1966-10-06

[Stage Direction]
Second report of special joint committee on consumer credit-Mr. Basford.
(Note: Text of the foregoing report appears in today's Votes and Proceedings.)


[Stage Direction]
On the orders of the day:
Right Hon. J. G. Diefenbaker (Leader of the Opposition):: Mr. Speaker, in the absence of the Minister of Veterans Affairs I would ask the Prime Minister-and this is at the request of old soldiers all across the country-whether the government intends at the present session to introduce an amendment to the War Veterans' Allowance Act so that war veterans achieving the age of 70, or 69, and becoming in receipt of the old age pension, will not have the amount of their allowance reduced.


Right Hon. L. B. Pearson (Prime Minister):: Mr. Speaker, in the absence of the minister concerned, who is laid up with the 'flu, may I tell my right hon. friend that I will be glad to take up this matter with the minister. As the right hon. gentleman probably knows, there are amendments to be introduced in this session to the war veterans legislation. As this is a matter largely for the minister, perhaps this should be dealt with after I have had a chance to talk to him.


Mr. H. W. Herridge (Kootenay West):: May
I ask a question supplementary to that asked by the Leader of the Official Opposition, and direct it to the Prime Minister. Could the Prime Minister also inform the house whether it is the intention to introduce some amendments to the pension act this session?


Lester Bowles Pearson: Mr. Speaker, I will be glad to take this question under advisement, too.



PRESENCE IN GALLERY OF MEMBERS OF JAPANESE GOVERNMENT

Lester Bowles Pearson: With your permission, Mr. Speaker, I should like to call the attention of the house to the presence in the gallery of a very distinguished delegation of members of the Japanese government, headed by the foreign minister of Japan, who have done us the honour of visiting us in Ottawa at this time, in the continuation of discussions which are periodically held by the representatives of both governments, and which have been going on for some years. I am sure that all members of the house will share my satisfaction at the visit of the Japanese foreign minister and his colleagues, to this country.
[DOT] (2:40 p.m.)



NORTHERN AFFAIRS


Hon. Arthur Laing (Minister of Indian Affairs and Northern Development):: Might I have the consent of the house to return to motions? When you called motions, Mr. Speaker, I was engaged in a lively conversation with one of my colleagues.
I should like the privilege of tabling copies in French and English of a summary of the report of the advisory committee on the development of government in the Northwest Territories, and a copy in English only of the complete report.


Mr. Speaker:: Has the minister leave of the house to revert to motions for the purpose of tabling these documents?


Some hon. Members:: Agreed.


Arthur Laing: It is my intention to speak very briefly on this matter.


John George Diefenbaker: Leave that until tomorrow. The agreement was just for leave to table the documents.


Arthur Laing: That is fine.


Mr. Speaker:: The minister can make a statement now, in the ordinary way, on motions. I understand we have reverted to motions. Of course after the minister has made

October 6, 1966
Inquiries of the Ministry his statement hon. members may comment on it.


John George Diefenbaker: Agreement was unanimous that there should be reversion tor the purpose of tabling a report. Now that the report has been tabled possibly the minister will wait until tomorrow. We would then be able to study the report and follow him intelligently in the argument he advances.


Arthur Laing: In the light of the comment made by the right hon. gentleman I think I am entitled to say a few words.


Some hon. Members:: Order.


Mr. Speaker:: Order.



INDUSTRY


[Stage Direction]
On the orders of the day:
Mr. T. C. Douglas (Burnaby-Coquitlam):: May I direct a question to the Prime Minister. Yesterday the government objected to a debate on motor car prices on the ground that this matter was before the committee on consumer credit. Since my information now is that the steering committee of that body does not intend to call representatives of the automobile manufacturing companies, may I ask the Prime Minister whether he would consider introducing a motion into the house to refer to the committee on consumer credit this question of the increased prices of 1967 car models?


Lester Bowles Pearson: I will be glad to look into that possibility.



WINTER WORKS


[Stage Direction]
On the orders of the day:
Mr. Raymond Langlois (Megantic):: Mr. Speaker, I should like to direct my question to the hon. Minister of Labour.
Does the government anticipate any change in its policy regarding the 1966-67 winter works program as compared with the projects implemented last year?


Hon. J. R. Nicholson (Minister of Labour):: Yes, Mr. Speaker. The hon. gentleman may not have been in the house, but I think that the fact that the $500 winter house building incentive bonus will not be payable this year was announced before the adjournment some months ago. With regard to other winter works programs I suggest the hon. member refer his questions to my colleague who has responsibility for them. These are not the responsibility of the Minister of Labour.


Raymond Langlois: Might I then direct my question to the minister answerable for the winter works program, since responsibility for it has been placed elsewhere.


Hon. Jean Marchand (Minister of Manpower and Immigration):: I think it was announced publicly-I do not know whether it was in this house or not-that during the coming year the same program will be implemented that was implemented last year.



NATIONAL SECURITY


[Stage Direction]
On the orders of the day:
Mr. R. N. Thompson (Red Deer):: My question is directed to the Prime Minister. Can the right hon. gentleman tell us when he will be able to announce the proposed special commission to inquire into security in Canada?


Lester Bowles Pearson: I certainly hope to be able to announce the membership of this committee shortly, but I am afraid I cannot go beyond this at the moment.



FINANCE


[Stage Direction]
On the orders of the day:
Hon. George Hees (Northumberland):: Mr. Speaker, I wish to direct a question to the Minister of Finance. In view of the announcement by the Dominion Bureau of Statistics appearing in this morning's paper to the effect that the index of industrial production has fallen for the third month in a row, would the minister and the government give consideration to reversing their tight money policy and allow production to expand rather than forcing it to contract?
October 6, 1966


Hon. Mitchell Sharp (Minister of Finance):: Mr. Speaker, I have seen no evidence whatever to suggest that the gross national product is declining.


George Harris Hees: As a supplementary question, would the minister be good enough to read the Canadian Press dispatch appearing in this morning's paper, outlining exactly what I have said?


Mr. Speaker:: Order, please.


George Harris Hees: Mr. Speaker, I should like to address my question to the Minister of Finance. Now that the minister has been made aware of the Dominion Bureau of Statistics figures showing that the index of industrial production has fallen for three successive months, does he not believe that he should reverse his tight money policy to allow industry to expand rather than force it to contract?


Mr. Speaker:: Order. I do not think this question can be asked at this time. The hon. member may want me to refer to a number of precedents on the point.


George Harris Hees: I will raise this question again at ten o'clock, Mr. Speaker.


EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
Mr. Heward Grafftey (Brome-Missisquoi):: Mr. Speaker, I wish to direct my question to the hon. Secretary of State for External Affairs.
I should like to know if the hon. minister has met with Mr. Couve de Murville, the French Minister of Foreign Affairs, with regard to the establishment or the creation of a French Commonwealth of sorts and, if so, is the hon. minister in a position to inform the house concerning the talks he has had?


Hon. Paul Martin (Secretary of State for External Affairs):: Mr. Speaker, it is true that I have met with the French Minister of Foreign Affairs, but there was no mention of this question.


William Heward Grafftey: Did Mr. Couve de Murville tell the hon. minister that he has had similar talks with Quebec officials?
Inquiries of the Ministry


Paul Joseph James Martin: Mr. Speaker, we discussed the suggestion made by the President of Senegal with regard to the French speaking peoples:
That is not the question the hon. member just asked me.


Mr. Gilles Gregoire (Lapointe):: Mr. Speaker, may I put a supplementary question concerning precisely the conversations which the Secretary of State for External Affairs may have had with President Senghor of Senegal.
Would the minister tell us whether Mr. Senghor's suggestion has received favourable consideration by the government and whether Canada intends to act on Mr. President Senghor's proposal?


Paul Joseph James Martin: Mr. Speaker, we were delighted to have in Canada so distinguished a man as president Senghor. I may say that I assured him we agree in principle with the suggestion he made a few months ago.


Hon. Theogene Ricard (Saint-Hyacinthe-Bagot):: With a view to implementing the proposals concerning a French speaking establishment, did the Secretary of State for External Affairs discuss the matter with the Quebec premier in order to seek his views?


Paul Joseph James Martin: I have not yet had this privilege.



UNEMPLOYMENT INSURANCE


[Stage Direction]
On the orders of the day:
Mr. Reynold Rapp (Humboldl-Melforl-Tisdale):: Mr. Speaker, I would like to direct a question to the Minister of Labour in reference to unemployment insurance for farm labour. Since the minister informed the house before the summer recess that he would bring in legislation to provide such insurance for farm labourers, may I ask when will he be ready to introduce that legislation?


John Robert (Jack) Nicholson: Mr. Speaker, I am happy to inform the hon. member and other members of this house that, on the strength of the legal advice which we have received, it will not be necessary to amend the Unemployment Insurance Act to bring about the desired end to wbirh
Inquiries of the Ministry the hon. member has just referred; it is the intention of the government to extend unemployment insurance to agricultural and horticultural workers effective on or about April 1 next year. We are now working on the necessary regulations and I hope to make them public at a very early date.


Mr. Knowles:: You should have hired those lawyers ten years ago.


John George Diefenbaker: Another triumph for the hon. member for Humboldt-Melfort-Tisdale (Mr. Rapp).



WHEAT-REPORTED DIFFICULTIES IN FINANCING SALES

[Stage Direction]
On the orders of the day:
Hon. Alvin Hamilton (Qu'Appelle):: Mr. Speaker, my question is addressed to the Minister of Trade and Commerce in his capacity as de facto spokesman for the Canadian Wheat Board. In view of the difficulty of getting credit for those countries which are presently buying wheat from us under long term agreements, what action has the minister taken to ensure that for the next sales under these long term agreements these countries can get credit in Canada?


Hon. Robert Winters (Minister of Trade and Commerce):: Mr. Speaker, I am not the de facto spokesman for the Canadian Wheat Board. The Canadian Wheat Board is under the Minister of Finance, and I presume he is in a position to answer the question.


Mitchell William Sharp: Mr. Speaker, I have been in constant touch with the Canadian Wheat Board and with exporters on this very difficult subject. My understanding is that the sales for early delivery have now all been financed, albeit with some difficulty.
I am very much aware that there has been difficulty in this regard. As Minister of Finance I have felt that I should not give any greater preference in the demand for credit in Canada to people in eastern Europe than I should give to Canadians themselves.

October 6, 1966
Therefore I felt I could not intervene to give discriminatory treatment in favour of those people as against Canadians many of whom require money for financing their enterprises in Canada. However, I do hope it will be possible in the future to avoid as much difficulty as there has been in these recent transactions.


Francis Alvin George Hamilton: Mr. Speaker, I have a supplementary question. First of all I apologize to the Minister of Finance for directing my question in the way I did. I only went on the news reports this last summer, and I thought the Minister of Trade and Commerce would now speak for the Canadian Wheat Board.
My supplementary question is this. Have the facilities of the Export Credits Insurance Corporation, which still has an odd $100 million available to pay for insurance, been examined to see whether it would be possible to amend the regulations in such a way as to make sure that those countries which want to buy supplies of wheat at this moment or in the next few months can have access to this available credit of the Export Credits Insurance Corporation?


Mitchell William Sharp: Yes, a very thorough examination had been made of all these facilities. As the hon. member knows, in our arrangements with the countries with which we have wheat contracts the undertaking of the federal government is to guarantee the repayment of the loans, not to provide the money. The Export Credits Insurance Corporation has facilities for extending loans for long term capital purposes, not for purposes of financing short term credits such as these wheat sales.
If it had been possible to use those facilities we would have given sympathetic consideration to it. In our judgment it would not have been suitable for this purpose. As I say, I am not at all unconscious of these difficulties, and the last thing I would want to see would be any prevention of sales to these countries pursuant to these contracts because of the non-availability of credit. This has not prevented the sale of wheat, and I do not think it will.

October 6, 1966



ADMINISTRATION OF JUSTICE


[Stage Direction]
On the orders of the day:
Mr. Frank Howard (Skeena):: Mr. Speaker, I should like to direct a question to the Solicitor General. I should like to ask the minister whether he has anything to report to this house about the progress of the discussions between his government and presumably the government of Quebec in respect of the interim considerations which were given to the Royal Canadian Mounted Police investigation into certain activities of the Seafarers International Union.


Hon. L. T. Pennell (Solicitor General):: Mr. Speaker, as a result of the findings of the Royal Canadian Mounted Police a report was made to appropriate officials in the provinces of Quebec and Ontario. I understand the final decision has been made by the province of Quebec, but I do not think their position has been communicated officially to the government. Regarding the position taken by the appropriate Ontario officials, that is still pending.
I have just now been informed by the Minister of Labour that an official report has been made to the Minister of Justice.


Frank Howard: Mr. Speaker, as a supplementary question may I ask the Minister of Labour about that report.


John Robert (Jack) Nicholson: Mr. Speaker, an interim report or a report on certain aspects of the matter has been submitted to the Minister of Justice and I have had an opportunity to discuss it with some of his officials, but there is one phase of the report which is still to come.


Frank Howard: Mr. Speaker, perhaps the Minister of Justice would give some consideration to this question in order that we may then know what he thinks about this matter.


Lawrence T. Pennell: My purpose in taking part was to help the hon. member, but perhaps I should not have attempted to give an answer in view of the fact that I was thinking of another investigation being carried out. The duties relating to the office of the Solicitor General have been completed and, therefore, reports would go to another minister.
Inquiries of the Ministry POST OFFICE DEPARTMENT



REPORT OF INQUIRY INTO GRIEVANCES OF EMPLOYEES

[Stage Direction]
On the orders of the day:
Hon. Michael Starr (Ontario):: Mr. Speaker, I should like to ask the Postmaster General whether Mr. Justice Montpetit has completed his report in regard to complaints of the postal workers.


Hon. Jean-Pierre Cote (Postmaster General):: Mr. Speaker, in answer to that question, I have been told that Mr. Justice Montpetit will present this report on October 13. That is the projected date, but it will be presented no later than October 18.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Mr. J. M. Forrestall (Halifax):: Mr. Speaker, I should like to direct my question to the Minister of National Defence. Did he receive a brief this morning from 45,000 Canadians of the Navy League of Canada, the Naval Officers Association and the Royal Canadian Naval Association?


Hon. Paul Hellyer (Minister of National Defence):: Not to my knowledge, Mr. Speaker, although it may have been received and as yet not brought to my attention.


Mr. Speaker:: Order, please. Perhaps the hon. member should complete his question. I do not think it is sufficient just to ask a minister whether a brief has been received.


J. Michael Forrestall: Mr. Speaker, I wanted to ask in a supplementary fashion whether the minister would give consideration to the reference of this brief to the standing committee on national defence upon its receipt.


Paul Theodore Hellyer: Mr. Speaker, it is very difficult to say what will be done with a brief that has not yet been received.


An hon. Member:: Everybody else has a copy of it.


Mr. Bell (Saint John-Albert):: It is on your desk and it is on everybody's desk.


J. Michael Forrestall: I have a supplementary question, Mr. Speaker. Upon receipt of this brief will the Minister of National Defence give immediate consideration to the suggestion?
8378	COMMONS
Inquiries of the Ministry


Mr. Speaker:: Order, please. This question has now become hypothetical.


John George Diefenbaker: I should like to ask a supplementary question, Mr. Speaker. Everyone has received a copy of this brief except perhaps the minister, and in view of the disagreement with the policy of unification-I am not speaking about integration-will the Prime Minister make it possible to convene the committee immediately in order that evidence may be heard and parliament made aware of the facts? Such a procedure would be more acceptable than mere ex parte statements by the minister;


Lester Bowles Pearson: Mr. Speaker, the sooner the legislation can be introduced and referred to the committee the sooner the committee will be able to meet and obtain all the facts, including the fact that there is an amount of agreement in the country regarding the policy referred to.


John George Diefenbaker: Having regard to saving money, how much has the national defence budget increased since this policy was adopted?


Lester Bowles Pearson: I am sure that is something the committee will want to know.


John George Diefenbaker: I should say so.



BRIDGES


[Stage Direction]
On the orders of the day:
Mr. Maurice Allard (Sherbrooke):: Mr. Speaker, I should like to put a question to the Minister of Transport.
In order to comply with the request made by the Quebec Trucking Association and hundreds of thousands of Canadians, does the minister intend to abolish tolls temporarily on Champlain bridge until the repair work is completed on Jacques Cartier bridge?


Hon. J. W. Pickersgill (Minister of Transport):: Mr. Speaker, I do not think the minister has the power to do what the hon. gentleman has suggested. The proposal that something of this kind be done by the government or the appropriate agency is under consideration.
[Mr. Forrestall.)
DEBATES	October 6, 1966



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Mr. Donald Maclnnis (Cape Breton South):: Mr. Speaker, I should like to direct a question to the Minister of Indian Affairs and Northern Development on behalf of the workers at the Louisburg project, the hon. member for Cape Breton North and Victoria and the Minister of National Health and Welfare, in whose constituency this project is located. Will the minister take the necessary steps to ensure that the pending or actual lay-offs at this project will not take place or continue, so this project may continue at its present rate?


Arthur Laing: At the
very start, Mr. Speaker, I want to assure the hon. member that I have had representations from my colleague the Minister of National Health and Welfare on this matter. I would think the lay-offs will probably be replaced, and I am hopeful that they will be replaced out of a winter works program as they were last year.


Mr. Maclnnis (Cape Breion Souih):: A supplementary question, Mr. Speaker. Will the minister make the necessary representations to the Minister of Finance, because our colleague from Inverness-Richmond may have difficulty reaching that minister?


Mr. Speaker:: Order, please.



FINANCE


[Stage Direction]
On the orders of the day:
Mr. L. M. Brand (Saskatoon):: Mr. Speaker, my question is for the Minister of Finance. In his budget speech on March 29 this year the minister told the house, as reported at page 3375 of Hansard, that the government expected to receive and publish within two months the report of the royal commission on taxation. In view of the fact that over six months has now elapsed since the minister made that statement, will he now inform the house when this report will be made public?


Mitchell William Sharp: Mr. Speaker, I regret to say that I do not have control over the operations of royal commissions, and certainly not over this one.
October 6, 1966

We had hoped, and that had been my expectation at the time, that the royal commission would present its report in two months. The latest information I have is quite pessimistic, and I would hesitate to give a date even now.


Stanley Howard Knowles: A supplementary question, Mr. Speaker. May I ask the Minister of Finance whether further chapters of this report have been made available to officials of his department in addition to those that were made available some seven or eight months ago?


Mitchell William Sharp: Mr. Speaker, I cannot speak of this with certainty because I have entered into a self denying ordinance as far as the minister is concerned. I understand from my deputy minister that officials of my department who are trying to keep closely in touch with this matter have undoubtedly seen further draft chapters. But this, I must say, is only hearsay.


Francis Alvin George Hamilton: A supplementary question, Mr. Speaker, to the Minister of Finance. Would the minister inquire, or has he ascertained, from officials of his department whether sections of that report have been made available to groups of business people and others in Toronto, who are discussing the report fairly publicly?


Mitchell William Sharp: I would deny quite emphatically that any parts of this report have been seen by anyone outside of officials of the Department of Finance. I was quite frank in the house in saying why we had made this arrangement. But if there is any speculation of this kind, it is based upon guesses as to what is in the report and not on the content itself.



AGRICULTURE


[Stage Direction]
On the orders of the day:
Mr. Augusie Choquette (Loibiniere):: Mr. Speaker, my question is directed to the Minister of Agriculture whom I would like to congratulate for his splendid contribution to the victory in Nicolet-Yamaska.
The question which I should like to put to the minister is as follows-


An hon. Member:: Just by the way-


Auguste Choquette: It deals with a press release of the Department of Agriculture in connection with an agreement entered into by the
Inquiries of the Ministry provincial ministers of agriculture of Quebec and Ontario and himself. Can the minister give some explanation about that agreement? Does it provide for an increase in the cost of manufacturing milk and the assurance of a renewal of existing subsidies?
This is a very important matter, Mr. Speaker, because the press release issued is unfortunately not explicit enough to enlighten people on this.


Mr. Speaker:: Order. It is not very easy to determine whether the question is so urgent that it requires an immediate answer. If the hon. member believes it to be particularly urgent-and he is nodding at me-in that case, I would suggest that he raise it tonight at ten o'clock.


Mr. Eric A. Winkler (Grey-Bruce):: In a
similar vein, Mr. Speaker, I should like to ask the Minister of Agriculture whether he would assure the house that the milk producers in the province of Ontario and the province of Quebec will, as a result of his announcement, be assured of $4 a hundred for manufactured milk, f.o.b. the farm.


Mr. Speaker:: The hon. member for Grey-Bruce may not have heard what I said a moment ago in another language. I wonder whether he would join the hon. member for Lotbiniere at ten o'clock this evening.


Some hon. Members:: Oh, oh.


Mr. Speaker:: There is no supplementary question. The question has not been accepted.



CANADIAN BROADCASTING CORPORATION


[Stage Direction]
On the orders of the day:
Mr. Eldon M. Woolliams (Bow River):: Mr. Speaker, yesterday I asked a question of the Prime Minister in reference to the 24 per cent or 22J per cent increase in wages granted Canadian Broadcasting Corporation employees. The Prime Minister said:
The government felt, since it was responsible for the C.B.C., that it would be unwise from the government point of view to go beyond these figures-
In view of that answer, what active steps did the government take in reference to the increase in pay, and will this matter be brought before parliament?
October 6, 1966

Inquiries of the Ministry Right Hon. L. B. Pearson (Prime Minister):
Mr. Speaker, it was an increase recommended by the chairman of a conciliation board and the totals did not go beyond the recommendation. My hon. friend will have a chance to discuss this and other matters concerning the C.B.C. before long, I hope, in this house.



EXTENSION OF TELEVISION SERVICE IN NORTHERN MANITOBA

[Stage Direction]
On the orders of the day:
Mr. Robert Simpson (Churchill):: Mr. Speaker, I should like to direct a question to the Secretary of State. I wonder whether the Secretary of State has anything to report on the progress which may have been made with regard to the provision of C.B.C. network television for northern Manitoba.


Hon. Judy V. LaMarsh (Secretary of State):: Mr. Speaker, while the house was in recess I had a meeting with the premier of Manitoba and the president of the corporation. I am happy to say that it appears that good progress is being made.



SHIPPING


[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 Transport. It is based on a Privy Council order permitting Canadian National Railways to construct a permanent bridge which will effectively block major navigation. The matter is urgent because the crew arrived yesterday to commence construction. My question is, what decision has the government reached concerning the provision of access to Bala wharf on lake Muskoka as a result of this bridge construction?


Mr. Speaker:: I was wondering whether this is actually a matter of national urgency. I suggest that the hon. member might want to take up this question directly with the minister.


Gordon Harvey Aiken: I would like to take it up with the minister at ten o'clock, Mr. Speaker.



FISHERIES


[Stage Direction]
On the orders of the day:
Mr. Lloyd R. Crouse (Queens-Lunenburg):: Mr. Speaker, I should like to direct a question to the Minister of Fisheries. In view of 
the objections raised to the recent extension of the closed season for herring seiners in the bay of Fundy, is the Minister of Fisheries now prepared to state the date on which this discriminatory regulation will be lifted?


Hon. H. J. Robichaud (Minisler of Fisheries):: First, Mr. Speaker, I would not agree that it is a discriminatory regulation, because the regulation was amended earlier this year. The closing date for seiners operating in a certain section of the bay of Fundy was advanced from November 15 to September 30, subject to review by the minister at that time. After an extensive review of this situation it was found possible to extend the season by 10 days in order to allow the seiners and their operators in the area to get their fair share of the herring catch.


Thomas Miller Bell: have a supplementary question, Mr. Speaker. In this connection has the minister received a request for a meeting about this matter; has he acquiesced in that request and, if so, when and where will the meeting be held?


Hédard-J. Robichaud: No such request has been received in recent months or even recent weeks.


Thomas Miller Bell: Is the minister aware that a wire went yesterday to the Prime Minister and himself saying that this group of seiners have been trying for three years to meet with the minister on this problem?


Hédard-J. Robichaud: Mr. Speaker, I am fully aware that such a telegram went to the Prime Minister. A meeting was requested last year, and I offered to have the seiners meet with senior officials of my department. This meeting took place and the regulations were amended accordingly.


Thomas Miller Bell: Will the minister meet these fishermen personally?


Mr. Speaker:: Order, please.


Frank Howard: Mr. Speaker, I have a supplementary question. I should like to ask the Minister of Fisheries whether he has any statement to make about straight base lines.


Hédard-J. Robichaud: Mr. Speaker, I want to repeat what I said in the house in August. Discussions regarding the establishing of coordinates, or straight base lines, have been
October 6, 1966

very active in recent weeks. We expect to have another meeting with United States officials within the next two weeks, and following that meeting I hope we will be in a position to take positive action.


Frank Howard: We hope so, too.



HOUSING


[Stage Direction]
On the orders of the day:
Mr. David Orlikow (Winnipeg North):: Mr. Speaker, I should like to direct a question to the Minister of Labour in connection with housing and ask him whether, in the light of the very sharp decline of almost 60 per cent in housing starts in Canada in the first seven months of this year as compared to the same period last year, the government is considering implementing any new policies to increase housing starts to meet the need for housing in this country.


John Robert (Jack) Nicholson: I think that on an earlier occasion in this house I stated that it was expected there would be a substantial decrease in housing starts this year. One reason was that there had been an abnormally large number of starts during the last quarter of last year.
This question is timely, Mr. Speaker, because in answering it I can refer to the fact that in certain cities where housing construction has fallen off there still seems to be an adequate supply of houses. I will give you one example. At the end of August, 1965-


Mr. Speaker:: Order, please. The answer the minister is giving now is very interesting, but it seems to me that this is not the time to give such an answer. Neither is it perhaps the time to ask such a question.


Mr. Reid Scoff (Danforfh):: I have a supplementary question, Mr. Speaker. In view of the decline in housing starts can the minister give the house an indication whether any priority will be given to passage of the legislation under his name which appears in Votes and Proceedings of today?


John Robert (Jack) Nicholson: I am very happy to give that assurance. I hope it will be up for discussion within the next few days.
Inquiries of the Ministry NATIONAL DEFENCE
INQUIRY AS TO SALARY SCALE OF NAVAL LIEUTENANTS On the orders of the day:


Mr. Robert McCleave (Halifax):: I have exceeded the record by 12, which is more than the score that Moe Drabowsky, who played baseball in Nova Scotia, inflicted on the Los Angeles Dodgers yesterday.
My question is directed to the Minister of National Defence. Will the minister look into the anomaly whereby naval lieutenants, who formerly received more in pay and allowances than chief petty officers now receive less under the new pay scale of the armed forces?


Mr. Speaker:: Order, please. This question should be placed on the order paper.


Robert Jardine McCleave: I shall bring it up again at ten o'clock, Mr. Speaker.
REQUEST FOR REPORT ON MINISTER'S VISIT TO HALIFAX On the orders of the day:


Hon. Gordon Churchill (Winnipeg South Centre):: I wish to direct a question to the Minister of National Defence. Will the minister tell us, in view of the timidity he has displayed in calling the defence committee together, when he will give the house a report on the abject failure of his mission when he met with personnel of the navy at Halifax during the recess of the house?


Paul Theodore Hellyer: It was a very interesting and worth while trip, Mr. Speaker. The people of Halifax were most cordial, and I enjoyed it very much.


Gordon Minto Churchill: I was talking about the naval personnel, Mr. Speaker.



POSSIBLE CLOSING OF NAVAL BASE AT CORNWALLIS, N.S.

[Stage Direction]
On the orders of the day:
Mr. J. P. Nowlan (Digby-Annapolis-Kings):: I wish to put a supplementary question to the Minister of National Defence regardless of whether it relates to his Halifax visit. In view of the quite proper concern in this matter has a decision been made to close the naval base at Cornwallis, and if so, on what date and where will a statement be made?


Paul Theodore Hellyer: The answer is that no decision has been made, as was indicated earlier. The base consolidation program will be studied during the next year or so and when decisions are made, plans will be announced.
October 8, 1966

Inquiries of the Ministry ROYAL CANADIAN MOUNTED POLICE	RAPESEED-POSSIBLE SALE TO JAPAN



REQUEST FOR RETENTION OF MUSICAL RIDE AND EQUESTRIAN DUTIES

[Stage Direction]
On the orders of the day:
Mr. K. H. More (Regina City):: Mr. Speaker, my question is directed to the Solicitor General. I wish to ask him whether the government is considering the removal from the R.C.M.P. establishment in Regina of training equipment, forces and personnel needed for the musical ride and other equestrian duties. If so, has the final decision been made, and is the minister giving sympathetic consideration to the numerous representations which have been made requesting that these facilities remain in Regina for historic and other substantial reasons?


Mr. Speaker:: The hon. member will allow me to say that this question has a familiar ring to it. My understanding was that it was to be put on the order of business for the adjournment debate this evening, although if the hon. member suggests that the question is different, it will be allowed. However, it seems to me that this question was refused yesterday and the hon. member agreed to give notice and discuss it later today.



TEXTILES-EFFECTS OF IMPORTS FROM JAPAN

[Stage Direction]
On the orders of the day:
Maurice Allard: Mr. Speaker, I should like to put a question to the hon. Minister of Finance and Receiver General.
Following a press release issued by the Department of Finance some 15 days ago predicting an increase in the imports of Japanese textiles into Canada next year, would the hon. minister give this house the assurance that the Canadian textile industry, and particularly the 12 Sherbrooke industries, will not be affected?


Mitchell William Sharp: Mr. Speaker, I can assure the hon. gentleman that the discussions we have been having with the Japanese have been of a character designed to protect the Canadian textile industry against disruption, as they have in the past. I think the success of this policy has been demonstrated by the continued healthy activity of that industry.
[Mr. Hellyer.l
On the orders of the day:


Reynold Rapp: I wish to direct my question to the Minister of Trade and Commerce. In view of the fact that a delegation from Japan is presently visiting Ottawa, will the minister bring to their attention the fact that this year we have a huge crop of rapeseed for sale and they can have almost any amount they might like?


Robert Henry Winters: You may be sure the subject has been mentioned, Mr. Speaker.



REQUEST FOR STUDY OF STATUS BY ROYAL COMMISSION

[Stage Direction]
On the orders of the day:
Mrs. Grace Maclnnis (Vancouver-Kings-way):: Mr. Speaker, I am not sure whether my question should be addressed to the Prime Minister or to the Secretary of State. Has the government received a request from the committee for the equality of women in Canada to appoint a royal commission to inquire into the status of women in Canada today? If so, what action is the government taking? Two answers will not be out of order, Mr. Speaker.


Lester Bowles Pearson: Mr. Speaker, I believe I have received that request and also a good deal of persuasive pressure on this matter from the Secretary of State (Miss LaMarsh). It is under serious consideration.



INQUIRIES OF THE MINISTRY

[Stage Direction]
On the orders of the day:
Mr. R. D. McLelland (Rosetown-Biggar):: Mr. Speaker, I should like to direct my question to Hon. Mr. Greene, Minister of Agriculture. Now that the South Saskatchewan river dam is rapidly approaching completion, will the minister inform this house and the nation whether the government is considering appropriately naming it the "John G. Diefenbaker Dam"?


Hon. J. J. Greene (Minister of Agriculture):: Mr. Speaker, I have no doubt in my mind that this would be a most notable name for many memorials in this country, but there are also other names which are equally meritorious and which are also being given consideration. The announcement will be made in due course.
October 6, 1966


Herbert Wilfred Herridge: Mr. Speaker, I wish to address my question to the Secretary of State. Did the premier of British Columbia communicate with the Secretary of State, as I understand is customary, before he accepted a foreign order?


Julia Verlyn (Judy) LaMarsh: I did not know that the premier of British Columbia took orders from anybody.



OLD AGE SECURITY


[Stage Direction]
On the orders of the day:
Eric Alfred Winkler: Mr. Speaker, I should like to put a question to the right hon. Prime Minister with regard to the proposed legislation to increase old age security payments. May I ask him if he would inform the house the date upon which such payments will become effective, regardless of when the legislation is introduced?


Lester Bowles Pearson: Mr. Speaker, that will be made clear in the legislation, and I certainly hope the legislation will be introduced shortly. There are one or two important measures that have priority over it, but after that I look forward to its introduction.


Thomas Clement (Tommy) Douglas: have a supplementary question, Mr. Speaker. May I ask the Prime Minister whether in the preparation of this legislation any consideration is being given to the fact that some of the provinces pay a supplementary bonus to old age pensioners. If this is considered income under the income test, then people in those provinces will get no benefit at all from the legislation.


Lester Bowles Pearson: Mr. Speaker, this is a relevant point. It is certainly being kept in mind in the consideration we are giving to the legislation.


Eric Alfred Winkler: Mr. Speaker, may I put a further supplementary question to the Prime Minister. Will the sum of money that is currently in the federal old age security fund be used in the payment of any increase as a result of this legislation?


Lester Bowles Pearson: Mr. Speaker, the hon. gentleman knows that I would be out of order if I tried to give details of this legislation at this stage.
Bank Act
[DOT] (3:20 p.m.)



BANK ACT


[Stage Direction]
The house resumed, from Wednesday, October 5, consideration of the motion of Mr. Sharp for the second reading of Bill No. C-222, respecting banks and banking.
Raymond Langlois: Mr. Speaker, at five o'clock yesterday I was addressing the house and the Minister of Finance (Mr. Sharp) with reference to the antiinflation drive that the government is now undertaking to fight a situation which exists not only in Canada but is world wide, with Canada caught in the midst of it.
I am not going to repeat what I said in the special debate on inflation, but this bill has a very significant meaning today vis-a-vis the present economic situation in Canada. In fact, the hon. member for Nanaimo-Cowichan-The Islands (Mr. Cameron) yesterday stated that following the debate on inflation and the turn of events in the sphere of economics and inflation in this country, some of his outlooks with regard to the Bank Act revision had been somewhat modified as a result of his experiences and observations.
I was saying yesterday that according to the statement of the minister yesterday and his previous statements, wherein he had asked Canadian producers, particularly manufacturers and retailers, and the Canadian people as a whole to keep down prices and to tighten their belts for a little while, if we are able to keep wage demands under control we will be able to fight inflation. I should like to add one suggestion here. If the minister is going to tighten the belts of the wage earners as well as the belts of Canadian manufacturers and producers, he might as well get ready to start tightening the belts of some of our Canadian financiers also. You cannot hold both ends down, allow the middle to go up and thereby level out the economy. If production costs, wages and the cost of living are to be held down, you also have to hold down interest rates, the cost of which is necessarily reflected in the selling price of any product in this country as well as in the cost of producing goods.
This is where I do not follow the reasoning of the minister. He applies tight money policies across the country, in particular restricts loans to industries, and then says that we have to cut down on the boom or we will go bust. On the other hand, he asks Canadians

October 6, 1966
Bank Act
for greater production and tells them we do not produce enough. You just cannot make both arguments. No matter which way you look at his reasoning you cannot follow it. The minister thinks, hopes and suggests, but he does not give any clear definition of the situation or seem to know exactly where he is going.
I am reminded of a brochure which I had before me in my office this morning entitled: "A Fantastic Debt Wonderland". In the brochure there is a sentence which was used by Abraham Lincoln in 1858, and it reminds me of the position in which the Minister of Finance is today. The sentence reads:
If we could first know where we are and whither we are tending, we could better judge what to do, and how to do it.
That is about the best description one could find for the minister today.
I find it difficult to follow the reasoning of the statement he made some time ago in the special debate on inflation when I read his statement of yesterday. If we are to cut down on the cost of living, we will have to cut down on the cost of interest. I say that because when industry borrows money from a bank the selling price of the goods produced will reflect the cost of the interest incurred in borrowing the money to keep the industry rolling. That is a certain fact. This interest cost will also be found in the price finally paid by the consumer. After all, the Canadian consumer pays in the end for everything.
The minister has stated that in some respects the banks will have no ceiling on interest rates. This will leave the door open to speculators, and I think there is enough speculation in the financial field already. When we consider the activities of institutions which we call "near banks" and some of the finance companies, there is ample scope for speculation there without providing further opportunities.
In the statement of the minister yesterday the second proposal which he made, as reported at page 8354 of Hansard, was in these terms:
Agreements between banks on Interest rates both on loans and deposits will be prohibited.
I ask, Mr. Speaker, how does the minister expect to prevent this occurring? I often walk into public transportation vehicles such as buses and trains and see a big sign above the door saying: "Prohibited to spit on the floor". Yet if you look, Mr. Speaker, you will find spit. It may be against the law but no

one has been able to stop it. If there is going to be the same kind of prohibition in respect of the banks, we might just as well not put it in the law.
The ceiling on interest rates is now 6 per cent; yet the parliamentary secretary to the minister clearly stated in this house that the banks have found legal ways of getting around this. Why should there be legal ways of contravening the law when the law itself means justice? Perhaps the minister can give some explanation of this, Mr. Speaker.
I told the Chair yesterday that I was not going to speak long on this subject because this matter is going before a committee and I imagine that at that time the minister will have many questions to answer from different members of that committee; at least I hope so. I also hope that he will answer these questions to the satisfaction of all. There are a lot of question marks so far as this bill is concerned, and before it goes through many answers will have to be given.
If the bill keeps its present form, the only people who may be helped in the long run are the big financiers, no one else. The minister realizes that there are a few modifications which can be made.
[DOT] (3:30 p.m.)
Modifications might be made not only in the Bank Act but also in the work of the committee. One of the things to be looked into, as we are talking about the chartered banks, is the fact that the banks are operating with worn-out charters. I do not know of any other body that could continue its operation when its charter had expired. Three years passed by before the introduction of this bill, and I imagine it will be another six months before we complete our study of it. I am willing to concede that under the circumstances in the house the matter could not be dealt with more quickly, but the effect of such a delay on the banks or allied financial institutions ought to be a matter for consideration.
We ought not to have to wait ten years between revisions of the act, or between cross-examinations of members of the financial community, to find out what is wrong. The banking community may also have its grievances, but it is part of the financial machinery of the economy. We have the productive and the distributive sides of our economy, which are governed to some extent by the financial machinery. We ought not to wait ten years between reviews of the structure.
October 6, 1986

The hon. member for Nanaimo-Cowi-chan-The Islands said that this debate might widen the horizons and the outlook of hon. members. If that is the result, then debates such as this should be repeated more often. The members of the banking fraternity, that is, those who come from the chartered banks, the trust companies or from other financial institutions, ought to be available more often for cross-examination. We should not wait from 10 to 13 years before submitting them to such cross-examination and bringing in legislation such as this. This bill has approximately 126 pages and over 140 clauses. We are given this amount of material to discuss, swallow, digest and accept. It has taken 13 years to bring these matters before the house and if we do not do something about it it will take another 13 years before we look into them again.
I submit, Mr. Speaker, that we should bring representatives of the chartered banks and the trust companies and other members of the financial community of this country before the standing committee having to do with finance more often in order to crossexamine them. In that way we might be able to prevent these recessions and concessions. I also say "concessions" because if we look at what is going on across the border we see that we are giving quite a bit away to that country. The Minister of Finance will know what I am talking about.
That is one principle which should be established now while we are reviewing Bill C-122 so that the House of Commons may keep close control over what is going on in the financial field and so that this matter will not be left entirely to the Minister of Finance or to some of the big string-pullers. That would be an advance and something we could be proud of.
We worry about productivity. The only man who speaks in the house about financial matters is the minister. We have no way of reviewing anything that the financial community says. If the banks at the end of the year issue statements, how can we verify whether or not those statements are correct? We do not see the persons who prepare these reports; in fact, we do not see anybody. Am I to question you, sir? Am I to question the Minister of Finance? As it is, I would probably get more answers in this respect from you than from the Minister of Finance. It is not that the minister does not know but he will not talk.
Bank Act
The minister is not on the boards of directors of the trust companies or banks. He has to accept their statements. The minister says the law is there, but how is he to know if they are obeying the law or if they are speculating too much. I say that it is the committee's job to find out these things. That is why representatives of these institutions should be brought before the committee to be cross-examined. It might help some members of the house because it would maintain their interest in the financial field.
This bill, sir, does not allow very much latitude to the productive or manufacturing part of the economy. In fact, it does not mean too much to the Canadian people. It is said that there will not be an interest ceiling. Is one to question each bank in order to find out the maximum it will charge? Is one to go from bank to bank asking what each bank will charge? There is already too much speculation under the present law, even at the 6 per cent level. If the minister would listen for a minute, also the member for Portneuf (Mr. Godin), it might help.
I wish to talk about the victims of bankruptcies. It is found that such and such a manufacturer in such and such a district has had a line of credit running between $150,000 to $250,000 for the past ten years. That credit is used to its maximum in the months of February or March, which are the low points for sales during the year. The manufacturer will reimburse the bank in June or July when construction gets under way across the country.
Then he is told by the bank to make good his overdraft. He has to repay it in three days. How is one to do that when there was no notice? Possibly there was a gentleman's agreement between the banker and the head of the enterprise concerned. As it was, there was no alternative but to sell some goods. The manufacturer did not sell them in the province of Quebec. They were sold in New Brunswick at between half and a quarter of their proper price so as not to disturb the market immediately adjacent to the industry concerned. But there is one very peculiar fact. A quarter of a mile from the concern in question there was another company in the same line of business, the president of which was a director of one of the chartered banks. That concern did not have its credit cut off.
[DOT] (3:40 p.m.)
This is something which I believe the Minister of Finance should look into. There is a conflict of interest and in too many cases it

October 6, 1966
Bank Act
is decided in favour of those who are inside the financial field, not outside it. This is more than a coincidence. The bank director was the president of a company, and that same bank was furnishing credit to the other company. On a day's notice credit to the other company was cut off. The man concerned was forced into bankruptcy but the other man is still operating. No wonder he did not want to sell the merchandise in his own immediate area; it was sold in New Brunswick. If we cannot follow up such things as this in the standing committee on finance we might as well approve any bill which comes before us and leave the field wide open to financial speculation. These people know when the moment is ripe; they can sense it.
One thing is missing from this bill. The hon. member for Nanaimo-Cowichan-The Islands mentioned it yesterday. It is a fact that we still have not recognized that there is a need to distinguish between the production side of our economy and the consuming side.
Consumer credit should not bear interest charges. As to the production side, yes, because the cost should be included in what the consumer pays. If we were to begin financing municipalities, school boards and similar bodies from public sources at very low interest rates we would be helping those bodies and we would at the same time be helping ourselves by cutting down every year the interest payable on the public debt. We are paying this year more than $1 billion as interest on this debt. To whom are we paying this vast sum? I should like the minister to tell us. To whom do we owe this interest? He may say that we owe it to the financiers. Who are the financiers? We do not see them much but we certainly hear a lot about them. They are the people who are far too often driving from behind.
Fifty, 60 or 100 years ago the various levels of government did not have the same responsibility toward the economy as they do today. Today the national economy embraces far more than it did 100 years ago. The time has come to consider dividing the economy into two parts, consumer credit on one hand and productivity, or the production side, on the other.
There is one instrument which would regulate both sides. It is not production. It is the means of distribution. It involves the representation of Canadian production in terms of dollars and cents. Until we change our method of financing we shall continue to face the problems which have so often plagued us
[Mr. Langlois (M6gantic).l
in the past and which will not be solved in any significant way by putting patches on the trouble spots.
I think the minister should seriously consider this aspect of our affairs. I do not go as far as to say that ours is a dual economy but the economy can be divided into two sectors, one which produces and one which consumes. Everything that is produced in this country has to be consumed by somebody or there would be no point in producing it, and if the consumer does not have the necessary purchasing power he is unable to pay for goods and goods will not be produced.
I am bound to laugh at the minister when he suggests we cannot produce enough. Let the people have the means of purchasing what they need. Let the producers have the means to produce and give them the markets they require. Let this be done and, believe me, production will double in a year's time or a little longer.
It is not only Canada we must think of. In the last great war 30 million people were killed in six years. Today hunger kills 31 million people a year, more than in the six years of the last world war. What are we doing about it? I suggest we are sitting back and saying to ourselves: this is the normal course of events. Yet we regard war as something to be dreaded, and when we consider the possibility of war in the future everybody shakes. How can the government ignore the fact that 31 million people died of hunger last year alone?
Of the $1,500 billion earned across this globe, 85 per cent is earned in North America and Europe. The share of all the other countries is 15 per cent. Two thirds of the world is going to bed tonight hungry. These are facts which the minister seems to forget. There is a consumer demand which is not being satisfied. World distribution is not being carried out properly.
We can produce the goods. We saw this during the last world crisis. Foodstuffs were being destroyed though the people who needed them were facing starvation. Where is the justice? Everybody is worried about this matter. When are we going to start feeding the hungry? If we were to do this, perhaps we would get peace. Peace is something we have to work for, and until we are prepared to work for it by trying to feed the hungry we might as well forget about peace altogether and begin worrying about the protection of our kinfolk.
Ociober 6, 1966

Let us begin to apply basic economic, financial and fiscal policies in this country which are adapted to the needs of the Canadian people and, if necessary, expand those principles across national borders so as to bring about the distribution of Canadian products to consumers by making the means to purchase them available. Until the government introduces a measure designed to reach this goal I shall be opposed to bills such as the one now before us.
It is useless to bring down measures which ensure that the house will be confronted with the same problem every 10 or 15 years. It is useless to give certain individuals more liberty in their financial activities while at the same time restricting the freedom of individuals among the Canadian public. The minister must think about giving something to the Canadian people. He must give them hope. By financial and fiscal policies he must devise a means of distribution that will satisfy Canadians and be an example to the rest of the world.
[DOT] (3:50 p.m.)


Mr. Bert Leboe (Cariboo):: Mr. Speaker, in rising to participate in the debate on second reading of Bill C-222 I wish to say it is my intention to deal with the principle of the bill by delving a little into history and posing some questions, because banks and banking are tied in with our very way of life, with our economy, and all facets of our lives are in some way governed by our banking institutions.
When we examine the causes and effects related to our banking institutions we are also seeing the tools which the Minister of Finance (Mr. Sharp) and the Bank of Canada have to regulate the banking business and financial community. One of the most powerful elements in the world of today is banking systems, and here let me say it is my view that the Canadian banking system is one of the best in the world. But I also wish to point out that I believe there are certain shortcomings in our banking system and I hope some of them will be corrected by this legislation. However, it is not going to be easy to persuade the minister, and many other people who have an axe to grind, that changes must be made for the public good. I do not think we will get all the changes we want, but certainly we in this party are going to ask many questions in order to find out how far we can go to correct the situation as we see it today.
Bank Act
The government's monetary and fiscal policies are based on the banking system, and in this regard I am reminded of the situation that existed before the last war when our unemployed were housed in camps. They were allowed 10 cents a day spending money and many people believed nothing could be done for them. But when the emergency of war arose, through government policy our banking system created millions and millions and millions of dollars for the war effort, and these people who were in what almost might be described as concentration camps were taken out of those camps and given jobs or were sent overseas.
We found we were able to look after their health and provide them with clothes. We gave them tanks, we gave them guns, we gave them U-boats, battleships and airplanes, and it did not cost them a cent. As a result we became prosperous. What was it that brought about the change? Surely it must be known to each and every one of us that it was the fiscal policy of the government, related to our banking system, that produced the change.
I give full marks to the government of that day for the manner in which it faced the tremendous inflationary pressures caused by the great expansion of our money supply by the banking system. It launched a strong drive to have people buy savings bonds, but people were not told the truth why savings bonds were being sold. They were being sold to take money out of circulation. They were not being sold to help fight the war because money was already in too great supply in relation to the amount of services and goods available.
The government then launched into the sale of war savings certificates which, as you will recall, Mr. Speaker, cost $5 each. They were another means to take money out of circulation and return it to the central coffers of the government in order that individuals would not spend it on goods and services that were in short supply.
Then the government reached further into individuals' pocketbooks and started selling war savings stamps at 25 cents each, again not to provide money for the war effort but for the sole purpose of taking money out of circulation. But after a while we reached the point where all these measures were effective no longer and compulsory saving was introduced. When this step was taken people started to understand the government's intention in selling bonds, saving certificates and war savings stamps.

October 8, 1968
Bank Act
But even that was not enough. We had to embark on rationing and price control. As a result of the great expansion in the money supply there was a corresponding rise in the national debt, and the only reason for the corresponding rise in the national debt was our banking system which had the sole right to create credit. But once the national debt rose it stayed at a high level and then became greater.
We ought to ask ourselves why our government and governments all over the world are in debt. Each country in the world is in debt, but to whom are they in debt? They may say, "Well, we are in debt to ourselves," but "ourselves" means mighty few people in the world. We are in debt to the financial institutions of the world. Through our banking system we have created a large number of financial parasites which should be eliminated at the first opportunity. We all know that these financial parasites exist. We know the pressures they can bring to bear on governments. We know those pressures are greater than governments can resist.
With this bank bill before us we in the Canadian House of Commons have a duty to the people of Canada and, in fact, to the people of the world, to give leadership by adjusting our finances and our financial institutions so that we can have complete consumption of the goods and services we produce. We should strive to place ourselves in the position, as suggested by the hon. member for Megantic (Mr. Langlois), where we can help the underprivileged people of the world. We should seek to place ourselves in a position where never again will we see stacks of tomatoes higher than box cars piled up in fields and then sprayed with some sort of chemical so that people cannot buy them. This has happened in the Okanagan where fruit has been dumped into gullies and chemically treated to prevent its sale in order to keep prices up. What nonsense, with two-thirds of the people of the world, going to bed hungry. Why does th:s happen? It happens because we regard our financial system as a sacred cow and are afraid to amend the law and make it function so that the people of this world can partake of the things which they produce. It is time we called a halt to this. I ask all members of this house, when we are dealing with the Bank Act, to consider seriously where we are going and how we can best adjust our financial system to the needs of the country and the world.
[Mr. Leboe.l
[DOT] (4:00 p.m.)
The banks of this country apparently have found ways of getting away from the 6 per cent ceiling. I am going to mention two ways in which this is done which have been brought to my attention. First of all, people are being asked to borrow more money than they actually want and to leave a certain amount of it in the bank as a deposit. This means that if they want $75,000 they are asked to borrow $100,000 and they pay interest on $100,000. But the bank then has $25,000 in an account and this extra money in the account allows it, under the reserve system, to create an additional amount of money which it can lend and on which it can collect interest.
There are ways and means by which the banks are getting around the 6 per cent ceiling. Undoubtedly this is what the hon. member for Nanaimo-Cowichan-The Islands (Mr. Cameron) was referring to yesterday when he spoke. The other day I had a report that an individual who was borrowing a large sum of money was asked to pay for the first time in his life a large service charge in connection with his loan. This is another way of getting around the 6 per cent interest ceiling. The banks call it a service charge. They got this terminology from the finance companies, and most banks have two or three finance companies attached to them. These are ways in which the banking system is operating not for the good of the general public.
I am glad to see that at last we are going to put the banking system into a position where the banks can make loans and take mortgages. This is one of the things we in this group have been complaining about over the years for the simple reason that people were forced to go outside the country to get this type of accommodation. What happened in the financial institutions outside of this country? By a very simple process they were able to take security in Canadian assets, create the money through their banking system and, with a stroke of the pen, collect the interest on that amount of money. Therefore they sapped the resources of the Canadian people through a deficiency in the banking system in Canada. I am glad this is going to be taken care of.
I am also glad that the inner reserves are going to be brought out in the open, although I think the actual effect is not going to be too great because the inner reserves have been known to the ministers of finance of this
October 6, 1966

country and surely, if we have any confidence in our ministers of finance, they have taken these things into account. Now that we are going to know what the inner reserves of the banks are I think we will be far better able to assess the potential of any individual bank or banker in increasing the money supply.
Surely one of the things that will result from additional mortgage money being made available by banks will be an increase in the money supply. This increase in the money supply, of course, will have to be closely watched by the Bank of Canada and ways and means will have to be used by the Bank of Canada to make certain it does not create additional inflationary pressures. The only thing I can see as a real hope is that the flow of money will be cut off from other sources when this increase is brought into being by the banking system and therefore within Canada we will have the banking system creating the credit. In that sense too I think we ought to be more conscious of how the shares of the present Canadian banks are distributed so far as Canadians and outsiders are concerned.
We have devised means in this world of causing a distribution of purchasing power, other than by preparing for and actually engaging in war, by what we call moon-shots and launchings into outer space. In this field a tremendous amount of money is being released in purchasing power for individuals. As we know, nobody buys one of these rockets which are sent up and which are costing the American people millions and millions of dollars. Nobody will buy one of them but the amount of money distributed in this way is still very substantial. I am glad we have devised a means other than war to aid in the distribution of goods and services.
In the last couple of weeks I have been travelling with parliamentarians from all over the Commonwealth. The one word that was on the lips of most of these parliamentarians from countries throughout the Commonwealth was "peace". I should like to ask hon. members what would happen if tomorrow the Minister of National Defence (Mr. Hellyer) rose in his place and said: "We have peace in the world. We are laying off all armed forces personnel. We will cut off all defence costs. We are going to dispense with the whole business." I predict to the Minister of Finance that we would have a revolution in this country within 60 days. We are not prepared for this type of thing. The financial system of this country is not geared in such a
Bank Act
way that we could look after such a situation if it arose. Yet we talk about peace when we are not in a position because of our financial structure to take care of the situation if it arose tomorrow. What would we do with all the people in the armed forces, those in the defence agencies and those engaged in the distribution of these goods and services? We would find ourselves in a good deal of trouble. So when we are discussing the Bank Act let us seriously consider how we can change the banking system of our country so that if we were suddenly confronted with peace in the world and in Canada we would be able to cope with it, because we will need the financial technique to do so.
In closing I should like to pose another question. I put it in the form of a question because I am not an expert in finance. What is so secret about the devaluation of our dollar by the same percentage as the increase in our gross national product? Common sense would tell me we are going the wrong way. For every increase in the goods and services that are available in the country we are saying that our dollar should buy less.
[DOT] (4:10 p.m.)
I pose this as a question because I think we should have an answer. The only result of this policy at this time is the reduction of the purchasing power of the dollar for the individual on the street. We will, of course, increase the amount of loans that can be made but they will be made at a higher interest rate. Perhaps this will assist the gross national product, but the financier will move in again under the guise of some secret formula that has been invented and take advantage of the increase in lending power.
I agree with the hon. member for Nanai-mo-Cowichan-The Islands who has said that there has to be some control on interest rates. Surely there is no reason for a great fluctuation in interest rates at any time. When we divide the dollar we reduce its purchasing power in spite of the fact we have a greater number of dollars. There is no reason in the world why we should increase interest rates.


Mr. Max Saltsman (Waterloo South):: Mr. Speaker, I was very heartened yesterday by the minister's statement regarding this bill because I detected what I felt to be an amenable attitude toward suggestion from all parts of this house as to how we can strengthen and improve this measure, making it more acceptable to Canadians. I was pleased to note the minister's recognition of the fact that he had perhaps placed an undue

October 6, 1966
Bank Act
emphasis on the efficacy of monetary policy and that we should give consideration to other measures.
Many problems arise in respect of the measure before us. The major suggestion is that this measure, by increasing interest rates, will improve the flow of money in Canada and remove some inequities that now exist. It has been suggested that we remove these inequities first by increasing the ceiling on interest rates which banks are permitted to charge and that eventually we adopt a formula to remove interest rate ceilings entirely.
While we agree that the rigid ceiling placed on bank interest rates does not mean much in view of what has been happening not only to our economy but to the economies of other countries as well we consider it would be a mistake to remove the ceiling unless assurance is given that thorough consideration will be given by the government to the adoption of some means of keeping interest rates from skyrocketing. The government must adopt some means to prevent this. At a later stage I propose to move an amendment to obtain that assurance and I hope the government will give it consideration.
All kinds of inequities result from the 6 per cent ceiling on the interest rate banks are allowed to charge and we know that this interferes with the proper flow of money between banks and financial institutions. We recognize it is becoming more difficult to control this situation by monetary policy because the unregulated sector of our economy is growing at a faster rate than the regulated sector.
Banks are more responsive to the controls used by the Bank of Canada. We in this house all know of the various methods resorted to by banks to circumvent the ceiling placed on interest rates. I use the word "circumvent" in the sense that they get around the ceiling forced upon them in order to preserve a competitive position. The maximum interest rate charged by banks is really no longer 6 per cent but in fact ranges from 6 per cent to 11J per cent. We do not think that banks or other financial institutions should be allowed to adopt this position. If an interest rate is set at a certain figure it should be accurate.
Those of us who have been members of the consumer credit committee have been fighting for the adoption of the principle of a true disclosure of interest rates. It is important that banks, as well as other institutions,
[Mr. Saltsman.I
should disclose true interest rates and other charges placed on loans instead of the various devices now being resorted to by these institutions. If we require that other financial institutions in Canada declare true interest rates in simple terms we must require this also of banks.
The situation in which banks find themselves vis-a-vis other financial institutions is somewhat inequitable and should be corrected. As unfair as this may be to banking institutions, in the sense that they are required to charge lower interest rates than other institutions, we may have to accept this situation in order to maintain some control over interest rates. I suggest it would be more proper to free bank interest rates and adopt some method of controlling interest rates charged by all financial institutions in Canada.
I am sure we have all noted the indications that point to higher interest rates. Let me quote from the Ottawa Journal of June 21 which states under the heading "High Interest Rates To Stay":
High interest rates are likely to prevail in the Canadian economy for the next ten years, according to a consulting economist from Missouri.
That economist is Mr. M. T. Welshans.
Let me quote from an article which appeared in the Toronto Telegram of August 26, written by Stephen Vitunski. He states:
If you're waiting for interest rates to go down, you may be in for a long wait.
[DOT] (4:20 p.m.)
The Globe and Mail of September 7 carried an article by Ronald Anderson in which these words were used:
The high interest rates-a response to a seemingly insatiable demand for capital in all countries -is likely to persist for some time.
These extracts from the press are merely a sampling of what I think is a general opinion that interest rates have nowhere to go but up. Certainly this will be the situation as long as the present conditions prevail, conditions of a great demand for capital that exists in the United States, to whose economy we seem to be very tightly tied. There is also evidence to indicate that the use of high interest rates, even where high interest rates are deplored but are used in an effort to dampen down demand and control inflation, is not having the desired effect. Apparently this system is not working.
There seems to be no evidence at this time that high interest rates are actually behaving
October 6, 1966

in the way they are supposed to behave in slowing down demand. One might say that demand might be higher if it were not for the level of interest rates at the present time. But even with the highest interest rates that I think Canada has seen for a long, long time there is no indication that they are slowing down inflation and there may be a possibility that they are actually fuelling inflation in the sense of contributing to the higher costs of many industries.
In this connection I would give an example, but I think this situation is probably prevalent in many industries where capital costs are more pertinent than labour costs. In an industry where capital is very extensively used, a rise in the interest rate would contribute far more to increased costs than would be the case with a rise in the cost of labour. I refer to a report entitled "Costs And Earnings of Selected Fishing Enterprises In The Atlantic Provinces." This report gives a cost breakdown on a number of ships. It indicates that wages in one instance represent 1.6 per cent of the costs and interest payments represent 4.3 per cent of the costs.
This may be very characteristic of capitalintensive industries and as such should warrant our consideration in doing everything we can to maintain interest rates at the lowest possible level. It is very difficult to see how removing the ceiling on the interest rate charged by banks would lower interest rates in Canada. It would certainly create a reallocation of money from one group to another but I cannot see how it would lower interest rates, and it might very well have the opposite effect unless we took positive steps to control interest rates throughout the whole economy. I should like to quote from an editorial which appeared in the Toronto Star of July 6:
An increase in interest rates on bank deposits will, in turn, force trust and finance companies to increase the rates they pay on deposits. Otherwise. they will go out of business. The net effect will likely be not only high interest rates on bank loans but increased costs of other types of lending such as mortgages and consumer credit.
In short, I think there is a very decided danger of a price war breaking out if some ceilings are not imposed on the general economy. It will not be a price war for the benefit of the lender; it will be a price war for the purpose of attracting deposits and the costs will have to be passed on to the lender. Then we will run the risk of having interest rate levels far beyond what I would consider desirable in a country that has to expand and
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needs to obtain money at the lowest price it can possibly get it for.
I think there has also been a tendency for our monetary policy to be less effective than it might have been, in the absence of over-all controls in respect of interest rates. In some circumstances where money has to be tightened in Canada I think there would be a fear that such tightening would send interest rates far too high, far higher than perhaps the authorities themselves would want them to go. To some extent this has reduced our willingness for and effectiveness in the use of such a policy.
I believe that if we had more positive and direct control over the level of interest rates the government and the Bank of Canada could more effectively use their monetary policies in finding solutions to the problems at any given time. It is disturbing to find that we do not have, or do not appear to have, at government level the same concern about the bad effects of high interest rates that is represented by the concern of our neighbours to the south in the United States. The Americans are very much concerned when the interest rate starts to rise. I am sure that concern is also felt in this country to some extent, but the sense of urgency about such a rise does not seem to be as apparent here. I think it is necessary for our governments to recognize the importance of maintaining as low an interest level in Canada as is consistent with obtaining sufficient funds for our development.
We have always tended to be an expensive money country. Certainly this applies in our relationship to the United States. Our money has probably been cheaper than European money but more expensive than American money. In a country that has to be concerned about industrial innovation, that has to be concerned about making its labour more productive by the use of more capital, it imposes a very serious limitation on the ability of the economy to accept this move unless definite efforts are made to keep the cost of money low for this purpose.
I would suggest that higher interest rates affect the consumer in a very bad way both as a borrower of money and as a user of goods and services within which are incorporated the higher costs of interest, because interest is certainly as much a component of any product or service as are labour or raw materials. We are concerned about the general rise in all other costs and we have to be equally concerned about the rising cost of interest in Canada. This interest is passed on

October 6, 1966
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and is ultimately borne by the consumer. Higher interest rates in Canada raise the cost of public borrowing.
[DOT] (4:30 p.m.)
There has been ample evidence for some time of the difficulties that all levels of the government have been having in selling their bonds and obtaining money for their financial needs. We had the unpopular issue of government of Canada bonds amounting to $500 million which was not selling well despite the fact it presented a most attractive deal. There was some concern that it would not be sold and that it would inhibit the floating of further bonds in the years to come or that future bonds might have to be floated at higher rates. I am advancing these arguments in favour of the necessity of maintaining as tight a control as possible over the level of interest rates in the hope of seeing that costs both in the private and in the public sector are held down as much as possible.
I was very interested in the remark concerning interest rates attributed to Harry Truman, a former president of the United States, reported in the September 9 edition of Time magazine of this year. He said:
We will bring on a precipitous deflation if we persist in high interest practices. The result could be a serious depression.
It is therefore vitally important that a government should not permit interest rates to rise because of a depression psychology which starts to develop when those rates reach a certain point. It is far better to try to keep them level as best one can than to run the risk of allowing them to go up too high and then fall off, bringing about undesirable results.
Furthermore, I think the government should recognize that if the ceiling is taken off the banks and if we permit the kind of competition we hope will take place among financial institutions within our economy, then great inequities will become evident. In spite of the best competition, certain problems will arise which the market cannot be expected to solve. Those of us who for a long time have tried to get the market to respond to social objectives have come to recognize the great difficulty in trying to get this finely tuned mechanism which operates on the basis of profit both to have a heart and to achieve the highest profit possible. It is the government that should have the heart and the concern for those people who are hurt because of what takes place in the market.
[Mr. Saltsman.)
The government must assure the house that it will take measures to correct the social distortions that occur in the market place as the result of the allocation of resources on the sole basis of profitability. There is no doubt that social capital will be required. The market cannot provide this, and it is the government which will have to do so. It will have to build schools, step up its programs and keep an eye on interest rates so that these programs do not become too expensive for the public sector.
Things like research are the responsibility of the government, and I am sure the minister is aware of the great regret that was expressed in this country when in his last budget he reduced the sum of money that would be made available to research. The government will have to make development funds available to help those industries in Canada which need encouragement and cannot find funds within the market system. Funds will also be necessary for regional development. We frequently find that when a tight money policy is adopted and interest rates start to go up, then the already disadvantaged areas, just as the disadvantaged group of people in our society, are the ones who are hurt the most. The government will have to recognize this and see that funds are made available for this kind of assistance.
For these reasons, Mr. Speaker, and also to make as many as possible of our institutions, apart from the chartered banks, responsive to national policies, I move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles), the following amendment, which is prepared in French and English. It reads as follows:
That Bill No. C-222 be not now read a second time, but that it be resolved that in the opinion of this house that consideration be given to the introduction of legislation to include provision for placing the sole operation of clearing house facilities in the hands of the Bank of Canada and requiring that all financial institutions issuing demand liabilities, transferrable and short term banking claims requiring access to the cheque clearing system be defined as banks and brought under provision of this legislation: and further that the government give consideration to taking such steps as are necessary to give to the Bank of Canada the power to set maximum interest rates on both loans and deposits as it deems necessary in the general interest of the economy in the light of prevailing economic conditions.


John Whitney Pickersgill: Mr. Speaker, before Your Honour puts the motion I wonder whether I could say a word on a point of order?


The Acting Speaker (Mr. Rinfret):: Yes.
October 6, 1966


John Whitney Pickersgill: The Minister of Finance and I were both listening to the amendment rather carefully. Would it be possible to reserve argument on the point of order and not make a decision on whether the amendment is in order until there is an opportunity to consider it, unless Your Honour is clearly of the view it is out of order


The Acting Speaker (Mr. Rinfret):: I would like to have the assistance of hon. members regarding the validity of this amendment. I would also like to put the amendment before the house. It reads as follows:
That Bill No. C-222 be not now read a second time, but that it be resolved that in the opinion of this house that consideration be given to the introduction of legislation to include provision for placing the sole operation of clearing house facilities in the hands of the Bank of Canada and requiring that all financial institutions issuing demand liabilities, transferable and short term banking claims requiring access to the cheque clearing system be defined as banks and brought under provision of this legislation; and further that the government give consideration to taking such steps as are necessary to give to the Bank of Canada the power to set maximum interest rates on both loans and deposits as it deems necessary in the general interest of the economy in the light of prevailing economic conditions.
[DOT] (4:40 p.m.)
May I ask hon. members to assist the Chair in enabling it to render a decision on the validity of this amendment.


Mr. Otto:: Mr. Speaker, am I to understand that you are willing to postpone for a time the hearing of argument on the point of order, as requested by the minister? I believe the minister asked whether you would be willing to hear argument at a later time after the minister and the house have had a chance to consider the wording of the amendment. Is it correct that you will accept argument on this point of order after a certain time, say after dinner? If this is your view I should like to continue the debate on the Bank Act.


John Whitney Pickersgill: Mr. Speaker, I wonder whether I might reiterate my request. I have no objection to the fact that we are taken a little by surprise by this amendment. That is part of the game. But it would be very helpful if my colleague and I had a little time to consider the wording of the amendment. If the house were agreeable to having the question whether or not the amendment is in order postponed until the hon. member for York East, who intends to speak anyway, has completed his speech, I think it would be convenient to do so. I wonder whether the hon. member for Waterloo South would object to that.
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Max Saltsman: I think that is a reasonable request, Mr. Speaker.


The Acting Speaker (Mr. Rinfret):: Is there unanimous consent to the request that has just been made by the minister?


Some hon. Members:: Agreed.


Steven Otto: Mr. Speaker, I was particularly impressed with the minister's speech yesterday in which he tried to define the purpose of this legislation to amend the Bank Act. He said, and rightly so, that it is intended to increase the degree of competition and flexibility in our banking system so that it will best serve the changing requirements of the Canadian economy and the interests of all Canadians.
That, Mr. Speaker, is a fairly far-reaching shift in emphasis because up until about ten years ago the purpose of the Bank Act was really to provide security or protection to people who had deposited money in banks so as to ensure they would not lose it. That was the emphasis found in the act, as is quite customary in the agrarian type of economy that we have. So the very fact that the government has realized the need for a shift in emphasis toward making money available for industrial and commercial expansion is in itself a very important matter.
Among the many items in the bill, I think one of the most important is the proposal by the minister that agreements between banks on interest rates, both on loans and deposits, will be prohibited. There is a presumption in the minds of a great many Canadians that bank heads or bank presidents actually do get together and agree to set interest rates. This is not so. They do not get together at a committee meeting or as members of an association and say: "We are going to establish such and such an interest rate for such and such a risk". That does not occur.
However, what does happen-this again pertains to a point made by the minister-is that although the banking system and the staff employed by our chartered banks are really quite efficient and forward looking, both are hindered because of the existence of cross-directorships.
It is strange to think that a bank, which is wholly a business, appoints its board of directors not for what the members of the board know about banking but because they happen to be well established and well known people. What the banks are looking for is an aura of respectability.

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There is nothing wrong with this provided that the bank itself can function. Unfortunately, what happens is that the directors of banks, not being involved in the banking business at all or not making their living from the banking business, are inclined to protect their good names by being very conservative in their approach toward financing. This is all very fine in an established and very stable economy but it is not suitable for an economy which is changing rapidly from day to day as is the case in Canada. As a result, Mr. Speaker, if the minister is going to be successful in his goal of making more money and credit available to industry and commerce in this nation, he will have to do a lot more than just limit to 20 per cent the number of directors of companies who may become directors of a bank.
I once talked to the president of a chartered bank who told me that he spent almost 90 per cent of his time trying to gain acceptance by the rest of the directors of his bank of policies which his staff had developed. He said that on top of that he was successful only about 10 per cent of the time. In other words, banking itself, which is obligated to provide credit and has a responsibility there, is hindered by its directorships.
Let us consider the state of affairs in the United States. In most of the directorships of industrial corporations in the United States 50 per cent or more of the directors are involved in the business of the company of which they are directors. In other words, you have vice presidents in charge of production, vice presidents in charge of advertising, vice presidents in charge of sales, and the president, and then there is a limited number of directors whose responsibility it is to look after the shareholders who are not involved directly in the company.
We must remember that if the members of a board of directors make their living from the business of the company they are going to be much more concerned about its welfare, whereas under the other system we wonder how the directors of some companies make their living. I know a number of directors of banks and other companies who do not seem to be involved in any business. They are almost professional directors. They do not make much money as directors, but being on the inside, knowing when shares are going to be issued, knowing that they can subscribe to shares without payment of more than 10 per cent of the value, and knowing that the shares will not be issued until they are sold,

they are able to make money in this way. They make a living by making the purchase of shares of banks and other institutions a worth-while project through reselling them on the market.
However, this does not necessarily gibe at all times with what the banks want to do and should do, which is to provide more credit, among other things. There are no agreements between bank heads to restrict interest rates. But it is done in other ways. For example, over a drink or lunch at the club it is done indirectly if one director of a bank, who is having lunch with another director of a bank, says: "There is John Smith over there and he will be stepping into your bank for a loan; but he is not a very good fellow and I would not touch him with a 10-foot pole", or words to that effect. This results in an agreement being made insidiously.
[DOT] (4:50 p.m.)
I doubt that anyone can point to a definite agreement or even to a potential agreement made between banks to set interest rates. Unless we can take steps to loosen the establishment of directorates and to allow people who know their business, who want to be in banking and who are interested in banking, to come in as directors of banks, we shall not see too much result in respect of what we want to accomplish, namely, more money available for industrial and commercial expansion.
There is some emphasis in the bill on this matter, and I am glad to see that there is at least some restriction with respect to the directorships of banks. It will be difficult for any government to try to make laws in this regard unless one can say that bank directors may not have an interest in any other business than banking. Another requirement could perhaps be, that at least 50 per cent of the directors of any bank must be involved in the banking business. In other words, they must be bankers. I think this may be one place where we will find difficulty.
Another thing that is not quite clear in the bill has to do with the fact that a bank may set any policy. It can be as liberal as it wishes in the granting of credit for business expansion. The bank does this through bank managers. It is both an unfortunate and fortunate thing that there is a curious pension plan in all banks. In most banks, when the manager retires he gets a pension approximately equivalent to 75 per cent of the average of his last three or four years' earnings. That is a very high pension. Consequently,
October 6, 1966

when a bank manager reaches the age of 50 or 52 and only has 10 years to go he does not want to take a chance. He does not want to lend money on even the slightest risk because he knows that he will be the one to be penalized in the event of a loans's failure.
Again, many people have come to the conclusion that whereas at one time usury was the charge made for risk, today it is the charge made for a waiting period which is without risk. Consequently, the banks are accused at times of wanting interest, without any element of risk attaching to a loan, merely for waiting until such time as payment becomes due.
These are things that have to be cleared up. We shall have to foresee problems relating to such things. We shall not see an immediate increase of available money for industrial and commercial expansion unless we can somehow solve the problems which will hinder the fluidity of money.
Before I conclude I wish to take issue with the last speaker and some others when they indicate they are worried about mortgages and about mortgage money coming from outside Canada. I am not the least bit worried about mortgages being taken by foreigners outside Canada. In fact, I think it is a good thing. There is a limited amount of money in Canada and that money can go either into equity or business investment or into mortgages. The only trouble with mortgage money is that it is tied up in bricks and mortar. Mortgages are worth less in real money at the end of 25 years, even when one takes into account the interest which has been earned, than the money originally lent. The money at the end of that time will be worth less than the original amount owing to constant inflationary pressures but this money could have been used to invest in industry, that is, in share or equity capital.
It has been the theme of debates for the last three or four years that Canadians want to own equity in their own industrial destiny. If that is so, why put more money into mortgages, because that money will be tied up? I would much sooner let United States citizens have all our mortgages. If they want to foreclose and take away the buildings, let them do so. Let us, however, induce Canadians to invest in equity growth shares and in the industrial and commercial development of this country. For that reason I am not worried about mortgages.
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There is, of course, always the fact that interest has to be paid, but after all it is only interest. As the former minister said, we should not mind foreign investment as long as we need only pay interest for a definite term. In that light the emphasis on mortgages is nothing that we should really be concerned with. What we should be concerned about is making available for Canadians money for industrial and commercial expansion.
I am not too concerned about the power given to the banks to invest in mortgages. I do not think it will have much meaning. Mortgages are long-term investments and banks are usually not long-term lenders. They are short-term lenders. Though they will invest a certain percentage of their money in long-term investments, I do not think this will be a point to be concerned with.
I should like to go back to the original statement made by the minister, namely, that the purpose of this legislation is to make available more money for the industrial growth of Canada. I hope that after the bill has been considered in committee and questions have been directed to the witnesses and recommendations have been made, we will have a clearcut view of whether the banks will succeed in doing what is asked of them, that is, to do a good job in banking. When I speak about a good job being done in banking, I do not mean banking in any limited sense. I am not talking of banking controlled by an established elite which does not know anything about investing, is not interested in investing and is interested only stability. The picture up to now in banking has been one of stability. What we need is daring.
I hope that after the committee studies and examines this bill it will come back to the house and report on whether or not the banks are willing and able to comply with the demands of this nation. May I call it five o'clock?


John Whitney Pickersgill: This is Thursday; you should go on.


Stanley Howard Knowles: It is not five o'clock until six o'clock on Thursday.


John Whitney Pickersgill: On a point of order, I think the hon. member for York East was under the misapprehension that we were to proceed to other business at five o'clock. Therefore he should either continue his speech-


Steven Otto: I have concluded my remarks, Mr. Speaker. Though it is five o'clock, I have come to the conclusion of my remarks.

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[DOT] (5:00 p.ra.)


John Whitney Pickersgill: Mr. Speaker, I wonder whether Your Honour is prepared for me to proceed with my argument on the point of order which was raised? I have looked at Your Honour's opinion, one which was not exactly in accord with the views which I and my friends expressed on August 30, with respect to an amendment moved to another bill by the Leader of the Opposition, an amendment which we thought was out of order but which Your Honour decided was in order. That amendment is the nearest immediate parallel I was able to find to the proposed amendment we are now considering.
I refer to the opinion given by Your Honour as reported at page 7808 on August 30 of this year. I have had only a few minutes in which to look at the recitation which Your Honour made of the kinds of amendment which could be moved as reasoned amendments. The first is an amendment declaratory of some principle adverse to, or differing from, the principles, policy or provisions of a bill. I do not think I need refer to the others. The amendment may express opinions as to circumstances connected with the introduction or prosecution of a bill, or it may seek further information, but the proposed amendment does not seek to do these things.
It seems to me that if this amendment does fall within the categories stated by Your Honour it must come within the first category as being declaratory of some principle adverse to, or differing from, the principles, policy or provisions of the bill. It appears that what this amendment seeks to do is to ask the House to give consideration to other legislation on a closely related but essentially different subject. Indeed, this would appear to be the kind of amendment which might have been moved with relation to the bill to amend the Bank of Canada Act which was given second reading by the House on June 13 and sent to the standing committee. I say this because the amendment seeks to give additional powers to the Bank of Canada and does not deal with the chartered banks which are the subject matter of the bill we are considering. It is true the subject may be closely related to the bill before us but the relationship is that of a first or second cousin; the proposed motion is not adverse to any principle, policy or provision in the bill itself. Indeed, it does not deal with the bill at all. I do not think I need to labour the argument, Mr. Speaker. It seems to me the whole case is right there.


Mr. Lambert:: Mr. Speaker, in speaking briefly to this amendment I should like to say that in my opinion it is clearly out of order because, though it tends to be adverse to the motion for second reading which is before the House it introduces an entirely new question. I say this with the greatest of respect to those proposing it. The three points put forward for inclusion in the legislation referred to concern the Bank of Canada.
The references to the Bank of Canada in the bill now under consideration are merely incidental. As the Minister of Transport has correctly pointed out, the bill before us deals with the chartered banks and with the chartered banks only. The reference to the Bank of Canada has to do with certain reserves and is purely incidental. On the other hand, what is proposed in this amendment as an alternative to aspects of the legislation before us deals with the Bank of Canada and is certainly not incidental to the operations of that bank. What is proposed would properly be the subject matter of amendments to the Bank of Canada Act, as the Minister of Transport has said.
On the basis of the observations which have been made I would say there is definite ground for arguing that this amendment is caught by citation 203, paragraph 5, to be found on page 171 of Beauchesne, which reads as follows:
An amendment was ruled out because it raised a new question which could only be considered on a distinct motion after notice.
I say this is a new question involving amendments to the Bank of Canada Act which could only be considered on a distinct motion after notice and that the proposed amendment falls to the ground for this particular reason in addition to others which may be cited by hon. members.


Stanley Howard Knowles: Mr. Speaker, may I first of all make a brief reference to the last argument advanced by the hon. member for Edmonton West. He quoted citation 203, paragraph 5, against this amendment but I would remind you, sir, that citation 203 applies to amendments to questions of substance. There is a separate section in Beauchesne, as in the other authorities, dealing with amendments which can be moved to a motion for second reading, and I suggest that the terms of citation 203 do not apply at this time but rather that we must look at citations 381, 382 and several of those that follow.
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I should also like to join with the Minister of Transport in drawing Your Honour's attention to the ruling you made on August 30 with respect to the amendment proposed on that occasion by the Leader of the Official Opposition. What we had before us then was a motion for the second reading of the government's back to work legislation. The Leader of the Opposition moved an amendment which, in effect, opposed proceeding with the second reading of the bill because it failed to deal with such matters as fringe benefits and the recommendations of the Feedman commission report.
I draw Your Honour's attention to the fact that the matters complained of in the amendment of August 30 were matters not dealt with in the bill. Nevertheless, Your Honour took the view that the amendment on August 30 met the requirements of a reasoned amendment. In other words, it was the kind of amendment which gave reasons why the Leader of the Opposition-and we happened to agree with him on that occasion-felt that second reading should not then be proceeded with.
[DOT] (5:10 p.m.)
This is what is proposed in the amendment moved by the hon. member for Waterloo South. The amendment is opposed to the second reading of the present bill for the reasons stated by the hon. member for Waterloo South and by the hon. member for Nanaimo-Cowichan-The Islands, namely that the bill does not deal with the problem of the interest rate and other banking problems in the way that we in this party feel those problems ought to be dealt with.
My hon. friends who have just spoken have suggested that we are dealing with the Bank of Canada Act rather than with the Bank Act. I suggest we are dealing with the problem of banking, just as on August 30 we were dealing with the problem of railway labour relations, and on that occasion Your Honour permitted a reasoned amendment that gave the reasons why we should not proceed with the second reading of that bill in the form in which it was placed before us. I submit that what is now proposed is a reasoned amendment as to why we should not proceed with the present bill.
I further submit, Mr. Speaker, that this amendment does not offend some of the other rules regarding amendments of this kind. For example, it does not propose changes that could be effected by changes in the bill itself. It proposes entirely different ways of coping
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with some of the problems in the field of banking. Therefore, Mr. Speaker, as I have often tried to, I rely on citation 382 in Beauchesne's fourth edition and I contend that the amendment is in order. If we again read that citation we see that it says:
It is also competent to a member who desires to place on record any special reasons for not agreeing to the second reading of a bill, to move as an amendment to the question-
That is the question for second reading, and that is what this does.
-a resolution declaratory of some principle adverse to, or differing from, the principles, policy, or provisions of the bill-
I think that is all I need to read of citation 382 because that is precisely what the amendment moved by my hon. friend does, but I am sure that in your study of this problem that has now been raised Your Honour will have refreshed your memory as to the things you said on August 30 as recorded at page 7808 of Hansard for that date.
I found it very interesting that on that occasion you compared Beauchesne's various clauses, going right down to citation 393, with May, from which these ideas came, and you expressed the view that the rule as set out in May is the one with which we should stay. Then a little later on you said:
We have before us a reasoned amendment and the principle of a reasoned amendment is set out very clearly in Abraham and Hawtrey's Parliamentary Dictionary at page 162, which states in very clear terms what a reasoned amendment is It reads:
"This form of amendment seeks . . . either to give reasons why the house declines to give a second or third reading to the bill, or to express an opinion with regard to its subject matter or to the policy which the bill is intended to fulfil.''
Frankly, Mr. Speaker, I do not think my hon. friend from Waterloo South could have met that stipulation any better than he has. The amendment gives reasons why we should decline to give second reading to the present bill, and it expresses an opinion with regard to the subject matter of the bill and with regard to the policy which the bill is intended to fulfil. My hon. friend's contention is that the bill before us does not implement that policy in the way that it should be done.
We are opposed to the bill in its present form. We think the whole problem of banking should be dealt with in the different ways that are suggested in this amendment. Therefore, because it is a reasoned amendment, because it is opposed to the second reading of the present bill in its present form,
I suggest that it is even more clearly in order

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than was the amendment of the Leader of the Opposition to the railway legislation, which Your Honour declared in order on August 30.


Mr, Olson:: Mr. Speaker, though I find myself in agreement that the government, and perhaps the house, ought to be giving some consideration to the proposals that were laid before us by the hon. member for Waterloo South in advancing this amendment, I think there are a number of reasons why it is out of order.
The operative part of the amendment is that Bill C-222 be not now read a second time. The rest gives some reasons, or what are purported to be reasons, but the amendment does in fact introduce new subject matter that is not in the bill. Therefore I think it can be argued that accepting this amendment that the bill be not now read a second time would have exactly the same effect as a direct negative when the bill comes to a vote on second reading.
Citation 202(12) of Beauchesne reads:
An amendment proposing a direct negative, though it may be covered up by verbiage, is out of order.
I suggest that this amendment falls into that category because if the hon. member's objective is simply to defeat Bill C-222, that can be accomplished simply by voting against it when the question is put on second reading. Citation 202(14) of Beauchesne reads:
An amendment which would produce the same result as if the original motion were simply negatived is out of order.
I also want to say that although the words of the amendment do not include that the bill be hoisted for six months, it does have exactly that effect. The hon. member for Edmonton West (Mr. Lambert) referred to citation 203(5) which reads:
An amendment was ruled out because it raised a new question which could only be considered on a distinct motion after notice.
I suggest that the hon. member for Waterloo South has the right to raise the three matters that are in his amendment, but for it to be in order he should put it on the order paper in the form of a notice of motion which would come up in the usual way that a private member has open to him in drawing matters of this kind to the attention of the house. If he does this he can then wait his turn to debate these matters.

The hon. member for Winnipeg North Centre referred to citation 382 in Beauchesne which reads in part:
It is also competent to a member who desires to place on record any special reasons for not agreeing to the second reading of a bill, to move as an amendment to the question, a resolution declaratory of some principle adverse to, or differing from, the principles, policy, or provisions of the bill-
I cannot see anything in the amendment indicating that the hon. member has any special reasons for not agreeing to Bill C-222. All he is doing is raising a completely new subject matter that is not contained in the bill, and therefore I do not think the amendment complies with the provisions of citation 382. So, Mr. Speaker, as I said at the outset, while I can find a number of reasons for agreeing that the matters raised by the hon. member ought to be discussed, debated and perhaps dealt with by legislation, there are a number of reasons why his amendment is out of order at this time.


Mr. Speaker:: If there are no additional contributions to this very interesting debate on procedural matters perhaps I should at this time give my opinion as to whether the amendment moved by the hon. member for Waterloo South ought to be accepted or not.
[DOT] (5:20 p.m.)
Hon. members know the practice and precedents governing the introduction and proposal of reasoned amendments better than I do. The Minister of Transport has referred the house to a ruling of August 30 last which gives in some detail the general practice and precedents governing such amendments. I feel myself bound by that ruling and I think it applies in this present case. However, hon. members know that even in the instance of a reasoned amendment the general rule regarding relevancy still applies.
Reference has been made to May's seventeenth edition at page 527 where it says:
The principle of relevancy in an amendment governs every such motion.
Meaning, of course, an amendment along the same lines as the one proposed by the hon. member for Waterloo South (Mr. Saltsman), that is a reasoned amendment.
The amendment must "strictly relate to the bill which the House, by its order, has resolved upon considering", and must not include in its scope other bills then standing for consideration by the House.
It seems to me that the proposal advanced by the hon. member in the form of an
October 6, 1966

amendment does not relate strictly to, but goes beyond the terms of the bill now before the house. I fully recognize it is always extremely difficult to determine whether or not an amendment of this type is relevant, but reading it as closely as I can and following upon the suggestion made by the hon. member for Edmonton West (Mr. Lambert), supported by the hon. member for Medicine Hat (Mr. Olson), it seems this is an entirely new, different and novel legislative proposal. Because of this I do feel that this amendment, proposed as a reasoned amendment, cannot be accepted because it is substantially irrelevant.
Referring myself to citations 202(3) and 203(5) quoted by the hon. member for Edmonton West, and sustained by the arguments also advanced by the Minister of Transport and the hon. member for Medicine Hat, I think I have to rule the amendment out of order.


Gilles Grégoire: Mr. Speaker, I would like to make a few comments on the bill before the house, that is the revision of the Act respecting Banks and Banking.
On re-reading the speech delivered yesterday by the hon. Minister of Finance and Receiver General (Mr. Sharp), we note on page 8354, left-hand column, paragraph (4):
(4) The present cash reserve requirement of 8 per cent of total Canadian deposits will be gradually replaced by a cash requirement of 12 per cent against demand deposits and 4 per cent against term and notice deposits (including personal savings deposits). On present figures this formula would result in an over-all cash requirement of 6.6 per cent.
This means, according to the new Bank Act, that the cash reserve requirement for chartered banks will be established at 6.6 per cent instead of 8 per cent of their deposit liabilities.
Mr. Speaker, let us figure out what this will mean. I would ask the Minister of Finance to pay attention to the following figures which I will quote, and tell me if that is not the concrete and true result his amendment will bring about.
Upon leafing through Canadian Statistics September 1966 issue, I read, on page 76, in Table 106 entitled Chartered Banks of Canada:
Canadian cash reserves-total reserves for chartered banks. $1,492 million.
Bank Act
And according to these same figures, this has made possible Canadian dollar deposits totalling $18,443 million which represents an average cash reserve of 8.1 per cent.
If we now establish an average cash reserve of 6.6 per cent-it must be noted, Mr. Speaker, that the total cash reserves will still remain at $1,492 million, which is the present amount. If an 8 per cent cash reserve of $1,492 million represents deposits totalling $18,443 million, this same $1,492 million cash reserve, which is at present in chartered banks, will make possible deposits totalling $22,600 million once the cash reserve requirement is brought down to an average 6.6 per cent, which represents an increase in deposits totalling $4,157 million. And where do the deposits come from? From the loans granted by the banks. In this connection, I wish to refer to a magazine published by the Royal Bank of Canada. I am not the one who says that, I am only quoting the Royal Bank pamphlet "Economic Trends and Problems", prepared by their Department of Economic Research, in June 1966, as a special issue for general distribution. On page 3, paragraph 2, we read the following:
Bank deposits increase when banks buy bonds or grant loans, because the people who sell bonds to the banks or obtain loans from them deposit the proceeds thereof in banks.
[DOT] (5:30 p.m.)
Therefore, deposits come from loans and by decreasing the average percentage of the bank reserves from 8 per cent to 6 per cent, chartered banks are automatically allowed to increase overnight their lending potential by $4,157 million without their having a single penny more, either in stock capital, claims or guarantees. Chartered banks, the very day after this bill is passed, will be able to make additional loans to the extent of $4,157 million, merely because the average percentage of their reserves has been decreased from 8 to 6 per cent. I doubt that the minister can deny what I am now saying.
If the Minister of Finance will listen to me for a minute, I shall ask him a question which he can answer when replying to questions in general. May I ask the Minister of Finance to listen carefully so that he might be able to answer the following question:
Is it not true that because the average percentage of the reserves will be lowered from 8 to 6.6 per cent, the banks, which will always keep the same reserves in Canadian money, that is $1,492 million, as reported in the latest issue of the Canadian statistical

October 6, 1966
Bank Act
In other words, chartered banks have just been granted an $8 million cash reserve.
Banks now have an extra $8 million in cash at their disposal, and an extra $8 million in current deposits. It banks previously had $80 million in cash at their disposal and $1 billion in deposits, they would then have $88 million in cash, (80 plus 8), and deposits totalling $1,008 million. The proportion of deposits offset by cash exceeds 8 per cent.
What is done when it exceeds 8 per cent? This is what the following paragraph shows.
Banks may now dispose of $92 million more for loans, and their deposits will then increase by $92 million.
It is not said that banks have an extra $92 million; no, it is said that they have an extra $8 million in cash and because of this, they may, and I quote:
Now dispose of an extra $92 million for loans, and deposits will then increase by $92 million if all their loan and bond money comes back in the form of deposits.
Another paragraph which corroborates very well the present argument.
Therefore, this example goes to show that the purchase of bonds by the Bank of Canada for an amount totalling $8 million has caused an $8 million increase in bank funds, which has brought about a total increase of $100 million in bank deposits and, consequently, money supply.
Mr. Speaker, this information is given by a chartered bank. The Bank of Canada, in one of its monthly letters, admits that when it issues $8 million, in cash, chartered banks hasten to convert this into $100 million. They can do that. They have the $8 million and, all of a sudden, they are in a position to lend $100 million while having only $8 million. How much profit do they make? They have only $8 million, but by lending $7 million at the present rate of interest, which is 6 per cent, they lend $100 million. This nets them $6 million in interest; but they only have $8 million. Therefore, in the final analysis, they make 75 per cent profit on what they have, since they only have $8 million.
[DOT] (5:50 p.m.)
The Minister of Finance (Mr. Sharp) finds that it is not enough for the banks to make 75 per cent profit on their assets. According to him that is not enough, so he will authorize them to raise the annual rate of interest on loans to 7 per cent; next there will be no ceiling on their rates of interest and, finally, by increasing their rates to 9 or 10 per cent on household commodity loans, banks can make as much as 135 or 140 per cent profit on their assets.
[Mr. Gregoire.I
Mr. Speaker, to hold a bank charter is to operate the most lucrative business; yet, the Minister of Finance finds it is not enough. He will extend the banks privileges so that, as I said a moment ago, they can boost their annual profit to $476 million, without hiring one single extra employee, even without building one single extra building; overnight, that is as soon as this bill becomes law, the banks will be able to make an additional profit of $476 million annually-I think that the Minister of Finance is giving them a wonderful gift, and, in any event, at the expense of the people, as my friend, the hon. member for Compton-Frontenac (Mr. Latu-lippe) has just said. And who will pay for all that? That will go into the production costs and the costs will increase even more. And the minister is complaining about inflation.
Mr. Speaker, the minister should not complain because the man mainly responsible for inflation in Canada is the Minister of Finance himself; as a matter of fact, the inflation which prevails at the present time is due to tax increases. In the last three or four years, we have seen the federal government, the provincial governments, the school boards increase taxes more and more, and prices go up; the workers who want at least to keep up with the cost of living are asking for salary increases and the minister talks of inflation. But the man mainly responsible is the Minister of Finance with his continuous tax increases at the federal, provincial, municipal and schoolboard levels in the last three or four years. And with that new increase in production costs due to increased interest rates, a real period of inflation is in the offing.
The government itself will suffer the consequences because that increase in interest rates will be reflected in the first budget after the act goes into force, by an increase of $180 million in the service of the national debt.
Mr. Speaker, the Minister of Finance is doing a great disservice to his country. He is betraying his country for the benefit of the banks and the few millionaires who have always made profits from dealing in money. The Minister of Finance should instead create another system; in fact, he should read that little booklet, which has only two pages and a two-page table, and then say to himself that what the chartered banks are doing, the Bank of Canada will do it too. Then the minister or the government would only have to do exactly what the chartered banks are
October 6, 1966

doing, namely keep the cash reserves and multiply them by 12 or 15, as it used to be done or will be done under the new act. Then the government would no longer have to keep borrowing from the banks; it would not have to pay so much interest on the national debt; it could develop the country's economy, not by reducing the value of money but by maintaining its real value and the country would experience true prosperity instead of alternating between periods of recession and inflation.
It seems, Mr. Speaker, that the governments are unable to keep us in a happy medium, between the two; when they do not cause a recession, they bring about inflation. We jump from the frying pan into the fire. Periods of recession are always worse after periods of inflation because the money never reverts to the same level, it continues to depreciate. We alternate between the two as if it were impossible to find a happy medium, a period of prosperity without recession or inflation.
Mr. Speaker, for the reasons that I have just set forth and because I believe that this amendment to the bank act is the biggest banking and monetary hoax ever seen, I do not need to tell you that I am completely against the motion for second reading of this bill and I suggest that it should be referred back to experts for drafting with the Canadian people in mind instead of the bankers.


Herbert Wilfred Herridge: Mr. Speaker, other members of our party have dealt with the amendment that we proposed as being necessary to make this piece of legislation more effective and, as we all know, the amendment was ruled out of order. However, we are still of the same opinion. I will not deal with the arguments advanced by the previous speakers but I do want to mention another aspect of this question. I might mention to the minister that I will follow a more or less philosophical vein in my approach to this matter.
First of all, Mr. Speaker, everyone knows that the program of our party is based on our belief in the need for a mixed economy at this time in history. Of course, one can give different interpretations to those words. We believe that under the present circumstances we can best maintain freedom and
Bank Act
work for security and equality so far as possible by the introduction of a program which provides for public ownership in certain fields, for co-operative ownership and for private ownership, all carried out as the result of government planning at all levels in participation with the people or with local groups. Therefore, Mr. Speaker, our group maintains that this measure will not be completely satisfactory or effective unless it is amended along the lines we propose.
I understand that other speakers in our group will bring forward various proposals when the bill reaches the committee stage, and I am sure the minister will listen to them. However, I also maintain that this measure affects only one aspect of banking. This measure will never be satisfactory unless it is coupled with the Bank of Canada Act and designed to serve the credit needs of all the levels of government in Canada. This measure would serve the immediate and short-term requirements of the private sector of the economy.
I should like to draw the minister's attention to the following. I have always been interested in the attitude of the Liberal party toward banking throughout our history. Not long ago I read that when Gladstone was prime minister of Great Britain he made a very interesting speech in which he recognized that the banking fraternity of Great Britain was more powerful at that time than the government. I commend that to the minister's attention. I understand that was the first time in the history of the Liberal party that a prime minister of a country like Great Britain recognized the strength of the banking fraternity compared to the government.
I remember quite well that the late Right Hon. Mackenzie King indicated that those who had control over the banking institutions of the country, those who issue currency and credit, have control over the economy. He recognized that. Quite recently I was looking at Hansard at the time the Bank of Canada was first formed. I should like to refer to the late Hon. Ian Mackenzie. I may say, Mr. Speaker, that the minister might be interested to know that at the time I was vice president of the British Columbia Liberal Association Hon. Ian Mackenzie and the late Gerry McGeer were sponsors of a resolution at a provincial party convention in British Columbia in which they urged the nationalization of the banks of Canada. Of course, that was in 1932 in the depression years and they thought it was a good move at that time.
October 6, 1966

Proceedings on Adjournment Motion
I quote from page 4362 of Hansard, June 27, 1934, where Right Hon. Mackenzie King is reported as having said:
I should like to read again the words quoted by the hon. member for Vancouver Centre. Referring to the control of credit and stating the position of the party with respect to the control of credit, I said:
"The Liberal party believes that credit is a public matter, not of interest to bankers only, but of direct concern to the average citizen. It stands for the immediate establishment of a properly constituted national central bank, to perform the functions of rediscount, and the control of currency issue, considered in terms of public need. A central bank is necessary to determine the supply of currency in relation to the domestic, social and industrial requirements of the Canadian people: and also to deal with the problems of international commerce and exchange."
[DOT] (6:00 pm.)
Then he went on:
I desire to direct special attention to these words: "-a properly constituted national central bank-" Also:
"To perform the functions of rediscount, and the control of currency issue, considered in terms of public need."
Shall I call it six o'clock, Mr. Speaker?


Some hon. Members:: Continue.


Herbert Wilfred Herridge: Mr. Speaker, I am being
incited to further action.



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Speaker:: Order. Pursuant to provisional standing order 39A it is my duty to inform the house that the questions to be raised at the time of adjournment this evening are as follows:

The hon. member for Sherbrooke (Mr. Allard), Historic sites-Quebec-demolition of home of Sir Alexander Galt.

The hon. member for Parry Sound-Mus-koka (Mr. Aiken), Shipping-obstruction of navigation by bridge construction; the hon. member for Regina City (Mr. More), Royal Canadian Mounted Police-request for retention of musical ride and equestrian duties.



MOTIONS FOR PAPERS


Frank Howard: That an order of the house do issue for a copy of any communication exchanged between the Maritime Trustees, or other organizations and other persons, and the Minister of Labour or any official of the Department of Labour, with respect to the Seafarers' International Union.


Mr. Speaker:: Is the house ready for the question?


Frank Howard: Mr. Speaker, I thought that with that question the motion was going to pass without any discussion, which of course is the way the government always likes to operate things. I will refrain from reading the motion again because you have just done so, but may I at the outset say that it is not my usual course to expose to the glare of publicity the private or inner affairs of any organization. The internal operation and functioning of a voluntary, private group of people such as those embraced by trade unions should be the affair of that organization alone. To drag out into the glaring light of publicity such affairs, with all the misinterpretations that can flow from such action, is a course to which I do not normally subscribe. However, in this situation the circumstances of history are peculiar and I think necessitate a more formal and public disclosure of some of the activities of the Seafarers' International Union than would otherwise be the case.
The public first became involved through government action in this matter when the government headed by the right hon. Leader of the Opposition (Mr. Diefenbaker) appointed Mr. Justice Norris as a royal commissioner to inquire into certain matters in which the Seafarers' International Union were involved. The hearings of that commission ranged over a long period of time, and some people make the direct accusation that partly because of the responsibility of the commissioner himself and partly because of his bias and prejudice the hearings resulted in the blackening and defaming not only of the organization itself but of a number of individuals within it whether or not there was justification for this sort of defamation. In addition to that, Mr. Speaker, and in addition to the royal commission of inquiry and all of the publicity attached thereto, certain members of parliament, some of whom do not sit too far away
October 6, 1966

Motions for Papers
from me, seem to have delighted themselves in harassing both the union and the individuals within it, or individuals who used to be within it, which again is a sort of public involvement in the affairs of an organization of individuals.
Parliament also became involved in the operations of the Seafarers' International Union and other unions when it passed a law establishing a trusteeship to take over and conduct the affairs of certain unions, a trusteeship, incidentally, which I understand expires at the end of this year unless the government takes action to keep it in existence.
It might be well to note that our position on this question is shown by a bill which I have on the order paper seeking to repeal the maritime trusteeship act immediately without waiting for its normal death at the end of this year. By repealing this act we will thus remove the possibility that the government, as a result of pressure from sources unknown, may seek to extend the term of office of the trustees.
Because of the publicity attached to the operations of the Seafarers' International Union there have arisen a number of false accusations, smears and innuendos on the part of individuals with particular axes to grind, either because they have become upset at not having won election within the Seafarers' International Union or for some other reason. These people have solicited the aid of members of parliament who have used the floor of this House of Commons to carry out a persistent attack.
This attack, which has been diminishing in recent months, has caused so much concern to the union itself-as I say, most of these accusations are false and are innuendos made for particular and narrow purposes-that it has had a deleterious effect upon the employees of shipping companies as well as a damaging effect upon the well-being, the welfare, the wages, hours and working conditions of sailors. This is because the organization to which they belong has been hampered and harassed by the spate of accusations which have poured forth as a result of public and government involvement in this one private organization. There is no question, Mr. Speaker, that certain ship owners rub their hands with glee at such a situation, and I am told they have been responsible in part for financing the continued tirade against this particular group.
[DOT] (6:10 p.m.)
As I said, Mr. Speaker, I am not one of those who believe in delving into the private affairs of organizations but things have got to the point where I think it is necessary to bring out into public light, as the motion requests, any communications exchanged between the maritime trustees, the group established by this parliament to be responsible for administering the affairs of certain unions operating on the seaway and in waterfront areas, or any other organizations and persons, and the Minister of Labour or any official of the Department of Labour, with respect to the Seafarers' International Union so they can be exposed now to public scrutiny. In this way we can discover, if it is possible to discover, whether in the opinion of the maritime trustees there was any wrongdoing on the part of individuals. If there was wrongdoing on the part of individuals, then the responsibility devolves on the Minister of Justice to take corrective action, to engage in any necessary litigation in order to punish those who may have been involved in wrongdoing, and also to see that those whose names have been smeared from one end of the country to the other are cleared by the exposing of information which the maritime trustees have had at their disposal. They have been the administrators of the union.
The purpose of the motion is to seek to make public these documents purely for the purpose of clearing those who are innocent and, if there are any who are guilty, to disclose the extent of their guilt so that all can see what has occurred. In that way one can insist that the government take the necessary corrective action to deal with those individuals if they have done anything contrary to the Criminal Code which requires prosecution.


Eldon Mattison Woolliams: Mr. Speaker, I am very happy to rise on this occasion to speak on the motion for papers presented by the hon. member for Skeena. I will preface my remarks by going to the meat of the motion at the outset. The hon. member is asking:
That an order of the house do issue for a copy of any communication exchanged between the Maritime Trustees, or other organizations and other persons, and the Minister of Labour or any official of the Department of Labour, with respect to the Seafarers' International Union.
May I preface my remarks by saying that this is that part of the supper hour used for private members' business. At this time we study private bills and motions. I hope no

October 6, 1966
Motions for Papers
one will say that we ought to be getting on with the business of the house. I want to make sure that my remarks are understood, because if I did not speak on this subject in private members' hour somebody else would.


An hon. Member:: Nobody is interested.


Eldon Mattison Woolliams: I support the motion but not the reasons for production given by the hon. member for Skeena. In his argument he mentioned the fact that there were members sitting not far away who knew about these matters. He sought by innuendo to malign certain people who have been interested in the operations of the Seafarers' International Union. He used the opportunity given by the House of Commons to malign those people. I assumed he was talking about the member for Bow River, the member who continually asked questions about Hal Banks.


Frank Howard: Do not presume too much.


Eldon Mattison Woolliams: My hon. friend from Skeena has said I should not presume too much. If I am wrong in my presumption I would ask him to stand up and say that my presumption is wrong and I will go to another argument. Unless he does so, I shall continue with the line of argument I have in mind.


Frank Howard: Mr. Speaker, far be it for me to interrupt the hon. gentleman, even at his own request.


Eldon Mattison Woolliams: I never thought there was another minister of external affairs in the house. I now know that there is another hon. member with the same qualifications.
First, I want to deal with the report of Mr. Justice Norris, who was an independent commissioner. Nowhere has it been suggested, even if he had political affiliations, as some judges have, that he had any affiliation with the S.I.U. I am certain that whatever finding he made about Hal Banks, the past president of the S.I.U., and about any other president of the S.I.U., such finding was not made because he was a Liberal, a Conservative or because he belonged to some other party.
After hearing the witnesses, reviewing the evidence before the commission and reading the documents, Mr. Justice Norris came to the conclusion-I do not have the report with me at the moment though I have read it on several occasions-that Hal Banks-and there is some proof of this fact because he had been convicted in the criminal courts of this country-had a criminal record as long as my

arm and that he had come to this country under very unusual circumstances. I do not mind putting those on record. I think the Minister of Transport knows something of this.
Hal Banks was brought in because the government of the day wanted to kill the Communist movement in the unions in Canada. So they brought in a man who had a criminal record as long as my arm. In reviewing the activities of the union one finds that Hal Banks while he was president, and in spite of his unusual investment of union funds, accomplished certain things. I will not use the privilege of immunity in the House of Commons in order to slander anybody. I will not go into details. My hon. friend from Skeena and others in the House of Commons Commons know what these unusual things were.
The judge described Banks in certain terms. He described him as a criminal, a barbarian and a hooligan who would stop at nothing for his own ends and who used the union for his own advantage.
I am one of those who believe that the unions of this country certainly deserve better leadership. They have a serious responsibility to the workers and they deserve better leadership than Banks or Hoffa or others like them gave. The documents in question might show that to be so. It was recommended in the report that Hal Banks be prosecuted for certain offences. That report was laid before this house shortly before our defeat as a government.
When the new government came in, because of pressure and probing from this side of the house Hal Banks was finally prosecuted. He was found guilty by a court of this country. He then filed an appeal. He got out on bail under very unusual circumstances and escaped to the United States. It turns out that the offence for which he was convicted is one of those to which extradition does not apply.
In this session of parliament, and I am not talking about the past few days since the adjournment but about the session from the beginning, I have continually asked the Minister of Justice why, when there is evidence that Hal Banks is guilty of a crime, he is not charged with that particular crime. I have asked why he is not charged and brought back to Canada by extradition proceedings.
The present Minister of Justice, the past minister of justice and the minister of justice
October 6, 1966

before that have argued or suggested, especially the present Minister of Justice, that they cannot get the documents from the files of the Supreme Court of Canada. We are talking about documents that should be produced having to do with the trustees and the officers of the S.I.U. The minister says that they are having difficulty.
[DOT] (6:20 p.m.)
What I suggest is happening now is that because of the atmosphere surrounding the Hal Banks investigation the Liberal party- there is certainly some atmosphere in this regard because of the manner in which Banks was brought into the country and the questions which were left off his application, giving him the right to come into this country-does not want him back. So the Minister of Justice is hiding under a cloak. He says he cannot get the documents from the Supreme Court of Canada. Why does he not lay charges, bring Banks back into the country and proceed with the appeal, if it has not already lapsed, so that Banks can start serving the five years which I believe he was given for the offence of which he was convicted? He is one of the few Canadians who has been found by a high court judge to be a hooligan, a barbarian, to have committed fraud against a union, and then to have been given bail, allowed to escape and remain in the United States.


Mr. Byrne:: The same old record.


Eldon Mattison Woolliams: Yes, the same old argument. The argument will never change. I can understand why the hon. member says "the same old record". It is because he does not wish to see laid bare before the House of Commons the charges which have been made with regard to certain contributions made by Hal Banks and the S.I.U. to the Liberal party. He does not want it to be brought out before the House of Commons that the application relating to Banks' admission to Canada was typed in a cabinet minister's office and that the question whether Banks had a criminal record was omitted from the application. I can understand why members opposite want to heckle me. The hon. member said this was the same old speech. Well, it is the same old Hal Banks, the same old hooligan and the same old barbarian. That answers the heckling over there.
I suggest that the Minister of Justice might tell the House of Commons in the course of the next few days that he has got these documents from the files of the Supreme 23033-532
Motions for Papers
Court of Canada and that they show Banks to have committed another criminal offence in Canada which would make him liable to extradition and forcible return to this country.
I shall pursue another line of thought. When the hon. member for Skeena (Mr. Howard) talks about individuals being maligned, surely he is not telling us, as a union man, that the kind of leaders he wants in the unions are men like Hal Banks and McLaughlin? The hon. member says Banks was a victim of prejudice and bias. I would like the hon. member to show me any evidence that there was any bias as far as Mr. Justice Norris was concerned in regard to the S.I.U.


Frank Howard: Evidently the hon. member did not listen to what I said.


Eldon Mattison Woolliams: I am sorry. I listened carefully to what the hon. member said and if I am wrong I hope he will correct me. As I understand it, he said the judge showed some bias.


Frank Howard: The hon. member needs a little lecture on facts. What I said was there were some people who claimed that Judge Norris was biased and prejudiced and that he expressed that bias and prejudice by the way in which he handled the commission.


Eldon Mattison Woolliams: That is an old trick of the trade, to say you have listened to experts and are merely using their words in the House of Commons. I was not born yesterday. It is an old trick to say: I am not going to say that but I heard a dirty little rumour to that effect. I should like the hon. member to tell us whether in his opinion there was bias and prejudice.


Frank Howard: I will say this to the hon. member: I have not the ability to pore over the report and look for ways and means of carrying out smear by innuendo. Mr. Harold Banks is not the person I am speaking about. There are others. If the hon. member wants to carry on in this way seeking to destroy something which is worth while, that is his business. But I do not intend to be taken in by his legal gobbledegook. If he wants me to become involved in explaining to the House the relationship between his party and some individual contributors and the nefarious way in which contributions are made to his party I will be glad to do so because I have the information available, but I do not want to become involved-

October 8. 1968
Motions for Papers


Some hon. Members:: Oh, oh.


Eldon Mattison Woolliams: The hon. member is using the tactics he used five minutes ago. To answer his interruption I will say this: there is a by-election being fought in Alberta, in Pincher Creek. Social Credit are running, the Liberals are running, the Conservatives are running and the N.D.P. are running. But the N.D.P. is the only party which is using six paid organizers from the union organization every day throughout the election. These are the contributions which people should know about.
Surely the hon. member for Skeena is not sensitive about the subject of Hal Banks. If he is, it is a pity, because I intend to say a few more words about Mr. Banks and Mr. McLaughlin in reference to the leadership of the S.I.U. I want to say these things because they are based on facts.
The hon. member has to use the method of operating a smear campaign against my speech hoping he will get a small headline saying that the member for Bow River is trying to smear poor old honest Hal Banks. Isn't that a comedy? Poor old honest Hal Banks, the man who was sentenced and who escaped across the border. They knew he was going to escape but he got bail. I am sorry I have hurt the sensitivity of the hon. member for Skeena with his affection for men like Hal Banks and McLaughlin whom Mr. Justice Norris described by the adjectives I have already used.


Frank Howard: Do not use such scurvy tactics.


Eldon Mattison Woolliams: I shall not allow myself to be tempted to get down to the hon. member's level because I have never been expelled from this House of Commons, as he has been because of the adjectives he used.


Frank Howard: More scurvy tricks.


Eldon Mattison Woolliams: I realize the Liberals would like me to take on a fight with my good friend from Skeena. I am not surprised. They are all in the same position. I was heckled by a member from British Columbia, one of the parliamentary secretaries who is close to the Department of Labour, so I am not surprised they are in the same boat.
Of course, I have always said that eventually all socialists will be on one side of the House, one or the other. That will be good for the country because we could then bring them out from hiding. I see one of them on the other side who might be in hiding. He is smiling.


An hon. Member:: We are all smiling.
[DOT] (6:30 p.m.)


Eldon Mattison Woolliams: I am glad you can smile.
The whole story of Hal Banks is a serio-comedy. I shall ask one question before I sit down. I should like to hear the Minister of Justice tell us that they have the document from the Supreme Court of Canada, they have the evidence on which to lay a charge against Banks, and that they will bring him back to Canada to serve the sentence he is facing now together with a concurrent sentence if he is convicted in another court. Without that kind of fairness, equity and law, we shall have played ducks and drakes with the system of administration in this country. I have asked for this. I have continually pressed for it, and these documents may show it.
I shall end with one last thought. When the trustees were brought before the committee we wanted to examine them to discover whether fair methods had been used in the election of McLaughlin to the presidency of the S.I.U. But one of the trustees returned to British Columbia. He was a judge and he was not examined.
Another witness did not give evidence. The chairman of the committee ruled against us securing the documents so that we were never able to get the real story about the S.I.U. and about the election of McLaughlin, who was a pal of Banks and was painted in the same terms by Justice Norris. I would like to have those documents produced and others as well because I believe they would tell a beautiful story.


Mr. B. S. Mackasey (Parliamentary Secretary to Minister of Labour):: Mr. Speaker, when we started private members' hour at six o'clock I had great hopes that we might stick almost religiously to the issue before us, namely, the notice of motion for the production of correspondence between the trustees, the Department of Labour and other departments, but predictably the contributions so far, particularly that of the hon. member for Bow River (Mr. Woolliams), have revolved around that member's favourite subject, Hal Banks.
I have to admire the tenacity of the hon. member because ever since I came to this house in 1962 he has made it his personal responsibility at every opportunity to pass opinions on the merits of Hal Banks. I do not think anybody in this chamber needs to be
October C, 1966

convinced that Hal Banks was an undesirable addition to the labour force of Canada.


Eldon Mattison Woolliams: Good.


Bryce Stuart Mackasey: Nor do I think the hon. member is revealing any secrets when he suggests that Banks was brought into this country in the mid-fifties with the collusion of the government and the labour movement, including Mr. Jodoin and others, for a specific purpose, to clean up a rather unsavoury situation that existed at that time. That has been said before in the house and I am not denying it, but I would prefer to talk about the question of the production of these papers rather than about the subject matter about which the hon. member of Bow River has spoken at great length.
I am sure the hon. member remembers another occasion when he and I discussed the same issue during the debate on the estimates of the Department of Justice earlier this year, when the former minister of justice, the hon. member for Kamloops (Mr. Fulton), participated in that debate very constructively and objectively.
I asked the question why, since Mr. Banks' crimes were public knowledge, particularly in shipping and union circles, as a result of the courageous declarations of Captain Walsh and other people, the minister of justice between 1959 and 1962 did not bring Banks before a court of law. As a matter of fact, the Norris commission was set up by the minister of labour in the Conservative government two months after the general election in 1962.
I am not questioning the motives of the then minister as to why he waited so long, because I have the highest regard for the present hon. member for Ontario (Mr. Starr). The former minister of justice, the hon. member for Kamloops, admitted quite frankly, that it is one thing to know of the escapades of Hal Banks and another one to prosecute him with any degree of certainty that the prosecution would be successful.
As recorded at page 11407 of Hansard for February 17, 1965, the former member for Carleton asked a series of questions about reports on the conduct of Hal Banks. His first question was:
Did the department of Justice, in 1958-
The date is significant.
-through the R.C.M.P., conduct an investigation to determine if Hal Banks had been employing Intimidation and violence in the furtherance of union activities?
Motions for Papers
The answer was:
Yes. In November, 1958, the Minister of Justice instructed the R.C.M.P. to conduct an exploratory
investigation-
The second question was:
Did the government on February 23, 1959-
Again the Conservative government.
-as a result of the aforementioned investigation, receive a full account of the conspiracy which resulted in the Walsh beatings?
The answer was:
The R.C.M.P. advise that on February 23, 1959, they forwarded a preliminary report to the Minister of Justice, under secret cover, outlining the findings of their investigation into the activities of Hal Banks, which included an account of the conspiracy to beat Captain Walsh.
In 1959 the minister of justice of the previous government was informed by the R.C.M.P. of the evidence available from Captain Walsh as to the alleged beating by Hal Banks.
The third question was:
Was any action taken by the government of that day to bring Banks to trial as a result of that evidence?
The simple answer to that question was no. Another question was:
Was another report, which included a further account of the Walsh conspiracy, sent on June 14, 1961, to the government by the Department of Justice?
The answer to that question was:
The R.C.M.P. advise that on June 14, 1961, they forwarded a further report to the Minister of Justice, under secret cover, which enlarged on their findings with respect to Hal Banks and the general picture of the S.I.U. activities, including further information with respect to the beating of Captain Walsh.


Mr. Prud'homme:: Was the hon. member for Bow River (Mr. Woolliams) here then?


Bryce Stuart Mackasey: I do not know where the hon. member was in those years, but the important point is that the R.C.M.P. did report on the activities of Hal Banks to the previous government in 1959 and again in 1961, and the minister of justice of that time, after receiving those reports, still felt there was not sufficient evidence to bring Hal Banks to trial.
I for one do not question the motives and integrity of the previous minister of justice. I think he made his decision and his finding in good faith and with the full knowledge that the senior officials of his department placed at his disposal. When we get into this kind of thing-

October 6, 1966
Motions for Papers


Rémi Paul: Did he report to the prime minister?


Eldon Mattison Woolliams: I rise on a point of privilege with reference to the former minister of justice, and I know the hon. member for Verdun (Mr. Mackasey) would want to be fair in this regard. He read the Norris commission report, and I point out that at a commission hearing you can examine and cross-examine witnesses. On the other hand, the hon. member knows that in a prosecution you cannot cross-examine your own witnesses, and it was only after the Norris commission was established that witnesses were able to come forth and volunteer to give evidence.
It was because witnesses volunteered, as a result of the Norris commission, that the legal officers of the department were able to lay a charge against Banks. This type of thing is total misrepresentation. I have heard it on political platforms and I have heard it previously in this house, and it is no answer to the question of why a charge was not laid by the previous minister of justice at that time. This is not being fair to him.
The fact is that until the commission was set up witnesses were scared. People had had rocks thrown through their windows. They lived in terror. This was the rule of the hooligan, but as soon as the commission was set up witnesses volunteered to come forward because they could have the kind of protection that would allow them to tell the truth, the truth which finally convicted this man and forced him to flee to the United States. I want to raise that point of privilege on behalf of the former minister of justice who is not here.
[DOT] (6:40 p.m.)


Bryce Stuart Mackasey: After having listened to the second speech of the hon. member I might say that I agree with him but he did not give me the opportunity to continue to read Hansard.


Eldon Mattison Woolliams: I heard your speech before.


Bryce Stuart Mackasey: And I heard yours before; they are as stereotyped as usual. I was going to go on to say that on that particular date in February I raised the specific argument I am raising now in front of the then minister of justice. I was very satisfied, and that is no reflection on the man. He pointed out to me that he could not prosecute Hal Banks before for the very reason the hon. member stated, and which I had intended to state if he had held on a little longer. Certainly as a result of

his most just explanation to me I understand there is more flexibility and freedom given to a royal commission than to a court of law, but it still makes us wonder when we know that it took four years-and we are not passing judgment on the minister-from the first report of the R.C.M.P. in 1958 to institute the royal commission to look into the affairs of the S.I.U. and Banks.
I do not think any party in this house can wash its hands of Hal Banks. We are all guilty, if we are guilty of anything, including the party of the hon. member for Bow River, and I am surprised that he brings it up because I think that on balance his party is equally vulnerable if not more so.
I should like to get off the subject of Hal Banks because that is not the point the hon. member for Skeena brought up. The hon. member for Skeena has shown partiality with regard to the affairs of the S.I.U., and I commend him for it. The S.I.U. plays a big part in the labour movement and it does not have to hang its head in shame. It is doing an excellent job at the moment. In co-operation with the trustees it has restored peace on the waterfront. I hope the day is not too far away when the S.I.U. will be free of the shackles of the trusteeship. That is not my decision to make. It will have to be made in the light of the report of the trustees who may make that recommendation at the end of this year. That is incidental.
I also commend the reasons the hon. member for Skeena presented, namely, that he wanted these papers to clear the names of certain persons. I would suggest humbly to the hon. member for Skeena that there is no agitation any longer. We have peace on the waterfront and Red McLaughlin, regardless of how Judge Norris castigated him, is at this very moment doing an adequate and satisfactory job, under the supervision of the trusteeship, as head of the S.I.U.
There is something more fundamental, and I think this really is what the motion is all about. I refer to the advisability of producing papers which are the property of the trustees. I think that as one of the better known lawyers of this country the hon. member for Bow River could have done a service to members such as myself and others if he had explained the rights of the trustees and how the very word "trust" or "trusteeship" is going to have any effect or validity in operation if we are going to destroy that trust which is implicit in the mandate of the trusteeship by taking confidential documents and correspondence between the Department of
October 6, 1366

Labour and the trustees in respect of the findings by the R.C.M.P. and their criticism of the S.I.U. and make them public periodically whenever anybody, well-intentioned or otherwise, asks for these documents. In that way the whole principle of the trusteeship would be destroyed.
The hon. member for Skeena did mention that it is not his normal practice to demand that the normal dealings of people, unions or business be made public for everybody to peruse, but he feels there are circumstances here which are more important involving the clearing of the names of certain individuals. I disagree with him. I think the whole question of the production of papers is a very contentious point under our parliamentary system. I have said this before. In this house we follow a pattern half way between the British and Swedish systems. I am sure most members are familiar with both systems. In Britain, as you know, the whole philosophy behind the production of papers is that everything is secret and only under exceptional circumstances are private papers or documents brought to public attention. The secrecy is so binding that not only does it apply to members of the House of Commons and members of the House of Lords but even to contractors who are doing jobs for the government in Great Britain. On the other hand, Sweden has a different philosophy and perhaps a more logical one in that everything is public with the exception of certain categories which are secret.
In Sweden they carry this to a logical conclusion, even to the extreme that in the cities of Sweden today, whether you are a newspaperman, a private citizen or a trade union man, you can go into large rooms in certain public buildings and demand or request, just like you do in a city library here, documents which under our system are considered secret. But even under this advanced method of dealing with documents and production of papers there are certain categories-four, if I recall accurately-which are considered to be secret and confidential and which cannot under normal circumstances be made public. The papers of the trusteeship fall into one of these categories. Therefore under the British system you would not get the papers and under the Swedish system, of which I approve because it spells out the conditions and categories in which papers are or are not available, papers such as the hon. member for Skeena has requested in good faith are not available.
Motions for Papers
The hon. member for Bow River talked about the committee on industrial relations and stated that the chairman refused to submit all papers. By a strange coincidence I was the chairman. I remember the situation very well. The hon. member for Bow River said I blocked off all access to all papers, but that is not the fact. As a matter of fact, in respect of the request by certain members of my own party I took the stand that certain documents should not be made public. I ruled against those hon. members, including I think one who will be speaking this evening. When it came to the specific papers which originated from the trustees I ruled, and I would rule again if I were in the same position, that you cannot have a trusteeship if you are going to take its papers and make them public. I am surprised that the hon. member for Bow River, who is a very experienced and senior member of the bar, should, of all speakers, not want to protect the rights of the trustees. I would think he would want to commend the fact that these papers are private.
The hon. member mentioned the fact that labour people are running around the country working for the New Democratic party. What about it? Labour in this country has the right to support whichever party it likes. Labour has as much right to support a political party as has big business to support the hon. member for Bow River. I see nothing wrong with that, nor do I see anything wrong with labour contributing to political parties just as big business contributes to the party of the hon. member for Bow River or any other party.
Since when has labour been denied the rights which other organizations have in this country? All of a sudden these contributions are bad because they came from one Hal Banks.


Eldon Mattison Woolliams: Would the hon. member permit-


Bryce Stuart Mackasey: I have listened to your speeches before.


Eldon Mattison Woolliams: Would you permit one little
question?
[DOT] (6:50 p.m.)


Bryce Stuart Mackasey: Certainly I will.


Eldon Mattison Woolliams: Do you agree with the union system whereby deductions are made from the pay cheques of union members and then sent to political parties?


Bryce Stuart Mackasey: No, I do not.

October 6, 1966
Motions for Papers


Eldon Mattison Woolliams: I am glad to hear that. That answers the question.


Bryce Stuart Mackasey: It does not answer the question. I do not approve oi certain things that happen within the labour movement whereby weekly deductions are made from pay cheques and sent to specific political parties. I do not agree with that and I venture to suggest that most of the members of the party to which I belong do not agree with it. The situation to which I refer was adopted as a result of a majority vote of the members of a specific union. It is to the everlasting credit of the labour movement in this country that its members, when they go to the polls and stand behind the screen, vote freely and according to their own beliefs. They do so because they feel that whoever they vote for will represent their best interests. If they vote for the labour member in Verdun they vote for me because I represent their point of view in this House of Commons, and I represent the labour line. I am becoming very impatient with people who continuously attack the labour movement in this country. Someone seems to be getting up every day attacking the S.I.U. and the railway unions, insinuating that something is wrong with labour unions and that everybody who belongs to the labour movement is a Hal Banks or a Jimmy Hoffa. These attacks are unfair to the labour unions. If these people wish to support the N.D.P. in good spirit they should do so through voluntary contributions. Surely that is a lot better than having big businessmen hiding in their offices and feeling that because they have sent $5,000 or $10,000 to one political party they have done their duty as Canadian citizens.
Let me return to the issue at hand, namely, should we or should we not produce the particular papers which the hon. member for Skeena has requested? Let me state to that hon. member that I hope he will withdraw his request because I do not think it is in the best interests of the S.I.U. and the labour movement generally to produce-


The Acting Speaker (Mr. Rinfret):: Order, please. I regret to interrupt the hon. member but the time allotted for his speech has now expired. I recognize the hon. member for
Trois-Rivieres.


Bryce Stuart Mackasey: Mr. Speaker, I rise on a question of privilege. Did you take into consideration the time taken by the tirade of the hon. member for Bow River?


The Acting Speaker (Mr. Rinfret):: Yes. We do have three clocks in this chamber and I also have the assistance of the Clerk in keeping track of the time used by members.


Bryce Stuart Mackasey: I was referring to the time taken by the hon. member for Bow River during his interruptions.


The Acting Speaker (Mr. Rinfret):: I have taken all the interruptions into consideration.


Frank Howard: Mr. Speaker, perhaps I may be allowed to rise on a question of privilege before the hon. member for Trois-Rivieres begins. Somebody on the other side will obviously talk this motion out and I think we might as well allow the hon. member for Verdun to do so as he seems so anxious to carry on.


The Acting Speaker (Mr. Rinfret):: I do not
believe the hon. member for Skeena has a question of privilege.


Mr.   J.-A. Mongrain@Trois-Rivieres: Mr. Speaker, as an independent member, I must admit it is not exactly edifying to hear both official parties telling each other that they cannot wash their hands of the responsibilities concerning the Hal Banks' case. I am also under the impression that this discussion will not add to the credit of the two old traditional parties so far as public opinion in Canada is concerned.
As for me, I was extremely pleased to see, for instance, that duel, that fencing bout between the hon. member for Skeena <Mr. Howard) and the hon. member for Bow River (Mr. Woolliams); both are brilliant parliamentarians but I think that is about all the usefulness of such a debate, for one must keep in mind the old French saying, which goes like this: Let sleeping dogs lie.
That Hal Banks' affair has been evil-smelling from beginning to end. I think it most desirable for the Canadian people to forget about it and even to forget about Hal Banks.
I do not think there would be advantage in spending money to have him returned here; the farther he will be the better for everyone concerned.
I cannot support the motion and I cannot support either the assertions-clever perhaps-which leave a rather strange taste of blame concerning the Norris inquiry.
October 6, 19G6

I followed personally with deep interest, from beginning to end, the situation at the time of the extreme troubles caused by the S.I.U. I was then mayor of my municipality and I saw in my hometown union organizers knocking people with baseball bats', I saw them terrorize part of our people. I had to threaten the vice president of that union with the sanctions provided by the Riot Act. I had to order that about 40 persons be put in jail, I think, in an attempt to maintain law and order in my municipality.
I then have reason to say that the Norris inquiry has been worthwhile and has been well conducted. I think the production of all that correspondence would add nothing at all to the matter involved because, first of all, it may be used by politicians of various affiliations to continue making insinuations on the hustings, only to complicate the situation. I will object therefore to the production of these documents perhaps not for the reasons already mentioned here tonight, but to end those smear tactics and deal with more constructive matters.
Before resuming my seat, if I am allowed to express a comment as an independent member of this house, I do not think that the supporters of any party in the house, have any advantage in smearing one another, as they do, in recalling contributions to election coffers coming from individuals of questionable and sometimes alarming reputation. That would not enhance the parties at all and it would be better to hide those matters under the cover of discretion and deal instead with constructive legislation.
Mr. Speaker, I will conclude my remarks by saying that it is seven o'clock.


The Acting Speaker (Mr. Rinfrel):: Order. The hour for private members' business being expired, the house will now revert to the business interrupted at six o'clock.



BANK ACT


[Stage Direction]
The house resumed consideration of the motion of Mr. Sharp for the second reading of Bill No. C-222, respecting banks and banking.
Bank Act
Herbert Wilfred Herridge: Mr. Speaker, when we called it six o'clock in order to consider private members' business I was quoting from a speech made by Right Hon. Mackenzie King on June 27, 1936. This quotation is to be found at page 4362 of Hansard for that date. I should now like to quote briefly from that page. Mr. King stated:
Note "in terms of public need" not possible private gain.
Later he said, speaking on the same subject:
The Bank of Canada, as constituted by this proposed enactment, will undoubtedly be the means of vesting in the Bank of England-
At this time that should be changed to the New York exchange. I continue:
-the management and control of Canada's foreign exchange and Canada's internal credit administration. As I said the other evening, once a nation parts with the control of its currency and credit, it matters not who makes the nation's laws. Usury, once in control, will wreck any nation. Until the control of the issue of currency and credit is restored to government and recognized as its most conspicuous and sacred responsibility, all talk of the sovereignty of parliament and of democracy is idle and futile. Those are strong words: they constitute a strong argument and they are words of which this house ought to take full account before it is too late.
As I said before, Right Hon. Mackenzie King mentioned the Bank of England but because of the change in circumstances we should substitute the New York exchange.
I found that even the Conservative party took a similar point of view and I wish to quote briefly from a speech made on April 2, 1935 as recorded at page 2323 of Hansard for that date. Mr. Stevens was then the member for Kootenay East and he is recorded as having said:
[DOT] (7:00 p.m.)
Why in the name of heaven do we not go to work? I will tell you why-because the credit of the country is in the control of a very small number of men and is not actually available except at costs that are too high or on conditions that are too onerous.
So here we have a former minister of the Conservative administration making the same criticisms of the banking system in this country. My speech will be dealing briefly with a package deal, as it were, namely, the relationship of this bill to the Bank of Canada Act and the Industrial Development Bank Act.

October 6, 1966
Bank Act
An amendment was moved by one of the members of this party because after serious consideration we thought it would do something to improve the effectiveness of the bill. However the amendment was ruled out of order. I am sure the minister knows-we know-that there is considerable dissatisfaction in his own ranks with the terms of this bill.


Mr. Boulanger:: How do you know? You are guessing.


Herbert Wilfred Herridge: Well, people express themselves freely in a free parliament-behind the curtains. The government has refused to accept our amendment and I believe it lost an opportunity, by not accepting it, to debate the points raised in the amendment. I believe the amendment, if carried, would have made some sections of the bill more effective. In spite of the remarks made by Right Hon. Mackenzie King and Mr. Stevens, a former minister of a Conservative government, and others, governments at all levels in this country continue to raise loans in the United States, because that is the place to go at the present time and under the present circumstances.
As I see it, under this bill the private banks provide the capital for the day to day requirements of persons and industry in this country, usually on a reasonably short-term basis. That is the purpose of the bill, as I understand it. We all know that the banks do not lend the investors' money. It is very often said that they lend the money persons have deposited in the banks. We all know that they create capital by bookkeeping entries. That is recognized. Mr. Mackenzie King recognized that, as anyone can see who has read that speech in full, and others that he made.
We should combine these three pieces of banking legislation. As I see it, the Bank of Canada should provide the social capital required for all levels of government, based on our natural resources, our industrial equipment and on the capacity of the Canadian people to produce. That is the way credit is issued in the United States. It is issued on no other basis.
We cannot understand why we cannot use the Bank of Canada, as one segment of our banking system, to this effect. This social capital would provide the opportunity for the building of highways, hospitals, schools, parks and the carrying on of socialized industries and other services. That is the way this capital is raised at the present time, and I think it is most unfortunate-
IMr. Herridge.]


Mr. Nugent:: Mr. Speaker, I rise on a point of order. Perhaps the hon. member would pardon my interrupting his speech. It seems to me that when we formed the government we always had at least 20 members in the house, particularly if we wanted to pass some legislation. There are five Liberal members on the other side of the chamber, and there is not a quorum in the house now.


James Allen (Jim) Byrne: You did not sit during the dinner hour.


Herbert Wilfred Herridge: I think the hon. gentleman is splitting hairs in the particular circumstances under which we are operating.


Terence James (Terry) Nugent: I did not think a reference to a lack of quorum was splitting hairs, certainly if the government is interested in this legislation. I never saw a time when we formed the government when we did not make sure that we had enough members in the house to ensure a quorum, no matter whether opposition members were present or not. If this business is worth carrying out and the government believes in what it is trying to do, I would think the government ought to make sure it has enough members in the house to enable it to carry on the business before the house. I suggest, Mr. Speaker, that the rules require a certain number of members to be present before we can carry on our business.


James Allen (Jim) Byrne: The hon. member may be interested to know that there are only four Conservative members in the house at the present time; and I would point out that during the years the Conservative party was in power we did not sit during the dinner hour.


Terence James (Terry) Nugent: I do not think it matters that the government has now changed the rules and finds itself unable to cope with the rules it has passed. A quorum is 20 members, Mr. Speaker.


Mr. Speaker:: Hon. members know what the situation is so far as the quorum is concerned. I think that by tradition, custom and practice the Chair does not raise the matter of a quorum of its own initiative. Particularly since we have dispensed with the dinner hour the practice has been that no pressure is exercised either by members on the Chair or by the Chair on members to call attention to the lack of a quorum in the house. That is why this was not done in the present instance; although I might mention to the hon..
October 6, 1966

841$
member for Edmonton-Strathcona (Mr. Nugent) that we appeared to have a quorum a few moments ago.


James Allen (Jim) Byrne: Yes; and the Conservatives are behind the curtain.


Gordon Minto Churchill: Don't blame it on the
Conservatives. What is the government doing?


Mr. Speaker:: I should like to bring to the attention of hon. members standing order 3, which says:
(X) The presence of at least 20 members of the house, including Mr. Speaker, shall be necessary to constitute a meeting of the house for the exercise of its powers.
(2) Whenever Mr. Speaker adjourns the house for want of a quorum, the time of the adjournment, and the names of the members then present, shall be inserted in the Journal.
I am wondering whether this is what members of the house want at this time. I must say that I have some doubt whether any good purpose would be served at this time by counting the members in the house, taking down the names of those who are here and indirectly recording the names of those who are not here. If this is what the house wants to have done, we will do so.


Terence James (Terry) Nugent: Mr. Speaker, the rule which established our sitting during the supper hour was not one that I favoured. The government had this rule passed, and I think they have a duty to make sure, because they were in favour of it, that they have sufficient members here to enable the business to be carried on. If the government are unable to carry on their business under the rules which they insisted upon, then I insist upon the rules being carried out.


Mr. Speaker:: The only other thing I can do for the benefit of this house is read citation 60 of Beauchesne:
Any member may direct the Speaker's attention to the fact that there is not a qourum present. The Speaker will proceed at once to count the house, and if there are not 20 members present, including himself, the Clerk will take down the names, and the Speaker will then adjourn the house without question first put until the usual hour on the next sitting day.
I hope hon. members realize that what they are proposing now is a rather serious procedure. They are proposing the adjournment of the house until tomorrow. If this is what the hon. members I see around me at the moment want to do, I will ask the Clerk to count the members and make a record of those present in the house.
Bank Act


Terence James (Terry) Nugent: May I ask you to proceed to do that, Mr. Speaker.


An hon. Member:: I think we have a quorum.
On the count being made 21 members were declared to be present.


Mr. Speaker:: The hon. member for Kootenay West (Mr. Herridge) has the floor.


Herbert Wilfred Herridge: Apparently, Mr. Speaker, the hon. gentleman suffers from poor eyesight.


Gordon Minto Churchill: There was no quorum for half an hour, and you know it.


James Allen (Jim) Byrne: There were 20 members here all through.


Gordon Minto Churchill: That is not true, and you know it.


Terence James (Terry) Nugent: Mr. Speaker, I rise on a question of personal privilege. I feel rather wounded that the hon. member for Kootenay West (Mr. Herridge) should think it necessary to bring to the attention of this house what is an apparent infirmity of mine. I admit that I usually wear glasses, and I forgot them tonight. But I was perfectly capable of counting about 12 members in the house when I brought this matter to the Speaker's attention.


Herbert Wilfred Herridge: When the interruption occurred I was dealing with the question of the issuing of credit by the private banks, and I dealt with the function of the Bank of Canada as part of our banking system. In my opinion, Mr. Speaker, if we were to have a Bank of Canada Act that provided for the issuing of the credit requirements of all levels of government in this country for the social purposes I have mentioned, we would have laid a solid foundation, a sound foundation, in this respect. We would hope that the Bank Act could be amended to serve the needs of persons and private industry in this country, and that it would be agreed that the Industrial Development Bank would meet the needs of small industry in Canada. If these three pieces of legislation were coupled together we would achieve a certain philosophical approach to our financial system and would lay the foundation for a sound financial system and a more equitable economic society. And in doing this, Mr. Speaker, I am sure the minister would agree with me that we would also be doing something fundamental for the control of inflation in this country in the years ahead.

Oclober 6, 1966
Bank Act
[DOT] (7:10 p.m.)
My comments have been made on a rather philosophical basis, and I tied the three pieces of legislation together, but I do think, Mr. Speaker, that we have to approach our financial problems along these lines if we are to have a sound financial system and an equitable distribution of wealth in this country.


Mr. Speaker:: If the minister speaks now he will close the debate.


Mitchell William Sharp: Mr. Speaker, in summing up the debate I would like to thank those hon. members who have contributed to it, and in particular the hon. member who made philosophical comments which I enjoyed very much. It did seems to me that a good many of the quotations that he gave us related to the necessity for institutions that have since been established, such as the Bank of Canada, and that some of the fears that were expressed by those statesmen of long ago have been met by our modern financial machinery.
I do also want to thank the members of the house for their restraint, because one point most hon. members seemed to be agreed on was that it is highly desirable to approve this bill on second reading and to get it before the standing committee where testimony can be taken from bankers, from experts and from the public in general.
As might be expected, even in the brief speeches which have been made on second reading of this bill, there has been a good deal of repetition of what was said when the resolution was under discussion, but some new points were also made.
I would like to congratulate particularly the hon. member for Nanaimo-Cowichan-The Islands (Mr. Cameron) for his contribution. It is not often that members of this house are prepared to modify their views in the light of the discussion and in the light of their reflection upon the legislation as presented to the house. It was very gratifying to me as the minister sponsoring this bill to find the hon. member for Nanaimo-Cowichan-The Islands saying the following among other things: "There are compelling arguments for the removal of the 6 per cent limit, and again, "While, as I say, there are compelling reasons for its removal I have not found an economist who would dispute that statement".
Now, Mr. Speaker, I do not say this in any way to gloat-not at all. I understand perfectly well that the hon. member was saying
[Mr. Herridge.I
a good deal more than that he agreed there were compelling arguments for removing the 6 per cent ceiling. I congratulate him because I think he has come to realize, as some of us who have been pondering this problem over some time, including the royal commissioners and other economists in this country, that whatever the 6 per cent ceiling on the bank interest rate did, it did not control the interest rates in this country. Therefore I felt that this was a most useful contribution to an understanding of the situation in which we now find ourselves.
The hon. member of course went on, as did some of his colleagues in the same party, to suggest that the Bank of Canada should be given power to regulate the rate of interest on loans and deposits. I do not agree with this suggestion but I can understand the reasons for it. I think it does mark an advance in the thinking of his party, that no longer are they concentrating on what I have always regarded as an obsolete and ineffective section of our present banking legislation, namely, the ceiling on bank interest rates.
I agree with several hon. members who have said that interest rates throughout the world are higher than is desirable. I said that in this house on September 8, and I said it in Washington. My views were echoed by almost every minister of finance in the civilized world. There has been undue reliance upon monetary policy, and I do hope that those who share my views and the views of other ministers of finance around the world will be equally prepared to support the kind of fiscal policies that are a better alternative.
I do not believe we can keep the rate of interest down by controls. It has been admitted in this house that to keep the rate of interest down by a 6 per cent ceiling on bank interest rates is not effective; neither do I think it would be effective to keep the general rate of interest down by law. What is important is to get a proper balance in the instruments for the stabilization of the economy, and I agree that too much reliance has been placed on monetary policy.
In this connection, Mr. Speaker, there have been some criticisms that economic conditions have changed and that the time has come for our general approach to economic policy to be changed. The hon. member for Northumberland (Mr. Hees) today asked a question which he thought he might debate at ten o'clock tonight-I gather he is not going to do so. He did point to the fact that there had
October 6, 1966

Bank Act
been some decline in the index of industrial production in Canada in recent months. From that he drew the inference that there had been a general change in conditions and that we were now facing some sort of a down-turn in economic activity, and that therefore we should change our general monetary policy.
I would like to say a word or two about the present situation because there could be some misunderstanding if the impression created by the hon. member's remarks were to go unanswered. The decline in the industrial production index in July was accounted for by strikes in copper, nickel and iron ore operations. There were also strikes in other industries. All together 812,000 man hours were lost due to strikes in July, the equivalent of 0.65 per cent of estimated working time of the entire labour force. For manufacturing and mining, which are the two principal components of the industrial production index, the percentage of time lost due to strikes was higher. The decline in iron ore and non-ferrous metal mining amounted to 13 per cent. This alone was sufficient to reduce the total production index by one point. Manufacturing as a whole was steady in July, with non-durable goods production increasing by half a point and durable goods production being down by a half point. The decline in those last figures was associated with the earlier shut-down in the automobile industry for new model changes.
[DOT] (7:20 p.m.)
The smaller rates of increase in total activity during the second quarter of 1966, which has also been remarked upon, were a natural consequence of the extraordinarily high rates achieved earlier in the year. The value of the gross national product increased by 4.4 per cent between the fourth quarter of 1965 and the first quarter of 1966. So that in the first quarter there was this extraordinary increase. This was far above any possible sustainable rate in the Canadian economy. In the first quarter the advance announcement of the Ontario sales tax increase caused some additional buying, and our exports to the United States in that quarter were very high, due to the very heavy demand at that particular time.
The adjustment from the extraordinary first quarter increase in the second quarter has been followed by a resumption of growth in many indicators in July and August. For example-and this is one of the most important of the economic indicators-there was a substantial increase in employment in August
and a decline in the unemployment rate. That cannot be associated in any way with a decline in economic activity. Automobile sales picked up strongly in July and August and total retail sales had recovered in June and July. Our exports continued to increase in July.
In general we are looking forward to a renewal of moderate increases in the gross national product in the third and fourth quarters of this year. With the economy fully employed it is difficult, indeed undesirable, to try to achieve the unsustainable rates of increase in the first quarter. Even, with the more moderate gains in economic activity compared with earlier in the year, pressure on prices and costs remains a serious problem and government policy is being followed to reduce the increases in prices that are troubling all of us.
I made these few remarks, Mr. Speaker, because they are relevant to some of the points made during the debate by speakers on various sides and because I did not want this particular question to go unanswered for more than a few hours.
The motion that was put and which was ruled out of order by you, Mr. Speaker, referred to the establishment of a new type of clearinghouse arrangement. I would draw attention to the comment that I made on July 5, 1966, when I was speaking on the resolution preceding this bill, when I said, as reported at page 7234 of Hansard:
The then minister-
I was referring to my predecessor.
-Indicated that the government intended to give further consideration to possible changes in the clearing system, including suggestions made by the royal commission, and would bring forward legislation on this general subject, which seems clearly to come within parliament's jurisdiction over banking. We still have this in mind for a future year.
I thought I should repeat these words, Mr. Speaker, in order to indicate that we are prepared to give consideration to one of the subjects raised by the motion that was ruled out of order.
Now, Mr. Speaker, when I introduced the proposed revision of the Bank Act I stated that one of the main objectives of the government was to improve the position of the small borrower. The government is convinced that an effective way to achieve this objective is to encourage and enforce competition, to implement a system where there are many competing sources of loan funds and many institutions freely competing for the custom of the consumer.

October 8, 1966
Bank Act
But the revision of the banking system and the introduction of more competition is not the only way the government intends to improve the position of the consumer who needs credit. Members will recall that on May 27 last I wrote to the provinces stating that I was prepared to convene a federal-provincial meeting on the subject of consumer credit and interest disclosure, which is so important to those Canadians who buy on instalment plan or who borrow from finance companies, banks or other sources. Since then officials of the Department of Finance have started to make preparations for such a conference and I hope to be able to announce to the house very shortly its agenda and date.
In the course of the discussions which we have had on this subject, it has occurred to me that there was an immediate opportunity for a breakthrough in one of the most important problems facing the consumers-that of the disclosure of the true and effective rate of interest. One of the basic aims of a consumer policy is to ensure that consumers have recourse to all the information necessary to make decisions that will be of greatest benefit to themselves and to the national economy.
Consumer groups and associations have urged for many years legislation requiring the cost of consumer credit of all kinds to be stated in terms of an effective annual or monthly rate of interest. Both the Nova Scotia and Ontario studies of consumer credit concluded that it was desirable and feasible for banks and other financial institutions to disclose the cost of borrowing both in dollar charges, as done at present, and also as an effective rate of interest. Nova Scotia, Ontario, Massachusetts and the United States federal government have all acted in this field in recent months.
I believe it to be of the highest importance that consumers buying on credit or borrowing for consumption have the fullest opportunity to know at what exact cost they are doing so.
I regard action on the disclosure of the effective cost of consumer credit extended by banks as a practical starting point for coordinated federal-provincial co-operation and development in this field. The banks are now the largest dispensers of consumer credit, and they can give us leadership in this field while we will be working on a more general approach at the federal-provincial conference.
In my recapitulation of the main proposals of the bank bill before you yesterday, I outlined the formula whereby the maximum rate of interest that banks may charge on 
loans in Canada would be made more flexible and eventually removed altogether. One of the technical effects of this amendment would be to remove any of the possible remaining problems of the banks in disclosing the cost of consumer credit transactions as an approximate effective percentage of the amount borrowed.
I think I might state at this time that among the amendments that the government will be putting before the house, which I mentioned at the conclusion of my first speech in the second reading debate, is an amendment, when this bill is in committee, which will require that a bank when making a consumer loan must state the effective rate of the combined cost of interest and service charges. In the committee there will be ample opportunity to consider the technical aspects of this proposal.
When this bill does receive second reading, Mr. Speaker, I would propose that it be referred to the standing committee on trade, finance and economic affairs.


Mr. Cameron (Nanaimo-Cowichan-The Islands):: Mr. Speaker, would the minister
answer a question before he takes his seat. I should like to get this clear. I came in just as he was apparently replying to some of the matters that I raised in my speech. I should like to thank him for his complimentary remarks, but I should also like to ask the minister whether we are to understand that the government's position with regard to the control of interest rates is that it should be left entirely to the operation of market forces.


Mitchell William Sharp: Well, Mr. Speaker, the general level of interest rates in this country is determined partly by the demand for credit and partly by the monetary policy of the Bank of Canada and the government. So the government has a responsibility for the general level of interest rates, which we do not deny. Indeed I, as Minister of Finance, accept that responsibility.
There are also special federal laws dealing with ceilings on particular kinds of consumer credit that are available to the public. I do>
not believe, however, that one could control the general level of interest rates by law, nor should one try. I think this ought to be the outcome of the monetary policy of the government.


Colin Cameron: Could I ask another question of the
October 6, 1966	COMMONS
minister? If he is convinced of what he has just said, and this is the basis for his decision to remove the 6 per cent ceiling, can he explain to us why it is not being removed immediately this act becomes law, and why he is doing it in two stages?


Mitchell William Sharp: Well, Mr. Speaker, I did explain this at very great length during the resolution stage. I did not do it on second reading because I did not want to repeat all of the arguments I had made; I gave only a summary. I said at that time that I thought it might be too great and too sudden a transition, and that one ought to proceed by stages so that when we came to take the ceiling off there would be less apprehension about the possible effects.
[DOT] (7:30 p.m.)


Colin Cameron: Do I take it from that, that the minister anticipates that if restraints were taken off immediately, there would immediately be a dislocating jump in interest rates?


Mitchell William Sharp: Mr. Speaker, I said that I felt there would be apprehension on this score.


Robert Simpson: May I inquire of the minister at this time in respect of the statement he made about the proposed amendment he is prepared to bring in? Can he say whether he feels that the amendment will provide safeguards for the maintenance of any increase over the 6 per cent bank rate? Would it prevent some of the practices now being carried out?


Mitchell William Sharp: The particular amendment I was referring to was for the purpose of disclosing the true rate of interest, and only for that purpose. There may be other amendments that may be proposed, but the particular one I was announcing in my concluding speech was only for the purpose of the revelation of true interest charges.


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


Some hon. Members:: No.


Some hon. Members:: On division.


Mr. Speaker:: All those in favour will please say, yea.


Some hon. Members:: Yea.


Mr. Speaker:: All those opposed will please say, nay.
DEBATES	8419
Quebec Savings Banks Act


Some hon. Members:: Nay.


Mr. Speaker:: In my opinion-and I have to go by my ear-the nays have it.
And more than five members having risen:


Mr. Speaker:: May I draw to the attention of hon. members the provision of standing order 6, which is as follows, that there will be no vote between the hours of seven and eight, if there is objection taken to such procedure. I now invite hon. members to indicate whether there is such objection or not.


Some hon. Members:: No.


Mr. J. B. Stewart (Parliamentary Secretary to Minister of Public Works):: Under standing order 6 (3) I am objecting to a vote at this hour. I believe I have the proper support.
And more than five members having risen:


Mr. Speaker:: I see five or more members objecting. There being five or more members objecting to the taking of a vote at this time, such vote is delayed, or deferred until eight o'clock.
Division deferred until eight o'clock.



QUEBEC SAVINGS BANKS ACT


Mitchell William Sharp: the second reading of Bill No. C-223, respecting savings banks in the Province of Quebec.
He said: Mr. Speaker, the purpose of this bill is to make a decennial revision of the Quebec Savings Banks Act, an act that applies to the .two savings banks which operate only in the province of Quebec, one with its head office in Montreal and the other with its head office in Quebec City.
There are relatively few changes from a similar bill that received second reading last year; about the only one of importance is the provision that would apply in these banks the same formula with respect to maximum interest rates on loans as that proposed in the bill to revise the Bank Act. The principal changes from the act at present in force that were in last year's bill, and continued in this one, are provisions relating to share ownership similar to those in the bill to revise the Bank Act. As proposed in that bill, an additional provision would permit pension and similar funds of provincial governments to own a limited amount of non-voting shares of these banks.
8420	COMMONS
Quebec Savings Banks Act
As recommended by the Royal Commission on Banking and Finance, it is proposed to increase the lending and investment powers of these banks but not to include the power to make commercial or business loans. They have not expressed any wish to engage in this type of lending. By amendment to their act in 1957 they were given the power to make mortgage loans without any interest rate restriction. In this market they have performed a valuable service in their respective communities and will continue to do so.
The bill follows, wherever appropriate, like provisions in the bill to revise the Bank Act and many of the administrative changes proposed in that bill, the motion for the second reading of which is to be voted upon at eight o'clock, have been incorporated in this one as well.
When this bill has received second reading, I propose that it should be referred to the standing committee on finance, trade and economic affairs for detailed study along with other banking legislation.


Marcel Joseph Aimé Lambert: Mr. Speaker, there is not a great deal to be added to the comments with regard to this particular bill. I think, perhaps, in his closing remarks at this stage the minister might disclose precisely what is the requirement for insured deposits with regard to this particular bank. Is the province of Quebec being treated as a separate area with regard to the "near banks"? Are the "near banks" really concerned with the Quebec Savings Banks Act, or are they concerned with the general Bank Act, under Bill No. C-222?
If there is separate treatment, I think that those remarks which I made in regard to what I call deposit insurance would apply with reference to this act. On the other hand, if there is not separate treatment, my remarks are covered in the previous debate with regard to Bill No. C-222.
Outside that, I have no additional comment. If the amendments to this act are parallel with those of the Bank Act, they would draw the same form of criticism as would apply to those under the Bank Act.
I feel that it is incumbent on the house to see that this act, as well as the other act, goes to the standing committee on finance, trade and economic affairs because, again, I fear very much that we shall not be able to meet the November 30 deadline that is imposed by existing legislation.

DEBATES	October 6, 1966


Mitchell William Sharp: Mr. Speaker, perhaps I could answer the question.


Mr. Speaker:: If the minister speaks now it will close the debate.


Mitchell William Sharp: Mr. Speaker, the question has a simple reply. The Quebec Savings Bank Act obviously applies to institutions that are under federal jurisdiction. They therefore will require to be insured by the Deposit Insurance Corporation when it is established.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the standing committee on finance, trade, and economic affairs.


Hon. Maurice Sauve (Minisier of Forestry and Rural Development) moved: the second reading of Bill No. C-218, to provide assistance to livestock feeders in eastern Canada and British Columbia.
He said:

Mr. Speaker, it will be recalled that on June 30 the house passed the resolution without discussion and that first reading was given to the bill intituled: An act to provide assistance to livestock feeders in eastern Canada and British Columbia.
All parties had agreed that on second reading, all stages of the bill would be proceeded with.
That is why, today, my introductory remarks will be slightly longer than usual to fully inform members of this house of the aims of the bill and to give them other information on its contents.
The bill I am speaking on today is another landmark in the efforts undertaken by successive governments to allow the use of western feed grain, to improve its availability and to further stabilize its price in eastern Canada and British Columbia.
The bill providing assistance to livestock feeders calls for the establishment of a Canadian Livestock Feed Board which would ensure the availability of feed grain and adequate feed grain storage facilities in eastern Canada to meet the needs of livestock feeders, the reasonable stability of feed grain prices and a fair equalization of feed grain prices in eastern Canada and in British Columbia.
October 6, 1966
[DOT] (7:40 p.m.)

A resolution containing a similar proposal had just been introduced by the former government under the initiative of Hon. Alvin Hamilton when the 1963 election was called.
Members of the house will recall that the standing committee on agriculture and colonization of the house which examined the feed grain pricing problem in 1964 recommended in its report on March 22, 1965 the creation of a feed grain agency. Since then, the implications of establishing this board and its relationship to other boards with responsibility in grain matters, have been assessed by the government. This evaluation led to the proposal you are being asked to consider this evening.

Freight assistance to feed grain and other grain products from the west to points of consumption in eastern Canada and in British Columbia was first started during the war, that is, in 1941.
That measure was passed because of the following situation: Breeders of eastern Canada and British Columbia maintained it was unfair that competing foreign breeders operating three or four miles away should obtain Canadian feed grain delivered in their countries at the same price or even at a lower price than that paid by Canadian breeders because of lower freight rates on grain exports. In addition, western grain markets were restricted due to the great risks endangering overseas shipments in wartime and because the allies required more concentrated foodstuffs.
The program served a double purpose: to expand the feed grain markets for the benefit of western grain producers and to enable farmers in eastern Canada and British Columbia to increase their cattle production.
Since the war, controls on wheat, oats and barley imports have deprived eastern cattle breeders of the opportunity to import grain at lower prices. Those factors, added to the concern of protecting investments made necessary by wartime needs, prompted government authorities to maintain this policy after the war. Since it also proved very profitable to western grain producers, it has been maintained and regularly extended through orders in council. The products eligible for assistance have changed little through the years, whereas the rates of freight assistance to
Canadian Livestock Feed Board various points have changed according to circumstances. The program required yearly appropriations ranging from $14.5 to $22 million.

In 1963 storage assistance was added to the program to encourage stocking of adequate supplies and as a means of moderating winter price movements. In the same year provisional pricing, formerly applied solely to wheat, was extended to oats and barley by the Canadian Wheat Board.
In 1964, in an effort to bring in truck competition and to allow for more effective bargaining on transportation rates on the part of local supplies, eastern Canada was divided into zones with a specific level of transportation aid applying to each zone. This part of the program has been particularly useful and has led to many and extensive rate readjustments.
Much concern is still expressed by feeders in eastern areas over fluctuations in feed prices. These result from a combination of factors including variations in supply and demand for western feed grains; changes in freight rates; shortage of winter storage space; paralysis of navigation in the winter; the holding supplies of certain pressure points in relatively few hands; price gyrations of other feed ingredients and to mounting retail mark-ups reflecting an increasing variety of services rendered at the retailing end of the feed business-credit, bagging, technical know-how, etc.

It is not easy to settle all those problems, since some of them overlap in the field of grain marketing. Up to now, the organization, purchase and distribution of grain stocks, as far as breeders are concerned, have been left entirely to trade.
The private sector has rendered many worthwhile services, but difficulties concerning stocks and prices have arisen and have been the subject of talks for some time.
In short, present programs concerning federal aid have not sufficiently dampened the unforeseeable and somewhat irregular movements of prices throughout the winter in eastern Canada as a result of the closing of the shipping season.
Eastern breeders have even asked the government to intervene to a greater extent in that field, in order to prevent unsteady prices, since otherwise feeding and production plans will be annihilated in a sector

October 6, 1966

Canadian Livestock Feed Board where the difference between costs and prices is almost always excessively reduced.
Cattle and fowl products represent three quarters of the financial income of eastern farms and 65 per cent of agricultural returns in British Columbia.
Agriculture which requires considerable manpower depends extensively on an ample supply of grass and fodder to which feed grain must be added. The vicinity of markets has also made the production of non-ruminant cattle profitable in surrounding areas of large consumption centres in eastern Canada, especially when considering that the areas adjoining Montreal and Toronto can very well lend themselves to an intensive grain production.
Cattle feeding represents an important current expense for farmers in eastern Canada and British Columbia. Outside the Prairies, a sum of $335 million is spent each year for the purchase of feed grain and seeds. The sale of feed grain in western Canada on those markets are just as important to the western farmer, since they represent about $110 million, of the farm income and contribute much toward the economic stability of the Canadian feed grain markets.
[DOT] (7:50 p.m.)
The inability of provinces to meet their needs as far as grain is concerned varies from 70 to 80 per cent in New Brunswick and Nova Scotia to 17 to 20 per cent in Ontario and Prince Edward Island. Quebec meets about half its own needs, while British *Columbia is short by about a third. Livestock product markets are expanding rapidly. Consumers now tend to get away from starchy food and favour meat proteins. That is why a larger share of the consumer food budget is spent on livestock and poultry products.
By 1980, the estimated population in eastern Canada will likely need 140 per cent of the milk now produced in eastern Canada, 244 per cent of its poultry production, 180 per cent of its egg production, 218 per cent of its pork production and 440 per cent of its beef production.

How are these quickly evolving needs going to be met? If recent production trends can be of some guidance the situation for the last 14 years can be summarized as follows: From 1951 to 1964 the June 1 survey shows that the number of cattle, other than dairy cows and heifers, has increased by 120 per cent in
[Mr. Sauve.l
the prairie provinces, 80 per cent in Prince Edward Island, 58 per cent in Ontario and 22 per cent in Quebec, while remaining almost stationary in Nova Scotia and New Brunswick.
Over the same period there was a 29 per cent increase in the number of hogs. There was a slightly lower increase in the prairies, Quebec, Nova Scotia and Prince Edward Island. Ontario's hog population does not show any definite trend, while New Brunswick's has dwindled by 37 per cent.
The total poultry population has increased tremendously in Nova Scotia and Quebec and, discounting shifts in types of poultry now kept, the other provinces are not showing any significant trend if we except Prince Edward Island which has witnessed a sizeable decrease of close to 60 per cent. The Quebec dairy herd is the only one holding the line, as the other provinces witness a continuous decline.
Should these trends continue in the near future, both east and west will be confronted by the additional food requirements I described a moment ago.

The increase in the number of livestock in each region will depend on such factors as the evolution of the market for grain and other products from the prairies, the evolution of meat markets in the United States, the extension of corn-growing land and the increase in the production of corn in the eastern and western part of the country, the improved conversion of livestock feed and the consumer demands with regard to freshness in the case of several agricultural products.
I introduce this bill today in this context and considering all these factors. The bill establishes a livestock feed board and an advisory committee. The board will act in the interest of livestock breeders and feeders in British Columbia and in the eastern part of the country by passing the necesary measures authorized by the law so as to ensure the availability of supplies and stockage at all times; it will also, as far as it is practical to do so, ensure a reasonable stability in prices and a fair equalization of freight charges.
In order to achieve these aims, the present aid policy concerning feed grain, and which extends to transportation and stocking, will become an integral part of the legislation. Even if the bill provides that the Canadian Livestock Feed Board shall deal with a considerable number of things, its first duty will
Oclober 6, 1966

Division BANK ACT
be to try to co-ordinate the various interests involved and, if necessary, to improve the means at its disposal. The aid provided for transportation may serve to encourage supply by water during the shipping season or by rail during the critical winter months. The board may negotiate the appropriation of adequate space in the elevators, as well as the establishment of lower rates of transport before rushing into large-scale marketing operations.
Should these means not succeed in achieving the objectives sought in this bill, the board may engage in purchasing, stocking, selling and other marketing operations. The use of such powers, should the need arise, shall be subject to an authorization by the governor in council, which would be valid for a definite time. There is a recommendation for the setting up, for the purposes of such marketing operations, of a $10 million automatically revolving fund. In case of need, when the fund is tied up in grain stocks, the governor in council may authorize the Minister of Finance (Mr. Sharp) to make further advances.
The powers it is proposed to confer to the board do not extend to "prices ex warehouses, Fort William", but relate to marketing of feed grain from that stage of pricing to the eventual consumption of feed in eastern Canada and British Columbia.
This bill embodies a very necessary policy destined better to organize the transport of feed grain and ensure a more stable market for both grain products and livestock products. This is a necessity which we must face and we may rest assured that the government intends to pass other legislation or modify the present policy to meet the changing needs of grain producers and livestock breeders.
Those, Mr. Speaker, were the main points I wished to make on first reading of this bill. I shall make other comments later in answer to those which the hon. members will wish to make concerning this bill.


Some hon. Members:: Hear, hear.


Mr. Speaker:: Order. It being eight o'clock it is my duty, pursuant to section (3) of standing order 6, to suspend the proceedings now under way so that the house may revert to the vote which was postponed earlier this evening.



DECENNIAL REVISION AND EXTENSION OF CHARTERS

[Stage Direction]
The house resumed consideration of the motion of Mr. Sharp for the second reading of Bill No. C-222 respecting Banks and Banking.
Mr. Speaker:: The question is as follows: Mr. Sharp, seconded by Mr. Nicholson, moved that Bill No. C-222, an act respecting Banks and Banking, be now read a second time. All those in favour of the said motion will please say yea.


Some hon. Members:: Yea.


Mr. Speaker:: All those opposed will please say nay.


Some hon. Members:: Nay.


Mr. Speaker:: In my opinion the yeas have
And more than five members having risen:


Mr. Speaker:: 
Mr. Speaker:: I declare the motion carried.
Order, please. I understand some hon. members would like to advise the house of something.
[DOT]	(8:50 p.m.)


John Robert (Jack) Nicholson: Mr. Speaker, I was paired. Had I voted, I would have voted for the motion.


Hédard-J. Robichaud: I too, was paired, Mr. Speaker. Had I voted, I would have voted for the motion.


Kenneth Hamill (Ken) More: Mr. Speaker, I was paired with the hon. member for Norfolk (Mr. Roxburgh). Had I voted, I would have voted against the motion.


Raymond Langlois: I was paired, Mr. Speaker. Had I voted, I would have voted against the motion.
Bill read the second time and referred to the standing committee on finance, trade and economic affairs.


Mr. Speaker:: Order, please. The house will resume the business interrupted at eight oclock, namely second reading of Bill No. C-218.



CANADIAN LIVESTOCK FEED BOARD


[Stage Direction]
The house resumed consideration of the motion of Mr. Sauve for the second reading of Bill No. C-218, to provide assistance to livestock feeders in eastern Canada and British Columbia.
J.-H.-Théogène Ricard: Mr. Speaker, we are now studying Bill C-218, an act to provide assistance to livestock feeders in eastern Canada and British Columbia. I listened carefully, although at times somewhat absent-mindedly, to the observations made by the minister of forestry (Mr. Sauve) when he introduced the bill. At the outset of the few remarks I wish to make this evening, I cannot help but remind the hon. minister that this measure is but the continuation of various legislative measures introduced by the Conservative government which preceded the present government.
In introducing this measure and giving the reasons for it, the present minister was in fact doing nothing else but addressing a word of reproach to his government. Indeed, he reminded us that a similar measure was on the agenda in 1963, that it had been proposed by the then minister of agriculture, the present member for Qu'Appelle (Mr. Hamilton). We also know, Mr. Speaker, that the farmers have been expecting this bill for a long time.
It must also he recalled, Mr. Speaker, that at the time the hon. member for Qu'Appelle
(Mr. Speaker.)
October 6, 1966

(Mr. Hamilton) was minister of agriculture, he has travelled through the provinces, particularly Quebec and Ontario, to promote cattle raising. It is well known that in recent years, specially, there is a tendency in eastern Canada, as well as in other provinces, to use more beef. As a matter of fact, people who were using large quantities of pork regularly in the past have now changed their eating habits in favour of beef. There are a good many reasons for the increase of beef consumption in the feeding of humans and I certainly shall not labour over that part of the matter. But we must recognize the fact that beef consumption has greatly increased in recent years in Canada.
The event which will take place in Montreal during 1967 will also help to provide those of our farmers who are in the cattleraising business with a greatly enlarged market.
Even though, there may be cause for deploring the government's backwardness in adopting the necessary measures to encourage cattle raising in the eastern provinces, one must however rejoice in the fact that it has finally decided to tread the path which was cleared by the preceding government.
Mr. Speaker, one must not forget that the farmer's well-being in the east is in no way an obstacle to the well-being of the farmer out west and conversely, it is also true that the western farmers are not at a disadvantage when their brothers in the east prosper.
It is a well-known fact that farmers, because of the constantly increasing cost of living, find it very hard to meet their obligations. The government should therefore take every opportunity to help this sector of our country's economy.
Anybody who has followed a little closely the change in the farmer's attitude knows for a fact that the latter has finally decided to take a more personal interest in the management of his own business. He has now taken cognizance of his own general responsibilities and has decided to participate more actively in the marketing of his products and in the things which affect his income and his welfare. That is why farmers, whenever they get together at conventions, consider more closely than they used to bills introduced here. And when the minister announced some time ago the abolition of free winter storage of feed grain in reserved space in eastern elevators, there was a general outcry against his decisions and farmers protested most energetically.
Canadian Livestock Feed Board
Mr. Speaker, it would not be logical for the minister to introduce, on the one hand, a measure intended to encourage the breeding of beef-type cattle if, on the other hand, he moved other legislation to deprive breeders of the grain they need to feed such cattle in winter. I know the minister received, like so many members of the house, a telegram of protest from the Quebec millers, supported by the Catholic Farmers Union.
I am sorry I do not have with me a copy of the telegram. But I can surely give the minister the copy I was sent when I have time to go to my office.
Mr. Speaker, the arrangements made by the minister also amazed me-you may feel that I am out of order here-but as feed grains are concerned the matter was studied specifically at the special meeting held in Drummondville, it seems to me the minister could have extended invitations not only to the members of the cabinet but to the other representatives of the area who are bent also on seeing an objective study made of livestock raising.
He attempted systematically to keep the members of the opposition out; maybe it is fair play as far as he is concerned, but I think that he has therefore done a disservice to the cattle breeders of my riding and the surrounding counties.
[DOT] (9:00 p.m.)
Mr. Speaker, there are still many points that we would like to clarify in this measure; it is not necessary to state all the objections, to undertake a detailed study at this stage of discussion, because we will certainly have the opportunity to look at it more closely. Then we shall make the necessary comments, and also offer suggestions because if we study the past achievements of the Conservative party especially in that field, we feel that we can justly claim a certain knowledge in this matter and I do think that the members of the opposition will offer to the minister suggestions which will certainly help him to carry out a policy which was initiated under his predecessor.
I know that the minister of forestry who is responsible for the administration of this legislation is broad-minded, that he wants to improve the well-being of the farmers and that, for that reason, it will be impossible for him logically to ignore the suggestions which will come from this side of the house.
October 6, 1966

Canadian Livestock Feed Board
Until we have the opportunity to say more about it, I wish the minister well in the discharge of his duties.


Herbert Wilfred Herridge: I rise to express briefly the support of this party of the principles and purposes of the measure before us.
I listened to the minister's remarks with interest, and having read the bill through carefully I think it is fair to say that at heart the minister is somewhat of a socialist. This measure reminds me of the early efforts of some of the agriculture organizations in the interior of British Columbia to get the government to take action along these lines, to equalize the cost of grain required for livestock and poultry production. There was an effort in the Fraser Valley toward this end and it is safe to say that the agriculture organizations of British Columbia were in the van of the movement to get some measure of financial assistance from the federal government toward the cost of grain transportation. At that time the question of storage was not mentioned.
I have attended many meetings at which this subject has been discussed. In the district I have the honour to represent we are severely affected by the high price of grain in the circumstances in which livestock and poultry are produced. I know that when this measure was first proposed some people suggested that we were advocating socialism. It was considered then an advanced form of legislation. Regardless of that, we are very glad to see it passed because this legislation will do something to bring a measure of equality to production costs as between various agricultural producers from one end of Canada to the other.
I presume it is correct to say that this is in the nature of experimental legislation, and that experience will provide an opportunity for improvements to be made. In this connection I am glad to see that it will be the duty of the board which is to be established to make a continuing study of feed grain requirements in eastern Canada and British Columbia, of the availability of feed grain and of the requirements for additional feed grain storage facilities in those areas. I am always anxious that legislation of this type should be followed up and that reports should be made to the minister and to the House.

I am glad to see it will be the duty of the board to make recommendations to the minister with respect to requirements for additional feed grain storage facilities in eastern. Canada; also, that generally it will be the duty of the board to advise the government on all matters pertaining to the stabilization and fair equalization of feed grain prices to livestock feeders. It is also good to note that the board will be required, to the greatest possible extent consistent with its objects, to consult and co-operate with all departments, branches or other agencies of the government of Canada or of any province having duties related to, or having aims or objects related to, those of the board.
It is my belief that if this legislation is to work satisfactorily there must be co-operation with the provincial departments concerned, with the farmers organizations and with all those who are directly affected. This is why the last provision to which I referred is particularly welcome.
I notice, too, that the governor in council may from time to time empower the board to make inquiries and investigations in respect of-
- (a) transportation, storage or handling of feed grain in eastern Canada and British Columbia.
(b)	supplies and prices of feed grain in such areas, and
(c)	payments related to the cost of feed grain storage or transportation made under this act.
[DOT] (9:10 p.m.)
I mention this particularly because I think it is essential in this type of legislation to have a follow-up and a continuing investigation of its effect on the farmers concerned, of its effect on the economy generally, the surrounding economy, and naturally of its cost to the government of Canada, and so on. I do not think there is any necessity for me to speak at length except to say I am confident that the agricultural producers who will be affected by this legislation will welcome it and do their best to co-operate with the government and all other agencies in making it a success.


Raymond Langlois: Mr. Speaker, it is with some anxiety mixed with pleasure that we listened to the minister's statement when he introduced Bill No. C-218. It had been eagerly awaited in this house for several years and a great deal has already been said on this matter.

October 6, 1966	COMMONS
After the board is established by this house, and everything will have been said, at least in principle, in this connection, the task of the minister responsible for it will not necessarily be completed. On the contrary, it will then be his duty to see that the bill is implemented most efficiently. Even though the bill contains some regulations, things are often different in theory from what they are in practice.
And I think that due to past experience, the Minister of Forestry and Rural Development, the sponsor of this bill, is well-informed and satisfactorily advised in that field. However, I take the liberty of drawing his attention to a few points which could perhaps serve him as guide lines, not for all practical purposes but in general, if you prefer, to some objections which could be raised on this side of the house and which he could take in consideration and study thoroughly, namely if it would not be a fair and profitable solution for the government as well as for the board and the farmers involved.
Mr. Speaker, there are clauses in that bill which are worthwhile, but there are others which make me feel uneasy. It is perhaps because I have not had time to study the bill as thoroughly as I would have liked to. Evidently, I will have an opportunity to do so during consideration in committee.
Nevertheless, I wish to draw the attention of the minister to certain provisions for obtaining such feed grain as far as eastern Canada and British Columbia are concerned.
I see that by this bill, the minister tries as much as possible to cut prices, that is to make feed grain available at a reasonable price to our farmers of eastern Canada, and heaven knows that they need it. However, an attempt must be made to find out how this result can best be attained.
I already mentioned some time ago in this house the mechanism which now prevails. I believe I asked the minister to keep an eye open to prevent unscrupulous individuals from using an agency responsible to the government. Unscrupulous persons used in the past certain devious means, which were not very orthodox, as it were, or means not altogether in keeping with Christian principles, to take advantage of this scheme to the detriment of western and eastern farmers. At a certain time, producers of western Canada were reported as saying: We do not get enough for our grain because eastern farmers and stock breeders do not want to pay.
DEBATES	8427
Canadian Livestock Feed Board And eastern farmers and stock breeders were saying: We cannot get feed grain at a reasonable price because western producers make a prohibitive profit.
In the end, who is right? Is it because one does not have the means to pay enough or because the other asks too much? And that is the problem which will always occur. Now it is the object of that agency to have enough feed grain at home to meet the needs first and then to have them at a reasonable price. Therefore, I am interested in finding out from the minister what means, will be used to distribute this grain once it reaches eastern Canada?
Of course, the livestock feed board will have its say. But it does not mean, for instance, that it will be the one responsible for carrying grain from the lakehead to eastern Canada elevators. There is somebody else who will have a finger in the pie, who will mess about in it. Now, I want to know who will mess about in there, who will fiddle about with it. Unless action is taken now, it will be found that the same situation will repeat itself, as was the case with western Canada in 1936, and which brought about the establishment of the present Canadian Wheat Board, which at least set out standards and which guaranteed an income to western farmers and producers.
On the other hand, it does not mean that speculators have been eliminated. Granted, producers were guaranteed a cost price, but what about speculators?
Have they been removed? Have we passed a law with enough teeth in it to protect western producers against being exploited by such people? And now this is what I would like to know. I am not sure whether the Canadian Wheat Board has managed to quench this speculation which was detrimental to western farmers. It has been contained at the head of the Great Lakes, but not removed entirely; on the other hand, the Board took control of production over there, exactly as the feed grain board can take control over here as far as purchases and distribution of feed grain to eastern feeders are concerned. But if speculation is not checked, the situation will go from bad to worse because there will be a go-between which will become a white elephant and which will cost the Canadian taxpayer a lot of money and the problem will not have been solved. If the price of grain increase or remain the same, there is no need in that case, to set up
3428	COMMONS
Canadian Livestock Feed Board a board to do what we are doing now. But I think that the minister is wise enough to keep a close watch on the openings through which speculators might sneak in. At least I hope so, because if we do not take steps to prevent as much as possible the payment of a commission here and a commission there through lack of organization in the distribution of such feed grain, we might as well not have any at all. And I think that the minister will keep an eye for such loopholes.
Should I notice at any time that there is a leak somewhere, it would be my duty to warn the minister. The same goes for all those here in the house. On the other hand, it is the minister's duty to take all the necessary precautions to avoid leaks. And here I think of some wholesalers, if you wish not only brokers because there are others who are not members of the exchange. As a matter of fact, I did not quite like the solution applied by the Canadian Wheat Board, Mr. Speaker, and if ever I am told that the Canadian Wheat Board will be linked to that body called the livestock feed board for eastern Canada, I will have some things to say about that. For instance I can say that the Canadian Wheat Board guarantees and negotiates prices very well but it does not necessarily see to the delivery. It is still asking the advice of some brokers it has kept away since 1936 from the purchasing field in western Canada. And that is what is called the grain exchange. It probably has its uses for speculations on the world market and all that, but I am against its speculating at the expense of Canadians in the central provinces.
Moreover, the Canadian Wheat Board has to turn to the members of the grain exchange to inquire about futures prices, that is, as anyone who is a wheat or feed grower in western Canada knows, the price quoted in the spring for such and such feed grain to be delivered in the fall in order to make an immediate sale. Grain is sold at a fixed price or a pre-fixed price if you wish. On the other hand, who is asked to set up that price? The brokers. And who buys in the fall, quite often the brokers.
[DOT] (9:20 p.m.)
They are not fools, Mr. Speaker, they are speculators. And if they intend to make a penny, a dollar on that, they will see to it that they make it. They just have to say: oats will sell for 67 cents this fall; on the other hand, one finds out that it sold through them for 75 cents afterwards. Therefore who

DEBATES	October 6, 1966
lost on that? Of course, there is always the question of rebate on sales paid immediately or in the fall then. But the future price is fixed. The price is set, the feed is sold at that price, which is then reduced at the expense of the western or eastern farmer. But the broker does not sell it at this price and he is the one who determines whether the harvest is to be good or bad and in a sense informs the Canadian Wheat Board. This does not mean that the wheat board does not work well but it could perhaps extend its scope a little further to give western producers a larger income. The feed grain board which will be established in my region could perhaps buy directly from the farmer without going through some broker or speculator. Of course, there would be a conflict of interest. We would have two commissions under the jurisdiction of the same government. It would have been better perhaps to have put this under the jurisdiction of the provincial governments, because negotiations, what is called "bargaining value", are involved. On the other hand, it is incumbent on the minister to find means to provide such feed grain at the lowest possible price or cheaper for the benefit of the livestock feeders in eastern Canada. And if such aim were not achieved, the board could not justify its existence. Unless we see to it that the goal be reached, we have lost our time in this house, the taxpayer's money has been dilapidated and we have fallen short of the expectations of eastern Canada livestock feeders.
I think we might have to sing the same song in eastern Canada and in western Canada; to put our backs into it once and for all; to indicate exactly the price that the farmers or the producers in western Canada obtain for their wheat, or get for their feed grain, or earn for the grain sold on the home market, in order that the eastern Canada farmer may know exactly how much the other farmer has received at the opposite end of the country.
Mr. Speaker, in this case, we find a differential of $2, $3, $4, and even $5 per hundredweight. You might find this amazing. Wait a moment, and you will hear things even more amazing. Let us consider the case of the western Canada producer who ships to Fort William, in what we call carloads, grain that bears dockage on arrival at Fort William. They remove what is commonly called wild oats, the straw, the chaff, whatever residues
October 6, 1966
there might be. They simply do not look for grain but for anything that might be found besides grain.
The dockage may vary between J, 2, 3 or 5 per cent. All this is removed and not paid for. This is called "dockage".
On the other hand, the farmer is not paid for that; yet he is asked to pay transportation charges on it from the elevators out west to the lakehead or Fort Churchill. He is not paid for it when it is taken away, but elsewhere, mills pay $2.35 and $2.70 per hundredweight for it.
Wild oats, chaff, straw and hulls come first, that is, what farmers are not paid for; yet, it is good enough for feed? That explains, up to a point, why feed is so expensive. Stock breeders in eastern Canada surely cannot feed their pigs, sheep, cattle, horses and milking cows with chaff and other fodder without food value; consequently, all kinds of ingredients are added to their feed. Each time ingredients are added, the price goes up; prohibitive prices are charged and feed ends up by costing how much? $4.50! But that type of feed is not very good, that is not the one which gets the best publicity either. Publicity is for the $5, $5.50 and $6 bags. Finally, why is it sold at $6 per hundredweight when the farmer out West did not believe it was any good, and did not get much for it? It was classed as "dockage" at the head of the great lakes.
Mr. Speaker, I would like the hon. minister to watch these grain transport operations and transactions. Let us first begin by putting into the feed which is sold in eastern Canada, ingredients which will provide our stock with the necessary vitamins.
They will perhaps have to put less of other things into it in order to obtain a reasonable price to sell our feed to our farmers, to enable our livestock breeder to buy that feed at reasonable prices.
He will have a field of about 70, 80 or 100 acres, he will harvest it, leaving 30 acres to be sold, for this deprives him of the wheat market. What is he going to do with it? It sells for 56 cents, 60 cents, 70 cents, 75 cents a bushel, not a hundredweight but a bushel. You are going to get oats weighing how much? Maybe 52, 53, 54, 55 pounds a bushel. This is not oats that was nipped by frost, not oats to feed poultry that I am referring to, but registered seed oats; and western farmers and members in this house are well aware of that.
Canadian Livestock Feed Board
How is it that oats of that kind is very often being brought to our area-that is not what is being sold to them as seed oats-at $5, $6 or $7 a hundredweight.
How come? Did the western farmer or producer not pay the freight from Fort William out of the 70 cents or 75 cents he gets a bushel? Is freight that expensive from Fort William to the province of Quebec? Does it really cost that much to supply oats or grain at a reasonable price to eastern farmers? Perhaps, along the way, unscrupulous people take advantage of the situation to make a few dollars. I am therefore asking the minister to see to it that such intervention is stopped, as well as anything which would permit those people to further speculate under the cover of any federal or provincial board; in short, let us put teeth in the law which will break them once and for all.
The western farmer or producer must be treated fairly, but the eastern breeder must also receive fair treatment; one must pay exactly what he ought, the market value, and the other must receive exactly what he should for his grain on the Canadian market. Let us not be so concerned with the establishment of external markets; let us begin by satisfying our domestic market, then we will sell outside. We now have some good domestic contracts; we sell right and left, and this is excellent. By their bountiful harvest this year, the western producers have proved they can produce. Western Canada this year had what may be called its record harvest.
They have proved they can produce, and now it is up to us to prove that we can, and soon, market their production, to the advantage of the eastern producer as well as that of the world at large, where exports are concerned. But this can be achieved only when we have legislation to block, once and for all, any attempt or possibility of speculation, on foreign as well as domestic markets, and to guarantee fairness or a fair price to the producers and buyers of these grains. That is why we will tackle the problem again and study each and every item of the bill when it comes before the committee.
In the meantime, we shall study it, and if need be, suggest what amendments should be made.
[DOT] (9:30 p.m.)


Mr. H. A. Olson (Medicine Hat):: Mr. Speaker, I am sure the Minister of Forestry and Rural Development (Mr. Sauve), who

Canadian Livestock Feed Board will be responsible for administering the provisions of Bill No. C-218, is well aware that what is being done by the provisions now before us is more important than the powers and responsibilities granted to the agency to be set up.
I rise tonight, not to advance categorical or unequivocal opposition to the establishment of this agency, but simply to caution the minister to make sure that in the application of the powers granted to the agency we do not create an unnatural imbalance of opportunities in various regions of Canada. This could be possible-and I talk not only about the imbalance in respect of livestock feeding but also in respect of grain producing. I am not the only one who has that opinion. Earlier this year discussions were held in Winnipeg regarding what was referred to as the feed grain dilemma. Some of the excerpts I wish to read are taken from speeches delivered to the Seventh National Farm and Business Forum.
During the course of meetings of a committee which studied this whole matter I was instrumental in moving a motion to the effect that a study should be made of prices being paid by livestock producers in eastern Canada and British Columbia. I have a great deal of sympathy for the problems that these people face toward the end of their feeding season, notably in February and March. Something in addition to what is being done should be done by the federal government to protect the stability of the feed prices these feeders must pay, not only at the end of the season but right from the beginning. In this way they could be sure when they undertake to feed cattle in October or November they would be able to purchase feed and grain to the end of the feeding season without being held up, or in some way suffer losses because of exorbitant prices.
We have heard some pretty convincing evidence which indicates that as soon as the seaway is closed the price of western grain in eastern Canada is increased by almost exactly the increase in transportation costs, in spite of the fact that this grain has been transported to eastern Canada by the cheapest possible means and stored.
Let me get back to this matter referred to as the feed grain dilemma. I want to quote from a speech made by Mr. Bert Hargrave, who is a leading agriculturist in Alberta and has been associated with many farm and

October 6, 1966
ranching organizations there. In his concluding remarks he said that-
-Canadians would soon have to forget their political differences and to realize that beef would have to be produced and finished in the most economic and efficient location. Artificial barriers or stimulants would eventually only upset other aspects of agriculture at increased public expense.
I suggest this is a valid point of view although it does perhaps place more emphasis on the interests of one region in Canada as against another. It must be remembered that Mr, Hargrave has represented beef producers in southern Alberta for some time.
I was rather surprised by this statement which appears in a speech delivered by Dr. Cecil B. Haver of the department of agricultural economics, Macdonald College, Ste. Anne de Bellevue, Quebec. In summing up he said:
The benefits of the feed freight program in the east . . . have largely gone to the big feeders and the big commercial users.
I am not surprised that he takes this attitude, but I suggest we must keep in mind, when setting up national policies involving the expenditure of money from the national treasury, the kind and size of farm we wish to help. If we find that our assistance is being provided to big feeders and commercial users we are perhaps misallocating public funds because we are using subsidies to produce beef, pork, or what have you, in regions where it is uneconomic to do so.
For those in this house who are not familiar with this feed freight policy perhaps it would be of benefit to draw their attention to the number of cattle fed in Ontario and in Quebec which are imported from western Canada. These live animals are freighted in. Then if you ship the grain from western Canada down here, where the feeding ratio of pounds of grain is away above that of the number of pounds of beef, in order to fatten the cattle, it is far less economical than feeding the grain to the animal in an area where both are produced and the carcasses are later shipped here in the form of meat. We have to take these things into consideration.
[DOT] (9:40 p.m.)
Dr. J. C. Gilson, head of the Department of Agricultural Economics, University of Manitoba, had this to say. This is not an exact quote, but it is very nearly what he said:
It was necessary to ask, bad the policy, in fact contributed to the development of the livestock industry in eastern Canada? What justification was

October 6, 1966	COMMONS
there for a national agricultural policy which helped one group of livestock producers at the expense of another? Were there not more direct and more effective means of dealing with the development of the livestock industry in eastern Canada?
I suggest that this is true so far as the national policy is concerned in that assistance to this group of feeders in eastern Canada has more or less been confined to freight assistance plus some storage. Perhaps the setting up of an agency that will have control throughout the whole feeding season, and also control of the price all through the feeding season, is another matter to which Dr. Gilson was referring. I am happy to say that this is a very important part of the bill before us.
However, in addition to the feed grain dilemma we must give consideration to the situation of the feed grain producers in Ontario and Quebec, because to the extent that additional subsidies are paid on western grain being brought in to this part of the country, their price is depressed. At least the demand for their product is lessened in these areas. I should like to read another quotation from this conference. For example, the following is given as Dr. Gilson's opinion:
He was almost tempted to conclude, that all the feed freight assistance policy had accomplished for the livestock industry in eastern Canada during the past 20 years had been to provide an incentive for a reduction in the quantity of locally grown grains.
That is a pretty severe conclusion, but I have to agree that there is some validity in it, because since freight assistance on feed grain was instituted, I believe in 1944 or somewhere around that time, there has been a marked decline in the volume of feed grains produced in eastern Canada, particularly in eastern Ontario and Quebec. Therefore we have to take this question into consideration.
I am sure there are a large number of farmers in Ontario and Quebec who depend for their livelihood on the price of the feed grains that they produce. As far as I am concerned, these people are just as important as those who depend upon the production of beef, pork or broilers in the poultry industry.
I am not going into a great deal of detail as to the provisions of this bill, because as I said at the outset-and I am sure the minister would agree-what is important is not so much what is in the bill but how its provisions are applied. I would give a word of caution in this respect. When a vehicle such as this is set up whereby government subsidies are advanced from time to time, and 23033-533
DEBATES	8431
Canadian Livestock Feed Board even increased from time to time to the advantage of one group, it may on occasion be tempting to allow these subsidies for one reason or another. Therefore when the minister administers the operation of this feed grain agency I think he will have to bear in mind constantly the impact on the whole country of any temporary change. He will not only have to bear in mind the impact on the whole country but on the farmers in the eastern region who may have a difference of interest, in that some would be more interested in a high price for feed grain and some would be more interested in a low price.
It may be tempting to solve local or temporary problems in this way because of pressure applied by a particular group. It may be tempting to increase subsidies for this reason, but I would hope caution would be used in this respect.
There is one other point of which I think the minister is probably aware, but I should like to draw it to his attention because I think it is important. I refer to the position of the feed grain producer in western Canada. I believe it is fair to say that if there had never been any feed grain freight assistance policy a large number of feed grains now being shipped from western to eastern Canada would never have started coming here, because there are large quantities of corn and other grains available in the United States that are closer to eastern Canada. In spite of the small duty, the competition from these grains in relation to grains from western Canada would have worked against the shipment of feed grains from western Canada to this part of the country. But we also have what at the present time seems to be a chronic problem, namely that of our international balance of payments. Our whole economy benefits and our problem in respect of international balance of payments is alleviated with every dollar's worth of goods, be it feed grain or anything else, that is produced and used in Canada.
In conclusion, Mr. Speaker, I would say to the minister that there are many, many contrary interests involved in what is contemplated in this feed grain agency. I hope that when the agency begins operations the minister will keep in mind the whole of Canada, rather than attempting to use the agency to satisfy some temporary local problem that may be raised.
Perhaps it would be more appropriate to discuss some of the powers of the board at another time, but I am concerned about one or two of the powers that will be granted to
October 6, 1968

Canadian Livestock Feed Board this agency. For example, on page 3 of the bill, clause 6 (c) says that the board may, in furtherance of its objects, allocate space reserved for its use in any storage facility among persons requiring feed grain storage facilities in eastern Canada. My understanding at the moment is that all the terminal elevators along the St. Lawrence river, in so far as priorities and allocations for specific purposes are concerned, are now in the hands of the Board of Grain Commissioners. It seems to me that the authority given to this feed grain agency to allocate or reserve space will have to be applied in such a way that it does not conflict with the powers now in the hands of the Board of Grain Commissioners. It seems to me, also, that one will have to be very careful about balancing these priorities. The word "balancing" always enters into these discussions, because I think eastern feeders have as much right to some of the storage facilities as the western farmers have to a large part of the storage for overseas shipments of wheat during the winter months.
[DOT] (9:50 p.m.)
And so it seems to me that perhaps one of the best ways of resolving this problem is to give some kind of joint power, or at least require that some negotiations take place between these two agencies so that they can take into account the interest of both the groups concerned. As is provided later on in clause 6, I think it is useful for this board to conduct a continuing study of prices, feed grain consumption and handling and shipping facilities, because one of the difficulties has been in getting accurate information on how much grain is in store at the end of the season, how much should have been put in store and what was the price, taking into account all the factors contributing to that price, and then to see what happens to that price later on during the feeding season. There has been contradictory evidence, but if we had an agency set up to conduct a continuing study and to assemble all the facts and figures, it would certainly be useful.
As I said, Mr. Speaker, my main purpose is to caution the minister and the administration because I regard this bill as a means of providing a useful agency which will render a service to Canada and to many Canadians. On the other hand if the minister, the agency or the government should yield to some of the temptations held out to them from a certain group it could turn out to be one of the most discriminatory and harmful


agencies that has ever been set up by this parliament. I rely on the minister to use sound judgment in the application of the powers that are involved in this bill.


Mr. Ed. Schreyer (Springfield):: Mr. Speaker, like most other hon. members who have spoken during the debate on Bill C-218 so far this evening, I should like to commend the minister on the introduction of this legislation. As the minister is undoubtedly aware, there are certainly mixed feelings in western Canada about the efficacy or desirability of bringing in this particular legislation. I myself, as a representative of a western agricultural constituency, have mixed feelings, but my reservations with respect to this legislation are not of sufficient degree to warrant my voting against it.
I certainly intend to support the establishment of a feed purchasing agency, my major reason being that the farmers of eastern Canada and British Columbia certainly deserve this kind of support from the government. After all it has how been several decades since the producers of western Canada have had the advantage of having their grain products handled by a crown grain handling agency, the action stipulated in this measure would seem merely to be a just action on the part of the government at this time. If one region of the country is to be given the advantages of a certain action by the government, such as the establishment by the crown of a grain handling agency, then other regions of the country should be entitled to the same kind of consideration and treatment if the economics warrant it.
To the best of my knowledge there have been conflicting opinions coming from a number of professional economists, some saying that there was scant justification for this kind of assistance and others quite firm in the opinion that there was an economic basis for it. The pattern seemed to me to be dependant upon what part of the country the particular economist came from. Certain agricultural organization spokesmen from western Canada, and one or two prairie ministers of agriculture, have expressed fairly strong opposition to this proposed legislation. Then again, there have been some-notably one Alfred Gleave, former president of the National Farmers Union-who, on several occasions over the past year has come out in support of the concept of a crown feed purchasing agency and also for the continuation of feed grain freight assistance.
October 6, 1966
Mr. Speaker, I realize it is very close to ten o'clock, but rather than call it ten o'clock and hold my remarks over until the next day, I would like to try to conclude in the next 60 seconds or so by simply saying to the minister that if there is opposition to this legislation, from certain quarters, there is at the same time a genuine need for the legislation in eastern Canada and in British Columbia. There is also support for it in western Canada, in the prairies, on the basis that what is being provided here is simply an extension of the benefits which have been extended to western producers over the course of many years.
Of course, I could ask a very valid question: Why is it that eastern purchasers of feed grain have not deemed it worth while to attempt to establish co-operative agencies for the purchasing of feed grains? After all, in western Canada several decades ago it was deemed advisable and necessary to do just that, to establish co-operative agencies for the handling of grain, and it has proved to be of great and immediate tangible value to the farmers. It seems to me that in like manner this would have been the case with respect to the purchase of grain in eastern Canada. However, it may well be that the logistics of organizing this kind of co-operative agency is simply beyond the scope and capacity of the co-operative groups existing in eastern Canada at this time.
Mr. Speaker, I would like to say that I heartily concur in and am in complete accord with what was already said by the hon. member for Medicine Hat (Mr. Olson), namely that it is not so much the legislation as the way in which the statute and regulations under it are applied that is important. This will determine whether or not the producers, and in particular the smaller farmers of eastern Canada, will get any real benefits or advantages from this policy or this legislation. We, the producers of western Canada will certainly be looking very closely at this agency and at how it works out in the course of the next year or two. If it comes to light that the ones who are really benefiting from the legislation are the virtually integrated livestock producers of the east, or that it is the distributors and speculators in feed that are benefiting to a larger degree, then of course this legislation will be deemed a failure. Therefore of course much remains to be seen. In the meantime our support is extended for BiU C-218.
8433
Proceedings on Adjournment Motion BUSINESS OF THE HOUSE


Michael Starr: Mr. Speaker, I wish to put a question to the acting house leader. In view of the fact that the program for today was changed, may I ask him what the government contemplates bringing forward tomorrow?
[DOT] (10:00 p.m.)


Lawrence T. Pennell: Mr. Speaker, it is proposed to continue debate on Bill No. C-218 now before the house, to be followed by the estimates of the National Research Council and the Medical Research Council. This is to be followed by the estimates of the Auditor General and the insurance branch of the Department of Finance. Then we will take the estimates of the Department of Agriculture.



PROCEEDINGS ON ADJOURNMENT MOTION

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


Maurice Allard: Mr. Speaker, I have a few remarks to make concerning the question I put yesterday to the Minister of Indian Affairs and Northern Development (Mr. Laing). Could the minister tell us why he ordered the demolition of Sir Alexander Galt's house in Sherbrooke, without giving notice to the Eastern Township Historical Society, and whether he intends to honour the memory of this Father of Confederation by restoring the remaining outbuildings?
Several months ago, the minister responsible for the national historic sites division agreed with the Quebec government, in the framework of centennial celebrations, to honour the memory of Sir Alexander Galt by restoring his old house which still stood in Sherbrooke until recently.
I leave it to the minister to indicate why he has ordered the demolition of that house. What I blame him or his officials for, is having ordered the demolition without having previously given notice to the Eastern Township Historical Society and the federal member for Sherbrooke who are greatly interested in the carrying out of the project.
I hope the minister will nevertheless authorize

8434	COMMONS
Proceedings on Adjournment Motion the commemoration of Sir Alexander Galt by restoring the outbuildings of the house or by erecting on that site a monument worthy of that great Canadian.
The project must be carried into effect, from both the historical and the confederative point of view, and I wish to draw the attention of the house to the great disenchantment of millions of Canadians, and particularly to that of the English speaking minority in Quebec, in the eastern townships and in Sherbrooke.
If the project is dropped altogether, it is unfair to an English Canadian who made a great contribution to the birth of this country.
People sometimes find that I give dynamic support to the viewpoint of French speaking Canadians from Quebec and elsewhere, but as for the feelings and the rights of English speaking Canadians in Quebec, I am eager to meet their just claims. National unity can be achieved only through equal treatment and mutual understanding.
I trust the minister has a favourable answer for us.


Arthur Laing: Mr. Speaker, I want to thank the hon. member for Sherbrooke for having raised this matter. I also want to assure him that I have received a considerable number of questions, and indeed complaints, from a variety of sources, including the hon. member for Richmond-Wolfe (Mr. Asselin) who has brought this situation to my attention a number of times during the past week.
I regret the occurrence very much indeed because apparently, as a result of the attempt to move this building, we have destroyed a house of one of the fathers of confederation, what was unquestionably an historic building of very great significance in the country.
I should like to tell the hon. gentleman what has gone on. This proposal goes back to 1962 when there was a private request for preservation of Galt House. My board-that is, the Historic Sites and Monuments Board -at that time approved the plan and said it was worth while saving, but no one came forward to participate.
In August, 1963, we again concurred, but asked that the matter of Galt House be kept over until we had had a look at the homes of as many of the fathers of confederation as we could possibly find in the various provinces, because there had been a suggestion that they should be preserved.

DEBATES	October 6, 1966
On February 4, 1965, we had a telephone call from the Dominican Sisters, whose property it was, telling us that they were going to move the house or demolish it in any case because they were expanding their own property and wondered whether we were interested. At the same time we had correspondence from the Eastern Townships Historical Society, who appealed to the Quebec government at that time that the Quebec Commission for Historical Sites be asked to participate. They wrote a letter to Hon. Carrier Fortin on July 24 and received a letter from him saying that they would participate.
On December 10, 1965, the president of the Eastern Townships Historical Society, Mr. Bachand, wrote to the department setting out their efforts to save the house. On March 3, 1966, Hon. Carrier Fortin expressed the first indication that the provincial government was willing to enter into an agreement with the federal government to assume 50 per cent of the restoration cost. This was confirmed by him in a letter on April 5, 1966.
On April 27 the department wrote to Hon. Carrier Fortin pointing out that if the province would not participate to the extent of maintenance, we could not carry the building ourselves. We therefore requested that the city of Sherbrooke participate. Sherbrooke became involved on July 29 and agreed to assume part of the cost, if we removed the building.
Later on, at about the end of July, we were informed by the Dominican Sisters of the fact that on August 8 they intended to begin demolishing the building. Thereafter we made a very great effort-a hurried effort-to put in a contractor. We got a report which said that the old house could be moved. It is a brick dwelling sitting on 50 per cent bedrock. We were told it could be moved, and we proceeded to move it. We did not get very far.
This house has heard the story of the doctor and the operation. Here, neither the operation nor the consequences of it were successful. I think we have learned that it is probably impossible to move a brick house off that type of foundation when the mortar is 100 years old. The building collapsed. We were confronted with the possibility of losing the house, and naturally, an attempt was made to move it. We attempted to move it, and the attempt failed.
October 6, 1966



SHIPPING-BALA, ONTARIO-OBSTRUCTION OF NAVIGATION BY BRIDGE CONSTRUCTION

Gordon Harvey Aiken: This afternoon I asked a question concerning wharf access. It is an urgent matter and involves an important principle.
Briefly stated, authority has been granted for the Canadian National to instal a fixed bridge in substitution for a swing bridge over Jeannette's Narrows on Lake Muskoka, which will close off all but small boat navigation to the wharf at the town of Bala, which is a town deriving most of its income from tourist traffic and the boat trade.
Moreover, a Privy Council order No. 1907 of 1965, and a Board of Transport Commissioner's order No. 121124 of June 17, 1966, were made without public or private notice to those affected.
Finally, the Canadian National serlt in a crew to convert the bridge, while efforts were being made to delay the conversion.
For 75 years excursion boats have carried passengers on the Muskoka lakes. The town of Bala was a regular calling place. There was, and still is, a large wharf at Bala, and within the past several years it has been rebuilt. The approaches have been improved and extensive funds have been spent.
The excursion boat traffic went into decline, and about eight years ago Bala was discontinued as a port of call. The navigation company closed down. Where the mistake was made, I believe, was that after this wharf had been disused for some time it was assumed that it would never be used again for its previous purpose. It has now come about that use is requested of the wharf. Last year, Muskoka Excursions Limited put a large new excursion ship, the Miss Muskoka, on the lake. This year a second ship the Lady Muskoka was added to the fleet. Excursion ships and excursion boats have now resumed plying the lakes. The town of Bala, and the ship owners have arranged to have the ships call at Bala wharf.
On July 20 of this year the town of Bala applied to the Canadian National for permission to open the swing bridge. It was then that the existence of the orders I have referred to became known.
I have raised this question because the government has acquiesced in what is being done under a privy council order. In closing this means of navigation permanently, there is no alternate way for boats to come in to the Bala wharf.
Proceedings on Adjournment Motion
[DOT] (10:10 p.m.)
If this had not been a government department the transaction would have been illegal under the Navigable Waters Protection Act. However, the government has the authority to make such an order, and it did so. My complaint is that the application was not founded on a proper basis and that an opportunity was not given to those interested to be heard and to explain what might happen in the future. I am asking the government now what means of access they intend to provide as an alternative to this bridge which is now closing off traffic to a major port on the lake at Bala Park.


John B. Stewart: The
Canadian National Railways maintain a railway crossing over Jeannette's Narrows. Originally this was a swing span structure. In 1965 the company requested the approval of the Board of Transport Commissioners for the conversion of this structure to a fixed span structure. The company's aim was to reduce the costs of maintenance and operation. The board requested the Department of Public Works to review the application; and the department advised that it would have no objection to the proposal, provided certain conditions were met.
These conditions were, first, that there should be a vertical clearance of 11 feet 3 inches above high water level and, second, that there should be a horizontal clearance of 55 feet on the north side of the pivot pier and 43|- feet on the south side of that pier. It was thought that this clearance would accommodate most, if not all, the traffic-a traffic which it is believed consists largely of smaller pleasure craft.
I am informed that larger boats are able to make use of an alternative channel to enter the Bala harbour and that this channel, which is about two miles away from the structure we are discussing, provides 32 feet of vertical clearance and 42 feet of horizontal clearance. Obviously there is a difference between the information I have and that which has been provided by the hon. member for Parry Sound-Muskoka-a difference which I suspect we shall not be able to resolve tonight.
I want to thank the hon. member for putting forward the information he has adduced, and to thank him personally for making me interested in the prospects of visiting Bala Park.

8436	COMMONS
Proceedings on Adjournment Motion


Gordon Harvey Aiken: In a very small boat.



ROYAL CANADIAN MOUNTED POLICE-REQUEST FOR RETENTION OF MUSICAL RIDE AND EQUESTRIAN DUTIES

Kenneth Hamill (Ken) More: My appearance here tonight arises through a misunderstanding. I had a consultation with Mr. Speaker about a question I had directed yesterday to the Solicitor General. I want to go on record that I have no criticism to make of the Speaker regarding the decision he reached. I apologize to him for having misunderstood him and gone through the motions I did to catch his eye, though perhaps I benefit-ted from it because I needed the exercise.
It is not my purpose to use my time debating with the Solicitor General about the problem I raised. There has been a change in the training of officers and men of the R.C.M.P. which has resulted in a curtailment in the use of horses. That is not the point at difference here. It is understood that the personnel, horses and necessary training equipment for the musical ride will be maintained for traditional and other purposes but, whether it is just a rumour or not, it is said that the training establishment is going to be moved to Ottawa.
DEBATES	October 6, 1966
This has caused great concern in my area and province, which for many years have been the centre for such training. We do not think there can be a good reason for moving the operation, and my purpose in asking the question of the Solicitor General was to establish precisely what the situation will be. So, without further debate I again ask him, is the government giving consideration to removing from the R.C.M.P. establishment in Regina the training equipment, forces and personnel needed for the musical ride and other equestrian duties? If so, has a final decision been taken, or is the minister giving sympathetic consideration to the many representations that these facilities should remain in Regina for historic and other substantial reasons?


Lawrence T. Pennell: Mr. Speaker, the important matters raised in the question put by the hon. member have already been given intensive study, and perhaps it in only fair for me to say there was more than rumour in the move referred to by the hon. member. However, in view of the representations from the hon. member for Regina City (Mr. More), and from others, the matter is now being given further consideration before a final decision is reached.
Motion agreed to and the house adjourned at 10.20 p.m.

Friday, Ociober 7, 196S