be received by about July 15. I can assure hon. members that Treasury Board will act upon it as soon as possible after that date. There are some 15,000 people in group B, as I recall the figure, who are being reclassified in the administrative group. With regard to these people the anticipation is that there may be a few weeks' delay beyond that time in dealing with them. The staff of Treasury Board has been considering this matter urgently and has been in consultation with the Civil Service Commission in the hope that we may deal with it as expeditiously as possible.


Hon. Michael Starr (Ontario):: Mr. Speaker, I have a supplementary question which is directed to the Minister of National Revenue. I should like to ask him whether he is aware that the customs and excise officers in Ontario zone 1, which comprises Peterborough, Oshawa, Bowmanville, Lindsay, Port Hope and Cobourg, have voted in favour of strike action in an attempt to force the federal government to abolish new job classifications and pay the balance of interim salary increases promised last year. In view of this action on the part of these people I wonder if the minister can tell us how he can bring about a solution to the problem.


Edgar John Benson: Mr. Speaker, first of all in dealing with job classifications, this is the responsibility of the Civil Service Commission and has been carried out at all stages in consultation with the employee associations. There is a large number of people in the customs and excise officer classification who have been red circled as a result of the reclassification by the Civil Service Commission. In no case do these people lose salaries, but if they are red circled they simply must wait until the new classification they are in is above the level they are at before they receive increases. The problem is serious, and

is one to which we have been giving a great deal of consideration.
I should like to point out to hon. members that after the final salary recommendations come from the Civil Service Commission with regard to group B, I believe the problem will be reduced greatly in that many of the red circlings will completely disappear at that time. I might point out also that the reclassification which is being carried on by the Civil Service Commission was necessary and essential, as recommended in the Heeney report, if the public service was to move in an orderly manner into collective bargaining. The situation was such, with the number of classifications in the civil service so great that it was felt it would be impossible to carry out collective bargaining on a reasonable basis without a reclassification taking place.
I am quite aware of the disruption and inconvenience which has been caused. The matter is receiving the daily consideration of Treasury Board.


John George Diefenbaker: Mr. Speaker, the minister has mentioned that Treasury Board will convene at once when the report is received; but is it not a fact that, immediately after this, three months will have to elapse before the allocation of employees to the new categories can take place, and then a further month for review?
If that is so, and this information received by civil service organizations is correct, it means that class B administrative categories will not receive their just due until the end of this year. What is the government going to do to accelerate the determination of this matter so these employees will not be left in this invidious position?


Edgar John Benson: Mr. Speaker, first of all I should like to point out that this government for the first time in history gave interim increases to civil service employees before the final determination had been made by the Civil Service Commission of their recommendations with regard to pay increases. I want to assure the right hon. Leader of the Opposition that we will act with all due dispatch, and that no one is more anxious than I am to see that these salary increases come into effect as quickly as possible. Any slowdown is not the responsibility of the government but the responsibility of the Civil Service Commission which, under the present legislation, has responsibility for reclassification of civil servants.
June 23, 196$


Stanley Howard Knowles: Mr. Speaker, may I ask the minister a supplementary question. Is the government yet in a position to make a clear statement about the point I raised in a question asked on Monday of this week; namely, can an assurance be given that despite the delays in readjustments that are taking place, none of these employees will lose out altogether on a salary adjustment?


Edgar John Benson: Mr. Speaker, this is a very difficult question to answer because Treasury Board as such has not as yet received any recommendations from the Civil Service Commission with respect to salary changes for group B employees. I think it is entirely unfair to ask the government to consider something it has not as yet received.


Stanley Howard Knowles: I have a further supplementary question. Will the government do everything it can to implement the Prime Minister's commitment made on Monday of this week that any possible injustices will be removed?


Edgar John Benson: I think-


Mr. Speaker:: Order, please. I suggest to hon. members that we are perhaps engaging in a debate at this point. There have been quite a few questions asked and answers given on this subject, and I would invite hon. members to go to another subject at this moment.


Mr. H. A. Olson (Medicine Hai):: Mr. Speaker, I wish to address a question to the Minister of National Revenue and ask whether he can give the house any assurance that when the government does get around to dealing with the salary increases of group B they will be made retroactive to October, 1965, when the cyclical review should have been considered.


Edgar John Benson: Mr. Speaker, they certainly will be.



BROADCASTING


[Stage Direction]
On the orders of the day:
Mr. David Lewis (York South):: Mr. Speaker, I intended to direct a question to the Secretary of State, but in her absence may I direct it to the right hon. Prime Minister. Is it still the intention of the government to table the white paper on broadcasting before the end of this month or is there likely to be a delay and, if so, for how long?
Inquiries of the Ministry Right Hon. L. B. Pearson (Prime Minister):
Mr. Speaker, the white paper is in the hands of the printer and we hope the printing and translation will be completed in time to make it possible to table it toward the end of next week.
[Translation1



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
David Réal Caouette: Mr. Speaker, I wish to put a question to the Minister of National Defence. Can he deny or confirm statements to the effect that the jet airplanes stationed at Val d'Or are equipped with devices to seed clouds with silver iodide so as to make artificial rain?


Hon. Paul Hellyer (Minister of National Defence):: Mr. Speaker, I do not think I understood the question clearly enough to enable me to give an answer.
[Translation1


David Réal Caouette: Mr. Speaker, I shall repeat
my question for the minister. Can he deny or confirm statements that the jets stationed at Val d'Or are equipped with devices to seed clouds with silver iodide so as to make artificial rain?


Paul Theodore Hellyer: Mr. Speaker, I should think that would be false. We are not in the rainmaking business at the moment.


EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
Robert Norman Thompson: Mr. Speaker, I should like to direct my question to the Secretary of State for External Affairs. In view of the grave situation which is apparently developing as a result of the threatened breakdown in talks between representatives of the government of Britain and Rhodesia, will the Prime Minister report on his discussion with High Commissioner Chevrier and tell us whether Canada, through its high commissioner in London, has recommended that negotiations might be carried out on some broader basis than that outlined by Commonwealth Secretary Bottomley?

June 23, 1966
Inquiries of the Ministry


Hon. Paul  Marlin@Secretary of Stale for External Affairs: Mr. Speaker, the second round of talks in Salisbury has apparently been completed. We have not yet had a full report on those talks. The sanctions committee yesterday reviewed the effects of the sanctions program to date, and I believe I can say that while the sanctions are not up to schedule, it would be wrong to say they are not having an effective result.


Hon. E. D. Fulton (Kamloops):: Mr. Speaker, I have a supplementary question. I am not sure whether the Secretary of State for External Affairs covered this in his reply, but I should like to ask whether there have been any indications that the sanctions committee will recommend a strengthening or reinforcing of the economic sanctions program now in effect and, if so, whether the minister is in a position to state the policy of the government in this regard?


Mr. Martin (Essex East):: As far as the
government of Canada is concerned, it has taken every action open to it. The sanctions committee has reviewed, as I said a moment ago, the effects of programs such as our own, as well as those of the British and other governments. Our government also took a stand with regard to mandatory action under article VII of the United Nations charter. I believe the wise course is to allow the sanctions program an opportunity to run a longer course before making a final judgment as to its effectiveness.


Mr. Fulion:: Mr. Speaker, the minister
did not quite answer the question I asked. I asked whether as a result of this review there had been recommendations for tightening up or reinforcing the sanctions program, and whether the government of Canada had reached a policy decision in that regard.


Paul Joseph James Martin: Mr. Speaker, it is not for the sanctions committee to recommend courses. It is for governments to take decisions and for the sanctions committee to review the effects of those decisions.



CANADA PENSION PLAN


[Stage Direction]
On the orders of the day:
Mr. R. R. Southam (Moose Mountain):: Mr. Speaker, I have a question I should like to direct to the right hon. Prime Minister, the urgency of which is emphasized by representations which were made by the major

Canadian trade associations, some 10 or 12 in number. Will the Prime Minister advise the house whether he plans to recommend the correction of inequities that presently exist under the Canada Pension Plan, whereby large over-contributions have been made by employers without refunds?


Lester Bowles Pearson: I think this matter was dealt with the other day, Mr. Speaker.


Michael Starr: Mr. Speaker, I have a supplementary question I should like to direct to the Minister of National Revenue. In view of the fact he and the Minister of Finance met yesterday with this organization of employers, can he indicate whether a decision has been reached, or tell us when a decision will be made to refund these overpayments?


Edgar John Benson: Mr. Speaker, we had a meeting with representatives of the employers' organizations yesterday during which they put forward several suggestions, some of which had been received before and some of which were entirely new. We indicated to them that we would consider these representations, but that any changes in the present system would require changes in the law.



INDUSTRY


[Stage Direction]
On the orders of the day:
Mr. A. D. Hales (Wellington South):: Mr. Speaker, I should like to direct a question to the Minister of Industry. Has the minister been in conference with Canadian car manufacturers in respect of the problem-which they expect to worsen-they are experiencing in meeting the objectives or achievements set for them in relation to the U.S.-Canada treaty, brought about by an auto sales slump in the United States?


Hon. C. M. Drury (Minister of Industry):: No, Mr. Speaker, I have not been in conference with them on this point.



REPORT OF JOINT COMMITTEE ON TIDAL POWER DEVELOPMENT

[Stage Direction]
On the orders of the day:
Mr. Robert C. Coates (Cumberland):: Mr. Speaker, I should like to direct a question to the Minister of Energy and Resources. Can
June 23. 1966

he indicate when action will be taken by the joint committee of representatives of the federal government and the governments of the provinces of Nova Scotia and New Brunswick in respect of harnessing the bay of Fundy tides, from a power point of view?


Hon. Jean-Luc Pepin (Minister of Mines and Technical Surveys):: Mr. Speaker, the board which has been created to study this project will get into action very soon, but I am not able to say exactly when.



NORTHERN AFFAIRS


[Stage Direction]
On the orders of the day:
Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, I intend to direct a question to the Minister of Northern Affairs and National Resources, but I have been advised that in his absence I should direct it to the Prime
Minister.
I want to say this is a question of national significance because it is of general interest to all persons who are interested in the conservation of our wildlife resources, and is of great interest to the people of British Columbia.
Is the federal government prepared to cooperate with the government of British Columbia in the development of Duck lake, which is a portion of Kootenay lake, for the conservation of our wildlife resources, and to provide a financial contribution to that end?


Lester Bowles Pearson: Mr. Speaker, we are only too anxious to co-operate with the government of British Columbia in all good causes, and I think this is one. How we should co-operate I will discuss with the minister concerned.



FISHERIES


[Stage Direction]
On the orders of the day:
Mr. Eric Siefanson (Selkirk):: Mr. Speaker, I should like to direct a question to the Prime Minister. Has the government received the report of the Mclvor commission dealing with fresh water fish marketing; and if so, will this report be made available to members?


Lester Bowles Pearson: Mr. Speaker, I will have to look into that matter. I think the Minister of Fisheries may have some information.
Inquiries of the Ministry


Lester Bowles Pearson: Mr. Speaker, a moment ago I was asked when the report of the royal commission on the marketing of fresh water fish, presided over by Mr. Mclvor, is likely to be received. I am informed that the work on the report of the commission is going along at a reasonable rate and it is hoped that it will be ready by the beginning of September.



PRINCE EDWARD ISLAND-TRAP AND LICENCE RESTRICTIONS

[Stage Direction]
On the orders of the day:
Mr. David MacDonald (Prince):: Mr. Speaker, my question is directed to the Minister of Fisheries. In light of the trap restrictions soon to be imposed in district 8, and information received recently about the difficulties encountered in the neighbouring area of district 7b, I wonder whether the minister is giving consideration to also putting a freeze on fishing licences as of, say, the middle of September of last year.


Mr. Speaker:: Order, please. I must say I cannot judge how urgent this question is. If the hon. member feels it is urgent and the minister is prepared to reply, I will certainly allow the question.


Hon. H. J. Robichaud (Minisler of Fisheries):: Mr. Speaker, while we will be imposing this year a certain trap limit, that is the maximum number of traps that can be used for each fishing boat, it is not our intention to impose control of licensing, although this matter is under very serious consideration.
[Translation1



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
Mr. Gilles Gregoire (Lapointe):: Mr. Speaker, may I put a question to the right hon. Prime Minister?
Is the Prime Minister in a position to tell us whether the proposed resolution appearing as No. 14 of the order paper, on the National Anthem of Canada, will be voted on or discussed before the summer adjournment, in view of the fact that this proposed resolution has been on the order paper for three years now?


Lester Bowles Pearson: I hope we will be able to get to it before long, Mr. Speaker.

June 23/ 1966
Inquiries of the Ministry {Translation1



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Mr.   J.-A. Mongrain@Trois-Rivieres: On a
question of privilege and begging your indulgence, Mr. Speaker.
The morning papers announced the appointment of General Allard as chief of staff for Canada. I should like to point out that he is a citizen of Trois-Rivieres and to thank the government for the recognition of his merits. I should also like to congratulate the general on his promotion and to wish him every possible success in his new responsibilities.
I am sure that the whole house will join in these wishes.


Some hon. Members:: Hear, hear.



WATER RESOURCES


[Stage Direction]
On the orders of the day:
Mr. G. H. Aiken (Parry Sound-Muskoka):: Mr. Speaker, I have a question for the minister of energy, mines and resources. Were any decisions on a program of anti-pollution measures on the great lakes reached with Secretary Udall at the meeting today; and if so, when may we expect some announcements?


Jean-Luc Pepin: It would be nice to be able to make decisions at that kind of meeting, Mr. Speaker, but it was not so. The meeting was essentially an exploratory one. We exchanged views on what both countries were doing on the great lakes. We intend to expand the research being conducted there, we intend to synchronize these studies, to co-ordinate them better, and we hope to develop standards on the great lakes that we will be in a position to offer to the rest of Canada and the United States as examples of what should be done against pollution.


Gordon Harvey Aiken: Mr. Speaker, I should like to ask a supplementary question of the Prime Minister. It arises out of a statement made by the Minister of Fisheries in Sault Ste. Marie that his department would be taking the lead in pollution measures on the great lakes. Does this indicate any transfer of responsibility for dealing with the great lakes pollution?


Lester Bowles Pearson: No, Mr. Speaker. I understand that at this particular meeting the Minister of Fisheries was particularly concerned with one form of pollution, namely that by lampreys, and he called attention to the great success that has been achieved through the lamprey control operations of the two countries, a success about which I am sure my hon. friend will be as gratified as I am.



AIRPORTS


[Stage Direction]
On the orders of the day:
Mr. Leonard Hopkins (Renfrew North):: Mr. Speaker, I have a question for the Minister of Transport. Has the minister received any correspondence from the municipal councils in the Deep River, Petawawa and Pembroke areas requesting that his department make a survey of the area to determine the feasibility of establishing an airport?


John Whitney Pickersgill: Yes, sir.


Leonard Donald Hopkins: A supplementary question, Mr. Speaker. When can we expect such a survey to get under way?


Mr. Ricard:: Soon.


Some hon. Members:: Oh, oh.


John Whitney Pickersgill: Almost immediately.



ADMINISTRATION OF JUSTICE


[Stage Direction]
On the orders of the day:
Mr. Frank Howard (Skeena):: Mr. Speaker, I wonder whether I could direct a question to the Solicitor General. My question relates to the search warrant which the R.C.M. Police were in possession of yesterday and which they used to gain entry to the various offices of the Seafarers International Union. I would ask the minister why, the search warrant having been obtained on the 8th day of June, there was such a long delay in putting the search into effect.


Hon. L. T. Pennell (Solicitor General):: Mr. Speaker, this action was along the lines being urged upon me by the hon. member for Kootenay West (Mr. Herridge).


Herbert Wilfred Herridge: Hear, hear.
June 23, 1966


Some hon. Members:: Oh, oh.


Lawrence T. Pennell: There were certain other matters that came to the attention of the authorities, and it was deemed appropriate to delay taking action at that moment.


Frank Howard: A supplementary question, Mr. Speaker. Perhaps the minister did not understand the question. The search warrant was obtained on the 8th day of June and at that time came into force and permitted the R.C.M. Police to carry out the raid on June 22. What I want to know is, why the long delay?


Mr. Speaker:: Order, please. The hon. member is asking for an explanation why something was not done. The question cannot be asked at this time.



POSSIBLE CONTRAVENTION OF COMBINES LEGISLATION

[Stage Direction]
On the orders of the day:
['No conference is contemplated, but I have had recent general discussions with Mr. Rusk on this particular problem, and proposals were made to the United States government some weeks ago. I have asked for a response to a proposal that we have made more recently, and if it is accepted I trust this will enable us to make progress with regard to the establishment of a straight base line system.']
John George Diefenbaker: Mr. Speaker, I direct my question to the Prime Minister. Now that Senator Keith Davey has been chosen as commissioner of the Canadian Football League-


Some hon. Members:: Hear, hear.


John George Diefenbaker: would the Prime Minister say whether a determination has been made by the government to bring professional sport under the provisions of the Combines Investigation Act?


Some hon. Members:: Oh, oh.


Lester Bowles Pearson: No decision has been taken on that matter, Mr. Speaker, but as the right hon. gentleman has raised the question I will be glad to get in touch with Senator Davey so he can get in touch with my right hon. friend to see whether anything can be done for the Saskatchewan Roughriders.


Some hon. Members:: Oh, oh.


John George Diefenbaker: The Saskatchewan Rough-riders need no help.


Some hon. Members:: Oh, oh.


John George Diefenbaker: However, I ask the Prime
Minister this. In view of the answer given by the President of the Privy Council in February while he was still minister of justice,
Inquiries of the Ministry as I recall it, that this matter was being considered in order to preserve a degree of fairness and to deny anything of an improper nature, has the government not given any consideration to this question or has it waited until the senator has been elevated to the position he now occupies?


Lester Bowles Pearson: No, Mr. Speaker. I appreciate that this is a serious matter, and the government wishes to treat it as such. No doubt in the consideration being given to this matter by the officials concerned they will wish to get in touch with the new commissioner.



[Stage Direction]
On the orders of the day:
Mr. Lloyd R. Crouse (Queens-Lunenburg):: have a question for the Secretary of State for External Affairs. In view of the fact that negotiations over the establishment of geographical co-ordinates as called for in the Territorial Sea and Fishing Zones of Canada Act passed in July, 1964 have not brought about the implementation of that act, would the minister indicate whether he is contemplating calling for another international conference on the law of the sea in the hope of securing agreement on this thorny problem? I raise this matter in view of the fact that Secretary Udall is in Canada and the minister might wish to discuss the possibility of another international conference with him at this time.


Hon. Paul  Marlin@Secretary of Stale for External Affairs: No conference is contemplated, but I have had recent general discussions with Mr. Rusk on this particular problem, and proposals were made to the United States government some weeks ago. I have asked for a response to a proposal that we have made more recently, and if it is accepted I trust this will enable us to make progress with regard to the establishment of a straight base line system.



VETERANS AFFAIRS


[Stage Direction]
On the orders of the day:
Mr. F. J. W. Fane (Vegreville):: I have a question for the Prime Minister. I ask this
June 23, 1966

Inquiries of the Ministry question because today I received a communication from the secretary of the standing committee on veterans affairs indicating that the name of the hon. member for Lotbiniere (Mr. Choquette) has been included in the group of committee members making a trip to Europe, I should like to ask the Prime Minister, in view of the fact that the hon. member for Lotbiniere has denounced everything for which Canadians fought and died in the past, if he approves of the appointment of the hon. member for Lotbiniere to this committee.


Mr. Speaker:: Order, please. I do not believe this question is in order.
[Translation1


Mr. Auguste Choquette (Lotbiniere):: Mr. Speaker, I should like to point out that the constituency of Lotbiniere has been represented for 17 years by the present lieutenant governor of the province of Quebec who was a war hero and I consider this honour bestowed upon me by the Prime Minister as homage to the constituency of Lotbiniere.
Second, I should like to deny categorically the dishevelled remarks made by the hon. member.


Frank John William Fane: Mr. Speaker, I just want to point out that while the hon. member for Lotbiniere is being put on this committee making this trip, he has not been officially appointed to the veterans affairs committee.


Mr. Speaker:: Order, please. I suggest to the hon. member for Lotbiniere that there is no question of privilege. However, he has made his point, and I suggest that perhaps the matter should be considered closed for the time being.


Mr. Donald Maclnnis (Cape Breton South):: On the same point, Mr. Speaker-


Mr. Speaker:: The hon. member should raise a new point because I have ruled there is no question of privilege.


Malcolm MacInnis: I raise a point of order, Mr. Speaker, relating to the activities of committees. I should like to inform the Prime Minister that while serving on the special defence committee I found it impossible to go on a certain trip which was made by that committee. The chairman refused to permit a wounded veteran member of this house to replace me on that committee because it was suggested that in the view of


the government a practice was developing under which anybody on any committee could be replaced. The view was that if the member was unable to go he could not be replaced, and this view was sponsored by the Minister of National Defence last year.

Mr. Speaker, my question was for the Prime Minister, but in his absence I will address it to the Minister of National Defence. Does the minister as a member of the government feel that the substitution made on a committee which is to travel overseas this week end is fair, considering the discrimination which his department practised against veterans last year?


Paul Theodore Hellyer: Mr. Speaker, I am not familiar at all with any alleged discrimination. I can assure hon. members that this would not be the case if it were known to us. The question of who goes on trips with committees, once the transportation has been arranged, is a matter for the committee to decide, not for me.


Malcolm MacInnis: A supplementary question. The minister says he is not aware of any discrimination. Is he denying the fact that a former chairman of the defence committee, who is no longer a member of this house, discriminated against the veterans on this side of the house by refusing to replace me on a trip?


Mr. Speaker:: Order.


Malcolm MacInnis: Mr. Speaker, I rise on a point of order. As it is necessary for members of this house to accept the word of hon. members on that side of the house, is it not also necessary for them to accept the word of a member on this side of the house? I say that the minister's department discriminated.


Paul Theodore Hellyer: Mr. Speaker, I have no knowledge whatever of the facts of the case but I can assure my hon. friend that the substitution of any member for himself on the committee would have been quite a remarkable improvement.


Some hon. Members:: Oh, oh.


Mr. Maclnnis (Cape Brelon South):: Mr. Speaker, I am sure the minister is aware that I did not spend my time riding motorcycles during the war. But I will tell him this-


Mr. Speaker:: Order, please.
June 23, 1366


Malcolm MacInnis: When he says he is unaware-


Mr. Speaker:: May we have order, please.



NATIONAL SECURITY


[Stage Direction]
On the orders of the day:
Robert Norman Thompson: My question is for the Prime Minister and deals with a report which has been tabled by the Attorney General of Ontario outlining the extent of syndicated crime in Ontario. In view of the fact that a commissioner has not yet been named for the inquiry into security, can the Prime Minister tell us whether he is considering widening the terms of reference of that commission to include a study of the national and international aspects of crime syndicates?


Lester Bowles Pearson: I think this is a separate subject and should not be confused with the commission to which my hon. friend has referred. I realize its importance, and perhaps it will require separate consideration. This matter is being considered also by the federal-provincial meetings of attorneys general.


Robert Norman Thompson: May I ask a supplementary question. Does the Prime Minister expect to announce the terms of reference of this inquiry before the end of the month?


Lester Bowles Pearson: I certainly hope to do so as soon as I can get the commissioners appointed and the terms of reference officially agreed upon.
rTranslation1



FELICITATIONS ON CELEBRATION OF ST. JOHN THE BAPTIST DAY

[Stage Direction]
On the orders of the day:
Gilles Grégoire: Mr. Speaker, holidays were mentioned a while ago. I should like to take this opportunity, as the house will not sit tomorrow, on St. John the Baptist day and the national feast-day of French Canadians, to mention the celebrations that will be held tomorrow and to extend, on behalf of our party, my very best wishes to our French Canadian compatriots and to wish them the realization of their ambitions.
Inquiries of the Ministry



CANADIAN CONSTITUTION


[Stage Direction]
On the orders of the day:
Mr. Andrew Brewin (Greenwood):: I should like to direct a question to the Prime Minister, Mr. Speaker. Will the Prime Minister say whether the statement made by his parliamentary secretary in the adjournment debate on Tuesday night, which appears in Hansard at page 6742, on the subject of a parliamentary committee to consider constitutional problems, represents the views of the government on this matter?


Lester Bowles Pearson: I agree with what was said by the parliamentary secretary the other evening that it was not, in the view of the government, considered desirable to set up that particular parliamentary committee at this time.


EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
John George Diefenbaker: I would not want the
Secretary of State for External Affairs to feel he had been neglected on this natal celebration date. I ask him whether, in connection with the dispatch of Mr. Ronning to Hanoi, the reports in the press that Mr. Ronning was sent without consultation with Washington are correct and whether, after Mr. Ronning arrived there, the United States Secretary of State got in touch with the minister and gave instructions regarding a United States proposal. I ask this because, if that is correct, parliament should know it. I wish the minister would clear this up.


Paul Joseph James Martin: I have already replied to
this question. The story in that form is incorrect.



AGRICULTURE


[Stage Direction]
On the orders of the day:
Mr. H. W. Danforth (Kent (Ont.) ):: I should like to direct a question to the Minister of Agriculture. Now that it is a fact that the farmers of Ontario are demonstrating openly
June 23, 1966

Inquiries of the Ministry to support their contention that the government's objective with regard to the guaranteed minimum of $4 per hundredweight for milk will not be reached in many areas of Ontario, will the minister state when the present policy will be reviewed in order to bring about this much publicized objective?


Hon. J. J. Greene (Minister of Agriculture):: I think the federal government's policy has been well conceived and has been discussed in all detail in the house. I believe the distress of the farmers is being displayed against the provincial government, not the federal government.


Harold Warren Danforth: May I ask a supplementary question. Is it not true that the provincial Minister of Agriculture suggested to the federal minister during deliberations on this subject that unless $3.25 f.o.b. was the objective, this $4 minimum could not be reached?


Mr. Speaker:: Order. That question is argumentative.



HEALTH AND WELFARE


[Stage Direction]
On the orders of the day:
Philip Bernard Rynard: Mr. Speaker, I want to address a question to the Minister of National Health and Welfare having to do with an article which appeared in the Globe and Mail. The article stated that the United Kingdom government is now using persuasion to stop cigarette advertising on radio and television and in films. Will the minister consider similar steps in Canada?


Allan Joseph MacEachen: Mr. Speaker, I will be glad to look at what the British experience is and consider whether it could be applied in Canada.



FISHERIES


[Stage Direction]
On the orders of the day:
Frank Howard: Mr. Speaker, I should like to direct a question to the Minister of Fisheries. On Monday I posed a question to him relating to the litigation between the Canadian government and the province of British Columbia over log driving on the Stellako river. At that time the minister indicated that he had had no reports on
[Mr. Danforth (Kent, (Ont.)).l

the court case in connection therewith. Then I asked the minister as a supplementary question whether any scientific reports on the log driving which took place last year could be made public and the minister said he would take the matter under consideration. Is the minister now in a position to report to the house on these matters?


Hédard-J. Robichaud: Mr. Speaker, in reply to the first part of the question I wish to advise the hon. member that the writ of mandamus proceedings which were supposed to be heard on Monday were postponed until tomorrow at the request of the Attorney General of British Columbia. With regard to the second question, I expect to be in a position to give the hon. member a reply on Monday at the latest.
1Translation1



AIRPORTS


[Stage Direction]
On the orders of the day:
David Réal Caouette: Mr. Speaker, I wish to put a question to the hon. Minister of Transport. Can he tell us if air terminals will be built at Val d'Or and Rouyn this year, and if so, when the work will start?


John Whitney Pickersgill: Mr. Speaker, I cannot say categorically, but every possible effort will be made to get both these projects under way just as fast as possible.



CANADA STUDENT LOANS ACT


[Stage Direction]
The house resumed, from Monday, June 20, consideration of the motion of Mr. Sharp for the second reading of Bill No. C-197, to amend the Canada Student Loans Act.
John George Diefenbaker: Mr. Speaker, there are a number of observations I intend to make in regard to this measure. When it was originally before the house Her Majesty's loyal opposition gave it their support, at the same time pointing out that the measure did not in any way conform with, live up to or equal the promise made so widely during two election campaigns that if the Liberal party were elected to office 10,000 scholarships per year
June 23, 1966	COMMONS
would be made available to students in our universities. As yet there has been no action in respect of a promise that was so widely made and so generously supported by many thousands of university students, who believed that political platforms were designed to convey the truth rather than hope and expectations not carried out.
Canada's Economic Council has stated-


Michael Starr: Mr. Speaker, I rise on a point of order. I wonder whether you would bring to the attention of the government benches the fact that a debate is proceeding and that the Leader of the Opposition is trying to make himself heard.


Mr. Speaker:: Order, please. The point is well taken. There are so many conversations going on at the moment that it is extremely difficult for the Chair or anyone who wants to follow the debate to do so. I would ask the co-operation of all hon. members, and I ask those who must carry on conversations to do so in the lobbies or behind the curtains.


John George Diefenbaker: Mr. Speaker, it was not I
who raised the complaint. Usually hon. members opposite start to listen after I have spoken for a while, and I have that expectation today. What I intend to present will be uncontroversial but I believe it is necessary for a full understanding of the measure before us.
I was about to quote from the report of Canada's Economic Council which has stated that the aim of Canada as a whole should be to provide a ready opportunity for higher education to every qualified Canadian student so that financial obstacles will be eliminated as a barrier to higher education.
When we were in office, Mr. Speaker, we proceeded to do many things on behalf of the attainment of this objective. I think it well, so as to keep the record straight, to place before the house and the country a general summary in this regard. During the days of the administration when I was Prime Minister there were made available for the first time long-term, low-interest loans to universities for construction of student residences. There were made available loans to Canadian universities to construct living accommodation for resident students. These loans amounted to a very large sum, a total of $41 million.
We also made possible the building of student residences and, doubling the number, additional residential accommodation for 23033-431
DEBATES	6795
Canada Student Loans Act
10.000.	We encouraged university students by providing for the deduction of tuition fees for income tax purposes. We provided special assistance to parents who were supporting their children at university by allowing exemptions even after the students had reached the age of 21 years. In addition, Mr. Speaker, we implemented legislation increasing the monthly education allowance for the children of war dead from $25 to $60 a month. These are a number of measures that we took in order to make possible the expansion of opportunities for education within our country.
[DOT] (3:40 p.m.)
The figures we have before us as to the cost of higher education in the years ahead are staggering in amount. Indeed, according to the figures issued by the bureau of statistics in December last, the cost of formal education and vocational training during 1964-65 amounted to $3,250 million. Within a very few years the amount will have to be increased to an almost astronomical extent. The full time enrolment in Canadian universities and colleges is going up at a rate that demands that there shall be, in ever increasing measure, national assistance in this field if Canada is to meet and discharge its national and international responsibilities. Whereas the enrolment in 1964-65 in Canadian universities was 180,000, by 1975 it will rise to
461.000.	This means that great and challenging action must be taken to meet the potential needs of education within this nation.
The policy of the Conservative party in this connection was to increase research grants to the National Research Council, to increase greatly grants to the Medical Research Council, to increase university grants by the Canada Council, to carry out the recommendations of the Hall royal commission in the education and health field and to set up a capital fund for research and teaching hospitals. In order to encourage wealthy men and women across this nation to make grants to universities and institutions of higher learning the amount of income tax deduction now applicable with respect to such gifts should be materially increased. I believe that we must take effective action.
For many years the attitude has been that, because of the constitutional allocation of education to the provinces the federal parliament ought not to take any action in this field. During our period of office we were able to bring about an agreement with the
June 23, 1966

advanced the idea that the days when students should struggle are entirely over.


David Lewis: It was I.


John George Diefenbaker: All of us have had the experience in our university days of working our way. I did all kinds of jobs, as did the Minister of Finance. I tried teaching once under a temporary licence. I worked hard at that school. But when the inspector came along during school hours I was out shooting gophers. That was not on the curriculum that year.


Mr. Sharp:: Did you have a licence for that as well?


John George Diefenbaker: In those days licences were not required. That was before the days of the C.C.F. in Saskatchewan.


Some hon. Members:: Oh, oh.


John George Diefenbaker: Sir, I think the solution to this problem lies in making available larger amounts in unconditional grants to the various universities than have hitherto been passed on to them so that they in turn may reduce the amount of the annual fees.
Today fees have risen to such a point that they are almost prohibitive. In my day $35 or $40 a year represented the amount of fees required. All that is changed and many students today find it difficult to carry on at the rates which now exist and which are increasing year by year. I believe that as the parliament of Canada makes available increased grants to universities, as it must-there is no escaping that-there is no reason why those sums should not be in the form of conditional grants with a provision that the amount of the fees paid by university students should be reduced. There is no interference there with the authority of the provinces over education. Nobody has to accept a grant. But if a grant is accepted it should be passed on in part for the benefit of the students.
These are just a few suggestions I wanted to make in a desire to bring about further changes and in conformity with the lead given by the Minister without Portfolio. In other words, they are intended to improve this legislation by bringing about changes during the months that lie ahead.
We will never realize our national destiny unless we make education available to those who are able to profit from it. In the province of Ontario tremendous advances 23033-4312

Canada Student Loans Act have been made under the Robarts government. I think of what the minister of education, Hon. Mr. Davis, has done in setting up community colleges. This was an excellent step and one which I think should be followed across the nation for the benefit of all. I believe that only 7 per cent of those of university age are able to attend universities. Some 30 per cent have the necessary capacity. The failure to make available a university education for that 23 per cent is a national waste. No one today has to prove that an education is of benefit economically to the individual as well as to the nation. I do not intend to go into that aspect of the matter on this occasion but there are many statistics on it.
It will be said that anything done in this connection will cost money. Well, this is the kind of expenditure which will bring dividends to the nation as a whole. It is because of this that I place before the minister these few suggestions, assuring him that any steps taken which have full regard to the constitutional division of powers and will expand and develop educational benefits will receive support.
[DOT] (4:00 p.m.)
I conclude with one further suggestion. Today we hear young men and women complaining about parliament and criticizing its operation and effectiveness. If any of them could hear in this house the young members elected to it within the last couple of years, that would be an answer to those who contend that parliament is not a living and vital place. Nothing more pleases one who has been here for years than to watch young men and women rising in the house, developing their talents and making their contributions, and I think it would give a tremendous lift to the youth of the nation if one more portfolio were added to the cabinet, a ministry of youth to bring together and correlate the various matters that particularly come within the ambit and influence of young men and women.
Such a ministry would give youth new hope. Young people come here regularly on visitations from various schools and other educational institutions. I have noticed the change in them after they have visited parliament. They come to scoff but when they return home, their viewpoint has changed. One of the finest examples of that was given in a recent radio broadcast over the C.B.C. by a young student, Michael Wood, of Milton consolidated high school, Milton, Ontario. I
June 23. 1966

Canada Student Loans Act do not know how many hon. members listened to him, but his was a tremendously moving statement. He indicated that when he came here on one of the Rotary adventures in citizenship trips his views of parliament were not laudatory, but then he saw parliament as it is.
That is why I suggest that we could give this institution a greater appeal to young men and women were we to set up a department of youth with one of the young members -there are many of them who are qualified-in charge of it to be a central bureau or kind of clearing house for the young men and women of the nation so that all of them would feel not only a personal interest but also would feel that by such an appointment they had become partners in making parliament a better place.


Some hon. Members:: Hear, hear.


Alfred Dryden Hales: Mr. Speaker, I would like to make three short observations at this point. Needless to say, the first is that I am happy to lend my support to this very popular piece of legislation. The proof of its popularity lies in the use that has been made of it. I know it is administered by the provinces but I am sure the federal government has a great deal to say about its administration.
Second, at present a new approach is being taken to increase the facilities of universities by adopting the summer semester idea whereby a student can do a year and a half's work in one year by making full use of a university during the summer. This idea has been put into practice at the University of Guelph in my riding, but it makes it necessary for a student to have more money over a one year period since he has to attend three semesters rather than two as in the past. I would like to be assured that this is taken into account by the various provinces.
The third observation I wish to make concerns the application form which a student and his parents must fill out when applying for a loan. I have before me one such application form from the province of Ontario which seeks some very personal and confidential information, including a statement of resources to be completed by the parents. It asks for information concerning salaries and wages, total income, other income, life insurance, whether their home is owned by themselves, its present market value, the amount of unpaid mortgage, details of other real estate and details of their bank accounts, both personal and savings.

I realize that such information is necessary in order to determine whether a student is in need of funds and I would quite agree with such an application form being retained in the hands of the banker who administers the loan, but when the information becomes generally known to university officials, including the registrar and everybody in his office, this is a mistake. Such confidential information should be retained in the hands of a banker who is in the habit of treating all such matters personally and confidentially. Again, Mr. Speaker, I wish to say that I lend my support to this very fine piece of legislation.


Mr. John Gilbert (Broadview):: Mr. Speaker, the principle of this legislation has been dealt with by party colleagues of mine but there is one point I should like to make to the minister, namely, that special treatment should be given to students who join The Company of Young Canadians or CUSO after graduation. In those cases there should be a moratorium on repayment of the loans. Such students will be directing their talents and energies to very worth-while purposes and should not be penalized by having to make payments during their period of service in these organizations. I would ask the minister to make a statement on this point when he is closing the debate.


Mr. Stanley Haidasz (Parliamentary Secretary to Minister of Northern Affairs and National Resources):: Mr. Speaker, I would
like to join with other hon. members in congratulating the Minister of Finance (Mr. Sharp) for introducing these amendments to the Canada Student Loans Act, and to lend my support to the remarks made by the Minister without Portfolio (Mr. Turner) in appealing to the minister to take into account the many part-time and night-time students attending our institutions of higher learning in order to improve themselves and obtain better jobs in this era of advancing technology.
I also associate myself with those hon. members who have appealed to the minister to take into account those students who are improving themselves by attending summer seminar courses, thereby proving to their fellow citizens that they are willing to give up their leisure and other pleasures during their summer vacation in order to get a higher education.


Mr. John M. Reid (Kenora-Rainy River):: Mr. Speaker, the last time I spoke on this subject was on June 13 and one point I raised
June 23, 1966
at that time has since become rather widely publicized. I asked what was being done with the loan fund in the province of Ontario and said that the fund was being perverted by the provincial government in order to integrate it with the provincial bursary system.
[DOT] (4:10 p.m.)
In an article in the Ottawa Citizen of June 21, 1966 I note that this matter was raised by the Canadian Union of Students and by some students from the University of Ottawa. They had protested to the Ontario minister of education about what was being done. I should like to quote a brief segment of the article:
Charges of "forced loans" were made on the basis of provisions requiring that the first $150 aid is a loan and anything more is 60 per cent loan, 40 per cent bursary.
Miss Larkin-
Who presented the brief.
* 'Said in an interview Mr. Davis was wrong to force loans.
1 agree. It always was my understanding that these loans were to be part of a coordinated program, that there would be loan, bursary and scholarship funds and that students in varying circumstances would be able to obtain assistance from whichever fund best suited them.
It seems that the province of Ontario has taken the students loan fund and has perverted it by changing it completely from its original basis. It may well be that under the arrangements made with the provinces the Minister of Finance (Mr. Sharp) does not have the authority we would like to see him have in respect of the distribution of these moneys. I suggest to the minister and to the cabinet that when this matter comes up again in the fall, as I understand it will, perhaps more reasonable provisions might be worked out with regard to what is to be done with this money.
I do not like to see the loan fund tied into the bursary fund because the two are quite different. As one who had a bursary as well as small loans from individuals when I went to university and also has had some experience in teaching at university, it is my opinion that this is not a good thing. It places an unnecessary burden on the student. The students have a hard enough time in university now without having to face the problem of applying for a bursary and ending up instead with a loan.
Canada Student Loans Act


The Acting Speaker (Mr. Rinfret):: May I
remind hon. members that if the minister speaks now he will close the debate.


Mitchell William Sharp: Mr. Speaker, many hon. members have taken advantage of the debate on the Canada student loans bill to express their views on education and educational policy generally. I have listened with very great interest to this debate. I think it has been a very useful one and has shown a remarkable unanimity of view among the parties in this house in respect of the importance of education and the large part government aid to education is necessarily going to play in the future. As one of those who had difficulty in obtaining a university education and, like the Leader of the Opposition (Mr. Diefenbaker), had to resort to various means of financing, I can heartily sympathize with the desire of all members who have participated in this debate to be sure not that university education becomes more easily attainable but that all those who have the ability to benefit from a university education obtain it.
As I said on a previous occasion, this problem is not going to be solved simply by making university education freely available either without charge or with such aid as would make it possible for students to obtain it. The problem is much deeper than that; it extends below the university level. One of the most difficult and serious problems we face is ensuring that those students who should be able to benefit from a university education do in fact graduate from high school. So the problem is one of far reaching difficulty and complexity.
I also agree with those who have spoken who have mentioned the magnitude of the financial requirements to ensure that our young people are adequately educated. As Minister of Finance I am very conscious of that; I am very conscious of it in relation to federal-provincial discussions. This is a question which must be discussed with the provinces. It is, if not entirely, certainly their primary responsibility. It is primarily the responsibility of the provinces, but that does not discharge the federal government from the responsibility to see that adequate educational opportunities are available to all Canadians. It does mean that we must work together with the provinces to achieve these desirable goals.
The Leader of the Opposition referred to the comments made by my colleague the Minister without Portfolio (Mr. Turner). I am

June 23, 1966

Canada Student Loans Act not a parliamentarian of great experience like the Leader of the Opposition and therefore perhaps it did not shock me quite as much as it did the right hon. gentleman when my colleague got up and expressed some views about education and put forward some of his own personal suggestions as to how this legislation might be improved in the future. I do know that my colleague, as he said, supports this legislation, but like many of us in the cabinet he hopes that in the future it can be improved still further. He put forward some suggestions, which he has made privately in other places and which I was glad to hear him put forward in this house, about how in the future we might move to make this legislation even more useful than it has been to date.
In general, during this discussion there has been agreement in respect of the aims of the Canada student loans plan and the amendments which now are before the house for consideration. In order, I hope, to shorten discussion in committee I should like to provide some answers to questions which were asked during the debate on the resolution stage and on second reading. The Leader of the Opposition asked about the eligibility of students from other countries. The Canada Student Loans Act defines a qualifying student as, among other things, one who (a) is a Canadian citizen or (b) has been resident in Canada for a period of not less than one year and has declared that he intends to reside in Canada after he ceases to be a full-time student.
In practice this means that a non-Canadian may be eligible if he has landed immigrant status. It does not include students from other countries entering Canada on a student's visa. Students from other countries applying for a student's visa for study in Canada must sign a declaration that they have sufficient funds to support themselves while in Canada. This financial support, of course, may come from Canadian sources in the form of scholarships or assistance under such programs as the Colombo Plan, but it follows that such students are not in need of and do not qualify for student loans.
Hon. members may recall that when the Canada Student Loans Act was introduced in the house nearly two years ago the minister of finance stated at page 5443 of Hansard of July 14, 1964:
Students who are residents of other countries will not be eligible for loans under the Canada student loans plan. Students from the richer countries abroad who choose to study here will have
their own sources of finance; with our universities already crowded we do not consider we should offer them special inducements to come here. Students from the less developed countries may. of course, obtain educational assistance under several Canadian programs.
[DOT] (4:20 p.m.)
I might mention further on this point that in order to avoid hardship for immigrants who have been in Canada for not much more than a year the provinces have agreed upon a residence formula which includes the case of landed immigrants. I refer here to the report on residence, which is included in appendix A of Hansard for June 11, 1965. This report forms part of the federal-provincial agreed criteria which are being applied in the administration of the plan and to which I referred in my opening statement when the resolution was being debated.
The hon. member for Burnaby-Coquitlam (Mr. Douglas) asked how the $58 million in the new basic loan provision is to be allocated among the provinces. The basic loan provision in the loan year 1965-66 will be allocated to all provinces and territories on the basis of population in the 18 to 24 year age group. The act provides that in subsequent years the basic allocation will be increased each year at the same rate as the estimated growth of the population in Canada in that same age group. This rate of increase has been about 5 per cent.
In addition to the basic loan provision, which is $58 million for this year, the bill provides for a discretionary amount equal to 20 per cent of the basic loan provision, that is, $11,600,000 in the current year, all or any part of which the Minister of Finance may allocate to any participating province where the demand for loans under the agreed criteria exceeds that province's basic allocation. As I explained in my statement on the resolution, this supplementary allocation provides the flexibility required to adjust allocations to the varying degrees of demand for student loans from province to province.
The hon. member for Vancouver-Burrard (Mr. Basford) suggested that the regulations be amended to extend the interest and repayment free period for borrowers while serving with CUSO or The Company of Young Canadians. This question was also raised by other hon. members. Representations to this effect have been made on several occasions recently and have been given very careful consideration. Legal advice has been obtained to the effect that such a change could be made only through an amendment to the act, not by regulations.

June 23, 1966	COMMONS
The reason we did not bring forward a change in the act in order to provide for this kind of flexibility is this. The Canada student loans plan is a very general measure applying to all provinces but one, and the effectiveness of such a general measure depends to a large extent on the basic simplicity of the plan. It was never intended to cover all requirements of all students but to serve as a broad base in the student assistance field, to be supplemented by other governmental and private schemes which should cover more specific situations. Any provision to afford a particular group special treatment under the plan would inevitably lead to representations for similar treatment by other groups who, at least in their own views, consider themselves equally deserving of special treatment.
The act and the regulations in their present form provide a bank, of course, with a good deal of flexibility in setting repayment terms with due regard to a borrower's probable ability to repay his loan, and it would be quite within the spirit of the legislation if a bank scheduled the repayments of a candidate for The Company of Young Canadians or CUSO over the maximum period provided for in the legislation, namely, ten years from the month of graduation.
This could at least partially meet the problem raised in individual cases where the amount of the loan owed is relatively small. To the extent that there remains a problem it seem to me and to the government that it could be dealt with more appropriately and directly through the provision of funds to The Company of Young Canadians and to CUSO for the purpose of helping to meet financial problems of highly desirable volunteers who, because of certain financial obligations, would not be able to serve without such special assistance. That is the brief answer to the point. It does seem to us to be more suitable for the special needs of candidates for The Company of Young Canadians and CUSO to be met by those agencies rather than by any forgiveness or special treatment under the Canada student loans plan.
The hon. member for Saint-Hyacinthe-Bagot (Mr. Ricard) referred to opposition to the Canada Student Loans Act two years ago on the ground that education is under exclusive provincial jurisdiction. He asked whether the views of the new premier of Quebec had been ascertained and, if not, whether I intend to get in touch with the new premier in order to know whether his views are the same as his predecessor's.
DEBATES	6801
Canada Student Loans Act
The act provides that if the government of a province advises the minister before the beginning of a loan year, that is before July 1, that a provincial student loan plan will be in operation in that province in that loan year and that no appropriate authority for that province will be designated for the purposes of this act, the minister shall pay to that province an alternative amount calculated in accordance with section 12(2). I am bringing this provision of the act to the attention of the new Quebec premier.
Those were some of the main points that were raised. Toward the conclusion of the debate today and on several other occasions comments were made about changes that have been made by the government of Ontario in the administration of its bursary plan. I would not wish to give the impression that all the changes that have been made by the province of Ontario are exactly what we would have approved, but I do believe it is in the interests of the federal plan, and ultimately of the students themselves, to have student aid resources used in such a way that the limited amount of aid that is available, particularly bursary aid, will go as far as possible to meet students' needs. So where a province integrates the federal loan scheme with a provincial bursary scheme it is entirely within both the letter and the spirit of the federal plan to have the provinces decide how and in what ratio it wishes to meet the needs from loan and grant sources. We may wish to critize some provisions of the Ontario plan, but I did feel it desirable to say that in principle we do not find its plans to be unacceptable.
Comments were made by some hon. members about the extension of these loans to night students and summer course students. My colleague the Minister without Portfolio made this suggestion. I am sure that all of those who have had experience in attending night school will know that one of the main reasons for having student aid available in the form of loans or bursaries is to avoid night study by students, which is not a particularly satisfactory way of carrying on one's education. It seemed to me when I was a student, and I am sure this is so today, that the problem is not one of being able to finance the limited cost of night study. The purpose of the Canada Student Loans Act is to see that students can attend universities in the day time for full-time study.
We are prepared, of course, to have another look at this problem. As my colleague, the
June 23, 1966

Canada Student Loans Act Minister without Portfolio, knows, a great deal of part-time study is done in one of the great institutions in his city, Sir George Williams University, and that is a provincial rather than a federal matter. I do know that in the city of Toronto there is a good deal of night study going on and we have not by any means dropped our consideration of this question for the future.
[DOT] (4:30 p.m.)
That hon. member also expressed concern over the lack of reciprocity between the Canada Student Loans Act and the Quebec student assistance plan. I am sure that hon. members will understand that this is a matter for negotiation between the province and the federal government. We have done some work and the agreement on residence that was worked out at a recent federal-provincial conference is evidence of the fact that we are concerned about the problem. Had it not been for the changes of government in various provinces in this country we would probably be engaged even now in discussing with the provinces this and other matters affecting educational policy.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Rinfret in the chair.
Clause 1 agreed to.
On clause 2-Limitation on aggregate amount.
Mr. Monteilh:: Mr. Chairman, I was not quite clear about the minister's explanation with regard to the 20 per cent supplementary allocation which amounts to roughly $11.6 million, I believe. Is it the fact that this amount is available only if all the other provinces do not take their full allocations?


Mitchell William Sharp: Mr. Chairman, the answer to that question is no. The 20 per cent is over and above the $58 million. We will make an allocation of the $58 million and then we will have 20 per cent of the whole to use in supplementing the allocations in those provinces where needs exceed the original allocation. I should point this out because I am sure it is a question that will arise in my hon. friend's mind. We do not make these supplementary allocations except in agreement with all the provinces.


Jay Waldo Monteith: Then actually the amount available is $69,600,000?


Mitchell William Sharp: That is right.


Stanley Haidasz: I should like to ask the
Minister of Finance whether any consideration has been given by him or his officials to extending the age limit for students wishing to borrow under this plan from 25 to 30 years of age.


Mitchell William Sharp: This is the first time I have heard this question raised and I will have to give consideration to it. It was not a matter that was urged upon us. But I shall certainly try to find out whether there is a problem here and if so I will bring forward amendments in the future.


Jay Waldo Monteith: I have one further question in connection with the $11.6 million. The $58 million is statutory. Will there be a supplementary estimate for any other amount that is necessary?


Mitchell William Sharp: This bill appropriates not only the $58 million but the supplement as well.


Mr. Priitie:: Mr. Chairman, I should like to add to the point raised by the hon. member for Parkdale. More and more people over the age of 25 are attending institutions of higher learning. In many of our large metropolitan cities today high schools are given over completely to adults who are going on from high school to college, university or technical institutions. I think this is a subject that bears looking into.


Mitchell William Sharp: Mr. Chairman, I think there is some misunderstanding here, and probably the reason this question has never been raised is that the problem does not exist. All that is provided for in this clause is the allocation of the funds amongst the provinces. So far as I know there is no age limit in this respect. This clause deals only with the allocation of moneys among the provinces on the basis of the 18 to 25 age group.


Mr. Lambert:: Mr. Chairman, I am sorry I did not hear the minister's statement earlier this afternoon. The other day on second reading I raised the question of whether negotiations had been entered into with the provinces in order to provide an extension of the period of forgiveness during which a student would not have to start repaying the loan, in view of the increasing activities of CUSO and now The Company of Young Canadians. The minister may have given the answer. If he did, I regret that I was absent attending the defence committee and did not hear it.
June 23. 1966


Mitchell William Sharp: Mr. Chairman, as the committee knows, I did attempt to answer that question when I wound up the debate on second reading. In brief the answer is that we believe the needs of students who are candidates for The Company of Young Canadians or CUSO should be met by those agencies rather than the Canada Student Loans Act. In principle we accept this responsibility.


Marcel Joseph Aimé Lambert: What I mean is this. If a student had borrowed from the fund during his university training and upon graduation became a member of The Company of Young Canadians where the earnings are actually very restricted, do I understand from the minister's answer that while serving with The Company of Young Canadians the period of repayment would be deferred?


Mitchell William Sharp: I did suggest in a very general way, because I knew this would be the subject of individual negotiation, that those agencies would themselves help the student to meet the payments and extend the period in that way.


Maurice Rinfret: Shall clause 2 carry?


[Stage Direction]
Clause agreed to.
Title agreed to.
Bill reported.
Maurice Rinfret: When shall the said bill be read the third time? Now, by leave?


Marcel Joseph Aimé Lambert: Now, by leave.


Mitchell William Sharp: the third reading of the bill.
Motion agreed to and bill read the third time and passed.



CUSTOMS TARIFF

Mitchell William Sharp: the second reading of Bill No. C-200, to amend the Customs Tariff.


The Acting Speaker (Mr. Rinfret):: Is it the
pleasure of the house to adopt the said motion?


Marcel Joseph Aimé Lambert: Mr. Speaker, in view of the comments made at the resolution stage I wonder whether the minister intends to make a statement at the beginning of the debate on second reading or on the particular clauses of the bill? The bill is very short.


Mitchell William Sharp: Mr. Speaker, when the budget resolutions relating to the Customs Tariff
Customs Tariff
were under discussion I made some comments on these items, although not very extensive ones because they are not of far-reaching importance. 1 have nothing further to say on second reading. My officials will be before me in committee and at that time 1 would be prepared to answer questions.


Marcel Joseph Aimé Lambert: Agreed.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Rinfret in the chair.
[DOT] (4:40 p.m.)
On clause 1-Schedule A amended.
Marcel Joseph Aimé Lambert: The other night, Mr. Chairman, I raised a question about item 41105-1 in schedule A which refers to captive balloons having a volume of 150,000 cubic feet or more. I was interested in particular in the incidence of the entry into Canada of this item and of the use to which it is put. I understand they are used in the logging industry in rather inaccessible places to anchor certain equipment. I should like to know just what the volume of entry is or was the item inserted at the request of one or two operators?


Mitchell William Sharp: Mr. Chairman, my understanding is the same as that of the hon. member for Edmonton West. These balloons are used for the transportation of logs in the mountains. The item aroused in me the same curiosity as it has in the hon. member. I understand that the item was requested by an industry which pointed out to us this new technique. Experimental work is being carried out on the west coast whereby these balloons are used to transport logs over rough terrain. The balloons are expensive. The request has been supported by the British Columbia Loggers Association. The balloons are controlled by cables, winches and so on. There has been no opposition to the request. There is no one who feels this is going to do damage to local production in Canada.


Marcel Joseph Aimé Lambert: One of my colleagues has suggested that these might be oversized trial balloons which the government might want in order to float some of their more difficult policies.


Mr. Barnett:: Would the hon. member for Edmonton West allow me to interject at this point? I am interested in his remarks about trial balloons. However, I was going to suggest that perhaps the hon. member for Edmonton West and the Minister of Finance

June 23. 1966
Customs Tariff
would care to visit my constituency during the recess when they might have an opportunity of seeing one of these mysterious balloons in operation.


Mitchell William Sharp: I am always much more interested in trial balloons that have a useful purpose than those which sometimes are tried out on political issues and which usually are punctured and collapse quickly.


Marcel Joseph Aimé Lambert: I should like to refer to item 70505-1 which covers goods imported by a settler for his household or personal use. Could we have pointed out the difference between the item incorporated in the schedule and what the item was before? I am sorry, but I do not have the whole of the Customs Tariff before me.


Mitchell William Sharp: Mr. Chairman, this item replaces two items that have been in the tariff for a number of years and which provided free entry for a specified list of settlers' effects. The new item represents a consolidation and simplification of the former item. Previously the goods had to be owned abroad by the settler for at least six months in order to qualify for free entry. The first change of substance is that under the proposed item the goods must still be in his possession to be entitled to free entry but the six months' ownership requirement has been dropped. The six month's ownership requirement has been a continuing source of irritation to settlers who were not aware of it.
The second change of substance is that formerly a motor vehicle brought in by a settler was dutiable on its value in excess of $2,500. This provision will no longer apply. In addition, formerly the item listed the goods which were entitled to free entry and under the new item the goods will be defined by the Minister of National Revenue.


[Stage Direction]
Clause agreed to.
On clause 2-Schedule B amended.
Marcel Joseph Aimé Lambert: There is only one item under clause 2. I want to make it clear, because some confusion seems to have arisen in the minds of people concerned with some industrial shops, that both the 99 per cent drawback and the removal of the sales tax under Bill No. C-198, I believe it is, will be generally applicable on those items and on dies, jigs, fixtures or moulds or any equipment going into the manufacture thereof. The provision is definitely limited to the production of dies,

jigs, fixtures and moulds used in the production of automobiles and motor vehicle parts. I take it this measure is in consequence of the announcement made by the minister or one of his colleagues some months ago, that this step was being taken in order to place Canadian parts manufacturers in a more competitive position with their United States counterparts who would not be faced with the same customs duties or sales taxes.


Mitchell William Sharp: Yes, Mr. Chairman, that is correct. This item provides for a 99 per cent drawback to be given on machines and certain equipment of a class or kind not made in Canada used in the manufacture of motor vehicles or parts, and the manufacture of dies, jigs, fixtures and moulds used in making motor vehicle parts. Previously a drawback could only be claimed by the manufacturers of motor vehicles or motor vehicle parts. This now applies much more generally. The addition of the words, "or when used for the manufacture of dies, jigs, fixtures or moulds which are used in the production of automobile or motor vehicle parts" will allow this drawback to be claimed also by Canadian manufacturers of these articles as well as by automobile manufacturers themselves.


Mr. Lamberi:: There is nothing that appears in the schedule, nor so far as I can see in Bill No. C-198, to the effect that there will be a discretion where these machines are of short life and are highly expendable as a result of model changes and rapid technological advances. There is nothing to indicate that it is for this reason they are getting this customs and excise tax relief. Somehow or other the impression has gotten abroad that there is an element of discretion as to those which are short-lived and those which are not. If there is any such discretion or discrimination perhaps that can be cleared up.


Mitchell William Sharp: In this item there is no discretion. The item is as described. It may be that when we get to the Excise Tax Act I will have to look at it. There is something also in my mind about that, but I am not sure.


[Stage Direction]
Clause agreed to.
Clauses 3 and 4 agreed to.
Schedule A agreed to.
Schedule B agreed to.
Schedule C agreed to.
Title agreed to.
Bill reported.
June 23, 1966
The Acting Speaker (Mr. Rinfret):: When shall the said bill be read the third time?


Marcel Joseph Aimé Lambert: Now, by leave.


Mitchell William Sharp: the third reading of the bill.
Motion agreed to and bill read the third time and passed.
[DOT] (4:50 p.m.)



EXCISE TAX ACT

Mitchell William Sharp: the second reading of Bill No. C-198, to amend the Excise Tax Act.


Marcel Joseph Aimé Lambert: Mr. Speaker, the other night when we were discussing this measure I raised a number of questions. At that time I was hopeful that we would receive some general answers to the points which were raised, but for some reason or other the minister deferred the answers until the clause by clause study. I think it would have been a little more helpful had we been given answers at that time.
One point that I particularly raised was why sales tax was now being imposed on tire retreads. I think the minister will remember that I asked him what was the reason for this. If we go back in history, the last changes made to the Excise Tax Act were in 1963. I cannot put my finger on how this particular change was made since the 1963 statute makes no mention of tire retreaders. However, I suspect that it was done by the removal of an exemption and the restoration of a general item and therefore the exemption disappeared from the 1963 version in that way.
It appears that at that time the minister of the day felt that tire retreading for stock should be subject to sales tax. In other words, a tire retreader who was purchasing or accepting used tires for incorporation into his stock and was then selling them after retreading should collect sales tax on the retreaded tires which were being drawn from his stock.
I do not know what representations were received by the government at the time but I suspect there was some pressure by the tire manufacturers. The net result, of course, is that some 600-odd tire retreaders in the country have suffered an extensive diminution in sales of retreaded tires taken from stock. It has also resulted in the manufacturers of tires, of whom there are only six or seven in
Excise Tax Act
the country, being able to flood the market with third and fourth line tires which are actually cheaper than good retreads.
The reason I am raising this point at this time and not on the item is that I think a matter of principle is involved at this juncture with regard to retreaded tires. The minister's colleague, the Minister of Industry (Mr. Drury), is now busily engaged with his officials and perhaps with provincial governments in improving automobile safety. Yet action has now been proposed to the government which will serve to negate a goodly part of any campaign for automobile safety. It is not only the body and the parts of an automobile that are important but also the tires. There is also no doubt in anyone's mind that a retreaded quality t.re is a superior tire to any third or fourth line tire which undersells it. So the left hand is now being used to negate something that the right hand is attempting to do.
I should like the minister to look at this particular situation. I know it is much more evident now than it used to be. I submit to the minister that it is quite possible to purchase a third or fourth line tire for $13 or thereabouts, sometimes even as low as $10, but certainly no retreaded quality tire can be purchased for that amount.
There is the added question of the individual motorist making up his mind whether he will purchase retreaded tires or buy new tires. If it is now going to cost him an additional 11 per cent on the price of the retreads, as provided for under the amendment to the act, then the price differential between a retreaded tire and a cheap, new tire is made much narrower.
I am also wondering, Mr. Speaker, why there is an extension of sales tax into the services field. The custom retreading which is provided for and made taxable under clause 2 of the bill is in the same category as, for example, shoe repairing. Suppose the minister or I went to a shoemaker to get our shoes repaired or rebuilt. If a retreader of tires is deemed to be a manufacturer or a rebuilder, certainly there are many shoe services performed which in essence constitute a rebuilding of shoes. But there is no thought or suggestion that sales tax should apply to such services. Nor is there, as in this particular case, a sales tax imposed not on materials but on labour. This does not apply in other instances. For example, we do not pay excise sales tax on a rebuilt motor. We do not pay excise sales tax on a rebuilt television set.

June 23, 1966
Excise Tax Act
Why should there be sales tax on a rebuilt tire? It is really a matter of being logical, unless particular pressure has been brought to bear.
I do want to discuss this matter further under the particular clause, Mr. Speaker, because I can point to a great number of differences. For instance, the minister is imposing sales tax on a stock tire in part twice. First of all, when the tire was new the full 11 per cent sales tax was paid. When it becomes used and is brought back into the shop, exchanged for another tire and is then retreaded, tax is again collected on the retail sales price to the customer. Incidentally, this is the only area in which excise sales tax is collected at the retail customer level. Why the discrimination?
If it is felt that there must be some revenue forthcoming, sales tax could be collected on the value of the materials which went into the making of the tire. But why treat the tire retreader as a manufacturer? As a manufacturer he would have to pay sales tax on the value of the rubber materials and any other materials he might have to use to make tires. I do not think there could be any great objection to that, but there is a vast difference between that and asking for the levy of sales tax also on the labour which goes into the retreading of tires.
[DOT] (5:00 p.m.)
I know that the minister has received representations in regard to the matter and I have too. As a matter of fact, the point I raised the other evening has brought forth a flood of telegrams from one end of the country to the other. I was interested in what the minister was trying to do even before there was contact with any people in the industry, because the amendment intrigued me. Why are we now moving into the services field with respect to sales tax? This is an extension of this tax and I am interested in the philosophy behind why it is being done. I should like to raise other points as the clauses come before us. However, I should like to hear from the minister at this time since my remarks are directed to the principle of this bill.


Mitchell William Sharp: Mr. Speaker, by speaking now I would close the debate.


The Acting Speaker (Mr. Rinfret):: May I
remind hon. members that if the minister speaks now he will close the debate.


Mitchell William Sharp: The hon. member for Edmonton West has raised a very pertinent question and one that has caused me a great deal of concern. Perhaps I might be permitted to give a general explanation and then talk about this particular activity.
When an activity is considered to be an act of manufacture or production for sales tax purposes, the person performing such activity must pay tax on the selling price of the products resulting from this activity. The general definition of manufacturer or producer in the Excise Tax Act is broad enough to encompass all activities resulting in the creation of new products, and also all rebuilding or remanufacturing of goods if the commodities involved are the property of the rebuilder or the remanufacturer and are sold in the same manner as new commodities. That is the present act before amendment.
Everyone who is engaged in production or manufacturing, whether he is remanufacturing something he owns or whether he is manufacturing a new article, is subject to sales tax. That is a well established principle of the Excise Tax Act and has been in effect for a long time. However, up until this amendment to the act the federal sales tax did not apply to services. This has sometimes caused problems in areas where services rendered to repair old commodities account for the major proportion of the value of the repaired articles. In such instances the persons repairing those commodities compete with vendors of the new commodities or of the rebuilt commodities that they already own.
In all fairness, and this is the underlying principle of this change, the tax should apply to the charges made for services. Certainly this is the case with tire retreading.
The hon. member will recall that in 1963 the act was amended to make it apply to the sale of stock tires owned by the retreader. It could not be applied, however, to the repair of old tires. The result was a rather untidy administrative position. Indeed, you can imagine the kind of tax avoidance that went on. Instead of buying a stock retread, a person would go to an establishment with an old casing and say: "If you build this up for me I will not have to pay tax." We decided this year to try to apply the tax fairly by applying it not only to the retreaded tires owned by the remanufacturer but also to the value added to tires brought in by a customer to have retreaded.
June 23. 1966

This is the basic philosophy underlying this change. I am free to admit to the hon. gentleman that it has caused a good deal of complaint. We have looked very carefully at these complaints because in a sense we have a choice of evils. Either we continue with the present inequitable and unsatisfactory situation or we change the law as we are now proposing, knowing full well that the administrative result is not going to be too satisfactory. We have come to a conclusion and that is why we are pressing this amendment on the ground that it is better to attempt to apply the law equitably by this amendment rather than continuing to suffer under the inequalities of the present law.


Marcel Joseph Aimé Lambert: My, my.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Rinfret in the chair.
On clause 1-
Alfred Dryden Hales: I wish to address a question to the minister simply to clarify something in my own mind. The 15 per cent excise tax, as I understand it, is levied on the final selling price of Canadian products. That price includes the cost of selling, advertising, credit, distribution, etc. On the same products imported into Canada I understand that the excise tax is calculated only on the value at port of entry. Is this the case or is this clause designed to correct that situation?


Mitchell William Sharp: Mr. Chairman, this clause does not apply to the general sales tax but only to the special excise tax. It is intended to apply to those cases where the goods are in certain kinds of containers as set out in the proposed amendment.


[Stage Direction]
Clause agreed to.
On clause 2-Retreader of tires deemed manufacturer or producer.
Marcel Joseph Aimé Lambert: Mr. Chairman, I must confess absolute astonishment at the reply given by the minister as to the rationale of the imposition of this tax in 1963 and its extension now. The reason given for the extension is that there were evils in the administration, in the application or incidence of the tax of 1963. I submit that the minister is jumping from the frying pan into the fire. He is now creating even greater evils both as to the administration and the incidence of the tax. The minister says that a customer having his tire
Excise Tax Act
custom retreaded has an unfair advantage over one buying a stock tire.
What about the used tire as against the stock retreaded tire? Should there not be a sales tax on the used tire? Also, does not that same principle apply to custom rebuilt shoes which compete with new shoes? Does this principle not apply to custom rebuilt engines as against stock engines? I point out that no tax is collected on the rebuilt engines.
[DOT] (5:10 p.m.)


Mitchell William Sharp: In order that there may be no misunderstanding, may I say it is my understanding that rebuilt engines are taxable as are rebuilt television sets and rebuilt refrigerators.


Marcel Joseph Aimé Lambert: I shall accept the minister's correction in that regard. But I find it extraordinary that this principle of the extension of sales tax to a service is now countenanced. I submit that we shall have a sales tax on services generally next. Using the salami method, there will be a gradual extension slice by slice. I cannot for the life of me see why this is being done.
Let us consider the difference between a tire retreader and a manufacturer. What is the difference between the new tire manufacturer and the retreader? The new tire manufacturer uses 100 per cent new raw materials and builds a new tire of which he maintains ownership until the time of sale. The retreader uses material mainly supplied by the tire manufacturer and the proportion of the content of new material to the old material is about 15 per cent. If the retreader is retreading a custom tire he has no ownership whatsoever in the tire. In the case of the stock tire he does.
Let us consider the difference in the incidence, say, of tax on a new tire as opposed to a retread. The new tire manufacturer pays a tax of 11 per cent on approximately 60 per cent of the selling price of a new tire. Let us take as an example a popular, good quality tire which retails at about $30. The cost to the manufacturer is between $10 and $12. He puts it out to the wholesaler or distribution agency where it is sold to a dealer, garage or service station at between $16 and $18. The customer pays $30. But sales tax is paid at the manufacturer's level.
In the case of a stock retread there may be an allowance of $5 or $6 on a good quality used casing. The value of the retreading, labour and materials is between $9.75 and $10.50. The retreaded tire is then sold for

June 23, 1966
Excise Tax Act
about $16, and that is where the 11 per cent sales tax is levied. The sales tax on a retread is on a higher level than it is in the case of a new tire.
The minister talks about improper incidence of taxation. Of course it is. But it is on the retreaded tire, not on the new tire. The retreaded tire bears a far greater sales tax load.
Are there any ways of avoiding or reducing the tax? Yes, there are certain ways. Some tire manufacturers own retreading plants. A manufacturer will sell to his own company at a wholesale price, and this is where the sales tax is levied. The service store is not then obliged to collect sales tax from the consumer at the retail level. The new tire manufacturer with his own retreading subsidiary has a definite advantage over an independent, and there are some 600 Canadian-owned independents in this country today. There are approximately seven tire manufacturers in this country, all foreign-owned. The application of this tax therefore places an unfair burden on Canadian-owned industry.
I will admit that the tire manufacturers employ a large number of people. But so do the tire retreaders. If hon. members wish to know the incidence of this taxation in connection with truck tires, I have some figures before me.
We must remember also the difference between the big trucking operator who is entitled to discounts and the small operator who is not. The sales tax on retreaded tires falls much more heavily on the smaller operator than it does on the big operator who is in a position to get substantial fleet discounts. Thus again we see the unfair incidence of this tax.
I am sure the officials in charge of sales tax administration in the department are aware of many ways in which this tax becomes an administrative monstrosity. There is no way of checking the number of retreaded tires which may be diverted to used tire stocks unless the department has inspectors out every morning to check on tire production and sales.
Other methods could be raised. I must say frankly that this will likely lead to the ruination of an industry. Let us face it: The tire retreading industry exists because of the sheer economics of the difference between the price of a new and a retreaded tire. The minister knows the cost of a huge tire such as is used for a carrier or heavy-load earth

mover. Such tires cost thousands of dollars. They go back to the shops for custom rebuilding. Why impose this tax on the custom work particularly. I assure the minister it will cause many administrative headaches.
[DOT] (5:20 p.m.)
Two of the principles of taxation are ease of administration and equitable incidence, and I have pointed out how the proposed tax is both inequitable and difficult to administer. The minister is taking a regrettable step in extending this tax and I would urge him to withdraw it because it is going to cause a great deal of hardship across the country.
The minister may feel that he will collect more tax this way but I think he will collect less because a number of the tire retreaders who have spoken and written to me have indicated that since 1963 the sale of stock tires has decreased anywhere from 20 to 40 per cent. If that is the case, we are now going to reduce the sale of custom retread tires and encourage the purchase of new, cheap tires in the $9 to $12 range, on which the minister receives an 11 per cent tax on anywhere from 40 to 60 per cent of the value of those tires.
I think that the net revenue is going to decrease. Not only that, the minister will lose income tax revenue payable by these firms if employees are sacked or let go as a result of the step which he is taking. The whole thing is completely wrong and I urge the minister to withdraw this tax. I am sure the amount of revenue that will accrue to the crown from it will not be great. Yet its effect on a segment of industry will be especially harsh.


Mitchell William Sharp: Mr. Chairman, I have listened with great interest to the representations made on this proposal by the hon. member for Edmonton West. I myself have received representations very similar to those he has received and from which I presume he was in part quoting. Admittedly there are problems raised by this proposed amendment but after examining the situation as carefully as I could and, I might add, sympathetically, I have come to the conclusion that there will be fewer problems as a result of this amendment than there are now because of the present inequity between the treatment of custom retreads and stock retreads.
As I said earlier, the present law provides that stock retreads are taxed but custom retreads are not. This has produced a situation where as many tires as possible are brought in by motorists to be retreaded and are not subject to tax, to the detriment of
June 23, 1966

those companies which buy their own casings, retread them and sell them. That is the reason why we are proposing this amendment.
I admit the problem is a difficult one but I believe it should be possible through administrative means to deal fairly as between new tires and retread tires. I believe it should be possible through administrative practices to help in ensuring that these tires are taxed at approximately the same level of trade. I agree with the hon. member that it would not be equitable to have retread tires taxed at a level closer to the consumer than new tires would be taxed, and it may be possible through administrative means, as we do in many other industries, to maintain as much equity as possible.


Marcel Joseph Aimé Lambert: The minister's suggestion is intriguing. Does he mean that the tax on the new tire is going to be levied and collected at a level much closer to the consumer? The worst feature is that part of the retread tire is paying sales tax twice and it is paying a great deal more tax than a similar tire of the same quality if it were a new tire. To me this does not make sense and is quite unjust.


Mitchell William Sharp: I was not suggesting that we are going to tax new tires any more heavily. I was suggesting that through administrative practice we might try to tax retread tires at a comparable level, in other words, by administrative practice try to establish discounts that would carry the effective level of tax back to what it would be if custom and stock retreads were sold at a different level of trade, at a lower level of trade, as are new tires when they are sold by the manufacturer.


Marcel Joseph Aimé Lambert: Then I take it the minister would be looking toward administratively bringing the stock retread into the same position as the custom retread; in other words, the sale price would be deemed to be equal to the retreading charge or cost. In the case of the stock retread there would be a figure placed on the value of the retreading, as is done now in the case of custom tires.


Mitchell William Sharp: Broadly speaking I can confirm that this is the intention but I will not be pinned down to fixing administrative rulings in this chamber. Generally this is the intention we have in mind.


Thomas Speakman Barnett: I have listened with interest to the discussion between the hon. member for Edmonton West and the minister and the minister has admitted that he is somewhat on
Excise Tax Act
the horns of a dilemma. I am concerned that this is one of these nuisance situations. Could the minister give the committee an estimate of the number of concerns which are not manufacturers at present so far as the excise tax is concerned but who will in effect become manufacturers as a result of this amending proposal?
I ask this question because it is my impression that there is a large number of quite small concerns, in some cases garages, which operate subsidiary tire retreading businesses and, I presume, are not now treated as manufacturers. Can the minister give an estimate of the number of people who will now qualify as manufacturers, many of them in small communities distant from the administrative centres of the Department of National Revenue?


Mitchell William Sharp: My understanding of the situation is that to a large extent those retreaders who have the necessary equipment will either do custom work or sell their own retread tires. The result of the 1963 amendment was that they shifted over from doing stock retreads to doing custom work because it was not subject to tax. One of the effects of this amendment will be to restore the stock retread business to some extent at least, it having fallen off very drastically as a result of the temptation to ask the customer to bring in his own casing and have it retreaded.
[DOT] (5:30 p.m.)


Thomas Speakman Barnett: Mr. Chairman, there is another question in my mind. As I listened to much of the exchange between the minister and the member for Edmonton West, it seemed that it centred around the question of automobile tires. One of the questions in my mind is, what is the impact of this proposal going to be on what one might call the industrial application of free trade? Take, for example, the situation which easily could arise in my own constituency. If I am correctly informed, in some instances logging concerns operate quite large fleets of vehicles such as logging trucks and other equipment in the woods. They may have an arrangement with a private concern under some sort of contract of sales arrangement to do this work on their behalf. In this case what would be the impact of this proposal? Are the large logging companies going to have to go into the field of doing their own retreading within their operations and if they do so will they be considered as manufacturers of tires? If they do not do so , will the retreader who has

June 23, 1966
Excise Tax Act
been doing their work have to charge them a sales tax and thus, with the resultant increase in the cost push the company out of business?
I can think of one or two concerns in my own area which do quite a large volume of business in retreading tires for this type of industrial vehicle, and probably as an ancillary service they do a certain amount of retail retreading work for individual customers. Could the minister clarify the picture for us? I suppose the same question might arise in other fields of industrial activity or in the case of agricultural producers who operate a good deal of rubber-tired equipment.


Mr, Sharp:: I am sure the hon. member will be pleased to recall that the sales tax is in the process of being removed from logging tires and therefore he will not have any problem to worry about. It will be a much reduced problem in April next year and no problem a year hence. The sales tax does not apply to agricultural implements and so on, so these are not problems of any great importance in the future. The hon. member asked a specific question in respect of whether it might not pay the logging companies to begin retreading their own tires. This would not save them from the tax.


Thomas Speakman Barnett: I did not quite catch the last part of the minister's remarks.


Mitchell William Sharp: I was saying that would not save them from the tax. The tax would continue to be applied even to those who retread their own tires if they are engaged in manufacturing.


Marcel Joseph Aimé Lambert: I know of some tire retread-ers who do extensive work for many mining and oil companies in the Northwest Territories, the Yukon Territory, northern British Columbia and northern Alberta. The type of work is hard on tires and the equipment is big. The minister indicates that beginning next year they will have to pay sales tax only on a reduced basis. They will not have to pay it on the new equipment but when they get it retreaded they will have to pay it on the retreaded equipment.
Unless there is a particular exemption from this section, this section indicates clearly that old tires which are to be retreaded shall bear the tax. There is no saving exemption unless there is an amendment. I am not incorporating all the references from subsequent sections, but I would like to be assured on this point because otherwise we will have to go through this same exercise next year. From

the minister's remarks it seems that the necessary drafting provision has been made. I am also looking at the differential between crown owned companies which do not pay the federal sales tax, such as air lines, and those which do have to pay the sales tax on the retreading of aircraft tires. Where there is discrimination between one corporate industrial or other activity as between a crown corporation and a private business concern, then again I say that to me it seems odd we should now have this extension into the service field, particularly in view of the fact that the minister now suggests they may reduce the incidence in the case of stock retreading and lower it to the level of the sales tax imposed for a service. This is the first time I have known that this is not a manufacturers' sales tax but is now a manufacturers' and service sales tax.


Mitchell William Sharp: Mr. Chairman, may I assure the hon. member that even federal departments pay sales tax. The sales tax is paid by crown companies whether they are federal or provincial. It applies generally and there is no discrimination in that regard. I can also assure the hon. member that the reduction in sales tax is coming into effect in April and I hope will be eliminated the following April. It applies to this type of tire, a rebuilt tire, if used by one of the industries described in schedule V of the present bill. If the hon. member will look at that schedule he will see a reference, for example, under paragraph (e) to gasoline powered and diesel powered self-propelled trucks mounted on rubber-tired wheels for off-highway use exclusively at mines and quarries and, under paragraph (1) to parts for goods described in paragraphs (a) to (k). That would include the tires.


Thomas Speakman Barnett: Mr. Chairman, I was glad to have the minister clarify the one point but I am still a little puzzled just how someone doing retreading internally will be liable for tax under this clause as it is worded. It says that the tax will be payable on a sale price equal to the retreading charge. If somebody is doing the work for themselves, just how does one establish what the retreading charge is? In other words, they are not making a charge. So far as I know the department has not the facilities or the legislative authority to go that far with regard to the internal operations of a company. I may be wrong but I should like this matter clarified.
June 23, 1966

[DOT] (5:40 p.m.)


Mitchell William Sharp: Mr. Chairman, I would refer the hon. gentleman to the Excise Tax Act, section 31(l)(d), which states:
1. Whenever goods are manufactured or produced in Canada under such circumstances or conditions as render it difficult to determine the value thereof for the consumption or sales tax because . . .
(d) such goods are for use by the manufacturer or producer and not for sale: the minister may determine the value for the tax under this act-


Thomas Speakman Barnett: There are a number of sections and some of us do not have the technical assistance the minister has in following all the cross-references within the act.


Mitchell William Sharp: I would not have known this if I had not had some very competent officials in front of me.


[Stage Direction]
Clause agreed to.
Clause 3 agreed to.
On clause 4-Articles progressively exempted.
Alfred Dryden Hales: Mr. Chairman, in clause 4 there is a reference to the removal of sales tax on goods described in the proposed schedule V. I must compliment the minister regarding the words to be added to section 20 to the effect that oleomargarine for consumption in the province of Newfoundland is to be exempted. The public accounts committee has made a recommendation to the house in this regard in its last three or four reports. In the fourth report in 1964 the public accounts committee made this observation:
The committee was concerned to learn that the undertaking given in 1949 that the government would submit to parliament legislation designed to exempt oleomargarine sold in Newfoundland from the federal sales tax in the same manner as basic foodstuffs in other parts of Canada had not been carried out. Instead, the authority provided to the executive by section 22 of the Financial Administration Act had been used to render a tax, applicable elsewhere in Canada, completely inoperative in one province.
The committee stated that it does not consider that section 22 of the Financial Administration Act should be used in this way.
I have read from page 158 of the Auditor General's report for the fiscal year ended March 31, 1964. I am glad to see that this has been taken care of under the Excise Tax Act. I think parliament has been remiss in allowing this situation to exist since 1949 without having amended this act. However, I object to this procedure. I am one of those who feel that exempting one province in respect of a
Excise Tax Act
particular foodstuff that is taxable in another province is not the way to build unity. This is not fair to other provinces.
Not long ago parliament voted $8 million to the province of Newfoundland, and we are doing our part in this way to help that province. Why we should exempt this particular product in one province and not in the others I cannot understand. This seems to be discriminatory.


[Stage Direction]
Clause agreed to.
Clauses 5 to 7 inclusive agreed to.
On clause 8-Schedule III.
Marcel Joseph Aimé Lambert: Mr. Chairman, I have run into some difficulties with regard to certain aspects of schedule III. I am particularly concerned about technical papers which are printed and produced for technical associations. If they are not stapled in a certain way they are subject to sales tax; yet if they are bound in a certain way they are not subject to that tax. In my opinion there is an artificial distinction in this regard and I should like to have some clarification.
Why should there be a distinction between technical papers which are produced by a printing firm for a conference because they are stapled in the corner or stapled and bound down one side? When they are bound down the side they are deemed to be books and therefore not subject to sales tax; yet if they are stapled in the corner they are deemed not to be books and subject to sales tax. To me that is ludicrous. What is being exempted is a technical paper. This is much like saying that if a paper was bound with blue thread it would be subject to tax but if it was bound with red thread it would not be subject to tax. There seems to be a little hometown favouritism here. Perhaps the minister could give us some explanation about this particular matter.
I should like to draw attention to part V and the point that was raised by the hon. member for Wellington South regarding oleomargarine. Let me repeat the remarks I made the other night in respect of natural gas. Natural gas in all its uses should be exempted from sales tax. I think there has been an inequitable and narrow distinction in respect of natural gas not used in internal combustion engines. Turbines have been deemed not to be internal combustion engines. There was inequity in this regard.


Mitchell William Sharp: Mr. Chairman, I have listened with great interest to the comments of the

June 23. 1966
Excise Tax Act
hon. member for Edmonton West. We have not made any changes in this schedule other than to rearrange it in alphabetical order. In so far as the matter about which he has spoken is concerned, I really am unable to give a very satisfactory answer to his question because I am not sure why there is a distinction. Now that it has been drawn to my attention I shall make an inquiry. This has been part of the law for some time and it may require amendment, but I regret that I am unable to satisfy the hon. gentleman's curiosity at this time.
[DOT] (5:50 p.m.)


Thomas Speakman Barnett: Mr. Chairman, I have a question which arises out of the schedule in clause 8. There is a reference under part XIII which explains the item to be deleted from part XIII, that is to say, diesel fuel oil when used in internal combustion engines at mines to generate electricity for use in mining operations and other purposes connected therewith. It goes on to say:
This exemption is now dealt with by the new sales tax exemption.
I take it that is the one in part VI where it says in paragraph 4:
Fuel oil for use in the generation of electricity except where the electricity so generated is used primarily in the operation of a vehicle.
As I read the new item in part VI, there is no restriction to a mining operation as there was in that part, of part XIII which is being deleted. I am interested in knowing why this is so. But what I feel requires some clarification so far as I am concerned is the question of fuel oil for use in the generation of electricity except where the electricity so generated is used primarily in the operation of a vehicle. What is puzzling me is, does this mean, for example, that in the case of the bus service in a city where the power for the buses is generated by the use of diesel oil and then transmitted to an electrically operated motor that portion so used is not exempt from sales tax whereas the rest of it is? Does it also mean in connection with mining that on the portion of the electricity generated by a diesel power plant which is used to operate the underground railway equipment in the mine the operator will now have to pay sales tax?
Could the minister give us some clarification of just what is involved in this particular change? It seems to me a rather strange distinction that fuel oil is exempt so far as the generation of electricity is concerned.


Mitchell William Sharp: The essential point is that what we are exempting is diesel fuel used in the generation of electricity for commercial and industrial uses and so on. It was not our intention to eliminate it in connection with diesel fuel used for transportation. Take, for example, a diesel train. It operates on the principle of generating electricity which drives the engine. It is not our intention to exempt diesel fuel for that purpose. The same comment applies to diesel fuel used for buses that might operate on the same principle. The purpose of this exemption is to apply only to the generation of electricity for industrial, commercial and domestic use.


Thomas Speakman Barnett: In other words, what is covered here is the directly linked diesel-electric operation in a vehicle. Just to satisfy my curiosity further I might inquire whether for this purpose the term "vehicle" includes a ship or a boat.


Mitchell William Sharp: Yes, it includes a ship and an aircraft.


[Stage Direction]
Clause agreed to.
On clause 9-Schedule V.
Marcel Joseph Aimé Lambert: Mr. Chairman, I have one question on clause 9, paragraph (i). It is a question that I raised the other night when we were discussing the resolution, namely, whether pipes, tubing, couplings, casings, fittings, thread protectors and nipples therefor used in the production of oil are covered with regard to the development of the tar sands in the province of Alberta. Will the use of these items in the production of oil under these circumstances be subject to sales tax as against their use in the conventional method of drilling oil wells?


Mitchell William Sharp: I am advised that pipes, valves and fittings used in the production of oil, whether from the tar sands or by the conventional method, would be covered by the lower rate next year and exempted from tax the following year.


Marcel Joseph Aimé Lambert: I want to get that clear, Mr. Chairman. There is a definite exemption at this time with regard to oil wells and natural gas wells. These tar sands are not wells. If there is no other provision whereby sales tax is not leviable on a similar type of equipment used in the production of oil from the bituminous sands, then no development such as the great Canadian oil sands near McMurray could claim to be producing oil from an oil well.
June 23, 1366


Maurice Rinfret: Shall clause 9
carry?


Thomas Speakman Barnett: Mr. Chairman, on clause 9 I have a question arising out of paragraphs (b) and (d) of schedule V. If I understand correctly, the effect of this schedule is to set out the items on which there is to be a graduated reduction in the imposition of the sales tax. As I understand paragraphs (b) and (d) the equipment referred to has to do with exhausting dust and noxious fumes in the one case, and equipment having to do with the carrying of refuse or waste from machinery and apparatus in the other. This would apply to the kind of equipment that is used, for example, in the pulp and paper industry.
This equipment has the effect of reducing the incidence and level of pollution of the air in the one case and of water in the other. I must say that as far as this provision goes, if my understanding is correct, it is in effect an encouragement up to a point to provide this kind of equipment in plants that create pollution in the air and water. If this sort of provision is being made for equipment in both these fields of anti-pollution, am I correct that so far as any rebate of the corporation tax is concerned the concession only applies to equipment in the field of water pollution? I know this was the case last year and it is related, of course, to the income tax bill. I should like to ask why this double provision is provided here when in the other act the encouragement or exemption is applicable to only one field, that of water pollution, rather than both.
[DOT] (6:00 p.m.)


Mitchell William Sharp: I think that this question could be answered a little more satisfactorily when the income tax bill is before us. I take it that the hon. gentleman is not objecting to the reduction of the tax on the equipment mentioned under (b) and (d).


Thomas Speakman Barnett: No, the reverse.


Mitchell William Sharp: Paragraph (d) does not specifically refer to water pollution. Paragraph (b) does refer to exhausting dust and noxious fumes produced in manufacturing operations. Paragraph (d) refers to carrying refuse or waste from machinery and apparatus, which is rather different. It would be necessary, in dealing with the question of pollution, for the department to look at the kind of equipment that was being used for this purpose. I do not believe it is necessarily machinery used in the production of goods. However, if it does
Excise Tax Act
carry away refuse or waste as well as doing something else, then presumably it is under paragraph (d). However, one would have to look at the equipment itself.


Thomas Speakman Barnett: Perhaps I could cite a particular example which happens to be the one with which I am concerned at the moment. I am thinking about the construction of some new pulp and paper mills in British Columbia. Fairly extensive installations are being made for carrying waste liquids from the plants to guard against pollution of streams or, in some cases, of the sea water. This is being done to avoid affecting our salmon fishery adversely.
I know that one firm in my constituency has a plant under construction at the present time and is making an investment which I am told will probably run into millions of dollars for this particular purpose. It consists of an extension of equipment under the water with disposal pipes and that sort of thing designed to carry away the waste. Perhaps the minister could be explicit whether this type of equipment would be covered.


Mitchell William Sharp: I am advised that in making a ruling it would be the system connected with the carrying of refuse or waste that would be considered. If the system involved the carrying away of refuse or waste, and this seems to fit the description given by my hon. friend, then paragraph (d) would apply.


[Stage Direction]
Clause agreed to.
On clause 10-Application and coming into force.
Mitchell William Sharp: I should like to propose an amendment to clause 10 relating to line 47 near the bottom of pages 15. I should like the Associate Minister of National Defence to move the following amendment:
That Bill C-198, an act to amend the Excise Tax Act be amended as follows:
(a) by striking out line 47 on page 15 thereof and substituting therefor the following: "on September 1, 1966".
By way of explanation to the house I would say that the proposed change in the effective date relates to the imposition of sales tax on processed furs at the dressing or dyeing stage. This change is a consequential modification in the present system of taxing furs and has necessitated the preparation of extensive regulations which, because of alterations in the original budget proposals, could

June 23. 1966
Excise Tax Act
not until now be released to the industry. To allow the industry sufficient time to get acquainted with these regulations and permit the Minister of National Revenue to determine the holdings of the industry and the market value of raw furs for tax purposes, it is desirable that the proposed change be postponed from July 1, 1966 to September 1, 1966.


Marcel Joseph Aimé Lambert: I think the minister will agree that these furs do become dear in more ways than one.


Mr. Cadieux (Terrebonne):: I so move.


Maurice Rinfret: Shall the amendment carry?


[Stage Direction]
Amendment agreed to.
Maurice Rinfret: Shall clause 10 as amended carry?
Clause as amended agreed to.


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


Marcel Joseph Aimé Lambert: By leave, now.


Mitchell William Sharp: the third reading of the bill.
Motion agreed to and bill read the third time and passed.



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Deputy Speaker:: It is my duty, pursuant to provisional standing order 39A, to inform the house that the questions to be raised at the time of adjournment tonight are as follows: The hon. member for Prince (Mr. MacDonald), External Affairs-request for federal union of north Atlantic countries; the hon. member for Waterloo South (Mr. Saltsman), Combines-gasoline-request for investigation into pricing, marketing, etc.; the hon. member for Winnipeg North Centre (Mr. Knowles), Old Age Security-inquiry as to further legislation this session.
It being six o'clock, the house will now proceed to private members' business listed on today's order paper, namely, notices of motions (papers), private bills and public bills.


George James McIlraith: I believe, Mr. Speaker, it would better meet the wishes of hon. members if instead of proceeding with notices of motions (papers), we were to proceed with private bills for the purpose of dealing with items 2 and 3 on the order paper, being two bank bills, and items 13 and 14 which are two C.P.R. branch line bills. At the conclusion of dealing with those four bills we will revert to government business. Possibly this arrangement would meet the wishes of hon. members.


Michael Starr: Agreed.


Mr. Deputy Speaker:: Is it agreed that the first business for private members' hour, namely, notices of motions for papers be deferred at this time?


Some hon. Members:: Agreed.


Mr. Deputy Speaker:: We will now proceed with the private bills listed by the house leader.



PRIVATE BILLS


Mr. Bert Leboe (Cariboo) moved: the second reading of Bill No. S-16, to incorporate Bank of British Columbia.
[DOT] (6:10 p.m.)
He said: Mr. Speaker, I will take only a few minutes. I want to thank the house and also the hon. member for Skeena (Mr. Howard) who has relinquished his place in private members' hour to let this bill come forward.
This bill is almost identical to the Bank of Western Canada bill which has already been to the standing committee and has been returned to committee of the whole. There are only one or two variations in this bill and they have to do with the capital stock of the bank, the fact that the head office of the bank will be in the city of Vancouver in British Columbia, that the majority of the shareholders will be residents of British Columbia, and also that the executive officers will be residents of, or have their ordinary residences in, the province of British Columbia.
As this bill is ostensibly the same as the Bank of Western Canada bill I feel we should proceed at once with the passage of second reading. I am sure hon. members are well aware that representations were made to the banking and commerce committee of the other place before the bill came to this house,
June 23, 1966

and the minutes of those proceedings are available to hon. members.
In closing, Mr. Speaker, I should like to suggest to the house that I would very much appreciate it if the bill, by unanimous consent, could pass all stages today because if it were referred to the committee on finance, trade and economic affairs there would only be a repetition of the proceedings in connection with the Bank of Western Canada bill. I might add that I am a member of that committee.


Mr. Jack Davis (Parliamentary Secretary to Minister of Mines and Technical Surveys):: Mr. Speaker, I should like to say a word or two on the bill to incorporate the Bank of British Columbia. A number of members from western Canada have expressed the opinion that we need more banking facilities in western Canada and banking executives who are more aware of the opportunities for investment in British Columbia and indeed in the other western provinces. I think that the Bank of British Columbia can help to perform this function. I think that the new Bank of British Columbia, like the Bank of Western Canada, will provide a more intimate knowledge of the resources of western Canada, of the market opportunities there as well as the export opportunities, as viewed from the vantage point of British Columbia, Alberta, Saskatchewan, Manitoba and, indeed, the Yukon and Northwest Territories.
There have been modifications over the last two years in the terms of the incorporation of the Bank of British Columbia which I think have been all to the good. The original plan was for the province of British Columbia to participate in the equity financing of the Bank of British Columbia. Initially, I believe the proposal was that the Crown, in right of the province of British Columbia, would put up 25 per cent of the equity capital and have voting privileges in porportion to that equity. This figure was later modified by the premier of British Columbia to 10 per cent.
Later the Minister of Finance (Mr. Sharp) gave indications as to the nature of the amendments to the Bank Act as the act applies to the incorporation of chartered banks and their operations in this country, and one of the stipulations which the former minister of finance made over a year ago was that no government, be it foreign or provincial, should own equity shares in a chartered bank in Canada.
Private Bills
I understand that the amendments more recently made in the request for a charter for the Bank of British Columbia have taken this intention of the government of Canada, as expressed by the former minister of finance, into account and that the province of British Columbia does not now intend to own any equity shares in the Bank of British Columbia. In other words, there will be no ownership provisions and there will be no voting stock held by the province of British Columbia in the Bank of British Columbia.
I think this is all to the good. In this country we have a written constitution. We have powers reserved unto the provinces and the remaining powers, many of them very important and vital to the survival of this country as a nation, are reserved unto Canada as a whole.
One of the vital powers of this nation is control over money and banking, currency, the incorporation of banks and so on. I think it would be a pity if the parliament of Canada were ever in any way to delegate unto the provinces, and particularly unto one province, authority over banking or activities relating to banking in the sense of the activities of chartered banks. So that the retirement of the province of British Columbia from voting stock participation in this new chartered bank, the Bank of British Columbia, I think is a laudable move, one which all Canadians interested in the retaining of federal powers by the parliament of Canada and by Canada as a whole will appreciate.
There is another and important aspect to control of any corporation, of course, Mr. Speaker. One aspect is control over voting stock; another and equally important aspect, in the initial stages at least, is the appointment of directors. A list of directors appears in this bill to incorporate the Bank of British Columbia. Several of those directors are employees of the province of British Columbia. They are senior officers in Crown corporations established by the province of British Columbia.
In view of the expressed intention of the Minister of Finance of Canada that no other government, foreign or provincial, should have a substantial say in the policy-making of the chartered banks of this country, I personally wonder whether it is consistent with that intention to have paid officers of a provincial government on the board of directors of any chartered bank in Canada. I realize that this is an interim board, one which will be subject to the intentions of the

June 23, 1966
Private Bills
shareholders of the Bank of British Columbia. I presume that this particular subject will be thoroughly discussed when the Bank of British Columbia bill is referred to the committee of this house which deals with finance. Indeed, I am sure that the matter will be raised. It will be raised because one of the proposed directors is the chief fund raiser for the government party in the province of British Columbia.
To reiterate, Mr. Speaker, I welcome this incorporation. I believe we must incorporate this bank and more banks in western Canada. Certainly I welcome the incorporation of the Bank of British Columbia with headquarters in Vancouver, the directors of which are British Columbians, and with capital raised through private channels in the western part of the country. I am sure the bank will perform a vital function. Subject to the qualification which I raised in respect of the directors, I trust that this bill will pass first to the committee and then, when it comes back from committee, that the Bank of British Columbia bill will receive third reading so it can become one of the most prosperous and useful chartered banks in this country.
[DOT] (6:20 p.m.)


Thomas Speakman Barnett: Mr. Speaker, I agree with the hon. member for Coast-Capilano (Mr. Davis) that the bill before us to incorporate the Bank of British Columbia will serve a useful purpose in the regional development not only of the area from which we come but also as an addition to our banking system. I must, however, express myself briefly in the strongest possible terms as differing with him on the changes which have been effected in this measure since it was first considered in its original form by parliament. Far from these changes being all to the good, in my view they are all to the bad.
I do not want to argue at any length, but I must make it clear so far as I am concerned that the hon. member's argument with respect to control of the banking system and with respect to the province's equity in ownership of the bank is completely specious. I am sorry that the hon. member for Coast-Capilano should continue falling into the error displayed by the former minister of finance in this house. I want to register this view when the bill is before us for second reading. Apart from that I would be happy to see the bill receive second reading so that it could go to committee for study.


Marcel Joseph Aimé Lambert: Mr. Speaker, so far as I am concerned I feel that the details of this bill should not be examined at this time. The question is simple. I think all these incorporations should be given approval in principle unless there is something patently wrong and should be sent to the appropriate committees. In this case the bill should be sent to the committee on finance, trade and economic affairs. Such bills can be examined in the committee. All members of the house who are so minded and prepared to attend, as they ought to be, the meetings of the committee, then have the opportunity to question witnesses at their leisure and to their greater benefit rather than posing hypothetical questions in the house which many times are meaningless. I am therefore in favour of giving this bill second reading at this time to get it off to the committee as soon as possible.


Mr. Ron Basford (Vancouver-Burrard):: Mr. Speaker, as a member from British Columbia I feel compelled to make a few remarks on this bill which has come forward more quickly than anticipated.
I have long been an advocate that we in western Canada and on the Pacific coast need financial and lending institutions which are particularly and peculiarly oriented to the problems that arise in western Canada and on the Pacific coast. In the last parliament, as in this, I have been a supporter of the bill to incorporate the Bank of Western Canada. I believe we need more banks in our country. We need more competition within our banking system. I welcome the opportunity of speaking in support of the principle of a bill which will establish a bank in British Columbia.
I hope that this bill will be sent to the
committee today. None the less I want to put on record a reservation and instruction to the members of the committee, of whom I am also one. I wish to point out some questions that I want to have asked in that committee.
I expressed during the last election campaign, when this matter was raised in my riding, the deepest possible reservations about some of the proposed directors of this bank. I particularly refer to Mr. Einar Gunderson who I suspect will be the president and chairman of the board of the new bank. Mr. Gunderson has had a checkered and colourful political career in British Columbia. At the present time he is the chief fund raiser for the Social Credit party in British Columbia.
June 23, 1966



He is general manager of the provincially owned Pacific Great Eastern Railway.
We saw not too long ago his peculiar relationship with the premier, and in connection with fund raising we are aware of the "Dear Hal" letter which came before the courts of British Columbia. We saw Mr. Gunderson's peculiar relationship with Mr. Harry Stonehill, the United States citizen who was kicked out of the Philippines and subsequently deported from Canada.
During the Easter recess I wrote to the parliamentary agent for this bill in Ottawa pointing out that I had a number of questions I would want to ask when the bill went to committee. I did so in order that material to answer my questions could be prepared in advance and thus the bill would not be delayed in committee because of time being required to prepare the information I wanted.
Because this bill has come before the house sooner than expected I shall not have an opportunity of putting my letter to Mr. Burke-Robertson on record. I simply asked the parliamentary agent to communicate with his principals and to prepare statements, because I want information on all business dealings during the last ten years that each of the provisional directors has had with the provincial government concerned or with any of its agencies. I want to know what appointments, jobs or remuneration, if any, these directors have received or are receiving from the province of British Columbia. I want to know because I suspect that Mr. Einar Gunderson and Mr. William Clark Mearns, who is an executive of B.C. Hydro, are simply puppets for the premier of British Columbia. In the course of the committee hearings I want to determine whether these men in fact are the premier's puppets. I look forward to putting on the record in greater detail, when this bill reaches the committee, the questions I have raised now.
While I support the concept of a bank for British Columbia to serve industry and the country, we all have an obligation to the people of British Columbia who will be investing in this bank and putting their savings into it. We have an obligation to ensure that their investments and savings will be safe. The idea and the concept of a bank for British Columbia is overwhelmingly popular and has support in my province. The many small people putting their money into this bank must be protected and we have an obligation to ensure that this money is properly managed. I am cautioning the committee
Private Bills
at this time to examine this measure and the people behind it to make sure that the savings and property of the people of British Columbia will be adequately protected by the bank's directors.


Mr. J. H. Horner (Acadia):: Mr. Speaker, before this bill is sent to the committee I should like to say a few words with regard to our banking system in relation to the bill.
Coming from a province in western Canada closely associated with British Columbia, I can say at the outset that I am in favour of a chartered bank with headquarters in British Columbia. However, like the hon. member for Vancouver-Burrard I must speak about the directors of this bank. I would rather see the provincial government have a 10 per cent share in the bank, if this is necessary, than have it acquire control of the bank in a roundabout way. In other words, if the province is going to have an interest in the bank it should be so stated.
I spoke on a similar bill that came before the house in which it was provided that the province of British Columbia would have only a 10 per cent share interest in the proposed Bank of British Columbia.
[DOT] (6:30 p.m.)
I said then that a bank charter is a very great privilege to be granted to any group of individuals and that a group granted such a charter should be prepared to work for the general advantage of Canada. A provincial premier certainly has responsibility for developing his province and providing for its people, and if he feels that an interest in a bank would help him to achieve those ends I cannot see why we should oppose an application along these lines.
However, as suggested by the previous speaker there is a close connection between the government and the directors set out in this bill. This makes one suspicious and I certainly hope that when the bill is sent to committee the members of that committee will carry out a thorough examination in this connection. Most hon. members do not like to see deals made under the table which might lead one to suspect there is or could be too close a connection. Before this parliament awards a charter to any group of individuals, careful consideration must be paid to their character, general worthiness and capacity to operate a bank.
It is interesting to note that last year there were three applications for charters on the order paper. One applicant is apparently

June 23, 1966
Private Bills
waiting until the revisions have been made to the Bank Act. This may be the proper attitude to take. Why apply for a charter before the act has been amended? Would it not be better to wait until we see the proposals for the revision of the Bank Act so that we will know exactly what we are granting?
A bank charter in this country is a privilege, and to appreciate this one must look at the banking situation over the years. Very few charters have been granted, none, in fact, since the thirties or a little earlier. But during the same period the house has dealt with many applications by finance companies, trust companies and people who in the minds of many might be classed as loan sharks. I do not think this is good for Canada. These loan companies do not need a charter from this house. Their accounts need not be subjected to federal scrutiny. Some hon. members might feel we should grant every application for a charter that is made. If we did we might find ourselves in the same position as many of the provinces with too many finance companies on shaky ground.
It is therefore our duty to give close scrutiny to every application for a charter. There should also be a careful examination of the worthiness and capacity of the directors, particularly as to their intent to work for the general advantage of Canada. A charter is a licence to operate in Canada as a private industry but with special privileges. We need only remember that banks today have a right to create money. That is what our banks do. For every dollar they have on deposit they can lend $20 or $30. This is a great privilege for a private business and we should make certain that the general intent is to work and serve for the advantage not necessarily of the board of directors or of the shareholders but of Canada as a whole. I hope all hon. members, particularly those who sit on the finance committee, will bear this in mind when they come to examine Bill No. S-16.
The Bank of British Columbia should certainly operate for the advantage of British Columbia. But it ought also to operate for the general advantage of Canada. I am somewhat concerned about this aspect. If the province were openly to own 10 per cent of the bank, I would know it might have 10 per cent of the influence. As it is, one does not know whether the province would have 50 per cent or 51 per cent of the influence, whether it would operate solely for the advantage of the

province, with its tremendous real and potential wealth in oil, timber and mineral resources, or whether it would work for the general good of the people of Canada.
I will say nothing further. I conclude by expressing the hope that the committee will examine this bill thoroughly and assess the directors carefully on the basis of the points I have stressed-worthiness, general intent and capability.
[DOT] (6:40 p.m.)
[Translation1


Mr. Henri Laiulippe (Compton-Frontenac):: Mr. Speaker, I am pleased to say that our group accepts this bill in principle; we are happy about its introduction and the fact that it is submitted by a province such as British Columbia.
Once this bill has been referred to the committee and passed by the house, it will be the first time in the history of parliament that a province has the right to operate a bank. That bank will belong to the province of British Columbia, if I understood the bill well.
Mr. Speaker, the provisions of the bill are not what we would like to see; we would like a much more flexible bill, granting much more common and stable rights, in short, rights which would give the province more powers than those which the bank exercises at the present time. But I know that British Columbia must comply with the government's requirements and accept the same conditions as the other banks.
The Bank Act will be the same for British Columbia as for any bank in Canada. But it is a step forward in the economy of the monetary and banking systems. If there is in that province capital to put at the disposal of the citizens, we must not be against the fact that such capital operates through a bank and that Canadians can benefit more therefrom.
The chartered banks are the creatures of the Canadian parliament. They literally owe their existence to it. They have to come to that same parliament every ten years to renew their charters without which they would stop existing. They get all their rights and privileges from parliament, even the exclusive right to create and issue money. That is so true that if the governmeht, as the sovereign body representing the whole nation, needs money in addition to what it gets from taxes or loans on the savings of the people, it must bow before those creatures.
June 23, 1966

Mr. Speaker, when that happens, it becomes obvious that the chartered banks are not constituted as they should be, because if the government is able to give them all that authority, it should at least hold the supreme authority and not be forced to go down on its knees before those institutions when it needs credit to finance the country. That is what we are against. We object to the fact that the government is forced to go down on its knees before the chartered banks and ask them to lend it money or credit to administer the business of the country when it has given them the exclusive right to create money and credit.
If the government can give these institutions exclusive rights, it can surely hold on to sovereign rights it has on institutions of its own creation and on the creation of money and credit in Canada. It is always a question of money, of shortage of money, when governments need credit. Not a single government in Canada, I would even say in the world, can create its own credit. Development of our various natural resources, construction of bridges, roads, institutions, universities, colleges, everything that is publicly-owned, should be financed and controlled by the sovereign government or a sovereign and independent commission of the government which would have control over money according to the ability of our citizens to develop our country.
There are many physical assets in this country which we could develop. The men are waiting; the institutions are waiting. Canada has a considerable number of engineers, qualified men capable of undertaking all those things Canadians absolutely need. We cannot do it because we operate within the money available, and we are too deep in debt. The federal and provincial governments are too deep in debt; the municipal governments and school boards are too deep in debt. So, the country goes undeveloped; we eschew giving work to our people and initiating what could be done in such a vast country as Canada.
There are a million things we could do: We could build more bridges and roads, as long as the need is being felt and as long as there are men and materials available. We have to deprive ourselves because we lack the necessary credit.
We support the granting of this charter to the Bank of British Columbia under government control. We want every province to progress. And we wish the same thing to the
Private Bills
other provinces and we hope that, in the future, there will be improvements, and amendments to the Bank Act and to the constitution if necessary, so that the sovereign government may take such control and exert such sovereignty.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the standing committee on finance, trade and economic affairs.
George James McIlraith: Mr. Speaker, I wonder whether it would be agreeable to hon. members to call the two C.P.R. railway branch line bills together?



CANADIAN PACIFIC RAILWAY COMPANY

Mr. R. J. Orange (Northwest Territories) moved: the second reading of Bill No. S-32, respecting Canadian Pacific Railway Company.


Mr. Deputy Speaker:: Is it the pleasure of the house to adopt the said motion?


Frank Howard: Mr. Speaker, before the motion is adopted or the sponsor speaks to the bill, could we have an understanding as to what was in the mind of the government house leader when he proposed that we take Bills S-32 and S-4 together? Upon their completion would it be his thought that we would revert to government orders?


George James McIlraith: Yes, we would revert to public business at the conclusion of these two railway bills.
Motion agreed to and bill read the second time.


Robert John (Bud) Orange: the second reading of Bill No. S-34, respecting Canadian Pacific Railway Company.
Motion agreed to and bill read the second time.


George James McIlraith: Mr. Speaker, instead of referring these two bills to the standing committee on transport and communications, I wonder if it would be agreeable to the house to deal with them in committee now?


Robert Norman Thompson: Mr. Speaker, I would agree with that.


Frank Howard: It is highly unusual.


Some hon. Members:: Agreed.

June 23. 1966
Private Bills


Mr. Deputy Speaker:: By unanimous agreement the house will now go into committee of the whole on Bill S-32.
The house in committee on Bill No. S-32, respecting Canadian Pacific Railway Company-Mr. Orange-Mr. Batten in the Chair.
On clause 1-Line of railway authorized.


Frank Howard: Mr. Chairman, for the sake of posterity and in order that those who read the record may come to some conclusion as to what we are doing, I think it would be advisable if the sponsor of the bill would place on the record what is contemplated by this bill.
[DOT] (6:50 p.m.)


Robert John (Bud) Orange: Mr. Chairman, as hon. members are aware, a railway company must come to parliament in order to obtain authority to construct a branch line in excess of six miles in length. The Canadian Pacific Railway Company is proposing to build a branch line a distance of approximately 11 miles in Saskatchewan in the vicinity of Fox Valley. Fox Valley is located on the C.P.R.'s Burstall subdivision about 70 miles west of Swift Current. The branch line will be built to a property owned by the Saskatchewan Minerals Corporation. The Saskatchewan Minerals Corporation owns a deposit of sodium sulphite estimated at nine million tons at Ingebright Lake. It is estimated that the plant which presently is under construction will commence operation some time this fall. It is for this reason it is urgent that the house give approval to this particular bill. In this area the government of Saskatchewan, in addition to the Saskatchewan Minerals Corporation, has extended rights to two other private companies to develop sodium sulphite deposits and subsequently to build plants in the area.
This is an important economic project both to Saskatchewan and to Canada as a whole. The construction of this line is in the best interests of the province and the country.


Frank Howard: Mr. Chairman, before this clause carries I should like to say that in matters such as this it is usual for the government to select from among its own members someone from the particular province to move such a bill. Could we have an explanation from the government why it did not select one of its members from Saskatchewan to sponsor this bill?


Stanley Ronald Basford: Mr. Chairman, the house has been very co-operative with the Canadian Pacific Railway in dealing with these two bills and I trust the members interested in this legislation will be equally co-operative when it comes to dealing with Bill C-206 to remove the Kitsilano trestle.


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


Some hon. Members:: By leave, now.


Robert John (Bud) Orange: the third reading of the bifi.
Motion agreed to and bill read the third time and passed.
The house in committee on Bill No. S-34, respecting Canadian Pacific Railway Company-Mr. Orange-Mr. Batten in the chair.
On clause 1-Line of railway authorized.


Robert John (Bud) Orange: Mr. Chairman, the purpose of this bill is similar to that of the previous bill. It is intended to construct a small branch line in the province of Alberta in the vicinity of Didsbury. The length of the line will be 16.5 miles and it will extend to the Canadian Superior Oil Limited plant. As in the last case it is important that this bill be considered urgent.


Robert Norman Thompson: Mr. Chairman, because the spur line which is proposed in this bill is within the confines of my constituency I think I should say a few words about it. This branch line of 16.5 miles in length is to run from the town of Didsbury west to the Canadian Superior Oil plant at Harmatton. This line is vital for the transportation basically of sulphur which is one of the byproducts of that plant. Therefore, the proposal that the C.P.R. build this line is important in respect of the ability of that plant to transport its products.
There has been some controversy with regard to the location of this line. The suggestion was made that it run from the branch line from Carstairs out from Cremona and north to the plant rather than run west from the town of Didsbury. For the record I should say that while the plan has been opposed by
June 23, 1966

the county council of Mountain View, the town of Didsbury and the local chamber of commerce have given support to the location which has been selected for the right of way.
While this branch line is only proposed to be 16.5 miles in length, one day before too long it will be extended to the boundary of Banff national park where at Panther Mountain there is one of the largest deposits of sulphur in the world. Therefore this line is but a forerunner of an extension which will take place in the not too distant future.
In respect of Bill S-34 there is just one area where I express some concern and that is that the Canadian Pacific Railway in its public relations program could have done a much better job in dealing with the public and settling the fears with regard to the best route for the railroad. I will not go into that in detail at this time. 1 should like to say to the members of the committee that this is a very important branch line and we will appreciate it if the bill can be cleared through the house at this time.


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


Some hon. Members:: By leave, now.


Robert John (Bud) Orange: the third reading of the bill.
Motion agreed to and bill read the third time and passed.


Mr. Deputy Speaker:: Order. The hour for the consideration of private members' business has expired.


George James McIlraith: Mr. Speaker, there is a C.N.R. resolution preceding a bill to which I referred earlier in the day. Because it is a C.N.R. bill and the provisions of funds is involved it requires a resolution stage. I wonder whether it would be agreeable to call the resolution so that the bill could be printed, distributed and dealt with later in the session.


Frank Howard: Mr. Speaker, the hon. member for the Northwest Territories has had remarkable success with railway bills today. Perhaps we should ask him to sponsor this measure.
Canadian National Railways [DOT] (7:00 p.m.)


Mr. Deputy Speaker:: Order, please. Is it agreed unanimously that the resolution in respect of C.N.R. branch lines referred to by the Minister of Public Works be considered now?


Some hon. Members:: Agreed.



CANADIAN NATIONAL RAILWAYS


[Stage Direction]
Hon. John N. Turner (for the Minister of
Transport) moved that the house go into committee to consider the following resolution:
That it is expedient to introduce a measure to authorize and to provide for the construction by Canadian National Railway Company of a line of railway in the province of Manitoba from the vicinity of Stall Lake on the Chisel Lake subdivision of Canadian National Railways in a northeasterly direction for a distance of approximately 12 miles to a point in the vicinity of Osborne lake in The Pas mining district of that province, and of a line of railway in the province of Saskatchewan from the vicinity of Watrous on the Watrous subdivision of the said railways in a northeasterly direction for a distance of approximately 18 miles to a point in the vicinity of Guernsey in the Regina mining district of that province, at a total expenditure of $3,400,000, not to be exceeded by more than 15 per cent, and to authorize and to provide for temporary loans to the company out of the consolidated revenue fund toward the cost of construction.
Motion agreed to, and the house went into committee, Mr. Batten in the chair.
Mr. Turner:: Mr. Chairman, this resolution combines in the standard form a request for authorization for the Canadian National Railways to build two branch lines, the first in the province of Manitoba from the vicinity of Stall lake on the Chisel lake subdivision of the Canadian National Railways in a northeasterly direction for a distance of approximately 12 miles to a point in the vicinity of Osborne lake and the premises of Hudson Bay Mining and Smelting Company. The purpose is, of course, to allow the development of the established reserves of copper and zinc in the area and transport it out.
The bill will provide for the usual traffic guarantee to the railway, and the parliament of Canada is requested to authorize a temporary loan to the company out of the consolidated revenue fund-this is the usual practice-and to guarantee the funds of the railway for the line.
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June 23. 1966

Canadian National Railways
The second part of the resolution deals with another branch line, this time in the province of Saskatchewan, from the vicinity of Watrous on the Watrous subdivision in a northeasterly direction for a distance of approximately 18 miles to the site of a shaft and processing plant of Alwinsal Potash of Canada Limited. This will allow the development of one of the new strikes of potash in the province of Saskatchewan. Again when the bill is circulated it will contain the usual provisions. We have already passed one of this kind this session.
When this bill comes before the house the Minister of Transport or myself will be prepared to give more detail as to the locations, the estimated capital cost and the resources being developed, as well as the time required for construction of each of these branch lines. One of us will state generally the traffic involved and the nature of the resources to be developed. I would therefore ask the committee to adopt the resolution so we can introduce the bill.


Mr. Scott (Danforth):: Mr. Chairman, on behalf of this group let me say that we are prepared at this time to reserve comment until we reach the first reading of the bill.


Herman Maxwell Batten: Shall the resolution carry?


Mr. Peters:: Just before it does carry, Mr. Chairman, I should like to ask whether the government has given consideration to these two lines, particularly the second one from Watrous to the new potash development, in relation to recent pipe line developments. In view of the fact that potash can be transported by pipe line rather than just by rail, I am wondering whether any consideration has been given to the development of a transportation policy. This new mode of transportation, that is by pipe line, is obviously geared to the province of Saskatchewan because of the development of potash and the fact that it is one commodity that can be transported by pipe line.
I am particularly interested in this subject because of the fact that in Ontario there have been developed branch line pipe line carriers, and there is contemplated a change in transportation systems in respect of certain commodities. Perhaps we should have a transportation policy which takes into consideration the new means of transportation.


John Napier Turner: Mr. Chairman, I may say that the suggestion of the hon. member is a pertinent one and that the Department of

Transport is looking into the system of transportation of solids through pipe lines. In this particular case the company felt that since it was able to obtain a 15 year guarantee of traffic from the company, during which time the cost of the line would be completely amortized, there was no uneconomic factor involved.
Resolution reported and concurred in.
Mr. Turner (for the Minister of Transport)
thereupon moved for leave to introduce Bill No. C-210 respecting the construction by Canadian National Railway Company of a line of railway in the province of Manitoba from the vicinity of Stall lake on the Chisel lake subdivision of Canadian National Railways in a northeasterly direction for a distance of approximately 12 miles to a point in the vicinity of Osborne lake in The Pas mining district of that province, and of a line of railway in the province of Saskatchewan from the vicinity of Watrous on the Watrous subdivision of the said railways in a northeasterly direction for a distance of approximately 18 miles to a point in the vicinity of Guernsey in the Regina mining district of that province.
Motion agreed to and bill read the first time.



FINANCE


Mitchell William Sharp: that the house go into committee to consider the following proposed resolution:
That it is expedient to introduce a measure to authorize payments to the provinces equal to 95 per cent of that part of the income tax paid under part I of the Income Tax Act by certain corporations in respect of income earned after 1965 that is attributable to the gross revenue of such corporations from the distribution and sale to the public in the province or the generation and sale in the province for distribution to the public of electrical energy or steam, or from the distribution and sale of gas to the public in the province; and to provide that an amount paid under the said measure that is paid or otherwise credited by the province to such a corporation for the use of that corporation shall be exempt from income tax.


[Stage Direction]
Motion agreed to, and the house went into committee, Mr. Rinfret in the chair.
Mitchell William Sharp: Mr. Chairman, this resolution seeks the permission of this house for the introduction of a measure to provide for the payment to the provinces of 95 per cent of the income tax paid to the federal government by certain public utility corporations on that part of their income arising from their
June 23. 1966

public utility operations. An arrangement was made in 1947-and has been renewed periodically by succeeding governments-under which 50 per cent of this federal tax has been transferred to the provinces.
[DOT] (7:10 p.m.)
In July last year the government undertook to increase the transfer from 50 per cent to 95 per cent and hon. members are being asked by this resolution to carry out this undertaking of the government of Canada.
The transfer to the provinces of a portion of the federal income tax paid by electrical, gas and steam utilities was instituted in 1947 as an integral part of the Dominion-Provincial Tax Rental Agreements Act of that year. Under that legislation Canada agreed to pay to the provinces for the five-year duration of the agreements one-half of the federal income tax paid by these utilities subject to certain minor adjustments. This sharing arrangement was continued for a further five years by the Tax Rental Agreements Act, 1952, and on the conclusion of that agreement Canada undertook at each subsequent quinquennial revision of the fiscal arrangements to continue the 50 per cent sharing by an item in the annual estimates.
In the estimates tabled in this house on February 14, 1966, there will be found under vote 5 of the Department of Finance a request for authority to share with the provinces the income tax paid by these utilities in 1964. It has, of course, been necessary over the years to adjust the regulations governing the 50 per cent sharing to take into account such changes in fiscal arrangements as the 1962 changeover from tax rental to tax collection agreements.
In addition to providing in 1947 for the payment to the provinces of one half of the income tax paid by certain privately owned public utilities, the government of Canada provided in the following year for a tax concession to these corporations. In 1948, at a time when the general tax rate was 50 per cent of taxable income, the rate on the taxable income of these public utilities was reduced to 43 per cent. While the 7 per cent rate advantage has been reduced, these corporations remain subject to a corporate income tax rate that remains 2 per cent less than the general 47 per cent corporate tax. This provision is contained in section 85 of the Income Tax Act. I draw this section to the attention of hon. members because many of the provisions of the bill which it is my intention to
Finance
introduce following the acceptance of this resolution are modelled on section 85 of the Income Tax Act.
The decision to increase this transfer to the provinces from 50 per cent to almost 100 per cent of the federal tax was in response to pressing representations from several provinces. Prior to and at the federal-provincial conference of prime ministers and premiers held in July last year many provinces argued that privately owned gas and electrical utilities were still at a competitive disadvantage vis-a-vis publicly owned utilities, and that this disadavantage inhibited the private companies from developing new power sites necessary for Canada's requirements. They also expressed concern that because of this differential treatment the customers of the privately owned utility companies were similarly placed at a disadvantage. Furthermore, it was argued that this disadvantage was felt most in those provinces which depended on private companies for the generation or distribution of electrical energy and gas and that the continuation of this disadvantage would oblige the provinces to consider the nationalization of these utilities. The government of Canada was obliged to acknowledge, after careful consideration, the force of the provincial argument as to the effect upon the consumers of electrical energy and gas of the differential treatment of utilities.
In announcing the policy decision to increase the tax transfer to the provinces my predecessor, the hon. member for Davenport, indicated that while the federal transfers to the provinces would continue to be unconditional he expected that the provinces would ensure that the benefit of the increased transfer would be passed on to consumers in the form of reduced rates.
Before speaking further to the intent of this resolution I should like to explain the 95 per cent figure. Hon. members may wonder why the government did not undertake to transfer 100 per cent of the federal tax to the provinces. The reason is that the federal government needs to retain some 5 per cent of the federal tax revenue to compensate it for the dividend tax credit it continues to give to shareholders of these Canadian corporations.
The public utility corporations to which this resolution applies are those whose main business is the distribution and sale to the public of electrical energy, gas and steam or the generation and sale for distribution to the public of electrical energy and steam. It is

June 23. 1966
Finance
the federal income tax paid by these corporations that this resolution proposes to transfer to the provinces. Hon. members may find it helpful if I were to refer to the relevant provisions of the Income Tax Act.
Part I, section 85, of the Income Tax Act, to ensure that the 45 per cent rate applies only to corporations that are genuinely in the public utility field and does not extend to corporations that may, incidental to their main activity, generate or sell electrical energy, gas or steam, requires that a corporation to be eligible for the lower rate must receive more than one half of its total gross revenue from such distribution and sale or generation and sale. Similarly, part I of the Income Tax Act, to ensure that the lower rate of taxation does not apply to corporations that are merely providing electrical energy, gas or steam mainly for subsidiaries or parent companies, and are not serving the public, requires that a corporation to be eligible for the preferred tax rate must receive more than one half of its gross revenues from sales to persons with whom it deals at arm's length.
The resolution now before this house seeks to secure the consent of hon. members to the introduction of a bill which will incorporate conditions analogous to the above provisions in part I of the Income Tax Act. I should further explain that where a corporation qualifies under the Income Tax Act for the preferred rate, that rate applies only to that portion of the corporation's income that arises from its distribution and sale or generation and sale to the public. It is 95 per cent of this portion of the qualifying corporation's federal tax that this resolution seeks the permission of the committee to pay to the provinces. When the 95 per cent share of the federal tax is determined, that amount will be paid to the province or provinces in which the distribution and sale or generation and sale to the public is made.
The resolution also proposes that the 95 per cent sharing arrangements shall apply to the income tax paid by the eligible corporations on income earned after December 31, 1965. It is the government's intention to continue to apply the present 50 per cent sharing arrangements to the tax paid on income earned up to and including December 31, 1965. As I previously stated, the estimates for 1966-67 tabled in this house on February 14 contain a provision to cover taxation years ending in the 1964 calendar year, and authority will be requested in the 1967-68 estimates to continue the existing arrangements in respect of the

1965 calendar year. Hon. members will note that there is a delay of approximately two years between the taxation year in which the profits are earned and the year in which the 50 per cent share is paid to the provinces. Aside from the time lag allowed all corporations in the filing of their tax returns, further delay is occasioned by the need to identify those corporations in respect of which the 50 per cent sharing arrangement applies and then to re-process their tax returns to determine the amount of tax revenues to be shared and the province or provinces to whom payment is to be made.
Mr. Chairman, in concluding my remarks, I should point out that when the government of Canada undertook to pay to the provinces 95 per cent of the federal income tax paid by these public utilities, it attached no conditions to the payments. My predecessor, the hon. member for Davenport, did express the expectation, as did Hon. Donald Fleming when in his 1961 budget speech he announced the continuation of the half-sharing arrangements, that the provinces might wish to use the additional revenue for the benefit of the industry and its customers. I also hope that the provinces will use the federal tax transfer for the benefit of the industry and its customers.


Reid Scott: Mr. Chairman, does the minister have in mind including a clause in the bill which will ensure that the savings made by the companies are passed on to the consumer in the form of lower rates?


Mitchell William Sharp: No, Mr. Chairman; these are unconditional payments.


Marcel Joseph Aimé Lambert: Mr. Chairman, I am very
pleased to see this resolution on the order paper. I can say that I thoroughly approve of it. I recall that in 1963, 1964, and I believe in 1965 I and other Alberta members in particular made representations in this regard, because of all provinces in Canada the province of Alberta will be affected, generally, more than any other. This is particularly the case with regard to electric power because apart from the municipal generation plant in the city of Edmonton, most of the electric power produced and consumed in the province of Alberta is by private companies.
[DOT] (7:20 p.m.)
We also have the distribution of natural gas in Alberta, so that province is very conscious of the sources of its power, just as any other province would be. It has always
June 23. 1966

been felt that the incidence of this income tax on Alberta Power Corporation placed the province at some disadvantage in competition with other provinces for the location of industry based on favourable power rates, because these other provinces had nationalized their hydro, in particular. As a matter of fact, I think it is common knowledge that Premier Bennett in 1961 nationalized B.C. Electric because he had not been able to get this particular increment from 50 per cent to either 95 per cent or 100 per cent, which he felt was his due. Well, the people of British Columbia now have a nationalized hydro system whether they like it or not, and they can thank Premier Bennett for that. This was one of those great whirlabouts. He was for free enterprise and private ownership, except where it suited his particular purpose.
I am glad to say that in so far as the province of Alberta is concerned, the wishes of the Minister of Finance and his predecessor in regard to this have been passed on by the provincial government. After all, the province need pass on these benefits to no particular company, and any particular company need not pass them on to its customers. The end result, however, so far as Alberta is concerned, has been that the province, after some hesitation but not long, did agree that all benefits derived by the province as a result of this agreement with the federal government, and which we are now asked to approve, would be passed on to the power companies concerned. This same, shall we say, message has been passed on to the companies. I am sure that this will result in either an actual reduction of rates or will prevent-and this is what is vitally important as well-predictable applications to the various utility commissions for increases in rates. I know one private company is on its third wage increase this year as a result of the incidence of the Canada Pension Plan and a number of other things. These costs cannot be paid out of thin air. They have to be paid ultimately out of earnings based on their utility rates, and in order to get an increase in those rates these companies have to go before their respective utility commissions. This provision will help defer some of the increasing expenses of power corporations.
We will be interested in seeing just what the provisions will be in the bill. I know that there are a number of provinces, particularly those which do have natural gas distribution companies, which will be affected by this provision. Others, I believe Nova Scotia is
Finance
likely the only other one, will have privately owned power systems and they, too, should benefit. I agree with the minister that the house should accept this resolution and that we should see the bill as soon as possible.


David Lewis: I rise, Mr. Chairman, to oppose this resolution and its principle as being, in my opinion, contrary to the best interests of the people of Canada in all parts of this country. I think it is a wrong principle, although it is already on the statute books, because constantly, in my experience, private corporations that function in the same field as public enterprise are always complaining about the fact that they have to pay taxes and public corporations do not. I have heard that complaint by private corporations in the field of transportation and in the field of communications where there are publicly owned enterprises.
Furthermore, Mr. Chairman, I think the
time has come for us to recognize that even though it is up to the people in each province to do as they pleased, all public utilities ought to be publicly owned. Whatever the reason may have been for Premier Bennett of British Columbia to bring the corporation there under public ownership, he did a service to the people of his province, just as the Lesage government did for the people of Quebec by bringing Hydro Quebec under public control. I do not believe this parliament ought to do anything to encourage a continuation of the private exploitation of basic public utilities that are the foundation of all economic and industrial activity in every part of the country.
My third point-I am putting them briefly because I do not want to make a long speech-is that I do not accept that the hope the minister expressed will be realized. In fact, if I understood his explanation correctly, he will make these rebates to the provinces concerned unconditionally. The provinces concerned may or may not hand them on to private corporations. I have no doubt that they will, but of course they are not obliged to do so. If he makes these rebates on the basis of tax arrangements with the provinces, I am sure he will agree with me that is the worst possible way in which to deal with so important a matter as the division of tax revenues. If he is making this rebate to the provinces to help the people concerned obtain cheaper electricity or cheaper gas, there is simply no guarantee whatever that will occur. The province may hand that money over

June 23. 1966
Finance
to the corporation but there is no guarantee that the corporation will in turn hand the benefit over to the consumers of the utility. If they don't, Mr. Chairman, parliament will have been responsible for adding to the very large profits now made by corporations who are crying tears about the extra federal income taxes they have to pay.
I see no reason why this parliament and the people of Canada as a whole should give up some of the revenue collected from corporation income tax in order to favour the private corporations' profit margin. There might be some sense to it if there were some way of guaranteeing that these benefits would be handed over to the consumers by the private utility corporations. I have no guarantee whatever that that will be done, nor has the minister. He expresses the hope that will happen. He expresses the hope that provincial authorities concerned will express the hope that will happen. This is about where he is and about where hon. members of this house are with regard to the likelihood of these benefits being handed on to the consumers.
As I suggested, Mr. Chairman, over most of the world and over most of Canada, the overwhelming majority of the units concerned with the manufacture and distribution of electricity and gas are now under public ownership. I know gas is not to the same extent, but it will be in the not too distant future, and that is where it ought to be. Public utilities ought to be under the control of the people, through their legislatures and parliament.
[DOT] (7:30 p.m.)
I oppose with all the vigour I can this added piece of pie to corporations which are already exploiting the natural resources of this country to their benefit, and who can afford to reduce their rates to compete with public corporations simply by reducing the cut of profit which they now get. My memory from looking at the figures is that private utility corporations are doing very well after taxes despite the fact that they pay this income tax. I see no reason why this parliament and the people of Canada should give them an additional handout.


Marcel Joseph Aimé Lambert: May I ask the hon. member a question. Is he aware that in allowing public utilities in, say the province of Alberta, of the hydro or gas type, to set their rates the public utilities commission must take into account such type of income as they would be

getting and therefore the result is that there is no increase in rates?


David Lewis: I am well aware of the workings of public utilities commissions-not as well aware as I should like to be, and I am sure my hon. friend is not as knowledgeable in the field as he would like to be. However, I also know that in all these regulatory situations the accounting, the auditing of balance sheets and the method of calculating the cost become a matter of great and long debate and argument. This has been the case before the board of transport commissioners with regard to the permissible rate of earnings over the years for the C.P.R. It has also been the case with public utilities commissions, about which I have read and know a little about the facts. I am not at all certain that the expressed desire of the Minister of Finance will be realized by the people with whom we should be concerned here.


Bert Raymond Leboe: Mr. Chairman, only a brief word in connection with this resolution. First of all, I want to say that I am not in agreement with the last speaker. I am not going to cry wolf before the wolf is actually with us. I believe that this resolution comes a number of years late. At the same time I agree that it is better now than never.
In the province of British Columbia, B.C. Electric, as has already been stated, was taken over by the province. The reason was that a situation had arisen in the province of British Colubia which would eventually cause the power commission at that particular time to put itself in such an advantageous position vis-a-vis B.C. Electric that in the final analysis B.C. Electric would have to go out of business owing to the differential in the tax structure between the publicly-owned B.C. Power Commission and B.C. Electric.
It was obvious, Mr. Chairman, that in time B.C. Electric would be in the position where it would have to bid for blocks of power, and the B.C. Hydro and Power Authority, as it is now, then the B.C. Power Commission, would be in a position to underbid B.C. Electric. As far as what has happened in British Columbia as a result of this situation is concerned, this could have happened either to the privately owned or the publicly owned utility.
The previous speaker was asked a question about public utilities commissions. These commissions are set up to regulate rates. I have no doubt in my mind whatever that when the tax rebate is received, the public
June 23, 1966	COMMONS
utilities commissions, taking that rebate into account, will see that it is passed on to the consumer. If it is not passed on to the consumer, the utility will be running the risk of the province taking it over anyway. The provincial governments which are responsible-and we have them all across Canada- look very carefully at this particular aspect of the tax structure.
I am in favour of this resolution, Mr. Chairman, and I speak now on behalf of the other members of this party. We hope that when the time comes for this rebate to go into effect the province of Alberta will expand in this field in the same way as has the province of British Columbia, whose expansion is second to none on the North American continent.
In the event of the rebate being passed on to the consumer there is no doubt in my mind that the industrial expansion of the province of Alberta will be affected in particular, this being one province wherein there is a private source of power. The terrific expansion experienced in British Columbia will no doubt be experienced even more so now than has been the case in the past in the province of Alberta.


Maurice Rinfret: Shall I report the resolution?


Some hon. Members:: Agreed.


David Lewis: On division.
Resolution reported and concurred in.
Mr. Sharp thereupon moved for leave to introduce Bill No. C-211, to authorize the Minister of Finance to transfer to the provinces the proportions of the income tax payable by certain public utility companies.
Motion agreed to and bill read the first time.



DAIRY COMMISSION


John James Greene: the second reading of Bill No. C-205, to provide for the establishment of a dairy commission for Canada.
He said: Mr. Speaker, I think I said pretty well all I have to say, in a general sense, in respect to this bill on the resolution stage. I will be happy at this time to answer any queries that hon. members may have with respect to the particular clauses of the bill.
DEBATES	6827
Stabilization of Milk and Cream Prices [DOT] (7:40 p.m.)
I may say, again in the same vein as I spoke on the resolution stage, that this is but part of the broader prospect of farm legislation which we hope and believe will bring the farmer into a more equitable position in the economy respective to his counterpart in industry who, during the past few years, with the industrial progress which has been made in this country, has moved ahead economically at a very rapid pace. On the other hand, I think the farmer has been equally productive. Statistics indicate that farm production has increased on a per capita basis at an even more rapid rate than industrial production in this age of automation. Despite that fact, I do not think that the farmer's economic position has kept pace with his productivity as a producer under our economic system. We have all heard many times in the past few months that the farmer finds himself caught in this price-cost squeeze where, even though he has become much more productive, the costs of the things he must buy have gone ahead far more rapidly than the price he can receive for his produce. This may be inevitable in a society that is progressing rapidly industrially. We have come up very rapidly industrially. Costs of industrial production go up. It is all to the good that there be higher wages in industry and higher returns for industry. However, on the one hand the farmer is caught by the fact that he must pay the prices that are concomitant with this fast development in the industrial world, while at the same time the price of the food he produces-some of which is sold domestically, and other of which, particularly in respect of that from western Canada which finds its way to world markets-has not kept up with the costs of the things that he must buy.
I think we would all agree that the farmer's income has not kept pace with that of his industrial counterpart. At the same time, two or three decades ago Canadians generally had not achieved the standard of living that they have today. Today we accept as necessities things that 30 or 40 years ago might have been looked upon as luxuries.
But the farmer, caught in this cost-price squeeze also, as are other citizens, expects greater social and economic returns from the fruits of his endeavour. He wants to have the things that his city counterpart has, and there is no reason why he should not have those things that are looked upon as the just rights and deserts of citizens today. I think the
Stabilization of Milk and Cream Prices farmer, caught in the cost-price squeeze, is not enabled to have the income which is comparable to his city counterpart's, as was the case pre-war. On the other hand the farmer is expected to be able to provide for his family in just as satisfactory a fashion, just as adequately, as his city counterpart. Therefore he finds himself caught on both sides of the horn of this dilemma.
Accordingly, I think that all agricultural legislation must be aimed to the end of enabling the producer to have a more adequate, more suitable and more reliable income. We are all concerned that in certain segments of the agricultural community there is a diminishing number of producers, and that not as many young people are going into farming as we should like to see. It is therefore the function of government to see to it that we have policies that will give adequate and suitable returns to the farmer, and that the profession of agriculture, and the family farm as we know it, or as it will develop in future, will provide an adequate return and an enticing way of life to our young people in the future.
I stated earlier, at the resolution stage, that in this regard I think it is necessary for us to go ahead on a threefold front. First, I think it is inevitable that if the family farm is to be maintained, to provide the kind of income of which I spoke earlier, that it must be a viable economic entity. It must be more a business than merely a social way of life, which was the way of the past. This requires larger capitalization for land, machinery, chemicals, fertilizer, etc. The family farm unit must be more heavily capitalized than was the case in the past.
Inasmuch as the private sector of the economy has not seen fit or been able to provide the capital for the farmer to expand as he needs to, then surely it is the function of government to provide this capital. We have tried to do something along these lines m an earlier measure. I am speaking of the farm credit corporation.
Second, it is of no value to have a viable economic unit if you do not have adequate and suitable markets. This piece of legislation is geared to this marketing aspect, which has always been such a bugbear in Canada by virtue of the complexities of our constitution, and which has resulted in marketing being a field requiring co-operative action with respect to legislation. Intraprovincial marketing is, of course, by virtue of judicial decisions

June 23, 1966
respecting our constitution, a provincial matter.
On the other hand, many facets of marketing have an extraprovincial or extraterritorial effect. Therefore the federal government must play its proper and adequate part. In the area of marketing, to provide suitable markets and reasonable and adequate returns to the farmer we are proposing the bill that is before the house at this time, in the interests of the dairy industry. In particular it is important to point out that the stability of income that we desire for dairy farmers is not only to redound to the benefit of producers. There has been too great a tendency, because of our becoming a more urban country, with a larger percentage of our population every day, every week, every month moving into the cities, for us not to appreciate the farmer's viewpoint. His viewpoint has not been sufficiently understood or appreciated by much of our urban population.
I point out that a measure such as this, which is a step toward responsible marketing legislation with respect to a particular segment of the agricultural community, also does a very considerable service to the consumers in the urban centres, because it is intended to bring closer the day when there will not be these inevitable rises and falls in production and in price which, when they reach one end of the scale, swing around, inevitably to the detriment of the consumer. At the end of the swing, when production becomes reduced and prices go up, because there is no control over production, by reason of the lack of adequate marketing legislation, it is the consumer who pays. When prices go up, that certainly is not in the interests of the consumer. When that happens we get into the old cycle, and up goes production with higher prices. This sort of thing has been the bane of the agricultural community in the past.
The marketing aspect of the measure is meant to encourage stability, and a reasonable return for the farmer. This is an extremely important measure. I believe this is the first measure, should it be passed by parliament, enabling the national marketing of a commodity such as dairy products. I think we will all watch with interest, if this house sees fit to pass the measure, to see how it works out, and to see whether it does the job required with respect both to the consumer's needs and the producer's income. Because if this measure does what we believe it will do, it may be that the house will see fit in the years to come to bring other agricultural

June 23, 1966

products within legislation of this type, which will enable national marketing of other agricultural products on an adequate scale, in co-operation with the provinces.
[DOT] (7:50 p.m.)
I suggest that the way toward a more stable farm income and a better development of our agricultural community might well be through this type of national marketing legislation. I would say a word, also, with respect to the third aspect of sound agricultural legislation, that is, legislation to protect the farmer against drought or other calamity. In this connection we are, of course, presenting a crop insurance amendment so that the three aspects of fundamental agricultural need might be covered.
I do not wish in any way to belittle these measures to aid the problems which affect the agricultural community in our country. I do not say these measures are all that are needed-not by a long shot. I had the honour of attending as a witness before the agricultural committee of this house. This is an exercise which would be difficult for one much more expert than I am in agricultural matters. But my attendance did impress upon me very strongly a feeling I had held previously: the knowledgeable and experienced members of that committee all seemed concerned about the need for over-all direction in Canadian agricultural policy.
Measures that provide for crop insurance, orderly marketing and so on are important moves in the right direction. But I do not wish to leave the thought that this is all that is required by the agricultural community. Agricultural development in this country has been one of evolution. It has come about largely as a result of the individual initiative and individual requirements of farmers across the land with respect to their profit motivation. I do not believe there has been any comprehensive over-all planning of our agricultural growth during the years of our history. We have moved as the times seemed to require and as individuals saw best with respect to the profitable operation of their own entities. In these dynamic times in which we are living today, all of us, certainly those of us who are on this side of the house, are convinced that a great degree of planning and direction is needed if we are to achieve the most productive and profitable results from the various segments of our economic endeavour, including agriculture.
It is not easy to get at the fundamentals of agricultural need. We are all aware that the
23033-433i
Stabilization of Milk and Cream Prices sphere of agriculture is vested in both provincial and federal governments and legislatures, and apart from measures such as this, which are patently in the right direction, I am very much of a mind that in the not-too-distant future the provinces, the federal government, the Canadian Federation of Agriculture, the farm unions and all the bodies which represent agriculture across the country will find it necessary to get together to work out a broad, new, long-term prospect for Canadian agriculture. I believe this is badly needed.
In the short period during which I have had the honour to hold this portfolio I have not yet reached conclusions as to whether we are doing the right things in the right places -whether we are growing the right crops in the right quantities. I think a broad inquiry of this kind is needed. We need to protect the domestic requirements of our agricultural community in the future, bearing in mind the growth of the domestic population, bearing in mind the new affluence of our society, and the necessity for our agricultural products being acceptable to the changing tastes of the community.
All these things must be considered to determine, in the domestic interest, what would be best for Canadian agriculture in the next two or three decades. We need long-range planning in this direction. There is an equally important requirement with respect to our national responsibilities-the part we should play in the next decade or so and the responsibilities we should assume with respect to the world food supply and our share of the commitment to world production. Statistics indicate that if we are to hold our own in our ability to supply the world with cereals we shall have to double cereal production by 1980. When we consider that the world population will double by the end of this century, and since we all believe that society as a whole must do a much better job of feeding the world than it has in the past, surely Canada, which has such abilities and resources in this sphere, will have to play a bigger part and make a larger commitment to the world community generally.
Here again, I believe there must be a pervasive national planning to determine how in the coming decades we shall be able to play our full and just part in this area as well as with respect to our domestic responsibilities.
I hope hon. gentlemen opposite will support this measure which, as I say, I believe to be a
June 23, 1966
6830	COMMONS
Stabilization of Milk and Cream Prices move in the right direction. I do not minimize its importance, though there are great challenges, beyond this, in the field of agriculture. Part of that challenge is presented by the marginal unit which is gradually disappearing. The bringing of assistance to marginal and sub-marginal producers constitutes a problem which does not fall specifically to my department, but it is bound to be an important part of our agricultural planning in future decades.
This is all I have to say at the present time. I shall be pleased to answer any questions which may be addressed to me, if I can be of any help to the committee, when we come to discuss the specific clauses of the bill.


John George Diefenbaker: My observations on this bill will be limited.


An hon. Member:: Hear, hear.


John George Diefenbaker: I am glad to have that measure of support which has already become evident from an hon. member opposite. I must tell him that I deeply appreciate that applause.
[DOT] (8:00 p.m.)
I wish to say at once that anything which will bring about an improvement in the dairy industry of Canada will be welcomed. Since this government came into office the dairy industry has been the forgotten industry. The result is that in every part of the nation farmers, who for years have been engaged in dairying, are leaving that industry because there are other areas of agricultural production in which there are greater opportunities to bring about that affluent society to which the minister has referred. We on this side of the house have regularly asked for action on behalf of the dairy farmers, but action was not taken.
We hope this legislation will benefit them to some degree, but it has been delayed for so long-for over three years-that the dairy farmers are feeling a sense of frustration and discouragement. What brings me into this debate is the rather unusual philosophical viewpoint expressed by the minister toward the concluding paragraphs of his speech, and when I say that I am not in any way implying that he was reading from a manuscript. He was not. He was actually pouring forth his soul giving the house a philosophy that, in my opinion, would be detrimental to Canada.


All of us will agree when he says that planning is necessary, but when he goes so far as to say that following his visits and journeys to all parts of Canada he has begun to wonder whether certain areas should, as it were, be designated to produce certain farm commodities and others other commodities, we have there the socialist concept that governments know what is best for the people. I am amazed, unless he has been in touch with the hon. member for Davenport (Mr. Gordon), that he would have expressed himself so strongly in favour of bureaucratic control of the farmers of Canada, directing them as to what they shall produce and where. Such a philosophy is alien to this country and, regardless of any views he holds in that connection, would not be acceptable to the farm population.
Sir, all of us believe that governments have responsibilities. The action taken here is far more optimistically viewed by the minister than the circumstances would ordinarily warrant. As he hon. member for Wetaskiwin (Mr. Moore) said at the resolution stage, as recorded at page 6666 of Hansard for June 20:
Great hopes were raised a tthe end of March when the new dairy policy was announced. The dairy farmers believed that they were going to get at least $4 per hundredweight across the board for their milk; that was to be the guaranteed price for all milk. This price, of course, has not been realized by many producers. There is really no guaranteed price of $4 per hundredweight: there is only the hope that with the subsidy $4 will be realized.
Farmers are greatly aroused over the failure of the policy. When it was announced, they thought it was the implementation of what we in Her Majesty's Loyal Opposition had advocated over and over again; but in the manner in which it has been administered it has proven to be a mirage. In every part of Canada dairy farmers are asking, "Who brought about this hoodwinking scheme that we expected was going to benefit us in the manner that we asked and demanded"?
Across the province of Ontario ask the farmers what their attitude is. What about the province of Quebec? One of the major reasons for the outcome of the provincial election in the province of Quebec was the disregard of the federal government to take action on behalf of the dairy farmers in that province. They demanded action: they got nothing but promises. And without in any way absolving the Lesage administration for
June 23, 1966

its responsibility and contributions to its own defeat, the Quebec dairy farmers in general had lost hope.
The hon. member for Peel (Mr. Beer) smiles. He would not smile if he went into the areas of Quebec that I visited last August when, over and over again, the question they asked me was, "Why doesn't the federal government act?" Now what we are getting is the setting up of a board-


Auguste Choquette: You were defeated in
Quebec.


John George Diefenbaker: The hon. member is better on trips abroad than he is on agriculture, and if he will just continue to travel in the direction that he hopes to on Saturday, he will have enough to keep him busy. I always like his interruptions because they bear no relationship to the discussions that are under way.


Mr. Favreau:: Nor do the answers.


John George Diefenbaker: The minister set forth this three-headed plan of marketing legislation, farm credit and crop insurance as though he and the present government had discovered these policies. I point out that these are but a continuation of the policies which we brought into effect. They have been changed, so far as crop insurance is concerned, and I think beneficially so.


George James McIlraith: Hear, hear.


John George Diefenbaker: Oh yes, experience
teaches. Even the government opposite is learning that fact.


George James McIlraith: Yes.


John George Diefenbaker: I am glad to see the
Minister of Public Works (Mr. Mcllraith) here because he approves of that statement. These things are not new. When I listened to the minister I was amazed as, in impassioned words, he told how they are going ahead with this great three-headed plan, every portion of which is represented by what has been done in this country for the last 25 years.
Speaking about product marketing I remember very well when the late R. B. Bennett brought the Natural Products Marketing Act before parliament, in the days when such legislation was a novelty. I remember the ridicule that was heaped on that policy and the manner in which, following an election, the King government placed that legislation before the courts and at the same time
Stabilization of Milk and Cream Prices informed the courts that in their opinion it was not within the legislative competence of parliament. That was the view held at that time, when new roads and new pathways for agricultural production and for the preservation of reasonable prices for farmers' products were being followed.
As I listened to the minister speak of crop insurance I almost thought there had been a visitation from above to him, producing crop insurance, farm credit, and marketing legislation.
[DOT] (8:10 p.m.)
So far as the legislation is concerned, it represents an endeavour to secure a degree of stabilized prices and a continuity of market. That is desirable; we hope it will be successful. There are, however, one or two clauses to which I intend to make reference. Over the years I have heard from those sitting opposite about the dangers of protection. When in opposition the Liberal party always stood against protection, and when in office it carried out the policies it had condemned. Here is a very interesting portion of this particular bill:
The governor in council may include on the import control list . . . any dairy product the import of which he deems it necessary to control for the purpose of implementing any action taken under this act to support the price of that dairy product or that has the effect of supporting the price of that dairy product.
That is a tremendous power for the governor in council to exercise-the power to assure that by order in council the government may at any time prevent the importation of any dairy product into Canada. Certainly powers like this will have to be exercised with discretion and care. These powers should not be exercised except when our neighbour to the south endeavours to dispose of any surplus in Canada to the detriment of our price level within this country. In other words, while that clause has in it the essence of protection, it can be used effectively only if in its use there is a realization of the fact that that use should be sparingly utilized, and only for the purpose of protecting and preserving the prices in Canada against the invasion of surpluses form other countries.
There are some other powers here under the regulations to which I want to make reference, because people should realize what this legislation will do:
The governor in council may make regulations regulating the marketing of any dairy product, including regulations
(a) providing for the marketing of any dairy product on a quota basis;
June 23, 1966

Stabilization of Milk and Cream Prices That power does not have to be exercised in consequence of the recommendation of any board.
(b) designating the agencies through which any regulated product shall be marketed;
That is the power which will place in the hands of the governor in council the right to designate not only the marketing on a quota basis but also the agency through which the disposal shall take place.
Here is another power. I ask the reason for this power which prohibits a person from engaging in the marketing of any dairy product, or any class, variety or grade thereof, in whole or in part except under the authority of a licence. That is a very wide and comprehensive power which could be used unjustly and unfairly. It goes on:
(f) authorizing the commission to fix, impose and collect levies or charges from persons engaged in the marketing of any dairy product or the production or processing of a regulated product for market and for such purposes to classify such persons into groups, fix the levies or charges payable by the members of the different groups and to use such levies or charges for the purpose of carrying out its functions under this Act.
That power is one which if utilized would arouse a great deal of antagonism. It might be justified on the ground that a levy is made to cover expenses of marketing and the like, provided that whatever is left over at the conclusion of each year should be repaid to the processor or to the farmer.
The purposes and objects of the legislation in the setting up of the commission are to provide efficient producers of milk and cream with the opportunity of obtaining a fair return for their labour and investment, and to provide consumers of dairy products with a continuous and adequate supply of dairy products of high quality. If my information is correct, our dairy production will not meet the needs of Canadians within the next couple of years. Farmers in the dairy business no longer see any purpose in remaining in an agricultural production which denies them a fair and proper return.
That brings me to a matter with which the minister dealt, namely the squeeze in which the farmer finds himself. There is the rising cost of production; labour costs are very high and there is the difficulty in obtaining the necessary labour on the farm; and the price of machinery has gone up to an extent which cannot be justified. The only action taken by the government to date is the setting up of a commission of one man to look into this matter. After two and a half [Mr. Dielenbaker.l
years of uncertain promises there is another delay.
Today the farmer finds himself, to an extent greater than in any other class, caught between the rising prices of things he has to buy, and almost a ceiling on his prices. This is one of the reasons there has been a universal demand not only among dairy farmers but also among farmers as a whole for an assurance that a reasonable degree of security will be assured them. I say to the minister that all the legislation which has been placed on the statute books will be a nullity unless there is effective action taken to meet the tremendous increase in the cost of machinery. This is where the farmer is in a dilemma today. He has no protection; he sells on the open market and he buys on a market that denies to him reasonable and fair prices. Finally who suffers? It is the consumer.
If action is taken which raises the prices of farm products to a height that would be unjust, those who suffer are the consumers of this nation. Today they are paying through the nose. There has been the largest increase in the cost of the needs of the average Canadian-an increase larger than ever before-and no action. The dollar goes down and down. All these makeshift ideas are brought into effect in order to meet the problems that are a result of the high cost of living.
One can only say that the government of Canada today pats itself on the back for having been able to achieve the settlement of two potential strikes. Why did they not do it in the first place; why did they wait all those weeks while the strike went on in Montreal, and then finally capitulate. If that be diplomacy, we indeed have had an example of it. This is an absolute determination for Canada that a 30 per cent increase in wages is the level at which settlements are to be made.
[DOT] (8:20 p.m.)
I believe in the rights of labour. Too often the man who works is forgotten. Did this government make any endeavour to find out how effective the settlement was that was finally achieved? What it amounted to, in effect, was simply the acceptance of that which, had it been accepted five weeks before, would have meant the end of the strike by the stevedores in Montreal, and that the potential strike on the great lakes would never have been threatened.
The trouble with this government is that they always wait for a crisis to develop before getting into a sweat. At that time they
June 23. 1966	COMMONS
finally decided to find out what these people want, and then do what they had refrained from doing during the intervening weeks, to the detriment of the Canadian economy. What we have seen by way of an increase in the cost of living in the last two months will be as nothing compared to what we are going to see within the weeks and months ahead.
Down, down, down goes the value of the dollar; yet the farmers have found themselves in the position in the last several years of having to pay prices for things they must purchase which are catapulting upward and upward. The minister says planning will have to take place. Any plan that has been offered to date or enunciated by the minister tonight, including the extension of farm credit, the adoption of crop insurance or the setting up of a commission, will be but palliatives unless the problem is faced head on. Many of us have hoped that the minister would take that course.
This minister has received more consideration than many others since assuming this portfolio. The time has now come for action rather than grand and eloquent observations, very often meaningless. All I can say to this government is that if it will bring in the necessary measures, Her Majesty's Loyal Opposition will give them every support. We want to see what can be done and we welcome this legislation as far as it goes, but I have pointed out some of the difficulties and I suggest to the dairy farmers of Canada that they will not find in this legislation that high degree of expectant hope that was placed before the house by the minister.
I like to hear the minister speak. I can just imagine what he might have said during the days of the drought, and how he might have described the picture, making the farmers really like it. This reminds me of one occasion when a certain politician in Saskatchewan was making a speech in a particular farm area. This was during the drought years when bullfrogs nine years old had never learned to swim. When his speech was completed he went outside to find out what the farmers thought about his farm program. In the darkness he heard one say to another, "Well, what did you think?" In reply he heard the other state, "He is a pretty good speaker, but an inch of rain would do a heck of a lot more good for us farmers."
Having listened to the minister this evening I can only say, about the wonderful prospects he described, that it is my fondest wish that his rosy expectations will at least bring about
DEBATES	6833
Stabilization of Milk and Cream Prices some improvement in the dairy industry, which has suffered irretrievable loss under this government in the last two and a half years.


Herbert Wilfred Herridge: Mr. Speaker, I must say that the members of this group have appreciated the dissertation on agricultural philosophy that the minister gave when introducing this bill. I think some of his remarks were pretty far removed from the principle of this proposed legislation. When the right hon. Leader of the Opposition (Mr. Diefenbaker) rose to speak he started by saying that his remarks were going to be limited, but what happened? He went over the whole spectrum of agricultural administration, then dealt with labour and consumers, and concluded with a more or less political tirade.
I cannot help telling a story on the Leader of the Official Opposition-one which is his own. The right hon. gentleman was addressing a meeting on one occasion in a small area in Saskatchewan. He made a rousing speech, touching upon all points connected with agriculture. When the meeting was over the right hon. gentleman went outside. Of course it was dark by that time. He sat there and listened to the farmers talking as they got into their cars. One old gentleman said, I am told: "Wonderful speech, wasn't it Joe"? His farmer companion replied: "It was a great speech, but let me tell you Joe, two inches of rain would have done a hell of a lot more good in this community at this time".
I do not think the right hon. Leader of the Opposition was quite fair to the minister when he spoke of him as being a person who would build a bureaucracy. I do not have that opinion of him at all. It is my belief that he would go in the other direction. The minister stated that he wondered if we were growing the right things in the right places. I am sure we are not growing all the right things in the right places, but rather that in many circumstances we are growing the wrong things in the wrong places. I think the minister intends to do what he can to correct that situation.


John George Diefenbaker: How will he do that?


Herbert Wilfred Herridge: They might do that through the operations of an institution which the right hon. Leader of the Opposition admires so much-parliament.
My attention was focused on the value of the dairy industry some 60 years ago. I will never forget when my mother purchased our
June 23. 1966
6834	COMMONS
Stabilization of Milk and Cream Prices first cow, and it was a very expensive cow. After she brought it home a number of people in the district became entirely dependent upon that cow for milk. After about a month a bank manager came out to see her. It was a Mr. Blackstock who later became the assistant general manager for Canada of the Canadian Bank of Commerce. He told my mother that this cow had been pledged to the bank, along with several other cattle, by another farmer for a loan he had obtained about three months before, and he said that he had come to take possession of the cow. He said that he must have it, and asked her to take him to the barn so that he could take it back to the village. My mother then reached over the back door for a loaded 30-30 rifle which was hung there for protection against wild animals. She took it down and said: "I think too much of the dairy industry to allow this cow to leave my premises. I am going down to the barn to shoot it", whereupon the bank manager told her not to do that and assured her he would try to make other arrangements. Arrangements were made to release this cow from the other farmer's pledge. That incident focused my attention on the importance of the dairy industry.
[DOT] (8:30 p.m.)
I support the principle and purpose of this bill, just as our members did with regard to the resolution. We look upon it as another step toward the logical development of marketing dairy products in Canada. I am informed that the principle of this measure is supported by the Canadian Federation of Agriculture, the farmers unions, the Dairy Council of Canada, the dairymens associations and so on. They have been urging the federal government do to do something along this line for some time. We think it is a development in the right direction.
I understand that this bill was introduced after a study was made of the dairy industry by a committee composed of representatives of the provincial governments, the dairy farmers, the dairy council and some of the officials of the federal and orov'ncial departments of agriculture. Therefore I do not think we can go far wrong in accepting the advice of this committee whose study was very widespread and reached into several aspects of Canadian farm life. They recommmended the setting up of this commission.
I know that hon. members of the house will watch the operation of this act with interest because it does establish a new principle in the marketing of dairy products in Canada. I


think all of us would agree that as a result of the experience gained in the administration of the act amendments will be made to the legislation and improvements will be brought forward. Mr. Speaker, let me say in conclusion that we think the principle of the bill is sound. It is a development along the lines that members of this group have urged for years. We have urged this type of marketing organization, as a matter of fact, ever since our party was formed in 1932. This is the logical development in orderly marketing within the country, just as we have urged the logical development in orderly marketing without the country. That is all I have to say at th s time. We will have a few questions to ask the minister when the various clauses of the bill to establish a Dairy Commission for Canada are before us in committee.


Mr. F. J. Bigg (Athabasca):: Mr. Speaker, I am very pleased to see that some action is at least contemplated for the dairy industry but I should like to put out one or two warnings in this regard. I am one who believes in planning, provided the planning does not defeat the end for which all good planning is designed. The only reason for governments interfering at all in the agricultural industry is to improve the lot of the producer and the consumer. This may sound very elementary but it is not really very elementary when you try to put it into practice. There is a danger in subsidy and there is a danger in lack of subsidy. I would never like to see Canadian agriculture get into the quagmire which they have south of the line. There is not a country in the western world today which does not have subsidies of one kind or another.
I hope that the minister and the experts in the Department of Agriculture will look beyond the borders of Canada to other countries which have had dairy policies for a great many years, and very effective dairy polic'es at that. I might mention just two in passing, Great Britain and Denmark. They have not destroyed the small family farm, either, in their national policies. There seems to be a great tendency in Canada today to concentrate entirely on efficiency and the cost per unit of production. I th'nk this is a very dangerous thing. I am one of those who believe that the family farm can be preserved in Canada and that we can have a certain kind of efficiency along with that policy. But when we plan, whether it be in dairy marketing or any other form of planning, I see sometimes a great danger in not relating one form of planning in agriculture to another.
June 23, 1966

I am very glad to hear that the minister is aware of this problem, because you cannot plan the dairy industry of Canada without affecting the beef industry, the pork industry, the poultry industry, the grain industry and all the other ramifications of agriculture. It is a very dangerous thing to take some strong step in any one direction unless you see that the planning which is designed to help the dairy industry is spread over into the other branches of agriculture in this country.
So I go right back, as I always have, to saying that the underlying principle that we should keep in mind is the preservation of the family farm, the small farm. Whenever you pick up an article on agriculture in Canada today you are inclined to read how well off a certain segment of the agricultural industry happens to be. In the last few years, due to our grain sales, everybody thinks that every farmer in western Canada is now marketing 50,000 bushels of wheat a year and spends every winter in Florida. This is just not so. We have thousands and thousands of marginal farms, and when I say marginal farms I do not mean necessarily that the land is not productive but that the size and location of the farm, its credit rating and the labour situation on it puts it into the category of being an uneconomic unit.
I do not go along with ministers of agriculture or experts in the Department of Agriculture who say that larger and more efficient farm units is the only answer for Canadian agriculture. I say quite the reverse, that the only answer for Canadian agriculture is a very, very widely spread agricultural industry on as many small, family farm units as this country can possibly support. Therefore I agree that there must be a certain amount of planning, but any planning in Canada which tends to reduce the number of farmers on the land and concentrates only on the so-called cost per cent per unit, to the farmer's detriment and the detriment of the welfare of Canada, is in my opinion the wrong type of planning.
We need today, and always will, a larger agricultural community. The small towns and the larger towns, our transportation system, our roads system and every other segment of the Canadian community will suffer if we keep on reducing the number of family farms in this country at the rate of something like
14,000	per year. This just cannot go on if we are to keep Canada in the position in which it has always been, namely a place for a man who becomes tired of city life and wants to
DEBATES	6835
Stabilization of Milk and Cream Prices return to the soil from which he sprang, where he will have an opportunity with courage and determination to provide for himself a home on the land.
I am glad to see that the minister is aware of Canada's role in the world, because I have always thought that we, as a primary producing country, have a wonderful opportunity not only to raise our own standard of living but that of people everywhere, if we have a well integrated world marketing system, of which Canada's national marketing system is only one part. I believe there would be in this event a future in agriculture in Canada which would be so attractive that we would not have to worry about such little things as quotas. We would be more worried about the type of efficiency required to improve acreage production, and production per man-hour.
This does not necessarily mean that we have to cut down the number of farm units. We would get a demand from the large and well paid markets and therefore would perhaps go out, as we are in the labour field today where there is a shortage of labour, and improve the labour situation on our farms. We should do this, rather than introducing policies that tend to take 14,000 family farm units off the land every year in this country.
[DOT] (8:40 p.m.)
I know that in so far as crop insurance is concerned, the minister does not want to give the impression that crop insurance is something which has been introduced by his government. He knows quite well that in 1959 a national system of crop insurance was introduced and any province that wanted to participate could do so. Crop insurance is absolutely essential to the agriculture industry. When a man makes a very sizeable investment in both money and time, he knows that with crop insurance he is not going to be wiped out in any one year. I am all in favour of the improvement of crop insurance, and hurrying it up. I do not blame the federal government in this regard. I believe the provinces have been dragging their feet.
The provinces know quite well the value of crop insurance. Manitoba has allowed itself to be the guinea pig. Crop insurance has been of great advantage to the farmers of Manitoba, and it is my fond hope that within the next two years both Saskatchewan and Alberta will have fully integrated crop insurance plans. I believe this is one place where the federal government could be even more
June 23. 1966

Stabilization of Milk and Cream. Prices generous than they have been. Crop insurance is something that affects every farmer in Canada. It does not tend to make large farms larger or small farms smaller.
When you are doing this planning, and certainly we need some planning, do not rely entirely on the Ph.D's in the agriculture department. Sometimes they cannot see the woods for the trees. I say we should lean heavily upon the farm unions in Canada because they are composed of the people who are actually living on the farms. These are the people who have to put up with the weather. These are the people who have to look for markets. These are the people who have had many years experience on the job. Sometimes you will find in discussing matters that these people are at loggerheads with the Ph.D's. If the Ph.D's make all the rules, I warn you that you will come to a dead end, and in so far as agriculture is concerned sometimes there is no return from a dead end.
In so far as farm credit is concerned, I do not believe it is necessary to make available any larger sum of money. I believe you should concentrate on enlarging the markets at reasonable prices. Then, you will find out there is no greater security in Canada than a good farm with a happy farmer. When a man is on land which will give him a good living, he will always be able to get credit with which to expand his business, especially when there is an opportunity for him to grow and sell a reasonable amount of products.


Mr. E. F. Whelan (Essex South):: I do not
intend to take up very much of the time of the house, Mr. Speaker. I only want to say that as a member of parliament and as a farmer I feel that legislation such as this is long overdue. This bill is a step in the right direction. Many of the products that are produced in Canada know no provincial boundaries. More federal legislation is necessary in order to help the agriculture industry. So far as I am concerned the whole of the administration of agriculture should be under the jurisdiction of the senior government. As I said earlier, many of our products know no provincial boundaries so far as sales are concerned.
There are different benefits given to the farmers in the different provinces. Those hon. members who are from the various provinces know this is true. Some producers are at a disadvantage because the province in which they reside may not be extending beneficial legislation to the producers, and yet in the

neighbouring province beneficial legislation may be extended to producers who are selling their commodities in that same market.
The hon. member for Kootenay West (Mr. Herridge) referred to the fact that his mother used a gun. I am not saying that the farmers of Canada, especially the dairy farmers, are that militant. However, I can tell you that if more benefits are not given to Canadian farmers they will become more militant as time goes by. This has been proven recently in Ontario. I know that so far as my area is concerned, some of these farmers are the men who, in 1957 and 1958, believed all the promises that were made to them. These are the people who are today driving tractors up and down the roads to indicate their discontent. The farmers of this nation are upset. They are not satisfied, because they are not getting a fair share of the wealth of this nation. I know they are not getting fair treatment so far as the division of the gross national product of this nation is concerned.


Mr. L. M. Brand (Saskatoon):: I should like to speak briefly on this subject, Mr. Speaker. I thought perhaps I could start out by telling that story again and completing the trilogy, but on second thought I believe we have heard it often enough. It may seem unusual for a city member to rise and speak on a measure concerning a dairy commission. However, as a result of distribution my urban riding will no longer exist as such. But this is not my main reason for rising here.
In looking over the comments made by the minister at the resolution stage I note he said, as reported at page 6657 of Hansard, when referring to the consultative committee:
It is the intention that members will be representative of the various segments of the dairy industry in Canada.
Recently I had occasion to look at the Unemployment Insurance Act, which is chapter 50 of the statutes of 1955. I should like to just put on the record section 19, subsection (2):
At least one of the members of the advisory committee, other than the chairman, shall be appointed after consultation with organizations representative of workers and an equal number after consultation with organizations representative of employers.
I wondered, in looking through the bill, why there was no statutory provision here for any members of the consultative committee to be representatives of the dairy farmers of Canada or the Canadian Federation of Agriculture. I ask the minister whether this was an oversight, and whether it might not
June 23, 1968	COMMONS
be a good idea to amend the bill to include this provision. I am sure, after listening to what I thought was a sociological discussion rather than a discussion of agriculture philosophy, that the minister had the best interests of the dairy farmers of Canada at heart when he introduced this measure. Perhaps this was an oversight. Nowhere in the bill is there any mention of representatives of this industry, either processors or producers, as members of the consultative committee. This is the only point I wish to make, Mr. Speaker, and I trust it is one which the minister will look at earnestly, in the interests of keeping the diary producers of the country in the forefront.
[DOT] (8:50 p.m.)


William Arnold Peters: I should like to say a few words on this bill. I am pleased a measure has been introduced to develop a Dairy Commission. However, I am concerned, as I am sure the minister is, about the relationship this Dairy Commission is going to have with the stabilization boards in the provinces. The reason we have not developed any real dairy policy in Canada is due to the reluctance on the part of many officials to be brave and bold in designing programs which come into conflict with the jurisdictions of other departments of agriculture in the provinces. This will probably be one of the main stumbling blocks to this legislation.
The dairy industry of Canada is very worth while, but one which in my opinion has never received the type of support it should receive. There are very good reasons for this. It seems to me that one of the major problems of the dairy segment of the agricultural industry falls pretty well within, in Ontario at least, the fluid milk industry, which produces fresh milk in containers for distribution and consumption, and the secondary milk industry, which comprises the manufacture of butter, cheese and allied products.
I have always been impressed with the problems of the farmers in the fluid milk industry who have to negotiate with dairies under quota for the supply of a given number of cans of milk at a predetermined price. In my opinion the price obtained in Ontario for fluid milk is reasonable, generally being over $5.20 and in some cases running as high as $6.10. This is a reasonable price which, in my opinion, enables the dairy farmers in Ontario to make a fairly good living.
In discussing this problem with my brother a year ago I was surprised to find that in his operation he sent less than half his milk to
DEBATES	6837
Stabilization of Milk and Cream Prices the fluid milk outlets, the remainder, which was produced in the same way at exactly the same cost, being disposed of on the secondary milk market at about $2.35 to him. When I mentioned that I was in support of a $4 price, he said: "Me too. I can show you that I am not getting $4 a hundredweight for the milk which I produce; and $4 is about my cost".
Over the years a farmer who had a quota set by the dairy was always willing to exceed the quota. I negotiated a milk contract for a group of farmers for a period of time but I was unable to conclude the negotiations because, in my opinion, the farmers at the time did not have the guts to dump their surplus milk, over and above that which they supplied on a quota basis. If they had, they would have found that the dairy would have had to increase their quota.
This is because fluid milk is not the only requirement of the dairy. If a dairy produces products like chololate milk, buttermilk and cottage cheese, it must purchase fluid milk. It is also interesting to note that once the dairy skims the milk to make chocolate milk out of it, the cost to the consumer of skim milk with chocolate flavouring in most cases is as high as or higher than the cost of fluid milk with the cream content remaining in the milk.


An hon. Member:: That is the case with two per cent.


William Arnold Peters: It may be. It depends how tight the operator tightened the screw on the separator, which in turn controls the quality of the milk. At the time I was more interested in the consumer, and in the farmer, who gets no profit out of the secondary milk; and the dairies think they do not either.
I completely agree with the farmer getting a reasonable price for his milk. But the price should be stabilized, and I would be pleased to see the establishment of a base price of $4 a hundred for milk. However, this price should also carry with it certain requirements, one of which would be this. When the federal government does decide to establish a price of $4 by paying a 75 cent subsidy on the provincial price for milk, they should be prepared to enforce the price.
The situation in Ontario, where tractors clog some of the highways, is an indication that the plan which we have implemented has failed. We have no control over provincial legislation. Neither do we have control over the setting of base prices in the provinces. If one province decides to allow the distributor to increase the price which he
June 23, 1966

Stabilization of Milk and Cream Prices charges the producer so as to allow for a lower delivery price to the factory, then the $3.25 which we anticipate will be the base price will mean that the farmer is not getting $4, but considerably less. He also has to deal with two governments, both of which are willing to pass the buck. The federal government says it has no responsibility in the field because this falls under provincial jurisdiction. The minister of agriculture in the province appears on T.V. and tells everybody that it is not his fault, the he did his share but that he has no responsibility. This does not help the farmer; when he gets his cheque he finds it is unsatisfactory.
The same situation is true in the case of the by-products of the farmer. I have had many complaints from cream producers, one of which is that they are very dissatisfied with the arrangement whereby, if they are skimming their milk on the farm, they are only paid quarterly. They see no reason for this, and neither do I.
Given the difficulty of providing machinery to make these payments, I believe that all we have to do is to feed the information into a computer, and then we will be able to make satisfactory payments. While I do not disagree that we have been slow in getting this program under way-for which the minister himself apologized-I would suggest to the minister that he assure the house and the farmers of Canada who produce cream on the farm that after July 1 payments will be made monthly as soon as the program becomes established and operational.
The fact that the $4 price takes into account skim milk at $1.05 appears to me to be unreaslistic. If you have some young pigs at the right age, you might think it all right to feed them on skim milk, in which case you find your return is $1.05 a hundred or more. But most farmers do not have sufficient quantity of pork bred on their farm to assure them a ready market for skim milk at the base price of $1.05; therefore this commodity in many cases is of little value to the economic farm unit, and in some cases of no value at all.
I know that the minister is not going to be brave about this question of provincial jurisdiction. However, many provinces would be quite willing to waive some aspects of their jurisdiction in this regard and be willing to co-operate if this assured some stability to the dairy industry.
The price which is paid today for milk is, in my opinion, the cost of production price.

No farmers get rich on $4 milk, and this includes the fluid milk producers, even though a percentage of their production is produced at a considerably higher price. They are just breaking even, and that is not good enough.
[DOT] (9:00 p.m.)
It seems to me that while the farmer in the province of Ontario, with his 38 quarts per hundred pounds gained something like 64 cents, the price of milk to the consumer went up from two to four cents, and this it seems to me is an unreasonable increase for the benefit the farmer received through the program that we are instigating.
It may be that the government will have to recommend a number of changes in distribution. There is no question but that distribution of milk has increased. In my area we could solve the dairy problem, for Timis-kaming, if the minister would provide the funds to allow both the entrepreneurs and the farmers in the area to establish one large dairy unit that would buy all the milk in the area and process it. They could haul the bottled milk 60 miles to the most distant point of that area and distribute it from one central point. That operation would be big enough to include a cheese and butter factory, and to manufacture some type of skim milk powder either rolled or dry. A casein plant could be included, as well as all the other things that go along with this.
This has not happened and not because the farmers have not asked for it, Farmers have had many meetings, but they found that the cheese factory which would go into operation in the area could not obtain assistance, because arrangements for the amalgamation of processing facilities in the area could not be made.
Such a project would take into consideration the distribution problems of farmers, because farmers cannot operate distribution systems. They have an exceptionally difficult time in staying above water in operating their own facilities. I think that many farmers' facilities could be brought together, into one big industry, which would take all the milk that could be supplied, so that farmers would not have to go to the cheese factory, or whether it should go to the province of Quebec, because of the provincial subsidy, to have the milk manufactured into casein.
The minister will have to do much more than establishing a board before the dairy industry will be satisfied. I am of the opinion
June 23, 1966

that he has taken a worth-while step. I also agree that there will be interesting developments in the interprovincial trade and in the export trade of our dairy commodities.
We should all pay tribute to Mr. Arnold for the work which he has been doing in the cheese industry in Ontario. The cheese industry has been able to develop an export market, which is still rising. Mr. Arnold got himself into disrepute by free enterprising government in Toronto who wanted to take over what he is interested in, because he has been successful, and because his organization has put certain controls on its own members. He should be thanked for having developed an agency to help farmers export cheese, particularly to England, where sales of Cheddar cheese are increasing.
The government will have to follow up with the next step. If smart action is taken the industry will be able to extend its export of Canadian Cheddar cheese in the British market.
Also, Mr. Speaker, this Dairy Commission should have money for research. That money will not be to develop a green colour with which to dye butter, in order to satisfy the housewife that the colour matches the tablecloth-although that has been suggested. I think we could develop in Canada a great number of cheeses which are of a regional nature, which can be sold for export and sold at home as well. Restaurants in Canada are developing a market for specialized cheeses now being manufactured by the Kraft Company in Canada. Encouraging this is a wrong approach. We ought not to take Cheddar cheese, grind it up and manufacture out of that a processed type or specialized type of cheese. The Department of Agriculture should be encouraging the cheese industry, to develop natural Canadian cheeses that would meet the demand which has been built up in export markets.


An hon. Member:: Such as Black Diamond.


William Arnold Peters: Yes. An hon. member mentioned Black Diamond. We should be very pleased with the work done by this company in the field it is engaged in. I recommend to hon. members who have not had the opportunity to sample Black Diamond specialty cheeses, to put in a good word with the hon. member representing the area concerned, and perhaps something can be done about the oversight.
This company has developed cheeses that
in my opinion meet the needs of the Canadian
DEBATES	6839
Stabilization of Milk and Cream Prices public. They are premium cheeses, Mr. Speaker. They do not sell for the base price of 42J cents, but run in the 75 cent and $1 class. This means that those engaged in this type of cheese industry had a reasonable return for their efforts. We as Canadians, as a result of that dairy industry, will enjoy a large export market for our cheeses.
We ought not to consider the measure before us an end all. We ought not to be content with the limitation of the federal jurisdiction in fields where the provincial governments have shown some inclination to do something, because we ought to enter those fields as far as the provincial governments will allow us to do so. In order to have a healthy dairy industry, and in order to develop that industry, we shall have to give to it all assistance possible, and to allow for its expansion.
In closing, Mr. Speaker, may I say a word for those young people who occasionally come to me, asking how they can go into the dairy business. This is a specialized field where assistance to a young person is just not possible. I believe that consideration must be given to amortizing over a long time purchases of good cattle, good blood stock, good breeding stock, at a low rate of interest, for those people who want to enter this industry.
We must do that so that those young people, by upgrading herds will be able to produce for all Canadians the type of milk that we think should be produced here, and that should be available to all Canadians. Such milk ought to be produced in the best manner, from the best possible types of cattle, because this will provide to Canadians the most nutritious products that can be supplied from farms today. If those products are supplied, then the farmer would be assured of a reasonable standard of living through the total production of dairy products.
[DOT] (9:10 p.m.)


Mr, Auguste Choqueite (Lolbiniere):: Mr. Speaker, it will only take two minutes to make my point. On page 5 of the order paper, item No. 48 reads, in part, as follows:
House in committee of the whole on the following proposed resolution:-
That it is expedient to introduce a measure to establish a corporation, to be known as the Canadian Livestock Feed Board, etc.-
June 23. 1965
6840	COMMONS
Stabilization of Milk and Cream Prices
In other words, the famous feed board concerning eastern Canada. A little further, on page 6, we read:
Second reading of Bill No. C-205, an act to provide for the establishment of a Dairy Commission for Canada.
The bill before us.
On page 7, we read:
Second reading of Bill No. C-208, an act to amend the Crop Insurance Act.
Now, Mr. Speaker, that is exactly what was promised during the last election campaign and, therefore, I just want to take a minute or two of the time of the house to congratulate the government and the Minister of Agriculture (Mr. Greene). Farmers can finally say: Here is a government which respects its commitments; and this is precisely the opposite of what the Leader of the Opposition (Mr. Diefenbaker) said when he stated that the Quebec provincial government, the Lesage government, had been defeated because Quebec had no farm policy.
Mr. Speaker, the present Union Nationale government of Quebec, recently voted into office, was elected because it promised to do what we are now doing. Here is what the Union Nationale platform says: a crop insurance act is the order of the day, as well as a feed grain board and a dairy commission. The members of the Union Nationale, and particularly Mr. Clement Vincent, who sat on the other side of the house, have taken up all the ideas of the federal Liberal government in an attempt to popularize them in the province of Quebec. This accounts for the relative success of the Union Nationale government.
In order to succeed, one only needs to take up the ideas of the Liberal party, and this is what I wanted to tell the Leader of the Opposition this evening. If Mr. Johnson succeeded in getting elected, it is because his farm policy is exactly the same as that of the federal Liberal party, with the difference that we, instead of making promises, implement that policy, as we are doing now, and I commend the Minister of Agriculture in that respect.


Marcel Joseph Aimé Lambert: The country's obstructionists and borrowers.


Auguste Choquette: Mr. Speaker, the hon. member has received such cursory applause that I realize he is wrong.
Mr. Speaker, since the Liberals have been in power, and this is not political partisanship, but quite factual observation, the dairy


industry in Canada has improved substantially. In 1963, when we were elected, the average price of milk paid to the farmers of Quebec was about $2.80 or $2.90 per hundredweight. This year, the same farmers are confident that they will be getting over $4 per hundredweight. Already, there is a $1 improvement in just two years of Liberal government. I cannot imagine the Leader of the Opposition claiming that we are without a farm policy for eastern farmers.
If some people showed any deficiency in that field, it is our friends opposite. The Leader of the Opposition alluded a little earlier to his trip in the province of Quebec, and particularly to Sainte-Perpetue, and here is what his candidate, Mr. Clement Vincent, said: "Come and applaud Mr. Diefenbaker''. He was so afraid that his leader would be badly received that he indulged in excessive propaganda to welcome the Leader of the Opposition. Here is what he said to the farmers in his riding: "Diefenbaker solved the problems of the west, now he will solve those of the east". He obviously admitted that his party had not done anything for the eastern farmers, and that appeared in all the newspapers of the province of Quebec. Mr. Clement Vincent confirmed the inefficiency of the Conservative party in agricultural matters.
Mr. Speaker, I rose tonight to make those few remarks and to say to the Leader of the Opposition that if he wants to succeed, he has only to keep on advocating the Liberal ideas; then he might have a chance to stay at the helm of his party.


Mr. Reg Cantelon (Kindersley):: After listening to the wild tirade from the hon. member who has just spoken, I wonder whether I can restore the house to an atmosphere where self-help is possible. I realize the hon. member is much disturbed because the member to whom he has referred, Mr. Clement Vincent, is now minister of agriculture in Quebec. So I suppose we can forgive him for his-


An hon. Member:: Jealousy.


Reginald (Reg) Cantelon: "Jealousy" is the word suggested. It seems to be a good word.
I notice there is nothing in clause 5 of this bill to regulate appointments to the consultative committee, and it seems to me some thought should be given to this question. In this connection I should like to refer the
June 23, 1966

minister to section 19(3) of the Unemployment Insurance Act which also deals with the appointment of an advisory committee. I am sure he will not wish this committee to be partisan, or to be accused of being partisan.
Section 19(3) of the act to which I have referred says:
No senator or member of the House of Commons and no member of the legislative council or the legislative assembly of any province of Canada is eligible to be a member of or to act on the advisory committee.
It seems to me that if the minister wants to have a consultative committee which will really carry out the duties assigned to it, the adoption of some such provision as this should be favourably considered.


Mr. Russell C. Honey (Durham):: I wish to take a few moments to speak briefly in this debate, and I intend to raise only two points. First, I wish to say that in my opinion the Minister of Agriculture (Mr. Greene) is doing a good job for the farmers of Canada and I wish to commend him for it.
The hon. member for Lotbiniere (Mr. Choquette) has just referred to legislation which is currently on the order paper. I should like to refer, also, to the provision of a 75 cent subsidy for manufacturing milk which is part of the dairy policy initiated by the present minister.
The other subject I wish to mention was referred to at some length by the hon. member for Timiskaming (Mr. Peters), namely the constitutional problem with which the dairy industry in Canada is involved, because of the division of jurisdiction between federal and provincial authorities. It is my hope that the establishment of a Dairy Commission will assist in bringing more orderly marketing to the Canadian dairy industry. We have of course all seen the press resports in the last few days drawing attention to the concern felt by farmers of Ontario about the price they are receiving for manufacturing milk, particularly, and the operation of the new dairy policy as related to the province of Ontario.
[DOT] (9:20 p.m.)
I do not want to assess any blame but, as hon. members know, there is a sort of buck passing between the province on the one hand and the federal authority on the other. But I hasten to add that in the case of the federal department the new dairy policy for manufacturing milk is working well. It has led to a substantial increase in the price to the dairy producer, and no doubt the problem
Stabilization of Milk and Cream Prices in Ontario is one that has to be resolved on the basis of the provincial authority. In this connection I throw out the suggestion to the provincial authority that perhaps an additional subsidy should be paid to manufacturing milk producers in Ontario.
The province of Quebec already has such a subsidy, in addition to the federal subsidy. I mention this to illustrate the point that we have a responsibility, one which I know the minister is well aware of, to bring more order and cohesion into the marketing of our dairy products. This Dairy Commission is a good step in that direction, and I hope through the medium of it, and through co-operation with provincial authorities, we will be able to establish a more uniform method of marketing and more uniform prices across Canada.
I close by emphasizing to the minister that one of the first responsibilities of this new commission should be to co-operate and have consultation with provincial authorities to try to find a uniform method for marketing our dairy products.


Robert Norman Thompson: Mr. Speaker, it is my intention to speak but briefly, and to emphasize one or two points that are of major importance in regard to the establishment of the Dairy Commission. In principle I think this is a wise move forward, and I have no better authority to substantiate that statement than the opinion of the dairy farmers themselves. I shall just quote one statement which I believe effectively expresses my own opinion of this bill in principle.
The dairy farmers of Canada have said over and over again that:
The need for such an authority, or "commission" as the government prefers to call it, arises out of technological advances. These have resulted in a rapidly changing and developing industry-one in which previously established marketing institutions and policies are proving to be inadequate to deal with the new problems which have been created. Price and marketing policy, including price support; the policy problems created by new products: changing structures in both the farming and processing sectors of the industry; planning of dairy export policy-all of these matters have led to the urgent need for the development of new, coordinated dairy policy through the establishment of appropriate boards or commissions.
The co-ordination must not only be between policies at provincial level, but between provincial and federal policies.
So, Mr. Speaker, I believe it is evident that
the establishment of a Dairy Commission is not only essential but inevitable in view of these changes that have been taking place.
June 23. 1966
6842	COMMONS
Stabilization of Milk and Cream Prices
There are one or two thoughts I wish to project at this point. In many instances marketing boards, as in the case of the Dairy Commission, can serve both the producers' and consumers' interests. The task of the consumers' representative is to try to identify new board activities that are in the public interest, and then to identify and oppose those which will unduly exploit consumers. For this reason I would strongly urge the minister when setting up the commission not to appoint just members belonging to the producers' sector of the industry. I believe he should also appoint a representative of the processors as well.
I have talked this over with the minister and I believe he knows my own opinion on the matter. It seems to me that this Dairy Commission must serve all sectors of the industry. It is imperative that on it there be at least one voice representing the processors, and in the establishment of the consultative committee likewise there must be representatives of all aspects of the industry, even on a wider basis than the representation on the commission itself.
Supporting this argument is the simple fact that the effects of the board's operations will depend to a great extent on what the board tries to achieve. If the board is going to go along with the consultative committee which will advise it, then I think it is imperative that representatives of both the producer and the processor be on both the commission and the committee.
I have taken some encouragement from what the minister has been saying in recent weeks. In fact I believe he has told the National Dairy Council that a representative of the processing industry will be appointed to the commission. I hope this is true, and again I urge him that he consider such appointments most carefully.
There is no doubt but that the board will be required to exercise its power, and also to work in co-operation with provincial authorities. If co-ordination and co-operation between the commission and the provincial and federal departments of agriculture can be realized, then I am sure equitable minimum levels of returns will be secured for all milk at the producer level, and also harmony and co-operation will be achieved between the various elements of the industry itself.
I shall close with just one more point. The Food and Agriculture Organization of the United Nations recently meeting in Rome has again emphasized that the world stands on


the brink of calamity with respect to food supplies. Unless we in Canada, possessing such a tremendous potential for raising food supplies, can take the lead in establishing financial and marketing policies which will distribute our surpluses both in the dairy industry, the wheat raising industry and other facets of agriculture, then I believe it is true that we do face a dangerous period so far as the food supply of the world is concerned. We are well aware that even during this present year millions of people are starving to death because they do not have enough to eat.
[DOT] (9:30 p.m.)
In recent years there has been a trend toward continual over-production in agricultural products in the Canadian economy. This applies to the dairy industry as well as to other aspects of agriculture. I am sure that within a period of five years, and perhaps even sooner, we will have before us the greatest opportunity of any nation in the world to head off calamity. Not only will we be able to do it in relation to our own surplus production but also with our know-how which is perhaps greater than any other country in the world, even the United States, in respect of agricultural production. I think this relates directly to the setting up of an international dairy policy with part of that responsibility on the Dairy Commission. Therefore I regard this as an important and vital piece of legislation. I would hope that as the minister brings the commission into being and when the appointments to the two basic bodies are made he will be mindful of these basic suggestions I have brought to his attention at this time.


Mr. Lee Grills (Hastings South):: Mr. Speaker, as we have been discussing at some length the matter of a Dairy Commission for Canada, which I am all for, it seems to me that at times the debate has drifted away from the source, and when I refer to the source, I mean the dairy cow. That may sound like farmers' language, but I am still a farmer. I say the cow is the source of supply. In Ontario and Quebec it has been said that the dairy cow has paid off more mortgages than any other phase of the farm operation. The cow has been known as several things, but first of all as the source of the dairy industry of course. Actually she is the mother of prosperity on the farm.
Many arguments have been made about beef versus dairy cattle and so on. I do not intend to go into that. I think however we will all admit that milk is nature's most
June 23. 1966

perfect food. I do not think anyone will argue that point. I have been quite encouraged by some of the arguments here. The hon. member for Timiskaming (Mr. Peters) enlarged on the dairy business to some extent. I think he inherited some of his knowledge from his father, whom I knew very well. His dad was very active in the Ontario Milk Producers Association in years past, and made a real contribution.
I was very encouraged by the remarks of the Leader of the Opposition (Mr. Diefen-baker). Since he is a distinguished politician I did not expect that he was quite as much a farmer as he is, and that he had such a good concept of the dairy problem. That was quite encouraging. Coming to the Minister of Agriculture (Mr. Greene), I should like to say that I have watched him very closely since he was appointed. We were somewhat encouraged because he is an eastern member and a person who is close to eastern Canada. We were told he had a brilliant brain and was going to develop a concept of the whole agricultural policy. I think he is trying very hard. I would say that he has a good personality and is a nice fellow to talk to. Someone told me he resembled Abraham Lincoln; and I thought that was a compliment. I do not know whether or not the minister thinks so. I do know he is working hard in his present portfolio, and propagandawise, on television and radio, he almost appeared to be the saviour of agriculture. I notice he also has a charming wife, which is a real asset to any politician.
However, I should like to assure the minister that it will take more than his remarks which I have heard on radio and his pictures which I have seen on television-although he is good-looking as is his charming wife-to satisfy the farmers of Canada. The farmers are beginning to ask questions. He certainly has built himself up to the position of an outstanding lawyer-farmer. I wish him only well and I assure him of my co-operation. Nevertheless I should like to remind him of a few things. There is a real cause for dissension and unrest among the dairy farmers across Canada. I am sure he is well aware of the unrest at the moment in Ontario. While he may not think it is his problem, eventually it will be.
Our farmers across Canada are becoming older men. Many factors are involved in the dairy industry. The hours of the day, the week and the month are longer in the dairy industry than in any other phase of farming.
DEBATES	6843
Stabilization of Milk and Cream Prices So our farmers are getting older and cannot take it any longer. For this reason they are slowing up; they are leaving the farms; their sons are not taking over the farms. We must make the dairy picture much brighter than it ever has been. I do not think there is any question about the hours put in on the farm; all of us are well aware of that.
I should like to mention the creamery producers and I place emphasis on this because the creameries continually are on our backs and writing us letters wanting to know whether they are going to receive any consideration. Also there are the cream shippers. They too are asking questions. I know this is difficult for the minister. I hope he realizes that I know it is difficult. It must be solved, however, in one way or another.
Then there is the matter of the cheese factories. I have had more than a casual interest in the cheese factory business for many years. Recently I was quite disappointed because the minister did not succeed in obtaining some assistance in respect of the amalgamation of the cheese factories in Hastings county. I am not blaming him personally because I took him at his word, and I hope he did try to get this through. For some reason or other it failed.
Some years ago when I was here in parliament I was quite interested in establishing an export subsidy for our cheese. I come from the home of that famous cheese, Black Diamond. I know this is not the place to suggest any commercials but, as I say, Black Diamond cheese and its equivalent is widely known. That should be a standard. There is something else I should like to ask the minister, and it is this; what is our Department of Immigration doing about bringing farmers to Canada? Whoever heard of a legitimate dairy farmer or a farmer interested in dairy farming coming from southern Europe? Let us bring potential farmers from northern Europe.
[DOT] (9:40 p.m.)
I suggest that he should impress upon the department of immigration that we bring to Canada potential farmers from countries which are involved in farming generally and the dairy industry in particular. These people would not only provide necessary assistance to farmers, they would eventually be potential purchasers of our farms. Our farmers as they get older will want to sell their farms. These people could purchase them and help to maintain our farm industry.
A great deal has been said about the guarantee of $4 per hundred pounds of milk.
June 23, 1966
6844	COMMONS
Stabilization of Milk and Cream Prices The minister's statement in this regard sounds very good on the surface, but the $4 per hundred pounds must be considered in relation to the increasing cost of everything the farmer must purchase. No one knows how the situation will eventually end up or how high the farmers' costs will climb. Let us all be realistic and face the facts.
As the hon. member for Timiskaming (Mr. Peters) pointed out, the consumer is rightfully concerned about increasing costs. When the milk producer demands more for his product the consumer must pay more. All I can say is that I hope our minister will take advantage of his legion of advisers and the encouragement he has received, and do something for the dairy farmers, who are very hard pressed.
[Translation1


Henry P. Latulippe: Mr. Speaker, I am pleased to participate in the debate on this bill which provides for the establishment of a Dairy Commission for Canada. I know that the fad nowadays is to appoint commissions on all kinds of economic problems. Every time such a problem has to be dealt with, a commission is appointed. Why so many of them? Why can the Minister of Agriculture (Mr. Greene) not think of anything else but instituting new commissions?
I think the Department of Agriculture, with all its branches is big enough to handle this, considering that 75 per cent of its appropriations are for administrative expenditures. Still, another commission is being appointed; more jobs. Friends and favorites of the government will form another commission and their salaries will be much higher than the income many farmers receive in one year.
What are the purposes and functions of that commission? Will it take over from the farmer when he ceases to produce because it does not pay him? The farmer has been selling at a loss for 25 years now. Will the commission solve that problem? Farmers leave the land. Will the commission prevent them from leaving their farms?
The Catholic Farmers Union sent you some briefs. They have asked $4 per hundredweight, and that request has yet to be met. They are told they will get it, and then they do not. Will the commission give it to them? How expensive-a commission to tell the farmers; We are giving you $4 per hundredweight. It is going to cost a lot to the taxpayers.


Why can the farmer not get a better price for his milk? Because the taxpayers cannot pay him, because the citizens do not have enough purchasing power to buy what produce families need. Is the commission going to solve that problem, Mr. Speaker?
There are several problems, all of which are easy to solve. They are far from being as complicated as you think, but you spend your time complicating them, wishing to favour friends of the system. I believe that is it, there is no other reason. If you want to please the friends of the system, do not take it out on the farmers, for they are bankrupt already.
The present system has led them to bankruptcy because you favoured farm loans and all the farms are mortgaged. Is that commission going to pull them out of the clutches of financiers? Never. So, why then create commissions, pay large salaries to those gentlemen who become members of the various commissions?
The farmers know their own needs; just read their brief. The Department of Agriculture and all its agronomists must know what to do. You must know the needs of the farmers; there is no need to create a new commission.
Why is the price of milk not realistic and consistent with the economic situation? It is because the necessary measures were not taken.
It has long been considered to establish commissions in order to settle the problem, to spend the taxpayers' money, to tax the people even more, the workers, the builders of the country, so as to pay some gentlemen $25,000 a year. This must be stopped. There is too much red tape in Canada. Red tape is harmful to the people, because it exploits them. The government cannot help but indulge in red tape. Farmers no longer believe in the present government, nor in any government, because they can no longer make a living.
The only thing to do is to set up a system designed to provide the necessary purchasing power and enabling the people to buy farm products. The farmers will then be in a position to sell their products and make some profits. The same holds in all areas. That is the problem to be solved. Why are the plasters always applied next to the sore, and not on it? The plasters are always applied next to the sore, so no wonder it festers and does not heal. The economic situation is in bad shape
June 23, 1966

and that is why there is so much discontent in Canada. That is why strikes are breaking out all over and soon strikes will occur in the agricultural industry. If it has not happened yet, it will.
There are problems to be solved but commissions must not be set up to pass the buck and avoid responsibilities. Most commissions are created to enable the responsible parties to pass them on to someone else's shoulders.
No one wants to assume his responsibilities.
I have not yet seen a minister of agriculture or any other minister in Canada really assume his responsibilities, without passing them on to someone else, through commissions which cost a lot of money to the people. Well, the people will soon have enough of all those things.
[DOT] (9:50 p.m.)
Let us assume our responsibilities and solve those problems. They are easier to solve than we think; they are not so complicated. The government is complicating them with its agencies and economic policy of commissions. They set up one commission after the other; they spend all their time paying people who do not accomplish anything in offices, who work only two or three hours a day, and even less. We must therefor put a stop to that. If the people on those commissions worked like the farmers, I can assure you, Mr. Speaker, that the bureaucracy would be reduced, because some work would get done. No work at all is done in the departments; people do not work any more. At three o'clock in the afternoon, if you telephone civil servants, they are not there; they have left the office. Even at eleven o'clock in the morning or at two in the afternoon, several are not in their office; they are not there at ten o'clock. This is how the commissions do their work, Mr. Speaker, and the citizens are aware of it.


Mr. Speaker:: Order. I am rather reluctant to interrupt the member for Compton-Frontenac, but I must remind him that the legislation now under consideration does not deal with the establishment of commissions generally, but more especially with the establishment of a Dairy Commission for Canada and I would suggest that he should restrict his comments to this subject.


Henry P. Latulippe: In that case, Mr. Speaker, I will answer the member for Lotbiniere (Mr. Choquette) who has made some suggestions to settle the problem. He said the price of milk
DEBATES	6845
Stabilization of Milk and Cream Prices climbed from $2.80 to $4 today and that this is thanks to the Liberal party. But he did not say for example, that the cost of living has tripled or risen by 300 per cent since then. He did not say that an 11 per cent tax has been put on building material and on all sorts of materials and enterprises in Canada. He did not say the cost of living has risen. Milk would have to bring $10 a hundredweight to offset the cost of living in Canada. He did not speak of that.
Who put all these taxes and caused all these economic difficulties in Canada, if not the Liberal or the Conservative party, the two old line parties which have been in power? So he talked about the Canadian Dairy Commission, and about politics, and I take the liberty to answer him.
I could talk on the subject at length, Mr. Speaker, but I will merely say that there certainly are problems to be solved. There is the financial problem; if the government took control of the financial aspect, it could pay subsidies to milk producers and farmers through the Bank of Canada, though credit given by the bank. Then the government would solve these problems; it will never do so otherwise.
Subsidies are necessary for chemical fertilizers which the farmers need so badly. Others should also be paid for various things, and at the same time the 11 per cent tax on all building materials which the farmers use and need should be removed. There would be subsidies to pay on transportation, on feed grain, on improving farmers' roads to their homes. Some of them do not even have passable roads to reach their homes. I live in an agricultural riding. There are farmers it is impossible to reach, where it is impossible to go, because the road is not passable. They are not interested in remaining on their farm. They do not even have a road to get out.
And this, Mr. Speaker, concludes my observations.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Rinfret in the chair.
Clauses 2 to 23 inclusive agreed to.
On clause 1-Short title.
Thomas Speakman Barnett: On clause 1, Mr. Chairman, if it were not for the hour at which I see the clock has arrived I might be inclined to make a few remarks. All I should like to say is
June 23, 1966
6846	COMMONS DEBATES
Stabilization of Milk and Cream Prices that, while I enjoyed very much the lyrical and broad-ranging speech of the minister on second reading, I hope the next time we discuss the establishment of a Dairy Commission he will give us the benefit of dealing a little more directly and in more detail with the subject than he did tonight. I am sure it would be helpful if in future speeches were directed more to the subject matter of the bill.


[Stage Direction]
Clause agreed to.
Title agreed to.
Bill reported.
The Acting Speaker (Mr. Rinfrei):: When
shall the said bill be read a third time? By leave, now?


Some hon. Members:: Now.


John James Greene: the third reading of the bill.
Motion agreed to and bill read the third
time and passed.


Mr. Bernard Pilon (Chambly-Rouville):: Mr. Speaker, with unanimous consent may I revert to motions, please?


The Acting Speaker (Mr. Rinfret):: Does the house give unanimous consent to the hon. member for Chambly-Rouville (Mr. Pilon) reverting to motions?


Some hon. Members:: Agreed.


Some hon. Members:: No.


The Acting Speaker (Mr. Rinfret):: There does not seem to be unanimous consent for
the hon. member to revert to motions.


J.-E. Bernard Pilon: Would hon. members opposite care to state their objections, please?


Jay Waldo Monteith: There is no need to state any objection.


Malcolm MacInnis: Mr. Speaker, I strongly object to any unanimous consent being given at this time, and I am not called upon to give any explanation.


Jay Waldo Monteith: Hear, hear.


George James McIlraith: Mr. Speaker, I wonder whether I could ask the house if it is the wish that we take another item, or would hon. members prefer to call it ten o'clock?


Some hon. Members:: Agreed.


The Acting Speaker (Mr. Rinfrei):: Do hon.
members agree with the suggestion made by the Minister of Public Works (Mr. Mcllraith)?


George James McIlraith: I refer to the item dealing with crop insurance, Mr. Speaker.


Jay Waldo Monteith: Mr. Speaker, we would be happy to deal with that item, No. 76.


The Acting Speaker (Mr. Rinfret):: Is this agreed?


Some hon. Members:: Agreed.


Herbert Wilfred Herridge: Mr. Speaker, members of this group object to proceeding with the crop insurance item at this time.



BUSINESS OF THE HOUSE

George James McIlraith: Mr. Speaker, I wonder whether I could indicate the business for Monday. We will start with item No. 77, the Atlantic Development Board resolution; then the second reading of the public utilities transfer tax bill; the health resources fund resolution at the committee stage; the Canada Assistance Plan bill, second reading; the Canadian Film Board bill, second reading; the crop insurance bill; the public service and other superannuation acts, and the C.N.R. branch line bills. In view of the large number of measures I have indicated, we may not necessarily follow that sequence in calling them, if any other sequence would suit hon. members better. Oh, I should have indicated The Company of Young Canadians bill as well.
[DOT] (10:00 p.m.)


Mr. Douglas:: Will we not be proceeding with the Bank Act as it was originally intended on Monday?


George James McIlraith: Not on Monday.


Thomas Clement (Tommy) Douglas: Can the minister say when?


George James McIlraith: I am not able to give a firm answer; right away, I hope and expect.



PROCEEDINGS ON ADJOURNMENT MOTION

[Stage Direction]
A motion to adjourn the house under provisional standing order 39A deemed to have been moved.

David Samuel Horne MacDonald: I rise, Mr. Speaker, to put a question again which I put
June 23, 1966
in the house on June 13-perhaps that is the reason no answer was given. The question had to do with a very important speech delivered by the Prime Minister (Mr. Pearson) on the previous Saturday, I believe, when he received the Pioneer Award at Springfield, in the United States. The substance of the question was whether, in the light of the Prime Minister's remarks on that Saturday afternoon he was recommending, or his government was going to recommend at some future date, a federal union of north Atlantic countries which would provide for some kind of collective political and economic policies.
Now, on rereading the speech I discovered that it had a great deal to say not only about some far reaching plans with regard to the economic union of the north Atlantic countries, but there was a strong suggestion made of the possibility of an even wider union including, at some far distant point in time, the union of all countries. Whether or not the Prime Minister was suggesting here some kind of world union or federation, he did not make it abundantly clear. He did say a number of other things, however, that seem to be relevant to our situation vis-a-vis NATO. One of the things he said which has not been reacted to very much in our country to date was that perhaps of all countries presently faced with the problem of NATO, France is most realistic in accepting the fact that the kind of agreements that were made in the late forties with regard to north Atlantic defence may not have the same viability and reality today that they had at that time.
By contrast, he also indicated that some of the more powerful nations making up NATO, I think by inference indicating our neighbour to the south, were not being altogether too realistic in their own reactions to the new position of France with regard to the NATO alliance. Indeed the Prime Minister went so far as to say that NATO itself is certainly not sacrosanct, and we must think of NATO in new terms and new leadership and in the sense of a greater amount of autonomy amongst the European nations. Perhaps we may even have to have a period of suspended animation, so to speak, when the European nations can consolidate their own strength, and then we can enter into some kind of far-reaching union. When we talk about the ways in which technology and the mass media draw closer together, it is interesting to think that perhaps there are new and
Proceedings on Adjournment Motion different alternatives to the inward looking nationalism that has been part and parcel of the western world, particularly at certain difficult times in the last 50 years.
I, myself, am most anxious to see a wider public debate take place, not only in this house but in the nation, as to the possibility of new kinds of relationships, economically and politically, with nations on both sides of the Atlantic. I quote from the Prime Minister's speech:
It is essential that we move ahead in the field of political and social organization in a way which is at least remotely comparable to our technological and scientific progress ...
I repeat, we must develop common, unifying political institutions which would provide for collective foreign and economic policies, as well as genuinely collective defence.
I am more than anxious to hear the response of either the Prime Minister or his representative here this evening.


Hédard-J. Robichaud: Mr. Speaker, I am convinced that the hon. member who has just spoken and all hon. members know that this government warmly shares the objective of those who favour the development of a closer relationship which would lead eventually to union among the members of the Atlantic community. The Prime Minister is a well known advocate of Atlantic union as our ultimate objective. This objective, it is true, is under strain now as a result of the proposals of the French government to withdraw from joint planning and command arrangements of the alliance. The main task for the immediate future is to concentrate on devising arrangements among the members of the alliance, including France, to minimize as far as possible the effects of the current crisis on the prospects for Atlantic union.
It seems to me that before union can be pursued effectively it will be necessary for the European members of the Atlantic community to develop their future relationships with one another. Meanwhile of course we should continue to encourage the kinds of relationships among Atlantic countries which will prepare the ground for promoting union at an appropriate time.


Mr. Max Saltsman (Waterloo South):: Mr. Speaker, on June 14 I directed a question to the President of the Privy Council regarding

June 23, 1966

Proceedings on Adjournment Motion the pricing and sales policies of gasoline companies in many parts of the country. The question was prompted in view of the recent report of the royal commission on the gasoline price structure in the province of British Columbia, which indicated the existence of unfair trade practices.
I asked the minister whether he would give serious consideration to conducting an immediate investigation under the Combines Investigation Act into the pricing, marketing and production practices of the oil, gasoline and products industry. I based the urgency of the question on the situation which prevailed in my riding at the time, where the gasoline dealers, in despair and anger at the situation current in the industry, had decided to close down their pumps for one day in protest. This was a mood that was sweeping many parts of Ontario. Other gasoline dealers had closed down the day before and there was an indication that others were prepared to continue this kind of shut-down to register their protest at the pricing practices of the oil companies in Canada.
I am pleased to see the President of the Privy Council here tonight to reply to my question. With all due consideration for him I might say that the answer he gave in reply to my question did not give me encouragement in regard to his willingness to accept the urgency of an investigation into this situation. I am, of course, looking forward to hearing a further statement from him tonight.
In this particular case the gasoline dealers in the riding of Waterloo South have, I feel, performed a signal public service in bringing this matter to attention. I should like to quote a statement made by the president of the Association of Gasoline Dealers in Waterloo South which appeared in the Evening Reporter of Saturday, June 11. The president, Mr. Lester, said:
[DOT] (10:10 p.m.)
The majority of the driving public is taking a terrible beating from the companies on the price of gas-"We hate to sell it at 44-45 cents a gallon. There is no need for that price. They are becoming too greedy . . . and are fleecing the public."
At present, he said, the companies are charging Galt area dealers 38 cents a gallon for retail gas. "To get our 7.9 cents a gallon profit, which is not that large, we have to sell at 44.45 cents," he said. "At the same time, they sell it to unbranded dealers at 30-31 cents-who can re-sell it at about what we are paying."
He went on to say:
"'If it is being sold at 31 cents to unbranded dealers, we intend to apply pressure to get the

same price," said Mr. Lester, "At present, the situation is completely unfair." Even at that price, 31 cents, he stated, the companies are making a solid profit on auto gasoline, which is a comparatively cheap product to manufacture.
He claimed about 90 per cent of the retail station gas outlets were owned and operated by the companies, "who believe they can charge them any price they like."
"Their attitude is that, if we don't like it, we can get out of the business," he protested. This was a bad situation when many dealers had invested money and their livelihood in equipment and facilities.
The problem of gasoline prices in Canada is serious not only for the dealers involved, who I genuinely believe are working very hard for small remuneration, and who are frequently little more than serfs of the oil companies, but also for the public. There are indications that the price of gasoline in Canada is far higher than it should be. There are indications that our national oil policy, apart from its effects on the consumer, is working to the detriment of Canada; that it is not helping to reduce our balance of payments problem; and that because the oil companies in Canada are completely protected from foreign competition, the prices they charge are what the traffic will carry.
One needs only look at what has been going on in Canada to see how inefficient this industry is in looking after the public welfare. We must ask, do we need gasoline stations on nearly every corner of a metropolitan area? Also, who pays for these gasoline stations? In answering, I suggest that the public is paying for them, and that the station operators at the same time are being put into a most difficult situation in terms of earning their own living. The implications from the overbuilding that has been going on are that the cost of stations is being passed on to the public, which must pay for the high overheads in the industry.
Many other aspects of the problem could be raised, but time does not permit me to do so. I raise this question because I think it is incumbent upon the President of the Privy Council, who is head of the new department that is supposed to assume responsibility for consumer affairs, to institute a complete and wide ranging investigation in this whole problem.
One province in particular has already done this, and has come up with interesting findings. That province has made certain charges that I think the new department should investigate. But any province is restricted in the investigation it can conduct.
June 23, 1966	COMMONS
The President of the Privy Council can, at this moment, indicate to all provinces which are presently conducting investigations, or would like to, what the federal government is prepared to place at their disposal, so that they can work in co-operation with the government of Canada.
We can find the answers to the problems I have raised only in this way. I urge upon the President of the Privy Council-


Mr. Speaker:: Order, please. I understand the hon. member's time has already expired.


Guy Favreau: Perhaps the hon. gentleman has just a few more sentences to add. If so, I suggest he be allowed to continue.


Mr. Speaker:: Order. The hon. member's time has expired.


Guy Favreau: The hon. member for Waterloo South (Mr. Saltsman) has, in fact, urged me to cause an inquiry to be undertaken by the combines branch into the oil industry with respect to pricing, marketing and production of oil and gasoline products.
It is, of course, apparent that this is a matter of some public concern, as witness an inquiry by a royal commission in the province of British Columbia and the pressure for other inquiries at the provincial level which are in progress or are forecast.
The undertaking of such an industry-wide study is a large-scale project. Hon. members will be aware that within the past few years the Director of Investigation and Research has undertaken an inquiry into certain aspects of this industry which resulted in the publication, in 1962 of the T.B.A. report by the Restrictive Trade Practices Commission.
Clearly there are a number of important industries in Canada concerning which research studies might well be undertaken, and different views are no doubt held as to which sectors of the economy ought to be examined by way of research, and the priority to be assigned to various studies. Unfortunately, the research section of the combines branch cannot physically undertake all the projects that hon. members would suggest and, indeed, it must develop its program in an orderly manner and in accordance with the best judgment of the officials concerned in the light of the staff available.
I have already drawn to the attention of the director the suggestion of the hon. member for Waterloo South. The director has
DEBATES	6849
Proceedings on Adjournment Motion informed me that he and his staff are already well aware of the matters raised by the hon. member. I again emphasize that it would be unwise to hamper the general work of the branch, which is already overburdened, as hon. members well know, by forcing them to undertake immediately tasks which do not fit properly, for the moment, into the orderly program of research that the director is attempting to develop.


Stanley Howard Knowles: Mr. Speaker, on Tuesday, June 21, as recorded in Hansard at page 6681, I directed a question to the Minister of National Health and Welfare (Mr. MacEachen) as follows:
In view of the minister's statement in Vancouver yesterday to the effect that the government is giving intensive study to the problems of our old age pensioners, can he say whether this means that some legislation in this field will be placed before parliament this session, apart from what we already have?
Hansard goes on, if I may quote a few lines, as follows:


Allan Joseph MacEachen: Mr. Speaker, I would not rule out that possibility, though I am not confirming it.


Stanley Howard Knowles: As a supplementary question-


John Whitney Pickersgill: That is an answer worthy of Paul.
That reference, of course, was to the Secretary of State for External Affairs (Mr. Martin).
The record continues:


Some hon. Members:: Oh, oh.


Stanley Howard Knowles: Mr. Speaker, I am trying to ask a supplementary question. In the meantime, while the government is deciding on this and while the minister is trying to make up his mind, would he make a statement as to what old age pensioners are to do to meet the rising cost of livingV
At that point Your Honour told me that my question had been ruled out of order previously, to which I replied: "It is still a good question".
[DOT] (10:20 p.m.)
I put the question tonight to the minister's parliamentary secretary, and I hope she will be able to tell us what old age pensioners are to do while the government is making up its mind as to whether or not there is going to be any legislation at this session increasing the old age security pension. It has been possible for many months for the government to answer this kind of question, whether it
June 23. 1966
6850	COMMONS
Proceedings on Adjournment Motion came from this side or from dissident Liberals, by saying, "Wait for the Canada Assistance Plan. It is going to have something in it for old age pensioners, perhaps even more than the opposition is asking for."
I hope the parliamentary secretary is not going to give that answer tonight because we have now got the bill that sets out the Canada Assistance Plan and we know there is not in it any direct benefit to any old age security recipient. It provides for payments to the provinces on a certain basis, and if the provinces decide to supplement pensioners' income on a needs test basis, the federal government will share in the cost. But there is no increase in the pension itself.
This is a retrograde step about which we will have something to say on Monday when the Canada Assistance Plan is before us, but I say to the parliamentary secretary and the government, do not give us that line any longer. What both she and other Liberals on that side know is that there needs to be in this session an increase in the old age security pension at least to $100 a month across the board. Prices are going up. People are facing real problems in this area, and this parliament stands on trial on the question of whether or not it is going to meet the needs of our older people.
I make just one more comment. I suppose I should be chivalrous and say the parliamentary secretary is not old enough to remember what I am going to refer to, but I would like to remind Liberal members that the last time a Liberal government was defeated at the polls, which was in 1958, it was defeated largely because of its callous attitude to the old age pensioners. I am beginning to wonder whether the same Liberal party is not trying to court another defeat on the same issue. Despite all its talk nothing is being done to meet the needs of our older people. This is a crying shame.

I hope we are going to get legislation in this field. I hope the rumours that there are ructions in the Liberal party are true. I hope we are going to get legislation at this session. If the parliamentary secretary cannot tell us that this is the case, then I warn her that the party she supports has a very rough road ahead, and so it should, if it does not do better for the old age pensioners of this country.


Jay Waldo Monteith: On a point of order, Mr. Speaker, I would like to correct the hon. member for Winnipeg North Centre (Mr. Knowles). The last time the Liberal government was defeated was in 1957.


Stanley Howard Knowles: Thank you, it was in 1957.


Mrs. Margaret Rideout (Parliamentary Secretary to Minister of National Health and Welfare):: Mr. Speaker, I think the hon. member for Winnipeg North Centre (Mr. Knowles) is well aware that the Minister of National Health and Welfare (Mr. MacEachen) has already replied to similar questions by hon. members. I refer to his answers at pages 6122 and 6434 of Hansard, and also to page 6673 when I replied for him to a question put by the hon. member for New Westminster (Mr. Mather).
There is nothing further I can add on this occasion without being repetitive, except to say I would like to remind the hon. member of the minister's remarks in which he said that the hon. member's interest, and the interest of all of us are shared by the government, which will be demonstrated as we develop further programs in support of Canada's older citizens.


Stanley Howard Knowles: When?
Motion agreed to and the house adjourned at 10.27 p.m.

Monday, June 27, 1966