1966-04-26

JUSTICE AND LEGAL AFFAIRS


[Stage Direction]
Mr. A. J. P. Cameron (High Park) presented the first report of the standing committee on justice and legal affairs, and asked for unanimous consent to move that the report be concurred in.
[Note: Text of the foregoing report appears in today's Votes and Proceedings.]
Mr. Gilles Gregoire (Lapointe):: Mr. Speaker, on the matter of-


Mr. Speaker:: If the hon. member will wait a moment, I shall first read the motion of the hon. member for High Park (Mr. Cameron). Is the hon. member rising to comment on the motion of the hon. member for High Park?


Gilles Grégoire: Mr. Speaker, it is about the unanimous consent required for the hon. member to move his motion today. I think 48 hours notice should be given in such a case. In view of the fact that a reduction of the quorum of the committee is requested, we do not believe this should be granted.


Mr. Speaker:: The hon. member for High Park must have the unanimous consent of the house in order to move this motion. I understand that the hon. member for Lapointe objects to giving this consent, and therefore the motion cannot be presented at this time.



HOUSING


[Stage Direction]
On the orders of the day:
Right Hon. J. G. Diefenbaker (Leader of the Opposition):: Mr. Speaker, I redirect to the Prime Minister, with slight changes, a question I have asked him on several occasions recently; namely, what is going to be done to meet the serious situation of prospective house builders who require money under C.M.H.C.? I suggest that the Prime Minister
has been receiving a great number of messages on this matter. People are being hurt by high interest rates and are unable to get the necessary money. The government should now be in a position to offer some hope, not only to the builders but particularly to those who desire houses.


Right Hon. L. B. Pearson (Prime Minister):: Mr. Speaker, the government has been considering this matter at a cabinet meeting this morning. That consideration will be continued, and I hope to have a statement to make to the house as soon as we have completed consideration of this matter, which I agree is very important. I hope to be able to make such a statement at the end of the week at the latest.



ADMINISTRATION OF JUSTICE


[Stage Direction]
On the orders of the day:
Mr. T. C. Douglas (Burnaby-Coquitlam):: Mr. Speaker, last week the right hon. Prime Minister indicated that the Solicitor General would be making a statement on Monday or Tuesday of this week with regard to Canadian citizens who have been called for military service in the United States due to the fact that at various times they have spent some period of time there. I wonder whether the Solicitor General is prepared to make that statement at this time.


Hon. L. T. Pennell (Solicitor General):: I am
sorry, Mr. Speaker, and I apologize to the hon. member, but I did not hear all his question. I believe, however, I answered the question yesterday in replying to starred question 1151 on the order paper.


Thomas Clement (Tommy) Douglas: The question I asked and in respect of which the Prime Minister said the Solicitor General would be making a statement had to do with whether the Canadian government intends to clarify the status of persons who believe they are Canadian citizens but who may have spent one or two years in the United States and now are being subject to call for military service. What is the status of such persons; what action should

April 26. 1966
Inquiries of the Ministry they take in the event they are called tor military service, and what protection have they in the event they visit the United States, where some of them already have been told they will be placed under arrest?


Lester Bowles Pearson: Mr. Speaker, this question is wider than the one which I agreed my hon. friend would take up. This matter has been under consideration, and of course involves an interpretation of United States legislation and the position of Canadians in the United States in respect of this legislation. We had a good deal of experience concerning this during the war when the draft law applied to Canadians. 1 am not in a position to go further than I have gone at the moment, but we are examining it and I hope to be able to make a statement as soon as that examination is completed.


Thomas Clement (Tommy) Douglas: Mr. Speaker, I have a supplementary question. With reference to the answer the Solicitor General gave yesterday to the member for Vancouver-Burrard (Mr. Basford), this answer would seem to indicate that the press reports with regard to the visit of the F.B.I. agent, Mr. Alfle Gunn, to the Briscoe family are incorrect when they state that the F.B.I. agent was given clearance by the R.C.M.P. before he called on this family.


Mr. Speaker:: Order, please. The hon. member may wish to rephrase the question. As he knows, he cannot ask whether a press report is exact or inexact.


Thomas Clement (Tommy) Douglas: Then, Mr. Speaker, may I rephrase the question and ask whether the F.B.I. agent, Alfie Gunn, was given the green light by the R.C.M.P. prior to calling upon the Briscoe family at Port Moody, British Columbia.


Lawrence T. Pennell: I believe my answer yesterday was that there had been no arrangement for Mr. Gunn to carry out the visit that he did carry out.


Mr. Speaker:: The right hon. Leader of the Opposition.


Thomas Clement (Tommy) Douglas: Mr. Speaker, I have a supplementary question.


Mr. Speaker:: I understand that the hon. member for Burnaby-Coquitlam has a further supplementary question.


Thomas Clement (Tommy) Douglas: The minister's answer is that no permission had been given. I am asking now whether there was any clearance, formal or informal, on the part of the R.C.M.P.
[Mr. Douglas.)


Mr. Speaker:: Order, please. I hesitate to intervene at this moment, but I do not think the question the hon. member is asking now is of the type which can be asked and which should be answered at this time. It is a detailed question about an event which already has taken place, and I do not think it involves a degree of urgency which would warrant its being allowed by the Chair at this time.


Thomas Clement (Tommy) Douglas: On a point of order, I am merely asking a question with reference to an answer the minister gave yesterday, which was somewhat ambiguous. I wished the minister to clarify it, and I took it for granted the minister would have that information at hand.


Mr. Speaker:: Perhaps the answer would be to put a further question on the order paper.


Mr. W. B. Nesbitt (Oxford):: Mr. Speaker, I have a supplementary question. Will the Prime Minister and his colleagues, when they are giving consideration to this matter, also take into consideration the terms of the Foreign Enlistment Act, which places heavy penalties on Canadians who are serving in foreign armed forces in countries with which Canada is not at war?


Lester Bowles Pearson: Mr. Speaker, I believe that is another question.


Mr. Eldon M. Woolliams (Bow River):: Mr. Speaker, I have a further supplementary question. Has the Prime Minister or the government made any protest to the United States about such behaviour?


Lester Bowles Pearson: Yes, Mr. Speaker. As I have already announced, we have made representations to the United States government in respect of this particular case.



DOMINION-PROVINCIAL CONFERENCE QUEBEC PROPOSALS FOR AGENDA

[Stage Direction]
On the orders of the day:
Gilles Grégoire: Mr. Speaker, I should like to direct a question to the right hon. Prime Minister.
Since the Quebec premier has just stated that he must have a strong mandate to enable him to discuss with federal authorities, could the right hon. Prime Minister tell us whether or not Mr. Lesage has informed him of the Quebec claims to be discussed at the next federal-provincial conference?
April 26. 1966

[English1


Lester Bowles Pearson: Mr. Speaker, the agenda for the next federal-provincial conference which is to take place in Victoria in June is still under consideration. We have asked for the views of the various provincial governments as to what might be placed on that agenda, but I am not sure whether all those views have been received, including those of the government to which the hon. member refers.
Perhaps I should point out that this conference is to be a short one of a ceremonial nature, in connection with the 100th anniversary of British Columbia. It is not anticipated that we will have a full agenda for this conference, which will last only two days.


Gilles Grégoire: Mr. Speaker, may I ask a
supplementary question of the Prime Minister?
Has the Quebec premier advised the Prime Minister of Canada that he has special points to discuss at the next federal-provincial conference?


Lester Bowles Pearson: Mr. Speaker, I shall look into this matter and hope to be able to make a statement within a short period of time, regarding the views of the provincial governments, as to what should appear on the agenda of this conference.



ADMINISTRATION OF JUSTICE


[Stage Direction]
On the orders of the day:
John George Diefenbaker: Mr. Speaker, the Solicitor General has kindly forwarded me a copy of the order in council in the Truscott case setting out the decision of the government, namely that the matter be submitted to the Supreme Court of Canada. The supreme court is being asked what it would have done had there been such an appeal, which was in fact denied by one judge, as I recall the circumstances.
In view of the limitations on the supreme court, even taking into consideration the fact that it may hear certain further evidence beyond that already given, does the minister
Inquiries of the Ministry not realize how very difficult, if not impossible, will be the onus resting on the appellant under the circumstances, the law and jurisprudence being what it is?


Lawrence T. Pennell: Mr. Speaker, I took into consideration the representations put forward on the floor of this house by the right hon. gentleman. I might say that we gave meticulous consideration to all representations, and in my humble opinion we reached a conclusion which will meet the purpose, which is, of course, to determine whether Truscott was the victim of a miscarriage of justice. It was in an effort to reach that end that we made this reference to the supreme court.
In view of the fact that the hon. member for Winnipeg North Centre asked a question and received a promise on April 19, I think it would be in order for me now to place on the record the form of review. It has now been decided to refer the case to the Supreme Court of Canada pursuant to section 55 of the Supreme Court Act. The pertinent part of the order in council puts this question to the court:
Had an anneal by Steven Murray Truscott been made to the Supreme Court of Canada as is now permitted by section 597A of the Criminal Code of Canada, what disposition would the court have made of such appeal on a consideration of the existing record and such further evidence as the court, in its discretion, may receive and consider?


John George Diefenbaker: Mr. Speaker, does the Solicitor General not see the difficulty here, that under the rules of the supreme court the limitations on that court are of such a nature as to practically deny any consideration of whether there has been a miscarriage of justice? The suggestion was made that the crown in its wisdom, had it come to the conclusion that there may well have been a miscarriage of justice, could grant a new trial. Would that not have been more appropriate? What were the reasons for the failure to accept that suggestion, since the supreme court has already ruled that there is no appeal.


Mr. Speaker:: Order, please. I would think the question posed by the right hon. Leader of the Opposition is argumentative in nature, and I doubt very much if it should be allowed.


John George Diefenbaker: I did not want to make it argumentative, Mr. Speaker. I am trying to help in this matter. I have been concerned in these cases myself, and we all know of
April 26. 1966

Inquiries of the Ministry serious instances of the miscarriage of justice. A policeman in Montreal was acquitted the day before yesterday after being sentenced to be hanged two years ago.
Is the minister in a position to say why the government is placing the matter before the supreme court in this way, by way of consideration similar to the course followed in the Coffin case? What were the reasons why the government would not give consideration to a new trial? Did the government conclude that it was unable to do so on the basis of the evidence that had been offered?


Lawrence T. Pennell: Mr. Speaker, allow me to say to the right hon. gentleman with the greatest respect that there is considerable difference between the type of reference in this case and that in the Coffin matter. I would point out that this has gone beyond the usual rules relating to appeals to the Supreme Court of Canada. I would with respect draw the attention of the right hon. gentleman-I do not think I need to do so, however-to section 103, I believe it is, of the Supreme Court of Canada Act, which permits that court to make rules to deal with any reference brought before it.


John George Diefenbaker: That is right.


Lawrence T. Pennell: We took all these matters into consideration. I give the solemn assurance to the house that after long and anxious consideration we deemed that the reference in this form would be the best way to deal with the question.


Mr. Andrew Brewin (Greenwood):: A supplementary question, Mr. Speaker. I wonder whether the Solicitor General could say why, if it was possible under section 55 to refer directly to the supreme court the question of the innocence or guilt of Steven Truscott, the matter should not have been referred directly instead of by way of appeal, which is very limited in scope?


Mr. Speaker:: Order, please. I recognize that the question which has been asked by the hon. member for Greenwood does not differ too much from the type of question asked by the right hon. Leader of the Opposition, which I considered to be argumentative to some extent. It does appear to me that we are embarking upon an exchange of views among legal experts in the house. Perhaps we might hear from the hon. member for Kamloops, who wants to ask a supplementary question, but I suggest that his question should not be argumentative.


Hon. E. D. Fulton (Kamloops):: Mr. Speaker, I think you will find it is not argumentative at all but is addressed to a related factor, which is this. Did the Solicitor General or the government give consideration to the question of providing counsel to argue the matter for Steven Truscott, and paying the expenses of counsel and related expenses of investigation that are necessarily concomitant to the gathering of new evidence, the submitting of new facts and the obtaining of opinion evidence, and so on? Was this considered, and if so what decision was made as to whether the expenses of counsel in this connection should be paid?


Lawrence T. Pennell: Mr. Speaker, I am satisfied that the government will ensure that Mr. Truscott will not be handicapped by lack of funds in putting his case adequately before the court.


Mr. Stanley Knowles (Winnipeg North Centre):: May I ask one further supplementary question, Mr. Speaker. Do the terms of reference as drawn make it possible for the supreme court to hear any new evidence in the case?


Lawrence T. Pennell: With respect, Mr. Speaker, I believe the terms of reference speak for themselves.


Mr. Reid Scott (Danforth):: Mr. Speaker, I have a supplementary question for the Solicitor General. Can we interpret the answer the minister has just given to the hon. member for Kamloops as an assurance that the legal costs of Truscott, and the costs of assembling the evidence, will be paid by the government?


Lawrence T. Pennell: No request has been made for legal or financial assistance, but I can assure the hon. member that lack of funds will not stand in the way of Mr. Truscott having an adequate opportunity to present his case.


Reid Scott: Can we get this
pinned down? If a request is made-


Mr. Speaker:: Order, please. That question has now been asked twice and a reply has been given. I suggest the hon. member should be satisfied.


Stanley Howard Knowles: Mr. Speaker, may I direct a question to the Solicitor General. In view of the wide interest in the order in council which was passed today concerning Steven Truscott
April 26. 1966

would the Solicitor General consider asking, through the Chair, for permission for it to be made an appendix to today's Hansard?


Lawrence T. Pennell: I will be pleased to do so, and I now formally make such a request.


Mr. Speaker:: Is there agreement that the order in council referred to by the Solicitor General be printed as an appendix to Hansard?


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



TRANSPORT


[Stage Direction]
On the orders of the day:
Mr. R. N. Thompson (Red Deer):: My question is directed to the Minister of Transport. Will the minister report to the house on the proposed transportation authority which would co-ordinate policy in planning transportation agencies?


Hon. J. W. Pickersgill (Minister of Transport):: I know of no such body.


Robert Norman Thompson: May I ask a supplementary question, Mr. Speaker. I was merely asking whether he could report to the house on the plans. I would add this question, is it the intention of the minister to reveal these plans when he speaks in Winnipeg tomorrow?


John Whitney Pickersgill: I have no plans to reveal, sir.



ST. LAWRENCE SEAWAY-EFFECT OF INCREASE IN TOLLS

[Stage Direction]
On the orders of the day:
Mr. Reg Cantelon (Kindersley):: I should like to direct a question to the Minister of Transport. In view of the fact that the St. Lawrence Seaway Authority has recently announced its intention to increase tolls by 10 per cent, and the fact that Mr. Charles Gib-bings recently stated the proposed increase in tolls on the great lakes-seaway system would add li cents to the cost of transporting a bushel of grain, will the government give consideration to refusing this increase?


Mr. Speaker:: Order, please. I doubt if the question is extremely urgent and should be answered immediately. Perhaps the hon. member may give some thought to placing it on the order paper. The urgency of the question is not readily apparent to the Chair.
Inquiries of the Ministry INQUIRIES OF THE MINISTRY
On the orders of the day:


Mr. David Lewis (York South):: I should like to direct a question to the Minister of Trade and Commerce, of which I gave him notice yesterday. Has it been drawn to the attention of the minister that persons making application to the office of the Civil Service Commission in Toronto for work as census takers this summer have been instructed to apply through their member of parliament or through the local Liberal organization? If so, does the minister approve of the practice?


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


Mr. T. S. Barnett (Comox-Alberni):: A question for the Minister of Transport. I should like to ask the minister whether he has abandoned his responsibility for making announcements about extensions of airport runways to one J. R. Caldwell, who is described as being an area director for the Liberal party.


Mr. Speaker:: Order, please.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Hon. Marcel Lambert (Edmonton West):: My question is addressed to the Prime Minister in view of the absence of both the Minister of National Defence and the Associate Minister. Has the government arrived at a decision to further reduce the strength of the armed forces by 10 per cent to conform with the realities of recruitment and the present strength?


Lester Bowles Pearson: I will be glad to discuss that matter with the Minister of National Defence.



INCOME TAX


[Stage Direction]
On the orders of the day:
Mr. H. W. Herridge (Kootenay West):: wish to address a question to the Minister of National Revenue. Has the minister an answer to my national sixty four dollar income tax administrative question, of which I have given him notice?
4306	COMMONS
Inquiries of the Ministry Hon. E. J. Benson (Minister oi National Revenue): As I recall this question, it was one that was raised with respect to the deduction of withholding tax from funds paid to Mrs. Munsinger by the C.B.C. I should like to inform my hon. friend in this regard that section 105 of the income tax regulations dealing with withholding tax for foreigners only applies to services rendered in Canada.



ANNOUNCEMENT OF EXTENSION OF FILING DEADLINE

[Stage Direction]
On the orders of the day:
Mr. A. D. Hales (Wellington South):: Mr. Speaker, I should like to address my question to the Minister of National Revenue and ask him whether he has had an opportunity to consider the question I asked him yesterday concerning extending the filing date for income tax returns.


Hon. E. J. Benson (Minister of National Revenue):: Mr. Speaker, I have considered the matter, and in view of the fact that April 30 falls on a Saturday I have decided that personal income tax returns mailed or delivered over the counter up to May 2, that is next Monday, will be accepted as having been filed on time. I have instructed the officers of my department to this effect.



ROYAL CANADIAN MOUNTED POLICE


[Stage Direction]
On the orders of the day:
Mr. Robert C. Coates (Cumberland):: I have a question for the Solicitor General. In view of the fact that Corporal Harry Sutherland of the Royal Canadian Mounted Police has pleaded guilty to the armed robbery of a bank at Trenton, Nova Scotia, is an investigation being initiated or continued into his possible involvement in armed robberies which have occurred recently in Nova Scotia, especially the one at Stewiacke, Nova Scotia, last year?


Mr. Speaker:: Order. The Chair hopes that the question is hypothetical.



CANADIAN APPLICATION FOR WINTER OLYMPIC GAMES

[Stage Direction]
On the orders of the day:
Eldon Mattison Woolliams: Mr. Speaker, I should like to direct a question to [Mr. Herridge.l
DEBATES	April 26. 1966
the Prime Minister. In view of the fact that the minister of health is attending the international Olympic committee meeting in Rome, has he anything to report regarding whether Canada has been successful in its bid for the winter games?


Lester Bowles Pearson: No, Mr. Speaker, but I am expecting a report at any moment.



FINANCE

[Stage Direction]
EFFECT OF POSSIBLE U.S. TAX ON TOURISTS On the orders of the day:
Mr. Maurice Allard (Sherbrooke):: Mr. Speaker, may I direct a question to the Minister of Finance?
Is the minister able to confirm the assurances given by Mr. Saulnier, last Friday night, to the municipal council of the city of Montreal to the effect that the $100 tourist tax would not be collected in the case of American people coming to Canada?


Mr. Speaker:: I suggest to the hon. member to put this question on the order paper.



FISHERIES


[Stage Direction]
On the orders of the day:
Mr. H. W. Danforih (Kent (Onl.)):: I should like to direct a question to the Minister of Fisheries. In view of the disastrous drop in the last few days in dockside prices for fresh water fish along the north shore of Lake Erie, can the minister inform the house whether the government is taking any action to stabilize these prices at a level which will provide some profit to these fishermen?


Hon. H. J. Robichaud (Minister of Fisheries):: Mr. Speaker, the matter of the substantial drop in the price of fresh water fish from Lake Erie was also brought to my attention a few days ago by the hon. member for Essex South and by the manager of the Fisheries Council of Canada. This drop is mainly due to an unusual carryover from last fall. If official representations are made by the fishermen and by the fish processors to the Fisheries Prices Support Board, the matter will be investigated at once.
April 26. 1966


EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
Hon. Gordon Churchill (Winnipeg South Centre):: Mr. Speaker, I have a question for the minister of external affairs. I asked the minister a question on April 22 in regard to the meeting of the commonwealth representatives concerning Rhodesia, and he said he had had no report at that date. Perhaps he has received a report by now, so may I ask him whether he will tell the house what transpired at the meeting, and whether any suggestion was brought forward at the meeting on which Canada might be acting with regard to imposing sanctions against South Africa and Portugal in order to restrict their dealings with Southern Rhodesia?


Hon. Paul Martin (Secretary of Stale for External Affairs):: Mr. Speaker, the meetings of the sanctions committee, by their very nature, of course must remain confidential. However, I may say that the kind of question raised, can only be decided by governments and is not the kind of question which normally forms part of the agenda of the sanctions committee. That body deals only with the operation of directives, and regulations based on those directives which are now in force.


Gordon Minto Churchill: May I ask a supplementary question, Mr. Speaker, because although the answer may have been clear to other members of the house, it was not clear to me. In view of the fact that we are going to consider the Export and Import Permits Act in just a few minutes, and as guidance to the house, can the minister inform us whether the government intends to extend to any other country the sanctions now applied under that act to Rhodesia?


Paul Joseph James Martin: Mr. Speaker, that
is a highly hypothetical question. If that situation should arise the government will have to examine the facts in the light of whatever circumstances are presented. What my hon. friend is asking the government is, if such and such a situation develops what will be the government's policy?


Mr. Winkler:: Nonsense.


Mr.   Marlin@Essex East: My hon. friend knows that is not a proper question.


Gordon Minto Churchill: A further supplementary question. I want to protect the Minister of Trade and Commerce, who will be dealing
Inquiries of the Ministry with this act in a few minutes. I would rather ask the minister of external affairs whether any action is contemplated under that act than the Minister of Trade and Commerce, who will tell me that he must refer the question to the minister of external affairs.
I now ask the minister again, is any action being contemplated by the government under the Export and Import Permits Act?


Mr. Speaker:: Order. The Chair would be inclined to support the Secretary of State for External Affairs in his suggestion that the question is hypothetical. In any event the minister has given a reply which, though it may be unsatisfactory to the hon. member, is the reply which he has to accept.
Right Hon. J. G. Diefenbaker (Leader of
the Opposition): Mr. Speaker, I should like to ask a supplementary question. I inquired the other day about importations from Rhodesia, and I had before me an advertisement regarding Rhodesian canned beef. I asked whether there were importations into Canada of this beef, and I think it was the Prime Minister who said he would look into the matter. That question was not hypothetical. The Secretary of State for External Affairs might now give the answer.


Paul Joseph James Martin: Mr. Speaker, my right hon. friend is quite right; that was not a hypothetical question, but as far as I can find it was not one that was based on fact.


John George Diefenbaker: All I have to say about that, Mr. Speaker, is that one can go into any store and buy this beef. So the question was based on facts. I should like the minister to become a little more observant.



PRIVILEGES AND ELECTIONS


[Stage Direction]
On the orders of the day:
Mr. Frank Howard (Skeena):: Mr. Speaker, I should like to address a question to the hon. member for Northumberland-Miramichi in his capacity as chairman of the committee on privileges and elections. May I ask him when he intends to present the first report of that committee, the decision about which was made some time ago?


Mr. G. Roy McWilliam (Northumberland-Miramichi):: Mr. Speaker, a request has been made for accommodation for the privileges and elections committee to meet, and when the space is allotted this question can be raised at that time.
April 26, 1966

Inquiries of the Ministry [Translation]



FINANCE


[Stage Direction]
On the orders of the day:
Mr. Fernand E. Leblanc (Laurier):: Mr. Speaker, I should like to direct a question to the Minister of Finance.
Has the minister received a telegram from the Association du camionnage de Quebec Incorporee, regarding the decrease in depreciation of car equipment, from 30 to 28 per cent, and the 11 per cent tax on the cost of retreading tires?
If so, what was his answer to the telegram?


Mr. Speaker:: Order. This question is not very urgent in my opinion. The hon. member could put it on the order paper or discuss it, if he wishes, with the minister.
[English1



HIGHWAY SAFETY


[Stage Direction]
On the orders of the day:
Hon. C. M. Drury (Minister of Industry):: Mr. Speaker, on Friday last the hon. member for Brome-Missisquoi asked some questions in relation to defects which may have existed in respect of Canadian produced automobiles, and I undertook, as soon as I got a detailed report, to furnish him with an answer.
In respect to General Motors Corporation cars, certain Chevrolet and Chevelle 1964 and 1965 models built in Canada and the United States were found to have a potential problem in the accelerator linkage sticking. Any vehicles from United States production in Canada or any of Canadian production sold in the United States will be followed up for corrective action, along with the vehicles produced and sold in Canada.
In the case of the Ford Motor Company, the only vehicles which have had defects discovered were produced in the United States. Those produced in the United States and sold in Canada will be subject to the same rectification procedures that are being followed in the United States by the Ford Motor Company.
In so far as Chrysler Corporation is concerned, the vehicles which have been reported defective relate to United States production. Canadian production is of a different design. So far as vehicles produced in the United States and sold in Canada are concerned, the follow-up will be made by the


Chrysler Corporation and corrective action taken.


Reid Scott: In view of what the minister has just said, and in view of published reports that the government has a policy with regard to auto safety, when can we expect a statement outlining in some detail the policy of the government in this whole field?


Charles Mills (Bud) Drury: I believe the house is aware that at the present moment attempts are being made, in consultation with all the interested parties, to draft an auto vehicle safety code. These efforts are making some progress. There will be a large scale meeting in June at which it is hoped to secure the co-operation not only of the various federal government agencies concerned but also of the provincial governments and the commercial and industrial interests affected.



CANADIAN NATIONAL RAILWAYS


[Stage Direction]
On the orders of the day:
Mrs. Grace Maclnnis (Vancouver-Kingsway):: I have a question for the Minister of Transport. In view of the fact that the Canadian National Railways has decided to discontinue operation of the steamship Canora on the west coast, causing unemployment for approximately 50 men, and in view of the fact that the Canadian Pacific Railway has now decided to operate its motor vessel on this same service, will the Minister of Transport intercede with the C.N.R. to re-employ the 50 discarded employees on the new vessel now being constructed to replace the Canora?


Mr. Speaker:: Order. The only comment I can make about the question is that the minister has noted the representations made by the hon. member. If further action is required I suggest the hon. member place the question on the order paper.



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
Marcel Joseph Aimé Lambert: question to the Secretary of State. In view of the pending debate on redistribution can the minister assure me that I will have an answer by tomorrow to questions Nos. 202 and
April 26. 1966

212, which have been on the order paper since January 24? A dog team would have got here twice in the interval.


Hon. Judy V. LaMarsh (Secretary of State):: As I have told the hon. member, these things go from my department to the Chief Electoral Officer, or the Redistribution Commissioner, and then out to the boundaries commission. I presume they come back. But I deny there has been any hold-up in my office. In fact instructions were given that every question was to be answered by the end of the Easter holidays. I know the province of Alberta has a well deserved reputation for efficiency in these matters, and I can only say to the hon. member that I would be happy to join with him as a representative of that province in doing everything I can to get the information he is seeking.


Mr. G. L. Chatlerton (Esquimalt-Saanich):: Can the Secretary of State advise us whether a transcript of the evidence given before the Redistribution Commission during the public hearings will be available to hon. members in time for the coming debate?


Julia Verlyn (Judy) LaMarsh: I am not sure. I do not think such a request has been conveyed to me heretofore nor, indeed, do I know whether this material is in existence. But I shall be happy to take it up with the redistribution officer immediately after the orders of the day have been called.


[Stage Direction]
On the orders of the day:
Mr. Howard Johnston (Okanagan-Revel-sloke):: My question is directed to the
Minister of Trade and Commerce. Is it the intention of the minister and his department to act on the request of the Vancouver Board of Trade and initiate negotiations with the Republic of Korea with a view to arranging a trade agreement with that country?


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



HEALTH AND WELFARE


[Stage Direction]
On the orders of the day:
Mr. Barry Mather (New Westminster):: My
question is intended for the Minister of National Health and Welfare. In his absence I
Inquiries of the Ministry might perhaps direct it to his parliamentary secretary. Bearing in mind a report from the department of health to the effect that there has been a marked increase in cigarette smoking among Canadian school children, will the minister tell the house at an early date what is happening to his program which is aimed at curbing such addiction?


Lester Bowles Pearson: I will take this matter up with the minister immediately on his return from Rome.



TRANSPORT


[Stage Direction]
On the orders of the day:
Mr. J. P. Nowlan (Digby-Annapolis-Kings):: My question was to have been directed to the Minister of Public Words. I do not see him in his place but I see him toward the back of the chamber near the third row. I wish to make sure he is in his formal position ready to answer this important question, of which I have given him notice. I should like to know whether the minister has received and considered a brief prepared by the government of Nova Scotia on the Petite Passage causeway-harbour project in Digby, Nova Scotia, and, if so, whether he has any plans to convene a meeting of all interested parties immediately in order to explore the feasibility of such a project.


Mr. Speaker:: I hope the hon. member will not mind if I suggest that the question should be placed on the order paper.



AGRICULTURE


[Stage Direction]
On the orders of the day:
Hon. J. J. Greene (Minister of Agriculture):: Mr. Speaker, yesterday the hon. member for Villeneuve asked me a question with regard to the payment of emergency agricultural relief cheques in the province of Quebec. On looking into the matter further I find he may have been referring to a special relief project in the Lake St. John area. In this particular area the cheques representing the federal contribution are being sent out directly by the federal government and not by the provincial government, as is the case under the more general program of emergency agricultural relief.

April 26. 1966
Inquiries of the Ministry
The cheques are now in the process of being sent out. I thought I should clear the record in this regard.


Gilles Grégoire: Mr. Speaker, may I ask a supplementary question.
In view of the fact that payments have not yet been made by the federal government while cheques issued by the provincial government have already been received by the farmers, could the minister let us know how long it will be approximately before farmers can receive these payments?
tEnglish]


John James Greene: Some of the cheques are going out at the present time. The total payment being made by the federal government in emergency relief to the farmers of this area comes to $989,140. I can assure the hon. member that we shall proceed promptly with the mailing of all the cheques, now that we have the list.



CANADIAN BROADCASTING CORPORATION


[Stage Direction]
On the orders of the day:
John George Diefenbaker: I direct this question to the Prime Minister. Has he had a report that the meeting which took place this morning between the president of the Canadian Broadcasting Corporation and the president of the Toronto producers' association has broken up and that a strike is imminent, the president of the C.B.C. having stated that he would not consent to any arbitration and that the decision regarding the removal of the two producers of "This Hour Has Seven Days" is irrevocable?
Further, will the Prime Minister say whether it is the intention of the government to use its good offices, without in any way infringing upon the act which sets up the C.B.C., to assure that there will indeed be arbitration with regard to this matter for the benefit of the Canadian people?


Lester Bowles Pearson: I have had no report on that particular meeting yet. As far as the latter part of the question is concerned, if the government can use its good offices in any way which will not constitute intervention in the affairs of the C.B.C. it will, of course, be glad to do so.
(Mr. Greene.]
[DOT] (3:20 D.m.)



EXPORT AND IMPORT PERMITS ACT


Hon. Robert Winters (Minister of Trade and Commerce) moved: the second reading of Bill No. S-23, to amend the Export and Import Permits Act.
He said: Mr. Speaker, section 27 of the Export and Import Permits Act now provides that the act will expire on July 31, 1966. The purpose of the proposed amendment is to extend the act for three more years. The act in its present form came into force originally in 1954 to expire in 1957, and was extended in 1957, 1960 and 1963, in each case for another three years.
The act under section 3 provides the authority necessary for control of exports of arms, ammunition and implements of war, and also of atomic energy materials and other strategic materials, in order to ensure that these are not shipped to destinations where their use might be detrimental to the security of Canada or her allies.
The act also provides authority to control the export of materials which become in short supply in order to protect the supply position of Canadian industry. The act provides authority for control of all exports to certain countries listed in an area control list, which includes all countries in the Sino-Soviet bloc.
The act under section 5 provides authority for control of imports of a commodity which is scarce in world markets or subject to intergovernmental allocation. It also provides authority for control of imports of commodities which are under price support in Canada pursuant to acts named in the section. It also provides authority to implement an intergovernmental arrangement or commitment.
The proposed amendment is a simple renewal of the act unchanged in its provisions. These provisions were debated in the Senate on March 29, 1966, during the second reading and discussed in detail in the banking and commerce committee at that time.


Gordon Minto Churchill: Mr. Speaker, the minister has given us a brief outline of the importance of this act and has indicated that the amendment will be simply an extension of the act for a three year period. Under those circumstances the house could assume that this might be done in very short order but, though we may deal with it expeditiously, nevertheless
April 26. 1966

we should take a look at the act because it was not discussed at any great length three years ago.
For those who may be discussing this act three years from now and who have the good sense to look at the Hansard index to find out what was said on this occasion, I shall list for their advantage something I would have appreciated myself on this occasion, namely, certain references which are helpful to a review of the act. I suggest that anyone wishing to make a survey of the act might look back to Hansard of March 16, 1954, page 3065 and following pages, where there is a good indication of the modifications made to the act on that occasion and also a listing of the strategic materials that were then indicated as being prohibited from shipment to various countries of the world.
The second Hansard reference I give is March 5, 1957, starting at page 1903. On that occasion there was extended discussion. The history of the act was given at some length by the then parliamentary secretary, Mr. Dickey, who was followed by Hon. Donald Fleming, then opposition critic of the Department of Trade and Commerce who, at page 1906 and following pages, also gave an extensive review of the act.
The third reference I give is May 17, 1960, page 3963, when the act was again extended for a three year period and was piloted through the house by my parliamentary secretary of that time, Mr. Pallett, with the chief critic from the then opposition being the present Minister of Public Works (Mr. Mcllraith).
In 1963, when the act again came up for renewal, the amendment was passed without debate. There were certain circumstances obtaining at that time which induced us to push through the act without giving it complete consideration. The government house leader of that time, now the Minister of Transport (Mr. Pickersgill), was floundering a little and, as I usually do when the house is in difficulty, I came to his assistance and we passed the act in a few minutes thus helping him out. There was no debate and consequently the 1963 reference will be of no advantage to anyone examining the act in the future.
However, anyone interested in the history of the act will be repaid by glancing at the 1957 debate. I do not intend on this occasion to give an extensive summary of the act. I simply point out that it is six years since it has been discussed and perhaps the house
Export and Import Permits Act should take a look at it to see how advantageous it is and whether it should be continued in its present form.
In the debate in 1954 Hon. Donald Fleming and Hon. J. M. Macdonnell criticized the government of that day for its avid desire for power. They thought the act was continuing in the hands of the government more power than was desirable. In 1957 the discussion ran in a somewhat similar vein and it was suggested by the opposition of that period, the Conservative party, that possibly the act need not be continued.
In 1960, when the positions had been reversed, the Minister of Public Works, then in opposition, took the stand that perhaps the act was no longer required. So it is obvious that people change their opinions when they cross the floor of the house.
Originally the act was designed to be used in emergencies. It was a carryover from some of the wartime legislation. When it was revised in 1954 the Korean problem was causing quite a bit of difficulty and so the act had a purpose for emergency situations. Then the act was continued after that time to make provision for problems that could arise due to the scarcity of certain commodities, either on the export or import side, and it had an additional, important purpose, to prevent the export of strategic materials to sensitive areas in the world where trouble might break out. In other words, the act prevents the export of arms, ammunition and base metals that might be useful for war purposes.
[DOT] (3:30 p.m.)
On the import side it has not been used as extensively as on the export side but it has been used in order to protect agriculture and fisheries in this country on occasions when it appeared that the market was going to be flooded with commodities which were in good supply in Canada and in the hope that the price level for the producer in Canada would be maintained.
When we reach the committee stage of the bill perhaps the minister could provide us with some details with regard to the operation of this act in recent years. On one occasion in 1954 I believe the act was referred to the Standing Committee on Banking and Commerce. I do not suggest that be done on this occasion because that committee has perhaps enough work to do without having an additional bill put in front of it. However, the convenience in doing so is that the officials could appear before that committee
April 26. 1966

Export and Import Permits Act to give full information on the operation of the act. Perhaps, however, we can obtain sufficient information today from the minister when we are in the committee stage.
I should like to know how extensively the act is being used at the present time, the total of export permits over the last two years, for example, and similarly the total of import permits for that period, also the type of goods affected on either the export side or the import side. Perhaps the minister might have this information available for us when the time comes.
Then I wish to deal briefly with one other aspect of this act. It was never intended for purposes other than those which I have indicated on the export and on the import side. Recently it has been used for the application of sanctions against Southern Rhodesia. When we were debating the subject of Southern Rhodesia in January and February I dealt at some length with this particular aspect of the matter. I wondered whether the Secretary of State for External Affairs (Mr. Martin) was making use of this act for a purpose which never was intended when the act was introduced and when it was modified over the years. There was no suggestion in any of the debates of the past that this act would be used for the imposition of sanctions.
The imposition of sanctions, of course, is one step closer to the imposition of force and you get into very dangerous waters when that is done. When we were discussing this matter with the Secretary of State for External Affairs I suggested that the action at that time should have taken the form of presenting to the house a resolution asking for the approval of the action of the government with regard to Southern Rhodesia. Instead of so doing he made use of this act, with the co-operation of the Minister of Trade and Commerce (Mr. Winters), to impose sanctions. As I said, from the history of the act, which I do not wish to review at too great length, it never was intended for that purpose; it was intended to prevent the export of strategic materials to sensitive areas of the world where warfare might break out. Naturally Canada does not wish to be involved in anything of that nature or be a party to assisting any country or any groups who are about to engage or are engaged in warfare. So the limitation on strategic materials, was imposed for a very definite purpose and of course should be maintained.
On the commodity side, in our interest as a world trader we have endeavoured not to

place any restraints in the way of our manufacturers and exporters in the shipping of non-strategic materials abroad. On the import side the use of the act up to the present, so far as I am aware, has been only on occasion when there was a really serious threat to producers in this country. Now, however, we have reached a stage where the act is used as a political arm for the purpose of applying sanctions involving a restriction of trade between Canada and Rhodesia, a restriction of trade in order to compel Rhodesia to take some political action of which Canada approves. Canada expresses its approval of that political action by saying in effect to Rhodesia, we will not trade with you any longer; we will cut off the export of goods to you and the import of goods from you in order to cripple your economy, if we can do so, to the point where you will revise the political situation in your country.
I do not know that the Minister of Trade and Commerce can deal with this particular problem, although he has to carry some of the responsibility, and I realize it overlaps into the field of external affairs. The Minister of Trade and Commerce, however, is the person who is responsible to parliament for the application of this act; he is the one who has to sign the export and import permits and supervise the act. At the same time, as Minister of Trade and Commerce he is responsible for the promotion of export and import trade. Therefore he is rather caught in a vise and has to renounce his good offices as a person in favour of expansion of trade to accommodate the Secretary of State for External Affairs who wishes to apply pressure to a country within the commonwealth for purposes to which this government has given consent.
When the Minister of Trade and Commerce replies, I hope he will give us a little advice with regard to this particular problem. When we reach the committee stage I will ask him one or two specific questions. To give him a little warning I should like to ask him now, and he can reply later, whether the extension of our embargo involving the application of sanctions to Southern Rhodesia was discussed with the continuing committee of NATO with whom 1 believe we are supposed to discuss any alterations in the lists of prohibited articles which come under the jurisdiction of the Department of Trade and Commerce in administering this particular act. Has there been a discussion with the members of NATO with regard to the extension of embargoes
April 26, 1966

under the Export and Import Permits Act or have we just been going it alone?
The other question which emerges is in reference to the statement the minister made that certain action can be taken by way of intergovernmental agreement. The intergovernmental agreement between the United Kingdom and Canada concerning Rhodesia, it seems to me, has been rather carelessly expressed in the letters which were exchanged between the two countries. I am wondering whether the Minister of Trade and Commerce is relying entirely on that or is he now placing some reliance upon the action of the Security Council of the United Nations.
[DOT] (3:40 p.m.)
I conclude by saying that I think the Export and Import Permits Act serves a useful purpose when it is restricted to those things for which it was designed, the prevention of the export of strategic materials to sensitive areas of the world, and restricting imports when there is some danger to the producers of this country. I do not think it was ever intended, or should be used, for the imposition of sanctions.


Reid Scott: Mr. Speaker, in connection with the bill now before us I had thought and hoped that the minister might have taken the opportunity to give the house a reasonably extensive review of the act in view of the fact that, as the hon. member for Winnipeg South Centre (Mr. Churchill) has said, it has had no real consideration since 1960. During the interval there has been a considerable turnover of personnel in the house and many members are not familiar with the act or its operation. Although this proposal involves merely an extension of the act, it does bring into review the entire statute and indicates the silly manner in which we proceed with legislation in that we are told the night before that an act of this importance is coming up for review. It is to be hoped that in future we can work out a better timetable so that members will know in advance when matters of this kind are to be brought before the house.
I should also like to say how much I appreciated the remarks of the hon. member for Winnipeg South Centre, because those of us who have not been in the house in previous years are not necessarily familiar with this act and his resume has been very helpful. It was the kind of thing I should have expected from the minister. It is not our intention to delay passage of the bill, but
Export and Import Permits Act before we reach the committee stage I should like to mention certain things about the act which, after reading it, might cause one to wonder. I hope the minister will be prepared either in his reply at this stage or in committee to elaborate considerably on the operation of the act in those areas in which we indicate we are interested.
The act on its surface appears to be very powerful, giving very wide and uncontrolled discretionary powers to the minister. For example, under the terms of section 3 there may be established a list of goods called the export control list. We should like to hear from the minister what goods are on that list. We will also ask him to inform us as to the criteria upon which this list is based and how decisions are made. We should also like to know what countries are involved in relation to this list and what goods are covered both for import and export purposes. In short, we want to satisfy ourselves that this act is not in fact being used as a screen behind which political decisions can be made and carried into effect.
When one looks at sections 7 to 11 he finds that they give great discretionary powers to the minister in respect of the issuing of import and export permits, import certificates and the altering of permits, as well as in many other ways. Again I hope the minister will tell us something about the operation of these sections and indicate what criteria are taken into consideration. Perhaps he will also state whether or not there is any provision for appeal from decisions which he makes under these sections. In short, perhaps he would give us a detailed rundown of the operation of the act.
Once the kind of information I have asked for is before us we can then proceed to a more detailed examination of this bill. At this point this is all we want to say other than to reiterate that we do not want to hold up passage of the bill but rather to look into it a little more closely to see how it has been operating during the last few years.


George Louis Chatterton: Mr. Speaker, my intervention in this debate will be brief and perhaps it would save time if the minister would answer a question I intend to put to him by merely nodding his head. Having regard to the announcement about individual permits made by the minister on March 1, which will apply in any case to offshore shipments when there is no contract in effect, will shipments to the United States require permits?
April 26, 1966

Export and Import Permits Act


Robert Henry Winters: To what shipments is the hon. member referring?


George Louis Chatterton: I am referring to shipments of copper to the United States and I should like to know whether they require individual permits?


Robert Henry Winters: Offshore shipments of copper scrap and copper contentrate require individual permits.


George Louis Chatterton: Does that apply to shipments to the United States?


Robert Henry Winters: Not to the United States, no.


George Louis Chatterton: Thank you. On March 1 the right hon. Leader of the Opposition asked the minister whether the purpose of imposing individual permits was to conserve our own supply and the minister replied, as recorded at page 1942 of Hansard, that was the case. If that is so, how can we conserve the supply for Canadian use when no permit is required for shipment to the United States? I can understand the situation if the purpose of the permit requirement is to avoid shipment to countries in the eastern bloc. However, if the purpose of the requirement of individual permits is to conserve our supply, how can this be achieved without imposing similar restrictions on exports to the United States?
I have been informed by a small copper mining company in British Columbia that they are selling their copper concentrate now on the London exchange at a price between 90 cents and $1.02 per pound. I understand it is being sold on the New York exchange at 44 cents per pound and that this is an artificially depressed price. This particular company had a contract at this time so a permit is not required. But that permit will expire within a short period of time, at which time they could be subjected to the requirements of this act and forced to apply for an individual permit. The company may be told it cannot sell on the London exchange in which case, by virtue of the differential in price between these two exchanges, it stands to lose over $7,500,000 per year.
Perhaps the minister will also indicate during our consideration of this bill in the committee stage what the present copper supply situation is in Canada. Is there a shortage created by the demand in the United States, primarily because of the war in Viet Nam, or is there a shortage caused by industrial development in Canada? I hope to obtain answers to these brief remarks and questions either in the minister's reply or


when we reach consideration of the bill in committee.


Wallace Bickford (Wally) Nesbitt: Mr. Speaker, I should like to refer to the point brought to the minister's attention by the hon. member for Winnipeg South Centre (Mr. Churchill) regarding the purposes of this act which I contend has been used in a very illegal way. I refer, of course, to its use in imposing sanctions against the government of Rhodesia.
[DOT] (3:50 p.m.)
The hon. member for Winnipeg South Centre pointed out that warnings had been issued in 1954 and again in 1957 that the great powers under this act could be abused. Those warnings were very well founded. Last fall and early this year we had an excellent example of how the power in this act has been misused by the government. As has been pointed out already by the hon. member for Winnipeg South Centre, this government, in particular the Secretary of State for External Affairs (Mr. Martin), has used the act to carry on economic warfare against another country simply because we do not like the form of government there or the method that country used to acquire its independence.
It is quite clear that the act was never intended for that purpose. The minister himself just a few moments ago, when setting out and reviewing the purposes of the act, never mentioned anything of this kind. He went to great lengths to show that the act was to be used for the purpose of controlling the export of war and strategic materials to iron curtain countries and controlling the import of goods in order to protect agricultural and fishery groups in Canada, and the like. Finally, at the tail end of his remarks the minister mentioned that the act was used to carry out intergovernmental agreements.
This matter was argued at length during a previous debate in the house on the subject of foreign affairs. A number of members, the hon. member for Winnipeg South Centre and myself in particular, pointed out at that time that there was no legal basis whatsoever for using this act to apply sanctions against the government of Rhodesia. I will not go into the legal arguments again at this point because they are already on record. However, one argument I might mention briefly is the rule of law known as ejusdem generis. This is one of the cardinal rules of administrative law. The minister pointed out the principal purposes of the act and referred to the fact that it is used to carry out intergovernmental
April 26, 1966
agreements. I have referred to the action taken by the government under this act and that matter has already been dealt with at length As I said, the act was certainly not intended to be used for political purposes and waging economic warfare for political reasons against other countries.
This matter has been raised in the house and discussed at length in the press and other places throughout Canada. It is one of considerable public interest and I am astonished that the government did not take this opportunity of suggesting to the Minister of Trade and Commerce (Mr. Winters) that the act should be amended at this time. If it is the intention of the government to use the act for international political purposes and imposing our will upon other countries with whom we are not at war, although apparently we are engaged in economic war with one country at the moment, I think amendments should have been introduced to make quite clear that this was a purpose of the act.
I am astonished that the government did not bring forward amendments at this time if this is its desire. Certainly parliament has never been given any opportunity of expressing its approval or disapproval of the government's actions against Rhodesia. The government has been very careful to avoid presenting this problem for the approval or disapproval of parliament. Since the government feels so certain that its actions in this regard are right, I am surprised it has not taken this opportunity to give parliament the opportunity to express its view on the matter.
I am amazed that the Department of Trade and Commerce has not seen fit to introduce appropriate amendments to the act at this time. I fully realize that the minister has other things on his mind than international politics as such, which is the job of the Secretary of State for External Affairs. To be perfectly fair, perhaps the Minister of Trade and Commerce did not think of these things when the act was brought forward for renewal. This appears to be the case in any event because in his statement there was no mention of Rhodesia and the use of this act.
Surely the Minister of Trade and Commerce and the Secretary of State for External Affairs should have consulted each other a little more closely before this bill was introduced so that in the future, if the Secretary of State for External Affairs wishes to carry on economic warfare against a country that
Export and Import Permits Act does not meet his standards and requirements, the Minister of Trade and Commerce, who has the responsibility of administering this act and, under present conditions, the highly questionable orders in council, would at least have the opportunity of saying whether he wanted to be the goat in these matters.
The whole purpose of this act has been abused and perverted and I am most astonished that the government, if it wanted to test the approval of parliament in this regard, did not decide to make it quite clear that the act should be used for political purposes and did not recommend to parliament appropriate amendments. When we reach the committee stage we will certainly have a number of other questions to ask the minister.


Maurice Allard: Mr. Speaker, the introduction of this bill is an opportunity for me to call, if I may, the attention of the minister to the great hardships besetting the Canadian textile industry.
I observe in the provisions of the Export and Import Permits Act that certain rules and regulations as to import permits have been designed to protect agricultural products in Canada. But I am of the opinion-and the minister may enlighten me further on this point-that an effort must be made now or very soon, so that the textile industry may benefit from government protection and assistance.
The minister is certainly aware that a highly important industry is involved, as far as Quebec is concerned. There are textile mills in more than 20 towns in the province of Quebec. Close to 40,000 men and women find employment in them and my own riding, the wonderful county of Sherbrooke, has 12 textile mills.
There is no one in the house ignorant of the fact that, each year, this industry is faced with considerable and gradually increasing problems as a result of imports from Japan, for the past few years from Communist China, and also from the United States and other countries.
[DOT] (4:00 p.m.)
Of course, if it must take into account the concept of trade, Canada must also consider selling to foreign countries and accepting goods from them. It is quite simple to deal with the exchange of goods. It is the good old primitive formula of barter.
But what we deplore, Mr. Speaker, is what is happening in the field of textile imports;

April 26. 1966

Export and Import Permits Act when we sell mostly Canadian wheat to some countries, they insist on selling us in return goods which they do not sufficiently diversify and thus send us too large quantities of textile products which are harmful to the Canadian industry.
Take, for instance, the case of Communist China to which we have been selling for some years the Canadian wheat it needs, and from which we accept, in return, goods comprising textile products in a proportion of 75 to 80 per cent.
The minister undoubtedly has information he can refer to; he has access to information sources much broader than mine. But that is precisely the fact which we deplore, and I think that the government should not lose sight of that problem in order to ask those countries to set their own export quotas or grant them limited import permits, taking into account a philosophy, a trade concept to the effect that we should not accept too large a quantity of textile products liable to harm the Canadian production.
The problem is difficult to solve. On the one hand, there are the textile companies which are complaining about foreign imports, something they have been doing for some years. On the other hand, those companies are obliged, in order to meet foreign competition, to increase productivity and have their employees work in almost inhuman conditions, I would say, where the employees have to work under a bonus system and with great speed.


Mr. Speaker:: Order. I hesitate to interrupt the hon. member for Sherbrooke, but I take the liberty to remind him of the standing orders of the house dealing with the relevancy of debate, which require that his remarks must be more closely related to the bill under consideration, namely:
An act to amend the Export and Import Permits Act.
The standing orders do not allow us, at this time, to enter into a debate about the provisions of the act itself, namely the Export and Import Permits Act. Hon. members must limit their remarks, as much as possible, to the renewal or extension of that act for a new period of time.
Of course, the remarks made by the hon. member at this time are interesting, but I am sure he will want to relate them in some way to the subject under discussion now, that is the renewal or extension of the said act.


Maurice Allard: Mr. Speaker, if I dealt with the point I raised, it is because of the remarks made by previous speakers, namely the hon. member for Winnipeg South Centre (Mr. Churchill), concerning the various problems he raised.
I realize that when you interrupted me, I was speaking more specifically of internal difficulties of the textile industry, but I was just about to relate them to the problem of exports and imports according to permits granted to exporters. It is obviously a digression, but I was intending to come to a conclusion and draw to the attention of the minister the problems of the textile industry as well as the quantity and the number of import licences granted to Canadian importers. I think that too many permits are granted and that there are not enough restrictions in Canada concerning textile products.
That is why I wanted to draw, very briefly, the attention of the minister to that matter. It is the first time I do so and I can assure the minister that the numerous textile workers as well as the heads of companies-there are now
5,000	unemployed-are very heedful of decisions made by the central government along these lines and of the welfare it can bring to people who suffer and need help.
[English1
Mr. Robert Muir (Cape Breton North and
Victoria): Mr. Speaker, I shall only take a few minutes to say a few words on the subject now before the house. I feel that the minister, being a Nova Scotian, might feel rather hurt if the members from Nova Scotia did not say anything during the discussion of a measure the minister has introduced. Like the hon. member for Danforth (Mr. Scott), I was rather disappointed that the minister did not take more time with his opening statement. The usual complaint made by the opposition is that ministers take too much time. The Minister of Trade and Commerce (Mr. Winters), like all Nova Scotians, is charming and not antagonistic or obnoxious, so I would have liked to hear a lot more from him. I am grateful, however, for what has been said by the hon. member for Winnipeg South Centre (Mr. Churchill) by way of background to the act and to bring us up to date. He went back to 1954. As the hon. member for Danforth said, this was most helpful to those who are new in the house as well as to some members who have been here for some years but who still perhaps do not have all the information they should have about certain legislation. The hon. member for Winnipeg
April 26, 1966

South Centre drew the attention of the house to the fact that the present Minister of Public Works (Mr. Mcllraith) opposed the Export and Import Permits Act in 1960. It is fine to have this information on the record. I had forgotten about that but I recall now that this was the situation.
Since the minister has spent some time away from the house in the ivory tower circle, he is probably not too familiar with the importance of this measure to his own province. I might mention that during the time the previous government was in power, and I have no doubt since although I am not quite sure, steel rails and other commodities were sold to the government of Mexico by Dosco which operates the steel plant at Sydney, Nova Scotia. I recall that on one occasion, through the actions of the minister of trade and commerce of that time and the right hon. Leader of the Opposition (Mr. Diefenbaker), who was then prime minister, an agreement was signed with the President of Mexico for the purchase of steel rails and other steel commodities.
Someone mentioned that the minister's job is the promotion of trade, and with this I fully agree. I hope the minister will be equally as effective in this portfolio as was the hon. member for Northumberland (Mr. Hees) when he held it. When the minister replies I should like him to advise us what liaison exists at the moment between the officials of his department and Dosco with regard to the possibility of securing more export orders for the steel industry at Sydney. I am sure that the minister, being a native Nova Scotian and up to date with what is happening in our province, realizes that the situation as to steel is alleged to be rather bad. I hope it is not as bad as it would appear to be according to the newspaper reports one reads. I hope the minister will exert every effort through his department to assist Dosco and thereby the employees of the steel plant at Sydney. I was wondering if any recent meetings had been held between representatives of the Department of Trade and Commerce and representatives of Dosco with reference to the possibility of securing more orders.
I can say to the minister that, if we get some good results from him, when the time comes that he decides to contest the leadership of the Liberal party I for one will work hard to get all the Liberal delegates from Nova Scotia attending the national leadership convention to support him. But once he 2303a-273
Export and Import Permits Act becomes leader of the party we will do our best to defeat him. I am sure we would all be pleased to see the minister in that position. I do not wish to continue these remarks but I should like to remind the minister that we have not forgotten he is a Nova Scotian. We are not forgetting that he is Minister of Trade and Commerce, for as such I am sure there is much he can do to assist the steel industry in Nova Scotia and thereby the workers concerned as well as the economy of the whole province.
[DOT] (4:10 D.m.)


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


Robert Henry Winters: Mr. Speaker, there are one or two remarks I might make in winding up this brief but interesting debate, and may I thank hon. members for their participation and contributions. I found it interesting to listen to the arguments advanced by those who feel that the actions by the government in its program regarding Rhodesia should not appropriately be taken under this statute. I can assure hon. members that this question has been explored by our lawyers who have come to the conclusion that this action does fall within the framework of the statute and so I may say that whatever is being done is being done on a perfectly legal basis.
Some questions were asked about copper. These could perhaps be more appropriately dealt with in committee. If the hon. member for Esquimalt-Saanich (Mr. Chatterton) does not mind, provided he is in the house at the time I will be glad to answer any questions on copper which fall within the purview of this act.
The hon. member for Sherbrooke (Mr. Allard) asked questions about textiles. I am glad to say that the textile industry in Canada is one of the industries which has shown growing efficiency and made great strides in recent years and is now able to stand on its own feet much better than it has for many years. It is competing very effectively both domestically and in world markets.
I am glad to tell the hon. member for Cape Breton North and Victoria (Mr. Muir) that it will be a great pleasure for me to do whatever I can to further the interests of the province of Nova Scotia, both with respect to the exportation of steel or any other products made in that most favoured of all provinces,
April 26, 1966

Export and Import Permits Act with the exception perhaps of one constituency in another province.
In recent weeks we have in fact enabled Dosco to ship a substantial order of steel rails through the instrumentality of the Export Credits Insurance Corporation. I and officials of the department had a number of meetings with officials of Dosco at that time, all of which, I am sure, were satisfactory to them, and for our part it was a privilege to be of assistance in enabling those transactions to be conducted. I think that those who direct the affairs of Dosco will be able to testify that the Export Credits Insurance Corporation has been of substantial help to them over the years and I hope it will continue to be so in the years ahead.
If there are other questions hon. members would like to ask in committee, Mr. Speaker,
I will be glad to endeavour to answer them.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Rinfret in the chair.
On clause 1-Duration.
Gordon Minto Churchill: Mr. Chairman, I should like to say a few words now we are in committee. The minister relied upon information from the law officers of the crown to the effect that legally the government was within its rights in using this act with regard to Southern Rhodesia. But the point which we were making was that the act was never intended originally, at least up until 1965, for the purpose which has now been attached to it. That was the point we were making.
I still think, despite the opinion of the law officers, that the government should have used a different method when it was breaking new ground in the imposition of sanctions. This is the only time in Canada's history that sanctions have been applied except for wartime, and certainly this particular act was never envisaged for that purpose.
May I relate to the house what the parliamentary secretary of the day, Mr. Dickey, had to say in response to those who were Criticizing the government in 1954 for asking for these powers which at that time the members of the opposition thought should be curtailed. As reported at page 3156 of Hansard for March 15, 1954, the parliamentary secretary said:
The final point made by the hon. member for Greenwood-


That was Hon. James Macdonnell.
-was to ask me whether or not the need for this power has disappeared, and to what extent that meant this power was being retained and re-enacted simply because it is nice to have powers. X can tell him that that is not correct.
Note these words:
The limited use of those powers is not properly the test of the need of the powers, but it is a test of the manner in which the powers have been used. It indicates. I think, the restraint and the care that have been brought to the exercise of these powers.
Those who were criticizing the government of that day from this side of the house were correct. They were fearful that the government would perhaps use these excessive powers in the wrong way. Constantly when we were talking, as we were in that decade, about excessive powers in the hands of the executive we were assured that, of course, the government of that period would never think of exceeding its powers. However, Mr. Chairman, if I may digress for one sentence, this shows the value of an opposition drawing attention, in the course of debate on legislative items, to the dangers that are inherent in legislation unless the drafting of bills is carefully considered.
Those who spoke against this measure in 1954 were certainly doing a service to their country. What they feared has happened. The government has used this act in a way that was never intended and it has extended immeasurably its powers under the act.
May I make one other reference, in this instance to the debate on May 17, 1960, as reported at page 3964 of Hansard. The present Minister of Public Works was then speaking and in a short paragraph had this to say:
I think all hon. members will agree that this type of legislation is not the type of legislation which is desirable in our parliamentary system and that, were it not necessary, it should not be brought forward. I think hon. members will also have to agree that world circumstances being what they are today there is not much alternative left but to grant an extension of this arbitrary power given to the government to control exports for certain purposes and to control imports for certain limited purposes set out in the act.
When he spoke on that occasion he saw dangers in this act at a time in 1960 when the world situation was disturbing because of the intensification of the cold war. He reluctantly agreed that the act should be continued in force but he did place emphasis on the limited purposes set out in the act for the control of imports, with which he dealt at some length later in his speech. However, at that
April 26, 1966

time nobody envisaged the use of the act in the way in which it is now being used for the imposition of sanctions and the complete cessation of trade with Southern Rhodesia.
At this stage I want to express my thanks to the minister for a letter he sent me on March 10 in answer to certain questions which I put before him on March 1 when we were considering his estimates. I have received from him a full reply to the questions I asked on that occasion.
[DOT] (4.20 D.m.)
Let me summarize the questions and the answers. I asked about the situation with regard to imports from Southern Rhodesia. In three stages the government reached the point at which it excluded all goods of Rhodesian origin. In reply to the question whether Southern Rhodesia had been properly placed on the area control list the answer was, yes. This had been done on December 20, 1965. May I ask the minister in connection with some of these problems whether there has been any evasion of export and import controls with regard to Rhodesia? My second question-I think I will end my consideration of Rhodesia at this point-is this: Is the minister about to use this act in order to pursue a program of economic sanctions against any other country?


Robert Henry Winters: I am not clear as to the purport of the first part of the question. Would the hon. gentleman mind repeating it?


Gordon Minto Churchill: I was asking whether there had been any evasion of export or import controls with regard to Rhodesia. The Leader of the Opposition indicated there were articles for sale in this country which obviously originated in Rhodesia.


Robert Henry Winters: I am sorry; I understood the word as "invasion". I heard the exchange between the Leader of the Opposition and the Prime Minister earlier this afternoon but I was not aware of the reported evasions. Nor am I aware of any other evasions. There could possibly be some but I am not aware of any. So far as I am concerned our application of controls under this policy with respect to Rhodesia is working.
The second part of the question was whether or not the government intends to use this act to apply sanctions to any other countries.
I must say I am not aware of any such intentions at the moment. I am not equivocating. It is just not a matter which has come up for consideration.
Export and Import Permits Act


Wallace Bickford (Wally) Nesbitt: I gather the minister is relying on the particular section of the act which refers to intergovernmental agreements for the imposition of this economic warfare on Rhodesia. Would the hon. gentleman indicate to us whether the intergovernmental agreement to which I presume he is referring is the agreement between Canada and Great Britain or whether it relates to the resolution passed at the United Nations to which Canada was a party?


Robert Henry Winters: I am not as fully versed in all the legalistic implications of this statute as the hon. member for Oxford is. But this action falls legally within the framework of that part of the statute which deals with intergovernmental arrangements and it is related to the intergovernmental arrangement between the United Kingdom and Canada respecting the program of exports to and imports from Rhodesia.


Wallace Bickford (Wally) Nesbitt: I have here the order in council. One of my hon. friends has been good enough to pass me a copy. It does refer to the intergovernmental arrangement between Britain and Canada dated November 26, 1965.
As I recall it, when this matter was being discussed on a previous occasion in the house it was requested that further particulars of this intergovernmental arrangement be made available to hon. members. I believe the communications were tabled and, to the best of my memory, rather than constituting an agreement between the governments of Canada and the United Kingdom the correspondence involved a pious expression of hope on the part of the United Kingdom that Canada would fall in line with some kind of arrangement to provide for economic sanctions against Rhodesia. Again, this becomes somewhat legalistic, but if the minister and his colleagues are relying on this section of the act to implement economic sanctions against Rhodesia it seems to me an intergovernmental agreement should be clarified by an exchange of notes or some formal, signed document rather than being, as I recall it, a mere expression of hope that Canada will conform with the wishes of the government of Great Britain.
This is probably one of the principal reasons why a number of members of this house have felt that these actions have, certainly in a technical sense, fallen short of strict legality. Moreover, as my hon. friend from Winnipeg South Centre has pointed out, it was
4320	COMMONS
Export and Import Permits Act made perfectly clear when this act was passed in the first place, and in the debates which took place in the house not only then but on later occasions, that these discretionary powers were only to be exercised with great care and in a very limited way. But here we have the government of Canada taking a brand new step on foreign policy, one having nothing to do directly with the Department of Trade and Commerce, in other words, declaring economic warfare against a country because they do not like the method by which it obtained its independence or because they do not like the internal policies of its government and using this particular act as an instrument. I submit it is most improper not only legally but morally for the government to use an act which was clearly to be used in the most limited way for the purpose of carrying out foreign policy, and taking a brand new step in foreign policy at that.
Certainly such a course was never envisaged in all the debates which took place when this measure was up for discussion over the years. I am sorry in a sense that the Minister of Trade and Commerce is at a disadvantage in this respect. This whole matter concerns foreign policy, a field which is not within the particular purview of the hon. gentleman. However, the act which comes under his jurisdiction is being used for other purposes. It is most improper. It is a pity that the hon. gentleman should have to try to answer these questions. Perhaps he is not in a position to reply to some of them. But I am surprised that when this matter was brought up it was not suggested to him that if it was intended to use acts which came under his jurisdiction for other purposes then at least they should be amended so as to give a much more legal basis for the activities proposed.


Gordon Minto Churchill: Has the minister a list of those countries which come under these controls?


Robert Henry Winters: Yes, I have.


Gordon Minto Churchill: Would the hon. gentleman read it?
[DOT] (4:30 p.m.)


Robert Henry Winters: Yes, I can give that list. It includes Albania, Bulgaria, China-including Manchuria but excluding Taiwan-Czechoslovakia, Estonia, Germany-Soviet zone only-Hungary, Latvia, Lithuania, Mongolia, North Korea, North Viet Nam, Poland, Roumania, Sinkiang, Tibet, the Union of Soviet Socialist Republics, and now Southern Rhodesia.
[Mr. Nesbitt.l
DEBATES	April 26, 1966


Gordon Minto Churchill: Is Southern Rhodesia the only Commonwealth and non-Communist country on that list?


Robert Henry Winters: I think it is safe to say that the character of the other countries is as mentioned by the hon. member.


Gordon Minto Churchill: I am interested in the shipment abroad of strategic materials from Canada. Has the minister anything at hand which would enlighten the committee with regard to the extent of shipments abroad of strategic materials and the countries to which they are going? Has he the number of permits issued for that purpose?


Robert Henry Winters: I have a quick rundown of the number of permits issued on an individual basis for all purposes. In 1962 there were 8,246 export permits and 178 import permits. In 1963 there were 8,544 export permits and 60 import permits; in 1964, 9,124 export permits and 74 import permits and in 1965, 8,182 export permits and 196 import permits. I do not have them broken down as to the nature of the commodities covered under those particular permits.


Gordon Minto Churchill: If the minister cannot reply to some of these questions perhaps he will follow the course he adopted in March and write me a letter on them.


Robert Henry Winters: I would be very glad to do so.


Gordon Minto Churchill: I would like to know what has been shipped abroad from Canada by way of arms and ammunition, and to what countries. My second question is, have machines called by the trade name "Shervic" been exported to Israel?


Robert Henry Winters: I will get the information, although I am not familiar with that code name or trade name.


Gordon Minto Churchill: To enlighten the minister so that he will not have to search too diligently, it was used a few years ago to conceal the fact that the machine was a Sherman tank without the guns on it and it was described to me as being for agricultural purposes, like a tractor.


Reid Scott: Under section 4, for example, in the case of China and the U.S.S.R. with whom we do some trading what are the criteria used by the governor in council in placing countries like these on the area control list? What are the factors the government takes into consideration in making decisions of this type?
April 26, 1366


Robert Henry Winters: Mr. Chairman, I shall have to review that with my colleagues in the government. I am not able to give a clear answer which would satisfy my hon. friend in all respects at this time. Perhaps I can inform myself more fully on this and speak to him.


Reid Scott: Perhaps the minister would have the appropriate officials give us some information on the list of goods in the export control list coming under section 3, and with respect to the list of imported goods under section 5.


Robert Henry Winters: I can give the hon. member some information on that but they are very long lists indeed. Perhaps it would be better if I sent them to the hon. member rather than putting them on Hansard.


Reid Scott: There does not appear to be any provision for laying before parliament the decisions which the governor in council makes under sections 3, 4 and 5. Has any consideration been given to providing some machinery for placing this type of information before parliament since it does not appear to be contained in the annual report which the minister lays before parliament under section 26?
The minister will understand that it is d'fficult to review the act when we are not able to obtain information. I am not criticizing the minister, because the matter is highly involved and technical, but I think the annual report should give the designated items under these various sections so that we can review the operations of the act when discussing the minister's estimates.


Robert Henry Winters: Under section 26 there is provision for placing a report before the house. The section reads:
As soon as practicable alter the 31st day of December of each year the minister shall prepare and lay before parliament a report of the operations under this act for that year.


Reid Scott: I have the report for the year ended in 1964 before me but it is of a very general type. It lists the total applications received and the total applications granted. It does not enter into any detail and does not provide, sufficient information to make a critical analysis of the act. We could get this information every year by way of questions on the order paper but that would clutter up the order paper with long, detailed questions. The minister might consider the advisability of making this information available by some other method. As has already
Farm Credit Act
been mentioned, the act gives him quite extens-ve powers and it is not inconceivable that it could be used as a screen behind which governments-I do not say this one-could carry out decisions which are not economic at all but are essentially political in character. The official opposition has already made reference to this point in connection with Rhodesia. Although our party agree with the action which the government took in the case of Rhodesia, it is an example of what is really a political decision being carried out under an act which was essentially designed for economic purposes.
Is any consideration being given to a form of appeal under sections 7, 8, 9, 10 and 11? These sections give the minister wide powers to grant exemptions both for export and import purposes, and there do not appear to be any regulations laid down respecting the manner in which he does this. Is there provision for an appeal from his decision in cases where exemptions of this kind are granted?


Robert Henry Winters: I do not believe there is any formal machinery for appeal but people do appeal occasionally. With respect to the hon. member's previous question, he may know that the lists of goods under control are established by order in council. They are tabled and published in the Canada Gazette and so are a matter of public knowledge.


[Stage Direction]
Clause agreed to.
Title agreed to.
Preamble agreed to.
Bill reported, read the third time and passed.
[DOT] (4:40 p.m.)


John James Greene: that the house go into committee to consider the following resolution:
That it is expedient to introduce a measure to amend the Farm Credit Act to increase the authorized capital of the Farm Credit Corporation from twenty four million dollars to forty million dollars and thereby to increase the maximum borrowing capacity of the said corporation from six hundred million dollars to one billion dollars.
Motion agreed to and the house went into committee, Mr. Batten in the chair.


John James Greene: Mr. Chairman, as the resolution states it is proposed to amend the Farm Credit Act to provide an additional $16 million capital for the Farm Credit Corporation

April 28. 1966
Farm Credit Act
and to increase the maximum borrowing authority of the corporation, from time to time as required, by a further $400 million. The total capital at present is $24 million and the Minister's authority to lend to the corporation is now limited to $600 million. It is estimated that the $400 million which will be provided by this amendment will be sufficient to meet the needs of farmers for a period of about two and a half years.


Mr. Rapp:: Mr. Chairman, we are pleased to have this increase in the capital and borrowing capacity of the Farm Credit Corporation because the expenses of farmers are higher than ever before in the history of Canada. When we speak about $1 billion in lending capacity in respect of the Farm Credit Corporation we are speaking of something which a few years ago was not applicable. We did not expect that the Farm Credit Corporation would have to have $1 billion available for the many farmers across the country. However, times have changed considerably.
While I was home over the Easter recess I noticed that some of the land which had been sold by farmers had been sold for amounts which nobody ever expected. For instance, an ordinary, good farm comprising half a section of land had been sold for $45,000. I well remember the years when I bought my first half section of land. At that time the price was $5,000 and it was a very high price to pay. So times have changed.
This increase will help place the farmers in a position to avail themselves of larger amounts to buy land through borrowing from the Farm Credit Corporation. But what, about the farmer who is starting out, the young farmer who is perhaps not able to take on where the old man left off? He wishes to go on farming the same as his father, his grandfather and others of his family have done in the past. I think there must be some other solution to the problems of the young farmer. As I said yesterday, there is the high cost of farm machinery and the high cost of living. This applies, of course, to every Canadian citizen.
However, I should like to impress the minister with the fact that there is another side to the picture. The farmer needs not only the opportunity to borrow large amounts of money through the Farm Credit Corporation but also must be placed in a position where he can repay the amounts he borrows from the corporation. This applies to all farmers from the west to the east.
Again I should like to stress the second point I emphasized yesterday under other circumstances, that is, that the Minister of Agriculture must take steps to improve the income of the farmer so that he will be in a position to be able to repay these loans.


Wallace Bickford (Wally) Nesbitt: Mr. Chairman, I wish only to add to what the hon. member for Hum-boldt-Melfort-Tisdale already has said. I should like to congratulate the minister for introducing these amendments which improve the lending capacity of the corporation. I think the Farm Credit Corporation has done a tremendous job over the years. I believe most hon. members in all parties are very satisfied with the manner in which the corporation has operated and the co-operation which has been given to farmers making applications. While some applications perhaps have not been accepted too readily in the first instance, the corporation and its officials have gone out of their way to give every possible consideration to applicants who are deserving. I think this reflects great credit on the corporation and originally, of course, on the m.nister of agriculture of the day who was responsible for setting it up.
There is one thing I should like to recommend to the minister which I think is quite important. I do not know whether this has occurred to the minister or whether, if it has, he has not been able to convince his colleagues, but I wish to suggest not only that the lending capacity of the corporation be increased but also that the ceiling on the amount of the loans be increased. At the present time the maximum amount of a loan is $40,000. In practice, of course, another $14,000 can be borrowed under the Farm Improvement Loans Act. While this is in a different category so to speak and under another administration, nevertheless farmers can obtain up to $54,000 at the present time.
I think these arrangements were very good when they were made but, as has been pointed out by the last speaker, farm operations like other operations in Canada have changed very greatly in the last few years. Certainly in southwestern Ontario, the part of the country from which I come, farming units have increased greatly in size and area for a number of reasons. I do not wish to take up the time of the committee by going into these reasons. I am sure hon. members know why farm units have increased in size. There are such things as the use of expensive machinery because of the shortage of farm labour, and so on.
(Mr. Greene.]
April 26. 1966

[DOT] (4:50 D.m.)
The fact of the matter is that because of the increased size of farming units, particularly dairy farms in southwestern Ontario and eastern Ontario, capital costs have greatly increased. Land value has gone up, the cost of machinery has gone up and, as has been pointed out, there is a tendency for farmers to acquire a greater variety of equipment. Various types of farming operations require larger and more equipment. This is particularly true of the dairy industry for the handling of milk and other products.
I hope the minister can convince his colleagues on the treasury benches that further alterations and changes should be made to the Farm Credit Act so that the size of loans to individual farmers can be increased from $40,000 to perhaps $50,000 or $60,000. This would be very helpful to farmers.
In certain parts of Canada there is a tendency on the part of individuals to get together and operate farms on a partnership basis. I have in mind one recent partnership formed in my own area. Under the terms of this act partnerships are only entitled to the same size loan as an individual farmer. Since there is a growing tendency in Canada toward partnership farming operations-fathers and sons, brothers and even friends-using the same equipment, I suggest that the minister should give consideration to extending the size of loan that the corporation can extend to this type of operation as well as to the individual farmer.


Mr. Schreyer:: Mr. Chairman, the legislation before us has been anticipated for some time. The proposed increase in the authorized capital of the Farm Credit Corporation from $24 million to $40 million will increase the lending capacity of the corporation and thereby increase the borrowing authorization from $600 million to $1 billion. This is all related to the changes now taking place in the agricultural industry.
The transition that is now taking place in the farming industry is causing an obvious trend toward larger operations. This change in the method or mode of farming has some obviously desirable features but I say with certainty that there are a number of undesirable features as well.
It would not be necessary to increase the amount of loan capital available to the Farm Credit Corporation if we had a better agricultural prices program in this country. Agricultural prices and farm incomes are not
Farm Credit Act
as high as they should be in relation to our economy. For this reason I believe it is incumbent upon the government to do something to increase the amount of farm credit available. Farm operators must enlarge the size of their operations in order to achieve a higher economy. Governments at the federal and provincial level have been increasing the amount of credit capital available to farmers and there has been a steady though not alarming increase in debt on the part of farm operators.
Since it is a fact that our agricultural pricing mechanism is deficient and inadequate, we are not in a position to oppose an increase in farm credit. But we certainly want to say that we have some misgivings in this regard because this is a poor substitute for proper pricing and increased income.
The hon. member for Oxford made a plea to the Minister of Agriculture to amend the legislation so as to increase the size of loans available to farm operators. I suggest that a good deal of consideration and study should be given to the possibility of easing the requirements because many small operators are not able to meet them for the purpose of obtaining credit. These are the people who need capital in order to increase their incomes by increasing the size of their operations. I am sure all hon. members who represent farming constituencies realize that the younger generation of farmers are unable to obtain loans from the Farm Credit Corporation because they cannot meet the requirements laid down by the existing legislation.
In addition to the plea made by the hon. member for Oxford, I ask the government to give consideration to the easing of the requirements under the Farm Credit Act. I realize there must be some limitation because if prudence were not exercised the corporation would find itself in a position of extending loans without security and with little likelihood of repayment. This would be just as harmful to the farmers obtaining these loans as to the corporation itself. In conclusion let me say that with certain misgivings we support this proposed legislation because under present circumstances additional farm credit is necessary for a healthy Canadian agricultural picture.


Mr. Olson:: Mr. Chairman, I want to say a few words about the proposed amendments to the Farm Credit Act. I am fully aware of the fact that while this is an important change it is a relatively simple one in that it increases

April 26. 1966
Farm Credit Act
the capital by $16 million, thus authorizing the government to extend the amount of credit available to the Farm Credit Corporation from $600 million to $1 billion. For that reason it may be improper to review all the regulations in respect of the Farm Credit Act.
[DOT] (5:00 p.m.)
The minister said that the government anticipates this expansion of the money available to the Farm Credit Corporation will be sufficient for two and a half years. I suggest to him that if the price of land and farm machinery continues to rise as rapidly during the next two and half years as it has in the last two and a half years this extension will not provide the capital required by farmers in the next two and a half years.
I think that perhaps one of the real problems and paradoxes in the extension of farm credit under the Farm Credit Corporation is that every time parliament increases the amount of money available to individual farmers you find there is an almost concurrent or immediately following increase in the price of land. The hon. member for Hum-boldt-Melfort-Tisdale spoke of the very high price, the almost astonishing price I think he said, paid for a farm in his area. This has happened in almost every other part of Canada as well.
1 have come to believe that one of the reasons for the increase in the price of land is that very recently the maximum amount available from the Farm Credit Corporation to an individual applicant was increased. I suggest, Mr. Chairman, that we are partially defeating the purpose of the act in increasing the maximum amount available. I do not believe, however, that the amendment now before us will have this effect because it does not in fact increase the maximum amount available to an individual; it simply increases the over-all amount available to the corporation and will therefore allow them to process and deal with more applications for loans.
I am apprehensive about the suggestion made by the hon. member for Oxford that the time has come again when we should increase the ceiling on individual loans, because I believe that only two years ago there was an increase of 100 per cent from $20,000 to $40,000 under the Farm Credit Act and from $7,500 to $15,000 under the Farm Improvement Loans Act. I do not believe that two years after a 100 per cent increase another increase is necessary. One of the problems that follows these increases and the

high prices paid for land and machinery is, of course, that the capital cost, interest charges and other things that a farmer must bear increase substantially.
One of the greatest problems-here I agree with the hon. member for Oxford and the hon. member for Springfield and I believe the hon. member for Humboldt-Melfort-Tisdale also mentioned this-is that we need to be even more concerned about finding ways and means of seeing that farmers have an opportunity to repay these loans. I know that an increasing number of well-established farmers are today getting into financial difficulty and have been for the last two or three years because of the so-called cost-price squeeze.
Every time land, capital investment or the price of farm machinery goes up substantially without a corresponding increase in the farmer's receipts, the cost-price squeeze, of course, becomes even more acute. Therefore I am not in full agreement at the moment that the ceiling per individual application should be raised so soon after the last increase which, as I said, was 100 per cent. Having said that, Mr. Chairman, I fully realize that the capital investment for a farm large enough to produce a reasonable standard of living continues to go up and up and up. Therefore we have to bear in mind that it now takes $50,000, $60,000 or $70,000 of capital investment in land, machinery, livestock and so on for a farmer to have sufficient production to provide a reasonably adequate standard of living.
The situation is perhaps not so difficult for well established farmers who have accumulated the necessary capital, but it is extremely difficult for a young farmer to obtain this amount of capital. If the young farmer does not obtain the capital he is unable to obtain the productivity necessary to provide a reasonable standard of living; his net income is not sufficient.
If we refer to the records of the Farm Credit Corporation we find that the regulations applicable to young people who wish to start farming have perhaps been a little too rigid. In this connection I refer to the matter mentioned by the hon. member for Springfield, namely, that some of the security requirements as to assets are perhaps too high and too rigid and do not allow a young farmer to qualify for a loan. I think the end result will perhaps prove that this is so, because in the Farm Credit Corporation annual report for the year ended March 31, 1965, they show an operating loss for that year of only $529,000. The year before it was
April 26. 1966

$1,118,000 and the year before that it was $1,080,000. Therefore the operating loss of the Farm Credit Corporation for the last fiscal year for which statistics are available was cut by about 50 per cent.
There is no explanation for this in the report but I suggest to you, Mr. Chairman, that this is a very small amount of the total amount of money lent by the Farm Credit Corporation and perhaps this in itself is an indication that they are not being sufficiently adventurous, or whatever word may be more suitable, taking into consideration the capabilities of young people who want to farm and are placing too much importance upon the firm or fixed assets they may have. Therefore I would urge the minister, in view of this very low loss, to prevail upon the Farm Credit Corporation to be more lenient, if that is the right word, or perhaps they could pay a little more attention to the qualifications and capabilities of young people who do not have a large amount invested in fixed or capital assets which can be put up as security.
At the outset of my remarks I said that I wanted to say only a few words. Perhaps we have strayed a little from the terms of the amendment, but there are a number of other areas respecting the handling of farm credit that ought to be considered very carefully. Even though I may be slightly out of order, Mr. Chairman, I should like to impress upon the minister that we in this part of the house are very concerned about the deteriorating net income of farmers across the country, because from this net income they will have to repay these loans in the future. Certainly we have a responsibilty to look into this question and see whether something can be done so that once the money has been lent there will not be a great many people in difficulty in attempting to pay it back.
[DOT] (5:10 p.m.)
Finally, I want to say that there has been an alarming increase in the price of farm machinery. We had a manifestation of the concern in this regard yesterday in the house. I am wondering whether there has not been an increase in the price of farm machinery because the maximum amount available to an individual farmer was raised from $7,500 to $15,000 only a short time ago. I wonder whether one of the first steps the minister could take in connection with this matter would be to have the people responsible for combines investigations look into the situation to ascertain if there have been any 23033-274
Farm Credit Act
agreements made between the various farm machinery companies to raise prices. If there have not been, it seems a little difficult to understand why all of them decided to raise their prices substantially within the last 15 to 18 months. We would hope that there has no.t been any agreement to raise prices simply because there is more money available. I conclude by saying that I feel the minister has a responsibility to do something to convince farmers across the country that there is some justifiable cause for the very large and significant increase in farm machinery prices which we have noted recently.


Mr. Laflamme:: Mr. Chairman, I just want to add a few words to support that resolution and point out some problems related to the application of Canadian farm loans.
I know that most civil servants responsible for implementing decisions concerning loans which must be granted to farmers, especially in the Quebec area, are aware of one of the fundamental problems of agriculture as a whole in eastern Quebec, namely the consolidation of farms.
I would like to draw the attention of the Minister of Agriculture to the fact that the civil servants who are responsible for the application of farm loans and who already understand the problem should consider helping the farmers who request loans to consolidate various properties liable to ensure economic operations.
In the past, farms were divided to ensure only the survival of the farmers and those living on the farm. Today, it has become necessary to ensure economic operations. Most farms in eastern Quebec have not been enlarged and besides, considering the cost of farm mechanization, it is absolutely possible to make of all our farms agricultural entities and units capable of giving their owners the equivalent of the average income of industrial workers.
I know, Mr. Chairman, that the Minister of Agriculture is able to understand that problem. It is a problem which, under section 96 of our constitution, comes under federal jurisdiction. Its application is, of course, extremely difficult because it is impossible to talk about expropriation, but I sincerely believe that if special consideration were given to farmers anxious to consolidate their farms, to have farms large enough to be economical, we could thus bring a basic solution to the main problems of agriculture in eastern Quebec.
Farm Credit Act

April 26, 1966
tEnglish]


Mr.   Kindi@: I have a few points, Mr. Chairman, which I should like to bring to the attention of the minister while the matter of farm credit is before the committee. First, in his view how long will it take before we reach the point when the fund set up under this legislation, which will now amount to a billion dollars, will become a sort of revolving fund? In other words, farmers borrow from the Farm Credit Corporation and each year a certain amount of the money they borrow is paid back. Eventually the farm credit fund should shake down to the point where it is functioning more or less as a revolving fund. When this point is reached it should not be necessary to increase the size of the fund for lending purposes.
The purpose of this bill is to increase the amount of the fund to a billion dollars. I see nothing wrong with that; in fact, I am very much in favour of it. All I am asking is, have the people engaged in the administration of the Farm Credit Act given consideration to the period of time that will be necessary before the funds repaid to the corporation will balance the amount of money lent by the corporation? In other words, the fund would then shake down to a point of equilibrium. I hope that the minister and his officials will provide an answer to that question.
Second, since there is no mention in the resolution that the interest rate of 5 per cent on the first $20,000, which was set in the old act, will be raised, I assume it will remain and that on any amount borrowed at above this figure interest will be charged at the going rate. I ask the minister if he has any idea what the rate of interest will be on the amount borrowed above $25,000 or $27,000, which if my memory serves me correctly was the amount established in the old act. Has the minister taken any steps to familiarize himself with what this rate will be?
There is one other point in that connection. Because of the recent increase in the cost of farms and the need for capital to purchase additional land to create an economic unit, it is becoming more and more apparent that farmers will have to go over the $27,000 limit, if that was the limit established in the old act. If a farmer does borrow above this limit he will have to pay the going rate of interest. The point I am raising is that the additional interest that will be charged by the Farm Credit Corporation becomes very important to the practical farmer. I shall not hold up the discussion of this resolution any longer.

[DOT] (5:20 D.m.)
I simply wish to say that I think we can see what a sound move it was to set up a farm loan agency and corporation administered by the Minister of Agriculture. It used to be administered by the Department of Finance and I for one spoke against that relationship. I felt all along that it should be under the direction of the Minister of Agriculture and now it is. I hope that its efforts in giving assistance to the farmers will be maximal.


Herbert Wilfred Herridge: Mr. Chairman, I know the mood of the house is to get this resolution adopted by six o'clock so I am not going to take a great deal of time. I rise to express my complete support for the purposes of the resolution.
I was very interested in the remarks of the hon. member of Humboldt-Melfort-Tisdale. I always appreciate what he has to say because he is a genuine farmer and knows what he is talking about. Whether or not we disagree over other matters, I always know that he has his feet on the ground.
I was also interested in what the hon. member for Medicine Hat said. You might think he was a chemist but that is not the case. He is a farmer who has made a success of farming and knows what he is talking about. The hon. member for Kootenay West is a farmer also and is very proud to be a life member of the Agricultural Institute of Canada. I wrote my thesis on farm credit before the first world war. I do not know whether or not the minister was born then. I also speak as president of the Canadian Tree Farmers Association which is very interested in this legislation.
This is one of the pieces of legislation for which we must give the former government credit for bringing into the house. I believe in giving credit where it is due and speaking harshly when I feel otherwise.
As I said before, Mr. Chairman, I have been interested in this subject since before the first world war. I have studied the practices used in Sweden, Norway, Britain, France and various other places. The first time I spoke on the need for an improved farm credit arrangement was in the house in 1945. I was very pleased, as I have said, when the former Progressive Conservative government introduced the Farm Credit Corporation legislation to supersede the farm loan act.


Mr. Ricard:: 
Herbert Wilfred Herridge: Yes, that is right, and they have expressed their pleasure in many ways, especially in western Canada.
The Farm Credit Corporation Act was introduced, I understand, largely as a result of the experience gained under the Veterans Land Act administration with respect to supervised credit. It is no use extending credit to people unless they have an opportunity to meet their obligations. Credit can only be extended as long as you have an assured production and a reasonably assured income. That is the other aspect of the question which I hope the minister will deal with in the days ahead.
While I am speaking on this subject I should like to give him credit for what he has done in connection with the price of milk. I have heard from a good many farmers in eastern Canada whom I have come to know in recent years that they appreciate the action taken by the government with respect to stabilizing the price of fluid milk. Anything of that sort helps the rural producer.
At this point I should like to say that I think this corporation is well managed. When the old farm loan act was in operation you could get very few loans if you were living in the interior of British Columbia. I am talking about the east and west Kootenay now. I am sure the hon. member for Kootenay East will back me up in this. I have followed very carefully the management policy in east and west Kootenay since this act has been in operation.


Mr. Starr:: The hon. member for Kootenay East is not even listening.


Herbert Wilfred Herridge: He is pretending not to but is taking in every word because he will repeat them later. He knows that what I say is right. I receive newspaper accounts of the hon. member's reports to his constituents and he is quite willing to give credit where it is due. He knows that this act has been of great advantage to many farmers in this country and I am sure he is supporting this resolution.
I have travelled from farm to farm and I know something about land values. I do not talk on any question I know nothing about. I am not a lawyer and I do get out of my depth on legal questions, but I have lived all my life on a farm. I know how farming people think, I know their approach to life, and I know that generally speaking they are somewhat conservative, with a small "c". They can be conservative with a small "c" in
23033-274J
Farm Credit Act
matters of finance and yet be socialistic in philosophy, which is a combination some people cannot understand.


An hon. Member:: Is that what you wrote your thesis on?


Herbert Wilfred Herridge: No; mine was based on the quite unorthodox practices of those days, which would consider a farmer as being in heaven with an act like this to cover his credit requirements. I have been on farm after farm, Mr. Chairman, and I must give the corporation management credit for a job well done. They have managed with a sympathetic approach to the farmer's needs, problems and requirements so far as loans are concerned, and I am very glad to see that the minister is continuing in the same vein.
Looking now to the future, we are particularly interested in having a policy that meets the needs of the young farmer. Circumstances are changing. Farms are growing larger in area, necessarily so, in order to be farmed efficiently. I might say that in contrast to the hon. member for Medicine Hat, who speaks for these very large farms and for farmers who ride around on huge combines listening to a radio playing while they are driving, I represent farmers who have had to make their living as a result of their acquaintance with the grub hoe, the crosscut saw and the walking plow. These are different methods of farming which you meet in various parts of our country.
I suggest that what we have to consider are the needs of our young people and relate those needs to the efficient family farm unit. Following the second world war many young men left the farms and went to work in industry because the wages were attractive. However, during the last five to seven years I have noticed a drift back to the farm of these young people, in some cases to their parents' farm and to other farms. They are willing to sacrifice certain material advantages so far as wages are concerned for what I call the farming way of life and the stability and other advantages this life brings with it.
I also suggest that the minister should give some consideration to increasing the amount of loans available to sound partnerships which are farming in most cases a larger area than the average individual farmer would farm. Consideration should be given too to loans to family corporations. Quite a number of farmers have found it to their advantage to form a family corporation, pooling their auditing, bookkeeping, income tax and other

April 26. 1966
Farm Credit Act
things. I think provision should be made for loans for farming purposes in respect of the total holding of a corporation. I am not talking of large companies or anything like that but of family corporations which operate family farms. In some cases you have a father and three or four sons who have owned individual farms forming a family corporation which they farm as one unit. That is the sort of thing which should be encouraged, and I trust that amendments will be made to the act in light of the experience which has been gained in recent years.
[DOT] (5:30 p.m.)
There are some regional problems which bear mention. It is amazing to see the great differences which can occur in this country between farms a short distance apart. I am speaking of my own district and of Fauquier on the Arrow Lakes where Delicious apples are grown which are nice and red, apples which will win prizes in Great Britain or at fairs across the country. However, 50 miles farther north that variety cannot be grown satisfactorily. Twenty five miles to the south, peaches and grapes can be grown commercially. These regional differences can be very localized and I suggest to the management of the corporation that attention should be paid to them. Management would then be in a position to advise young men beginning to farm, or anxious to extend their farming operations, on the basis of this experience of localized differences affecting varieties of fruit, grain and other crops.
I also suggest there could be greater flexibility in the administration of the act to meet particular circumstances of the kind I have outlined. I agree that the management of the corporation have not acted like bureaucrats but have administered the act sympathetically in the interest of the farmers concerned. But I suggest there could be greater flexibility so as to provide for differing conditions which can be found within a comparatively small area.
Finally, I suggest that the management would be well advised to keep in touch with farmers at the local level, not just address the Canadian Federation of Agriculture at its annual convention of the farmers unions at their annual meetings but have the officials go out to the local farmers institutes and union branches to obtain their co-operation in this respect. I have had experience along these lines and I am sure that if the officials get the co-operation of local people who are able and willing to advise on the circumstances which exist in their own area the
[Mr. Herridge.l
corporation would become an even greater success than it is today. I am speaking about participation at the local level.
I mentioned this years ago with respect to the National Housing Act. The officials were afraid to go out into the country because they thought they might get involved in questions of policy. However, in recent years they have been giving talks to farmers institutes and similar organizations. They tell the story; they are not as restricted as they were years ago. Their action has been welcomed by the local organizations and communities concerned. It has been of advantage to the corporation as well as to the advantage of the communities and borrowers directly involved.
That is all I have to say now. I repeat that this act has been well administered and that the officials deserve to be congratulated on what they have done to date.
f Translation1


Mr. Elhier:: Mr. Chairman, I should like to join the other members of the house with regard to this resolution, in asking for an increase in the amount of money assigned to farm credit which is to be made available to farmers.
I also wish to echo some of the recommendations made by other members to the minister. With regard to my own riding, first of all I wonder if it might not be possibe to reduce the initial payment required by the corporation when it agrees to grant a loan to a young farmer, because it is very difficult today to operate a farm unless one has a working capital of $30,000 to $35,000.
According to the act as it now stands, a young farmer needs $15,000 in cash to set up that type of operation. Farmers very seldom have that much money. And so, we lose a great number of highly qualified farmers who, on the other hand, are not as qualified to enter the labour market. They are denied the opportunity of becoming good farmers
Second, in my riding, loans were refused several times under total loan No. 3. To qualify, the farmer must not be over 45 years of age.
Now, I would ask the minister to bring this fact to the attention of the corporation to determine whether it would not be possible to extend the age limit to 50 years. On account of this, we are losing good farmers who have operated small units for some years, but who, because they are refused a loan to enable them to earn their livelihood, are forced to leave their farms.
April 26, 1966

Another point I should like to bring to the attention of the minister concerns the maximum which was increased two years ago from $22,500 to $27,500. To my mind, a small increase to $35,000 at 5 per cent interest would be desirable, in view of the recent amendments to the act. As a result, a larger number of farmers could qualify for a loan. I think this is the only way a farmer can obtain money to settle on a farm. Nobody lends money to farmers nowadays, except the Farm Credit Corporation. It is desirable to improve the act so as to enable the majority of farmers to benefit from it.
Aware of the good sense of the Minister of Agriculture-I believe that his riding is similar to my own riding of Glengarry-Prescott and that the problems I am bringing to his attention have already been brought home to him by the farmers of his own riding-I shall rely on him to intervene with the corporation so as to solve these problems satisfactorily.


Mr. Pugh:: Mr. Chairman, I believe the committee generally is agreed that there should be an increase in the borrowing capacity granted to the Farm Credit Corporation. There is no question about that. I enter this debate to say that I am very pleased this action is being taken.
[DOT] (5:40 p.m.)
I will confine my remarks to support for what the hon. member for Oxford has said. In future the minister might well consider increasing the maximum size of the loan. Expressing another opinion, the hon. member for Springfield told us that in his opinion the loan ceiling might be lowered. I believe one important factor was overlooked by those putting forward arguments in favour of both a higher and a lower figure, namely, the, fact that the staff which serves the Farm Credit Corporation is made up of extremely able and dedicated civil servants. This has been shown throughout the years. In other words, regardless of the ceiling the loan has to be based on a good background. Otherwise no loan is made, and that is all there is to it. It does not matter whether the application is well below the ceiling or above it. The field staff take a look at all applications and deal with them promptly and efficiently.
In the Okanagan I had occasion within the last ten days to listen to the manager of the Farm Credit Corporation for the province of British Columbia, as did a number of extraordinarily good orchardists, and we were
Farm Credit Act
all exceedingly pleased with the manner in which he explained the corporation, its aims and objectives, and how applications were handled. He satisfied us with his well prepared speech and with the easy and able answers he gave to all questions, no matter how difficult. Incidentally, in that area many of the questions were difficult because many applications have had to be turned down.
The reason I am stressing this is that with the growth of farm units in Canada over the last number of years, with the increased cost of farm machinery, so ably stressed by the hon. member for Humboldt-Melfort-Tisdale, and the resulting increased capital that has to be put into a farm, it may well be necessary for the minister to examine the question of increasing the maximum amount of loans that can be made. The hon. member for Oxford emphasized the dairy industry as one requiring exceedingly large capital to finance it. No doubt this will be pointed out to the minister by his staff.
But once again I would point out that no matter what maximum is fixed, and I believe the present maximum is a fairly good one, the staff of the Farm Credit Corporation are not going to turn all the money loose and say: Farmers, come and get it. They will ask what kind of units farmers have, the purpose for which they require the money, and then with their experience in all fields they will help them.
From its inception the corporation and its method of making loans have been far superior to the old farm loan board. The statute was introduced by a Conservative government and it is one of the better ones we have in Canada.


Mr. Rynard:: Mr. Chairman, I have just a few words to say about the Farm Credit Corporation which was set up by the previous government and which on the whole has worked very well. I am all in favour of increasing the amount of money. This is absolutely necessary in the high cost, high production age in which we are living, with the high cost of buildings, machinery and equipment.
One thing which concerns me is that it appears to be much harder for a small farmer to get a loan than a big farmer. I know a few cases in point. I shall not go into detail on them but one in particular, a dairy farm, seems big enough to me to be able to guarantee the loan sought. The buildings and equipment are good for half the loan and the land without the buildings is almost worth the

April 26, 1966
Farm Credit Act
other half. I wonder whether there is a tendency to go against the small farmer because of his smaller productivity and not take into account the help he receives from his family growing up on his farm.
On big farms there is the labour factor involving the cost of wages but in the particular case I have in mind the farmer does not have to employ any labour at all and so has a terrific advantage. I ask the minister to examine this point. Surely we want to keep our young boys and girls on the farms in rural Canada. Surely we do not want to discriminate against the small operator if his productivity is sound. Mistakes have been made in this regard and I think I can prove the point. A small farmer with a milk contract and family help can have an economic unit.
The milk of human kindness should be showered upon the small farmer. Otherwise he is the fellow for whom we will have to dig into our purses in order to rehabilitate him when he moves off his land. We will have to buy his land when we should be trying to keep him on it.


Reynold Rapp: Surely the minister is going to give a short reply.


John James Greene: Mr. Chairman, first of all, I wish to thank hon. members who, with their constructive and valuable contributions, have helped me in respect of the suggestions they have made with regard to the administration of the act. On behalf of the officials of the Farm Credit Corporation I also acknowledge the pleasing comments made by members on all sides about the efficiency of their administration. There were one or two specific questions which did not involve policy and which I might answer. Though there were many suggestions in the policy area with which I might personally agree, needless to say questions of policy are a matter of cabinet responsibility.
The question was asked what size the fund would have to be in order to become a self-sufficient revolving one. I believe it was the hon. member for Macleod who asked that question. At the present time 27 per cent of the funds that are available for lending come from repayments by farmers. The rest comes from additional capital such as that which we are providing here. The officials of my department estimate that the fund will become a fully self-sustaining revolving fund when it is in the neighbourhood of $2 billion. I am not actuarially sure of this figure but it is the best estimate my officials can give.
[Mr. Rynard.l
The hon. member for Macleod also asked a question with regard to that part of the repayment bearing an open interest rate rather than the fixed rate, in other words, in relation to the excess above $20,000 under Part II and above $27,500 under Part III. The rate has to be approved by the governor in council and now is approved at 6f per cent which I think is probably under the market in most other areas but certainly is above the 5 per cent paid on the first portion of the loan.
[DOT] (5:50 p.m.)
Useful suggestions have been made from all s-des of the house. May I say that since my term of office as Minister of Agriculture commenced I certainly have been most fortunate in receiving co-operation from all sides of the house, not on a partisan basis but apparently in all cases because of what hon. members felt was in the best interest of the farming community. I may say this is something which has been most heartwarming and encouraging. Not only in respect of this house where I would expect to find that kind of co-operation but also in working with the provincial departments of agriculture and provincial organizations I may say that universally I have found this same spirit. All persons engaged in public life, both at the political level or at the level of public service, provincially and federally, seem very anxious to work in the best interest of the agricultural community.
At no time have I had any impediment in doing my job because of anyone acting in a partisan rather than a public spirited way on behalf of the farmers. If I do not succeed in doing an adequate or satisfactory job on behalf of the agricultural community, certainly I will have no cause for complaint that it was because of lack of co-operation or lack of good will on the part of persons of other political stamp who are involved in the problems of agriculture. I do wish to thank hon. members not only for their co-operation in respect of this bill but also for the very valuable help and the suggestions I have received from them at all times in respect of agricultural problems.
I was extremely interested to hear sugges-t'ons such as that with regard to the partnership aspect and the possibility of increasing the loans in respect of partnerships. I said earlier that family corporations now are eligible for loans. Off the top of my head may I say I really am not familiar with whether the loan is increased by reason of the corporation
April 26. 1966

aspect. To the best of my knowledge I think that while a family corporation is eligible for a loan it is eligible only for the present maximum loan which an individual could obtain.
If I understood it correctly, I think the suggestion made by several hon. members was that partnerships and family corporations should have available to them larger loans because of the number of persons or the number of families involved, the size of the holding and the number of viable agricultural units which would comprise that holding. I shall be very interested to look into this aspect of the matter because I think these are very worth-while suggestions.
I was also very interested to hear of the concern of hon. members with regard to young people going into farming and the availability of more ready capital and the possibility of making farms available to them by means of a lower down payment through greater flexibility in the Farm Credit Corporation. I believe the hon. member for Glengarry-Prescott (Mr. Ethier) very forcefully made that point. I think this is a very worth-while matter and one we should look into. I think all of us are somewhat concerned by the fact that the incidence of older people is more prevalent in farming than it is in other fields of economic endeavour in our country. It is very difficult for a young man to get started in farming, possibly by reason of the cost-price squeeze which has been referred to so forcefully by hon. members.
It is possible that young people have not found it too attractive to go into farming in past years. Surely if our farm economy is to be sound we must do everything we can to encourage young people to enter the agricultural sector of our economy. I shall be very pleased to look into this aspect of the suggestion made by hon. members.
Resolution reported and concurred in.
Mr. Greene thereupon moved for leave to introduce Bill No. C-171, to amend the Farm Credit Act.
Motion agreed to and bill read the first time.


Mr. Deputy Speaker:: When shall the said bill be read the second time?


Some hon. Members:: Now, by leave.


John James Greene: the second reading of the bill.
Farm Credit Act


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon. Mr. Batten in the chair.
On clause 1-Capital.
Frank Howard: Mr. Chairman, I just now have the bill before me and I see that it cons.sts of only one clause. Substantially it is the same as the resolution and increases the capital of the corporation to $40 million from the present $24 million. A rough calculation would show that this is an increase of about 70 per cent. This reminds me of a discussion I had last evening concerning other 70 per cent increases. There was the 70 per cent increase in the cost of the pavilion for the performing arts at Expo '67, which the Prime Minister classified as not being inordinately high in the light of construction costs. There also was an increase of about 70 per cent in the bids on the grain elevator at Prince Rupert over the estimate of the cost of that elevator extension, which the minister classified as being inflationary. Because of this he decided it would not be desirable economically to proceed with the grain elevator extension. Last evening he made reference to the Budget and the announcement there to the effect that the construction activities of the federal government would be curtailed by about 10 per cent because of their contribution to inflation.
[DOT] (6:00 p.m.)
I agree with the purposes of the bill now before us. The Minister now lauds this bill and urges us to accept it so that by unanimous consent it can be given third reading and passed. I have no objection to that procedure because of the merit of the proposal but I do submit that it is in effect a contribution to the inflationary trend. We will be putting more money into the hands of the people who will borrow under this act, giving them greater purchasing power, which undoubtedly they will use and thereby pumping more money into circulation and contributing to any potential inflation. That is exactly the spectre the minister says is confronting him.
Several things have happened in recent days which I wish to point out. The position taken regarding the extension to the Prince Rupert grain elevator, when compared to the purposes of the present bill, creates an illogical situation. On the one hand the minister is asking us to endorse a bill which will contribute to inflation while on the other he is telling us that he cannot proceed with the extension to the grain elevator because this

April 26. 1966
Farm Credit Act
would contribute to inflation. It seems to me that he cannot have it both ways.
I do not object to the contents of the bill but I do object to the government wearing two coats. The government is acting like Janus, the ancient god after whom a month was named, who had two faces and could look fore and aft at the same time. That is what the government is doing, I submit.
I have taken the opportunity of speaking at this time simply to draw attention to what I consider to be illogical positions advanced by the minister, namely, his position in regard to the bill now before us compared with the position he took last night regarding the extension to the Prince Rupert grain elevator.


Maurice Rinfret: Shall the clause carry?


Thomas Speakman Barnett: Mr. Chairman, I referred last night-


Maurice Rinfret: Order, please. In order that the house may proceed to the consideration of private members' business it is my duty to leave the chair.


Frank Howard: Perhaps in the light of the importance of this bill we should not see the clock for a few minutes.


Maurice Rinfret: Does the committee give unanimous consent to the suggestion advanced by the hon member, that we continue with the business now before us?


Some hon. Members:: Agreed.


An hon. Member:: No.


Maurice Rinfret: There does not seem to be unanimous agreement.


Michael Starr: Mr. Chairman, I think that agreement can be reached if we have some idea as to the length of time required for the passage of this bill.


An hon. Member:: Half an hour.


Maurice Rinfret: Order, please. I asked the committee whether there was unanimous consent and it did not appear to be given. In view of that fact, it now is my duty to leave the chair.


An hon. Member:: I think there is unanimous consent.


Maurice Rinfret: I ask again whether there is unanimous consent of the committee to proceed with the business now before us?


Michael Starr: I think unanimous consent can be given if we agree to carry on for another ten minutes.


Maurice Rinfret: Is that agreeable?


Some hon. Members:: Agreed.


Maurice Rinfret: The committee has now unanimously agreed to proceed with the business before us for another ten minutes.


Thomas Speakman Barnett: Mr. Chairman, the hon. member for Skeena on a number of occasions has drawn the minister's attention to the importance of the extension to the Prince Rupert grain elevator. I am sure he must by this time, if not before understand how persistent and persuasive the hon. member for Skeena can be.
Perhaps this whole problem could be settled by the Minister of Agriculture if he could find some clause in the Farm Credit Act whereby the corporation could build this extension. It might be easier for the minister to find such a clause than it would be to persuade the Minister of Finance and his colleagues on the treasury benches to exempt this project from the axe to which he referred last night.
The Minister of Finance is in his seat and I should like to take advantage of the fact and suggest that he could settle this question quickly and relieve the Minister of Agriculture of any embarrassment by announcing to the committee that the blockade in respect of the Prince Rupert elevator will be lifted. I am trying to be helpful by making these suggestions through you, Mr. Chairman, to the two ministers with the hope that this whole matter can be expedited. Perhaps we can have an answer from one or both of them at this time.


Maurice Rinfret: Shall the clause carry?


Herbert Wilfred Herridge: Mr. Chairman, I have been very interested in the minister's replies to the various observations made by hon. members during the debate on the resolution. Before the bill is passed will the minister give consideration to increasing loans available to partnerships when there is a sound basis for doing so? In many cases a number of families are involved in farm communities and I suggest this would be ample reason for increasing the size of loans available. Will the minister also consider providing farm communities with a greater understanding of
April 26, 1966

the act by seeking the co-operation of not only national bodies but local units of various farm producer organizations?


Harold Warren Danforth: Mr. Chairman, I should like to ask the minister one question relating to the fears now held in many agricultural areas because of the tight money policy. Can he assure us that there will be no closing down on applications for credit through the Farm Credit Corporation or pressure put on those individuals who wish to borrow money such as has taken place in banking and other lending institutions? Will loans be granted on the same basis in the future as they have been in the past few years?


John James Greene: Mr. Chairman, I think the best evidence of the government's intention in this regard is the fact that we have now placed this bill before the house, we have done so to make sure that these loans will be continued. There certainly is no change in the policy of making loans available in the best interests of the agricultural community.


[Stage Direction]
Clause agreed to.
Title agreed to.
Bill reported and read the third time and passed.


Mr. Deputy Speaker:: It is my duty, pursuant to provisional standing order 39A, to inform the house that the questions to be raised at ten o'clock this day are as follows: the hon. member for Trois-Rivieres-Trade -shortage of copper in Canada; the hon. member for Kootenay West-Expo '67-refusal of permission to record R.C.M.P. band; the hon. member for Cumberland-Royal Canadian Mounted Police-Nova Scotia-arrest of member of force.
[DOT] (6:10 p.m.)
It being after six o'clock, the house will now proceed to the consideration of private members' business as listed on today's order paper, namely, private bills and public bills.


Michael Starr: Mr. Speaker, in view of the fact that we have encroached by some ten minutes upon private members' hour, I wonder whether we could have unanimous consent to
Private Bills
carry on with private members' hour until ten minutes past seven?


Mr. Deputy Speaker:: Does the house give unanimous consent to continuing private members' hour until 7.10?


Some hon. Members:: Agreed.


Frank Howard: No, Mr. Speaker. That has not been the practice in the past and I do not think we should be breaking new ground now.


Michael Starr: That is entirely wrong, Mr. Speaker, because the same thing occurred yesterday and by unanimous consent we continued private members' hour until 7.25.


Thomas Speakman Barnett: That item was a very important resolution introduced by a colleague of the hon. member for Ontario (Mr. Starr).


Mr. Stewart:: Don't discriminate.



PRIVATE BILLS


[Stage Direction]
The house in committee on Bill No. C-lll, to incorporate Bank of Western Canada-Mr. Richard-Mr. Rinfret in the chair.
On clause 1-Incorporation.
Maurice Rinfret: Shall clause 1 carry?


Frank Howard: Mr. Chairman, some of us are rather disturbed about the incorporation of the proposed bank. In the initial presentation two or three years ago the proponents of the bank engaged in a little misleading propaganda in order to try to convince those who might just look at the surface that the bank would be publicly owned. I do not mean publicly owned in the sense of government ownership but owned by members of the general public as distinct from ownership by corporate entities.
The proponents of the bill exhibited this tendency to propagandize by setting out in the bill of previous years the names of sundry individuals who were listed as shareholders. The names of those individuals covered two pages of the bill introduced at that time. Together with the names of the individuals who were listed as shareholders was a designation of their profession. We find listed in the bill a number of people who were classified as persons from what we might call

April 26. 1966
Private Bills
the ordinary walk of life. Architects, solicitors, a couple of executives, farmers, physicians, a professor and an investment dealer were listed and I think they even had a blacksmith listed at one stage. I shall not read the names and occupations of the individuals listed in the previous bills and classified as the major shareholders except to say there were about 100 of them.
Inasmuch as these names and professions were contained in the first clause of the bill presented to us at that time, I submit it was designed to leave the impression that here was a true people's bank, that not only was it to be a bank dedicated to the advancement of banking interests in western Canada with its headquarters in Winnipeg but it would also be owned and controlled by the common people.
In the bill before us at the present time those who will control the Bank of Western Canada have dropped that subterfuge and list in clause 1 merely the names of a few top flight individuals, namely, James Elliott Coyne, executive; Sinclair McKnight Stevens, solicitor; Maxwell Bruce, one of Her Majesty's counsel, all of the city of Toronto in the province of Ontario. Then there is listed one Edward Rex Plewman Nesbitt, executive, of the city of Winnipeg in the province of Manitoba, and John Leslie Bodie, executive, of the city of Edmonton in the province of Alberta, followed by the words, "together with such persons as become shareholders in the corporation by this act created, are, incorporated under the name Bank of Western Canada hereinafter called 'the Bank.' "
I say that the subterfuge of broad participation by people has been dropped and we see that of the five individuals listed, who incidentally shall be the provisional directors, three come from the city of Toronto, one from Winnipeg and one from Edmonton. The names and occupations of common people have been dropped. I think it is a little more honest to do it this way than was the case previously.
I believe some consideration should be given to the manner in which this bank is effectively owned or controlled. The proceedings of the Finance, Trade and Economic Affairs Committee which considered the bill and dealt with it in some detail-in fact the detail ranged over the period of three or four sittings-show the extent to which the proposed Bank of Western Canada is owned and controlled by other than common people. I might say that the information was not easy

to obtain. I was not on the committee and was not able to attend its hearings, but a reading of the evidence and the information elicited by such individuals as the member for Lapointe, the member for Acadia and others who asked searching questions of the witnesses indicates that it was difficult to obtain full information about the company.
In the Minutes of Proceedings and Evidence No. 1 of the Finance, Trade and Economic Affairs Committee there are extensive references stretching over quite a number of pages which show that the ownership or effective control of the Bank of Western Canada is by way of quite a bit of involvement with other companies. Perhaps I could read briefly from page 14 of the proceedings. Mr. Stevens was giving evidence and pointed out the following with regard to raising the money for the bank:
[DOT]	(6:20 p.m.l
This money was originally raised in February and March, 1964 and is broken down as follows: first, over 5,000 people placed $6,450,000 in trust with the Canada Permanent Trust Company for future investment in the proposed bank.
One might think 5,000 people would constitute a broadly based ownership of a company such as this. Then he said:
Second, a further 2,000 people put in trust $3,750,000 to be invested by the Wellington Financial Corporation in the proposed bank.
We will have more to say about the Wellington Financial Corporation in a moment.
A further 2,600 people bought shares in Canadian Finance and Investment, which in turn is committed to investing $2,250,000 in the proposed bank.
We will also have more to say about Canadian Finance and Investment in a moment.
I should have mentioned that Wellington is a Toronto based company originally established in Guelph, Ontario, in 1926. The Canadian Finance and Investment is a Winnipeg based company originally established in 1926 in that city. The York Trust and Savings Corporation of Toronto is committed to investing $495,000 in the bank, and the proposed provisional directors of the bank are committed to a further $37,500.
This statement was followed by extensive questioning as will be seen from a perusal of pages 14 to at least 32 and subsequent pages as well. I am just going as far as page 32 because I think the gist of the ownership is shown there. There are some rather involved answers given to questions asked by the hon. member for Lapointe. Finally Mr. Stevens,
April 26, 1966

the witness, answered some of these questions as follows:
The bank will be owned by four different main groups. The first group is a group which owns shares directly in the bank and are now holding trustee certificates. Now, all together they number a total of about 5,100 odd. The next largest shareholder in the bank will be the Wellington Financial Corporation, which owns approximately 30 per cent of the proposed bank.
We know, as a result of studies made by people concerned about the ownership of corporations, that a 30 per cent ownership of a corporation in the hands of one group or one individual can be used to control rather effectively the operations and activities of that particular company. Here we have the Wellington Financial Corporation, one of the companies which Mr. Stevens said was going to put some money into the bank, owning about 30 per cent of the proposed bank.
Then there were some questions put by the hon. member for Acadia. He asked Mr. Stevens about his connections with Wellington Financial Corporation, about his connections with Canadian Finance and Investments Limited and his connection with York Trust and Savings Corporation. These three corporations are involved in one way or another with the proposed Bank of Western Canada. Mr. Stevens answered these queries by saying he was president of all three corporations. The hon. member for Acadia then went on to ask about another corporation, and I am quoting from page 30 of the evidence:
What is your connection with British International Financial (Canada) Limited?


Mr. Stevens:: I am also president of that company.
There follow extensive questions and answers which eventually elicited the information that the large shareholder, British International Financial (Canada) Limited, through some of the companies it controls, has absolute or effective control of this bank. We find that British International Financial (Canada) Limited will own the Bank of Western Canada directly or indirectly to the extent of almost 50 per cent.
The hon. member for Acadia put this question directly to Mr. Stevens:
Would I be right in assuming that you would have nearly 50 per cent of the paid in capital of the $13 million in this proposed chartered bank?


Sinclair McKnight Stevens: You mean in our various companies?


Mr. Horner (Acadia) :: Yes.
Then Mr. Stevens went on to rationalize this by saying:
At the beginning that was true. As you will recall, it was contemplated in the proposed amend-
Private Bills
ment to the Bank Act that was introduced in the last parliament, and is also referred to in the Porter Commission report, that initially there should be an exception made when a new bank is starting. In other words, while it may be considered desirable to have the share ownership of banks spread around into relatively small holdings and certainly no large block, it is accepted, I believe. that initially some organizational group is likely-and in fact it would be very difficult not to do it otherwise-to have a very dominant block in any new bank that is being formed. Our intention is that while we should start with, say, effective control, in all likelihood it would not be maintained, and the suggested changes in the last Bank Act are quite acceptable to us in the sense that we would divest our holding if asked to do so by the Treasury Board or whoever is in authority. We would also agree not to exercise rights or warrants in this type of thing to maintain our position.
I submit that on the face of it this is not really very acceptable. We all know that the only effective way of preventing the consolidation of ownership or control in the hands of a few is to prohibit it by statute, either directly in the bill currently before us or by way of an amendment ot the Bank Act. This provision should preclude the possibility of any one, single financial group or company being able to control such a corporation. I gather from reading Mr. Stevens' remarks that he really is not in favour of effective control of the Bank of Western Canada. He would like to see a situation prevail in which there was a wide distribution of ownership. He would like to see the Bank of Western Canada owned and controlled by individual shareholders and he would be happy if some authority in government would come along and tell him subsequent to the passage of this measure, if it ever is passed, that is what he has to do.
[DOT] (6:30 p.m.)
I believe the situation is not as Mr. Stevens paints it. Mr. Stevens pointed out he was president of British International Financial (Canada) Limited in Toronto which has assets somewhere in the neighbourhood of $90 million. British International Financial (Canada) Limited, either by absolute control or by effective control, is the dominating influence in 21 separate financial institutions. These include Wellington Financial Corporation, York Centre Properties Limited, Cardiff Investments Limited, British International Finance Trust Limited, Timed Investors Limited, Timed Investment Fund Limited, Globe Auto Leasing Limited, Maritime Mortgage and Loan Company, Scarboro Finance Corporation Limited, and so it goes on and on.

April 26, 1966
Private Bills
I submit that a company president who appears before a committee and says "We do not want control of the Bank of Western Canada" is not telling the full facts concerning his intentions and desires when the company of which he is president owns in many cases 100 per cent and in the great bulk of cases more than 50 per cent of several other companies and has effective control over a few others to the extent of 21 mortgage, loan and finance corporations. He is asking the committee and parliament to accept the incredible, and I for one cannot accept it.
Assuming that Mr. Stevens really felt sincerely that this was a desirable course of action and that he and those who will control the Bank of Western Canada were going to divest themselves of their holdings, there is no guarantee that some other group will not move into the picture in order to be able to bring about effective control of the bank. In fact, in answer to another question by the hon. member for Acadia, reported at page 31 of the proceedings, Mr. Stevens went on to say with respect to ownership and effective control:
The second thing that is probably more likely to happen is that the ownership being so widely spread, you would quickly find a fight for control and some group, completely unknown to parliament, could potentially come in and take over the bank. In that sense parliament would have no control over who owns the bank.
Then the hon. member for Acadia asked:
What you are saying is that you are better than an unknown factor.
To which Mr. Stevens graciously replied:
At least you know us.
I do not know if I am able to differentiate between one type of effective controller and another in the field of banking and finance and trust and loan companies. I think they are all within the classification of what Will Rogers called loan sharks and interest hounds. That is what comes first, not the interests of people.


Maurice Rinfret: Order. I have to interrupt the hon. member as his time has expired.


John (Jack) Henry Horner: Mr. Chairman, in rising to take part in this debate I want to say at the outset that I have been greatly interested in banks in Canada for a number of years. I have followed the applications of several of the banks which have been before this house and the other place over the last
IMr. Howard I
two years. I have become particularly interested in this bank for the reason that it is proposed to call it the Bank of Western Canada, which immediately arouses interest in western Canada.
I am one of those who believe in free enterprise. I believe that in competition with one another under the free enterprise system the greatest savings can be made and the greatest efficiency brought about. I think the same theory holds true with regard to banks. Therefore, basically I am all for more banks in Canada.
On the other hand, as a member of parliament I feel that the right to be granted and to operate a bank charter is a great privilege. I do not think that I or other members of parliament should take our office lightly and grant a charter to anybody who may want to apply for one. It is our duty to examine every applicant and to make certain first of all that he is worthy of the charter, second, that he is capable of carrying it out and, third, that he will be sincere, once he has obtained the charter, in working for the general advantage of Canada. I do not expect him to lose money or to take money out of his own pocket to foster, promote, or continue to promote, a bank of which he holds the charter. But I do believe that in operating a bank in Canada under a charter which has been granted by parliament the operator should work for the general advantage of Canada along with making a profit for himself, though perhaps a limited one.
I believe that a bank charter is something similar to a licence to operate a public utility. It is similar to the right to transport oil or gas across Canada as in the case of Interprovincial Pipe Line or Trans-Canada Pipe Line. They have the charters to move oil or gas across Canada. We have also set up a National Energy Board to make certain that the monopoly we have granted them is controlled and will work for the general advantage of Canada. This is why I examined the proposed application for this charter to the best of my ability in the committee.
I am in no way opposed to the creation of more banks in Canada, but I want to establish first the three principles which I think are important and which I should like to repeat. First of all, the applicants must be worthy. In other words, they must accept the responsibility which this house places upon them with a great deal of care, sincerity and dedication. Second, they must also be capable. In other words, though you and I, Mr. April 26, 1966

Chairman, may not be capable of operating a chain of banks across Canada under a charter there are financiers who are capable of doing so. Third, they must be prepared to operate a banking system in Canada which works for the general advantage of Canada, not solely for the general advantage of themselves. These are the three basic principles upon which my questioning was founded and upon which I shall continue to question this particular application.
I am not going to quote from the committee proceedings; I want to deal in generalities. We have an application before us for a bank charter to set up a bank with a capitalization of $25 million. Money has been obtained in trust to the tune of something like $13 million. How has that money been appropriated? Under my criterion that a bank charter should work for the general advantage of Canada, if I alone were granted such a charter I would be more inclined to work for the general advantage of myself because this venture would perhaps be my sole interest. But the general application of my thinking is that the broader based the applicant, the greater the possibility he will continue to work for the advantage of different segments of industry and different parts of the economy of the country. I place a great deal of importance on the fact that such a charter as this should work for the general advantage of Canada and that the applicant should be broadly based, therefore enabling him to work to a greater degree for the general advantage of Canada.
[DOT] (6:40 p.m.)
When I was examining this matter initially I was greatly concerned because we were told in committee that the applicants had put up something like $6 million or more to be placed in trust in the event of the charter being awarded and that this amount had been quickly taken up by shareholders in eastern and western Canada, most of them in western Canada. We also found that the greater portion of the $13 million was controlled by finance houses owned or controlled by three individuals in Toronto. I said in the committee and I say again to this house: If 50 per cent of the amount they wanted to raise was quickly taken up by proposed shareholders in this bank, why did they not let out a little more? Why did they not let out 70 per cent? The remain'ng 30 per cent would still provide for effective control of any company. But they wanted to make sure of absolute control by retaining 51 per cent, 52 per cent or 53 per
Private Bills
cent. This raised some doubt in my mind whether these people were prepared to work for the general advantage of Canada or for the general advantage of themselves.
Consider the title of this bank-the Bank of Western Canada. We were told in committee that western Canada is a deposit surplus area. I would not have believed it. I would have thought that we westerners were spending every nickel we get. But the highest banking officials in Canada including a former governor of the Bank of Canada tell us they believe western Canada to be a deposit surplus area. With this in mind we must consider the fact that 53 per cent is to be owned and controlled in the city of Toronto and that something like 20 per cent of that 53 per cent is owned by trust and finance companies in eastern Canada. Then we should ask: Who will benefit? Where is western Canada's deposit surplus likely to go?
I am not a man who is suspicious by nature. I may be a born optimist. But when I link these two things together I have a tendency to become suspicious. It may be said that finance houses and trust companies are institutions of which many people are suspicious to begin with. I do not think I can be classified in that group. But throughout these proceedings I asked questions in an attempt to set aside the fears which were evidently in my mind with regard to the present application. At no time were these fears set aside by the witnesses.
It is well known that in the course of this summer parliament will have to deal with the Bank Act. Consideration of amendments to this legislation has been postponed for two years. Why should this application not wait until the Bank Act has been dealt with. This would clear up the doubt about foreign ownership and about the limitation on the interest rate. We would know how this application would fit into the new Bank Act. We would also know whether or not the applicants are trying to take advantage of the situation in which we find ourselves today in Canada where those granted bank charters may charge interest only up to a maximum rate of 6 per cent. In other words, they may want to get in while the going is good and then, should the maximum committee interest rate be increased to 7 per cent, they would be in a position to take advantage of it.


Mr. Walker:: Is the hon. member aware that this bank has expressed a complete willingness to comply with any regulations which

April 26, 1966
Private Bills
might be made consequent upon the revision of the Bank Act?


John (Jack) Henry Horner: I am aware of that. Statements of that kind were made time and time again in the committee. But remember that more than $6 million has been placed in a position where substantial capital gains, non-taxable gains, can be made depending upon what this parliament does with regard to the Bank Act. Basically we are considering a proposition which would enable three Toronto financiers to make a substantial capital gain depending on the interest rate permitted under the Bank Act say a month from today.
What is the rush? This application has been before parliament for two years. Let us wait another month or month and a half by which time we shall be in a better position to know what we are doing.
I do not believe these people should not make a profit. I believe in making a profit. I know that all the banks now operating in Canada believe in making a profit. They always have from me, and I know this is really their basic interest. But by operating a network of banks across Canada they also work to the advantage of the public generally.
[DOT] (6:50 p.m.)
In this application we have to examine whether the intent is to serve the advantage of the public. If that intent is not present then parliament will be making a terrible mistake in granting these people their charter solely because we need more banks in Canada and this is one of the applications for a new bank charter. We may have 25 other applicants next year.
To me a charter to operate a bank is a privilege. It is a privilege to get into the banking business, a privilege we should not grant lightly to operate a monopoly under certain controls and rigid confinement. We must examine whether or not the applicants are worthy and whether or not they are efficient.
From my examination of the efficiency of the applicants, I would say that, if they can operate as many trust and finance companies as they do and remain in business as long as some of these companies have, they must be reasonably efficient and qualify in that respect. But for the present I am not examining them on that basis at all. I am examining whether they are worthy and will work for the general advantage of Canada. They have

not proven themselves to me on either point, and these two points are closely linked.
Are these applicants worthy? To prove worthiness they must prove desire and intent. Time and time again I questioned them in the committee. Time and time again I wanted them to say that they believed the banking system in Canada was similar to a public utility but they never did. Time and time again I wanted them to say that they were prepared to let more shareholders in but they said no.
The interesting thing in this case is that from the first time these people applied for a bank charter until this day, instead of showing evidence of where they have dispersed some of their holdings the three people involved gave evidence before the committee which convinced me that they had taken it upon themselves to gobble up more of the outstanding shares being held in trust to establish the bank. They admitted quite frankly that western Canada had quickly bought up the shares released from trust where they had been placed for the establishment of the bank. But if this is so, why did they not release more? Why did they have to keep absolute control? These are questions upon which they have failed to answer fully and conclusively in order to convince me that I should wholeheartedly endorse their application. I want to do so. I want to be on record as supporting more banks in Canada, but I take my job here seriously and I want to examine all applicants to make sure that they wish to work for the general advantage of Canada and not just for themselves.


Ovide Laflamme: Mr. Chairman, I only have one question to ask.
The only thing I want to know is whether a private bill, passed by a committee, must be referred back to the house for consideration? What is the use of calling witnesses before committees, hearing their testimonies for days, and then waste the time of members of parliament? I am asking the house, which is master of its own procedure, to vote on this matter.


Mr. Cameron (Nanaimo-Cowichan-The Islands):: Mr. Chairman, I was unable to attend the first meeting of the Finance, Trade and Economic Affairs Committee when it discussed the Bank of Western Canada. However, a perusal of the proceedings of the
April 26, 1966


Maurice Rinfret: Order. It being seven o'clock it is my duty to rise, report progress and request leave to sit again at the next sitting of the house.
Progress reported.
[DOT] (7:00 p.m.)



INCOME TAX


[Stage Direction]
Ron. Mitchell Sharp (Minister of Finance) moved the second reading of Bill No. C-154, to implement an agreement between Canada and the United Kingdom for the avoidance of double taxation with respect to taxes on certain classes of income and to implement a supplementary income tax agreement between Canada and Sweden.
Marcel Joseph Aimé Lambert: In this connection, Mr. Speaker, I think perhaps we should have a statement from the minister which would be helpful in delineating precisely the terms of what he conceives to be the impact of this agreement. He might indicate any changes or improvements that were made on prior agreements, or conversely areas which are-not now covered. I think there are many

April 28, 1966
Income Tax
Canadian holders of British securities who would be very interested in knowing the exact details of what the government of Canada has been able to negotiate in this regard.


Mr. Sharp:: Mr. Speaker, the purpose of this bill, as its title indicates, is to give legislative effect to the recently signed income tax agreements with the United Kingdom and with Sweden. For convenience the bill is divided into two parts, the first dealing with the new agreement with the United Kingdom signed last December, and the second dealing with the supplementary agreement signed last January that amends the agreement signed with Sweden in 1951. In substance the bill is similar to the bills implementing income tax agreements or supplementary income tax agreements between Canada and other countries that have been approved by the house since 1942. Canada now has in force 12 comprehensive income tax agreements-with the United States of America, New Zealand, France, Sweden, Ireland, Denmark, West Germany, the Union of South Africa, the Netherlands, Australia, Finland and Japan.
Part I of the bill approves and gives the force of law to the agreement with the United Kingdom, which is set out in schedule 1. This agreement is considerably less comprehensive than the agreements to which I have just referred, although like them, its object is to avoid double taxation, or to reduce taxation, of the income received by individuals and corporations of one of the countries from sources in the other country. It is an interim agreement limited to four classes of income on which action could be taken pending consideration of the forthcoming report of the Royal Commission on Taxation and appraisal of the consequences for tax agreements of the recent major changes in the British tax system. Since the agreement is of an interim nature it may be terminated by either government giving six months notice, but both governments have expressed the hope that it will be replaced by, or expanded into, a comprehensive agreement as soon as this is feasible.
Hon. members will recall that the former income tax agreement between Canada and the United Kingdom signed in 1946 was terminated in accordance with its terms when Canada gave notice of termination in June 1964. This was after negotiations, held over a three year period with a view to amending

the agreement in accordance with Canadian policy, had proved unsuccessful. The main point of difference leading to the termination of the old agreement was the fact that it prevented Canada from imposing any tax on dividends paid by a wholly owned subsidiary in Canada to its parent company in Britain.
The new agreement establishes a general rule, similar to that in other Canadian tax agreements, that all pensions and annuities will be taxable only in the country where the recipient of the pension or annuity is a resident. This differs from the old agreement in which the rule was that pensions paid in respect of British or Canadian governmental or military services could be taxed only in the country of source.
There are exceptions to the new general rule that preserve the position that persons in receipt of such governmental pensions had under the old agreement, if they prefer to retain that position. The provisions of the agreement concerning the tax treatment of recipients of pensions will benefit some 15,000 Canadian residents receiving pensions from United Kingdom sources and some 2,500 recipients of Canadian pensions living in Britain whose financial position has been affected by the termination of the old agreement.
The other classes of income with which the agreement deals are profits of an enterprise earned by a permanent establishment, for example a branch office, profits from the operation of ships or aircraft, and copyright royalties.
The agreement contains the usual rule, adopted by all the members of the Organization for Economic Co-operation and Development, that the industrial or commercial profits of an enterprise of one of the countries shall be taxed in the other country only if the enterprise has a permanent establishment in that other country and only to the extent that they are attributable to that permanent establishment. This exempts a taxpayer of one country from taxation in the other country, if he merely buys goods there. It also protects a taxpayer who only sells goods in the other country through an independent agent or an agent who merely takes orders and does not conclude contracts.
The agreement provides that the profits of an enterprise from the operation of ships or aircraft in international traffic shall be taxable only where the enterprise is resident. This provision is similar to that in most other agreements.
April 26, 1966

The agreement provides that copyright royalties and similar payments in respect of the use of literary, dramatic, musical or artistic work, not including royalties for motion picture or television films, shall be exempt from tax in the country of source. Canada exempts such payments to non-residents in its Income Tax Act but, following the termination of the old agreement, Britain has been imposing its standard 41J per cent tax on these royalties paid from sources in Britain to Canadian residents. Persons in Canada who receive such royalties will thus obtain relief.
The provisions of the agreement are designed to come into operation on the dates the old agreement ceased to have effect. For Canada this will be January 1, 1965 and taxation years ending in or after 1965. Refunds will be made where taxes contrary to the new agreement have been levied during the period from the date of the termination of the old agreement to the date of the coming into force of the new agreement.
The new agreement will come into force after each contracting government has been notified that all the things that have to be done to give the agreement the force of law in Canada and the United Kingdom respectively have been done. The government of the United Kingdom has notified the government of Canada that it has completed the necessary actions. The agreement will accordingly come into force when the royal assent is given to this bill.
Part II of the bill deals with the supplementary agreement between Canada and Sweden. The purpose of the supplementary agreement is to make several amendments to the income tax agreement between Canada and Sweden signed in 1951. The change of most importance for Canada is the deletion of a provision that prevents a non-resident withholding tax of more than 5 per cent controlled subsidiary company in one of the countries to its parent company in the other. Each country continues to agree not to impose a withholding tax on dividends in excess of 15 per cent. The normal rate imposed by Sweden when there is no tax agreement is 30 per cent. This change will bring the Cana-da-Sweden agreement into conformity with the announced policy of the Canadian government.
The supplementary agreement will come into force on the date when the exchange of instruments of ratification takes place, and
Income Tax
will be effective in Canada for the taxation year 1966 and subsequent taxation years. The effective date for the replacement of the 5 per cent maximum withholding rate by the 15 per cent maximum withholding rate on certain dividends will be April 1, 1966. I am hopeful that the supplementary agreement will enter into force before many more weeks have passed.
[DOT] (7:10 p.m.)


Marcel Joseph Aimé Lambert: Mr. Speaker, I am very pleased to see that the government of Canada has come forward with this particular bill, because we were getting more and more anguished cries, and I think legitimate ones, from many Canadians who were holding investments in British concerns-and this of course is something which is to be encouraged. Canadians do hold interests in operations abroad, but since 1964 of course they were subject to the penalties of double taxation. This frankly does not enhance our attractiveness to British investment in Canada or to Canadian investment abroad. There certainly is no incentive to Canadian coporations to establish operations in the United Kingdom. Not only does this have an effect on the industrial and business field, but it has an effect on the thousands upon thousands of new Canadians-that is an odd term-of British origin who settled here after world war II. Many of them are veterans and are entitled to service pensions, either for reasons of disability or otherwise, yet they are very seriously penalized. The fact that they could take their pensions and come to Canada under the former tax agreement was one of the major considerations which led them to come here in the first place.
Because Canada was in some difficulty regarding the high rate of withholding tax in relation to British operations in Canada, this agreement was cast aside and allowed to lapse. This came about as one of the unfortunate consequences of the budget of 1963, and some of the things that followed.
I agree that there may be some argument that Canada should not be prepared to enter into a finite agreement pending the Carter commission on taxation, in view of the fact that Britain has also made some rather drastic changes in its structure, and we may expect more; but as an investor I would find it rather difficult to forecast the future, certainly in respect of long-term investments in growth stocks, and I would not be encouraged by the interim nature of this agreement.

April 26. 1966
Income Tax
By reason of article XI the whole agreement may be terminated by Canada effectively with six months' notice, and by the United Kingdom in a matter of a little more than nine months because of its tax year. Why Britain insists on retaining April 6 as the date on which it collects revenue I do not know, but in my opinion one of the negative aspects is this agreement not being made for a finite period.
With that reservation I earnestly hope that before long the government will have studied the Carter report on taxation and made up its mind on what it intends to do with regard to taxation. I hope there will not be any undue delay either on the part of the government whether this one or one formed by the opposition, in allowing the implementation of the major recommendations of that commission's report. I hope that a finite agreement can be reached expeditiously at that time.
Any further remarks I wish to make can be made more appropriately when we are considering the bill clause by clause. Once again I wish to say that I find the omnibus clauses too all-encompassing. I refer particularly to clause 2(3) which provides that-
-the Minister of National Revenue may make such orders and regulations as are. in his opinion, necessary for the purpose of carrying out the agreement or for giving effect to any of the provisions thereof.
I do not know how many times I have said that I am overly suspicious of such clauses. Administrative regulations which embody matters of policy ought first to be considered by the house, but they often find their way into legislation through a back door. For this reason I return to the point made by the committee on procedure, that there should be a committee of this house to review delegated powers. When the minister creates any regulation under the powers granted to him by *clause 2(3) he should be required to come before the parliament to satisfy that body that he has not exceeded his powers or created any regulation the effect of which is retroactive to the authorization of those powers.
I urge the minister to refer this recommendation to his colleagues-because this is one of the more serious aspects that we should consider-so that regulations do not become pseudo-legislation by means of regulatory powers.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Batten in the chair.
On clause 2-Agreement approved.
Marcel Joseph Aimé Lambert: Mr. Chairman, I think this may be the appropriate time, during our consideration of clause 2, to discuss the articles of schedule I. If the minister has any reason why we should not discuss it now I will defer my remarks. I wish to discuss only two articles about which I want to elicit some explanation from the minister.
[DOT] (7:20 p.m.)
Undoubtedly within the next few weeks we will have an opportunity of reading brochures from the Canadian Tax Foundation which may be more critical of this legislation. They should guide us for the future. I want particularly to consider article IV paragraphs (a) and (b). This article deals with related enterprises operating in both the United Kingdom and in Canada, and the definition contained herein refers to "where an enterprise of one of the territories participates directly or indirectly in the management, control or capital of an enterprise of the other territory." If there is a participation of, say 5 per cent-a matter of less than control-what is the degree of participation which will identify that connection between the operations in the two territories? Shall it be just isolated participation? Shall it be a matter of 1 per cent, 10 per cent, 20 per cent, effective control, or what have you?
Also, to what degree under paragraph (b) do the governments in question consider the participation directly or indirectly by, shall we say, the cross-election of directors? In other words, in order to benefit by the experience abroad or to get advice on operations abroad, a Canadian company may elect to its board of directors an experienced resident of the United Kingdom, an industrialist or financier, for example, and the converse situation may also apply. What degree of participation will attract suspicion of, shall we say the non-arms length aspect-I think that is a possible term to be used-in this relationship between the operations in the two countries?


Mitchell William Sharp: Mr. Chairman, may I first of all point out to the hon. gentleman that this is the standard clause that is in all our tax agreements and is identical with the clause in the former agreement with the United Kingdom. So we are not breaking any new ground here. I should have thought that since the purpose is exactly as the hon. gentleman outlines it, namely an effort to be sure that these related companies operate at arm's

April 26, 1966

length, the test must be one of judgment. In other words, the authorities in the two countries watch the operations of companies that appear to be related, and if their relationship is such that they are beginning to juggle their profits from one country to the other, then they can deem that the juggling does not reduce their tax in the country from which the profits have been taken, shall we say illegally.


Marcel Joseph Aimé Lambert: In other words, you say that the taxing authorities reserve unto themselves to judge whether they shall have the p e and eat it, too?


Stanley Howard Knowles: Mr. Chairman, I have one or two questions which relate to the schedule, but the schedule appears to be covered by clause 2 of the bill. Does this new agreement between Canada and the United Kingdom cover pension income? I have in mind in particular the case of people who have come here from the United Kingdom and are still drawing their pensions from the United Krngdom. Will this agreement have the effect of relieving such persons from taxes that they now have to pay in the United Kingdom?


Mitchell William Sharp: Mr. Chairman, I am not sure whether the hon. gentleman was here when I made my brief remarks on second reading. Perhaps I will be permitted to repeat the substance of them which deals precisely with this point. The general rule established in this new agreement is that all pensions and annuities will be taxable only in the country where the recipient of the pension or annuity is a resident. This differs from the former agreement, but in order to preserve the position of pensioners who might prefer the old rule, they are permitted to do so.
Therefore the general rule laid down by this agreement is that pensions and annuities will be taxable only in the country of residence, but if the old agreement conferred a benefit upon them that is taken away by the application of this new rule, they may retain their former position provided they were in residence in either of the countries.


Stanley Howard Knowles: I have one more question, Mr. Chairman. If the minister tells me that he answered this question while I was out of the chamber, I can only plead that the point gets reached when it is a human desire to go out and have supper. What is the position with regard to the effective date? I have looked at article X of the agreement and
Income Tax
think I understand it, but may I put the question this way: If a person is assessed taxation on income from the United Kingdom at the present time, will there be the possibility of that assessment being adjusted after this agreement goes through, in view of what seems to be the effective date in the case of United Kingdom income of April 6, 1965?


Mitchell William Sharp: Mr. Chairman, I think the short answer is yes.


Marcel Joseph Aimé Lambert: Mr. Chairman, I should like to ask a question about article VIII. Not having the previous agreement with me, I should like to know whether the provisions of article VIII, paragraphs 1 and 2, are the same as existed in the previous agreement. This deals with disclosure of information at the request of the other contracting party. In other words, it is obvious that the two taxing authorities must be able to exchange information with regard to operations in both territories as covered by the agreement. I am glad to see that there is provision that "no information as aforesaid shall be exchanged which would disclose any trade, business, industrial or professional secret or trade process."
Following the changes made in CALURA, information is passed by the Department of National Revenue to the Dominion Bureau of Statistics with regard to operations of Canadian business. What effect has that provision in relation to article VIII? Is this procedure specifically excluded? Would the authorities in Canada who have possession of information with regard to the operations of, say a foreign principal operating in Canada, have the right to pass information which they obtain under the terms of this particular agreement to the Dominion Bureau of Statistics, who may have a perfectly legitimate purpose in the future in determining for statistical purposes the size of global operations of companies or subsidiaries, business enterprises, operating in Canada?
It is conceivable that we would like to have this information at some date in the future. It may be that I am engaging in some form of wide hypothesis here, but we do know that under CALURA there is the power and in fact the duty imposed upon the Minister of National Revenue to pass on such information. This was something that I and several of my colleagues, including the late hon. member for Digby-Annapolis-Kings, objected to strenuously, when the CALURA statute was amended.

April 26. 1966
Income Tax
[DOT] (7:30 p.m.)


Mitchell William Sharp: When I was the minister of trade and commerce.


Marcel Joseph Aimé Lambert: Yes, when the Minister of Finance was then the minister charged with piloting through CALURA amendments. He knows whereof I speak.


Mitchell William Sharp: Mr. Chairman, this article is not identical with the article in the previous agreement, because the scope of this agreement is much more limited than the agreement it replaces. The precise answer to the first question put by the hon. gentleman, therefore, is that the exchange of information is more limited because this article relates to the exchange of information that is necessary in carrying out the provisions of this agreement. It is not as comprehensive as the former one was.
The second point I should like to make is that the form of this article is in accordance with the recommendations of the Organization for Economic Co-operation and Development. This is based on their model law for tax agreements.
The third point is that the only information that can be exchanged is, first of all, information necessary to the carrying out of the agreement. It is information which is at their disposal under their respective taxation laws in the normal course of administration. I do not believe it would be possible for the taxation authorities to pass on anything that they did not get in the ordinary course of administration of the taxation laws that relate to matters covered by this agreement. I do not really think that the question of CALURA is raised because, under that act, the taxation authorities were passing information along to CALURA. This relates only to the passing of information between the taxation authorities of two countries, information that is necessary for the carrying out of the provisions of this agreement. I suggest to my hon. friend that he is stretching his suspicions almost beyond belief.


Marcel Joseph Aimé Lambert: Not beyond belief; I do not believe I am necessarily chasing a bogeyman here. With respect, I point out to the minister that the information the tax authorities of this country obtained from business was for the purpose only of the administration of taxation. However, they take that self-same information and pass it on under the terms of CALURA. It will be recalled that under CALURA, as it was originally designed, there

was a specified return made for the purpose of that particular act, the Corporations and Labour Unions Returns Act. Now, we simply ask for the tax report, plus perhaps some additional imformation, so therefore t he Minister of National Revenue of this country is obtaining information during the ordinary course, as is disclosed by this wording, "concerned with the assessment and collection of taxes which are the subject of this agreement".
Farther on there is a reference to what is necessary for the carrying out of the provisions of this agreement. I am raising this particular point as a warning because I rather believe that some of our friends, such as auditors and chartered accountants, may raise it. I hope that I may be wrong, but there is, to my mind, at least, a question. Perhaps experience will show whether I am right or wrong.


Thomas Speakman Barnett: I should like to return to the subject matter of article VII. When the hon. member for Edmonton West was speaking during second reading he said that this article relates to pensions and has affected, I suppose, thousands of people in various parts of Canada, certainly in my own part of Canada. The minister gave the hon. member for Winnipeg North Centre a short answer a moment ago, but I feel this is something on which we should be quite clear, so that if this agreement comes into effect we will be in a position to answer inquiries directed to us, at least up to a point.
I understood the minister to say during the debate on second reading, that this new agreement becomes effective as of the date of the expiration of the former agreement between ourselves and the United Kingdom which lapsed for a period. As I understood him, he said that the pensioners who were resident in either country would have some choice as to whether, in future, they accepted their tax levies under the terms of the old agreement or under the terms of the new agreement. Is that so?


Mitchell William Sharp: My understanding of the position is that the general rule in the future will be that pensions and annuities are taxable in the country of residence of the pensioner or annuitant. However, pensioners or annuitants who were receiving pensions under the old agreement, when the rule was different, in that the country of the source of these governmental pensions was the taxing authority, will be able to retain their former status if that is more advantageous than their new
April 26, 1966

status. This alternative will not apply in the future to any new pensioners.


Thomas Speakman Barnett: Following through on that, as I understand it, certain pensioners have, during the period when the old agreement lapsed, been subject to double taxation. Someone receiving a pension from the United Kingdom had to pay tax there, and then it was taxable income for the purpose of our tax laws. Will such people be reimbursed for the extra taxation that they have paid? For example, will a person who has had tax deducted in the United Kingdom be reimbursed from the United Kingdom or will he be reimbursed his Canadian tax?


Mitchell William Sharp: My understanding of the position, Mr. Chairman, is that they will be entitled to a refund from the United Kingdom. They should apply to that government for a refund when this new law comes into effect in Canada from January 1, 1965 and in the United Kingdom from April 6, 1965. They will have been overtaxed by the United Kingdom government and should apply to that government for a refund. I am referring to the cases which have been mentioned by the hon. member. Of course, if there are Canadians who happen to be in this group in Canada, then they apply to the Canadian government.


Thomas Speakman Barnett: Would a Canadian resident in the United Kingdom who has been taxed in Canada be reimbursed by the Canadian government?


Mitchell William Sharp: We do not tax pensions at the source in Canada, so no practical problem of that kind arises.


Stanley Howard Knowles: Does that reimbursement
which was just discussed go back only to April 6, 1965, or could it go back farther?
[DOT] (7:40 p.m.)


Mitchell William Sharp: Mr. Chairman, this is a very technical question. Perhaps it would be safer if it were put on the order paper or addressed to me as Minister of Finance, so we can get a precise answer. It depends partly on the kind of pension involved. If it were a governmental pension it might be treated differently from another kind of pension. My general understanding is that it would not have been overtaxed prior to April 6, 1965. However, I hesitate to give that as a general answer because there might be exceptions.


Stanley Howard Knowles: The minister will find in his mail a letter I wrote a few days ago covering
Income Tax
a case where both kinds of pension are involved, governmental and non-governmental. I shall await the reply with interest.


Thomas Speakman Barnett: Mr. Chairman, there is a matter which arises directly under clause 2. It was raised by the hon. member for Edmonton West in respect of subclause 3 of that clause and it has been a matter of discussion from time to time in regard to various bills which have been before the house. I must say that I for one found the argument advanced by the hon. member for Edmonton West rather convincing, particularly in respect of the way this paragraph is written, at least as I see it. I would not quarrel with the fact that there must necessarily be room under a bill for the making of regulations, but reflecting upon the argument presented by the hon. member for Edmonton West it does seem to me that one particular phrase in this paragraph is unnecessary. I refer to the words "in his opinion".
I would not quarrel with the idea of granting the Minister of National Revenue the powers to make orders or regulations-and I say the same in respect to the governor in council-such as are necessary for carrying out the purposes of the agreement. But when it comes to our giving blanket authority to a minister to do whatever "in his opinion" may be necessary, it seems to me that this is extending a pretty broad power. If if ever came to the point where the minister was asked whether he had acted in accordance with the act of parliament which had been passed, he would say "Yes, in my opinion I did", as I see it. The way this subclause is phrased, that would end the matter.
It seems to me that apart from any other aspect of the matter this phrase is worthy of some consideration before we pass this bill. In fact, for the purpose of having this matter definitely discussed I would be prepared to move, and I so move:
That sub-clause (3) of clause 2 be amended by deleting from line 16 the words ". in his opinion,".


Mitchell William Sharp: Mr. Chairman, apparently this is an historic clause. It has been in bills to implemenit tax agreements for as long as my officials can remember. Moreover, they cannot recall the clause having been used many times. Certainly I have never heard any complaints that it has been abused.
Personally I would have no objection to the removal of those words, because in any event I think the discretion must lie with the Minister of National Revenue as to whether
April 26. 1966

Science Council of Canada the orders and regulations which he makes are necessary. I think that the words "in his opinion" are really quite redundant and I do not think much hinges upon them. My only reason for hesitating a little, though I do not think I would hesitate for very long, is that these words are hallowed by history and may have some hidden significance of which I am not aware. However, as far as I am concerned I see no difference in the intent or in the meaning of this clause if the words "in his opinion" were removed.


Herman Maxwell Batten: Shall the amendment carry?


Some hon. Members:: Carried.


[Stage Direction]
Amendment agreed to.
Clause as amended agreed to.
Clauses 3 to 5 inclusive agreed to.
Schedules agreed to.
Clause 1 agreed to.
Title agreed to.
Bill reported.
Mr. Deputy Speaker:: When shall the said bill be read a third time? Next sitting of the house?


Some hon. Members:: Agreed.



SCIENCE COUNCIL OF CANADA


Charles Mills (Bud) Drury: the second reading of Bill No. C-149, to provide for the establishment of a science council of Canada.
He said; Mr. Speaker, in moving that the Science Council of Canada bill be read a second time there are some aspects of its intended functions and the operation of the council, as well as other matters, which contribute to an understanding of the purpose wh ch I should like at this time to bring to the attention of the house.
Frequent reference has been made over many years, in the public press and elsewhere, to the amounts of money the government of Canada has provided to support research and development in this country, often enough drawing an unfavourable comparison with relative amounts allocated for a similar purpose by the United States, Great Britain and other countries. I believe it useful to examine past performance briefly, to consider trends and to give some perspective to the position in which we now find ourselves or which may be reasonably anticipated in the years immediately ahead.


[DOT] (7:50 p.m.)
In the United States, government expenditures on research and development which were inconsequential at the beginning of this century, expanded slowly until the early 1950's. By 1953 the total amount was about $3 billion a year. At that time the gathering momentum was such that expenditures for this purpose increased by large factors annually until by 1964 the total amounted to some $15 billion a year. At the present time there is strong evidence that a stage of levelling off has been reached and that further expansion will comprise little more than an upward adjustment related to inflation and to the so-called sophistication of equipment. It appears that little or no increase and even a slight reduction-due to completion of major capital installations-is projected for the coming year. The expenditures in the United States represent about 15 per cent of the national budget or approximately 3 per cent of the gross national product. Whether this is the correct, or the ultimate, or the maximum proportion of government funds which should be spent for research and development is a matter for conjecture; but for the present, at least, it seems to be the proportion of resources that the people of the United States are prepared to allocate for this purpose.
In Canada the situation is comparable in form but off-set in time by perhaps 10 to 15 years. Although complete statistics are not available it is well known that in the first quarter of this century the amount spent by government for research and development was exceedingly small indeed. One estimate suggests that by 1939 the total amount was about $7 million a year. During world war II there was a substantial increase and by 1953 the amount had risen to over $100 million, of which some $5 million went to the universities. Canada is now entering the period of rapid growth in this area which was experienced in the United States more than a decade ago. The expenditure in 1964-65 at $330 million is about 4.6 per cent of the federal budget-rather less than one third of the comparable ratio in the United States. All the evidence points to the possibility that within the next ten years the proportion of resources which the people of Canada will have to be prepared to spend on research and development, if we are to extend or even maintain our position in science and technology in the international scene, will be as much as three times what it is at present.
April 26, 1966

The exact ratio cannot be predicted, of course, but will be determined by circumstances and the outlook, the desires, and the imagination of the people of Canada and their willingness to participate adequately in these great enterprises.
At a recent international conference on science and economy, Dr. Alexander King, Director of Scientific Affairs of the Organization for Economic Co-operation and Development and a long time student of science in public affairs, made the following statement:
With regard to the place of governments in science, I would say that on the whole the main function of the government is to ensure that the necessary skills are provided, that fundamental research is supported sufficiently and that applied research is encouraged at a level of sophistication so that the total comprehension of a country as to technological future prospects is high.
I would place this need to establish and maintain a comprehensive and high level of scientific awareness as a major government responsibility necessary if cultural life is to be rich and dynamic, and equally necessary for the effective use of the world's store of knowledge through industry, agriculture, health, etc., for the well-being of our societies. Its achievement requires from governments an understanding and wise development of the education system, wise legislation and fiscal policy, the building of institutions which are lively and self-critical so that the innovative spirit be fostered in the country as a whole. The understanding and enlightened action of industry is equally important.
In brief, Dr. King was saying that what really matters in the potential for advancement is the totality of knowledge and the level of comprehension in a country. I am certain that all of us would agree with this modern concept.
That we are in the early stages of a period of rapid growth with perhaps two thirds of the ultimate pattern remaining to be established provides in this country an opportunity and an obligation; an opportunity to develop the kind of pattern which will be truly Canadian and which will in the long run best serve the interest of the country, and an obligation now to examine our resources, our needs, our prospects, and to ensure that as far as possible the steps we take are guided by the concepts associated with such a pattern. This is not an easy task. It will require the effort, the consideration and the thoughtful advice of many people in the professions, in government, in the universities and in the community at large if it is to be effectively undertaken. It is the intention and purpose of the Science Council of Canada to serve as a
Science Council of Canada focus for information and advice, to commission intensive studies, and to develop from these many sources of information and concepts that will be useful to the people of Canada in formulating policies and plans for the future.
In respect of the composition of the council it is the intention that the members of council shall be appointed as individuals, not as representatives, ex officio or otherwise, of any organization or group. It is further proposed that members will be drawn from government service, from industry, and from universities and that they will be people who have a knowledge of some aspect of the world of pure or applied science and have a grasp of the relationship between science and national needs.
In many respects the work of the Science Council will be analagous to that of the Economic Council. One of the functions of the latter is to ascertain the areas of our economy in which growth depends mainly on science and technology and to suggest which of these areas are of foremost importance from an economic standpoint. The Economic Council may also be expected to indicate in broad terms the proportion of our financial, physical and human resources that we as a nation might reasonably devote to research and development-they have indeed already pointed out the importance of expanding substantially the support of education in science.
The Science Council will have the purpose of delineating, again in broad terms, the fields of science and technology that may be expected to contribute most to these economic and social objectives and to indicate how their development can best be organized and supported, as well as where and by whom the resources mentioned can be most effectively employed.
In recent years, the National Research Council has been fully concerned with its university support, laboratory and industrial assistance programs, and has not been significantly involved in advising the government on the activities of other departments and agencies. The government has, of course, not lacked advice. Each department and agency offers advice on its own program but, in the nature of things, is concerned principally with its own efforts. I have discussed this problem with my colleagues in the cabinet, with present and former members of the National Research Council, and more recently with ministers responsible for science in other countries. The creation of the Science
4348	COMMONS
Science Council of Canada Council of Canada, as an independent advisory body with no operational responsibility, seems to offer the most effective solution.
In making this decision and offering the Science Council bill, the government has been greatly encouraged by the favourable response of professional scientific organizations in Canada. Among the societies commending the government on its proposed course are the Royal Society of Canada, the Canadian Council of Professional Engineers, the Royal Architectural Institute of Canada, the Agricultural Institute of Canada, the National Conference of Canada Universities and Colleges, the Chemical Institute of Canada and the Engineering Institute of Canada. I am grateful for this response and for the offers of assistance from many of these organizations.
The Science Council, unlike the National Research Council, the Defence Research Board and other agencies and departments of government, will have no staff, no laboratories and no authority over expenditures other than the amounts allocated for the chairman and for expenses of members when attending meetings of the council.
[DOT] (8:00 p.m.)
By utilizing the services of committees, special panels, technical specialists, appropriate government agencies, and industrial, academic, professional and other groups the council will initiate studies in depth, assemble and analyze information, and obtain opinions that will serve as the basis for recommendations and planning. The position of the science council vis-a-vis operating agencies in government, industry and the universities, could perhaps be clarified by pointing out that the council will be concerned with policy and planning for science and technology in Canada, whereas the agencies' concern is with policy and planning in science and technology-two different kinds of activity.
In Canada, as in other countries, because the money provided by the central government represents much the largest component of the total amount spent on research and development, the balance of distribution of government funds among the government's own laboratories, industrial organizations, universities, and of allocation to particular areas of science and technology exerts a most important influence on the scope and character of the entire community of science and technology in the country. Unless careful thought is given beforehand it is all too easy to drift into a situation where there is an
fMr. Drury.]
DEBATES	April 26, 1966
uneven or unhealthy emphasis on one segment of science, or in one geographic area, or in one type of organization. Such an imbalance, once created, is almost impossible to correct. In this important matter the Science Council will be expected to develop principles that will assist the government in effective allocation of its resources.
As the success of any programs or plans that may be devised will inevitably depend upon there being available a sufficient number of intelligent and competent people, with adequate training and skill in science and technology, a prime objective of the Science Council will be to study the needs, the numbers and the training programs that will be required. It has been stated that in the United States some 35 per cent of all professionally trained scientists and engineers are engaged in research and development: the comparable figure for Canada is in the order of 15 per cent. This is but another measure of the relative importance attached to this sphere of enterprise at the present time, and another indication of the possible magnitude of growth in this country.
Our real objective must be, in the fields of science, in medicine, engineering, industry, the universities, to provide the exciting and challenging opportunities in the broad spectrum of science that will not only retain our best minds but induce many of those who have left to return, and thus reverse the outward flow of Canadian scientific and technical manpower.
In order that the people of Canada, and of other countries, may be kept informed of its findings, projections, and recommendations, the Science Council, upon the instruction of the minister to whom it reports, will publish statements, bulletins, and comprehensive reports. It is anticipated that this will provide the public with a factual basis on which to judge the prospect of science and technology and to make personal and corporate plans for the years ahead.
Although the council itself will have no staff, it is proposed that the science secretariat in the Privy Council office will have the responsibility of assembling and analysing information and preparing briefs and other studies for consideration by the council. The secretariat will provide professional and administrative assistance for the council, will prepare reports and undertake day to day services for the council that will ensure continuing and active relations with appropriate government agencies and with industrial,
April 26, 1966

professional and other groups who may be asked for, or who may volunteer advice, assistance and information.
Provision will be made in the Privy Council office vote for general administration for the costs of operating the council, including remuneration of the chairman, travelling expenses of members, salaries of secretarial personnel, fees of consultants, and the expenses of conducting special studies and preparing reports.
The government believes that the Science Council of Canada will be in a position to perform essential and especially useful functions in assessing Canada's scientific and technological resources, requirements and potentialities. It is believed that the proposed structure and composition of the council are sound, that the duties assigned are appropriate and sufficiently comprehensive, and the objectives realistic.


Reginald (Reg) Cantelon: Mr. Speaker, in rising to speak on this bill to establish the Science Council of Canada I would like to say at once that it has my hearty approval, and I think that of all members of the house. However I am somewhat disturbed by one thing that the minister has emphasized in his careful and thoughtful speech, namely that the council will have no power. It will be purely a recommending body, but I hope the recommendations it makes will receive most careful consideration by the government. If they do not, then I am afraid it will be a quite useless body.
Like many others I have been greatly distressed that the Prime Minister (Mr. Pearson), after mentioning this proposal in two throne speeches, has taken so long to get it before parliament. Surely he must know how important this type of legislation is to Canada's future.
In society as it exists today the need for research is very evident. It is not only evident, it is essential if this country is to maintain and improve its industr;al output and, of course, its standard of living. It is essential if we are to keep in the forefront of medical progress and transmit research developments into a better life for all Canadians.
I hope, and I trust my hope is not misplaced, that this council will be a factor in seeing that research in all fields receives more money. I hope too that the council will have the sympathetic ear of the Prime Minister and the cabinet. Unless it has it will be, as I say, useless.
Science Council of Canada
We know there is an enormous demand for funds for research projects from every university. They know the necessity facing our country more clearly than perhaps we in this house do. Undoubtedly there would be similar demands from industry if it felt that there was any prospect of getting aid.
All research has been squeezed for funds. In consequence of this shortage of money and the second grade position that research has had we have lost, through what is commonly called the brain drain, many scientific people whom we could ill afford to lose.
The minister has quoted figures to show that in the United States something like 36 per cent of graduates are doing research, while in this country the percentage is around 15 per cent. That is much too small. Of course, he went on to point out that we are approximately 10 years behind the United States. I hope, as does he, that we can close this gap, but it is going to cost a good deal of money to do it.
Recently United States authorities provided figures which show that in a two year period from June 1963 to June 1965, of the more than 100,000 Canadians who emigrated to the United States, somewhat more than 50,000 were wage earners. Among these wage earners were 1,765 engineers and scientists. There were 1,187 technicians, 163 industrial designers, 258 university professors, 820 physicians and surgeons, 725 accountants and auditors, and 2,040 trained nurses. I think that is terrible and I am sure the minister will agree.
We cannot afford to lose these people, not only because they are our best skilled and potentially valuable people but because they indicate a heavy financial loss to us. It has been estimated that one such person has cost the state $10,000 to educate, and from this it can be seen that on the 1,765 engineers alone we lost $17 million.
[DOT] (8:10 p.m.)
Today we are spending something like 1 per cent of our gross national product on research and development. The United States is spending more than 3 per cent for this, while countries like Belgium and France spend more than 1 per cent. We are not spending nearly enough. It is far too little to produce the result we want. Of course, as a scientist has put it, science is in its adolescence in Canada. He goes on to say that it will not reach maturity for another ten years. David Spurgeon in an article in the Globe and Mail of Saturday, March 19, pointed out
April 26, 1966

Science Council of Canada that in 1925 the National Research Council's expenditures were $139,000, while in 1965 they were $61 million. Naturally this leads to growing pains. We all hope that this new Science Council will help to eliminate some of these pains. It should, and I sincerely hope will, direct money to the proper research projects. It should, and I hope will, stimulate the government to largely increase its support for research.
While I do not think that any particular phase of research merits much more help than that given to any other, it might be worth while to examine one branch more exhaustively; let us pick medical research for this. This is one branch that admittedly does need help, especially since we are preparing to introduce medicare in the near future. I previously stated that Canada lost 820 physicians and surgeons in two years. Since our universities graduate approximately 1,000 of these people each year, we lost 40 per cent of them to the United States. It is no wonder we lost them since the Canadian government's aid to medical research in the past year was only about $15 million; this is about 75 cents for every Canadian. Aid from private sources and $1^ million from the United States National Institute of Health added about another $5 million to this. This does not stand comparison with the United States where the National Institute spent $1,072 million on medical research or $5.35 per capita.
The Hall report gives us a good indication why our doctors go to the United States. It tells us that the Canadian doctor who is 30 years of age and holds an M.D. and a Ph.D. is able to get a research post in the United States which will pay him $15,000 a year and give him good facilities. I hope we notice that it says "give him good facilities". If he stays in Canada he likely becomes a lecturer at a Canadian university at a salary of $7,500 without many of the facilities he would have had in the United States.
John Cowan in an article in Commentator, which he called "Brain Drain-Nobody's Fault But Ours", said that only 67 per cent of applications for grants in aid of research were approved by the Medical Research Council. He considers this rejection as dangerously high. He was most disturbed by the fact that the more expensive projects which tended to be more imaginative and to take off into new fields were most likely to be rejected. He thought this tended to create an attitude on the part of the scientists to, in Mr. Cowan's words "apply for only small things, do not try for anything new and risky, stick

to good conservative research techiniques, and you will get what you apply for."
The Saskatoon Star-Phoenix of March 19, 1966 pointed out that last January some 400 medical teachers and researchers forecast for the Prime Minister the financial aid which they thought would be needed in the next five years just to maintain present standards of medical practice. I quote from the article in the Star-Phoenix:
New hospitals and equipment would cost about $150,000,000; staffs of medical schools and hospitals would have to be doubled in teaching and research.
Research, administered by the Medical Research Council, would have to be doubled from $21,500,000 in 1965-66 to $87,100,000 by 1969-70, with Ottawa providing $80,000,000 of that amount. In addition, universities must contribute $15,000,000 annually or four times their present contributions.
So a manpower shortage in medical research, teaching, and practitioners is facing us. Thus far our medical personnel requirements are being supplemented by the British Isles, Europe and Asia, but as those countries experience a fall-short, they will keep their doctors at home.
Thus we may find that Canada has a national medical care plan, and the provinces have their plans administered on compulsory and voluntary bases according to the respective government policies. Unless the doctors are available to serve the people, the medical care plans lose their significance, because they are immobilized. Among the priorities we hear about, the problem of medical research, teaching, and supply of doctors, should be moved to the top of the list.
Since, then, the Science Council should be one more factor that would help us to enlarge research, it has my unqualified endorsement. More than that, not only do we need to keep the men who can do the research for us, but we need to see that these men get the space and the equipment which will enable them to do a first rate job, and which of course will keep them here in Canada.
As Dr. D. V. Bates, assistant dean for graduate studies in research at McGill University's medical faculty said-and I quote from the Ottawa Journal of January 23, 1965:
"We can't bring scientists and show them empty floor space. How can we recruit good men? They can't work without tools."
Dr. Bates said in an interview the Canadian government has said that "no mechanism exists" for capital grants to universities. He was in Toronto to attend the Canadian Society of Clinical Investigators convention.
He named McGill, Dalhousie, University of British Columbia and the University of Western Ontario as the four schools. He said $4,000,000 is needed to equip the new buildings.
Lest you think I have devoted too much emphasis to a discussion of medical research, let me assure you that such was not my intention. All phases of research in chemistry, physics, the biological sciences, mechanics,
April 26, 1966

and the humanities-especially in teaching -require massive doses of money with some solid assurance that programs can be set up and carried through to a conclusion. To emphasize this may I quote from an article in the magazine Contemporary, an organ of St. Francis Xavier University, published on March 15, 1966:
Only a bold, imaginative and massive program of government-financed scientific research can save Canada from early and certain defeat in economic competition with the other industrial powers of the world.
It is an urgent matter of national security, said Dr. E. M. Clark, head of the physics department of St. Francis Xavier University and one of North America's leading physicists. Canada, he said should be spending an additional $500,000,000 on crash research programs in her universities.
He went on to say:
"We are spending huge sums on Canada's military forces in Europe... In the long run, however, the real threat to Canada is not a military but an economic one. Our scientific research should be getting at least as much money as our air force wing in Europe."
I	would like to say here that I agree with him wholeheartedly. In fact that might be a good place to get the money.
"I think we can safely say that the military situation in the world today is stabilizing", said Dr. Clarke. "But the economic war is rapidly sharpening, and in this field Canada is falling behind.
"Countries like Japan and Russia are making steady inroads into world markets for industrial goods. China will soon be a new and perhaps even greater threat. And much closer to home, of course, is the U.S.A. All of these countries are expanding their industrial plant at a much faster rate than Canada. And they are able to do it because they are spending far, far more money on research."
[DOT] (8:20 p.m.)
Lest one think that Dr. Clarke holds this opinion alone I would like to direct your attention to what the brief submitted to the Commission on the Financing of Higher Education by the Association of Graduate Schools says on the subject of graduate studies. On page 11 of this brief it is pointed out that the total annual current expenditure for graduate studies in the humanities, the social sciences, sciences and engineering should be of the order of $90 million in 1964-65-certainly we are far short of that-$380 million in 1970-71, and $600 million in 1975-76. In addition to this there should be capital expenditures of $488 million for the period 1964-65 to 1970-71, and $353 million for the period 1970-71 to 1975-76.
To put it another way, the association is convinced that extremely heavy investments by the nation-some nine to ten fold higher than in the past-should take place over the 23033-2751
Science Council of Canada next 11 years. I know that the Budget made some attempt to stimulate assistance for research, but this attempt is problematical of success and certainly will not fill the need.
I re-emphasize what I said before, and what Dr. Clarke said, that the future of this nation depends upon developing a research program which will enable industry and science to provide us with the developments which will lead us forward as an industrialized nation.
I hope that the new Science Council will be listened to by the government, and that through its efforts research will be provided with the funds to meet the needs I have outlined. I note what the Hon. Minister (Mr. Drury) said about the level of scientific advance being dependant upon the state of scientific education and the general education of the people, and I cannot agree with him more. I hope, however, that this is an indication that the government will be prepared to increase substantially not only aid to research but aid to education as well.


Mr. Max Salisman (Waterloo South):: Mr. Speaker, let me begin by joining with the hon. member for Kindersley (Mr. Cantelon) by indicating support for Bill C-149.
The minister gave us a very leisurely delineation of this bill. I think his delivery tonight was perhaps typical of the whole attitude that has generally prevailed about the need for a science policy in Canada. We welcome the news that we will have a council, but we cannot let this occasion pass without expressing regret over the loss of many years to the people of Canada in this regard.
There have been commissions and more commissions, and the Prime Minister on April 30, 1964, when he indicated that he would accept the first recommendation of Dr. Mackenzie's report, missed the opportunity of bringing in the second recommendation which called for the establishment of a science policy. That time has been lost and it will be increasingly difficult for Canada to make it up.
I was somewhat disturbed by the minister's statement that we must wait, or words to that effect, for Canadians to prepare for spending. The truth of the matter is that Canadians have been prepared to spend for a long time but have been waiting for the government to provide some direction in this regard. We hope that with the establishment of this organization, with the combination of the
April 26. 1966

Science Council of Canada secretariat of the Science Council and the minister responsible, we will be able to accomplish in the area of science what we have been able to accomplish through groups such as the Economic Council of Canada.
To a considerable extent our experience with the Economic Council has been non-partisan. The council has performed an invaluable service to this country and has presented objective information and conducted objective research into problems in Canada. Certainly all of us hope that the new science secretariat will do the same.
I was somewhat disturbed by the minister's complacency when he pointed out that the government's efforts over the years had been increasing and that it has allocated larger and larger resources to the development of sciences in this country. I should like to quote some figures which show that in spite of the fact that the gross amount spent in the field of science has been increasing, the actual allocation to individuals working in this field has remained level, if not somewhat lower than in the past.
I should like to refer to the one area of operating grants given to people in our universities for conducting scientific research. This is the only type of grant, in most cases, that an individual conducting research can look forward to in order to continue his work. I have computed the average grant per person in physics by adding up the amount of operational grants and dividing it by the number of persons who receive grants.
By making this calculation I arrived at these figures. In 1958-59 the total amount spent was $402,000, the number of people involved was 76 and the average grant was $5,300. In 1959 to 1960 the total amount granted was $476,400, the number of people involved was 100 and the average grant was $4,800. In 1960-61 the total amount was $580,480, the number of people involved was 106 with an average grant of $5,500. I shall not read the complete list but I want to mention the last year. In 1963-64, which is the last year for which I have statistics, the total amount granted was $892,700, almost double that for 1958-59. However, the number of people involved was 181, and the average grant, instead of being even $5,300, as it was for the 1958-59 period, had gone down to $4,950. The cost of research has gone up significantly and the amount of grants in support of research should also have gone up in proportion to that increased cost, but that

is not the case. These figures can be contrasted with the situation in the United States. There a young newly appointed professor of physics can expect a grant of from $15,000 to $25,000 per year. A well established professor will have a research budget of almost $100,000 per year.
There is a crisis in Canada in the sense that we are losing some of our most able people. This relates not only to the number we are losing but to the quality of the people being lost. I should like to quote from Dr. L. E. Howlett on "Physics in Canada" in which he says:
Above all we should ruthlessly stop certain ingenious optimists who keep publishing statistics to show that the over-all statistical balance proves the loss is not a too serious one.
He is referring to the exodus of Canadian scientists to other countries. He then states:
This is arrant nonsense. The quality of the people who move is the thing of overwhelming importance and this must be examined before numbers have any meaning at all.
[DOT] (8:30 p.m.)
I believe we all recognize that if we are going to keep these able people in Canada we are going to have to support them with adequate sums for research purposes. I certainly hope that the new Science Council of Canada will recognize this situation.
I have read the terms of reference of the council and they are very good, with one exception. The duties are defined as giving consideration to, and making reports and recommendations to the minister on, the adequacy of the scientific and technological research and development being carried on in Canada; the priorities that should be assigned in Canada to specific areas of scientific and technological research. I think these duties are fine. However, Mr. Speaker, this council will have to be given one further term of reference, and it is one that only the government can give it. The government will have to define the kind of objectives and the quality of the work it wants to see carried out in Canada so that the council, with the duties assigned to it, can make some intelligent decision with regard to those objectives.
Unless this or any other organization has clearcut ideas about what the national purpose is, I feel it must prove inadequate to the task; it will flounder around in all directions seeking a sense of guidance for the things this country requires. I urgently suggest to the minister and the government that they define a clearcut policy. Regarding the kind
April 26, 1966
of country they want to see Canada become; whether it is to be a country just passing out a little bit to every scientist who comes along and spreading the gratuities all over, whether there is to be an emphasis on quality and whether some direction will be given to the Science Council to see that whatever Canada embarks upon, whichever courses of action are decided upon as being most advisable and which sciences shall be supported, those sciences are supported with funds which are adequate to ensure that only the highest quality work will be done in this country.
I think we would be far better oil to do fewer things in Canada and do them extremely well than to try to imitate our neighbour to the south, the countries of Europe or any other country in regard to science policy. We have special problems in Canada; we have a relatively small population with a special geography. Some direction from the government in this regard would prove of great importance to the work of the Science Council.
I hope that I read the terms of reference correctly and there will be a minister of the crown who will answer to the house for the Science Council, so this house can question him on its work and he can bring before the house matters of direction that the council will require. If this is done, the house will have an opportunity of expressing an opinion. I should like to close my remarks by quoting from an article by Dr. J. Gordon Parr, Dean of the Faculty of Applied Science, University of Windsor, in which he says:
It is not, however, too early to appreciate that direction-guidance, if you prefer it-is lacking.
He was referring to the scientific secretariat.
In what areas is industrial development most promising? In what subjects should we rely upon imported technology? In what products do we have a peculiarly Canadian advantage? To what extent should universities be expected and encouraged to contribute to a national effort?
I hope this council will solve some of these problems for the Canadian people.


Thomas Speakman Barnett: Mr. Speaker, as my colleague the hon. member for Waterloo South (Mr. Saltsman) has said, I take it that all members of the New Democratic Party welcome the introduction of this legislation. Even being as pessimistic about it as one can be, I would be inclined to say that it is certainly worth a try. In other words, it would appear obvious to me that something needs to be done to co-ordinate and indeed to
Science Council of Canada tabulate what is or is not being done in the various fields of research in Canada. Certainly some steps need to be taken to ensure that there is not unnecessary overlapping of effort and that there is some planning for the proper allocation of the trained personnel we have available.
My purpose in rising to take part in the discussion on this bill is to suggest that my contention that the idea of a Science Council is certainly worth a try has been borne out, as far as I am concerned, as a result of some efforts I have been making in recent months to arrive at a picture in my own mind as to what is or is not being done in a particular field of research, namely the matter of the control of pollution of our air, water and soil.
I have found it very difficult to really get any picture in my mind and have come to the conclusion that possibly no one in Canada has a complete picture of what is being done in this field, or what is really required to be done. If the establishment of a Science Council can do something to correct the situation in this particular field of research, even apart from any other very necessary fields of research that are required in our modern society. I for one am willing to support the idea embodied in this bill and hope that the council when established will, among other things, give us an assessment of the requirements and priorities in the field of research and action in the development of the control of pollution.
Therefore, Mr. Speaker, by way of illustrating what I feel should be the function of this bill I shall pretty well confine my remarks on it to this particular aspect of research, in the hope that it will serve to commend the bill to the house and also focus the attention of the house and of the Science Council of Canada, when it is established, on the high priority as far as this particular field of research is concerned.
[DOT] (8:40 p.m.)
A number of rather interesting articles have appeared recently in various publications in this connection. A series of articles was published in the Vancouver Sun a year or so ago, written by their reporter in this field, Mr. Arnie Myers. I believe this was a very commendable effort in expanding our knowledge as citizens of the problem, and of setting out some of the limitations on what is being done at the present time. I am glad to notice that in recent months the Toronto Globe and Mail has also been publishing a number of quite interesting articles in this

Science Council of Canada field. The article, under the byline of Mr. John Leblanc, which appeared in the Toronto Globe and Mail for April 13 of this year, apparently concerns an interview with the director of the University of Toronto Great Lakes Institute, Dr. George B. Langford. The author describes Dr. Langford as a veteran educator and scientist with a six foot four physique, academic credentials as imposing, and a high degree of disrespect for most politicians.
According to the article Dr. Langford had come to the conclusion that not many people in Ottawa like him. I suggest, however, that the Minister of Industry (Mr. Drury), other members of the government and members of the house, should not be prejudiced by their likes or dislikes in respect of words that may be uttered on such subjects as pollution and the need for expanded research by those who have the professional and technical qualifications to advise us. The article goes on to illustrate some of the remarks which, in the writer's view, may explain some of the dislike in Ottawa for Dr. Langford. Perhaps I may quote from the article:
Proliferating Canadian and American-federal, provincial, state and international agencies dealing with the lakes outdo Parkinson's Law. (The theory is that any given number of government employees will create enough work to keep themselves on the payroll).
Later on in the article, we find this:
His relations with most government bodies being somewhat strained, he is not surprised that his research organization's body of knowledge has not been called upon as an emerging water crisis becomes clear. On the other hand, he is not impressed by the current flurry of official action north and south of the international border.
"Now that they're finally waking up to the problem, they want to dash off on their own in all directions like Don Quixote's horse.''
Action, it is true, is sprouting on many fronts. Until recently, there were about 77 bodies dealing with one aspect or another of the lakes. A few more are in the process of being created as the various governments initiate hurry-up campaigns to reverse, or at least restrain, the developing foulness of the lower Great Lakes.
I hope that the Science Council of Canada is not going to become simply another of these proliferating bodies to which reference is made in this article, but rather a body which may serve to co-ordinate and possibly reduce the number of bodies that are working, perhaps sometimes at cross purposes or at least without knowledge of what each one is doing, in connection with the various aspects of research work. If Dr. Langford's analysis of the situation in respect of the Great Lakes is correct, I suggest that it is, in itself a

April 26, 1966
rather weighty argument in support of the establishment of something along the lines of the proposed Science Council of Canada, provided it will be given freedom and authority and that action will be taken upon its recommendation to reduce this proliferation to which Dr. Langford refers.
I am not going to read all of the article, but I quote a portion which has some significant points which emphasize to me, at least, the importance of taking a forward step in the field of scientific research. Talking about the hurry-up action in the Great Lakes situation, the article says:
The action has been stimulated by a spreading awareness that the multiplying tonnages of human and industrial wastes pouring into the lower-and smaller-lakes are taxing the capacity of the waters to keep themselves refreshed-
Eutrophication-overloading with nutrients from shore discharges-has caused an unnatural mushrooming of low forms of life such as algae over more than a fourth of Lake Erie's area. Water quality has deteriorated, more desirable forms of fish have faded away and large sections of shore have been fouled. Lake Ontario and Lake Michigan have developed similar characteristics in spots.
Just what Canada will be doing about all this is not yet clear; new moves appear confined to doing more studies.
The article goes on to deal with some of the proposed actions in the United States. It is made clear that quantitatively at least the United States has been responsible for more pollution of the Great Lakes than we have in Canada so far. This is understandable in view of a comparison of our population and industrial development in the area.
Later, the author points out:
Federal Mines Minister Jean-Luc Pepin, who carries the central government's share of water responsibility, indicates that Ottawa's activities this year will consist of some sampling of Lake Ontario and St. Lawrence River water. The Mines Department will spend $1 million and the Health Department a lesser amount. The Ontario Water Resources Commission-a provincial agency-will conduct other sampling.
Then reference is made in the article to another matter which I think will be an increasingly important subject for public action. Certainly, I think it is related closely to at least the initial stages of the work of the Science Council. The article goes on to point out this:
Somewhat less tangible-and considerably further in the future-is a role that may be played by the Canadian Council of Resource Ministers, a federal-provincial group set up several years ago with a secretariat in Montreal.
I feel that at some point in the discussion of this bill it might be useful if the Minister

April 26, 1966
of Industry were to indicate just what relationship he envisages between the proposed Science Council of Canada and the federal-provincial council of resource ministers. It does seem to me that there should be, very definitely, some form of liaison established, and it should be understood what the relationship between these two bodies is to be.
I shall just quote briefly from the article once more:
The conference is planning a Fall convention on pollution and our environment-the group calculates water, air and soil pollution costs Canada $1.1 billion a year-and is going to begin with 100 background papers on the subject, written by experts.
I would say, Mr. Speaker, that in relation to some of the figures that have been mentioned by other members concerning the current spending on research, this cost indicates to me the possibility of achieving a net saving to our country by stepping up our research in this particular field, if in no other.
[DOT] (8:50 p.m.)
The article goes on to point out that the conference will begin with 100 background papers on the subject written by experts. After that there will be another series of papers on how to control it; but this is a long range proposition, the article says. I suggest that out of that conference the Council of Resource Ministers should find considerable food for thought and study; that is, if these background papers are what I hope they will be-pretty representative of current knowledge and thought on what can be accomplished in this particular field of research.
In this connection, and to further illustrate the need, in my view, for the establishment of this Science Council, I point out that I have been trying to seek some information on what the federal government is doing in the field of pollution research. There was recently tabled a reply to an order paper question I had asked, No. 555, regarding what research is being done. I asked which departments or agencies of the federal government are conducting research into (a) water pollution control and (b) air pollution control. Then I went on to ask what amounts for each of the last five fiscal years had been spent in this field.
The reply I received was a somewhat conditional one, but rather an illuminating one in a number of ways, one which illustrates the need for some greater co-ordination and understanding of what the various arms of the federal government are doing in this area.
Science Council of Canada I realize it is a little difficult in some respects to define what is or is not being done in this field specifically related to research to achieve control of pollution.
For example, the National Research Council indicates in the answer given by the Minister of Industry that the council itself is not doing research into water pollution control or air pollution control. In 1964 the National Research Council established an associate committee on water pollution to coordinate the interests of Canadian universities, industry and government in the matter of water pollution and to encourage research into the problem in Canada. Support was also given to researchers in the universities for scientific research in several relevant areas, the result of which could be of potential use in the field of control.
It is apparent to me, Mr. Speaker, that while the Research Council has shown some interest in this subject, it appears from the answer given that the council is not fully aware of all the ramifications of its efforts or what is being done by various universities or other agencies across the country.
An answer supplied me by the Minister of Mines and Technical Surveys (Mr. Pepin) informs me that that department does not carry out research into the control-it underlined that word in its answer-of water and air pollution. However, the department does conduct air and water pollution studies. On that basis the questions are answered in this way, and I should like to put some figures on the record because they are important in relation to the estimated $1.1 billion that the council of resource ministers suggested pollution is costing us today.
In the period 1961-62 air pollution studies represented an expenditure of $22,300; water pollution studies cost $5,000. In the period 1962-63 air pollution studies cost $22,300; water pollution studies, $5,500, an increase of $500. In 1963-64 air pollution studies cost $22,300; water pollution studies, $8,500. In 1964-65 air pollution studies cost $23,300; water pollution studies, $10,250. In 1965-66 estimated air pollution studies cost $37,300; water pollution studies, $51,750. It is to be noted that of the water pollution studies expenditure for the period 1965-66, $14,000 went to the Great Lakes Institute.
Then I had another answer from the Minister of Transport (Mr. Pickersgill) which informed me that the Atlantic Development Board, for the fiscal year 1965-66, spent $18,955.88 on water pollution control. Apart from

April 26, 1966

Science Council of Canada those figures, Mr. Speaker, the only figures of expenditure by the federal government that I have been given on reserarch into this field relate to moneys spent by the Department of National Health and Welfare, the Department of Fisheries and the Fisheries Research Board of Canada. These figures are, in my view, of very minor consideration indeed.
For example, the Department of National Health and Welfare has spent on water pollution control an average of between $40,000 to $50,000 per year over the past five years. The Department of Fisheries estimates that it has spent $90,000 over each of the last five fiscal years. The Fisheries Research Board of Canada, in addition to that spent by the department directly, has spent of the order of $55,000 to $60,000 per year average over the last five years. This is all in the field of water pollution control.
The only expenditures in air pollution control have apparently been made by the Department of National Health and Welfare and I should like to put these figures on the record. In 1961-62, $58,096; in 1962-63, $72,858; in 1963-64, $94,438; in 1964-65, $119,487; and in 1965-66, $112,036. Those figures represent, according to the return given me, the total amount currently being spent by the federal government in the field of pollution control, which the council of resource ministers estimates is presently costing Canada $1.1 billion a year.
If the Science Council of Canada can do something to change this situation, then I for one will be glad to see it go into operation. I should point out that the answer I was given does make it clear it is provided with the explanation that the reported activities of the department and agencies include only those which have been directed specifically toward research into water and air pollution control, per se.
[DOT] (9:00 D.m.)
Not included, according to the answer I received, are the wide ranges of departmental investigations and monitoring of water and air phenomena which directly or indirectly affect the nature, distribution or dissipation of pollutants. I think this is an answer which might properly be put on record. I do not think one could put a question on the order paper which would produce an exact answer telling us what is being spent for such purposes as the monitoring, and other studies to which reference is made. But other figures indicate that it probably represents a very
fMr. Barnett.]
small proportion of federal expenditures in relation to the necessity of dealing with this growing problem as a matter of urgency.
I hope the Science Council can also do something to keep the government and all concerned more directly in touch with what is being done in various research fields. To illustrate this point I should like to refer to a letter I received from the Minister of Forestry after I had asked some questions during his estimates about an amount of $1,700,000 granted to the Pulp and Paper Research Institute of Canada for its capital spending program.
I asked the minister whether or not this research institute was conducting any research into pollution. He said he really did not know but he would obtain an answer for me. I am glad to say he did. As a result, I had sent to me, together with a covering letter, a letter from the President of the Pulp and Paper Research Institute which outlined some of the work which this body is doing. It indicates that in a modest way at least some research has been done in the pollution field, though, apparently, "in a corner", without the minister who is responsible in this field having any direct knowledge of it. I take it that this is the kind of situation which the proposed Science Council is designed to remedy. I hope the council will be successful in its endeavours.
I am sorry there is not time to put on record the full statement made to the minister and, indirectly, to myself by the President of the Pulp and Paper Research Institute because it does contain some interesting information. However, I invite any members of the house who may be interested to have a look at the letter.
I have mentioned this in the present context because I think it illustrates how uncoordinated and, in many respects, how fragmentary our efforts have been in various fields of research, particularly in this field of research into pollution control in which I am interested, because it affects many people in the part of the country I represent. In addition, all hon. members will agree that this is a question of growing national importance.
I hope that when we get into committee of the whole the minister will be able to amplify and clarify some of his ideas as to the way in which this council may be able to assist in dealing with problems of the kind to which I have drawn attention.
April 26, 1966


Mr. A. B. Patterson (Fraser Valley):: My
hon. friend from Okanagan-Revelstoke was supposed to speak on this subject on behalf of the Social Credit party, but the Committee on Broadcasting, Films and Assistance to the Arts, is sitting at the present time and he is a member of that committee. It is therefore my responsibility to pinch hit for him tonight and make a few brief observations on this measure.
I do not consider myself qualified to make any profound contribution to the debate on this question but I venture to suggest that all members and possibly all Canadians are concerned with this matter of scientific research and development. The world is moving rapidly along this particular road and we must make sure that Canada maintains its place in the onward march.
It has been pointed out that Canada is losing a great many well qualified individuals who are moving to other parts of the world, particularly to the United States, because of the lack of adequate facilities, opportunities and remuneration here. This is a matter of real concern. We are constantly reading articles in magazines, newspapers and various periodicals drawing attention to the disastrous effect this process will ultimately have on Canada and its place in the world. Because of this we are happy to support the establishment of the Science Council as indicated in the measure before us.
However, I should like to refer to a difficulty to which attention has already been drawn-the proliferation of agencies and departments of government which are presently engaged in various pursuits which closely parallel the contemplated work of the Science Council. I believe the minister when introducing this measure said that in some way the work of the Council would parallel part of the work of the Economic Councl. We hope, therefore, that in working out the programs which will result in the establishment of this agency steps will be taken to ensure that there will be no unnecessary overlapping of activity or work as between these two bodies or other bodies working in the research field.
We all recognize the valuable work which is being done in the field of research by our universities and by private industry. We look to this Science Council to become an agency which will not only promote projects and research studies but serve as a repository for information and data which are fed to it by other agencies working in this field.

Science Council of Canada [DOT] (9:10 p.m.)
I believe it essential that priorities be established for the work of the council. It will not do for it to start off in a haphazard manner and shoot off in every direction. Close attention will have to be given to the immediate, pressing needs of our nation and economy in order that they receive prior consideration.
In another context it has been pointed out that in meeting the social and economic needs of the people of Canada we must establish priorities, recognizing the fact that capital is somewhat limited and is not sufficient to meet the challenge in every field of activity and endeavour. I believe the same principle obtains in the area of science.
Just as an aside, Mr. Speaker, an hon. member, a friend of mine, made a suggestion a few minutes ago that in view of the fact development in the fields of science and research will cost so much money, one of the first projects to which the council should give attention is research into the science of finance. Even though he is not a member of the party to which I belong, he suggested it might be advisable and profitable to have research into the Social Credit financial philosophy and proposals. We believe that the adoption and implementation of our financial proposals would give the treasury of our country a certain amount of capital which could assist the development of a science program-


Mr. Speaker:: Order. I am sure the hon. member for Fraser Valley (Mr. Patterson) expects me to intervene to remind him that the house is considering the establishment of the Science Council of Canada and this has very little to do, so far as I can judge, with Social Credit science, as the hon. gentleman calls it. I would suggest he revert to the subject matter at hand.


Alexander Bell Patterson: With all due deference and respect, Mr. Speaker, we are talking about how to finance scientific research and development programs. This is one of the problems with which the council will be faced. Therefore, with all respect and sincerity, I submit that what I have suggested would contribute to quite an extent to the meeting of that problem and provide the finance that is necessary to move forward in these fields. I appreciate your indulgence, Mr. Speaker, and with these few remarks will conclude my contribution to this debate.
April 26, 1966

Science Council of Canada [Translation]


Maurice Allard: Mr. Speaker, I thank you for recognizing me for the third time today. It may be that in the consideration of certain legislation, because of certain criticism I utter, I may be looked upon by you as Daniel in the lions' den. Tonight, the lions are not in a roaring mood; to the contrary, they seem quite apathetic, considering the atmosphere of the house.
Nevertheless, I think the lions, in view of the principle of this bill, are not in the proper cage as consideration is being given to the establishment in Canada, under exclusive authority of the federal government, of a Science Council of Canada.
I am quite aware that few voices will be raised in this house to recall the provisions of the Canadian constitution, but as long as the courageous population of Sherbrooke riding continues to send me here-and I say courageous because they put up with me, as my colleagues do-I shall repeat my deep conviction that the administration of Canada cannot be conducted in utter chaos.
The provisions of the Canadian constitution must be adhered to. Now, under the confederation agreement of 1867, more precisely under sections 92 and 93, all questions of a local, regional, social, civil, religious and educational character have been given to the provinces. There is a special section of the Constitution, section 93, under which exclusive jurisdiction is given to the provinces in matters of education.
In 1937, Supreme Court Justice Duff ruled that such exclusive jurisdiction belonged to the provinces at all levels, elementary, secondary and university.
Such, then, are the guiding constitutional principles.
Oh, I know too well that during economic depressions and in wartime, the central government has crept into certain fields. But what has become unconstitutional is that in peacetime it stepped up this practice and its meddling in fields of provincial jurisdiction.
In short, the purpose of a science council is highly commendable. We have an urgent and immediate need for it; all the more so because we note that most of our scientists, graduating from our universities, are leaving the country, mainly for the United States. From 1956 to 1961, 1,239 Canadian scientists moved to the United States.
I admit that the problem is important, but I say, Mr. Speaker, that in this field, like in

many others, the government should proceed in conjunction with the provinces, according to the evolution of modern-day problems.
Preparations are being made for a June conference on education. Let us see how the central government proceeded in the field of education which relates to that of science a field in which provinces have exclusive jurisdiction under the Canadian constitution. Well, it has reached a point, where it grants prizes to students, announces scholarships, prepares a national conference on education in June, and is now meddling in a provincial field without the co-operation of the provinces. In my opinion, it should have waited to put the science council project on the agenda of a federal-provincial conference on educational and scientific problems, precisely in order to establish co-operation in the evolution of the Canadian constitutional life.
The mentality is not the same as it was in 1867. We admit that. On the other hand, I am against a government, whether provincial or federal, interfering in a field coming under another government's jurisdiction without co-operating with the latter.


Mr. Speaker:: Order. I hesitate to interrupt the member for Sherbrooke when he is expressing with such eloquence his views on the resolution now under consideration, but I must remind him that the standing orders do not allow a member to make the same speech twice, and the member for Sherbrooke is now repeating substantially the same speech he already made in this house when we considered this bill at the resolution stage.
If the hon. member will refer to page 2869 of the official report, he will find there in substance the same remarks he has just made. Under the circumstances, I take the liberty of reminding him that he is not allowed, under the standing orders, to repeat remarks already made.


Maurice Allard: Mr. Speaker, I congratulate you on your excellent memory, because it is true I expressed certain views in more detail on another occasion, but at the time, I had put some questions to the minister (Mr. Drury), who is now looking at me sympathetically, but he left them unanswered then.
I shall put the question more precisely today. Is there any specific agreement or consultation, in short, any approval on the part of the provincial government in this matter, or has the minister received any protest?
I should like the minister to give me a specific answer to this question.
April 26, 1966

[DOT] (9:20 D.m.)


Mr. Speaker:: The hon. member for
Kootenay West.


Herbert Wilfred Herridge: Mr. Speaker, I will be very brief, but I cannot resist rising to say I think all members of this house support the principle and the purpose of this bill. I wish to congratulate the honourable and gallant gentleman for accepting the C.C.F. policy 30 years late. This was the policy of the C.C.F. as enunciated by the league for social reconstruction which was more or less the Fabian society of the C.C.F. in 1935. But better late than never. We are very pleased to see that the minister in introducing this bill has accepted another of the C.C.F. or New Democratic Party, policies. If they keep going at this rate, we shall have to work on some more policies for the years ahead.
In any event I was very interested in the statement made by the minister, which I thought was quite a clear cut exposition of the principle and purpose of this bill. I am not one of those who is pessimistic. I know the minister's war record; he was a good administrator and I expect him to put the same effort into the administration of things concerning the Canadian people during a time of peace.
Someone around here said something about soft soap. I do not know whether or not that was my friend in the Social Credit party. Speaking seriously, Mr. Speaker, I am quite optimistic about this bill if the government proceeds with it according to the exposition by the minister this evening, and I am sure we will see some good results from it. As I see it, the concern simply will be-and this is my recommendation to the government-that parliament will approve these recommendations, if they agree with them, and provide the funds.
At this point I should like to mention the fact that my hon. friend from Fraser Valley (Mr. Patterson) was quite in order when he suggested that with this Science Council they also would be quite justified in investigating the science of money, because this was done by Mr. Keynes' science council for the examination of finance, which reported to some organization in the United Kingdom. I am not saying I can accept all the ideas of the member of the Social Credit party, but I think it would be well to have some persons
23033-276J
Science Council of Canada approach objectively the question of providing funds for programs designed by the parliament of Canada. I hope I have put myself in good order there.
Without a doubt research is the greatest need. That was brought to my attention very recently when I paid a visit to the University of Michigan when I was at Ann Arbor. At that time I had been invited by some of the faculty there, and had an opportunity to meet some of those persons interested particularly in the problem of the conservation of national resources, such persons as Dr. Leonard, and others like him, who were most interesting persons to speak to. During the time I spent with them I learned a great deal. Last year that university had $40 million for research. I understand they do a good deal of space research and other research for the government of the United States. Just compare that; one university in the United States last year spent something over $40 million for research. We have a long way to go in this country. As I said before, they do a good deal of research which is carried out in respect of programs designed by the United States government.
For some 20 years I have preached on this subject. I am going to put this resolution on the record before concluding, so that the Science Council will have something to get on with in the first instance:
That, in the opinion of this House, the government should consider the advisability of the creation of a water pollution control division, composed of representatives of the ten provinces, within the framework of the proposed National Resources Council, with powers and funds required to institute research programs, collect, collate and analyse water control data, and to co-ordinate the water pollution control objectives for the provinces; in addition, to further the study of water pollution control problems of a national character.
I put that down, Mr. Speaker, to bring it particularly to the attention of the minister, as one of the first problems this Science Council has to undertake. I might say also that I was invited by the Engineering Institute of Canada to attend a seminar conducted by the Young Liberals Federation of Canada at the Chateau Laurier on water resources and water pollution, and I attended it. I have to be very careful what I say now. In fairness I wish to say that I congratulate those who organized that seminar. Nearly 400 people were in attendance. I wish to congratulate them for the progressive approach taken by the delegates there. I spent a most interesting day; as a matter of fact it was a day and a
April 26, 1966

Science Council of Canada half. Whoever organized this seminar organized it very well. I met a number of very bright young men to whom I intend later on to sell New Democratic Party memberships.
Now, I have one other suggestion. I suggest that sometimes scientists are inclined to get divorced from the public. The function of parliament is to keep, shall I say, the ultra type of people in touch with the ordinary people. In the administration of this act I suggest that the minister not only co-operate with the provinces, which I am sure will be done, but also co-operate with public bodies, and with the public, with a view to getting their understanding of what is being attempted and also with a view to receiving information from ordinary persons. There is many an ordinary person who does not have a degree or anything of that nature who comes up with great ideas. The council has the opportunity of getting the best result by using all the brains that are applied to this problem of research, such as program priorities and things of that sort.
With those few remarks I now take my seat.
[DOT] (9:30 p.m.)


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


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Rinfret in the chair.
Clauses 2 to 10 inclusive agreed to.
On clause 11-Duties of the Council.
Charles Mills (Bud) Drury: Mr. Chairman, in the course of my remarks earlier on the second reading of this bill, I endeavoured to make a distinction between planning for science and planning in science, and indicated that the role of the council was planning for science and technology whereas the role of the operating agencies was planning within science.
I would, therefore, suggest that clause 11(d) be amended by changing the first line which reads:
-longterm planning in scientific and technological research and development in Canada;
It should read: "long term planning for scientific and technological research and development in Canada".


Hédard-J. Robichaud: Mr. Chairman, I move:
That clause 11 (d) be amended by replacing the word "in" in the first line by the word "for".


Mr. Deputy  Chairman@: Shall the amendment carry?


[Stage Direction]
Amendment agreed to.
Mr. Enns:: Mr. Chairman, perhaps I should have put my question in relation to the amendment, but my concern is whether or not the Science Council will concern itself with behavioural sciences. I am thinking of fields such as psychology, psychiatry, social work and so forth. I am not sure whether the amendment relating to scientific and technological research will cover these services. Perhaps I should address myself to paragraph (h) of this clause which refers to certain aspects of scientific, economic and social aspects of life in Canada.
I do not know whether or not the minister has considered this or not, but any discussion about elemental research or the study of personnel, manpower and social sciences will definitely affect any progress we may make. Specific measures have been considered by this house such as medicare and the Canada Assistance Plan, as well as the Company of Young Canadians and the broad question of penology. I should like to ask the minister whether the Science Council will be able to consider the behavioural sciences?


Charles Mills (Bud) Drury: I think I made it quite clear at the outset of the discussion on the resolution that sciences and scientific research in the sense used in this bill in relation to the Science Council relate to the so-called natural sciences and not to social sciences. The natural sciences and technology in this sense as indicated in paragraph (h) relate to the fundamental work of the natural sciences rather than social sciences.


Siegfried John Enns: Do I understand that the question of manpower will not come within the scope of the work of this council?


Charles Mills (Bud) Drury: Mr. Chairman, obviously in so far as sciences in Canada are concerned, the output of manpower will have a relationship and to that extent will be considered. One cannot advance scientific research and technology without increasing the number of men available. For that reason there will have to be some study made as to how best to train these men and use them.


Maurice Allard: Mr. Chairman, I should like to direct a question to the Minister of Industry pertaining to clause 11 (f).
April 26. 1966	COMMONS
Under subsection Cf), it shall be the duty of the council to assess:
The responsiblities of universities in furthering science and technology in Canada.
Could the minister tell us whether he has obtained the consent of the Quebec government or discussed the matter with that government? There are other universities in Quebec. The minister knows the Quebec mentality. Is it the duty of the council to assess the responsibilities of universities? Would the minister elaborate on this matter?


Charles Mills (Bud) Drury: The clause under consideration entrusts the science council with the task of establishing the responsibilities of the government towards the universities. This does not mean that it will try to establish the responsibilities of the universities but rather those of the government towards the universities.


Maurice Allard: The minister knows very well that the government of the province of Quebec considers that it is its responsibility and not that of the federal government to determine the functions of those universities in every field.


Charles Mills (Bud) Drury: I have just explained to the hon. member for Sherbrooke that we are not denying the responsibilities and the functions of the universities. The council will study the responsibilities, if any, of the government of Canada toward the universities.


Maurice Allard: In Quebec?


Charles Mills (Bud) Drury: At the present time, the National Research Council of Canada allocates sums of money for research purposes to individuals in Quebec universities. I hope that the National Research Council will keep on making research grants to scientists in any Canadian university.


Maurice Allard: That is centralization.
[English1


Thomas Speakman Barnett: Mr. Chairman, I think it would be appropriate during our consideration of this clause to ask the minister whether he can comment on or answer a question I asked during the debate on second reading as to the relationship between the Science Council and the Council of Resource Ministers. I do not wish to re-arouse any discussion on this question vis-a-vis Quebec, but have there been any discussions as to the relationship between the Science Council and
DEBATES	4361
Science Council oj Canada provincial agencies, such as the B.C. Research Council which was set up under the auspices of the government of British Columbia?
[DOT] (9:40 p.m.)
I note that in paragraph (h) reference is made to "developing and maintaining cooperation and the exchange of information between the council and other public or private organizations." Perhaps I might pinpoint my question by asking the minister whether in his understanding "other public organizations" could, if it was the desire of the provincial governments, embrace provincial governments or agencies as far as the terms of reference regarding the activities of the council are concerned.


Charles Mills (Bud) Drury: Mr. Chairman, in response to the first question, namely the relationship between the Science Council and the Council of Resource Ministers, there is no plan for a formal link. The Council of Resource Ministers is a policy-making body in a special sphere. The Science Council will be a policy-evolving or policy-developing body in a larger sphere. Obviously I would expect that the Science Council would look to the Council of Resource Ministers for specialized advice, and that the Council of Resource Ministers might well look to the Science Council for general advice on larger targets. A precise relationship has not been worked out.
I have taken note of the interest of the hon. gentleman and will see whether consideration can be given to his suggestion. In relation to the second question, namely whether the Research Council of British Columbia is included in the phrase "other organizations", I think the answer is yes, the Science Council will seek the kind of information and advice it needs to render intelligent opinions wherever it can best be obtained, and reciprocally, if the Science Council of Canada can render valid advice and opinions I would expect the Research Council of British Columbia to seek advice and opinions from the Science Council. But it is not anticipated that there will be any role of a regulatory character or any control exercised by the Science Council of Canada over the British Columbia Research Council or indeed any other research council.


Thomas Speakman Barnett: I thank the minister for his answer. I think the minister would agree with me that, while the Council of Resource Ministers may be concerned with a limited area of activity, it is in a sense the first
April 26, 1966

Science Council of Canada federal-provincial body with a secretariat and does operate in a field in which what is being done in research is quite important. I am glad to know that the minister does envisage that there will develop at least some form of liaison, even though it is an informal one, between the Council of Resource Ministers and the Science Council. I would agree with him; I am not suggesting that it is something we could or should put in the legislation.


Maurice Rinfret: Shall clause 11 as amended carry?
Clause as amended agreed to.
Clause 12 agreed to.
On clause 13-Initiation of studies, etc.


Alexander Bell Patterson: Mr. Chairman, I am having a little difficulty reconciling clause 13 with the amendment to clause 11 introduced by the minister. That amendment changed the word "in" to "for" and that portion of the clause now reads:
-long term planning for scientific and technological research and development in Canada;
I understand the amendment was made on the basis that the council does not carry on its own research but provides that it be done. Clause 13 says:
The council shall on its own initiative, or if directed to do so by the minister, conduct such studies, inquiries and other undertakings-
I am having a little difficulty, as I say, reconciling those two statements, and perhaps the minister would enlighten us.


Charles Mills (Bud) Drury: Mr. Chairman, I think probably clause 13 refers rather to responsibility than actual operation. The intention here is that the council will assume responsibility for work that is done, rather than doing it itself. It will commission it, have it done through the science secretariat of the Privy Council office, endorse it as in effect being its own and carrying its judgment, and consequently qualifying under clause 13. As I indicated earlier, it will not itself have a staff or investigative agencies.


Alexander Bell Patterson: In my view, Mr. Chairman, this wording is rather ambiguous. I wonder whether there should not be some change in the wording of clause 13 and instead of "conduct such studies" the wording should not be "provide for such studies", or something like that, in order to clarify the matter. Is the minister satisfied that the clause is clear enough so that its meaning is obvious?


Charles Mills (Bud) Drury: I think the meaning is sufficiently obvious. Unless one uses a verb such as "conduct", it is difficult to attribute responsibility. "Provide for" means clearly that this will be somebody else's work, but if the council is not provided with any funds to conduct any studies, clearly those studies that bear its endorsement have been carried out by someone else but are the responsibility, and consequently the judgment, of the council.
Clause 13 agreed to.
On clause 14-Council may utilize services of employees of other departments.


Charles Mills (Bud) Drury: Mr. Chairman, I think it may be rather more appropriate to government organization if clause 14 (1) made provision for the designation of other government departments by the governor in council rather than by the minister.


Mr. Bell (Carleton):: Hear, hear.


Charles Mills (Bud) Drury: I would accordingly suggest, seconded-by Mr. Bell (Carleton)?


Richard Albert Bell: Yes.


Charles Mills (Bud) Drury: -or by the Minister of Fisheries that in place of the last three words, "Minister may designate" there be substituted therefor the words "the governor in council may designate for the purpose." I think you already have that amendment in your hands, Mr. Chairman.


Hédard-J. Robichaud: I move:
That clause 14 be amended by deleting in the first paragraph the words "the minister may designate" and substituting "governor in council may designate for the purpose."


[Stage Direction]
Amendment agreed to.
Clause as amended agreed to.
On clause 15-Not agent of Her Majesty.
Richard Albert Bell: Mr. Chairman, I
wonder whether the minister would be good enough to explain the significance of clause 15 and the disclaimer in that clause of the council's being an agent of Her Majesty. I am quite interested in the contrast in this wording compared with, for example, the act setting up the Economic Council of Canada, where specifically in clause 17 it is said:
The Council is for all purposes of this act an agent of Her Majesty.
[DOT] (9:50 p.m.)
Why is it that in the Economic Council of Canada legislation there is such an adoption
April 26, 1966	COMMONS
of the council to Her Majesty, while in this case there is a total disclaimer of agency?


Mr, Drury:: I understand, Mr. Chairman, that the analogy in this case is rather to the Canada Council, in which legislation there is a disclaimer of agency in relation to Her Majesty. The members of that council are not members of the public service of Canada.
I think this situation relates to the fact that the functions of the council are advisory and that its members, as members of the council, will not be members of the public service, although some of them may happen to be members of the public service. Presumably, the council will not have to carry out executive functions. There is probably no necessity for it to be classed as an agent.
There is probably some rather more profound legal reason, but I must confess I do not know it. The note I have is that this is statutory.


Mr. Bell (Carlelon):: Would the minister be aware as to what the situation might be in respect of the National Research Council or the Medical Research Council? I have not had an opportunity of looking at the legislation with regard to that. I think perhaps this legislation should coincide with that of the Medical Research Council and the National Research Council.


Charles Mills (Bud) Drury: The Medical Research Council is a division of the National Research Council.


Thomas Miller Bell: But set up by statute?


Charles Mills (Bud) Drury: Yes, set up by statute. The National Research Council Act, which is very many years old, to the best of my knowledge does not make this disclaimer. However, the National Research Council has executive functions. It does, like the Medical Research Council, award grants, I think perhaps the situation is somewhat different from that of a body which will not be in the executive field.


Thomas Miller Bell: I am simply interested in seeing that we have a standard principle that is followed in relation to these measures. The matter having been raised it might, in another place, be considered as to whether this is the appropriate way to deal with this particular type of body and whether that principle might coincide with legislation of this type which we are considering, so that it might be standard.


[Stage Direction]
Clause agreed to.
Clause 16 agreed to.
DEBATES	4363
Proceedings on Adjournment Motion
On clause 17-annual report.
Thomas Miller Bell: There is just one minor point in connection with clause 17. It seems to me rather extraordinary that it is the chairman of the council who is to transmit the report. Why is this not left to the council?
I have observed that this has become a practice in draftsmanship, but it seems to me it should be the council which should transmit the report and not one particular officer of the council.


[Stage Direction]
Clause agreed to.
Clause 1 agreed to.
Title agreed to.
Bill reported.
Mr. Deputy Speaker:: When shall the said bill be read the third time?


Michael Starr: As amended, by leave now.


Charles Mills (Bud) Drury: the third reading of the bill.
Motion agreed to and bill read the third time and passed.


Charles Mills (Bud) Drury: I wonder if I might ask the indulgence of the house? There is a small bill, entirely consequential on the adoption of the Science Council Act, which is concerned with some housekeeping amendments. It is a very short bill to amend the National Research Council Act and contains housekeeping changes.


Michael Starr: You can deal with that when the bill comes up for second reading.


Charles Mills (Bud) Drury: Second reading is for tonight.


Mr. Deputy Speaker:: Does the house agree to call it ten o'clock?


Some hon. Members:: Agreed.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Herbert Wilfred Herridge: Mr. Speaker, on April 20 the Minister of Labour (Mr. Nicholson) replied to the following question by the hon. member for Hamilton West (Mr. Macaluso):
Will the Minister of Labour use his offices with the American Federation of Musicians in order to obtain permission for a recording to be made of
April 26. 1966
4364	COMMONS
Proceedings on Adjournment Motion the R.C.M.P. band at Expo '67 as a cultural contribution to Canada's centennial year since this permission has been given to the United States army, air force, navy and marine corps for cultural purposes?


Hon. J. R. Nicholson (Minister of Labour):: Mr. Speaker, I have used my offices in this connection. Representations have been made to the American Federation of Musicians in relation to the proposed recording of the R.C.M.P. band. The policy of the musicians union is that persons who are not members of the musicians union are not allowed to record since it would be in violation of the recording agreement between the recording companies and the union. The members of the R.C.M.P. band do not belong to the musicians union, and their participation in a recording would therefore violate the agreement between the record producers and the union.
In answer to the second part of the question, in the case of personnel of the military service bands in the United States, they are members of the union and therefore would be permitted to record.
Later that same day, Mr. Speaker, I asked the minister two questions, as follows:
Mr. Speaker, I wish to address two questions to the Minister of Labour, as a firm supporter of organized labour but also as a proud Canadian. Mv question arises out of the answer the minister gave with respect to the right of the R.C.M.P. band to record in Canada. My first question is, does the government agree with this decision of the international headquarters of the musicians union? My second question is, if not, would the minister consider discussing this matter with his opposite number in the United States in order to provide appropriate guide lines to meet this type of situation?
[DOT] (10:00 p.m.)
Then Mr. Speaker ruled me out of order.
I mention this because I have had a number of complaints about the matter. This is a question of United States influence affecting the celebration of our centennial year. I am very concerned at this attempt to prevent Canadians enjoying recordings of the R.C.M.P. band, particularly during our centennial year.
This type of situation was first brought to my attention some years ago when the band of the 48th Highlanders played for the celebration of the union of the two congresses. When I heard that the colonel of this regiment had to get the permission of brother Petrillo in the United States before he could play in public in Canada, I nearly vomitted. I know a good many other Canadians feel the same way about this sort of thing.
I am a strong supporter of trade unions. However, I am very much opposed to this practice and to this attempt to interfere with the playing and recording of bands in this country which are maintained at the expense
[Mr. Herridge.i

of the people of Canada, through the federal government. Everything possible must be done to protect the musicians union and their rights, but it is going too far when they take this attitude.
Therefore, I suggest that the minister should discuss this further with the musicians union to see whether we cannot make some satisfactory arrangements for the R.C.M.P. band to be recorded at Expo '67 and at other events. We have thousands of Canadians who have never had the opportunity to hear this magnificent band. I know something about bands because I have played in a band, and I was once a band conductor of some five musicians. But many Canadians are denied the opportunity to hear a recording of this band during centennial year. I urge the minister once more to take this matter up with the musicians union and get them to see the Canadian point of view in this respect.
Failing that, if there is still no opportunity to obtain agreement I would suggest that we should form a crown corporation which would provide for the recording of music played by the R.C.M.P. band and army bands in Canada. During these recordings, in order to protect the persons concerned, all those taking part and playing in the recordings should be paid the proper union rates and dues. Therefore I shall look forward to hearing what the minister has to say about this interesting situation.
As I say, I have had many letters about this from persons who are interested in the welfare of organized labour and the work it is undertaking in Canada. Personally I strongly resent any attempt on the part of a United States labour leader to tell Canadians what they are going to do in 1967.


Charles Mills (Bud) Drury: Mr. Speaker, as I am sure the house is aware, the Minister of Labour is unfortunately away on public business in the west and consequently cannot be here tonight. However, I will say on his behalf that I know he is fully seized of this question. He shares the views expressed by the hon. member that the R.C.M.P. band should be allowed to make its recordings. I think the hon. member can take comfort from the fact that the Minister of Labour will be pursuing the particular topic to which reference has been made.
Motion agreed to and the house adjourned at 10.07 p.m.
April 26, 1966



APPENDIX


[Stage Direction]
AT THE GOVERNMENT HOUSE AT OTTAWA TUESDAY, the 26th day of APRIL,1966
PRESENT:
His Excellency
The Governor General in Council.
Whereas there has been laid before His Excellency the Governor General in Council a report from the Solicitor General substantiating
That Steven Murray Truscott was convicted at Goderich, Ontario, on September 30, 1959, of the murder of Lynne Harper and sentenced to death;
That Steven Murray Truscott appealed the said conviction to the Court of Appeal of Ontario by which court the said appeal was dismissed;
That Steven Murray Truscott thereupon applied for leave to appeal to the Supreme Court of Canada by which court the said application was refused, the court at that time having jurisdiction to entertain such an appeal on questions of law only;
That on January 21, 1960, His Excellency in Council was pleased to commute the sentence of death so passed upon Steven Murray Truscott to a term of life imprisonment in Kingston penitentiary where Steven Murray Truscott is now confined;
That on September 1, 1961, section 597A of the Criminal Code came into force whereby a person who has been sentenced to death and whose conviction has been affirmed by the
court of appeal may appeal to the Supreme Court of Canada on any ground of law or fact or mixed law and fact;
That there exists widespread concern as to whether there was a miscarriage of justice in the conviction of Steven Murray Truscott and it is in the public interest that the matter be inquired into;
That for the purpose of said inquiry the question hereinafter set out should be referred to the Supreme Court of Canada pursuant to section 55 of the Supreme Court Act;
Therefore, His Excellency the Governor General in Council, with and by virtue of the authority conferred by section 55 of the Supreme Court Act, is pleased to refer and doth hereby refer to the Supreme Court of Canada for hearing and consideration the following question?
"Had an appeal by Steven Murray Truscott been made to the Supreme Court of Canada as is now permitted by section 597A of the Criminal Code of Canada, what disposition would the court have made of such appeal on a consideration of the existing record and such further evidence as the court, in its discretion, may receive and consider?"
Certified to be a true copy,
R. G. Robertson,
Clerk of the Privy Council.
[Stage Direction]

Wednesday, April 27, 1966