1966-09-02

Right Hon. L. B. Pearson (Prime Minister):: Mr. Speaker, as a result of the question asked yesterday by the right hon. Leader of the Opposition I promised I would make a statement on motions in respect of the forthcoming Commonwealth prime ministers' conference. The situation in Canada at the moment happily is such that I expect to be able to leave Ottawa tomorrow to attend the conference in London.
At that conference all but one of the members of the Commonwealth will be represented. There are now, I believe, 23 members of the Commonwealth. This shows how it has grown over recent years. The growth reflects the changed nature of the Commonwealth and indeed the changed nature of the world, because of these 23 members of the Commonwealth all but six are from Asia, Africa or the Caribbean area; all but Canada, the United Kingdom, Australia, New Zealand, Cyprus and Malta.
I believe there will be 12 or 13 prime ministers who will attend this conference, and in cases where prime ministers are unable to attend, as unfortunately is the case in respect of some members of the Commonwealth, those countries will be represented generally by their foreign or other ministers.
This will be the first meeting of the prime ministers at which a Commonwealth secretariat will be entirely in charge of the arrangements. The secretary general of the Commonwealth secretariat, a distinguished former official of the Department of External Affairs, will be the secretary general of the conference.
Undoubtedly there will be a wide range of subjects discussed. Over the years it has been the custom not to indicate in advance by means of an agenda what those subjects will be. This is a tradition which to me does not seem to have very much meaning in the present circumstances, but is one which always has been followed. So when there is a
discussion of the Commonwealth meeting in advance it is customary to say: "the following subjects likely will be discussed although no agenda has been agreed upon."
I do not think I would be betraying any secret if I were to mention two or three of the things which undoubtedly will be considered.
[DOT] (11:10 a.m.)
The international picture generally is reviewed by the Commonwealth prime ministers, and on this occasion I am quite certain that the review will include consideration of the Viet Nam situation. It will be remembered that at the last meeting of the Commonwealth prime ministers in London over a year ago the prime ministers had a very active and, I think, valuable discussion about the Viet Nam situation, as a result of which a mission of four Commonwealth prime ministers was established and charged, if the parties to the conflict agreed, to do what they could to intervene in and mediate that situation.
It is perhaps not remembered as it should be that this mission-and three of the four members were heads of government from countries uncommitted in any way-was accepted for a visit by the governments of South Viet Nam and the United States, both of which were directly concerned, but that mission was completely rejected by the government of North Viet Nam, which made it quite clear it would not receive it in any way, shape or form. In any event, this situation will be considered again, I am sure.
There will also be a review of the disarmament position and I would expect, with particular reference to steps that have been or should be taken to prevent the proliferation of nuclear weapons. There will be very little at this conference in the way of economic and financial discussions; not that they are unimportant because, of course, they are, but it is extremely difficult to separate the problems in this field inside the Commonwealth association from those problems which are of world wide significance.
As I indicated the other day, there will be a meeting of the International Monetary Fund in September, at which time these matters will be discussed. Perhaps I should also have mentioned the other day that there
September 2, 1866

Commonwealth Relations will be a meeting of the Commonwealth ministers of finance in Montreal beginning September 21, at which time they will review the matters which will later come before the International Monetary Fund.
I am quite certain that the most important and the most difficult question to come before the Commonwealth prime ministers will be that of Rhodesia. It is because of that question I have said, and I do not think this is an exaggeration, that the future of the Commonwealth as a multiracial association-and that is the only basis on which it has a future-will be at stake at this meeting. In that sense the meeting will be crucial to the evolution or, indeed, the devolution of the Commonwealth of nations.
There are very deep differences of opinion in regard to the Rhodesian situation and what should be done to ensure that the illegal regime in authority there ceases to exercise that authority. These deep differences of opinion can and I think will be discussed in London in the traditional Commonwealth conference manner of complete frankness and understanding. I hope this discussion will result in some progress toward a solution to this very difficult question. We will certainly need at this conference all those qualities of frankness and freedom of discussion, and a feeling that there can be that kind of discussion conducted in mutual respect and without danger of violent misunderstanding.
So far as our own attitude is concerned, it would, of course, not be wise or prudent for me, before the conference, to indicate in detail what will be the policy of the Canadian delegation in respect of the detailed matters as they arise. It is certainly not wise to take firm and public positions on specific issues before a conference of this kind actually meets. Our basic policy in regard to Rhodesia has been made known. There have been discussions in the House of Commons, questions have been asked and answered from time to time, and there was a very good discussion of the matter before the committee on external affairs. Indeed, if it would help in any way I have no doubt that these discussions could all be put together and a memorandum or some kind of white paper issued with regard to them.
From the beginning this government, I think with the approval of all members of the house, has co-operated fully in regard to the imposition of sanctions against the illegal regime in Rhodesia. We have taken part in economic pressures which it was hoped would


bring to an end the illegal regime in that country and restore constitutional government to Rhodesia, as a first step to eventual independence on the basis of majority rule, which is the only basis on which independence can be established and accepted.


Some hon. Members:: Hear, hear.


Lester Bowles Pearson: We have also co-operated as a government, I believe with the support of parliament, in carrying out resolutions of the United Nations security council and in carrying out the agreements of the prime ministers' conferences. We have not questioned, nor do we question now, the decision of the British government, which still has the ultimate constitutional responsibility for that country, not to use military or armed force against Rhodesia unless, as the Prime Minister of Great Britain said, such force was necessary to restore law and order. I have no doubt this matter will be re-examined at the forthcoming conference. We will certainly examine also the working of sanctions. For that purpose we will have a very detailed report from the sanctions committee which was set up after the conference of last January in Nigeria and is presided over by the Canadian high commissioner in London. We will be examining this report to see how and whether sanctions could be strengthened.
There is no doubt that the operation of sanctions as a method of bringing the regime to an end has been disappointing and that disappointment, I am sure, will be expressed in the reports we will receive. There is no doubt also that sanctions are having an effect on the economy of Rhodesia. In my own view there are still further steps that could be taken to strengthen economic pressures through sanctions. I have no doubt that proposals will be made to this end, and that one of these will be to refer the matter to the United Nations so that United Nations mandatory sanctions could be applied, either full or limited mandatory sanctions, under chapter 7 of the United Nations charter.
Under that chapter provision is made for the application of economic sanctions and military sanctions. I have always taken the stand, and I am sure hon. members agree with this, that imposing military sanctions under chapter 7 of the charter of the United Nations or under resolutions of the general assembly does not imply the use of force in the conventional sense. Nevertheless I am certain that before any use of force was contemplated under chapter 7 of the charter
September 2, 1966

there would be a full examination of whether economic sanctions under the United Nations could be applied and made effective. All these matters will be discussed and I have no idea what the results of these discussions will be. [DOT] (11:20 a.m.)
There is a very special problem with which we and other members of the Commonwealth are concerned, namely the relationship of Zambia in this situation. Zambia, which unfortunately will not be represented by its president, Kenneth Kaunda, who is one of the wise and moderating influences in African development and who will be represented by his foreign minister, is in the unenviable position of being as anxious as any country could be to see the illegal regime in Rhodesia brought to an end and replaced by one where the majority will prevail. However, at the same time Zambia is very dependent at the present time upon Rhodesia for its economic existence. If Zambia is to release itself from that dependence it is going to need economic and financial assistance from its friends in the Commonwealth and, I would hope, from outside the Commonwealth. For instance, it is an anomalous and ironic situation that one third of Rhodesian exports go to Zambia, yet Zambia is not in a position at the present time to cut off that one third which would inflict real economic damage on Rhodesia because it would destroy itself economically in the process.
This is the problem that has been actively considered in recent weeks, and proposals for assistance to Zambia by the United Kingdom and by other members of the Commonwealth including Canada will undoubtedly be considered at the conference.
Mr. Speaker, I regret that I cannot go into further details at the present time, but that is a summary of the situation which I think will confront us at the meeting which will open in London at the beginning of next week. I can only hope that out of this meeting will come some agreement which will help to solve the problems we will be facing, especially the problem of Rhodesia, the difficulty and complexity of which is greater than that which has faced, I think, any meeting of Commonwealth prime ministers.
On our ability to find some satisfactory solution to that problem, or some satisfactory progress to a solution, I think, might well depend the existence of the Commonwealth of Nations which we now know as a multiracial institution spanning the continents
Commonwealth Relations and including people of all races, of all colours and all creeds on the basis of complete equality.


Right Hon. J. G. Diefenbaker (Leader of the Opposition):: Mr. Speaker, the meetings of the prime ministers of the Commonwealth are of great importance for the Commonwealth and for the peace of the world. I am happy to hear the Prime Minister's reference to the multiracial nature of the Commonwealth as being of paramount significance.
I recall the criticism in 1960 and 1961 when I took the stand-the only white prime minister to do so-that without the principle that the Commonwealth must be colour blind it could not survive. I have not changed that view. What was heresy then is now accepted.
The fact that the Prime Minister will be able to attend the conference is naturally a matter of personal pleasure. I suggested that he should do so. I brought the matter before the house, because I think it is imperative that he be there.
A prime minister's conference without prime ministers is not effective, and one of my regrets, based on the information which appeared in the press, is that the prime minister of India will not be there nor will the president of Pakistan. These are the highest representatives of areas inhabited by approximately three quarters of the population of the Commonwealth. Therefore, authoritative representations by those countries will be lacking. No one except the leaders of countries can speak for them with the authority that is necessary.
With regard to the second portion of the Prime Minister's remarks dealing with the meeting itself, I am of the opinion-and there can be disagreement with this-that it is not necessary to have a prime ministers' conference at this time. Three of them will have been called in one year. The first was in January in Africa, the second for June, and another now.
As the Prime Minister stated, the problem of Rhodesia is the one above all others that will be receiving attention. Naturally there will be a review of the world situation. The question of disarmament will receive its regular and unfinalistic review. However, the major problem is Rhodesia.
[DOT] (11:30 a.m.)
We in this party have taken the stand that Rhodesia is a matter for the United Kingdom and the responsibility of the United Kingdom. The particular relationship of Rhodesia to the
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Commonwealth Relations United Kingdom places that problem in that category. I am not saying what happens there does not have an effect elsewhere in the world on the relationship between the whites and the blacks. However, the problem of Rhodesia cannot be solved by the United Kingdom placing it before a prime ministers' conference. I was strongly criticized, as were the hon. members for Winnipeg South Centre (Mr. Churchill) and Oxford (Mr. Nesbitt), when we contended that the policy of sanctions would not work. It does not require a report by a committee of the Commonwealth nations for it to be known that sanctions have not worked. They have had their effect; they have interfered with various areas and sectors of the economy, but they just have not worked. Sanctions, on the basis of history, will not work.
Yet, one member of the government after the other, including the Secretary of State for External Affairs (Mr. Martin), as far back as June last claimed they were working effectively. Well this is not the first time that predictions of that kind have not been borne out by events. It is generally admitted now that they have not worked. It is admitted by the Prime Minister of the United Kingdom, by Sir Edgar Whitehead in a recent article and by one of the great Commonwealth leaders Sir Roy Welensky. It is attested by the fact that the Smith regime is carrying on with no discernible discomfort and that Zambia will continue to be dependent on Rhodesia for oil. They have not worked. Naturally the British government wants a Commonwealth conference. This is the problem of the Wilson government, which said that it had the answers to this question.
I want to emphasize that this is not our problem. Mr. Wilson said that his solution would work. Now apparently the responsibility is again to be dissembled among the Commonwealth nations. Three meetings in one year are at least one too many. It does not make for unity to meet together regularly and not have anything particularly in mind; and there is nothing in mind on this problem except, as the Prime Minister has said, that the matter might be brought before the United Nations, and I will refer to that in a moment.
The Prime Minister mentioned, and properly, the tremendous growth of the Commonwealth with, I think he said, 23 members now. What is going to happen there? I have expressed this fear before. Today the Prime Minister speaks almost lugubriously of the

DEBATES	September 2, 1966
prospects for the Commonwealth. Months ago and prior to June my concern, as I expressed it, was that if a vote should take place at the prime ministers' conference, with the overwhelming number of the members of the Commonwealth of other than the white race, and that vote should be unacceptable t o Canada, or Australia, or New Zealand, or the United Kingdom, then you have the beginning of the disintegration of the Commonwealth. That is why I fear for this meeting. It will either end with a communique which could have been written even before the conference began, which I am told sometimes occurs, or the conference could end in a cleavage and a division that would have irreparably detrimental results to the whole concept.
The Commonwealth is an amazing institution. It has no rules, no regulations, no agreement; no decisions are made, yet it has worked. I share the Prime Minister's fear that this meeting will bring about a situation that will lead to the most frightening results not in the years ahead but in the months ahead. It is because of this that I have so strongly pressed that the conference ought not to meet at this time. Time to cool has its benefits.
I know that in the last few days events have occurred that are bound to cause concern. It was only a few moments before I came into the house that I realized that this matter was going to be discussed; therefore I have before me only a few references. In the last few days Mr. Smith has acted in a way that would indicate that he is trying to meet in anticipation any action on the part of the prime ministers' conference. Up to the present Prime Minister Wilson has been talking about talks about talks. This pretty well ended in the last few days. The talks have halted, but to all intents and purposes they ended on August 25, when a bill was introduced in the Rhodesian parliament which was disastrous to the negotiations. This was a deliberate and contemptuous act designed to indicate in advance to the Commonwealth prime ministers' conference the contempt which Mr. Smith and those associated with him have for the Commonwealth.
What are the prime ministers going to do? Are they going to send the issue to the United Nations? In his statement yesterday U Thant indicated that the United Nations is in a serious position apparently unequalled in all the years of its existence. If the matter is placed before the United Nations, what will
September 2, 1966	COMMONS DEBATES	8011
the United Nations do? What can they do? Are we going to have the United Nations determining the rights of individuals and the authority of a de facto government of a country which is not a member of that institution? The responsibility here rests firmly on the parliament of the United Kingdom. I repeat that Prime Minister Wilson said only a few months ago that he had the magic solution to this problem.
The Prime Minister now says, let me repeat, that the matter should be put before the United Nations. Well, as far back as January 11 or 12 of 1966 he stated that if it was not clear within a matter of weeks rather than months that existing sanctions were ending the rebellion, then further measures would have to be considered, including action in the United Nations under chapter 7. He referred to "a few weeks"; it is now months.
Chapter 7 implies military action in part. It is easy to talk of that. The Prime Minister brushed it aside, and I agree with his view. Canada should have no place whatever in any military actions that may be determined upon in this connection against a country within the Commonwealth; and no Canadian forces should be used, whether under the United Nations or otherwise, for that purpose.
[DOT] (11:40 a.m.)
We are in Cyprus as a self-appointed international policeman, at our own expense and we shall continue to pay. When I look at unification and integration and the mess they are in I can only conclude that we have come to a point in Canada where Canada's defence is to be forgotten, and in place of it involvement in international forces will be the rule. I am not going to deal with that now but I hope very shortly to do so. I can make some quotations from the texts of the minister of defence.
Having said that, I say to the Prime Minister that we can only hope this meeting will be productive of something positive regarding the Rhodesian problem. I do not know what it will be. The government has contended since last April that the sanctions were successful. Indeed, On April 20 last at page 4069 of Hansard I asked the question, and the answer was:
-the embargo is being enforced: the embargo is successful.
All I have to say is that it does not turn out that way. We in Canada can support the need of sanctions to raise the standard of international conduct or action within the
Commonwealth Relations Commonwealth, with no fear of suffering in Canada; because we have no trade to speak of in that area. Will the United Kingdom be willing to agree to sanctions, harsh sanctions, against not only Rhodesia but other countries such as Portugal and South Africa? Because unless that is done the sanctions cannot work; and if it is done, and Britain accepts the views of the United Nations on these things and says "We have got to clamp down on this; the sanctions must be made to work," the British crown and trade will suffer seriously and the depreciation is bound to be great, so that any question of submitting these matters to the United Nations is not very hopeful.
Indeed, that has been tried. It was tried back in May. The African nations called for the use of force in Rhodesia, I think on May 23 last, and they came before the security council. Six of the council's 15 members voted for the resolution. Among the Commonwealth there were Nigeria and Uganda. But the United States, Britain, the Netherlands, France, China, Japan, the Argentine and Uruguay abstained, with New Zealand voting against, so there is little hope that action will be taken if this matter goes to the United Nations. It is easier to state the problem than to be able to come up with any solution.
What is happening in Africa is that there is a rush toward democratic institutions and freedom without the knowledge of the operating techniques of freedom. All those countries that have rushed in to attain freedom find themselves in a serious situation. When the Prime Minister was in Nigeria, at the conference in January, he was greeted by Sir Abubakar, one of the great democratic leaders in an emerging nation, a man for whom I developed tremendous respect. A few days later he was destroyed.
What is to be done? Is it possible that the government of Canada might consider sending representatives to Rhodesia, to meet there with the representatives of the Smith administration to try and bring about something? The British cannot do it; they have shown that. The other night on television a young man with the solution for all the problems of mankind stated that Canada enjoys a high prestige in Africa. I believe that. When we were in office we were able to provide assistance to those new countries which had broken away from France and become established because of our peculiar position here in Canada. We did that, and
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Commonwealth Relations that has been continued under the present
government.
We have a good and excellent standing among emerging nations. Would it not be a good idea if the Prime Minister and the Secretary of State for External Affairs were to go and try at first hand to do that which has not been achieved by the British government, which is naturally an interested party in any decisions taken, so through the medium of Canada there might be brought about some relationship which will ultimately lead to that which we all desire, namely peace with equity, and peace with the recognition that whatever the colour of a man's skin, men are equal and their rights must be respected.


Mr. T. C. Douglas (Burnaby-Coquitlam):: Mr. Speaker, the prime ministers' conference which is to begin early next week meets against a background which is gloomy and foreboding. One has only to read the letter which Secretary General U Thant wrote to the security council announcing that he will not be available for another term to realize just how serious the world situation is. I think every member of parliament ought to read that letter, to see in it the despair of a man who is probably more intimately associated with the forces at work in the world today than any other human being. He cites the lack of financial support for the United Nations. He cites the war in Viet Nam as an action which in his opinion, if not stopped, could ultimately lead to a major catastrophe.
[DOT] (11:50 a.m.)
Therefore it seems to me that the Commonwealth prime ministers are meeting at a most appropriate time. The right hon. Prime Minister said that two subjects would be discussed, one being the question of Viet Nam. I think it is a matter of regret that the Commonwealth prime ministers' delegation which endeavoured to meet with the various parties in the Viet Nam dispute was rejected by some of the disputants. This is a view which I expressed as forcefully as I could when our parliamentary delegation met Mr. Mikoyan, who at that time was President of the U.S.S.R. However, I hope the prime ministers' conference will not allow this rejection to dissuade them from whatever other action they can take.
One of the hopeful signs is that Canada and India, two of the members of the Commonwealth, are two of the members on the international control commission. If it is not
[Mr. Diefenbaker.l
DEBATES	September 2, 196&
possible to get the two co-chairmen of the Geneva accord powers to reconvene that conference, I think Canada and India might well discuss the possibility of themselves calling a conference and inviting all those who are affected, including the national liberation front in South Viet Nam.
It may be that Peking and Hanoi would refuse to attend, although I seriously doubt it.
I doubt if they could stay away from a conference called by two members of the international control commission, two countries which have nothing to gain by prolonging the war in Viet Nam.
I hope the Prime Minister will use all the influence he can to persuade the Commonwealth Prime Ministers to speak out on the question of Viet Nam, and to urge the Commonwealth at least to endorse publicly the basic proposals put forth by U Thant, the secretary general of the United Nations, for a cessation of the bombing, for a conference of all groups including the national liberation front, for the eventual withdrawal of all foreign troops, and for the right of the people in Viet Nam to determine in free elections what form of government they wish to have.
The second question the Prime Minister said will be discussed is Rhodesia. I cannot agree with the right hon. Leader of the Opposition that this conference should not be held at this time. I think it is imperative that the conference should be held at this time. It is true that constitutionally this problem is the responsibility of Great Britain, but if all the members of the Commonwealth, including Canada, do nothing; if there is no attempt to find a solution, what will inevitably happen is that members of the Commonwealth in Africa and even in Asia may one by one withdraw from the Commonwealth.
We can destroy the Commonwealth by inaction. We cannot do any harm by having the prime ministers meet. While it may be Great Britain's responsibility even the British government, or any other government, is surely not averse to getting the consensus of other nations which are equally concerned about preserving the Commonwealth as a force in the world. I think this is the time for the prime ministers of the Commonwealth to meet.
It is true that there is no easy solution, but it seems to me there are three courses of action open. The first is to do nothing and to allow matters to go on just as they are. Apparently the economic sanctions have not been
September 2, 1966	COMMONS DEBATES	8013
completely effective, although undoubtedly they have had some effect. But if nothing is done there will undoubtedly be a withdrawal of some of the African Commonwealth countries from this association, and that could even be followed by the withdrawal of some of the Asiatic members from the Commonwealth.
If Mr. Ian Smith and his illegal regime carry out their threat of revising the constitution so that Mr. Smith can jail his opponents without trial, there could be bloodshed in Africa; there could be intervention by other African countries; there could be the beginning of a war between Africans and whites that would shake that whole unhappy continent. It seems to me that to take the policy of despair and say there is nothing we can do, and just let events take their course, is a complete abdication of statesmanship.
With respect to the other alternative that has been mentioned, of military sanctions against Rhodesia, apart from the moral consideration it is doubtful if Great Britain could assemble a military force and launch a military attack against a country as isolated as Rhodesia. There is another consideration apart from the military logistics. It is that a war between the forces of Great Britain or the Commonwealth and the illegal regime of Mr. Ian Smith might be an invitation to the 4 million blacks in that country to rise, and an invitation to other African countries to intervene.
It seems to me that the only solution which appears to be in sight at the moment, unless the prime ministers when they meet next week find some better proposal, is to submit this matter to the United Nations and ask the United Nations to impose mandatory economic sanctions. I recognize all that has been said about what this would entail. It may mean not only economic sanctions against Rhodesia but may mean economic sanctions against Portugal and South Africa. I recognize that Great Britain is very dependent at the present time upon its trade relations with South Africa, and that the imposition of mandatory economic sanctions by the United Nations under its charter would involve very considerable financial sacrifices for the United Kingdom.
But, Mr. Speaker, peace, like everything else, has a price. We have to decide whether we are prepared to pay the price to maintain a world in which the rule of law obtains. We must decide whether we are going to see a
Commonwealth Relations police state with a racist government continue a policy which could lead to a conflagration in Africa, or whether the United Nations will take whatever steps are necessary to guarantee the freedom of over 4 million Africans who at the present time are living under a totalitarian regime imposed upon them by less than a quarter of a million white supremacists.
I think Canada has to give its support to any such proposal if the Commonwealth is prepared to make an advance to the United Nations. It has been asked, "What can the United Nations do"? Well, Mr. Speaker, if we adopt a policy of despair that the United Nations can do nothing, and if this body, which was launched with such hope and optimism in 1945, is now so completely decrepit and useless that we cannot refer this matter to it, the future is filled with impending gloom.
[DOT] (12 noon)
I for one do not regret that Canada has contributed to the maintenance of peace in Gaza, Cyprus or anywhere else. Any small price Canada has paid out of its great affluence to maintain peace in any part of the world is a small price to pay. Peace is indivisible. Wherever there is war, dissention or racial discrimination in any part of the earth the peace of the world is in danger and the freedom of mankind is at stake. If Canada, by giving its support wherever such contribution is necessary financially, whatever sacrifices are involved, can contribute to the establishment of a genuine democratic government in Rhodesia with equality of treatment for all its citizens whether black or white, that, Mr. Speaker, will be a small price to pay for reaching such a satisfactory situation. I hope the Prime Minister will use his very considerable influence at this conference, in the absence of any other course of action which with his knowledge of the facts may seem preferable, to urge that the situation not be allowed to deteriorate further and, if Great Britain does not feel it can act on its own or if the Commonwealth does not feel it has any solution at hand, to urge that this matter be taken to the United Nations with a request that they deal with this troubled spot before it spreads throughout Africa and endangers the peace of the world.
The Prime Minister of Canada goes to this conference with very considerable prestige, prestige on his own account because of his long record in international affairs and his well-known interest in the cause of peace. He
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Commonwealth Relations also goes with considerable prestige because Canada is a country which has the respect and I think the affection of many of the countries of Africa and Asia. We have stood with them on many occasions not only under the present Prime Minister but also under the former prime minister. We have stood with the African and Asian people in many of their disputes with the western powers. I think Canada is respected and will be listened to.
I believe our Prime Minister probably can wield more influence in discussions with the Commonwealth leaders of Africa and Asia than can any other white leader who will be present at this conference next week. Therefore I say to the Prime Minister that he goes to this conference, I am sure, with the best wishes of the Canadian people and carries on his shoulders our hopes and aspirations. It is our hope that he and his colleagues will be able to find some of the answers which will help promote and maintain peace in the world.


Mr. Real Caoueite (Villeneuve):: Mr. Speaker, the Prime Minister (Mr. Pearson) told us that 12 or 13 prime ministers of commonwealth nations would meet in London in a few days.
According to the Prime Minister, the international situation will be discussed during this conference. It is perfectly normal that prime ministers of commonwealth nations deal with the international situation and they will naturally discuss the American escalation in Viet Nam.
But I do not see how the commonwealth prime ministers could decide anything about Viet Nam. Since Canada is geographically located next to the most powerful country in the world, in the past the American government and the Canadian government have discussed the Viet Nam issue and will continue to do so in the future without seeking the advice of the other prime ministers of commonwealth nations because in some cases, Canada has to take positions that other commonwealth countries do not have or do not want to take. This is quite normal, precisely because of our geographical location and the close ties between the American and the Canadian people.
Another subject that will probably be brought up is that inflation which is presently causing great damage in Great Britain and in many other countries. But it seems that the

DEBATES	September 1, 1966
most debated question will be that of Rhodesia. As a matter of fact, the Prime Minister devoted two thirds of his statement to the Rhodesian problem. Before dealing with Rhodesia, the Prime Minister announced that the Ministers of Finance will meet on September 21 in Montreal to review our position with regard to the International Monetary Fund. I sincerely hope and suggest to the Prime Minister that he bring together the federal and provincial Ministers of Finance in order to review our monetary position right here without having to resort to the International Monetary Fund.
To revert to the question of Rhodesia, Mr. Speaker, the Prime Minister said that Canada had to impose economic restrictions in the case of Rhodesia because the government there is illegal.
I am not questioning the fact that there is an illegal government in Rhodesia, but Rhodesia is not the only country with an illegal government. I suspect that in Russia, the government there is not quite legal. I do not think that in China, the government is quite legal either. In Cuba, the government is not quite legal. In other countries of the world there are governments that are not quite legal, but this does not prevent us from dealing with them, from making large deals with them.
Now, as for Rhodesia, we must be concerned directly in its situation, or rather in the position they are taking.
This should not be taken to mean that I approve what the present illegal government of Rhodesia is doing in that country, far from it, but I am in full agreement with the Leader of the Opposition (Mr. Diefenbaker) when he says, for instance, that the problem of Rhodesia is no concern of Canada, it is the concern of Britain. This is true. This concerns the Wilson government, in Britain.
It does not concern us here. There have been skirmishes between Britain and Rhodesia, but that is no concern of ours. We have nothing to do with that and the Leader of the Opposition is right on that score. I understand the problem is most delicate and that every means are being sought to sanction and strangle Rhodesia and incite the people of Rhodesia to throw out a government which is considered illegal.
The people, men, women, and children suffer from these economic sanctions pressed upon them, because an illegal government is
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in power, like so many others all over the world.
Mr. Speaker, the problem is delicate and the right hon. Prime Minister informs us that Zambia is ready to co-operate with Canada and the other countries, but cannot afford to do so since it depends upon Rhodesia for two-thirds of its needs. It cannot do without Rhodesia. Canada could grant Zambia massive exports in order to substitute for Rhodesia.
Mr. Speaker, I do not feel these considerations contribute to the settlement of the Rhodesian question. Neither do I believe that Canada should be very much involved in the affair. I do not feel it should be. And for these reasons, the right hon. Leader of the Opposition is right in saying that the Rhodesian question concerns the Wilson government in Great Britain. He is right.
Mr. Speaker, it appears to me that there are other problems to be discussed among commonwealth country members, economic problems for instance, not economic sanctions or restrictions. If an appeal were made to logic and common sense, in Rhodesia and elsewhere, could we not reach an agreement?
I know how strongly the right hon. Prime Minister feels about world peace and good feelings throughout the world. I am aware of the fact that he was with the Department of External Affairs for many years and that he is thoroughly competent in this field. I know that the right hon. Prime Minister will enjoy, at this conference, great prestige, but is it not a fact that, on that occasion, Canada's influence, the Prime Minister's influence, is due to our being neighbours of the United States and that country is known as the most powerful in the world? That is reflected upon us Canadians, members of the government or of the Canadian parliament.
Mr. Speaker, the right hon. Prime Minister enjoys this influence, to be sure, but let us use it to promote amity, cordiality, understanding, co-operation between nations. I am sure that the Prime Minister will measure up to expectations at this conference of prime ministers of Commonwealth countries, and my best wishes go with him. I am of the opinion that Canada stands to gain therefrom and I hope that the Prime Minister sees to it that the word "peace" is not merely an expression to be used right and left, without ever knowing where it should be applied. May it be used everywhere, in Rhodesia as
DEBATES	8015
Commonwealth Relations elsewhere, and let there be an end to restrictions pressed upon people who probably deserve them no more than others who are at present not affected by them.
Let there be mutual understanding and cordiality, and above all let Canada make the most of its influence on Commonwealth countries as well as on the nations of the world.
[DOT] (12:10 p.m.)


Mr. R. N. Thompson (Red Deer):: Mr. Speaker, I am sure that with all of the concern and advice expressed to the right hon. Prime Minister he will not have very much difficulty at the conference of prime ministers next week. I suppose there may be some disagreement on the part of the prime ministers of Australia and New Zealand, so far as the advice given about Viet Nam by the hon. member for Burnaby-Coquitlam (Mr. Douglas) is concerned, in view of their stake in the southeast Asia situation. I can imagine as well that it will be difficult to get agreement among the leaders of the governments of the African Commonwealth countries.
It is with sorrow and a heavy heart that we look back at the last eight months and realize that a number of the men who would normally have been representatives of countries such as Nigeria are no longer alive as a result of two military coups that have taken place. Likew.se there has been an upheaval in Ghana. The whole situation as to alignment or non-alignment with the great powers of the world is certainly not as fixed as it was a year ago.
I am sure the Prime Minister will be a little confused as a result of some of the remarks of the Leader of the Official Opposition who talked about three Commonwealth prime ministers' conferences held this year. If my memory serves me right, this is merely the second conference. The July conference that was to follow the January conference held in Lagos was postponed because of disagreement and lack of clarity so far as the problems in Rhodesia were concerned, so really this is the second conference of the Commonwealth prime ministers to be held this year rather than the third. Whether it is the third or second conference, Mr. Speaker, the grim realities of the world situation faced by the commonwealth prime ministers are something that do not give reason for very much cheer or optimism so far as the future of the world is concerned.
September 2, 1966

Commonwealth Relations
I only wish to say to the Prime Minister at this time that the most important thing in the Commonwealth and in the world is reasonable judgment and understanding by literate men of good will. There is no magic formula that will solve the problems of Rhodesia and Viet Nam. There is no easy way out of these problems. What we need in the world is balance, and that can only come from men of good judgment and understanding who fully appreciate the problems and what is at stake.
When we consider the situation in Africa and realize how interdependent these countries are so far as their economies are concerned, when we look at the history of the world during the last few years, and listen to the cries of uhuru and peace, when we consider the responsibilities of governments and administrations that must make decisions, it is easy to understand why this conference will not be an easy one. It will be difficult for the Prime Minister in his particular position as leader of a country which is respected, and for which there is great affection to give leadership during the deliberations that will take place and at the same time give consideration to every country's problems.
The fact that Zambia is as dependent as she is upon Rhodesia and Rhodesia upon Zambia and the fact that colour of skin and racial problems are not solved just by the declaration of high sounding principles point to the soberness and importance of this conference. These facts also point to the need for getting together and talking things over on a reasonable basis. If that requires another conference this year at which this kind of discussion can take place, then let us have another one, because as long as people are talking and trying to understand each other there is hope that some kind of satisfactory arrangement can be made.
In concluding my remarks, Mr. Speaker, let me say in regard to the problems of Rhodesia that reason must be applied. The changing of so-called illegal governments by the normal process of democratic elections in countries such as Rhodesia is something that just cannot happen. There must be a period of time during which Rhodesia can be properly prepared for the processes of a true democracy, and this is something that will only result from the efforts of literate men and women who have some background in the administration of public affairs. If that can be done I am sure that Rhodesia as well as other African countries can live in harmony. In this

way I am sure that some answer can be found to the problems which relate to black and white, underdeveloped, senior and junior Commonwealth countries and, indeed, perhaps even to the Viet Nam situation.
[DOT] (12:20 p.m.)
Therefore, Mr. Speaker, personally and on behalf of our party I wish the Prime Minister and his staff well in the deliberations they face. I say again that we understand the importance of this meeting and the tremendous weight of the problems to be faced. We trust that, as has been characteristic of Commonwealth prime ministers and Commonwealth countries, men coming together to talk over their problems will be able to come to some reasonable solution and that step by step men and nations will be led forward in order that we may obtain the proper and full development of our resources both material and human.



LABOUR RELATIONS


Hon. J. R. Nicholson (Minister of Labour):: Mr. Speaker, I am pleased to be able to announce that, under the authority of section 9 of the Maintenance of Railway Operation Act, I, as Minister of Labour, have appointed Mr. Carl Goldenberg, Q.C., as the mediator to take charge of the mediation proceedings in the pending dispute between the rail unions and management.


Some hon. Members:: Hear, hear.


John Robert (Jack) Nicholson: Mr. Goldenberg has already started his work. He has copies of the five conciliation board reports and he is now studying them. He will be in Ottawa at the beginning of next week, after he has studied the reports, to discuss the matters on which I gave certain assurances yesterday and also to discuss whether at this stage associate mediators may or may not be necessary.
I think the people of Canada are very fortunate to have obtained the services of a man with Mr. Goldenberg's background and reputation in the field of conciliation and mediat on in labour disputes. In the minds of labour and management he is one of our most highly respected mediators and conciliation board chairmen. I should like to express publicly the thanks, I am sure, of every member of this house to Mr. Goldenberg for taking on this very important task at this time.


Some hon. Members:: Hear, hear.
September 2, 1966



BUSINESS OF THE HOUSE


Hon. J. W. Pickersgill (Minister of Transport):: Mr. Speaker, I wonder whether I might be permitted at this stage of the proceedings to say a word about the procedure that would be followed after the orders of the day, in response to the very constructive attitude taken last evening by the hon. member for Qu'Appelle (Mr. Hamilton). I should like to draw attention to the words he used:
The proposal I want to make, which apparently we will be able to consider overnight, follows other precedents in the house. I want to move at the end of my remarks, which I presume will be tomorrow morning, that the subject matter of Bill No. C-231 be referred to the standing committee on transportation, provided however that despite this motion the said bill shall remain on the order paper as an order for second reading without prejudice to the right to make or proceed with the motion for second reading.
What I am suggesting, Mr. Speaker, for the consideration of the party leaders or house leaders of the various parties is that before we can intelligently vote on the many principles which are inherent in this omnibus legislation we might be able to speed up things quite a bit if we were to move straight into committee stage, before continuing our full debate on the principle. I intend to make in the committee stage, if I am allowed, some proposals which I think can speed up the lengthy debate that I foresee on two sections of the bill.
I can assure the hon. gentleman and the house that the government agrees completely with the desire to proceed urgently with this measure, particularly because of the relationship it has to the negotiations to which the Minister of Labour has just referred. I am not able to accept the actual suggestion made by the hon. member for Qu'Appelle because we have had one or two experiences of that kind of procedure. In the first place, it requires unanimous consent because it is quite contrary to our rules. In the second place, I am still scarred from an experience three years ago-


John George Diefenbaker: Scared.


John Whitney Pickersgill: -when I agreed to do this in relation to another bill. I would point out that in this bill clause 1 is not the short title but is a substantive clause. It is a clause that contains the main principles on which the transportation policy is based. This would therefore enable a pretty ample debate after second reading and committee stage when we came back to committee of the whole. I believe that at the committee stage we could iron out many of the difficulties the hon.
23033-507J
Business of the House gentleman suggested and no one would be denied any opportunity for the fullest kind of debate on those issues upon which there was not already agreement.
The principle of the bill certainly does not involve the acceptance of any of the procedures, about which I can understand there are going to be some very sharp differences, and certainly I would never interpret a vote in favour of second reading of this bill as acceptance of all the procedures involved, because they could only be worked out in committee.
I was wondering, therefore, whether the hon. member's position would be met if we could proceed relatively urgently with the bill and have a relatively short debate and get second reading with the understanding that second reading was only approval of the two general principles, one that there should be a Canadian Transport Commission and, two, that there should be railway rationalization, if I may broadly put it that way. The other matters could be ironed out in committee. I have had a word or two with the hon. member for Qu'Appelle and perhaps, Mr. Speaker, you would permit him to make a reply now.


Hon. Alvin Hamilton (Qu'Appelle):: Mr. Speaker, the proposal I made was based on the assumption that in this bill there are several principles which are very complicated and very frightening to us in the opposition. In making the proposal I thought we could obtain more clarification with regard to what the government intends to do, not just on the question of railway line abandonment but on the question of freight rates which has been a 30-year struggle in this country. It was on this question that I based my major concern to get some clarification from the government.
Since the government in its wisdom has decided not to accept the proposal, I would suggest that when the leaders of the parties have spoken today perhaps we could adjourn the debate until the next sitting of the house so that we could have two or three days to study the very complex bill that we have before us. I would hope, too, that the minister would use his time over the weekend to consider another proposal, namely, if we are to give effective opposition to this bill in a constructive way at the committee stage then, just as the minister admitted last night that the government has to go outside the country occasionally to obtain expert advice, I think the minister should consider giving all parties

September 2, 1966
Business of the House in opposition some sort of help and independent people we can draw upon to advise us on these very complicated matters. This proposal would involve the expenditure of money, which we in the opposition have no right to ask for, but if the minister would consider that as well as the other proposal I made I am sure it would be very helpful to us. I hope the minister will give my suggestions fair consideration.


John Whitney Pickersgill: If it is agreeable to other members of the house the government would be quite happy, after one representative of each party has spoken this afternoon, to adjourn the debate to our sitting on Tuesday to meet the suggestion of the hon. member. Since we do not sit until 2.30 on Tuesday afternoon, I would be glad to get certain of the officials together at a totally informal meeting where they could answer questions if any hon. members felt that answers to some factual questions would assist them in debating the measure more effectively and expeditiously. If this would be agreeable to the house I would ask our chief whip, after representatives of each of the parties have spoken today, to move the adjournment of the debate.
[DOT] (12:30 p.m.)


John George Diefenbaker: Mr. Speaker, I do not think the matter is quite as simple as it was represented to be by the minister when he said that the acceptance of second reading would not mean approval of any principle other than, as he said, the appointment of a board and the rationalization of the problem that faces western Canada in particular. I think there is much more than that in this bill. He said that some haste was necessary because this bill was interlocked with the bill which the house passed yesterday. He will recall that one or both presidents of the railway companies-certainly the president of the C.P.R.-stated that this bill gives nothing to the railway companies that they do not possess already.


John Whitney Pickersgill: For 1966.


John George Diefenbaker: Therefore this legislation will not meet the tremendous demands that will rest on the railway companies as a result of the legislation which parliament passed yesterday. As the minister knows, there are tremendous problems connected with this bill. He has given a great deal of study to it. Nobody knows better about that than a person with his responsibility.

I understand his difficult problem but the fact has to be faced that in addition to the two points he mentioned there is an immeasurably greater problem which is that unless great changes are made in this legislation the granting of freedom to the railway companies to be virtually untrammelled in the fixation of the amount of freight rates will intensify the discrimination against the maritime provinces and western Canada and will bring about an accentuated distortion of the inequalities of today. I know that no one would suggest that such a matter can possibly be tossed aside by the acceptance of second reading, and I think the minister has come up with a very good suggestion. He accepted what the hon. member for Qu'Appelle has said and after having heard the views of several parties he dealt with this matter at length and in a very capable way except when he discussed the Prime Minister's retractions or retreats. I could not quite understand why he brought that subject up last night. Aside from that he covered the situation in a way which I am sure all members of the house would agree was complete and thorough.
I believe, Mr. Speaker, that after having heard the representatives of the various parties express their views on this matter the adjournment of the house until Tuesday will have a dual effect, one being that we would be able to study the matter and the other that those who wish to return home for the week end will be able to take Hansard with them and study it while away from Ottawa.


Mr. Knowles:: Mr. Speaker, may I ask one related question? If we are making special arrangements regarding the number of speakers today, should we not hear from the minister and from the house leader what the government has in mind about the hours of sitting? For example, if we decide to take up something that will not require the full day, what will we be considering for the rest of the day? Maybe there is a necessity or desire for a cabinet meeting, in which case we might adjourn for the lunch hour.


Mr. Mcllraiih:: Mr. Speaker, in view of what has been said, and there have been some requests for this, I suggest that we rise at one o'clock for the regular lunch hour from 1 p.m. to 2.30 p.m., then resume the sitting and carry on until the debate is finished at which time we would follow the suggestion of the Minister of Transport and adjourn the house.
September 2, 1966


Mr. H. A. Olson (Medicine Hat):: Mr. Speaker, I just have one or two points to make. I also wish to receive the assurance of the minister on a point regarding the procedure he has outlined.
I want to say at the outset that with regard to our consideration of this bill I would have preferred the course outlined by the hon. member for Qu'Appelle (Mr. Hamilton). However, I am aware of the need for unanimous consent and of some other problems arising from the suggested motion which have been mentioned by the Minister of Transport.
One thing about which I am concerned is that the minister said the only principles we would be adopting would be whether or not there should be a transport commission and whether a railway rationalization procedure should be established. However, as has been pointed out there is a principle of equal and perhaps greater importance involved in this bill and that is the matter of rate-making. This principle appears throughout the bill. I ask the minister whether he could provide us with some costs to allow us to do some calculations regarding various commodities because the whole bill appears to support a cost-plus rate structure for all non-competitive traffic.
This principle permeates the entire bill. I therefore wish to ask for an assurance from the minister that we will not be prevented, either in the standing committee or when this bill returns to the house, from moving amendments which may turn out to be in violation of the principle that may have been adopted in these formulae. Even if we spend most of next week on it I am afraid members of this house simply cannot possibly understand what is meant by this new principle of rate-making unless some figures are supplied to us. If the Minister of Transport could give us an assurance that we will get some of these costs and also an assurance that he will accept reasonable amendments to what may be a new principle of rate-making even though we adopt the bill in principle on second reading, then we could agree to his suggestion.


John Whitney Pickersgill: I am happy to give the assurance, sir, that within the ambit of the bill itself the government, as I thought I said last night and, if not, as I intended to say, does not feel that all wisdom is contained in the bill, and any amendments that seem likely to improve the procedure will certainly
Proposed Legislation
not meet with our objection on any technical
grounds.


Horace Andrew (Bud) Olson: Will the minister give us his undertaking that we can get some of the costs on which the formula is based?


John Whitney Pickersgill: That will certainly be one of the elements.


Mr. Churchill:: Mr. Speaker, this is improper.


Mr. Speaker:: Is it agreed the house will suspend its sitting between 1 p.m. and 2.30 p.m.?


Some hon. Members:: Agreed.



NORTHERN AFFAIRS


Hon. Arthur Laing (Minister of Northern Affairs and National Resources):: Mr. Speaker, may I ask for the unanimous consent of the house to make a motion pertaining to additional authority being given to the standing committee on northern affairs and national resources?


Stanley Howard Knowles: What is it?


Gordon Minto Churchill: Put it on the order paper.


John George Diefenbaker: Let us hear what it is before we agree to it.


Arthur Laing: I am quite certain the house will find it agreeable. The motion is as follows:
That the standing committee on northern affairs and national resources, in addition to the powers granted to it on July 13, 1966 be empowered to obtain further information relating to matters and projects dealing with national parks and historic parks and sites;
That, for this purpose, the said committee be authorized to sit while the house is sitting or during adjournment of the house and to adjourn from place to place within Canada; and
That the clerk of the said committee and the necessary supporting staff accompany the said committee.


Mr. Speaker:: Is there consent to this motion?


Mr. Slarr:: No, Mr. Speaker.


Mr. Speaker:: There is no consent to the motion.

September 2, 1966
Proposed Legislation
[DOT] (12:40 p.m.)



MANITOBA-SASKATCHEWAN BOUNDARY ACT DECLARATION OF BOUNDARY LINE SURVEYED AND MARKED

Hon. Jean-Luc Pepin (Minister of Mines and Technical Surveys) moved: the first reading of Bill No. S-45 (from the Senate), respecting the boundary between the provinces of Manitoba and Saskatchewan.
Motion agreed to and bill read the first time.



SASKATCHEWAN-NORTHWEST TERRITORIES BOUNDARY ACT DECLARATION OF BOUNDARY LINE SURVEYED AND MARKED

Jean-Luc Pepin: the first reading of Bill No. S-46 (from the Senate), respecting the boundary between the province of Saskatchewan and the Northwest Territories.
Motion agreed to and bill read the first time.



MANITOBA-NORTHWEST TERRITORIES BOUNDARY ACT DECLARATION OF BOUNDARY LINE SURVEYED AND MARKED

Jean-Luc Pepin: the first reading of Bill No. S-47 (from the Senate), respecting the boundary between the province of Manitoba and the Northwest Territories.
Motion agreed to and bill read the first
time.



CANADA LAND SURVEYS ACT


Jean-Luc Pepin: the first reading of Bill. No. S-48 (from the Senate), to amend the Canada Land Surveys Act.
Motion agreed to and bill read the first time.



ADMINISTRATION OF JUSTICE


[Stage Direction]
On the orders of the day:
John George Diefenbaker: Mr. Speaker, I should like to ask the Solicitor General a question which arises because of the continuing interest, as
[Mr. Speaker.)
evidenced by correspondence received, in the Truscott case. When will this case come before the Supreme Court of Canada and, second, is provision to be made for Truscott to have available to him the evidence or at least the advice and counsel of an alienist or alienists at the expense of the people of Canada? I think it would be helpful and very beneficial if this could be provided.


Hon. L. T. Pennell (Solicitor General):: Mr. Speaker, the matter is now in the hands of the courts and I am sure no one knows better than the right hon. gentleman that it would be improper if there were any interference on the part of the Solicitor General at this stage. I am advised, and this is subject to confirmation but I believe it to be true, that counsel for Mr. Truscott has been in communication with the court on the matter, through motions, and they are working out a procedure to bring on the action at the appropriate moment before the Supreme Court of Canada.
The government has fulfilled its commitment to the house to arrange for the financial reimbursement of expenses incurred by counsel in the course of the defence. I believe the matter is well in hand. Mr. Truscott has eminent counsel representing him and it is my understanding subject to confirmation, as I say, that it is proceeding as agreed by counsel and the court.


John George Diefenbaker: When is it expected to proceed?


Lawrence T. Pennell: I understand it will be heard reasonably early in the new court term commencing this fall. This is a matter, of course, for the Supreme Court. Apart from that, I have nothing further to add except to say I am confident the matter will be dealt with in a manner in keeping with the spirit of justice.


John George Diefenbaker: So there will be no
misunderstanding, I was not suggesting any action before the Supreme Court. The matter is before the court. I was asking whether or not, as part of the financial responsibility of the department, provision is being made not only for the payment of counsel but also for necessary expenses for the provision of alienists and the like, if considered proper by counsel for the condemned man?


Lawrence T. Pennell: I appreciate the right hon. gentleman's natural interest and concern in the matter. It is my understanding Mr. Truscott now has two counsel, senior and
September 2, 1966

junior, assisting him. There was a meeting between officials of the Solicitor General's department, the Department of Justice and counsel to arrange the financial terms. 1 believe they are satisfactory to Mr. Truscott's counsel.



INQUIRY AS TO REPORT ON ASSISTANCE PROGRAM

[Stage Direction]
On the orders of the day:
Thomas Clement (Tommy) Douglas: Mr. Speaker, I should like to ask the Minister of Finance if it is his intention to table the Donald report on coal mining in Nova Scotia?


Hon. Mitchell Sharp (Minister of Finance):: Yes, Mr. Speaker, it is the intention to table this report. The government, however, has not yet completed its study. The report has been under study now for some time and when that study is complete the report will be tabled, probably accompanied by some statement from the government.


Thomas Clement (Tommy) Douglas: May I ask a supplementary question? Is it the government's intention to pay the $25 million for the stabilization of the coal industry in Nova Scotia before tabling the report or is this to be left until after the report has been studied?


Mitchell William Sharp: This is not my particular responsibility, Mr. Speaker; it is the responsibility of the Minister of Mines and Technical Surveys. I should like to say in general that it is my understanding the government intends to fulfil its commitment.


Thomas Clement (Tommy) Douglas: May I ask the Minister of Mines and Technical Surveys when some announcement will be made with respect to the $25 million for the stabilization of the coal industry in Nova Scotia?


Jean-Luc Pepin: Mr. Speaker, the last part of the sentence uttered by the Minister of Finance was really an answer. This will be part of the policy which will be announced. I might add to what he said by giving the reason the report cannot be made public before about mid-September. The necessary number of copies are not yet available, and when they are available the report will be made public.
Inquiries of the Ministry [Translation]



AGRICULTURE


[Stage Direction]
On the orders of the day:
Mr. Roland Godin (Porfneuf):: Mr. Speaker,
I should like to put a question to the Minister of Agriculture concerning the payments made directly by cheque to farmers with regard to the new milk price support program.
Could the minister tell us why the cream shippers are paid only every three months, since, regardless of the nature of goods received, whether it be milk or cream, processing plants have to report within the same period of time?


Hon. J. J. Greene (Minister of Agriculture):: I regret to say, Mr. Speaker, that we cannot indicate the period for which the cheques are issued. We have gone into this matter carefully and the data processing equipment and cheque issuing equipment just does not make this possible. We have tried every way to see to it that the cheque itself would indicate the period for which it was given, but we have found this is not possible. We are now investigating the possibility of at least issuing an annual statement to each farmer at the end of the year to indicate to him what period each cheque represented so that at least at the end of the year he would have some accounting of the cheques he had received.
With respect to the cream shippers being paid every three months, the difficulty is that up until this year cream shippers had never been registered with the stabilization board because they had received no direct payments from the government. Accordingly, it is taking some time to assemble the data from the various plants, and during this period the stabilization board feels it can only pay every three months. There is considerable difficulty in getting all the data from the various plants. I believe there are something like
265,000	farmers who are receiving payments. When the information is sufficiently complete and when our statistics are sufficiently complete, we hope that the three-month period for the payments to cream shippers will be improved upon and we will be able to pay more often than every three months.

September 2, 196$
Inquiries of the Ministry BRITISH COLUMBIA-ARDA PROJECTS IN KOOTENAY DISTRICT
On the orders of the day:


Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, I wish to ask a question of the Minister of Forestry. I apologize for not giving him notice but the matter has just been brought to my attention. Are any surveys being undertaken by officials of the minister's department or the Department of Agriculture in the famous Kootenays with a view to the development of an ARDA program at the present time?


Hon. Maurice Sauve (Minister of Forestry):: This must be the Canada land inventory, Mr. Speaker.



CONSIDERATION OF PROBLEMS OF INCREASED PRODUCTION COSTS

[Stage Direction]
On the orders of the day:
Mr. E. Nasserden (Rosthern):: Mr. Speaker, I have a question for the Prime Minister. Has the government under study the special problems posed in regard to farm income levels resulting from increasing costs of production, and when is it expected that legislation will be available to meet these problems?


Lester Bowles Pearson: Mr. Speaker, that is an important question of far reaching policy which will be announced in due course.



HOUSING


[Stage Direction]
On the orders of the day:
Mr. Heward Graffley (Brome-Missisquoi):: Mr. Speaker, my question is addressed to the Minister of Labour in his capacity of reporting to the house for Central Mortgage and Housing Corporation. In view of the fact it was reported yesterday that a controller in the city of Toronto said that city is facing a housing shortage more serious than that of the second world war, I would ask the minister whether the government is currently seriously considering changes in housing policy?


John Robert (Jack) Nicholson: Mr. Speaker, the question of housing in Toronto and in other parts of Canada is under continuous study by Central Mortgage and Housing Corporation, the Ontario Housing Corporation and other interested bodies. If there is to be any change in government 
policy it will be announced in due course, but I might say that none is expected in the near future.


William Heward Grafftey: A supplementary question to the minister. In view of the fact it has been reported that housing starts are down 26 per cent from the comparable period last year, can we expect this announcement in the very near future?


John Robert (Jack) Nicholson: Mr. Speaker, I said that I did not expect to make any announcement in the near future in connection with this matter.


William Heward Grafftey: Mr. Speaker, in view of the fact that wartime babies are now young married couples who are looking for homes, can the Canadian people not expect the announcement very soon?


Mr. Speaker:: Order. The third question is argumentative.



LOCATION OF ATLANTIC TIDAL POWER PROGRAMMING BOARD

[Stage Direction]
On the orders of the day:
Mr. Thomas M. Bell (Saint John-Alberl):: Mr. Speaker, I have a question for the Minister of Mines and Technical Surveys in connection with the recent announcement that the head office of the Atlantic Tidal Power Programming Board will be located in Halifax. May I ask the minister whether consideration was given to any other location in another area?


Jean-Luc Pepin: Yes, Mr. Speaker. Many eloquent representations were received but the decision was taken to go to Halifax. It was taken on technical grounds. My department already has an establishment there; computer services are available and transportation is a little easier.


Thomas Miller Bell: A supplementary question. Would it not have been better to have a location such as Saint John, which is closer to the area and would be more interested in this development than Halifax?


Mr. Speaker:: Order. I suggest that question too is argumentative.
September 2, 1966



NORTHERN AFFAIRS


[Stage Direction]
On the orders of the day:
Mr. R. J. Orange (Northwest Territories):: Mr. Speaker, I have a question for the Minister of Northern Affairs and National Resources. In view of the recent radio and newspaper reports that the Carrothers commission has recommended that Yellowknife be selected as the capital of the Northwest Territories, would the minister confirm or deny these reports? If they are true, is the minister now prepared to make known the other recommendations of the commission?


Arthur Laing: Mr. Speaker, Dean Carrothers presented me with a copy of the report the other day in addition to nine other copies. I and my department are in possession of all copies of the report. We have made no statement on the contents of the report, nor have I been asked to by anyone. It is not within my capacity to have any control over speculative stories, but this story is pure speculation.


Mr. T. S. Barneit (Comox-Alberni):: Mr. Speaker, I would like to address a question to the Minister of Northern Affairs and National Resources arising out of a question asked earlier by the hon. member for Northwest Territories.
I should like to ask the minister when he intends to bring an end to speculative reports about when the Carrothers report will be tabled in the house.


Arthur Laing: Mr. Speaker, I have told the house already it was my desire to table the report at once but that I was anxious also that I should be able to table the French version at the same time. We now are in the process of seeing whether or not we can obtain a condensed summary in French, in which case I think we will be presenting it to the house at an early date rather than wait for the full translation which may take six weeks.



INQUIRY OF THE MINISTRY

[Stage Direction]
On the orders of the day:
Mr. Gilles Gregoire (Lapointe):: Mr. Speaker, I have a question for the Prime Minister.
Inquiries of the Ministry
In view of the fact that the former premier of Quebec, Mr. Lesage, made a statement concerning the Labrador border and I quote from today's Le Devoir:
Only one last solution remains, military occupation.
Is it the intention of the government to set up an inquiry into the matter of the Labrador border or to prepare a bill such as we find on the order paper today, to determine the Labrador border as to what part belongs to Newfoundland and what part belongs to Quebec?



WHEAT-REQUEST FOR HIGHER INITIAL PAYMENT

[Stage Direction]
On the orders of the day:
Horace Andrew (Bud) Olson: Mr. Speaker, a few days ago I asked the Minister of Finance whether or not the government was actively considering increasing the initial payment on wheat and he replied that it was. Inasmuch as the Canadian Wheat Board has just begun or is about to begin the authorization of initial payments on wheat that has been delivered in the new crop year, can the minister tell the house whether or not there will be a change before the payments are commenced so as to avoid having to make retroactive payments?


Mitchell William Sharp: Mr. Speaker, this matter, which as the hon. gentleman said I mentioned in the house the other day, is under study as a result of representations received from various parties. These representations are not all on the same side and I do not expect that there will be an early decision.



TRANSPORT


[Stage Direction]
On the orders of the day:
Mr. Frank Howard (Skeena):: Mr. Speaker, I wonder whether I could direct a question to the Minister of Transport. Has he any information to give to the house about the proposed increase in tolls on the St. Lawrence seaway?


John Whitney Pickersgill: Not at the present time, sir.

September 2. 1966
Inquiries of the Ministry ADMINISTRATION OF JUSTICE



SUGGESTED CHANGE IN METHOD OF JUDICIAL APPOINTMENTS

[Stage Direction]
On the orders of the day:
Mr. R. W. Prittie (Burnaby-Richmond):: Mr. Speaker, I have a question for the Minister of Justice. Has the minister received from the Canadian Bar Association a report of the discussions and the resolutions passed at their recent convention concerning the appointment of judges and, if so, are they being studied by his department?


Hon. Lucien Cardin (Minister of Justice):: To my knowledge, Mr. Speaker, there has been no communication from the Canadian Bar Association, though I have been following their activities through newspaper reports. I can assure the hon. member that consideration will be given to this aspect of their deliberations.



FINANCE


[Stage Direction]
On the orders of the day:
Mr. Jack Davis (Coast-Capilano):: Mr. Speaker, I should like to address a question to the Minister of Finance. Has the province of British Columbia applied for financial assistance in the construction of a highway to cross the national harbour in Vancouver?


Mitchell William Sharp: No, Mr. Speaker.


John (Jack) Davis: A supplementary question. Can the same general principles which applied in the construction of the new bridge over the harbour at Saint John, New Brunswick, be applied in this case in Vancouver?


Mr. Speaker:: Order. That question is out of order.



AIRPORTS


[Stage Direction]
On the orders of the day:
Mrs. Grace Maclnnis (Vancouver-Kings-way):: Mr. Speaker, I have a question for the Minister of Transport. Has the minister received representations from the associated chambers of commerce of the lower mainland of British Columbia urging action on the proposed bridge approaches to the Vancouver international airport? If so, what action is he taking?


John Whitney Pickersgill: Mr. Speaker, I have received many representations about this very important matter, and I am giving it the most urgent consideration I can.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Mr. Jack McIntosh (Swift Current-Maple
Creek): Mr. Speaker, has the Minister of National Defence an answer to the question I asked him the other day in regard to aircraft carrying military cadets to Vernon, B.C.?
Hon. Paul Hellyer (Minister of National
Defence): Mr. Speaker, in reply to this question, no service aircraft has been identified as having been involved in any flight involving the transport of military cadets during which an emergency arose. My departmental officials advise me that the aircraft used to transport these cadets was operated by TransAir of Winnipeg under contract to the department. I presume that is the incident to which the hon. member was referring. TransAir has advised that the incident referred to is presumed to be that of a DC-6 on July 18, which 13 minutes after take-off from Winnipeg en route to Penhold returned to Winnipeg owing to excessive loss of oil in one engine.
In reply to the second part of the hon. member's question, there has been no evidence of deterioration in the quality of servicing and maintenance of aircraft in the R.C.A.F. On the contrary, a steady decrease has been noted during the past three years in the percentage of aircraft incidents attributed to errors on the part of maintenance personnel. I hope I said "decrease" the first time because that is what is in my script and that is what is in accordance with the facts.
Mr. Auguste Choquette (Loibiniere):: Mr. Speaker, I have a question for the Minister of Mines and Technical Surveys-


Gordon Minto Churchill: Mr. Speaker, I rise on a point of order. I have some questions to ask of the Prime Minister, the Secretary of State for External Affairs and Mr. Lee, none of whom is present. I think we should wait until 2.30.


An hon. Member:: They were here until one o'clock.
September 2, 1966


Mr. Speaker:: I am in the hands of the house. If the house wishes to continue the question period at 2.30, that will be done. It being one o'clock-


John Whitney Pickersgill: I wonder, in view of the arrangements that were made about the debate, if it would not be possible to sit for a few minutes more to finish the question period?


John George Diefenbaker: We want to ask some
questions.


Thomas Speakman Barnett: I have a question for the Minister of National Health and Welfare, but he is not here.


Auguste Choquette: Mr. Speaker, I rise on a question of privilege.
I had a question to ask before the hon. member and you had recognized me.


Mr. Speaker:: Order, please. Pursuant to the order made earlier this day the sitting of this house is suspended until 2.30 this afternoon.



SITTING SUSPENDED

[Stage Direction]
At 1.05 p.m. the sitting of the house was suspended.


[Stage Direction]
On the orders of the day:
Auguste Choquette: Mr. Speaker, I wish to direct a question to the Minister of Mines and Technical Surveys which will undoubtedly be of interest to the parliamentary correspondent of the newspaper Le Soleil.
Could the minister tell us if he has quite recently had talks with the premier of Quebec about the construction of a thermonuclear plant which is to be set up in Becan-cour, in the riding of Nicolet, and can he tell the house if the project will be carried out in the near future?


Jean-Luc Pepin: Mr. Speaker, both
governments have now formally agreed to that project and press releases to that effect are issued today in Ottawa and Quebec city. 23033-508J
Inquiries of the Ministry


Auguste Choquette: A supplementary question,
Mr. Speaker.
Can the minister tell the house if an agreement is expected between Quebec Hydro and the Atomic Energy of Canada and when it is to be signed?


Jean-Luc Pepin: As a matter of fact, Mr. Speaker, that agreement will now be put on paper, but what mattered most was to get the
two governments to agree.

Right Hon. J. G. Diefenbaker (Leader of
the Opposition): Mr. Speaker, because of the fact that the by-election in the constituency of Nicolet-Yamaska and the announcement made today are purely coincidental, may I ask the minister when the decision was made to build this atomic energy plant in that constituency?


Jean-Luc Pepin: Mr. Speaker, I think there were
three phases or three steps, if you want to put it that way. The first one was in May, 1965, if my memory is good. At that date there was an agreement in principle between the then premier of the province of Quebec and the Minister of Industry who announced it in the house.


John George Diefenbaker: When was that arrangement made?


Jean-Luc Pepin: In May, 1965.


John George Diefenbaker: What year?


Jean-Luc Pepin: 1965.


John George Diefenbaker: Oh, and you waited until there was the coincidence of a by-election.


Some hon. Members:: Oh, oh.


Auguste Choquette: We don't need that; we are sure to win.


Mr. Winkler:: You know better than that.


Jean-Luc Pepin: Then, the second step, in May of this year agreement was reached on the location, and now the third step, this is a report on the agreement between the two governments. The fourth step will be an arrangement or agreement between Hydro-Quebec and Atomic Energy of Canada Limited. I would dare say that the Leader of the Opposition should not be giving a partisan meaning to my announcement of to-day, because I am quite sure that the new premier of the province of Quebec will not be looking at it in the same light.

September 2. 1966
Inquiries of the Ministry


Some hon. Members:: Hear, hear.


John George Diefenbaker: Mr. Speaker, the agreement was made in 1965 and the announcement is made now. That is its own answer. I would ask the hon. gentleman-


Jean-Luc Pepin: On a question of privilege, Mr. Speaker-


John George Diefenbaker: I am asking him for the
answer-


Mr. Speaker:: Order, please. The minister is rising on a question of privilege.


Jean-Luc Pepin: I do not think the implication should be let go in that way. What was arrived at in May, 1965, was an agreement in principle-


John George Diefenbaker: Oh yes?


Jean-Luc Pepin: -and it was understood from the beginning that this agreement in principle would be followed by the necessary research-


John George Diefenbaker: I see.


Jean-Luc Pepin: -in order to find out if new improvements could be made-


John George Diefenbaker: Political?


Jean-Luc Pepin: -on techniques.


Mr. Speaker:: Order, please. This is not really a question of privilege. It is a matter of debate.


John George Diefenbaker: Mr. Speaker, I am sorry to bring up anything that is controversial. I would ask the minister this: What is the present position with regard to the Brinco agreement, and if the Brinco agreement is not signed what arrangements are envisaged regarding the electricity that will be produced?


Jean-Luc Pepin: Mr. Speaker, it is well known by constitutionalists-the right hon. gentleman knows this very well-that, notwithstanding the fact that the federal government has jurisdiction to intervene in matters of this kind, by convention the National Energy Board has never tried to intervene in matters of this kind between two provinces. This is the practice in the Canadian constitutional system. We have not been party to the negotiations and we are not at the moment party to the negotiations.


John George Diefenbaker: So far as the National Energy Board is concerned did the government not reverse its decision the other day

with regard to the shipment of gas by Trans-Canada?


Jean-Luc Pepin: The decision to reverse the decision of the energy board was not based on constitutional matters.


Mr. Speaker:: The hon. member for
Rosthern.


Auguste Choquette: Mr. Speaker, a further question to the minister-


Mr. Speaker:: Order, please. May I suggest that we go on to another question now. The hon. member for Rosthern.


Auguste Choquette: One last question to the Minister of Mines and Technical Surveys, who has been very kind to me. I was going to add whose smile is almost as graceful as that of the Minister of Finance..
I would like to ask the minister if he can give assurance to the house that the agreement which is to come about between Quebec Hydro on one part and Atomic Energy of Canada on the other part with respect to the erection of thermonuclear plants is in any way related to the fate of the proposed steel complex for Becancour?


Jean-Luc Pepin: Mr. Speaker, from the beginning, I believe these were two separate projects and they should not be confused.



CANADA ASSISTANCE PLAN


[Stage Direction]
On the orders of the day:
Edward Nasserden: Mr. Speaker, I wish to direct a question to the Minister of National Health and Welfare with regard to the Canada Assistance Plan and its application in the various provinces. Could the minister tell us whether he has had any complaints from the province of Saskatchewan with regard to the lowering of the standards of assistance under the new plan compared with what was said before the plan was passed?
September 2, 1966


Hon. A. J. MacEachen (Minister of National Health and Welfare):: No, Mr. Speaker, I do not recall receiving any complaints and I do not think there is a basis for any complaint on the grounds suggested.


Edward Nasserden: As a supplementary question, is it possible for a province to bring in regulations that would have the effect of making it more difficult for people to secure assistance than it was before the Canada Assistance Plan was passed?


Mr. Speaker:: Order, please. The hon. member is now asking for what is tantamount to a legal opinion, and I do not think the question is proper.



ADMINISTRATION OF JUSTICE


[Stage Direction]
On the orders of the day:
Gordon Minto Churchill: Mr. Speaker, my question is for the Minister of Transport who appears to be Acting Prime Minister, in I hope a very temporary capacity. I should like to ask the minister when the report of Commissioner Spence will be tabled in the house. I understand that the report unofficially has been in the possession of the government for some time.


John Whitney Pickersgill: Mr. Speaker, to the best of my knowledge the allegations of the hon. gentleman are untrue. The report has not been delivered to the government and therefore it would not be possible at this stage for the government to table it in the house.


Gordon Minto Churchill: May I ask a supplementary question, Mr. Speaker. I do not like to get involved in semantics, but when the minister says that the report has not been officially delivered to the government, would he tell us whether any copy has unofficially reached the hands of the government?


John Whitney Pickersgill: I do not believe any such thing has happened. Certainly nothing of that kind has happened to my knowledge.



TRANSPORTATION


[Stage Direction]
The house resumed, from Thursday, September 1, consideration of the motion of Mr. Pickersgill for the second reading of Bill No.
Transportation
C-231, to define and implement a national transportation policy for Canada, to amend the Railway Act and other acts in consequence thereof and to enact other consequential provisions.
Francis Alvin George Hamilton: Mr. Speaker, last night in my remarks on second reading of this bill, because of the possibility that we would be called to the other place I had time to make only one or two general observations in an effort to highlight what I think is the significance of the big change in the situation now from what it was at the time of the MacPherson report. Today I should like to develop my thoughts in a more sedate and orderly manner than was possible last night. In 1964 when the resolution in respect of Bill C-120 was on the order paper I had a discussion with various members of the government at which time it was intimated that the bill which was being introduced at that time was the bill of the previous government with some improvement. I spoke on behalf of the opposition and indicated general support of those principles. At that time I warned that when the bill was presented to us we would be very wary of it, but outside of that I think it can be said that generally I gave approval to the idea that now is the time to take a big new look at the whole question of railway legislation in this country.
In my speech on that occasion I outlined the history of railway development in Canada. I pointed out how in the course of time the application of flat freight rate increases across the country had affected the prairie areas and the maritimes. It was this unjust discrimination in rates that caused so much dissension in our country for so long, and as a government we were determined to halt it. We set up the royal commission on transportation in 1959. The fundamental job of this commission was to examine the whole railway structure in Canada in the light of the present development of our country in an effort to lay down ground rules so that the railways could operate efficiently in Canada and at the same time end this discrimination in respect of rates in various regions.
Those were the fundamental purposes of the royal commission on transportation headed eventually by Mr. MacPherson. In 1964 we were beginning to feel that the recommendations of the MacPherson report had to be modified because of the fact that they left up in the air any practical way of achieving the

September 2, 1966
Transportation
objectives of that report. In 1964 our attention was concentrated on the question of rationalization of railway management and operation primarily in the prairies where the greatest problems lay.
When the bill was produced in 1964 it was immediately very clear that the ideas we on this side of the house had were not being implemented. We had felt that if there was some way of getting the two major railways in western Canada to rationalize their efforts, then not only would there be more efficient railway transportation in the prairies but also the necessity of always claiming there were losses on the Crowsnest pass rates would end.
One of the greatest myths ever promulgated in this country is that the railway shippers in Canada are asked to subsidize the movement of western grain into world markets. This myth was finally destroyed last night when the minister accepted the proposition of no losses and said that is why they took the subsidies out of the bill. So at this moment I am speaking to those in central Canada who have lived comfortably all these years with the myth that they were subsidizing the movement of western grain into world markets. This has now been exposed as a myth. This is one of the points I wished to make.
In so far as the rationalization provisions of the 1964 bill are concerned, they failed because of a very simple fact. A rationalization board was set up and at the time the rationalization board was given no power to deal with anything. Therefore we had to point out that this was a complete farce from the point of view of trying to fool the people into believing that there was going to be a rational operation of our railways in western Canada.
Recommendations for the improvement of railway operations in western Canada have been made for over 30 years. Very few of these recommendations have been accepted. Many of us have come to the conclusion that until there is leadership provided by the government or parliament in directing the railways of this country, particularly in western Canada, to run on a rational basis they will not be run on that basis but will continue the inefficient practices that have been developed.
[DOT] (2:50 p.m.)
No one wants to go back and rehash the history of the railway companies in western Canada. Suffice it to say that the Canadian Pacific Railway, which first entered that area, over the years has developed what could be IMr. Hamilton.]
described as a reasonably efficient and integrated system. As a result of the enthusiasm on the part of the railway companies at the turn of the century and the ability of the prairie provinces to produce agricultural products they built railway lines all over the country. That is what precipitated the railway building spree. Lines moved in all directions. If one company built a line it was duplicated by another company, and we have had to pay for this situation for two generations.
This is the time to end this hodgepodge railway operation in western Canada. At this time when we are considering this legislation I am sure most of us agree that we desire forward progress and an end to this hodgepodge operation. The bill presented to the house in 1964 gave no power to the rationalization board to deal with this situation. Instead of rationalization all the board did was to turn over an application for abandonment to the Board of Transport Commissioners. Then traditionally, as always has been the case, the board accepted the railway figures.
Railway operational costing is so complicated that as yet there is no accurate system acceptable to experts. We had a bill before us in 1964 which turned over the whole question of whether a line would be abandoned, and whether the government or the taxpayers would pay a subsidy to keep the line in operation, to the board of transport commissioners. This was bad legislation because it only dealt with the question whether a line from point A to point B was paying or not paying and whether it should be abandoned or subsidized by the taxpayers. That did not provide an answer.
We intended that this rationalization board should have the power to look at each area of the prairie provinces where there was a duplication of railway services, railways running parallel for miles because they did not wish to use each other's lines, and decide whether there was an anomaly. We thought this board had the power to direct the railway companies to run these lines efficiently and within limits of ordinary common sense. We were convinced that once this took place there would be no railway line in western Canada that was not running at a profit.
In my speech in 1964 I made the proposal, even before I saw the bill, that we should divide western Canada into areas. The bill before us has accepted that principle. Since the bill of 1964 was presented our knowledge
September 2, 1966

has increased and the principles envisaged at that time are no longer the right ones. The concept of the bill now before us incorporates a better idea so far as lines in western Canada are concerned.
We are now aware that most of the railway lines in western Canada are not only economical but produce a profit because of the tremendous increase in transported goods in the last two years. That does not necessarily mean that the railways are now making money. Let us not allow these anomalies to continue because of the operation of unnecessary lines. We could reduce costs even more than they have been reduced in recent years and effect greater profits.
Last night I said I hoped the railways would use the potential increase in profits to purchase new equipment and to make railway employees' wages equivalent to those being paid in similar types of industry. For generations we have asked railway employees in this country to refrain from seeking to have their wages grow in pace with the country's wealth and in pace with other sections of the economy. During the last few years we thought the railway industry was dying.
The third general suggestion I made last night was that we expect the railways to make this major change in thinking as a result of which not only will higher profits result but better wages, better equipment and lower freight rates. When the railways eventually adopt the concept of expansion it will follow in a rational way that rates can be reduced, resulting in more business.
Having reviewed railway history in a minor way let me now indicate that during past debates and discussions of this situation I have tried to be helpful. This is the time we should think in terms of action based on straight thinking. Let me put on record some ideas which I think will help this house to think along these lines.
Bill C-231 is a much improved bill compared with Bill C-120 presented to the house in 1964. The minister deserves congratulations because he has tried to understand this very complex situation and has put into this bill wording which indicates that new concepts are developing. This is indicated by the measure now before us.
Having said that, Mr. Speaker, I must be honest and say I do not think it will help management, labour or shippers unless we propose ideas during this debate or at the
Transportation
committee stage which are practical and helpful. Before I attempt to do so let me remind the minister of what I said briefly last night. One or two principles embodied in this measure terrify me. The first relates to freight rates, and I will deal with that subject in greater detail in a moment or two.
A very real difference is developing in thinking regarding rationalization in order to remove the fear of western Canada about line abandonment. I am sure the minister knows the situation I have in mind. What are the new facts regarding this new concept? Railways are not declining as a mode of transport any longer. The change began in 1961. The one thing more than anything else which reversed that thought was the commencement of grain sales to China and other eastern European countries. Railways are no longer declining as an efficient method of transportation. It took some time after 1961 for us to realize that changes were taking place. Let me list some of the changes that have occurred.
[DOT] (3:00 p.m.)
I quoted these figures in a hurry last night and I should like to re-emphasize them. Using round figures, though I am sure the experts will not quarrel with them, as late as 1958 approximately 400 million bushels of grain were moved out of western positions. In the crop year just completed over 800 million bushels of grain were moved. The significance of these figures when applied to railway hauling can only be understood if one recognizes that the greatest part of the cost of running a railway is fixed. It does not make any difference whether no trains run or a great many trains run; there are certain fixed costs.
In my early days of studying railway economics we used to use the rough figure of 60 per cent or 70 per cent as representing the fixed costs of a railway operation. I have no recent figures but I hope to get them. If 70 per cent of the costs are fixed and you suddenly double the tonnage of goods being moved on the railway, the proportion of fixed costs drops away down and your profits rise tremendously. This can be demonstrated most dramatically in charts to show what happens to the cost per unit of freight hauled.
The movement of grain is in itself only a single fact in the new situation, but being such a large bulk product it is a very important part of our economy. Just a few years ago we in some parts of western Canada used to generate 20,000 or 25,000 bushels of grain

September 2, 1966
Transportation
per mile. Now in these same areas it is over
80,000	bushels per mile. A revolution has taken place in respect of this one item. Because of these facts we must make sure that in the parliament of our country we legislate on the basis of a growing, expanding industry and do not legislate to share the poverty of a dying industry.
The second point I want to make concerns the huge increase in goods that flow back from the central provinces into the prairies. This development has occurred in the last five or six years. We must recognize the tremendous number of dollars of new earning power that has poured into the prairies since 1961, first of all from the sale of the great quantities of unused and unsold grain and, second from the tremendous crops we grew in 1962, 1963, 1964, 1965 and, I trust, with God's help in this year 1966. These tremendous sales of grain and increased income have meant that a tremendous increase in purchasing power has poured into the central provinces and British Columbia. As a consequence our trains are carrying a tremendous back-haul of goods from the central areas of our country into the prairies. The importance of this situation is that when the railways are hauling goods both ways the amount of profit rises in a general ratio rather than in a direct line proportion. I wish I had the time and statistical staff to put before the house the extent to which this back-haul has grown in the last five years.
Third, Mr. Speaker, on the point that the railways are not a declining mode of transport I would refer also to potash, a new product. Potash is one of the three main fertilizers needed to keep our land productive in order to feed the people of the world. Potash is not needed for Canadian soils at the present time, at least, not in western Canada because our soils are too new and it will probably be a century before we have to use potash in order to restore the fertility of that land. But the great continents of the world, Asia, for example, where civilization has existed for 3,000, 4,000 or 5,000 years, need this product. The old continent of Africa needs it as do the newer areas of civilization in western Europe. South American and other areas with teeming millions are not as productive on the land as they should be and there is an increasing need for potash.
These vast areas of the world need the potash that is buried under the soil of the province of Saskatchewan and to some extent in Alberta and Manitoba. At the present time

our production of potash is approximately 2 million tons a year but by 1970, with markets that are already known, the need for potash exports out of the west coast will be at least 4 million tons, and certainly between 1970 and 1975 the export of potash from the prairies to the west coast alone will have reached 7 million tons. This is on the basis of known markets, and the figures I have quoted do not include any figure for China where 700 million people now live. By 1980 the population of China will be 1 billion people. In the south of that country they grow three crops a year. One crop has to be wasted in growing grain fertilizer in the form of clover. In the north of that country they grow two crops a year, one of which is used for fertilizer. Chemical fertilizing alone will increase production in southern China by a third and in northern China by half. Here we have a market in addition to the markets I have already indicated. This will demonstrate to the house the tremendous movement of bulk products in Canada to our coasts.
I am sorry I do not have any estimates for the movement of this product to the south, the eastern markets and the markets of Europe and Africa. I am only positive of one thing, that they will be there, and I am sure that unless we learn new techniques in the next few years, for a good while at least these products will be carried by rail cars. I know of the work being done in connection with pipe lines. However, in potash alone the demand is tremendous. The only way I can explain this sensibly and make it understandable is by comparing it with a product we all know, namely, wheat. Those who have seen the hundreds of railway trains carrying our wheat to market will realize that an equal number of trains will be required to carry potash and they will have an idea of the expansion that will take place in western Canada in this connection.
I have dealt with potash, Mr. Speaker, but I do not want to overlook the fact that products like sulphur, a by-product of our oil and gas wells, are now in great demand all over the world. I believe that just a year ago one million tons of sulphur went through the port of Vancouver. I would suggest that in this item alone there will be a tremendous tonnage in the future. We know that Japan wants our coal and that Japan and other nations want many of our mineral ores in concentrated form. We know there is a great demand in many parts of the world for our
l.p.p. fuels, butane, propane, methane and so
September 2, 1966

on. Although many of these fuels are carried in pipe lines, a great quantity is still carried by rail.
[DOT] (3:10 p.m.)
To give hon. members an illustration of the attitude on the part of railway management that we have to fight, I mention the Pine Point Railway. In 1958 the then prime minister of our country announced in Winnipeg a ten-point, over-all development program. One of these points concerned the building of a railroad to the south shore of Great Slave Lake. I well recall the laughs and mockery at that time. Some said it was a vision.
Let me relate to the house the significance of Pine Point not only to the development of new wealth in this country but to railway profits and operations. The Pine Point Railway runs for approximately 400 miles from Steen at the end of the Northern Alberta Railway.
The property at the end of the railway was owned at that time by a subsidiary of Co-minco which is in turn a subsidiary of the Canadian Pacific Railway. Naturally we went to the railway and asked if they would not co-operate in building this 400 miles of line to Great Slave lake in order to haul the lead and zinc from the vast volume of reserves to help us develp not only a needed resource but also to establish an economic base and platform on which we could develop the whole Mackenzie river basin. The attitude of the Canadian Pacific Railway is well known. They refused to take part in the building of this railway. As a result the C.N.R. built the line on the guarantee of the federal government and rates were set to make the hauling of the ore from Pine Point compensatory. I believe the C.N.R. got the hauling rights for that ore down to Calgary and the C.P.R. takes it over the mountains to Kimberley and Trail.
The point I am making can best be described by giving some of the rough figures which have appeared in the press regarding the value of that mine in the first year. The mine started to operate when the railway was completed in the fall of 1964. The first full year of operations was 1965 and I think the capital cost was roughly $25 million. The profits in the first year of $22 million were sufficient to pay off most of the capital costs of the mine in that one year. The year 1966 is not over and if I read the press correctly profits on the Pine Point mine this year are running at approximately $36 million.
Transportation
Here is my point, Mr. Speaker. This mine has risen in value because there was a sale for its products. Everyone was so involved with the glamour of rising stock prices that they forgot the tremendous importance to the railway economy of this movement of tonnage to the places I have named, which has made the whole fabric of railway transportation in western Canada that much stronger. It is quite clear that these mineral ores are not unimportant to the wealth of the country and to the wealth of our railways.
The second major fact I wish to emphasize is the need for more capital equipment on the railways. First of all we need more motive power to meet the expanding needs of the railways. Last year the C.P.R. leased some locomotives but now I think they should realize that what is required, with a rising demand for railway transport, is not a one-shot deal but that this demand will continue not only for transporting grain but many other commodities. We need this motive power to move a tremendous volume of goods faster and more efficiently.
We need to make use of modern technology, new grain cars and new ore cars. We still use cars with side loading for hauling grain. We started to use them in the last century and, by George, we are still using them. The building of artificial false doors, lining the cars with paper, loading the grain into the centre of the car and pushing it back require a tremendous amount of time. When the cars arrive at the terminal the same operations have to be repeated in reverse except for the fact that they have a few gadgets now to lift the grain car at each end.
I am simply suggesting that the modern type of grain car, which is open at the top, carries three times as much grain and can be dumped in a few seconds, as fast as the grain can pour out of the big opening, is one of the things that are necessary to decrease costs and increase the service to the shipper.
Another thing that we need is more new port facilities. This is in itself a whole new field. I have seen lakers on the Great Lakes carrying a million bushels of grain. They can now be unloaded in a matter of hours. Yet in some of our ports the operation takes four days. Shovels are still used to load or unload a million bushels of grain. I see in other places great boat-loading facilities and when I realize that we still continue to use the old techniques at our terminals I suggest, even though this is not dealt with in the bill, that what is needed among other things to make

September 2, 1986
Transportation
the railway system efficient is a complete revision of our port facilities. I suggest that this matter should be dealt with at an early opportunity.
To those of us who come from the prairies I say, without fear of contradiction, that we need a modernized country elevator system. We still use the same elevators that were used at the turn of the century. There is such a devotion to the old type of country elevator system in western Canada that it is hardly recognized that this method is costing the farmer 3 to 7 cents a bushel more than what he would be charged if we had a new system. This matter has a bearing on railway rationalization. Before you can ask the elevator companies to accelerate the building of a modern country elevator system you have to come up with a rational plan, not in 15 years but in the next year or so, whereby the companies can be told where these elevators can be built safely.
The third fact I want to put forward has to do with the question of rationalization which I have referred to once or twice before. I think I have made it clear that the government must lead and must act in this field. The bill says that the Commission may make recommendations to the railways. To me this is a waste of time. There is one section in the bill which can be utilized and which give the government power to clear up these points in a matter of two or three years. I say this power should be used.
Running rights are not new, and if I had to mention every single case in western Canada where foolishness in operation exists I would be here for many an hour speaking about it. Naturally one tends to pick the examples with which one is familiar, but when I think of some of the great areas of grain production in western Canada, the Goose Lake area, towns like Eatonia, Snipe Lake, Eston, Hughton, Forgan, Dinsmore and all the other grain towns through which a tremendous volume of grain passes, I do not need to be an expert in railway management to know that unnecessary cost is involved. The answer is so simple. For example, if we could get the C.N.R. to switch its trains to C.P.R. lines, go across the Outlook bridge and get back to the main line, that would be one case where a saving could be made. Rationalization was a new idea a few years ago but now it is a fact which we must accept. We can no longer let the railways dither and delay accepting efficient methods of operation. If we have to put up millions of dollars in subsidies for the

railways we do not want to see these subsidies used for inefficient operations. This is the main point I am making. This is a new factor, and we must accept this principle of rationalization.
[DOT] (3:20 p.m.)
Another factor is productivity. I do not know how many Canadians know it but in the last few years some 12 million or 13 million acres of land in western Canada have had the bush cut off, the stumps pulled up and the land broken to produce more grain. These 12 million or 13 million acres account for more good farmland than Ontario uses. This is what these so-called broken down, small bush farmers in the west have done in the last few years. It is a revolution in itself. All the economists, all the experts have been telling these smaller farmers that they are finished. They have been saying that you have to have a great, big farm. The farmers say, we homesteaded this land or our fathers or grandfathers did and we are not going to give it up. They have cleared the bush, broken this land and now they are able to produce crops quite easily so that now we have a production of 700 million bushels plus.
The point I am trying to make is that many lines that are up for abandonment are in these areas which were not heavy grain producers a few years ago. What little grain they did produce was used to feed live-stock. Now they are areas with tremendous surpluses. A few years ago when I was the minister in charge of the Wheat Board I used to think a three or four bushel quota would clean up the grain in these areas with smaller farms. We know now that these are areas with heavy surpluses of grain. Larger quotas have cleared the grain off the big farms which were supposed to be efficient. However, the little fellow is now using machinery just as the big fellow does. He is using fertilizer and he has new land. In addition, he has an incentive to produce which he did not have five or six years ago because he knows he can sell his grain.
This means we have a new factor to consider. Many of these areas were not considered to be big revenue producers for the railway but they are now large grain producing areas. This is a new situation which I have put on the record in some detail. We have to face the fact that there is a new situation. I was hoping this bill would have indicated a realization of these new factors which are not particularly secret. They are
September 2, 1966

well known. I hoped the bill would indicate a complete break with the philosophy of the past, namely, that the railways' share of the traffic was dropping from 60 per cent to 40 per cent and therefore we should ease their misery in their declining years. Instead we get a bill which, when we read the sections dealing with branch line abandonments, indicates the tortuous process we will have to go through in connection with the abandonment of lines.
If I may, I should like to take the liberty of quoting from the bill. The government is very kind to us. When lines are going to be abandoned posters are going to be put up all
over the place.


Thomas Clement (Tommy) Douglas: Death by inches.


Francis Alvin George Hamilton: It will be death by slow strangulation. I find one example on page 24
of the bill. It reads:
The company shall post in each station of the branch line to be abandoned under this section and keep so posted for such period as may be prescribed by the commission a notice of any order or direction under subsection (4) or (5) made in respect of that line.
If you read the other sections, you will find they are going to give us five years of living on borrowed time. I have one other example which is found on page 32. Reading this section is like drum-fire on our sensitive nerve ends. It deals with costs and claims and reads in part as follows:
(a)	post notices at stations served by the passenger train service; and
(b)	publish notices in any paper or papers circulating in the area served by the passenger-train service.
We are going to be the best informed of any people in the world as we go to the hangman's noose. I could not help but tell the minister last night that in my opinion this bill is a pessimistic one. All I have to do to give myself nightmares is to take all the applications for railway line abandonment, take a coloured pencil and put a heavy line along those lines in Alberta, Saskatchewan and Manitoba. It is the most frightening map at which you can look, particularly when you estimate the number of people who are going to be affected.
Last night, therefore, I made an appeal to the minister to see to it that the situation is not hopeless. In view of the facts I have just given we should take away this fear of abandonment. We should end the long drawn out process outlined in this legislation for han-
Transportation
dling abandonments. In addition, we should increase the efficiency of railway operations so they can make more money and I hope they use some of it to pay their men additional wages and reduce freight rates.
In order to make this possible we need, in addition to what we have in the bill, more than an oral statement from the minister that his intentions are to go even farther. I should like to see a written statement from the government setting forth government policy. The branch line procedures outlined in this bill add to the fear under which we have lived for the last number of years. There are doubts about the government in western Canada. A definite and clear statement of this kind, which we knew could not be changed, would clear away one of the issues dividing us in this house. It would get these abandonments off our necks. We are going to have a big enough fight on railway freight rates without getting into a fight about railway line abandonments. I know the government has been working on this matter and I should like to get a statement of clarification so that we can vote on the other principles contained in this bill. I do not want to go into all the details but I think the minister can guess what they are.


John Whitney Pickersgill: Rather easily.


Francis Alvin George Hamilton: The first thing we need is a declaration by the government that all applications for railway line abandonment in western Canada are going to be thrown out. The next thing would be to issue a list of lines on which the government would not accept applications for abandonment until 1975 or for about ten years. From the amount of use made of lines in western Canada not only for grain but for other bulk products I know the lines that will be on this first list. They will be the majority of the lines for which applications have been received for abandonment. I ask that those lines not only be taken off the list but be protected for ten years.


John Whitney Pickersgill: Would the former minister like to ask me now?
[DOT] (3:30 p.m.)


Francis Alvin George Hamilton: I have one more statement to make and then I will ask the question.
The third thing I want is an undertaking in this written statement that a plan of this kind will be undertaken in the form of a consensus arrangement in the sense that we will all know now the lines that will be considered

September 2, 1966
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for abandonment. Then members in this house will know how they are affected. If there is general agreement on this, then they can go forward. The ones on which there was going to be debate could go through the procedures outlined in the bill and we are prepared to accept those long procedures. Let us remove this fear of abandonment from the minds of so many thousands of our western people. My question to the minister is this. Will he consider giving an undertaking in writing to remove these applications entirely, to list the lines in relation to which no applications will be considered, and will he let us know which lines will be in doubt, so that we can begin to get down to making decisions?


John Whitney Pickersgill: Mr. Speaker, the hon.
member is awfully good to let me intervene at this point to answer his question, and I appreciate it very much. I saw the presidents of the railways this morning, but for another reason. I took advantage of the meeting to ask them whether I might be permitted to say that on the very day on which this legislation passed they would withdraw all their existing applications for abandonment on the prairies, and that they would revise their applications in the light of the decisions made by parliament and put forward in the legislation, not as it stands at the moment necessarily but as it emerges from the committee and is passed by parliament. I was given the authority of the presidents of the railways to say that that would be done.
In other words, all those applications which are in suspension, none of which is being proceeded with, will be withdrawn on the day the legislation is completed. I think it is only fair that they should wait until then, because they would prejudice their own position if they acted and if we did not proceed with the legislation.


John George Diefenbaker: Would they be refiled the next day?


John Whitney Pickersgill: They would only be filed on the basis of what parliament decided in the legislation which was passed.
To answer the hon. gentleman's second question, I thought I indicated in a general way last night-but I think I can be a little more specific in reply to his question-that I hope to get the approval of my colleagues to some of these things, though not perhaps before second reading because this week has not been an easy week to conduct deliberations with them. However, the government
[Mr. Hamilton.)
has already decided in principle that a network of railways in western Canada will be guaranteed as essential for a period of years.
Just as soon as it is possible for me to give the details I will give them to the house or to the committee and make them public. I will also give the date before which no applications under any procedures for abandonment will be considered on this essential network. As the hon. gentleman has said, I think that will accomplish the second purpose.
The inference to be drawn from this, of course, as all hon. members will realize, is that those lines which are not included in the guaranteed network will therefore be candidates for abandonment by whatever system parliament decides on. However, I think that that means that even a lot of those lines may not necessarily be abandoned. Some of them will not. However, they would not be guaranteed for the relatively long period suggested by the hon. member, or for some other similar period.
In respect to the new procedures for abandonment, I hope it will be agreed that the priority should be given to those lines that carry the least traffic, unless they are situated in an isolated area, are the only form of transport and are required there. But speaking generally, those lines carrying the least traffic will be the ones considered first.
I think that if these procedures are followed, then most of the fears that the hon. gentleman and I well know do exist in western Canada will be removed very quickly. I would be hopeful that something very like the consensus suggested by the hon. gentleman would be reached. I do not expect that we will get everybody to agree; we never can. But I think that we would make very rapid progress in this field; at least, that is my hope. I am very grateful to the hon. gentleman, as I say, who has given a great deal of study to this matter, as we all know, for giving me the opportunity to agree with him.


Francis Alvin George Hamilton: Mr. Speaker, I want to say at the outset that the second point of the minister's statement is the key one. You have to give this guarantee in advance that for ten years, say, no more applications will be considered in respect to those lines.


John Whitney Pickersgill: That is right.


Francis Alvin George Hamilton: If we are given that by the government, then I think we have achieved a great deal today.
September 2, 1966

I want to clear this matter away, because if we can handle this question in the way I think it is going to be handled, then we have all served our constituents well. However, there are still the major issues which I said were concerning us, and the issue which I touched on last night I have to deal with first. This is the question of costing.
Costing is the key to the second principle enunciated by the minister this morning. He mentioned that we should accept as a first principle that there should be a "superboard". He mentioned that he thought we should accept the principle that there should be subsidies paid for things done by the railways in the national interest which were non-compensatory as far as the railways were concerned. That is all very fine, but who decides what are the costs before we pay them? On this costing-


John Whitney Pickersgill: Would the hon. gentleman permit me to ask him a question?


Francis Alvin George Hamilton: Well, will you make it brief.


John Whitney Pickersgill: Yes. Does he not think that inevitably on the part of the government there will be a more direct and immediate interest in this matter than there has ever been in the past? Because these subsidies would have to be paid by the Minister of Finance out of the treasury, and obviously he is not going to accept anybody else's costing, except the costing of the government.


Francis Alvin George Hamilton: This is the very argument I wanted to make, but I would ask the minister to let me complete my remarks.


John Whitney Pickersgill: I apologize.


Francis Alvin George Hamilton: September 2, 1966
Transportation
railways and there is no need for the subsidy for that.
The same thing could apply when we come to look at passenger services. We will have to pay subsidies for passenger services which lose money, but which costing figures will we use? The minister says we will use the government's costing figures, but in the past, the government has gone to whom? It has gone, and it goes to the Board of Transport Commissioners. And what figures does the Board of Transport Commissioners use? It uses the railway's figures; so that you might as well not bother with that procedure. I am simply saying that we have a responsibility in this legislation to give some sort of directive to the transport commission which would indicate some guide lines for them to follow in deciding which costing procedure we will start with. We ought to be laying down the procedure, which they can change as they learn more from year to year. As the board gets more and more staff members, who are experts in this business, it will be able to compete with the railway economists and with the railway accountants. There may be better ideas from other quarters of the house, but I do think that on the question of costing and costing procedures the new board will have to be directed for a few years yet by parliament.
I want to add one more point to what I have said about costing. Two years ago I suggested that we should look at each of our areas in western Canada, by areas. Now I think we should make it clear in this legislation that we are going to look at the prairies as a unit, and that the railways will have to prove loss on the prairies rather than on individual lines from point A to B. All the way through this bill you see this business of costing your losses on the basis of having a starting place and a finishing place on a line. This is what sends us up the wall. At the very beginning of section 314, dealing with the matter of lines, it refers to-
-the costs incurred by the company in any financial year thereof in the operation of the line and in the movement of traffic originating or terminating on the line,
And it goes on to say: over
(ii) the revenues of the company for that year from the operation of the line and from the movement of traffic originating or terminating on the line:
This business of determining that the loss will be the loss from point A to point B means that the taxpayer is helpless, because we have no way of ascertaining for sure what 
the costs and revenues with respect to that line are, except by accepting the railway's figures. Therefore, to get away from this trap that is in the legislation, when considering these lines that are up for possible abandonment I think we should look at the whole thing on an area basis, and the area should be the whole region. It must be remembered that these lines that are above the marginal level in their generation of grain shipments add to the profit of other sections of the line. It is when we forget this, that we could fall into a trap, as legislators, if we accept this definition of costing in the bill. When we use figures with respect of point A and point B, what do we know? What are the real losses? We are in a complete trap and at the mercy of the railway accountant.


An hon. Member:: That applies also to the costs of operating.


Francis Alvin George Hamilton: That is what I said. We can look at the revenue figures, but unless we have some way of costing, we are completely helpless. Therefore, adopting this principle in the bill of taking point A to point B, in my opinion at least, is bad. We cannot allow the taxpayers to be robbed, on a principle such as this. The only fair way to do it is to put the whole area together.
We will co-operate in getting rid of lines which are not necessary. Fortunately, there are not too many of these now. But when the matter is all rationalized, and operating, we will not give the railways a single cent until they do the things we want. In other words, there is no subsidy and no help until they rationalize their operations in all these areas, as the government directs them to. And if this rationalization procedure is not acceptable to the railways, there are no subsidies, period. That is the only language they will understand, and that is the only way to get these things done.
When I see a section such as the one I have referred to, I have to warn the house and I have to warn the country that we are turning ourselves-that is the taxpayers of this country-over to the hands of the railway accountant. This we cannot allow.
The next subject has to do with the super board. We have had three boards before, handling aeronautics, rail and water. Now we have a board that handles rail, air, water, motor transport-I suppose that includes buses as well as trucks-commodity pipe lines, and other things. Bridges do not come under the board, but are administered by the Department of Public Works. The theory is
September 2, 1966

that by having one board, or with supervision at the top over the five sections of it, we will be able to co-ordinate things better. This theory sounds good, but all sorts of questions come into my mind.
In the past all these boards have tended to operate purely on precedent. The precedents of one board however, are isolated from the precedents of other boards. In the period in between, when there will be this adjustment to a super board, I presume the tendency will be for the board to accept the precedents from the original three boards. To my mind this might be a good opportunity to hear from various hon. members of this house as to how they feel, or as to how parliament feels about laying down some guide lines and some terms of reference, so that this super board will know what we feel about certain things.
Let us take an example. Over and over again in this bill is repeated the fact that every rail rate charged to the shipper shall be compensatory. The bill says that the railways cannot charge a rate which is less than the variable cost. This is an out-of-pocket affair. We will not let the railways charge less than it costs to transport certain goods. That sort of provision is primarily put in as a protection to truckers. But now that we are going to take over interprovincial trucking we will have to deal with the truckers to work out some of the arrangements for their freight rates. What is the attitude of the house about setting rates which are below trucking costs? What control can the board have over this when, at the present time, this is up to the provinces.
I think this is a question that should be looked into. If the interprovincial truckers come under federal legislation, and if we are going to turn over to this super board, the power of running this whole country, this is the time when parliament should lay down the terms, limits or directions for this board to adopt. I should put this in the form of a question, because quite frankly I have not come to any conclusion of what we can do on that score.
But I do say that if we are going to force the railways not to go below a certain price or charge, and if we are going to take over air transportation and trucks, we should be careful in co-ordinating tariff rates.
The next question, that of passenger services, is a subject on which many hon. members will have much to say, and many ideas to express. Under the proposals in this bill
Transportation
the railways are going to be allowed to abandon passenger services on the basis of cost, and if we as a parliament or government decide that they must continue passenger services for the national interest, then we are going to pay 80 per cent of the losses.
The first question I ask is, who is going to do the costing on that? But beyond that there is a bigger question. Today the C.N.R. railway management holds to the view that there is a future in passenger services in Canada, and is doing all it can to get passengers to ride the C.N.R. When passengers get on C.N.R. trains the management does everything it can through its staff to make travel as comfortable and friendly as possible. Here you have a railway management and staff all pulling together to get people to ride on their railway. But when you go from the C.N.R. to the C.P.R. it is just like going from a nice warm pleasant bath to a cold frigid shower, because apparently at the top level of the C.P.R. they have decided that they do not want passenger service, and by various means they have got this philosophy through to some members of their staff, with the result that the most frightful things happen to you on the C.P.R.
[DOT] (3:50 p.m.)
You can phone up for a reservation and they say, "Oh, we cannot get you a reservation for days, weeks or months." The first two or three times you get fooled by this, but then you walk down to the station, walk on to a train and take a chance that you can con the sleeping car conductor into getting you some accommodation. Then finally, when you get into the sleeping car you find it is half empty.
When you say to the conductor, "There is something funny going on; I have tried for days to get a reservation," he usually replies, "I don't know anything about that. All I know is, there's a lot of space here." On three occasions this last summer I was unable to get space on a C.P.R. train, but I took a chance, walked on, and every time I found any accommodation I wanted.


John Robert (Jack) Nicholson: Mr. Speaker, would the hon. member permit a question. Would he be interested to know that a C.P.R. train left Toronto this morning without a single pas-enger on board?


Stanley Howard Knowles: Now who is striking?


Francis Alvin George Hamilton: I think my point is well made. I believe it should be pointed out to

September 2, 1966
Transportation
the C.P.R. that if they want to abandon all their passenger services, we realize we cannot force a railway company to haul passengers. We cannot force them to be nice to their customers if they do not want customers, but we do have a right to say that we want running rights over the C.P.R. lines so that the C.N.R. can carry passengers and give somebody some service.
While speaking on this question of passenger service I must say that I have seen morale decline among C.P.R. employees. I have seen morale decline on the express services. I cannot understand, and neither can the railway workers understand what management is trying to do. Here is a railway company that over the years has served Canada tremendously.
Coming from a C.P.R. family myself I know of days when the C.P.R. was tough and hard, and the employees were proud, as rail-waymen, to work for a tough and hard company. If a man made a mistake he got some black marks, some demerit marks; but the men did their best to get the odd merit mark. They were proud of a railway that was rated as a crackerjack railway. But now when you talk to railwaymen on the C.P.R. they do not know how to explain this new management attitude.
This is a problem that affects the efficiency of the company and we have a right to bring it to the attention of the C.P.R. If they want to get out of passenger services they should do it in an honourable and open way, and let arrangements be made for the other fine to carry passengers over their rails. These are questions which other hon. members will raise in this debate.
Turning to the question of commodity pipe lines, to my knowledge Canada at the present time has not got a single commodity pipe fine. Oil and gas are covered under the national energy legislation, but apparently the government proposes to bring this new type of operation under the transportation board. I think the logic is good.
When you look at the bill you see the government has included some sections of the National Energy Board Act, to protect Canadian ownership and management, and I suspect this is the only place in the bill where it is proposed to give power to the government to direct. It does not direct the railways, trucks and air lines, but people engaging in commodity pipe fines are going to be

directed by the government. I think the reason the cabinet's courage got so high is that there is at present nobody to direct.
Are we just to set up a framework of technical regulations? What are the terms of reference under which we want this section of the board to operate? For example, how are charges going to be set on commodity pipe lines? Whether you like it or not, Mr. Speaker, a pipe line is a type of monopoly, and a type of monopoly must have some control over charges.
Are we going to use the principle laid down and accepted in the oil and gas industry, namely that the charge must be such that the maximum return on capital is 7J per cent. Are we going to allow this 7J per cent based on a rate base system, a combination of equity and bonding debentures? What are the terms? I ask, has not parliament the duty to see that something is done in this respect, that something is laid down much more clearly respecting the guiding of these commodity pipe fines for the protection of the public, and so that the companies can operate efficiently and rationally?
I said last night that as a person who is very friendly to the concept of railways I have long hoped for the day when railways would go into all types of transportation, such as air and water. Now pipe lines are going to become a bigger and bigger part of the transportation picture and the railways, in order to keep themselves fully competitive and integrated, should be one of the first types of companies to move into commodity pipe fines.
If more and more of the goods of the country are going to be hauled by pipe lines, then the railways should be planning now to set up pipe fine companies either as subsidiaries or separate entities. Sometimes I think it would be best for the two companies to work together, although this creates a monopoly. If they do not get into this field, transportation revenues will pass away to competitors and once again the industry will go into a decline.
We have all heard about the studies presently being conducted into the movement of grain through a commodity pipe line. Other hon. members are more knowledgeable than I with respect to the technical terms, such as the slurry technique and the capsule technique, but certainly within the next decade grain, potash and wood chips, which were once heavy bulk products handled by railways, will be handled by pipe fines.
September 2, 1966

The contention that I am putting forward now is really none of my business. I cannot force the C.P.R. and the C.N.R. to go into the pipe line business, but I think we should let those companies know we in this house feel that they should be looking to this new form of transportation in order to keep themselves alive and competitive. I would even go so far as to suggest they should consider not only commodities carried by pipe line, within the definition of this bill, but also the question of oil, which we shall have to consider within the next few years.
[DOT] (4:00 p.m.)
There is another point in this bill about which I am very worried. In the old bill we had clauses on agreed charges; now they are out. This is another reason I was completely pessimistic as I read the bill. The agreed charge section is out. What is the agreed charge section? This is a section which allows the railways, when building a market, to charge a rate which is not compensatory, because they know that at the end of three, four, five or six years the market will develop to such a point that they will be in the black. You cannot develop a country, particularly in the mining and wooded areas, unless in the first stage there is a loss period.
The railways now are forbidden to open up a new area like this, if this section is out. I may be wrong, but as I read this section it seems to me it has disappeared. I can refer to it at page 49. I see the Minister without Portfolio (Mr. Turner) shakes his head. It says:
The heading preceding section 349 and section 349 of the said Act are repealed.
The note says:
This section permits the board to authorize special rates for specific shipments between points not being competitive points, to develop trade or to create business, or for the advantage of the public interest, if not otherwise contrary to the act.
As the clause says, it is going to be repealed; and as the explanation of the clause stands, I can only take it that the section is out. The agreed rate system can be helpful; only if it is hurting anybody else in opening up an area is it not helpful. We know that the minimum rates are compensatory; it is repeated again and again in the act. It is for the protection of the trucking industry. The maximum rate control provisions in this bill are the same as they were in 1964. The clauses in respect of the captive shipper are lengthy. Many people think they are adequate, but frankly I know that some will
Transportation
debate the details of the captive shipment
principles. I will leave that to the experts.
What I should like to wind up with, and express in the strongest terms, is that under this bill I do not see an end to the discrimination in rates. In looking at page 51 of the bill under the part headed "traffic, tolls and tariffs", I find that it reads as follows:
381. (1) All tolls shall be just and reasonable, and shall always, under substantially similar circumstances and conditions with respect to all traffic of the same description carried over the same route, be charged equally to all persons at the same rate.
That sounds wonderful, but there is one thing left out. What about region to region? This is where I need the help of persons who are extremely qualified in interpreting this. To me this reads that, in respect of an article going over the same route, any person buying a similar article in the same area gets the same rate. Suppose I live in Saskatchewan, that this rate applies only from Toronto to Sudbury and I want to get the same type of goods from Winnipeg to Saskatchewan. All the people in that area get the same deal under this section, but it may be anything at all compared to the rate from Toronto to Sudbury or vice-versa. The way this is written I do not see anything but regional discrimination again.
What has been the policy all down through the years? This is what the fight has been about. As the railways needed more money, from the thirties on, they applied freight rate increases all across the board-10 per cent, 12 per cent, 17 per cent. They obtained authority from the Board of Transport Commissioners to apply this all across Canada, but they never applied it all across the country. They applied it only in the areas where there is no competition. In the main, these areas were the maritimes and the prairies. The same discrimination applied in areas of northern Ontario and northern Quebec, but the only thing different about the northern areas of Quebec and Ontario in relation to the maritimes and the prairies is that no one in these areas has fought for these people; that is the reason they never heard much about it. This discrimination, however, has been consistent. Every time the railways wanted more money, up went the rates. Naturally we look for a clear explanation. Goods of the same sort carried the same distance should be shipped for the same price whether in Saskatchewan, New Brunswick, Ontario or British Columbia. That should be the principle; we have fought so hard to get this principle accepted.

September 2, 1966
Transportation
I am only a layman and others may have an interpretation which will clear this up, but unless I am misreading the bill, this principle is not contained in it. I have to tell the minister that in spite of his remarks this morning I cannot vote for the second reading of this bill until this point is cleared up. This is the reason that yesterday I made the appeal that we do not have this debate on second reading. I do not want to stop the good sections of this bill because of the things with which I do not agree; but this is all fundamental to our economic well-being. I do not wish to turn over to the railways the right to say that one area will develop and another will stagnate. Being extreme in my views, it seems that a railway could decide to ship goods from Winnipeg to Brandon at such and such a rate, and at a different rate from Winnipeg to Kenora. One town would have high rates and all the people in that area would have high rates, while all the people in the other area would have low rates. I have spoken to a good many people who feel as I do, and this is the interpretation they put on it. This is the reason I have no choice but to fight as hard as I can and as long as I can. This is a battle we have had for 30 years and it must be cleared up in a manner satisfactory to all.
I appeal to all parties in this house, not only on the opposite side, to realize that this is the key, the real issue. We can resolve the question of railway line abandonments in western Canada. But the point on which the country is dependent is that there will be equality in carrying a certain amount of goods a certain distance and that the rate should be the same in any part of the country. That is the main contention that I put forward. I am not going to deal with the matter of the maritime freight rates or the grain rates; they are protected for two or three years.


John Whitney Pickersgill: No; indefinitely.


Francis Alvin George Hamilton: 
Mr. Turner:: Mr. Speaker, I rise on a point of order, without exercising my right to speak. The hon. member for Qu'Appelle referred to me when he was talking about agreed charges which are covered in section 16 of the Transport Act. This section has not been affected at all, consequently clause 61 of the new bill does not relate to agreed charges. I wanted to make that point clear at this stage.


Thomas Clement (Tommy) Douglas: Mr. Speaker, Bill C-231, an act to define and implement a national transportation policy for Canada, is one of the most important pieces of legislation to come before this parliament at this session, because it has overriding implications regarding the Canadian economy, and its growth and development. The house agreed to waive the resolution stage of the debate and consequently there

September 2, 1966

are a great many details with which we are not familiar. We did not have the opportunity of questioning the minister to obtain clarification of a great many points. As a result I have some trepidation about entering the debate. There are quite a few points in this bill about which I am not at all clear. Since that fact did not deter the Minister of Transport (Mr. Pickersgill) from taking part I see no reason why I should allow my modesty to keep me seated. I am just pulling the minister's leg of course, because the minister is very well informed about this subject and displayed that fact by his excellent speech last night, without a single note. He was operating under a terrific handicap, expecting momentarily that the house would be summoned to the other place. He reminded me a bit of Wellington who, during the battle of Waterloo, is supposed to have taken out his watch and said: "Blucher or night". The minister seemed to have made his speech with the thought: Usher of the Black Rod, or adjournment.
The Minister of Transport made a very informative and witty speech, but I thought he would likely get into trouble as the result of his statement that the Prime Minister (Mr. Pearson), as usual, was going to have to backtrack. There is an old saying that many a true word is spoken in jest, but let me remind the minister that this kind of witticism from a minister might get him summoned to the other place.


John Whitney Pickersgill: Surely the hon. member is not imputing motives in making that observation?


Stanley Howard Knowles: The hon. member regards
that as a fate worse than death.


Thomas Clement (Tommy) Douglas: I also thought the minister's remarks about newspaper editorial writers in the city of Toronto had a somewhat bitter note.


John Whitney Pickersgill: No.


Thomas Clement (Tommy) Douglas: The minister took very strong exception to an editorial which appeared in the Globe and Mail under the heading "Can Politics be Kept out of Transportation". I think the minister was a bit hard on that Toronto newspaper editorial writer. This probably resulted from a guilty conscience because of the extent to which politics has entered the administration of transportation in this country.
Transportation
The minister made a very informative speech with respect to the machinery and techniques which will be set up under this legislation. I was disappointed that I did not have the feeling that the minister was outlining a national transportation policy with which this house could be fully seized. I felt that the minister was unfortunately vague on the matter of policy. He began by saying that one could not take politics out of transportation. I should like to quote what he said as reported at page 7989 of Hansard:
I hope the day never comes when some editor in some ivory tower in Toronto is able to take politics out of transportation.
In one respect I believe there has been too much politics in transportation.


John Whitney Pickersgill: Mr. Speaker, I am sure the hon. gentleman is not attempting to misrepresent what I said. I said exactly what he is now saying. There are two kinds of politics. One is the kind that all of us who have any self-respect in this house are proud to practice, while the other is the kind which editorial writers seem to have on the brain and which I would describe as a dubious kind of conduct which is not confined by any means to politics.
[DOT] (4:20 p.m.)


Thomas Clement (Tommy) Douglas: I was about to say that part of the sorry mess transportation is in at this time has been in large part due to the shenanigans that have gone on among railway promoters and politicians. In that regard, as I shall show later on in my remarks, I think the sooner we get politics out of transportation the better it will be for Canada. When the minister says that we must have politics in transportation I take it he means we cannot have transportation in this country without government control and direction. I am completely in agreement with that suggestion. One cannot operate a transportation system in the same way as one operates a soap factory or an automobile assembly line. A transportation system cannot be operated merely on a profit and loss statement. A transportation system, particularly in Canada, has certa'n very definite functions to perform. As the minister said last night, transportation has been the life line of Canada. Here we are, 20 million people spread across the American border stretching for some 4,000 miles, with a depth varying from 200 to 300 miles in the settled parts of our population. We have a straggling, sparsely settled population that must be linked by adequate transportation

Transportation
services. From the time Canada was born transportation has been the main consideration of the governments that brought Canada into existence and have conducted its affairs in all the years from then until now.
There are few countries in the world that are so dependent upon transportation. We are dependent upon transportation because such a large part of our produce has to find its way into world markets. There are few countries in the world where the people spend such a high proportion of their per capita income on the transportation of goods and people. Consequently for nearly 100 years transportation has been a matter of national policy and could not be conducted in the way one would conduct an ordinary business of manufacturing or mining.
One of the principles that has had to be followed is that a transportation system must get our primary goods, as well as our manufactured goods, to world markets at competitive prices. This is why we have had such things as the Crowsnest pass agreement, to allow the farmers of the prairies to get their grain into world markets. This is why we have had various subsidies to enable Canadian manufacturers and primary producers of minerals, pulp and timber to get their goods into world markets.
In addition to that, national policy has dictated that Canada had to develop its great industrial potential in central Canada. This is a fact that is sometims forgotten. We often meet people who tell us how much assistance has been given to the people of the maritimes and the people on the praries in the way of various subventions, subsidies or fixed shipping rates. But it is equally true that part of our national policy has been directed toward bringing raw materials to the great industrial complex of central Canada as cheaply as possible, and to bring fuel to central Canada. That is why we have had subventions on coal from the maritimes into central Canada. It has not been merely to enable the maritimes to sell coal but to given central Canada cheap fuel. That is why we have given assistance in putting gas pipe lines through to central Canada. That is why we have special rates on shipping feed grain from western to central Canada, to enable the farmers of central Canada to fatten their cattle for market.
I am not complaining about it, but I am simply pointing out that part of the national policy for decades has not only been to allow primary producers to get their products into world markets at competitive prices but also

September 2, 1966
to help central Canada by giving them raw material's, feed grain and fuel at the lowest possible cost. The result of this, of course, has been to produce a freight rate structure that is a veritable nightmare. I had the privilege on two or three occasions of appearing, along with the late Hon. Angus Macdonald, the former premier of Nova Scotia, and the late Hon. J. L. Kalston, before the federal cabinet to appeal freight rate decisions of the Board of Transport Commissioners.
I think anyone who has tried to study the freight rate structure will agree that the longer you study it, the less you know about it. The freight rate structure is like the peace of the Lord; it passeth all understanding. But the fact is, of course, that we have learned to live with it. I think it can be improved. I think the discriminatory features need to be removed. I believe we should look very carefully at this bill which, while it may take some of the anomalies out of the freight rate structure, introduces an entirely new principle which could be dangerous in the extreme; because as I see this legislation it is designed to let competition solve our major problems in transportation. It is designed on the thesis that the competitive forces of the alternative modes of transportation will be effective in preventing exploitation of the shipper, and any abuse on the part of those who are in the transportation business. This was stated very clearly by the minister last night at page 7991 of Hansard when he said, referring to the MacPherson report:
But the basic approach of the report was a new one. It was that there has been a development of alternative and competitive modes of transport in most parts of the country for most classes of travel, and that the kind of regulation of railway charges and practices by a regulatory body which may have been needed in the past was no longer essential for the protection of the public.
Mr. Speaker, that is a very debatable contention. I am afraid that in making that statement the minister let his free enterprise bias influence his judgment.


John Whitney Pickersgill: Mr. Speaker, I am sure the hon. gentleman does not want to be unfair to me. That was my interpretation of what was said by the MacPherson commission, as he pointed out at the beginning of his statement.


Thomas Clement (Tommy) Douglas: Yes, and I am assuming, of course, that the minister agreed with the position of the MacPherson commission and that this legislation is introduced to implement the recommendattions of that commission. All I am saying to the minister is that
September 2, 19G6



the thesis that there are now sufficient alternate modes of transportation to provide enough competition that the public will be protected, without the kind of restrictions which have existed in the past, is extremely debatable.


John Whitney Pickersgill: Mr. Speaker, I wonder whether the hon. gentleman would mind if I stated it the way I should like to state it.


Thomas Clement (Tommy) Douglas: Mr. Speaker, the minister-


John Whitney Pickersgill: I am simply objecting and saying that I am being misrepresented by the hon. gentleman, and I know he does not want to do that.


Thomas Clement (Tommy) Douglas: Mr. Speaker, I do not object to the minister's jumping up and down, but he has a very bad habit of doing this. Our speeches are punctuated with his jumping up and down. I asked the minister a question last night and he said he did not want his train of thought interrupted. I kept looking for the train. I thought there was a strike on because the rails seemed to be comparatively bare. The minister did not want to be interrupted, and I do not want to be interrupted. Neither do I want to misrepresent the minister. Let me read the next paragraph:
[DOT] (4:30 p.m.)
Habits die hard. It has been very hard to get through our heads the idea that this has become true, and if we do not make a real effort of imagination it will be hard to appreciate the fact that many regulations which in the past were necessary in the public interest have simply become shackles in the present.
Surely that is clear. The minister has a perfect right to his opinion. I am not saying he has not; I am simply saying that the minister's thesis and the thesis which came out of the MacPherson report recommendations is that we now have sufficient alternate modes of transportation to give enough competition in this country to safeguard the public interest, without many of the restraints and restrictions which have existed hitherto. I say this is a debatable contention. I became doubly suspicious of it when I saw that the moment the MacPherson report was issued and the moment the government indicated this type of legislation, not only in this bill but in Bill C-120, which the minister introduced on September 14, 1964, it was hailed with glee by the presidents of both the big railways. When they begin to rub their hands in glee I always think that anyone who is concerned about the public interest and about safeguarding the pockets of the shippers of
Transportation
this country had better take a second look at the proposition which they are lauding to the skies.
I ask the house to look for just a moment at this thesis.


John Whitney Pickersgill: Mr. Speaker, I do not like to seem to be popping up and down, and I apologize to the hon. gentleman, but if he is going to make a reply to my thesis I wonder if he would mind my putting in the part he left out of it. I said half a dozen times since this subject has come up that there are areas where there is a monopoly, and wherever there is a monopoly regulation is needed just as much as it was ever needed. However, there are other areas, and they are expanding, where there is effective and economical competition. It is in these areas that many of the regulations that were needed in the days of monopoly appear to me no longer to be needed now. If it is stated that way, I will be very happy to have it debated.


Thomas Clement (Tommy) Douglas: I have no objection at all. As
a matter of fact I was going to deal with these very points and will do so if the minister would just possess his soul in patience.
I want to ask in the first place: Where will this genuine competition exist? What are the alternative modes of transportation that will provide the competition so as to keep rates at a reasonable level? The argument is immediately put forth that the trucking industry will provide this kind of competition in some parts of Canada. And yet the fact remains, Mr. Speaker, that both the large railways in Canada have been acquiring large trucking operations, that they are already operating interprovincial trucking firms in this country, and that many of the trucking companies in Canada are just waiting to get a lucrative offer from either of the railroads. As the railways move into the trucking business- and I do not blame them for doing so; they would be very foolish to stay with only one form of transportation-which they have done and will do in increasing measure, where will the competition be then? Will the shipper have the choice between shipping by the railways or shipping by trucks owned by the railways, or maybe eventually by pipe line owned by the railways? We will be leaning on a broken reed if we depend on competition to keep transportation rates at a price that is fair and reasonable to the shippers who want to get their goods to market at competitive prices.

September 2, 1966
Transportation
Second, what about the areas where there are no alternative forms of transportation? The areas in the maritimes, in northern Quebec, northern Ontario and on the prairies will not have alternate modes, and large parts of these regions cannot have a trucking service that is independent from the railroad. These regions will not have the kind of competition which would keep rates at a reasonable figure. What alternative will the shipper on the prairies have, one who wants to ship livestock over long distances, or the potash and the mining companies? What about the lumber companies and the pulp and paper companies of northern Ontario and Quebec?
The maritimes will have some protection for two years, but they too have always faced this serious situation, which we also have in western Canada, that whenever the railway companies have been given permission to raise the rates it has been the Atlantic provinces and western Canada which have borne the brunt of those rate increases. I cannot see anything in this bill that will give any guarantee of protection to the shippers of these areas.
If the government is going to take the
wraps off the railroads, it will be able to get more money, which it claims it needs. I have very strong fears that the areas from which they are going to get that extra money are western Canada, northern Ontario and Quebec, and probably later on the maritime provinces.
In the television address which the Prime Minister delivered over the national hook-up on August 23 of this year he said this to the
Canadian people:
Necessary increases in wages oi the railway workers since 1960 have on three separate occasions, been met by government subsidies to the railways. Such subsidies are now costing the taxpayers of Canada $100 million a year. The government cannot continue to provide subsidies to pay railway workers without imposing higher taxes. This we are not prepared to ask parliament to do.
We do, however, intend to ask parliament immediately to pass transportation legislation based broadly on recommendations of the royal commission on transportation. This legislation will give the railways greater freedom to adjust their charges to meet competition and increase their earnings. Therefore, it should enable the railways themselves to bear the burden of a legitimate increase in wages.
This legislation, as hon. members know, called for the steady reduction of that $100 million annual subsidy over a period of eight years.

Where will the railways get this extra money to reimburse them for the loss of a $100 million subsidy and to enable them to pay increased wages? We may speculate on whether or not it is fair to have a subsidy which is paid for by all the people of Canada or else say to the railways: You can get this money instead out of levying higher freight rates on those areas of Canada where the competition places you in a position of monopoly.
[DOT] {4:40 p.m.)
I greatly fear that the removal of restraints and restrictions on railways with reference to freight rates will mean that certain regions of Canada, those I have already named, are going to pay the shot and that some of the burden which heretofore had been borne by all the people of Canada is going to fall upon those areas of Canada which can least afford to carry this burden. Certainly the maritime provinces cannot afford to carry it. They will have a couple of years of grace, but we do not know what will happen after that. Certainly the northern part of Ontario and Quebec cannot carry it. Already the prairie provinces are paying freight rates that are much higher than those paid in other parts of Canada, and they should not be called upon to carry this extra burden. If there had to be extra money for the railways, surely that is a matter of national policy. The funds to provide that extra revenue ought to be provided equitably by all parts of Canada and not the parts of Canada that at the present time are less prosperous and have less industrial development than other parts of this country.
The fact is, Mr. Speaker, that I do not believe that free enterprise and the competitive system of transportation can give Canada an adequate transportation policy at a price we can afford. There may be countries where they can afford to have all sorts of free enterprise and competition; different forms of transportation and different companies competing with each other, duplicating services. However, in a country of 20 million people where, as I said before, we are more dependent than probably any country in the world on getting our goods to market over long distances at competitive prices, where we spend more per capita on transportation than probably any other country in the world, I do not think we can afford the luxury of having a free enterprise, competitive transportation policy.
September 2, 1966

September 2, 1966
Transportation
task of getting people and goods from point A to point B, and the best way to get them from the one point to the other. We should have thought of integrating all forms of transportation so that one form of transportation would complement the other rather than duplicating it.
Every hon. member who has travelled across Canada knows that railway lines sometimes run close enough together that one could throw a baseball from one set of lines to the other. There is endless duplication. I can take members to places where two sets of transcontinental lines and the trans-Canada highway all run within sight of each other, and all are used as a means of hauling similar goods. There has been no co-ordination and no integration because we have thought in terms of separate modes of transportation rather than in terms of a single transportation system that would move goods and people from one point to another.
What I should like to see in this legislation is not just a commission set up, but a Canadian transportation authority clothed with the power to begin to integrate and to co-ordinate all forms of national transportation in Canada, so that we will be able to eliminate the wastefulness, duplication and overlapping which we cannot afford in a country like Canada, if we are to convey our goods to world markets at competitive prices without having to subsidize their carriage out of the public treasury.
I think this probably means that such a transportation authority would have to begin with the integration of the two railway systems. Instead of having some of the ridiculous anomalies which were pointed out by the hon. member for Qu'Appelle (Mr. Hamilton), and which I need not repeat, such as going 100 miles north and then 100 miles south again rather than switching on to the other company's line, examples such as this which can be duplicated at various points across Canada should be eliminated. It does not make sense not to have these railway systems integrated, certainly as far as passenger traffic and freight are concerned.
I think that the day will undoubtedly come when these two railways will have to be integrated as part of a government transportation system. By that time the railways themselves will probably be operating a good part of the interprovincial trucking system.
I think that a national transportation authority will have to move into the field of pipe lines for moving solids. Because if it
tMr. Douglas.]
does not, and if the public transportation system is to operate railroads and allow some free enterprise promoters to operate pipe lines, we will be back to the old situation of the government owning the most costly form of transportation and allowing private enterprise to make a lot of money out of other forms of transportation.
I am not hopeful that the government is going to be sufficiently farsighted that it is going to move as fast as I would like it to move. I want to tell the government that if it does not do this the day is coming when some government and some parliament will, in the not too distant future, be compelled by the pressure of economic events to take all of our national transportation systems and weld them into a single public utility. I think that is inevitable, and it would be far better if this were done right away.
One good thing about the minister's bill is this-


Mr. Deputy Speaker:: Order. I must advise the hon. member for Burnaby-Coquitlam (Mr. Douglas) that the time allotted to him has expired.


Gordon Minto Churchill: Carry on.


Thomas Clement (Tommy) Douglas: I was interrupted a few times, Mr. Speaker, but if I may have a few minutes more I can finish.


Mr. Deputy Speaker:: Does the house give unanimous consent to allow the hon. member to continue?


Some hon. Members:: Agreed.


Thomas Clement (Tommy) Douglas: One good thing about the minister's bill is that it does propose to set up this Canadian Transport Commission which, while it has no power, has some regulatory authority and will do considerable research into the various forms of transportation. It is a first faltering step, and it will at least provide the framework within which this government or some other government, if it has the courage, will be able to build a genuine national transportation authority and eventually to establish national transportation as a public utility.
Therefore, I hope that this first faltering step which the government is taking will be followed up very quickly. I am convinced that this government or the government that succeeds it will find that in a few years this transport commission, because of its lack of power and authority, will not be able to solve
September 2, 1966

the problem. If the house does not at this time give that commission some power and put some teeth into the bill, then some subsequent parliament will be compelled to do so, after we have lost valuable years and very large sums of money.
In his speech on September 14, 1964, the minister said that this legislation was revolutionary. Well, we have heard of the quiet revolution, and we now have what I would call the timid revolution. It is a very tepid revolution. It is a move in the right direction and will bring the various forms of transportation at least under regulation. It is a start. But I hope that before the committee to which this bill is being referred reports back, it will give very serious consideration to putting some real muscle into this act so that the Canadian Transport Commission will become an authority, not merely a regulatory body.
I would urge the committee of the house to which this bill will be referred to think of transportation for Canada in terms of the last quarter of the twentieth century and the first quarter of the twenty-first century, rather than in terms of the nineteenth century. If transportation was vital to the economic life of Canada 100 years ago when the fathers of confederation began to dream of binding Canada from sea to sea with a ribbon of steel, how much more vital is it today in a world that is shrinking so rapidly, a world where it is absolutely essential to move goods cheaply and quickly if we are to retain our place as one of the great trading nations of the world.
The minister is right when he says that transportation is Canada's life line. If that transportation system is not efficient, if it does not provide service as cheaply as possible, if it does not free itself from wasteful duplication, then this country will suffer the economic consequences of our neglect and of our lack of vision.
[DOT] (5:00 p.m.)
I trust, Mr. Speaker, that when this legislation goes to the committee of the house it will get a full and complete revision, not in the light of past experience alone, but in the light of the great changes which face Canada in the future.


Horace Andrew (Bud) Olson: Mr. Speaker, at the outset, when the Minister of Transport was introducing this bill into the house, he made some point about politics in
Transportation
transportation. I think he went on to define the different meanings in the word "politics".
First, I should say that I appreciate the interpretation or connotation that the Minister of Transport put on the word "politics", and with the connotation that he used with respect to politics in transportation I agree. In spite of all attempts by editorial writers, and so on, across the country during the past two or three years in particular to degrade politics and politicians generally, we still must recognize that it is the politicians, particularly in this house, who stand between the government and the governed. That essentially is a noble function. It is also true that those politicians who have been maligned and degraded stand between the monopolistic interests in the country and the people of the country. Here again they perform a noble purpose. This purpose I think is being served reasonably well by politicians.
The Minister of Transport also commended to the members of this house the first clause of the bill defining a national transportation policy, and asked us to read it. I have read it. While it is very short, certainly no one can disagree with the objectives outlined in that brief statement.
Having said that, Mr. Speaker, we go on to read the rest of the bill, and we find outlined in the balance of the bill the ways and means of achieving the objectives that have been outlined in the statement of policy. I do not think the Minister of Transport would be critical if I suggested that there could be wide disagreement on the ways and means of giving effect to these objectives, so far as the other clauses are concerned.
Similarly, Mr. Speaker, as I look over the bill, those remarks might apply so far as the new transport commission is concerned. I agree with some of the other statements which have been made, that it is a step in the right direction. Although I will not cite cases today, the very fact of air routes and railway lines having been referred to different boards has had the end result of denying certain communities in Canada adequate transportation from either the one form of transport or the other. I hope that there will be an improvement in co-ordination so far as the public interest is concerned, when the new transport commission is set up, and I hope that the board will consider all modes of transport, so far as the over-all requirements of each community are concerned.

September 2, 1966
Transportation
We have to examine in great detail the powers and duties of this new transport commission. As I look over some clauses of the bill I find that there are differences between
powers that appear to be assigned to this commission and the powers that the existing
Board of Transport Commissioners has had in the past. I am not going into detail, but I
should like to quote one example. We have had what might be termed a long standing
traditional right that any shipper could go before the Board of Transport Commissioners
and plead discrimination-discrimination in his own individual case, so far as rates are concerned, and as those rates applied to his own personal or corporate business. That provision was contained in section 317, I believe, of the old Railway Act. The provisions appearing in the new bill, defining the powers and duties of the new Canadian Transport Commission, are such that an individual shipper will have to prove, before his case can be valid, that the discriminatory rates he is charged, if you want to call them that, affect the public interest. I hope this will not be the case, because, surely, some small corporation or individual should not have to go before the transport commission and prove that the public interest is being damaged because of a rate being charged to him. Yet that is what the new act seems to provide.
The long standing tradition to which I have referred is something that shippers have valued and used for many, many years; namely the privilege of being able to go before the Board of Transport Commissioners and prove that there was discrimination against them in relation to other shippers of a similar kind, with the result that a railway company could be ordered to change its rates and remove the discrimination. That sort of thing appears to have gone, as I read this bill.
Talking in the same vein, in the bill before us there is no definition of the words "public interest". During the course of his political career I know the minister has probably used the words "public interest" thousands of times. I have used them, and I expect every hon. member of the house has used them. But what do they mean, so far as railway rates are concerned? They are not defined in the bill. Do they mean that an individual shipper who ships, say, for 500 miles or for smaller distances from his point of origin must prove that something affecting him has to do with the public interest, affecting the people from

Bonavista to Vancouver Island? That is an
unreasonable condition. The reason I raise the point now is that we are discussing the principle of a new railway act. That long standing tradition that a shipper might apply to the board, pleading discrimination so far as rates are concerned, has not been incorporated in this bill. I hope the minister will correct this deficiency, and perhaps something can be done by way of suggestion or amendment in committee which the minister will be prepared to accept.
[DOT] (5:10 p.m.)
I am not going to speak more about the transport commission, except to say I think there is some value in co-ordinating supervision over all the modes of transportation that come under federal jurisdiction, so that there will not be a withdrawal of vital services by one mode, and then by another, leaving communities without adequate service by any mode.
The bill also makes provision to deal with commodity pipe lines. As the minister said, this is something we shall probably have to be concerned with in the future. It is not a major problem at the moment. It is not even a major factor in our economic structure at the moment, but it is probably good to consider it and have something in the statute so that we may have a starting point when problems arise.
Another part of the bill deals with motor transport. It constitutes a very timid move, and this is probably good because for the most part the provincial governments are responsible for motor transport. After all, provincial governments have built most, in fact almost all of the highways, and therefore moving into this field timidly and gently is probably a good thing.
Another provision allows for transfer of responsibility for bridges from the Board of Transport Commissioners to the Department of Public Works. I do not think it is of any particular concern which department handles them, so long as it looks after the public interest.
So far as railway rationalization is concerned, I was pleased to hear the Minister of Transport say that at the outset they are going to establish a minimum grid system of railways in the prairies. The provincial government of Alberta, which has the same political affiliation as my party in the house, has been asking for this for a long time. At this point I do not know whether the grid
September 2, 1966

system to be established will be completely satisfactory to everyone involved. As the minister said, most likely it will not, but at least a start will be made on it.
Before dealing with the rate making provisions, which are probably the most important part of the bill, I wish to deal with the principle which claims that the transport commission ought to have greater power to direct and control all modes of transport, so that over-all transport policy is directed by the commission.
In my opinion it is a fallacy to argue that an appointed board, no matter how competent the appointees may be, is in a better position to direct all transportation policy for Canada than a number of individual groups and companies who are trying to move goods, people and commodities in Canada at the lowest possible cost, in order to do well by their companies. I do not buy the argument that it is better for an over-all authority to give directives and have complete control. Experience has shown that this has not proven to be the case in other areas. Of course, because of the nature of our geography, there are cases of monopolies, and in that instance there is justification for some government control.
The possibility, indeed the probability of change in rate making envisaged by the bill is the most important feature of it. At the outset in discussing this particular subject I want to say that all this talk about freedom to make rates, to lift ceilings, and to give the railroads freedom to make the kind of money that they need to operate and pay wages to their employees, and so on, is a farce. I say that, because on less than 5 per cent of the total commodities and goods now being shipped is the ceiling rate charged.
The railways have argued that until the government frees them from freight controls, permitting them to operate competitively, their hands are tied. Only this summer in the prairie provinces there has been a general increase of 3 per cent on most goods rates, and they are still not up to the ceiling. Therefore I think we should dispel the fallacy that the railways hands are tied.
The other night the president of the Canadian Pacific Railway said on television that this bill does not give the railways anything that they did not have before, so far as money and earnings are concerned. I have to agree that it does not, except that there are certain provisions in the bill to allow the
23033-509J
Transportation
rate ceiling to be lifted. Even now the railways have plenty of room to raise rates to the ceiling. It is not a valid argument that parliament has held down and controlled rates up until now. But where the railways have no competition, no effective competition, in some cases their rates are already raised to the permissible ceiling. However, I think it can also be shown that where they are charging the maximum they are also getting the costs, plus-and in some cases unreasonable rates over costs. This is one of the things about which we are very concerned.
I would ask the minister to get for us from the railways some of their costs of moving commodities, so that we can calculate what the rates would be if, under certain clauses of this bill, the costs plus formula is going to be used. I have reason to believe that it will be somewhat difficult to get this information from the railway companies, but it is absolutely essential that we get it in order that we can make our own calculations.
It would be absolutely hopeless to try to understand the principle of this rate making formula unless we have the basis from which it is going to start. So far we do not have it. I would hope the minister would stand up in the house, stiffen his back, throw out his chest and say: We will get those costs. He should not say: We will try to get those costs, but rather that he is going to get them, so that we can do our own calculations.
[DOT] (5:20 p.m.)
I should like to know, for example, how much it would cost to ship a 30,000 or 100,000 pound carload of fertilizer from Medicine Hat to Vancouver and from Calgary to Winnipeg. I should like to know how much it would cost to move a 70,000 or 100,000 car of potash from a certain point to Vancouver and how much it would cost to move a 100,000 pound or 70,000 pound car of steel to Edmonton. I should like to know how much it would cost to move steel, fertilizer, sulphur, or farm machinery and so on, 500 miles. We need to know these things.
The other night when I asked this question, because I made the mistake of trying to relate it to a captive shipper the minister asked me what I called a captive shipper. A captive shipper is defined in the act, of course, in words to the effect that it is where there is no alternative, effective and competitive service. With regard to farm machinery, for example, I suppose it is possible for motor transport to move a piece of farm machinery from Hamilton to Calgary. Does that remove

September 2, 1966
Transportation
it from coming under the definition of "captive shipper", because it is physically possible in some cases to ship in this manner


John Whitney Pickersgill: May I ask the hon. gentleman a question. The definition I do not think says "physically possible or theoretically possible", does it?


Horace Andrew (Bud) Olson: No; it does not say "physically or theoretically possible"; it says "alternative, effective and competitive."


John Whitney Pickersgill: Exactly.


Horace Andrew (Bud) Olson: We have been faced with the argument that while there is an alternative mode, perhaps it is only carrying 5 per cent. That is very practical proof that there is 90 or 95 per cent being carried by rail, despite the fact that it is possible, and so on, for it to be delivered. I still think that falls almost in the category of a captive shipment; yet it might be a little difficult to prove by the wording that is there.
In any event what I am asking is that we get the costs in respect of certain commodities, because at the present time we do not know these costs. When you look at the formula which was advanced in the old bill, although this formula has been changed a little in the new bill, I think you will find that it is essentially the same. For the purposes of this bill it is the Canadian Pacific Railway with which we are concerned in the matter of costs, because this is the standard which is going to be used, and it will apply to the other railway companies. They are not going to use the costs of the Canadian National Railways.
In the bill it states that the cost used will be cost plus on the basis of the C.P.R. costs. At the present time these are not made available. Therefore, we find we have to use some of the costs which are published in the United States. The Interstate Commerce Commission publishes these costs in respect of some commodities. In the bill the basis which is spelled out is that which is related to a 30,000 pound car, and then you establish a cost plus from that basis. Yet, we know very well that some of these same things move in 120,000 and 140,000 pound cars and that the railways, under this bill, could charge as much as 800 per cent over cost. We know that the average size of car which is being used is not a 30,000 pound car. It seems to me it is ridiculous to base it on a completely unrealistic size of load. If the cost plus is 150 per cent and you base it on a 30,000

pound car, you get the cost of moving a
30,000	pound car, but if you move four times that much weight in a car with a similar additional cost, then you get these enormous increases in cost.
Mr. Speaker, we again urge that the Minister of Transport and the government reconsider this basis for calculating the costs, because it seems to me the most realistic thing to do would be to base it on the actual cost in categories of perhaps from 30,000 pounds to 40,000, and another above 50,000 pounds, and then another above 80,000 pounds and so on, rather than base it on the cost of moving a 30,000 pound car.
Well, Mr. Speaker, at the moment our hands are tied. We hope we can obtain this information in committee. We do not yet have the information we need in order to do the necessary calculations so that we can find out what this will amount to when it is reduced to dollars and cents. There are other differences in rates which are completely incomprehensible and which do not seem to be provided in the bill. Why, for example, does it cost more to ship from Vancouver to Toronto than it does to ship from Toronto to Vancouver when moving exactly the same thing the same distance and in the same car. We do not understand why there is not a provision that once a rate is established for a certain commodity and a certain route it would apply both ways.
The bill does not seem to make provision for correcting these things. I should like to say, Mr. Speaker, that there are some improvements in our whole national transportation policy as a result of this bill. We hope the bill can get to the standing committee on transport and communications as soon as possible, because I think there would be some futility in having a protracted debate in the House of Commons until the minister and his officials are prepared to give us additional information, so that we know what all these words mean. We wish to know in dollars and cents what some of these things will amount to when the calculations are made.
So, Mr. Speaker, I will close now in the hope that this bill will go to the committee. However, before I conclude I should like to suggest to the minister, and to the house particularly, because I know the minister does not have full control of this matter, that while we have perhaps a little more urgent responsibility and a little more pressure upon us, because of things that happened this week and last week, to get a new railway act, that
September 2, 1966
we do not try to rush it through the committee. We would hope that it would get the attention and study which it deserves.
[DOT] (5:30 p.m.)
I think it is fair to suggest that it is necessary for all interested parties to have at least a three week period to consider this bill and present a report. It is a long and complex subject. Hon. members should have an opportunity to study it and then collect their thoughts. I know there will be a great deal of pressure to get the committee started. I hope the pressure will not be such that we cannot give this bill the consideration it deserves.
In closing let me make one other point, and I may say that I hesitate to refer to this at this time. I am haunted by a suspicion that this dispute between the railway companies and the railway unions was partly prompt-ed-and that is perhaps a harsh word-by the railway companies in order to put pressure on parliament to pass this bill. During the eight months prior to December, 1965, and even before that, until the strike took place there was really no serious attempt made by the railway companies to negotiate with the unions. The companies made no reasonable offer at all, nor was any indication of any offer made public.
I do not like this kind of pressure put on members of parliament as a result of power politics, if that is what happened, to force us into passing rapidly this new railway act. As I said, I have been haunted by the suspicion that that is what happened, because during the past few months there have been indications that a strike was imminent. Everyone apparently knew that a strike would take place; yet during that time the railway companies claimed their hands were tied until the government passed legislation necessary to allow them to increase revenues in order to meet the union demands. The companies complained about competition and the inability to compete, using this as a reason for not being able to meet demands for higher wages.
Transportation If competition has prevented them from making bigger profits in order to pay higher wages, that is one thing; but the companies should not blame the government or parliament for not moving to free them from an unfair position.
I do not intend to say anything more at the moment. I am sure we will have a very useful and constructive discussion at committee meetings. We in this party have a number of suggestions to make and I hope the minister will accept them as constructive suggestions which may improve the ways and means of giving effect to a good national transportation policy, which we agree must be established at this time.


Mr. Bernard Pilon (Chambly-Rouville):: move that the debate be now adjourned.


The Acting Speaker (Mr. Rinfrei):: It has
been moved that the debate be now adjourned. Is it the pleasure of the house to adopt the motion?


[Stage Direction]
Motion agreed to.
John Whitney Pickersgill: Mr. Speaker, perhaps my parliamentary secretary may be given leave to explain an arrangement that has been made for officials to meet on Tuesday before the opening of the house in order to answer any questions about this bill which hon. members may wish to pose.


Mr. J. A. Byrne (Parliameniary Secretary to the Minister of Transport):: Mr. Speaker, arrangements have been made for a briefing session, referred to by the minister, on Bill No. C-231, to be held in the Senate railway committee room, 356-S on Tuesday, September 6 at 12.30 p.m. Sandwiches and coffee will be served, but I do not wish hon. members to consider that to be an inducement to attend. A memo will be sent out to all hon. members to this effect.


George James McIlraith: Mr. Speaker, I move the adjournment of the house.
Motion agreed to and the house adjourned at 5.39 p.m.



Tuesday, September 6, 1966