1966-07-07

[Stage Direction]
Mr. Gerard Loiselle (SI. Ann) presented the second report of the standing committee on miscellaneous private bills.
[Stage Direction]
First and second reports of standing committee on privileges and elections-Mr. McWilliam.

Mr. H. E. Gray (Essex West):: Mr. Speaker, I beg to present, in English and French the eleventh report of the standing committee on finance, trade and economic affairs.

In that report the committee refers back to the house a bill concerning an insurance company.

[Note: Text of the foregoing reports appears in today's Votes and Proceedings.1



STANDING ORDERS-CONCURRENCE IN SECOND REPORT OF STANDING COMMITTEE

Mr. Patrick T. Asselin (Richmond-Wolfe) moved: that the second report of the standing committee on standing orders, presented to the house on Tuesday, July 5, be concurred in.


[Stage Direction]
Motion agreed to.

Mr. Ian Watson (Chateauguay-Hunlingdon-Laprairie) moved: that the first report of the special joint committee on penitentiaries, presented to the house on Tuesday, July 5, be concurred in.


Mr. Gilles Gregoire (Lapointe):: Mr. Speaker, once again I want to talk about the quorum of the committees being reduced. At
the beginning of the session we objected to the quorum being reduced and the committees sitting at the same time as the house. On many occasions, the government house leader (Mr. Mcllraith) and even the Prime Minister (Mr. Pearson) told us that they would study the situation in order to solve that problem. Nothing has been done yet and every day new committee reports are presented asking for permission to sit at the same time as the house or as is being done today to reduce the quorum. That is not the solution and we ask the government house leader to find a solution as quickly as possible, so that we will no longer be faced with the same problems. That is why we object to concurrence in that report; if it is concurred in, we ask that it be on division.

Motion agreed to on division.
[DOT] (2:40 p.m.)



PUBLIC SERVICE


Hon. Mitchell Sharp (Minister of Finance):: Mr. Speaker, I am pleased to join with Hon. James Allan, provincial treasurer of Ontario, in announcing a reciprocal agreement for the transfer of pension credits for civil servants transferring from the government of Canada to the province of Ontario or vice-versa.
This agreement is designed to assist a person wishing to transfer his employment from one government to the other to transfer at the same time the pension credits which are acceptable to the other government's pension plan. Details of this procedure authorized under the respective superannuation acts have now been completed. September 1, 1965 is the effective date, and transfers on and after that date will be covered by this authority.
With the agreement of the house I should like to table copies of the agreement.


Mr. Speaker:: Has the minister leave of the house to table the documents?


Some hon. Members:: Agreed.
7304	COMMONS
Inquiries of the Ministry PENSIONS



PROVISION FOR REGULATION OF PRIVATE PLANS

['We have discussed the reconvening of the conference from time to time\nJuly 7, 1966\tCOMMONS\nwith both the United Kingdom and the government of India. I am not aware that the particular conditions reported to have been attached to reconvening a conference by the Prime Minister of India were sent to the government of Canada before she made that statement. I had not seen them. Possibly they had come to hand before this morning; I would be glad to look at once to see whether that has happened.']
Hon. G. J. Mcllrailh (Minister of Public Works):: Mr. Speaker, yesterday a notice was sent in the usual way to enable a bill having to do with pension benefits standards to be placed on the order paper. Through some pure inadvertence on the part of the clerical staff the bill does not appear on Votes and Proceedings of today as it should have. I should like permission to have this bill dealt with as if it had appeared where it should have, and to have the mistake rectified in that way. I ask for the concurrence of the house in this regard.


Mr. Speaker:: Is that agreed?


Some hon. Members:: Agreed.


Mr. Speaker:: Does the Minister of Public Works propose that the bill to which he referred a few moments ago be moved?


George James McIlraith: Yes, Mr. Speaker.


Mitchell William Sharp: for leave to introduce Bill No. C-221,
respecting pension plans organized and administered for the benefit of persons employed in connection with certain federal works, undertakings and businesses.


Mr. Speaker:: Is it the pleasure of the house that the minister shall have leave to introduce the said bill?


Some hon. Members:: Carried.


Some hon. Members:: Explain.


Mr. Speaker:: Order, please. The minister should have been given an earlier opportunity to give an explanation. Is it agreed that the Minister of Finance shall be given an opportunity to explain the bill now?


Some hon. Members:: Agreed.


Mitchell William Sharp: This legislation deals with the portability and solvency of private pension plans applicable to employment in works, undertakings and businesses under the jurisdiction of parliament. This bill was contemplated in a statement to the house on December 18, 1964, by the then minister of finance. It is based upon and is very similar to legislation which has been enacted in the provinces of Ontario, Quebec and Alberta.
Motion agreed to and bill read the first time.

DEBATES	July 7, 19S6



[Stage Direction]
On the orders of the day:
Right Hon. J. G. Diefenbaker (Leader of the Opposition):: Mr. Speaker, in the absence of the Secretary of State for External Affairs would the Prime Minister be in a position to advise whether the initiative taken by the Prime Minister of India, Mrs. Indira Gandhi, calling on Russia and Great Britain to reconvene immediately the 1954 Geneva conference on Indo China had been discussed with Canada before being announced by the Prime Minister of India? Also, is the Prime Minister aware of the fact that in the British house the foreign secretary mentioned this initiative, and that the British government would consider the Indian plan with sympathy and hope?
What is the attitude of Canada in this regard? Does Canada support the basis upon which the Prime Minister of India asks for the reconvening of the conference, which is that all foreign troops must be withdrawn from Viet Nam; that Viet Nam must be insulated from what she calls "foreign interference", and that the Geneva conference should guarantee the integrity and independence of a neutral Viet Nam as well as of the neighbouring states of Laos and Cambodia?


Right Hon. L. B. Pearson (Prime Minister):: We have more than once expressed the hope that the Geneva conference could be reconvened by the chairman with a view to bringing the conflict in Viet Nam to an end. I should not like without further consideration to express an opinion on the conditions laid down by the Prime Minister of India for the calling of such a conference. My first reaction is that if the requirements were insisted upon, it would be very difficult indeed to call such a conference with any chance of success.


John George Diefenbaker: Would the Prime Minister say whether there has been any consultation with India or with the United Kingdom with particular reference to the ad hoc suggestion made by the Prime Minister of India? Have any tentative approaches been made to the United States to discover whether such terms would be acceptable?


Lester Bowles Pearson: We have discussed the reconvening of the conference from time to time
July 7, 1966	COMMONS
with both the United Kingdom and the government of India. I am not aware that the particular conditions reported to have been attached to reconvening a conference by the Prime Minister of India were sent to the government of Canada before she made that statement. I had not seen them. Possibly they had come to hand before this morning; I would be glad to look at once to see whether that has happened.



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, I wish to direct a
question to the Prime Minister and I ask it in the light of certain reports which are current in the press. Is it still the intention of the government that the legislation respecting medicare shall be dealt with before this session recesses, as the Prime Minister indicated on June 1?


Lester Bowles Pearson: It is our intention to introduce, I hope within a very few hours, the resolution dealing with medicare, and it is still our hope to get the legislation through all its stages with the least possible delay.


Some hon. Members:: Hear, hear.
Kon. Michael Starr (Ontario): The Prime Minister says the medicare resolution will be introduced within a few hours. Was he in communication with the leader of the house
before making that statement?


Lester Bowles Pearson: When I say "within a few hours" I mean anything between two and twelve hours.


Mr. Starr:: How about three months?


Lester Bowles Pearson: I hope we shall get this resolution introduced into the House of Commons and passed perhaps before the end of the week. That is only a few hours.


Michael Starr: A supplementary question based upon press reports. Is the Prime Minister aware of the statement made by the hon. member for Winnipeg North Centre to the effect that there have been some conversations with Liberal members in this house who are anxious to join the New Democratic Party?
DEBATES	7305
Inquiries of the Ministry


Some hon. Members:: Oh, oh.


Michael Starr: Could the Prime Minister say what are his opinions with regard to this statement by the hon. member for Winnipeg North Centre?


Mr. Speaker:: Order. This question is
theoretical.


Michael Starr: On a point of order, I think it might be theoretical if the Prime Minister stated it was. not so, but on the surface I think we can only take it for granted that the statement is the truth.


Mr. Speaker:: I really think the question is not acceptable at this time.


Michael Starr: I believe the Prime Minister wishes to correct this situation. I feel certain he does.


Lester Bowles Pearson: I do not wish to be out of order.



CANADIAN BROADCASTING CORPORATION


[Stage Direction]
On the orders of the day:
Gilles Grégoire: Mr. Speaker, I should like to put a question to the Secretary of State.
Further to the statement made in this house yesterday by the minister to the effect that construction of the C.B.C. building at Montreal was delayed by a shortage of skilled labour in the building trades, could the minister tell us whether she has received protests from building labour unions of the province of Quebec and from the Province of Quebec Builders Association to the effect that there was enough competent labour available to work on the C.B.C. building at Montreal?


Hon. Judy V. LaMarsh (Secretary of State):: Mr. Speaker, I have received protests from no one, and indeed I should not; for it is proceeding exactly as the government planned.



COMMONWEALTH RELATIONS


[Stage Direction]
On the orders of the day:
Mr. R. N. Thompson (Red Deer):: Mr. Speaker, I wish to direct a question to the
July 7, 1966

Inquiries of the Ministry Prime Minister. Can the Prime Minister report on the progress of the talks now going on with the heads of the Carribean governments; and can he assure the house that everything possible is being done to encourage an increase in trade between that area and Canada?


Lester Bowles Pearson: Mr. Speaker, while we are in the midst of the talks I can only say that they are going on extremely well. A committee has been set up to deal with the matter to which my hon. friend refers, to find ways of increasing trade between the Caribbean area and Canada, and we have also discussed other important subjects. We expect to complete our meetings tomorrow evening, and I hope to be in a position to make a statement about the conference when the house convenes on Monday.


Robert Norman Thompson: As a supplementary question could the Prime Minister tell us whether the government has sought to hear the views of the Caribbean nations on the question of Canadian membership in the Organization of American States?


Lester Bowles Pearson: That has not yet been discussed, Mr. Speaker, but I suspect it will be tomorrow morning.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Hon. E. D. Fulion (Kamloops):: Mr. Speaker, I have a question for the Minister of National Defence related to the recent announcement of retirements and promotions at senior levels of the armed forces. Can the minister offer the house any explanation for the retirement of three very senior serving officers in the armed forces, two of them four years before normal retirement age and one of them seven years before normal retirement age? Have these retirements any connection with the program for the armed forces now being insisted upon by the minister?


Mr. Speaker:: Order. I suggest to the hon. member that this question is not urgent. It refers to retirements which have already taken place, and I suggest the question should be placed on the order paper or debated at adjournment time.


Edmund Davie Fulton: Mr. Speaker, I hesitate to take up the time of the house at the adjournment hour; but the implications of this matter are


serious and urgent, as my question will suggest. Since the minister was rising to reply I wonder would Your Honour stretch a point?


Mr. Speaker:: I always like to stretch a point for the hon. member for Kamloops.


Hon. Paul Hellyer (Minister of National Defence):: Mr. Speaker, the retirements are by mutual understanding.


Some hon. Members:: Oh, oh.


Edmund Davie Fulton: As a supplementary question is it normal understanding or normal policy that at a time when these senior officers should be producing and giving of their maximum contribution, they should retire four and seven years respectively before normal retirement age?


Mr. Speaker:: Order. I do not think the second question is acceptable.


Hon. Gordon Churchill (Winnipeg South Centre):: Mr. Speaker, my question is for the Minister of National Defence. Were the recent compulsory retirements of senior officers made on the advice of the chief of the defence staff, or is the minister acting as commander in chief of Canada's armed forces and dismissing all those who are critical of his innovations?


Paul Theodore Hellyer: Mr. Speaker, the alleged facts in my hon. friend's statement are inaccurate.



INQUIRY AS TO PROVISION OF STANDARD UNIFORM

[Stage Direction]
On the orders of the day:
Mr. Lloyd R. Crouse (Queens-Lunenburg):: Mr. Speaker, I should like to direct a question to the Minister of National Defence. Has a decision been reached to date to provide a uniform uniform for Canada's armed forces?


Paul Theodore Hellyer: Not as yet, Mr. Speaker.


Mr. H. Russell MacEwan (Pictou):: I should like to direct a supplementary question to the minister. Will he again assure the house, as he did when his estimates were before us, that the kilt will be retained as part of the dress uniform for highland units?


Paul Theodore Hellyer: Yes, Mr. Speaker, that is my intention.
July 7. 1966



AGRICULTURE


[Stage Direction]
On the orders of the day:
Mr. Eric A. Winkler (Grey-Bruce):: Mr. Speaker, I wish to direct a question to the Minister of Agriculture. Can the minister report to the house whether he has found a solution in regard to the payment of $4 milk to producers, in keeping with his election promise?


Hon. J. J. Greene (Minister of Agriculture):: Mr. Speaker, I believe that solution was properly announced on March 23 in the
house.
Som hon. Members: Hear, hear.


Eric Alfred Winkler: As a supplementary question, Mr. Speaker, the minister knows very well that is not so, and I wonder whether he can report anything further with regard to his meeting this morning.



PUBLIC SERVICE


[Stage Direction]
On the orders of the day:
Hon. E. J. Benson (Minister of National Revenue):: Mr. Speaker, the right hon. Leader of the Opposition asked me yesterday whether I had received a resolution passed by the branch presidents of the Customs and Excise Officers' Association, and asked what was my reaction to this resolution. I did receive, on Monday last, a telegram listing a number of resolutions passed at the branch presidents' meeting last week end, and I have reviewed the contents of the telegram.
As I mentioned yesterday, the results of the pay revision announced last week will have the effect of removing a substantial number of employees from holding classifications, established as a result of the pay conversion program. Furthermore, the chairman of the staff side conference of the public service has endorsed and supports the pay revisions announced last week.
With respect to the second question asked by the right hon. gentleman regarding the government's position toward establishing a regulatory group distinct and separate from the clerical group, the government feels that the pay revision program should be completed as planned, and consideration for changes

Inquiries of the Ministry in the occupational groups should be postponed until the legislation concerning collective bargaining has been passed and initial experience demonstrates that changes are required.
All the questions raised in the telegram have been and will continue to be the subject of consultation between the independent Civil Service Commission, which is responsible for reclassification, the Treasury Board, which is responsible for final decisions on rates of pay, and the major employee organizations. These organizations include the staff side conference and the Civil Service Federation of Canada, to both of which the Customs and Excise Officers' Association is affiliated. Many of the problems involved are extremely complicated and will be worked out only as a result of hard work by all concerned in the normal process of consultation.


John George Diefenbaker: Mr. Speaker, would the minister answer the suggestion made in this telegram that as a result of the reclassification in the administrative sections to which reference is made by the president of the Customs and Excise Officers' Association, 40 per cent of their staff will find themselves reduced in so far as their salaries and allowances are concerned?


Edgar John Benson: Mr. Speaker, reclassification does not reduce the salary of any civil servant. What happens in the reclassification which is carried out by the independent Civil Service Commission, and which will increase the federal government payroll with regard to civil servants by 2 per cent, is that when persons are in a classification where they are red circled they will not receive advances until the classification has a ceiling beyond the salary they presently are receiving. In each case employees involved have the right of appeal to the Civil Service Commission with regard to classification.
I should like to point out also that many civil servants are being green circled rather than red circled, and their salaries are being increased.


John George Diefenbaker: Whether they are green circled, red circled or purple circled, is it a fact, as they allege, that 40 per cent will find themselves in a lesser position than today, and that the appeal of those who are dissatisfied will be to the very body that has fixed the order against which they complain?
fuly 7, 1968

Inquiries of the Ministry


Edgar John Benson: Mr. Speaker, I should like to point out that none of the civil servants are blue circled, and that their right of appeal of course will be considered through the departments involved. In my particular department, to which my right hon. friend referred, we are looking to ways of reviewing the status of people who are red circled and of moving them to other classifications if they have the necessary qualifications to move to such classifications. In this case they no longer will be red circled.
I think ultimately all civil servants will be quite pleased with the method of classification and particularly the method of collective bargaining which will result from the reclassification of the civil service.


Mr. David Lewis (York South):: Mr. Speaker, I have a supplementary question which I was going to ask on this subject yesterday. I should like to ask the minister whether he and the Treasury Board have given consideration to a method of red circling which involves permitting the incumbent on the job to obtain the increases during his term of service and a new person taking that job accepting the rate established, rather than freezing the incumbent without permitting him to get an increase during his term of service.


Mr. Speaker:: Order. I do not think this question should be asked at this time; it is very general in nature. I suggest it might be placed on the order paper.



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
Michael Starr: Mr. Speaker, I have a question for the Minister of Labour. Would he consider referring Bill S-35, which is item No. 85 on the order paper, to the appropriate standing committee of the house, in view of the fact that a number of people and organizations who are interested in this bill wish to present briefs and make representations?


Hon. J. R. Nicholson (Minister of Labour):: Mr. Speaker, I think representations from several of these organizations already have been made to a committee of the Senate, but if there are further requests from interested bodies, I certainly will give serious consideration to the suggestion made by the hon. member.



INQUIRY AS TO BUSINESS FOR TODAY

[Stage Direction]
On the orders of the day:
Eric Alfred Winkler: Mr. Speaker, I have a question which is supplementary to the question asked by my hon. friend for Ontario concerning the business of the house. I wonder whether the government house leader could tell us exactly what the routine is for today, because it was left rather in mid air last night.


George James McIlraith: Mr. Speaker, I do not admit there was an error last night.


Michael Starr: There was nobody here to give
the business.


George James McIlraith: Yes, there were some ministers here. I do not wish to reopen the debate of last night other than to say that there are some things in Hansard that are perhaps not as complete as they ought to be about that. There were two ministers here at the time.
In any event, I understand the hon. member's question concerns the business for today. As the first item we will proceed with the banking resolutions and complete them. Then we will proceed to the income tax bill, the crop insurance bill, the appropriation bill and interim supply, in respect of which I wish to say something in a moment. Then, depending on the hour, we will proceed to the Canada Assistance Plan, and possibly we might wish to call the bill in respect of the national art centre, depending on what members are available.
On interim supply I understand it would be agreeable that debate would proceed without a discussion on Viet Nam until the minister could be in the house. He is in another quite important conference at the moment. When we are dealing with interim supply we might want to ask for some kind of an understanding that this matter would not be debated while he is out of the house.
I should add that there has been some discussion about private members' hours for today and tomorrow. If it were agreeable to hon. members it might be in order to ask for an order of the house suspending private members' hours today and tomorrow.


Some hon. Members:: Agreed.


Mr. S. J. Enns (Porlage-Neepawa):: Mr. Speaker, in respect of the minister's suggestion regarding private members' hours, there are four or five bills which have received the approval of the private bills committee. It
July 7, 1966

would be desirable, and I do not think it would take too long, to have these bills receive third reading today.


George James McIlraith: To clarify this point, I understand that private bills do not come up today or tomorrow in private members' hour.


Edmund Davie Fulton: Let us put them on today and tomorrow by agreement.


Eric Alfred Winkler: Mr. Speaker, I wish to refer again to the business of the house and make a suggestion to the house leader. My comments are related to the proposed change in respect of private members' hours. Perhaps some arrangement could be made by unanimous consent to deal with a few bills now on the order paper sponsored by private members. Members of all parties of the house were very generous of their time in committee this morning in an attempt to see that the business was expeditiously handled. In the interest of seeing that bills are properly handled, I think all interested parties would be happy if some arrangement could be made.


Edmund Davie Fulton: On the same point of order, Mr. Speaker, may I suggest to the house leader, in connection with the suggestion that the private members' hour be dispensed with today, that a discussion be held to see whether it would be agreeable to substitute for the consideration of notices of motion for the production of papers, an hour on private bills. There are a substantial number of them, some of them urgent.


An hon. Member:: No, Mr. Speaker.


Edmund Davie Fulton: I am only suggesting that there might be some discussion on the point.


Mr. Speaker:: The hon. member must realize that in order to give effect to the proposal there would have to be unanimous consent, and obviously at least one hon. member has indicated that he is not in agreement.


Edmund Davie Fulton: I am only suggesting that the house leader, with his well known powers of persuasion and ability to get along, discuss this matter with hon. members, and perhaps then the hon. member who indicated his dissent would change his mind.



LABOUR RELATIONS


[Stage Direction]
On the orders of the day:
John Robert (Jack) Nicholson: May I say, Mr. Speaker, that yesterday I 23033-4631
Inquiries of the Ministry assured the house I would be filing today certain correspondence among the International Longshoremen's Association, their legal advisers, the Prime Minister and his office, and myself and my department. It is taking a little longer than I expected to prepare the documents, but I can now give a positive assurance that they will be filed tomorrow morning.



CANADA PENSION PLAN


[Stage Direction]
On the orders of the day:
Mr. A. D. Hales (Wellington South):: Mr. Speaker, my question is directed to the Minister of Finance and arises out of the announcement he made this afternoon concerning the reciprocal arrangement between the province of Ontario and the federal government for the transfer of pension credits for civil servants. Was any arrangement made for the abatement of over payments on behalf of the employer in this case, which is similar to the situation that prevails with regard to thousands of employers throughout Canada?


Mitchell William Sharp: Mr. Speaker, I do not think that subject is either covered or should be covered in the agreement.


Alfred Dryden Hales: I should like to direct a supplementary question to the Minister of National Revenue. Has he as yet arrived at some plan by which overpayments by employers to the Canada Pension Plan can be refunded?


Edgar John Benson: Mr. Speaker, we have been considering this matter very seriously but up to the moment we have not found a way of refunding overpayments to employers. Our position in this regard is no different from the position of every other western country which has such a national pension plan.



AGRICULTURE


[Stage Direction]
On the orders of the day:
John James Greene: Mr. Speaker, last Thursday the hon. member for Saint-Hyacinthe-Bagot (Mr. Ricard) asked me whether I had received a request for financial help from the apple growers of St. Pie, St. Paul, St. Hilaire, Rougemont and St. Jean-Baptiste, who incurred serious damages because of hail-storms on June 14 and 17 last.
July 7, 1966

Inquiries of the Ministry
The same question was directed to me by the hon. member for Chambly-Rouville (Mr. Pilon) on June 20.
As the hon. member knows, such assistance rests with the provincial government. Until now, the federal government has received no request from the provincial government asking to share in an assistance program to help these fruit growers.


Hon. Theogene Ricard (Saint-Hyacinthe-Bagot):: A supplementary question, Mr. Speaker.
If such a request were made, would the minister give serious consideration to the losses incurred-


Mr. Speaker:: Order. The question is becoming hypothetical.


J.-H.-Théogène Ricard: Mr. Speaker, I should like to put a supplementary question to the Minister of Agriculture.
In his reply to me a minute ago he informed the house that the hon. member for Chambly-Rouville (Mr. Pilon) had dealt with this question on June 20.
Would he say whether the hon. member for Chambly-Rouville dealt with this question here in the house, orally or in writing?


Mr. Speaker:: This question is out of order.


J.-H.-Théogène Ricard: Mr. Speaker, with all due respect, I feel I am entitled to a reply, and to a complete reply.


Mr. Speaker:: I think the question of the hon. member is not one which can be entertained in the circumstances.


J.-H.-Théogène Ricard: Mr. Speaker, the reason I insist is that I was unable to find in Hansard for June 20-


Mr. Speaker:: Order. The question is not as urgent as the hon. member seems to think or would indicate. If he feels that the question should in fact be considered by the minister, he is free to serve notice that the question will be brought up under the adjournment motion.


EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
Mr. L. M. Brand (Saskatoon):: Mr. Speaker, I wish to direct a question to the Prime

Minister. Has the Prime Minister or the Secretary of State for External Affairs received a resolution from the United Nations Association of Canada over the signature of Willson Woodside, stating that the association supports the stand taken by U Thant on June 20, 1966, and the following three recommendations; a halt to United States bombing of North Viet Nam; a scaling down of operations by all sides, and the calling on all parties to enter into discussions with all those participating in the fighting? What action does the government plan to take in respect of this resolution?


Lester Bowles Pearson: Mr. Speaker, this resolution may have reached my office but I do not recall having seen it. I will check into this immediately.


Mr. Speaker:: The hon. member for Winnipeg South Centre.


Gordon Minto Churchill: Mr. Speaker, I cannot get a satisfactory answer from the Minister of National Defence, so I will not ask another question.



CANADIAN BROADCASTING CORPORATION


[Stage Direction]
On the orders of the day:
Eric Alfred Winkler: Mr. Speaker, inasmuch as the conflict which exists in the C.B.C. is widespread, I should like to direct a question to the Secretary of State. In view of the serious trouble that exists, will the government consider creating a trusteeship for this organization and, if so, would it be possible to appoint Mr. Ernest Bushnell to this assignment?


Julia Verlyn (Judy) LaMarsh: That is quite a novel idea, Mr. Speaker.



INQUIRY AS TO DUTIES OF H. G. WALKER

[Stage Direction]
On the orders of the day:
David Lewis: I have a supplementary question, Mr. Speaker. I should like to ask the Secretary of State whether, in view of various rumours and statements in the press, she can inform the house as to the present functions and duties of Mr. H. G. Walker.


Julia Verlyn (Judy) LaMarsh: Mr. Speaker, the position of Mr. Walker is vice president of C.B.C. He has within the last 24 hours, since we met yesterday, removed himself from consideration as a
July 7, 1966
possible candidate for the new vice presidency in Toronto, responsible for public affairs programming.



NATIONAL CAPITAL COMMISSION


[Stage Direction]
On the orders of the day:
Mr. Maurice Allard (Sherbrooke):: Mr. Speaker, I wish to put a question to the hon. Solicitor General.
Did he receive from the city of Hull protests against the fact that Royal Canadian Mounted Police officers patrolling the National Capital Commission territory are almost all exclusively unilingual, English speaking that is? Can he also advise the house what he intends to do to put an end to this anomaly?


Mr. Speaker:: This question could easily be put on the order paper.



CANADIAN CENTENNIAL


[Stage Direction]
On the orders of the day:
Mr. J. M. Forrestall (Halifax):: Mr. Speaker, I should like to direct my question to the Secretary of State. Is that hon. lady now in a position to advise the house as to whether the centennial commission of Canada will proceed now or next year with initial planning for a centennial youth parliament to be held next year?


Julia Verlyn (Judy) LaMarsh: Mr. Speaker, this matter has now gone to the centennial commission and from there to the cabinet for consideration. I am grateful to the hon. member for providing me with this opportunity to thank members of this chamber and the upper chamber for the many hours they spent studying this situation, because the Fair proposal was inadequate; and for giving the best of their advice to the centennial commission in order that it may be possible to hold a youth parliament.
I will make an announcement as to whether it will or will not be held as soon as a final decision has been taken. Let me add that should parliament not be in session I shall notify all members by mail.
Inquiries of the Ministry HOUSING



REPORTED SHORTAGE OF MORTGAGE MONEY

[Stage Direction]
On the orders of the day:
Mr. Heward Graffley (Brome-Missisquoi):: Mr. Speaker, I should like to direct my question to the Minister of Labour. In view of the very important statement made a day or so ago by the head of C.M.H.C., is the government now considering further action in order to fill the needs of prospective home owners?


John Robert (Jack) Nicholson: Mr. Speaker, the head of C.H.M.C. makes many important announcements, and I am not just sure which one the hon. member has in mind.


William Heward Grafftey: The one I have in mind relates to the fact that there is a serious decline in house building this year from last year and many Canadians who need homes are going to be without them. Has the government given any consideration to immediate constructive and positive action in this regard?


John Robert (Jack) Nicholson: Mr. Speaker, the government has given and is giving serious consideration to this matter and has taken positive action. I have some very interesting figures here about house building in Canada, and I will be glad to furnish the hon. member with them on request, but I do not think I should do so on orders of the day.


William Heward Grafftey: May I ask another supplementary question. In spite of the figures the minister could give the house, is it the opinion of the government that the needs of prospective home owners are not being filled under present circumstances?


Mr. Speaker:: Order, please. The hon. member is now asking for the expression of an opinion.



INQUIRY OF THE MINISTRY

[Stage Direction]
On the orders of the day:
Mr. John Loney (Bruce):: Mr. Speaker, I have a question for the Postmaster General, but in his absence I should like to direct it to the acting minister. My question is consequent upon the reply of the Minister of Industry as recorded on page 7273 of Hansard of July 6. Will the Postmaster General commence an investigation to determine the possible loss in the mails of a letter from Queen's Park, Toronto, dated May 19, 1966, written by



July 7, 1966
Inquiries of the Ministry Ross M. Whicher, member of the legislative assembly for Bruce, addressed to the Prime Minister?


Hon. C. M. Drury (Minister of Industry):: May I clear up what may have been a misunderstanding on my part yesterday in giving a negative answer to the hon. member's question. I thought he was asking whether this letter had been addressed to me, to which my answer was no.



AGRICULTURE


[Stage Direction]
On the orders of the day:
Mr. Auguste Choquette (Loibiniere):: Mr. Speaker, I should like to ask a question that is in order, contrary to the previous one.
I should like to ask the Minister of Agriculture, since he had talks this morning with the Quebec and Ontario ministers of agriculture, whether he is in a position to report to the house on these talks and also to indicate to the house what conclusions have been reached during such talks?


John James Greene: This morning I had a very interesting and useful meeting with the provincial ministers from Quebec and Ontario. These discussions are under my consideration and that of my officials at the present time.


Auguste Choquette: Mr. Speaker, I should like to ask the minister whether Mr. Clement Vincent, provincial minister of agriculture, has reiterated to the minister-


Some hon. Members:: Hear, hear.


Auguste Choquette: I do not see why they applaud a man who repudiated them.
I should like to ask the Minister of Agriculture-

Anyway, he left the Conservative party because he did not feel at home within that party.


Mr. Speaker:: Would the hon. member be kind enough-


Auguste Choquette: I should like to put a supplementary question, Mr. Speaker, if my friends opposite have the courtesy to let me.
I want to ask the minister whether Mr. Vincent has promised to carry out the commitments he made during the election campaign to the effect that he would implement the proposals of the Liberal party-


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


J.-H.-Théogène Ricard: Mr. Speaker, I rise on a question of privilege.
I wish to inform the house that the Conservative party has not repudiated Mr. Clement Vincent. On the contrary, we are very proud of him and I think he can do much to instruct the federal Minister of Agriculture who is far from an expert in this field-


Mr. Speaker:: Order, order.


Auguste Choquette: There is no room for a French Canadian within the Conservative party.


Some hon. Members:: Sit down.


Mr. Speaker:: Order, please. May we please have order in the house.


Mr. H. W. Danforth (Kent (Ont.)):: Mr. Speaker, I wish to direct my question to the Minister of Agriculture. It arises out of the very commendable action of the ministers of agriculture of Ontario and Quebec on behalf of the dairy industry in requesting a meeting with the minister. May I ask the minister whether these gentlemen have requested any other meetings of this kind in regard to other segments of agriculture?


John James Greene: Not to my knowledge at the present time.


William Heward Grafftey: May I put a supplementary question to the minister. The night before last the minister said on television that he was a fatalist. Does this mean he is fatalistic about the dairy farmers ever getting the $4?


John James Greene: I am sufficiently fatalistic to believe we shall remain on this side for a long time.
July 7, 1966



AIR TRANSPORT


[Stage Direction]
On the orders of the day:
Mr. Barry Mather (New Westminster):: Mr. Speaker, I wish to direct my question to the Minister of Transport, but in his absence I will put it to his parliamentary secretary. It is a somewhat urgent question related to air traffic safety. Has a telegram been received from the radio operators in the British Columbia region asking for an early and firm date to be set to settle their wage classifications so as to avoid the possibility of a walkout?


Mr. Speaker:: Order, please. I do not think this is a question which can be asked at this time.


Barry Mather: I hope the parliamentary
secretary has taken notice of the question.



EXPO '67 INQUIRY AS TO REPRESENTATION OF AGRICULTURE

[Stage Direction]
On the orders of the day:
Mr. A. D. Alkenbrack (Prince Edward-
Lennox): Mr. Speaker, my question is directed to the Minister of Agriculture and it arises out of the recent visit by hon. members of this chamber and of the other place to the Expo site in Montreal. Will the minister assure the house that the Canadian agricultural industry will have suitable and prominent representation, displays and exhibits at Expo '67, particularly for the Canadian dairy industry and other products which we sell on the world markets?
Mr. Speaker:: Order, please, I do not think this question can be asked at this time. It can be placed on the order paper or discussed later.



AIRPORTS


[Stage Direction]
On the orders of the day:
Mr. George Muir (Lisgar):: Mr. Speaker, I have a question for the Minister of Transport but in his absence I will put it to his parliamentary secretary and ask him to take it as notice and give the answer tomorrow. In the estimates for the Department of Transport there is an item regarding the installation of escalators at the Winnipeg international airport. Is the minister now in a position to tell

Inquiries of the Ministry the house when this work will be commenced?


Mr. Speaker:: Order, please. I suggest to the hon. member that this question is not so urgent as to warrant it being asked at this
time.



EDUCATION


[Stage Direction]
On the orders of the day.
Mr. John M. Reid (Kenora-Rainy River):: My question, Mr. Speaker, is addressed to the Minister of Finance and concerns the student loans program. On June 11 of last year the former minister of finance tabled a report in this house which appears in Hansard of that day. The report contains a section entitled "Approved Report of the Federal-Provincial Standing Committee on the Concept of Students' Need." My question is whether this section of the report has been revised. If so, will the minister consider tabling the revision in the house?


Mr. Speaker:: Order, please. It appears to the Chair that this is a question of general nature and therefore cannot be asked now.



SHIPBUILDING


[Stage Direction]
On the orders of the day:
Mr. Thomas M. Bell (Saint John-Alberl):: Mr. Speaker, my question is addressed to the Minister of Finance and concerns Bill C-216. This week the minister said he was considering the deferment of some of the sections of this bill. In view of the fact that the bill may come up for study this afternoon, can the minister tell us the results of his consideration?


Mitchell William Sharp: Yes, Mr. Speaker. When the bill is called I will move to have the sections dealing with the Canadian Vessel Construction Assistance Act deleted and reconsidered later in the year.


Hon. R. A. Bell (Carleton):: I have a supplementary question, Mr. Speaker. Is it the minister's intention to introduce a further bill to amend the Income Tax Act dealing with those budget resolutions which are not contained in Bill C-216? If not, are we to assume those budget resolutions have been dropped?

July 7, 1S66
Bank Act


Mitchell William Sharp: No, Mr. Speaker. There are some sections of the resolutions, particularly those dealing with deferred profit sharing plans, which have proven to be extremely difficult to translate into legislation, so rather than hold up the bill which contains some provisions which should be enacted immediately it was decided to introduce legislation later, to cover these resolutions. I have no intention of dropping any of the proposals.


Mr.   Beil@Carlefon: At this session?



BANK ACT


[Stage Direction]
The house resumed, from Wednesday, July 6, consideration in committee of the following resolution-Mr. Sharp-Mr. Batten in the chair.
That it is expedient to introduce a measure to provide for the decennial revision of the Bank Act and the extension of the charters of the existing chartered banks till July 1, 1976, and to provide further for certain changes in connection with the administration of the act.
Mr. Basford:: Mr. Chairman-[DOT]


Stanley Howard Knowles: I rise on a point of order, Mr. Chairman, which concerns something about which we had an agreement at a house leaders' meeting earlier today. I am sorry the point was not raised while the government house leader was present. It has to do with the length of time remaining in this debate, which is one hour and nine minutes. Hon. members will recall that at the start of this session when we amended the rules so that the Prime Minister and Leader of the Opposition would not be limited to a 20-minute period at this stage of debate, it was agreed that if either of them took more than 20 minutes that time would be added at the end of the debate.
I may say, Mr. Chairman, that at the house leaders' meeting this morning there was no contention or argument about it at all. It was agreed that the 37 minutes extra that were taken between them by the Minister of Finance and the Leader of the Opposition would be added at the end of this debate, thus making it possible for two more speakers than would otherwise be the case. I am sure the house leaders who are present can confirm this agreement.


Michael Starr: I think the time just taken by the hon. member for Winnipeg North Centre should be added to that time also.


The Chairman:: The standing order which governs the time allocated to this debate is standing order 61A which reads as follows:
When a resolution preceding a bill involving the expenditure of public money has been referred to the committee of the whole house, the time allowed for consideration thereof in such committee shall not exceed one sitting day. For the purposes of this standing order, such a resolution shall be deemed to have been considered for one sitting day, provided the order to go into committee of the whole house is called as the first item under government orders on a Monday, Tuesday, Thursday or Friday, and provided it is continued, if necessary, until the normal time of adjournment on any such day. Such an order having been called on any Monday, Tuesday, Thursday or Friday, it shall have precedence over all other business until the time of adjournment on that day, unless it is disposed to earlier. Under any other circumstances, a total of five hours shall be deemed to be the equivalent of one sitting day.
This is the standing order by which the Chair is governed. If, however, it is the wish of the committee to do otherwise, I shall of course carry out the necessary procedure. Up to this point the Chair has not been advised of any agreement having been reached, other than what has been said in the committee this afternoon.


Mr. Pennell:: On behalf of the government house leader I am pleased to concur in the statement made by the hon. member for Winnipeg North Centre.


Herman Maxwell Batten: Does the committee agree that the extra 37 minutes be added to the time allotted for this debate?


Some hon. Members:: Agreed.


Stanley Ronald Basford: I just hope the five minutes taken to reach this agreement will not be taken off my time. When I was caught by the clock last night I was dealing with the Porter Royal Commission and expressing some criticism of that and other commissions making recommendations in a constitutional void, that is to say, making recommendations for action without careful study of the constitutional considerations which apply to their recommendations. I was even more startled by the remarks yesterday of the hon. member for Kamloops, who gave us a very interesting and learned discourse on banking and financial policy. He did so in the never, never land of constitutional unreality, because he called for a number of reforms and courses of action without reference to the British North America Act.
July 7. 1966

For example, the hon. member did what the royal commission did and called for far greater control over what has become known as near-banks. I take it that the hon. member for Kamloops, in referring to near-banks, was referring to deposit-taking institutions. I should like to inform him, Mr. Chairman, that there are in the country only eight federally incorporated trust companies which are doing approximately one-third of the trust business in Canada. The huge trust companies such as National, Montreal, Royal, Crown and Trust General are all provincial institutions. I hope the hon. member for Kamloops is not suggesting that at the moment we in this house have the constitutional power to deal with those trust companies or near-banks.
We also have federally incorporated mortgage loan companies under the Companies Act. There are, I think, some 12 of those, some of which are deposit-taking institutions. They are doing two-thirds of the business, leaving about one-third for provincial institutions. I say, with regret, that we in this house do not have the power to pass amendments to the Bank Act to deal with these provincial institutions.
I am one of those, and I am sure the hon. member for Kamloops is, who favour more uniformity in our financial legislation and greater regulatory powers to deal with the various banks, near-banks, finance companies and loan companies. However, I say it is unrealistic for the hon. member for Kamloops and other hon. members opposite to make suggestions without reference to the constitution. I would remind them that we are discussing the revision of the Bank Act, not the revision of the British North America Act. Much as that act, in my view, needs amending and revising, much as the constitution needs revising, we are dealing with the Bank Act and not the constitution.


Edmund Davie Fulton: Will the hon. member permit a question?


Stanley Ronald Basford: I am very limited as to time and perhaps I could answer the question at the end of my remarks.


Edmund Davie Fulton: It is a short one. The hon. member is aware-


Stanley Ronald Basford: I am sorry, but my time is limited. I would hope we could have a revision of the British North America Act. Possibly if it were not for the stand the right hon. gentleman opposite took in this house
Bank Act
some time ago with regard to what had become known as the Fulton-Favreau formula, we might now have in Canada a formula for amending the constitution.
The hon. member for Kamloops and other hon. gentlemen opposite have also made reference in the course of their speeches to the collapse last year of Atlantic Acceptance Corporation and British Mortgage Corporation which caused real concern in the financial community in Canada. This situation is of great concern to all of us. Surely the hon. member for Kamloops does not suggest that we in this house have the power at the present time to pass legislation dealing with a corporation like British Mortgage Corporation.
[DOT] (3:40 p.m.)
I think that the course suggested by the minister in introducing the resolution, in which he called for a federal-provincial approach to the problem of getting greater uniformity in our financial legislation, is the only approach that can be taken at this time. Hon. gentlemen opposite seem to have forgotten or have completely left unread the statement by the minister which appears at page 7233 of Hansard for July 5 when he said, in stating government policy:
As part of the long-term policy to promote competition and flexibility in the financial system, it is desirable that progress be made in the legislation governing all financial institutions, both federal and provincial, and that the measures taken in regard to the various classes of institutions should be related to one another in such a way as to achieve this broad objective.
Then in a later paragraph he said:
Officials of the federal and provincial governments have recently met to discuss these and related matters. Out of this activity of both levels of government will come, I trust, a broadly integrated approach designed to improve our financial system as a whole so that it can better serve Canadian individuals and Canadian business.
In view of our constitution I think that is the only approach that can be taken to this question of uniformity.
As chairman of the special joint Senate-House of Commons committee investigating consumer credit, I am sure that that committee, which is now writing its report, will have a good deal to say, judging by the evidence it has heard, about the need for uniformity in legislation and the need for legislation. It will be making recommendations dealing with federally-incorporated small loan companies and federally-incorporated finance companies. But until the report of the Senate-House of Commons committee is before the house I

July 7, 1966
Bank Act
suggest it is too early to do something about the matter right now. That committee has carried on an exhaustive examination into the situation, and I think its report should be awaited by this house and by the Minister of Finance.
However, Mr. Chairman, I welcome the minister's statement that there will be a federal-provincial conference on the question of consumer credit. The question of interest disclosure, or truth in lending as it is often called, has become one which raises very difficult federal-provincial considerations. The recent decision of the Supreme Court of Canada, which I think put a very restrictive meaning on the word "interest", has further complicated the situation when dealing with actual consumer costs. Interest, in its restrictive sense, is only one small part of the total consumer credit cost and unless we in this house have the power to deal with interest and finance charges as a cost to consumers, we will be in difficulty.
We have seen other provinces taking action in the consumer credit field. I refer to Ontario, Alberta and New Brunswick. We in this house and the federal government itself have some constitutional authority in this regard. I would hope that we have a great deal, but the extent of our power is somewhat in question at the moment. Therefore, if we are to have a total approach to the protection of consumers against those who want to charge exorbitant and excessive consumer finance charges, we will need an integrated and co-ordinated federal-provincial approach which can only be arrived at under the aegis of a federal-provincial conference.
In referring to the revisions of the Bank Act I should like to make reference in the short time allowed me to only two other points. One is the right of banks to enter the conventional mortgage field and to take as security mortgages on real property.
We have heard from members opposite contentions that the revisions of the Bank Act must protect the little man or be concerned with the little man, and we have been criticized because our revisions do not do this. I suggest that one aspect of the revisions does take into account very seriously the situation of a great many small home owners in the country. During the period 1954-59 the chartered banks of Canada acquired a great many National Housing Act mortgages. The banks invested a great deal of their funds in this type of security. As the interest rate on National Housing Act mortgages went up, the banks withdrew from this field and at the

present time are virtually not lending any money for this type of mortgage because the interest rate on such mortgages exceeds the 6 per cent ceiling.
Under these revisions, Mr. Chairman, the banks will be allowed, as I think they should be, to take up this type of mortgage business again. A great problem is being faced by the many small home owners in this country who presently have their houses financed through National Housing Act mortgages. When they come to sell these houses they sell them on terms of cash to mortgage. As these mortgages are reduced or become amortized, it becomes increasingly difficult to get terms of cash to mortgage unless the homes are refinanced with another mortgage, which is not available from the banks today. Allowing the banks into this area will mean that home owners who are anxious to sell their houses and can only do so by refinancing will be able to refinance them through the present holder of the mortgage, namely, one of the chartered banks. By allowing the banks into this area, Mr. Chairman, we are also bringing about competition with the conventional mortgage lenders.
However, there is another important aspect which has not been mentioned in this debate. The chartered banks, by having thousands of branches across Canada located in every community, will be able to provide to people in those smaller communities mortgage services which are not available to them at the present time. Most of the big conventional mortgage lenders' offices are located in the large centres of Canada only and people living, for example, in Kamloops, Prince George, Nanaimo or Nelson in my own province have difficulty raising mortgage funds from conventional lenders. If the banks which are located in all these smaller centres are allowed into this area, this will provide the people there with a very much needed mortgage service.
Much has been said about the intimation of the minister that the bank interest ceiling rate will be raised. I suggest that this will increase the degree of competition existing between the banks and subsidiary lending institutions such as finance companies and loan companies.
I suggest that over the years, in building up what is undoubtedly one of the safest and most secure banking systems in the world, we have in fact placed our banks in a strait-jacket within which they must operate. I suggest that because the banks are in this strait-jacket, which we have imposed upon
July 7. 1966

them through legislation, the banking system of Canada is no longer serving the nation as it should. Because of this strait-jacket, we have seen over the years a fantastic and tremendous growth in near-banks, trust and loan companies and finance and acceptance corporations. At the same time, many of these corporations are filling needs which the banks must be allowed to fill if they are to serve the nation. Because of the strait-jacket into which we have put the banks, over the years they have become no longer able to fill the need for credit which exists. I suggest that we must remove or untie some of that strait-jacket and I contend that this is what the revisions will do.
Much has also been said by members on the opposite side of the house about the small businessman, the small farmer, the fisherman and the truck logger. I come from a province of such people, people who under the present Bank Act are unable by and large to go to a bank now and obtain credit or loans for their business operations in order to buy their trucks, farm equipment or fishing boats. Because of the restrictions imposed on the banks by the Bank Act, these people are forced into the hands of the loan sharks and acceptance companies, which are lending money obtained from banks at a low rate of interest to these farmers, small businessmen, truck loggers and fishermen at greatly increased and inflated interest rates. I suggest that by lifting the interest ceiling on the banks and allowing them to compete more effectively with the existing lending institutions, we will help these small people.


Herman Maxwell Batten: Order. I must advise the hon. member that the time allotted him has expired.
[DOT] (3:50 p.m.)


Mr. Hees:: Mr. Chairman, one of the important objectives of the Conservative party is to do whatever we can to help bring down the interest rates which are paid by the average Canadian on the money he needs to operate his business or his farm, or for his own personal needs. We believe that this can be best done by bringing all lending institutions in Canada under the Bank Act, thus enabling them to operate under the same ground rules and to engage in all-out competition for the loan business of the Canadian people. We are convinced that this kind of competition will provide the lowest interest rates and the best service possible to the people of this country.
Bank Act
All financial institutions can be brought under the Bank Act by consultation with and co-operation by the provinces. It is just a question of sitting down and explaining what we have in mind and what objectives and benefits are to be derived therefrom. The provinces are just as anxious as we are to have the lending institutions under their jurisdiction come under the provisions of the Bank Act, because they know that this will make possible a general lowering of interest rates charged on loans to the people they represent in their provincial jurisdictions.
We all know that the interest rates which are charged on loans vary according to the security which the borrower is able to put up to secure his loan. Because of the differences existing in the various kinds of security that borrowers can provide, naturally there is a wide variation today in interest rates charged in all parts of the country. In merchandising goods and services, practice has clearly proved that prices are lower and service to the customer is better where competition for the customer's dollar is the keenest.
The same principle applies, of course, to the business of lending money. It was for that reason that the Porter Commission recommended that the best way to ensure the greatest availability of loans to the public and the lowest rates of interest on all types of loans would be for all lending institutions in Canada to be brought under the Bank Act. In this way, when this is done, they will be in a position to compete freely and fairly for the business of those who wish to borrow money in this country. Having talked to officials of a number of our chartered banks I know, as I am sure other hon. members know, that the banks would welcome this kind of competition against the near-banks for the loan dollar of the Canadian people.
In fields where greater competition between the banks and the near-banks has been allowed for instance, in the personal loan field, rates have been reduced very materially from somewhere around 18 per cent to approximately 10 per cent, which is a very important reduction indeed. If this kind of competition were allowed to take place for all types of loans the interest rate on the great majority of loans would be greatly reduced by the far greater competition which there would be for this business.
We in the Conservative party agree with the recommendations of the Porter Commission which was established by our government some years ago to develop thinking and

July 7. 1966
Bank Act
recommendations for such time as the Bank Act would come under revision. We strongly condemn the present government for not carrying out the recommendations of that commission, recommendations which were clearly and carefully thought out after many months of extremely hard and careful work. We condemn the government for not incorporating the commission's recommendations in the legislation now before the house.
Turning to the resolution we are debating today we see that it provides for a raising of the bank rate according to a formula which is not based on any business principle geared to the needs of business or agriculture. We are reliably informed that the formula was worked out a very short time ago after a great deal of controversy within the government and is geared far more to bringing harmony to the warring factions within the government party than to any business or economic need. This resolution completely disregards the most important recommendation contained in the report of the Porter Commission, which was that the removal of the interest rate ceiling must be coupled with bringing the near-banks under the Bank Act.
Today, Mr. Chairman, as we in this house know very well, industry and agriculture in all parts of the country are suffering from the tight money policy which has been imposed by this government. This policy is making it impossible for many farmers and businessmen to obtain the capital they need to carry out the normal business expansion they must carry out each year in order to handle the additional business which a growing economy in a country such as Canada makes available to them. If they are not able to expand and take advantage of the additional sales which they could otherwise make, these sales, particularly in the export market, will go to other customers in other countries and they will be very difficult, if not impossible, to regain.
Anyone who has been in business knows that once a customer becomes used to dealing with somebody else, he will very likely find out that the other person can provide just as good a standard of service, or perhaps better, than you can, and the customer tends to remain with the other supplier even though you are able to come back into the market and offer him your goods again. The only way that our farmers and industrialists can cut costs and thereby make a better return on the capital and labour they put into their operations is to expand production and, by
[Mr. Hees.J
making use of the economies of scale, cut their initial costs as much as possible.
We in the Conservative party are convinced that the proper role for government to play in business and agriculture today is to help these people about whom I have spoken help themselves in every way possible. We believe that the government should be assisting our businessmen and our farmers in every way possible to expand their operations, thereby providing more jobs for our people and more prosperity for our country.
We believe that the best way to do this is to take steps to provide adequate credit at the lowest possible rates of interest. This, we are convinced, will be done if all our financial institutions are brought under the Bank Act, as was strongly urged by the report of the Porter Commission. If this is done these financial institutions will be able to enter into fair and wide open competition for the lending dollar of the Canadian people. This, we are convinced, will result in the average Canadian being able to borrow the money he needs at a considerably lower rate of interest than he has to pay today.
We in this party have decided that when this government does decide to follow the recommendations of the commission that was set up to give very deep and penetrating study to this matter and when it decides to bring the near-banks under the Bank Act and thereby make possible a general lowering of interest rates by greater competition, we shall then be very pleased indeed to support this measure. Until then we intend to oppose it.
[DOT] (4:00 p.m.)


Mitchell William Sharp: Since the hon. gentleman's time has not expired I believe, may I ask him a question? I followed his remarks with great interest. I was not clear on one point. Perhaps he could elucidate to me the connection between bringing these institutions under the Bank Act and the maintenance of competition. I failed to follow the argument there.


George Harris Hees: If all our lending institutions are not brought under the Bank Act, and if they do not operate under the same ground rules, some of our financial institutions will be faced by unfair competition from other members of the lending community. The competition will not be fair, free and wide open. As the Porter Commission said, the only fair way in which all our lending institutions can
July 7, 1966

compete, and the best way to make sure we get the greatest possible competition and the lowest possible rates of interest, is to bring all these lending institutions under the Bank Act.


Mr. Saltsman:: Mr. Chairman, it is always strange to hear a minister being criticized for doing what the critics are accusing him of not doing. If there is any criticism to be made of the minister it is that he has slavishly followed the Porter Commission recommendations. If we examine the proposals he has introduced we will find they have been taken almost word for word from the report of that commission. The argument about whether or not near-banks should be brought under federal jurisdiction is, I suspect, a piece of camouflage.


Mitchell William Sharp: Hear, hear.


Max Saltsman: Perhaps hon. gentlemen opposite should save their applause; I have some things to say about which they may feel differently. The advisability of bringing nearbanks under federal jurisdiction is questionable at this time though one might well be tempted to ask the government why it does not try to do so. The government has indicated its intention to introduce this legislation and there will be time in the months ahead to consider carefully what precisely is meant by "bank" and what authority the federal government possesses in this field. These questions might well be referred to a court which could adjudicate upon them, because I think definitions of this kind are badly needed.
With the exception of the hon. member for Vancouver-Burrard, who hinted at it, everybody seems to have overlooked the fact that the federal government does have clear-cut jurisdiction over interest rates under the British North America Act. If the federal government were really serious about regulating the financial institutions of this country it would have no need for any jurisdiction or authority beyond that which it already possesses.
I suggest to the minister that the federal government could, if it wished, control interest rates throughout Canada and that it is within the framework of its authority to do so. If the minister does not do so in this particular case, it is a clear indication that he has no intention of using control over interest rates in order to remedy national problems as he sees them.
Bank Act
We should be well advised to take a careful look at the sugar-coated pill which the doctor is introducing into this house and intends to administer to the Canadian people. He has made some accommodations. He has suggested certain reforms which are long overdue, and in these areas some credit is due him. I have in mind particularly the hidden reserves of banks. For the first time in Canada we have a Minister of Finance who is beginning to realize that this business of hidden reserves has not always worked to the benefit of the Canadian people and of the tax collectors of this country. I am pleased an attempt will now be made to obtain disclosure of information concerning the relationship between profits and hidden reserves.
The sugar coating covering this measure does, however, hide an extremely bitter centre. At the core of this entire measure is the question of interest rates. Whatever may be said about the fringes, at the heart of this legislation is the question: what will happen to interest rates? Will they rise, will they fall, or will they be allowed to float with the market?
What is happening here is typical of what is happening to the Liberal party. By permitting this legislation to come forward as an instrument of their policy the Liberal party is moving unequivocally to the right. Any idea that there might be a left wing or reform movement within that party should now be completely dispelled. I do not hold the minister responsible for this. The Minister is a right-winger; he has an integrity of his own, and what he has brought in is a right-wing policy.
I listened with some sadness the other evening to the hon. member for St. John's West when he talked about the needs of his particular area, criticized some members of this house for wishing to return to a laissez-faire economy and welcomed the fact that the government was prepared to play a role in Canadian finance. Mr. Speaker, this is exactly what is not happening. Perhaps the hon. member for St. John's West should have a heart to heart talk with the Minister of Finance. What his minister has in effect said is that we are now returning completely to a laissez-faire economy. The controls which now exist will be dropped in favour of market regulation and the only restraints, the only restrictions, will be what the traffic can bear and what the market will accommodate itself to accepting.

July 7, 1966
Bank, Act
Our economy has its problems and it is interesting to see the way in which the minister, after an analysis of those problems, has arrived at solutions. Questions have been asked in the house many times concerning the shortage of mortgage money in Canada. We know there is such a shortage. We know the cost of mortgage money has risen. The minister's answer to these questions-and he has only one answer-is: First, we shall raise the ceiling, then we shall free the rate and the competition will take care of the situation.
I suggest to the minister that this is not what will happen. In some circumstances such as a major recession-and I suspect the minister knows the circumstances-the applying of these rates in an economy where some elements are competing fiercely for money might lead to those levels finding a proper and just point at which to settle. But we are moving toward a managed economy to a considerable extent, an economy within which no government will permit a serious recession to take place. It is obvious that interest rates cannot be completely fluid in circumstances of this kind.
We know the banks are lent out. All financial institutions are lent out. How will the minister get more mortgage money unless it is diverted from other sources? How will he get cheaper money in the circumstances he is developing for us? If the bank rate in this situation is freed from restriction or permitted to increase, I have no hesitation in saying that Canada will face the highest interest rates, the highest cost of money, in all history.
[DOT] (4:10 p.m.)
Nobody can say where that level will settle, whether it will be 1 per cent more, 2 per cent more, or what. If in this situation the bank rate goes up by 1 per cent you may rest assured that the trust companies, the nearbanks and other financial institutions will increase their rates by that differential and in effect what you will have is a competition for money.


Mitchell William Sharp: Would the hon. gentleman permit a question? I am very interested in his comments, and I think this is something that seems to engage the attention of his party more than anything else, namely, whether one moves to the right or to the left. Is he suggesting that the members of the Porter Commission made their recommendation because they unanimously favoured a move to the right?


Max Saltsman: I do not know the members of the Porter Commission. However, I have read their recommendations and if ever I have seen recommendations suggesting a return to a laissez-faire economy they are the recommendations of the Porter commission. Whether they knew they were doing this I do not know. However, the minister has followed them quite faithfully, and this is my conception of a return to what I would have thought was an outdated doctrine in the 20th century.


Mitchell William Sharp: Does the hon. member think that Mr. Gordon L. Harrold and Dr. W. A. Mackintosh, distinguished members of the commission, would have recommended a turn to the right?


Max Saltsman: Mr. Minister, you too are a very distinguished member of this house despite the fact that you are a right-winger. Being a right-winger does not make you any more or less distinguished. It is merely an indication of the way you think.
Returning to the question of mortgage money I would refer to an article in the Financial Post of July 22 headed "Mortgage Drought Is A Red-Hot Issue Now," which quoted a Toronto businessman as saying:
I won't pay 71 per cent-8 per cent for a mortgage. If I can't do better, I'll have to forget about buying a house for the time being.
I assume that Toronto businessman is doing a little better than the fellow who works in a factory; yet he cannot afford to buy a house now. So what happens to the fellow working in a factory if interest rates go up, and they will go up under the conditions described by the minister?
If interest rates on mortgages increase from 7 per cent to 8 per cent this means a difference of $106 per year. In other words a 1 per cent rise costs the home owner $106 per year. Translated into weeks this comes to $2 extra per week. But if the working man goes out and says he needs more money, then everybody in the country suddenly throws up their hands at the spectacle of the dreadful working man asking for more money.
From the viewpoint of inflation, how much more inflationary can anything be? Take that extra cost in every business and pass it on to the consumer and you really have got a cost-wage spiral position, and there will be nobody to blame but the minister for introducing this kind of legislation. I hope the minister will remember this if he hears the cry that the working man needs more money and is asking for more money. In that case I
July 7, 1966

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hope the minister will be very sympathetic to the working man's demands. He should be, because if this legislation goes through in its present form he will be largely responsible for the inflation that will take place.
The minister says that the necessity of removing the ceiling on the rate is so that small businessmen will be not be the victims of loan sharks. This is very commendable and I appreciate the minister's concern for small businessmen. Everyone in this chamber shares the same concern. But is the minister really helping the small businessman? Has he discovered the percentage of small businessmen who are really going to the sharks and paying high interest? If the minister would take a statistical look he would find that the vast majority of small businessmen still go to the banks and get accommodation from them. If the bank rate is raised the vast majority of small businessmen will be hurt, and the increased cost they will pay for money will be passed on to the public.
If the minister wants to correct the abuses that exist in the system, and there are abuses, I again mention the remedy I suggested which is within the minister's jurisdiction, namely, control interest rates in Canada. The federal government has the authority to control them. We can do it in the same way as we do under the Small Loans Act and the Moneylenders Act. If the minister is going to have a managed economy from the fiscal point of view he should also consider it from a monetary point of view, and I suggest this is a more useful instrument for ensuring that Canada would not become an expensive money country, certainly more useful than freeing the rate and letting the market determine what interest rates should be.
We have also heard that the bank rate has to be freed in order to help consumers who borrow money. On this point I might digress for a minute to say that one of the most salutary events that has taken place has been the entry of the banks into the consumer lending field. They have done an admirable, excellent job despite the fixed 6 per cent interest rate. As we all know, that rate is not maintained in this field. The banks cannot engage in that kind of business at 6 per cent, but their entry into this field has been most useful. It should be encouraged. But why do we have to take the interest ceiling off in a blanket way? Why remove it completely?
Why couldn't the banks be freed of the ceiling in the area of consumer lending and allowed a special rate? Even in the area of
mortgage lending they could have a special rate. There is no reason to believe that the banks have to be either restricted or completely free. There are intermediate ways of accomplishing the necessary objectives.
However, the minister has taken a look at a situation that needs correcting and has come up with a one-note answer-free the interest rate. This is supposed to be a new panacea, but it is only a return to 18th century mercantilism. That is not good enough. If the minister is doing this with the thought in the back of his mind that by making Canada a high interest rate country he can attract foreign capital, then he had better tell us so.
Because my time allotment has almost expired I want to reserve the last few minutes for a brief summation of what I think the effects of the Bank Act revision will be. To remove the interest ceiling without proper safeguards is to raise the cost of every single thing in this country. It is to put the cost of money in Canada at a height it has never achieved previously, and one that no one at this point can calculate. Interest rates of 8 per cent and 9 per cent on commercial lending may be possible through this type of approach. The present 6 per cent ceiling on the banks may be rigid, may in some ways be unfair and may require some changes, but to remove the only protection we have and not bring in some other assurance that there will be regulatory factors in the economy, is to invite a disaster of the greatest proportion for everyone who uses and needs money in Canada.
[DOT] (4:20 p.m.)
If the minister feels that some rates have to be increased then the minister alone should not determine what that increase shall be. He should set up a board to which those who require the increase, and who can present a good argument for it, can come, and it can then be decided in the national interest whether such an interest rate should be permitted. One way or another an increase in the interest rate will affect the entire cost of living in this country. Everyone, whatever he may do and whatever he may buy, will be affected because interest rates are as much a component in the cost of products as is labour. If he is concerned about low-cost housing he might as well forget about it. It will be dead. There will be no low-cost housing and there will be no medium-priced housing. There will only be high-cost housing in this country.

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The Deputy Chairman:: I regret to interrupt the hon. member but the time allotted for his speech has expired.


Max Saltsman: Mr. Chairman, I wonder whether I might have the indulgence of the house for a minute.


Maurice Rinfret: Is it agreed that the hon. member may continue?


Some hon. Members:: Agreed.


Max Saltsman: Thank you, Mr. Chairman. I should like to thank all members of the house. I shall be only a few minutes more. Every cost of government borrowing will move up. The taxpayers will have to share this burden. Municipalities will find that bonds will rise with the rise in the bank rate. We will reach a point where either we will 6e paying far more than we should for municipal government developments or we will not be able to afford them at all.
In short, then, unless a regulatory body to control interest rates is brought in or unless the federal government is willing to set a ceiling on interest rates throughout the country I, and I am sure many other members of this house, will not be able to support the proposals of the government.
[DOT] (4:30 p.m.)


Mr. Forest:: Mr. Chairman, it was important to introduce before the recess the resolution dealing with the decennial revision of the Bank Act and the extension of the existing charters until July 1, 1976.
After first reading, all those who are interested will have the opportunity to study the bill. And, as stated by the Minister of Finance (Mr. Sharp), they will be able, later this fall, to express their views and recommendations to the committee on finance, trade and economic affairs to which it will be referred.
This bill affects practically all Canadians, because banking operations play a vital part in our economic and social life and our banks must be able to play that part without being hindered by obsolete legislation which does not take into account today's economic realities.
Our banking system is fortunately, as mem tioned by several hon. members, one of the best in the world, but it is certainly possible to improve it to the greater benefit of the people in general. It is readily agreed that our banks play a very important role. And

our hopes for greater economic independence in the future may depend on the way the government will legislate in the banking field. We are already late in making this revision, but in 1964 when the bank charters expired, it was necessary to extend them in order to be able to study the long and complex report which the royal commission on banking and finance had just submitted.
It is a very detailed and exhaustive study which constitutes an excellent work of reference and the fact that it is approximately seven times heavier than the MacMillan report published 30 years ago shows to what extent our financial system has become complicated.
Of course, that shows the commissioners' very commendable preoccupation to present a complete report. In 1965, the adjournment of both houses prevented the study in committee of the bill after the resolution stage. After what the Minister of Finance has said, it seems that the government has decided to limit and prevent foreign control of Canadian banks. And that decision will meet with the approval of all those who take an interest in our economic future, because previously nothing prevented a foreign bank from acquiring an important part of the shares, if not all of them, of an existing Canadian bank.
If, on the one hand, customers could derive some benefit from the fact that those banks might bring new ideas and initiatives, a different way of doing business, however, they would certainly be less receptive and sympathetic when it came to following the recommendations and suggestions of the Canadian authorities as pointed out in the report of the Porter commission.
Moreover, it would be disastrous for many Canadian businesses whose operations might be transferred elsewhere. If a bank, for instance, were controlled by American interests, it could then easily obtain the patronage of a Canadian subsidiary, of a company which would already be its customer in the United States.
The government wants to encourage the greatest competition and variety possible in the service of loans and savings to meet the needs of Canadians during the next decade. And this can be done by allowing an increase in the number of banks in Canada; the government has wisely decided that the new banks will have to be in the hands of Canadians.
July 7, 1966

It had been recommended by the royal commission on banking and finance, which is based on the experience of several generations of banking transactions, that the Bank Act be extended so as to include several institutions which are not subject to it now, and which are under the provincial jurisdiction instead.
It is certain, Mr. Chairman, that several of our institutions could come within the banking system without its soundness being affected, and they would benefit thereby, but the important question of the constitutionality of that measure must be taken into consideration and the government has taken a wise course in attempting to incite them to come freely within our banking system. This is certainly a field where there should be co-operation and consultation between the various levels of government.
The minister has given to understand that the provinces or their agencies will henceforth be allowed to invest in bank shares without voting privileges and I think he is well advised to open such an investment opportunity to provincial funds, because normally a province or one of its agencies should be empowered to invest all their funds in gilt-edged bank stocks and there is no reason to deprive them of this right in the present circumstances.
The minister has also announced a federal-provincial conference on consumer credit this fall and I hope that, by then, it may be possible to come to an agreement to require all credit firms throughout the country to indicate and clearly publish the actual interest charges, so that all credit institutions, whether under federal or provincial control, may be on the same footing and obliged to disclose the actual rates charged to the customer for any given period.
The Minister of Finance is providing for changes in the reserves which the chartered banks are required to maintain with the Bank of Canada and it is his intention to reduce these. Such reserves, made up of an 8 per cent statutory reserve and a secondary reserve equivalent to 15 per cent of all deposits payable in Canadian funds held by the chartered banks, leave them in an unfavourable position as regards the competition of other banking institutions not subject to such restrictions, and the royal commission has recommended a lowering of the cash ratio. Considering that the protection of the depositing public is involved, I hardly think
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there can be any question of eliminating
them.
It was also announced that the government intends to prevent the directors of a bank from sitting on the board of another bank, and also to prohibit all agreements between banks on the interest to be charged on loans or to be paid on deposits and this measure should encourage free competition between such institutions so that the public may benefit from the best possible yield.
Because of the ceiling on interest rates and of other restrictions in the Bank Act preventing them, for instance, from granting mortgage loans, the banks closely associated themselves with trust, mortgage, loan, investment companies and others. It has been specified, I believe, that chartered banks will not be allowed to have more than a 10 per cent equity ownership in a Canadian corporation. It may be necessary to read the bill to obtain further details, but through the amendments to be made to the act, banks should not find it necessary to get involved so much with competitive financial institutions. In order to promote competition, it is necessary to control the purchase of shares, mergers or the establishment of subsidiary or satellite companies.
Mr. Chairman, I do not want to discuss all proposed or commendable amendments, but rather deal briefly with the two main questions of greater concern to the average citizen and which seriously hinder free competition: first, the interdiction to grant mortgage loans, a provision to be deleted, and
then,	the ceiling on interest rates which is being changed and may be adjusted according to the economic situation of the country.
The fact that banks will be allowed in the future to grant mortgage loans at the current market rate is welcome news, because the present situation was unsatisfactory, both for the public and for the banks. The latter never had that power, except since 1954, with the exception of loans granted under the National Housing Act. They did not hesitate then to enter into that new field and loaned over one billion dollars, which proves that with their network of branches throughout the country, they can render tremendous services to the people in that connection.
However, when the rate of interest on such loans was set at more than 6 per cent, they had to withdraw from the market, due to the ceiling being imposed on them. The coming of banks into this important segment of our

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economy will promote greater competition and activity and will contribute to check any increase in interest rates by making available new capital in the field of mortgage loans.
This will also allow them to improve their commercial loans services, particularly with regard to small businessmen who, thanks to this additional guarantee, will be able to borrow greater amounts and more easily from the banks, at a rate certainly more advantageous than elsewhere. Big mortgage companies undeniably grant loans more easily in large cities than in small municipalities and distant regions. Local institutions such as credit unions, which are familiar with the needs and characteristics of a given region, give very efficient service there, and the banks, thanks to their branches here and there, will also be able to help decentralize mortgage funds and balance investments in the various regions.
I also hope that, in the future, private institutions, like those of the government, for example the Industrial Development Bank, will expand and improve the services they give small enterprise by putting at their disposal economic and technical advisers and giving them financial information and advice, so as to help them manage and control their business better. This legislation concerning mortgage loans will be welcomed by all and will undoubtedly improve service in this respect.
Mr. Chairman, according to what the hon. Minister of Finance indicated, the 6 per cent ceiling on the bank rate will be periodically readjusted until conditions on the money market improve, when it can be eliminated.
In introducing the resolution in May 1965, the former minister of finance had specified that, if there were a general increase of the rate of interest in the future, the government would then review the situation. Since then rates have increased considerably, quarterly treasury loans, for example, increasing from 3.82 in 1965 to a recent 5.10, and rates of interest must now be considered in a totally different perspective.
Nobody can dispute, Mr. Chairman, that the existing rate of 6 per cent does not correspond to the current rate: indeed, it was set up during a period when the conditions of the capital market were very different from what they are today. It favours the use of indirect means and the multiplication of related financial institutions that escape that ceiling and

are not under the control of the federal authorities.
The current rate of 6 per cent applicable to commercial loans, that is loans to small businesses, small industries and small businessmen, works against those whom the law intends to protect against the abuses of lenders, and compels them to turn to companies charging higher and often excessive rates of interests. One needs only to be convinced to read the reports of the finance companies which, in recent years, have multiplied average-term commercial loans. The progressive and controlled increase of the ceiling would certainly have the effect of balancing the capital market and, by extending the field of action of banks, the competition will help to limit that of institutions with much less control and responsibility than our banks.
The fear of those who anticipate a general increase of interest rate as a result of this measure is not justified and is indeed denied by the great majority of experts. The future will show, I am sure, that that fear was not founded. Such an increase in the ceiling would rather adjust and balance the rates. Actually, that was the main recommendation of the Porter commission; page 364 and the following pages of the report set forth major and convincing arguments in favour of a higher ceiling, and I quote:
The 6 per cent interest rate ceiling introduces undesirable rigidity in the financial system and hampers and distorts the working of markets. It also has arbitrary effects on the institutions' competition for business and on their ability to serve the community well which were not contemplated when the ceiling was originally introduced and subsequently amended.
We recommend that it be removed regardless of other changes in the legislation. The ceiling stands in the way of flexible lending by the banks in that it frequently prevents them from making loans on which higher rates must be charged to cover administrative costs and risks. Obviously, this is to the banks' disadvantage; more importantly, however, it discriminates against borrowers such as small businesses which, if they are to obtain funds at all, must turn to the other lenders which charge rates well above those the banks would ask if free to do so.
Mr. Chairman, another group of independent experts, the Economic Council of Canada, supported unreservedly that attitude, and in its Second Annual Review, page 187, made the following statement:
[DOT] (4:40 p.m.)
More generally, to minimize distortions and instabilities in credit and financial markets, and to ensure easier access by homebuilders, consumers and small business to credit, various recommendations of the royal commission on banking and
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Bank Act
finance deserve careful attention-including measures to promote more competitive credit conditions, and removal of the arbitrary 6 per cent interest rate ceiling which currently forces many small borrowers into loans at much higher rates.
The vast majority of financial and economic experts hold this opinion as well. It has also been claimed that banks already show large profits and that this measure will only serve to increase them even more. Now, the government can easily control them and reach them, through taxes on profits or otherwise; at any rate, it is not a logical reason for preventing them from playing a more efficient and more advantageous role with regard to the people generally, and the financial system of our country. This would be preferable to transferring those powers or leaving them to similar institutions at a higher cost to the public.
In order to enlarge their share of the market in the face of competition, banks will have to improve their services, make loans at reasonable rates and pay higher rates of interest on savings. In order to obtain additional funds, they will have to increase the rate of interest on deposits, thus benefitting millions of people who, as a precautionary measure and for security, entrust their money to banks. Incidentally, more open competition might be favourable to banks but, above all, the good of the community as a whole must be considered and promoted.
The Minister of Finance, who has already given us proof of his experience, his competence and wisdom, has once more formulated a realistic, practical and constitutional policy, to enable our banking institutions to make an even greater contribution to the progress and growth of our country; a policy that will also contribute to the economic and social well being of the Canadian people as a whole.
This act, Mr. Chairman, will bring progress to our financial system in its evolution, will give it greater flexibility, firmness, dynamism and competitive stamina; the Minister of Finance must certainly be congratulated.


Mr. Caouette:: Mr. Chairman, I listened with interest as the hon. member who spoke before me talked about the banking system, about the services rendered by banks to industry, business, individuals, etc. Strangely enough, there seems to be an attempt to compare banks to other Canadian financial institutions; to compare a bank to an ordinary finance company, when the two are absolutely not similar.
Ordinary finance companies must have in their tills the amounts they can lend or wish to lend, while chartered banks do not have to have in the till the huge amounts they lend.
Last night, the Parliamentary Secretary to the Minister of Finance (Mr. Chretien) spoke at great length on this resolution and on these amendments to the Bank Act. If the Minister of Finance (Mr. Sharp) has read the speech made by his parliamentary secretary, he must have died laughing this morning. His dear parliamentary secretary blundered, he contradicted himself flagrantly, he made about the most ridiculous speech ever delivered here in this house. Indeed he said;
This decennial revision will certainly be welcomed by the newspapers and the public as the most radical measure since the institution of the Bank of Canada about 30 years ago. It will likely increase the confidence of the public in our banking institutions and in any future decisions of the government concerning the monetary policy of our country.
And then he added:
It is easy to note that the Minister of Finance has decided to implement the necessary reforms for such a competition between all levels of financial institutions in Canada, and I think he should be very warmly commended.
A little further, Mr. Chairman, the hon. member for St. Maurice-Lafleche (Mr. Chretien) stated:
The 6 per cent ceiling was adopted some forty years ago-
Well, 40 years ago the ceiling was at
5	per cent. A bank could not charge more than 5 per cent interest on a loan. Here he said:
Under the present system, Mr. Chairman, big borrowers definitely have an edge over small people who need money. As banks have become the cheapest source of capital supply for corporate and individual borrowers, since there is a 6 per cent ceiling on interest rates, there developed recently a practice which clearly discriminates against small borrowers.
And he went on to say:
Generally speaking, the small borrower who comes to a bank gets a loan at a rate higher than
6	per cent.
Please note that the small borrower who goes to a bank where the ceiling is 6 per cent manages to get funds at a rate higher than 6 per cent since the banks have found a legal way out. I wonder if the minister agrees with that. The banks have found a legal procedure which allows them to make personal loans at 9 and 10 per cent. It means that the small borrowers we are trying to protect by setting the rate at 6 per cent

July 7, 1966
Bank Act
are not protected at all by the present banking regulations. Such is the statement made by the secretary to the Minister of Finance last night: the ceiling is 6 per cent but legally the banks have succeeded in making loans at 9 and 10 per cent.
At the beginning of my remarks, I said that the banks are lending something they do not have. If a bank has a $100 million reserve with the Bank of Canada, it has the right under the federal legislation-and I am calling the Minister of Finance to witness what I am saying now-to lend $1.4 billion, based on the $100 million reserve with the Bank of Canada. And it has the right to ask for 6 per cent on $1.3 billion it has just created.
The bank has the power to do that. That means $78 million in interest for a year; $390 million for five years; and $1.56 billion for 20 years, whereas the bank had only $100 million in reserve with the Bank of Canada.
That is the power of the chartered banks in Canada. It cannot be compared at all with that of the other loan companies. And if the minister is so solicitous about the small Canadian borrowers, then instead of removing the ceiling on the interest rates charged by the banks, why does he not force the finance companies to reduce their usurious interest rates to protect the small borrower whom the government wants to protect, as it is trying to make us believe, with this bill.
Mr. Chairman, there is a way to help the small people, and it is certainly not by helping the big people to get bigger that you will help the small people. We live under a system where the big people get bigger in smaller numbers and where the small ones get smaller in greater numbers, and no solution is found to that problem. Let us reduce the interest rate and force the finance companies to reduce their interest rates instead of allowing them to charge 24, 20 or 15 per cent interest, and let us impose a ceiling on those companies.
[DOT] (4:50 p.m.)
Another thing could help the small borrowers: why does the Department of Finance or the federal government allow the banks to create a shortage of money and credit in Canada? Why? If the government assumed its responsibilities and told the banks: We need so much credit for the normal business of the country and you will create the credit or we will do it through the Bank of Canada. It would be a solution but the government does not do that. Instead, to help the small

people, it allows the banks to increase the interest rate.
Another way for the government to help the little fellow would have been to stop gathering the savings of the small and average citizens, and to leave them in circulation. Instead of piling them up here, in Ottawa, the government should help, for instance, in lowering income tax. No, the government does not think of that. It introduces a bill to amend the Act. This is the greatest monetary reform since the creation of the Bank of Canada. Imagine, in the twentieth century, in 1966, to tell us that in the House of Commons. Why? Because the majority of government members understand nothing of the mechanism of chartered banks of Canada.
I understand that one may laugh but it is believed that the chartered banks are financial institutions like the Traders Finance, the Household Finance, the Beneficial Finance and any other finance company. But it is not true. The finance companies, the "caisses populates" the savings banks, cannot lend more than what they have. However, the chartered banks can lend any amount even what they do not have. They can take my own savings and multiply them by 14 to lend to the public at 6 per cent. Six per cent interest on credit created out of nothing is not enough. That is what control by the chartered banks means in Canada.
I understand and I repeat it, the finance companies practice usury; I understand that. The government has the power to bring these people to book. Mr. Chairman, I realize that this bill in abolishing the ceiling on interest rates for chartered banks agrees to direct theft, legalized by the federal government. Instead of simply allowing the thief to remain as it is, it gives him the means to grow bigger. The small thief goes to jail. As for the big thief, the financier, let us allow him to charge more interest. That is the fine monetary reform of the federal government. It has been spelled out in full and explained by the Parliamentary Secretary to the Minister of Finance. The Minister of Finance himself said the day before yesterday that the rate of interest is too low and should obviously be raised to help such borrowers, and that banks must be able to compete with private lenders.
Mr. Chairman, what is to prevent banks from lending to whomever they please? I do business with finance companies, with Traders Finance.
July 7, 1966

We are told here: When the rate of interest is higher, banks will lend more easily to small borrowers. The borrower who wants a loan at 6 per cent and who does not seem to have all the security required by the bank does not get a loan. If the rate of interest were 8 per cent, does the minister think this man would then be able to get a loan? No. I know of one particular case where a man went to a chartered bank to borrow a sum of money to pay for a car. The bank manager told him: My friend, you do not have enough security for a loan. Then this person went to the Household Finance Company, borrowed the money to pay for his car, signed a promissory note attached to his contract including interest, insurance, and so on. Household Finance took this note to a Canadian chartered bank, whether the Royal Bank of Canada, the Canadian National Bank or the Toronto-Dominion. The bank accepted the note of this same man who was not solvent ten minutes ago and bought it at a discount rate of 85 to 90 per cent. This means that the finance company immediately got all of its capital plus part of the interest charged. Immediately. This man who, according to the bank, was not solvent ten minutes ago-how is it that his credit is better at 24 per cent? Why does the bank accept his note from the finance company, but not directly from him? Mr. Chairman, we will be told again that an increased rate of interest would allow banks to help small borrowers more. That is not true. The banks do not help the small borrowers but the big ones, as the Minister of Finance is well aware.
Mr. Chairman, the Minister of Finance made another point the other day. The banks must reveal their hidden reserves. They do not pay taxes on them at the moment. How would the minister force the banks to declare their hidden funds? What means would the government use. They do not tell us. We are told: We will take the necessary measures; we will request the banks to declare their hidden funds on which they do not pay any taxes at present.
Mr. Chairman, the minister nods his head. But by what means will he accomplish this, since the banks have done many things behind this government's back, and behind the former government's back? The banks have always played hide and seek with the government. And today, the minister tells us: We will force the banks to declare their hidden funds. By what means will we do so? Everyone has to declare his income. Everyone is supposed to
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declare hidden income; yet, a large number of Canadians hide money away. Not only banks, oh no. There are others still who do not declare anything to the government.
How is the government going to find out who hides money with a view to evading income tax? Mr. Chairman, the parliamentary secretary to the minister added this, yesterday:
It follows that the 6 per cent bank loan market is available to two particular types of borrowers, that is small businessmen and industrialists.
What an amazing discovery.
As banks are limited to a 6 per cent ceiling, there is absolutely no leeway possible.
Poor banks. Up against a depression. Will higher rates improve slums in Canada? Let the minister compare bank buildings in in Canada with the dwellings of little old Canadians who have to borrow money. Then you can tell me if those poor banks are to be pitied so. I have nothing against banks that deal with the public on a private basis, that is all very well. Provincial or federal governments, or school boards, should not have to kotow before a chartered bank that has the power to create credit 14 times the amount it holds in reserve. But let the Bank of Canada service public undertakings; and let chartered banks continue to serve private enterprise, not at exhorbitant rates of interest, not at rates without a ceiling, but at a rate that has a ceiling. When that ceiling was 6 per cent, banks did not starve to death. They knew no economic recession, they did not suffer. But the Canadians suffered.
Mr. Chairman, I maintain the monetary reform advocated by the Minister of Finance is nothing but a hoax. And some people believe in it. A while ago, a member made a speech on banks, on those poor banks which do not have the right to ask the same rate of interest as the small private companies. There was applause because people do not know what control banks have in Canada.
Mr. Chairman, Social Credit has a solution, it may still provoke laughter, but he who laughs last laughs best, because, Mr. Chairman, in the present system, with unrequited strikes right and left, if one seeks the root of the problem, one will find a question of money and credit and so long as the present or future governments fail to alter the present financial system in order to make money serve mankind instead of forcing mankind to serve money, grave days, dangerous days are in the offing for Canada as other countries of the world have experienced.

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If we must perforce follow in the footsteps of world revolutions, very well. But if we can avoid this, if we can react soon enough to bring about monetary and fiscal reform so that money and credit may serve the people then, Mr. Chairman, we will have saved the country and specially the Canadian people, which is what counts in the long run.


Mr. Laflamme:: Mr. Chairman, would the hon. member permit a question?


David Réal Caouette: Surely, Mr. Chairman.


Ovide Laflamme: Would the hon. member explain what he means, when he talks of making money serve mankind, instead of making mankind serve money and how he would proceed?


David Réal Caouette: The first step

and I shall not take up the time of my hon. friend from Red Deer (Mr. Thompson)-would be the distribution of a national dividend to each and every Canadian, to give them the purchasing power to go and buy the goods, the production of Canadians for Canadians. Then, money would be serving the people.


Ovide Laflamme: A second question, with your permission, Mr. Chairman.
Where are you going to find that dividend?


David Réal Caouette: At the Bank of Canada. My very good friend has still not grasped the idea, though it has been taught to him for 25 years.


Ovide Laflamme: I am sorry to say that I understand even less when I hear him talk.


David Réal Caouette: There you are. Dunces
neither die nor fade away.
[DOT] (5:00 p.m.)


Robert Norman Thompson: Mr. Chairman, I realize the time left in the debate on this resolution is rather short so I will attempt to keep my remarks to a minimum in order to allow at least one other speaker to take part in the discussion.
The resolution before the committee provides for the decennial revision of the Bank Act, a revision which is already two years late, and will extend the charters of the present banks to July 1, 1976.
Apart from the remarks of the Minister of Finance, the details of the present legislation are not known. The minister has outlined his policies relating to the legislation which is to

follow this resolution. He has enunciated some points with which we agree and some others which we do not find acceptable. But we do say that this resolution should pass in order that the legislation can come before us.
At this point I would urge the Minister of Finance-I believe that if he will do this all members of the committee will be in agreement-to refer the subject matter of this resolution to the standing committee so that it can get down to the hard work which must be done in coming to the highest common denominator of agreement so far as the legislation is concerned. After that work has been completed the matter can come back to the house for final decision. If this is done I am sure that much of the committee work can be accomplished while the house is in recess.
However, the passage of this resolution does not mean, and I make this very clear, that we are in agreement in principle with what may be the policies of the minister in the legislation. We are in agreement with the principle that the Bank Act must be revised and that this legislation must be passed before the end of this session. We in our party believe that the subject matter of this resolution should go to the committee as quickly as possible. We should not wait until after second reading before making such referral because there would not be sufficient time then to debate the decisions that are made in the committee.
Perhaps the most important revelation was when the minister said that the banks will be required to disclose their inner reserves. To this we give our complete agreement. These hidden reserves represent a privilege which has been grossly abused. Therefore we believe that the minister is to be commended for this announcement. Likewise, it is good that the different banks will be prohibited from making agreements on interest rates on both loans and deposits.
We in the Social Credit party also agree that the interlocking of bank directorates should be prohibited. We believe also that the relaxing of restrictions prohibiting banks from participating in the area of mortgage loans is fair and sound. The minister outlined his policies, some of which we believe are good. However, there are others with which we cannot agree.
The reduced cash reserves allowing flexibility in reserve requirements can only be fair if the near-banks are likewise brought under the umbrella of this banking legislation. If the Minister of Finance really means
July 7, 1966

Bank Act
that greater competition is a good thing for banking, then it seems to us that he must also include those institutions, other than credit unions and treasury branches, operating in the same areas as the banks, and they should be brought within the legislation controlling banking with which we will be concerned when this resolution has passed.
The second major area of difference, and the one which is the most vital in my opinion, is the decision to lift the 6 per cent interest ceiling on bank loans. With this we cannot agree. The banks have advanced a strong argument in favour of this policy. They have developed the argument that by lifting the ceiling on bank loans there would be a general reduction in interest rates. True, it would lower the interest rates presently charged on mortgages through trust and finance companies, which today are operating at rates of 8 to 12 per cent and in some areas even as high as 20 per cent and more. These interest rates are wrong. They are immoral and unjust. Yet we must seek to correct the problem at the top level and not just equalize the situation by raising the bottom level.
I believe that the desired objective of lower bank interest rates rather than raising them can be better effected by including those institutions which to day are operating at extremely high interest rates under banking legislation, so that the total picture of interest rates will be reduced. It is only in this way that we can help those sections of the economy which need help the most, that is, the small borrower, the independent businessman and the farmer, for whom today there is not adequate credit available.
Again we come back to the principle that this government actually lays down in its policies, those principles which affect the nation's monetary policy. While we hear so much about inflation today, the truth of the matter is that there is not too much money in the country. There is an inflation in prices. As this comes about there is a lack of money in the country and the section of the economy which needs help the most is not getting that help. Therefore we would say to the minister that it is essential that this section of the economy be our concern.
The banks today, Mr. Chairman, are not facing bankruptcy. Their facilities are the best in the land. All you have to do is to note the new buildings and the improvement in banking facilities which has been brought about over the last few years. Likewise, their profits are among the best in the country.
This does not mean that the banks should not operate at a profit. They should. It does not mean that we are not in favour of private banking. It is the best form of banking ever devised so far as the private sector of the economy is concerned. But it does mean that we must protect those areas of our economy which are not able to protect themselves and which do not receive at the present time the protection and justice they deserve.
If Canadians really believe in free enterprise, they must see to it that the financial institutions are allowed to operate in an equitable atmosphere of fair competition. But on the other hand, just by raising bank interest rates we are not going to make the operations of these sectors of the economy as equitable as they should be. Today some small businessmen, including farmers whom I know pay up to 24 per cent on money which they cannot get through the private banks, money which I think it is the responsibility of private banking to supply in addition to supplying the capital needs of big business and industry.
However, to oppose this resolution as it now reads would be irresponsibly because it simply states that which must be done. It does not state what is the actual policy of the government. Again I would urge the Minister of Finance-and I think he would receive the support of the house-to permit the subject matter of this resolution to be referred to the committee on finance, trade and economic affairs so that we can really get down to the hard work of discussion and hearing the necessary witnesses so as to arrive at what I described as the highest common denominator of agreement.
There are several other points of importance, Mr. Chairman. I should like to refer to the Porter commission report which has been called a dead report; at least, it seems so. However, there are a few important recommendations made by the commission which we may be in danger of forgetting.
Again here I must emphasize the need of some form of control over the near-banks. The British Mercantile and Trust Company collapse, after the failure of the Atlantic Acceptance Corporation, makes this an urgent question which has yet to be dealt with and which I trust will be dealt with as we go through this legislation.
[DOT] (5:10 p.m.)
What we need in Canada today is a desirable economy. Banking is the means by which this desirable situation within the economy

July 7, 1966
Bank Act
can be reached. I believe a desirable economy may be expressed as an economy which utilizes all modern methods oi production but which at the same time offers equitable employment tor all. I believe there is a national inventory of purchasable production which, when maintained by effective demand, would bring about a desirable economy. Effective demand is that which places in the population's hands the necessary purchasing power to buy those things that are necessary to make possible the standard of living of which we are capable, while at the same time solving the problems of distribution presently facing us. It is in this area, Mr. Chairman, where banking as it relates to the supply of money and to the supply of capital, which it is so imperative to have and which is actually the responsibility of the banking system, that this legislation is involved.
Finally, I would say that we must return to the part of sanity so far as our financial policy is concerned. The basic reforms which are talked about as being essential in our banking system are twofold. A permanent money supply is needed to cope in quantity with all sorts of needs. It is needed as a medium of exchange. With our tremendous potential in Canada and our tremendous know-how, there is no reason why our monetary supply for our monetary needs and our capital should not be adequate to develop to the limit that which we are willing to work at. Also, our financial system should be one that will distribute incomes to large numbers of our citizens so that everyone can have a certain reasonable standard of living quite apart from whether or not our citizens are able to obtain employment.
Again this comes back to a satisfactory money policy. I believe it is imperative for our banking legislation to be such as to provide for the supply of the public or social capital with which we have to build our bridges, schools, and hospitals. This is not capital which makes a profit, but it permits the development of the public sector of the economy without our having to pay the high rate of interest that we talk about in relation to the private sector where profits are permissible. Unless our banking legislation will permit the creation of that capital, and unless we can meet the needs of the people in supplying the required medium of exchange necessary to move, economically, that which we produce within our economy, an unnecessary burden will be placed on our people.

Therefore, Mr. Chairman, we again urge the minister to make sure that the subject matter of this resolution be referred to the committee where it can be discussed in appropriate detail in full debate.


Mr. Nasserden:: Mr. Chairman, in rising to take part in this debate let me say that one cannot help but realize that once again the hon. member for Red Deer not only has swallowed himself, so to speak, but has reiterated the position that his party has taken over the last several months and even years in supporting the government when it finds itself against the wall.


Robert Norman Thompson: Could I ask the hon. member a question? Does the hon. member not agree that it is necessary to provide legislation to revise the Bank Act?


Edward Nasserden: Mr. Chairman, I was very interested in the remarks made by the Minister of Finance in bringing forward this measure the other day. One must realize that as he spoke he was thinking back to what has happened in this country during the past several years and what is happening today. The Canada of today is very much different from the Canada that existed when this government came to office a few short years ago.
As we look at the remarks which the Minister of Finance placed on the record we realize that the actions proposed in connection with the revision of the Bank Act are heavily influenced by the conditions existing in Canada at the present time, which the minister and other members on the government side have referred to as abnormal. These conditions prevail not only in Canada but also in the United States. It is interesting to hear the Minister of Finance of this country proposing that we bring forward legislation to meet an abnormal condition but which will have a long-term effect on the nation as a whole.
I come from an agricultural constituency where new industries are being developed today and, as in many other parts of this country, we know what tight money is. I say to the government that raising the ceiling on interest rates under the Bank Act will not solve the problem of tight money in this country.
Reference has been made to the arguments put forward by this country's banks which say that they have a problem with respect to lack of money. One of the reasons why the
July 7. 1966

banks have this problem is the utter failure of successive governments to deal with the consumer finance companies of this country which today operate under scarcely any regulation. Let us take a look at the over-all situation.
The banks tell us that all the money they have is in circulation. The finance companies take up the balance of the lending field. Raising the interest rate simply will not by itself solve that problem. What is needed today is legislation to deal with the finance and other consumer credit companies of this country. Such legislation would save our people some of the money that the Minister of Finance proposes should be expended on higher interest rates.
One need only look at the increased cost of housing, of development and of almost every other factor in our economy to realize that if the resolution is passed, as the minister explained it in his speech the other evening, this nation faces an increasing spiral of costs such as it has never known in the years gone by. At the present time this government has the reputation of bringing about the highest cost of living in the nation's history. Apparently the government now wants the nation to have its highest interest rates in history, which will lead to an even higher cost of living. For these reasons I cannot see how any thinking member of the House of Commons can support this resolution before us.,
There are other aspects I cannot possibly deal with in the short time available to me which have to do with the economic prospects facing this nation and also with our relations with the other nations of the world. Those nations demand that the action proposed by the government opposite be not taken at this time in our history.
For the last few days the Minister of Finance has been going around with a long face. We on this side and some hon. members on the other side of the house cannot help but know why this is so. The minister himself must have serious doubts as to the seriously detrimental effects that this legislation, if put into effect, will have on the economy of this nation now and in future.
Those who put their money into deposits should not expect the same returns that people who put their money into development are entitled to expect. The government and the minister suggest that we should pay a bonus to the person who is cautious, who is afraid to go out and try to develop this 23033-464
Bank Act
nation. That sort of thing is almost a denial of everything that we in this nation believe in. Another effect this legislation will have will be to attract tremendous amounts of money from across the border, which is something that hon. members opposite seemed to be worried about in the months gone by.
When a home owner pays close to $20,000 for his home and the rate of interest he has to pay is increased by 1 per cent, he is immediately faced with having to pay approximately an additional $200 per annum. Taking the amount he has to pay over a 30-year period it can be seen that the additional cost the home owner has to pay is more than the total cost of many homes built in years gone by.
[DOT] (5:20 p.m.)
We cannot but realize that this government not many months ago brought in amendments to legislation concerning farm credit which permitted an increase in the cost of credit to the farmers of this country. If the measure now before us were allowed to proceed there would inevitably be an increase in the cost of credit to those in the agricultural industry desiring credit for development.
But the man who cannot escape the consequences of higher interest rates, the man who cannot pass the cost on, is the man who carries a dinner pail. He, together with all those on fixed incomes and all those who must live on small incomes, has no redress. Once again in the measure before us we find the government loading down the man who carries the dinner pail with an additional charge on his income and one which he certainly cannot afford at this juncture in our history when Canadians are facing the highest cost of living ever known in exchange for the privilege of having a Liberal government.
I cannot but feel that regardless of where hon. members sit in this house, if they are to do their duty as protectors of Canada's financial soundness and her place in the world and help to provide a future for our citizens in their desire to earn a decent livelihood, they have no choice but to vote against this measure.
I believe the banks of this country have been doing a worth-while job. Today they boast, and we should take this into consideration, that they have made all the funds at their disposal available to the people of Canada for their use. If we study their
7332	COMMONS
Quebec Savings Banks Act balance sheets we find they compare favourably with the balance sheets of other businesses in this country. In these circumstances one can only ask: Why has the government chosen the avenue of rising interest costs as one of the instruments not only of banking policy but apparently of economic policy in this country as well?
I should like to read from an article which appeared in the World Economic Review and Forecast, 1966, published by the New York Times. I will give hon. members some indication of what has been done by the government opposite during the past year.


Herman Maxwell Batten: Order. Since the time provided for the consideration of this resolution has expired, it is my duty pursuant to standing order 61A to interrupt the proceedings and put the question forthwith.
Motion (Mr. Sharp) agreed to: Yeas, 86, nays, 59.


Herman Maxwell Batten: I declare the resolution carried.
Resolution reported and concurred in.
Mr. Sharp thereupon moved for leave to introduce Bill No. C-222, respecting banks and banking.
Motion agreed to and bill read the first time.



QUEBEC SAVINGS BANKS ACT


Mitchell William Sharp: that the house go into committee to consider the following resolution:
That it is expedient to introduce a measure to provide for the decennial revision of the Quebec Savings Banks Act and the extension of the powers of the existing savings banks till July 1, 1976, and to provide further for certain changes in connection with the administration of the Act.
Motion agreed to and the house went into committee, Mr. Batten in the chair.


Some hon. Members:: Carried.


Herman Maxwell Batten: Shall the resolution carry?


Thomas Miller Bell: On the same division.
Resolution reported and concurred in.
Mr. Sharp thereupon moved for leave to introduce Bill No. C-223, respecting savings banks in the province of Quebec.
Motion agreed to and bill read the first time.

DEBATES	July 7, 1966
[DOT] (5:30 p.m.)



INCOME TAX ACT

Mitchell William Sharp: the second reading of Bill No. C-216, to amend the Income Tax Act and to repeal the Canadian Vessel Construction Assistance Act.
He said: Mr. Speaker, I shall give just a few brief words of explanation on second reading. This bill is to implement the Income Tax Act resolution which was debated at considerable length in committee of ways and means some weeks ago.
Because there has not been time to complete the drafting of the complicated provisions concerning deferred profit sharing plans and the related subject of supplementary unemployment benefit plans, this bill does not contain amendments based on paragraphs 11, 12 and 13 of the resolution. Legislation to implement the proposals in these paragraphs will be introduced as a separate bill later this session, possibly when parliament reconvenes.
It will be noted that the bill is entitled "An Act to Amend the Income Tax Act and to Repeal the Canadian Vessel Construction Assistance Act." When the house is in committee I would like to move to delete all references to the Canadian Vessel Construction Assistance Act, not because the government has changed its views about the desirability of the amendments but simply because members of the industry feel they would like to have an opportunity of having further consultation with the government before the act is repealed. It was not our intention to repeal any of the provisions of that act but simply to incorporate them into the Income Tax Act.
As is usual, the bill contains a few amendments of a technical nature dealing with administration which were not described in the resolution. The most important are found in clause 11 which deals with the Tax Appeal Board, and in clause 18 which concerns the communication of information.


Mr. T. S. Barnett (Comox-Alberni):: Mr. Speaker, as the Minister of Finance (Mr. Sharp) says, this bill is entitled "An Act to amend the Income Tax Act" and I suppose the principle of the bill is described in those words. It is not my intention to launch into a lengthy dissertation on the principle of the bill-


Some hon. Members:: Hear, hear.
July 7, 1966


Thomas Speakman Barnett: -but with a little more encouragement from the hon. member for Kootenay East (Mr. Byrne) I might be disposed to do so. However, I hope I am not going to be provoked into making a lengthy speech. The point to which I wish to address myself is related to what appears to have been a general disposition on the part of the minister, as well as on the part of quite a number of his predecessors, to be more concerned in the annual bill to amend the Income Tax Act with the principles in that act have to do with making rather complicated deductions in respect of the profits of corporations rather than being concerned with the principle of providing equity under the act for those who file their income tax returns as individuals.
Over the years a good many of the sections of the act have been amended, and one could argue that each section, at least in some measure, stands on its own feet in relation to the principles that are involved. I believe that the basic principle we should argue on second reading is whether the proposals of the minister contained in the bill are designed to achieve equity and fairness in the application of the income tax law. In my submission the principle of this bill is inadequate in that respect, at least in one direction.
During an earlier stage of discussion on the Budget I made reference to what I think are serious omissions in the minister's proposals. I much regret that he did not see fit to agree with the arguments I advanced then and that this bill does not provide a long overdue amendment to section 5 of the act which deals with the deduction of expenses incurred by workers in the course of earning their living.


Gilles Grégoire: 
Mitchell William Sharp: Mr. Speaker, I regret to say I was unaware that the bill was not available in French. This comes to me as a great surprise.


Gilles Grégoire: This does not surprise us so much, because it often happens that we get the French copy of a bill much later than the English. I feel, however, that is not good enough on the part of the minister, and he should ask instead that the study of this bill be deferred until we get French copies.


David Réal Caouette: On the same question of privilege, Mr. Speaker, will the minister tell us when we can get a copy of this bill in French?
tEngflish]


Mr. Deputy Speaker:: Order. I must refer the house to standing order 74, which is as follows:
All bills shall be printed before the second reading in the English and French languages.
If the bill is not available in French perhaps the Minister of Finance will wish to make some comment.


Mitchell William Sharp: Mr. Speaker, I certainly would not want to continue the discussion without the French text being available. I do not think I have any responsibility for having ^ French text available, but I express apologies to those whose native tongue is French. Would it be agreeable to the house if the hon. member who is speaking now were to complete his remarks and then we could adjourn the debate until the text of the bill is available in French?


Mr. Deputy Speaker:: The hon. member for Comox-Alberni.
[DOT] (5:40 p.m.)


Thomas Speakman Barnett: Mr. Speaker, if it is agreeable to the hon. member for Lapointe and the hon. member for Villeneuve, who raised this legitimate question of privilege, I would be quite happy to complete my remarks at this point and then follow the suggestion made by the Minister of Finance.

July 7. 1966
Income Tax Act


Mr. Speaker:: Is it agreeable to the house that the hon. member for Comox-Alberni shall continue his speech?


Some hon. Members:: Agreed.


Gilles Grégoire: Mr. Speaker, we are ready to agree to this, but afterwards we shall defer consideration of the bill until we get at least one copy in French.


Mr. Speaker:: Is it agreed that at that point the debate shall be adjourned until the French text is available?


Some hon. Members:: Agreed.


Thomas Speakman Barnett: As I was saying, Mr. Speaker,
I regret that the bill before us does not contain provisions which I feel would have greatly improved it in principle. I was about to draw the attention of the house to the absence from the bill of what I consider to be a vitally necessary and long overdue amendment to section 5 of the act. As the minister may be aware, this omission is not one which is new. I do not wish at this stage to argue the point at length, particularly in view of the situation which has developed in respect of the availability of the French text.
I believe that this bill would have been greatly improved had it in fact contained an amendment to section 5 along certain lines which would have provided equity in the application of the tax in respect of expenses of workers which are incurred necessarily by them in the course of earning their living. I suggest that if the minister had adopted the proposal contained in Bill C-51 on the order paper this bill would have been much improved.
Bill C-51 suggests that section 5 of the Income Tax Act should be amended by adding a new subsection 3 which would have allowed the taxpayer to deduct from his gross income in a year expenses necessarily incurred by him for board and lodging by reason of his employment at a distance from the place where he maintains a self-contained domestic establishment; expenses incurred by him for transportation between his ordinary place of residence and his place of employment where, by reason of distance, he is required to live away from home to perform the duties of his employment; and expenses incurred by him for depreciation and replacement of tools and
[Mr. Bamett.J
special equipment or clothing which are necessarily required by him in the performance of his duties. If this section had been included in the bill which the Minister of Finance has placed before us, then I for one would have been happier.
I feel that the discrimination between taxpayers whose incomes come from wages or salaries, those who are classified as being selfemployed, and corporations in respect of the deduction of expenses has been in the act far too long. As I indicated during a previous stage of the debate, I am looking forward to the day when the Minister of Finance in his budget proposals will take firm action to rectify this longstanding discrimination.


Mitchell William Sharp: Mr. Speaker, on a question of privilege, the hon. member for Lapointe drew attention to the fact that there was no French copy of the bill available. I understand that one copy is now available. I do not know whether this would be sufficient or whether, as indicated earlier, we should adjourn the debate for the time being.


Gilles Grégoire: Mr. Speaker, I should not want to be unfair to any member of this house. If I am given a copy, it is unfair to the members for Hull, Lafontaine, Beauce, Mount Royal, Quebec-Montmorency, Chapleau, Saint-Hyacinthe-Bagot (Messrs. Caron, Lachance, Racine, Trudeau, Laflamme, Laprise and Ricard), in a word to all French-speaking members, including the member for Vau-dreuil-Soulanges (Mr. Emard).


David Lewis: And also to the member for York South.


Gilles Grégoire: Mr. Speaker, if a copy is handed to us on this side or accepted by me, I am convinced beforehand that 25 members from this side will rise to protest. I therefore object and ask that the study of the bill be deferred.


Mr. Georges C. Lachance (Lafontaine):: Mr. Speaker, I have never authorized the member for Lapointe (Mr. Gregoire) to speak on my behalf.


Mitchell William Sharp: I have no objection whatever. I entirely agree with the hon. member for Lapointe. I merely took advantage of this opportunity to say that we have at least one copy.
July 7, 1966


Mr. Speaker:: Order. Is there unanimous agreement that the debate on Bill C-216 will be adjourned?


Some hon. Members:: Agreed.


Gordon Minto Churchill: If the government would pull itself together it would be a good idea. There has been terrible mismanagement.


Mr. Speaker:: There has been unanimous agreement that the debate be adjourned.



CROP INSURANCE ACT


John James Greene: the second reading of Bill No. C-208, to amend the Crop Insurance Act.
He said: Mr. Speaker, during the debate on the resolution stage of this bill I outlined briefly the current position of crop insurance in Canada and the roles of the federal and provincial governments in this important agricultural policy. At that time I indicated that I would go into more detail on the actual amendments when the bill came before the house for second reading. The intention in these amendments is to make crop insurance more attractive to farmers and more widely applicable to the risks of nature over which they have no control.
One of the basic problems has been that for large areas of Canada policies which are possible under the act in its present form do not appear to provide enough protection to the farmer. I am confident that these amendments will do much to rectify this situation and to make crop insurance universally more attractive and useful to Canadian farmers. The amendments to the Crop Insurance Act which you have before you make three major changes and two relatively minor ones in the current legislation.
At the present time the act authorizes the federal government to enter into agreements with the provinces for crop insurance programs where the coverage does not exceed 60 per cent of the long-term average yield of the crop in the area. Many farmers, particularly those in areas where severe losses due to adverse weather conditions are not common, have felt that a coverage equivalent to only 60 per cent of the long-term average yield for the area was not in fact useful to them. Their position very simply was that they were good farmers and that seldom if ever did their production fall below this level.
Crop Insurance Act
The proposed amendment, by increasing the permissible level of coverage to 80 per cent and by permitting the calculation of the average yield on an individual farm rather than an area basis, is designed to provide protection commensurate with each farmer's needs and with his ability as a farmer. The proposed 80 per cent level is a maximum level. Policies could be sold at any level of coverage up to 80 per cent. Obviously, however, the higher the level of coverage under any given circumstances the higher must be the premium rate. A condition of the legislation is that the premiums, including, of course, any payments made by either this government or a province toward this cost, must be such as to make the program selfsustaining.
[DOT] (5:50 p.m.)
The second major amendment increases the premium share payable by the federal government from the present 20 per cent to 25 per cent of the total premium. Let us assume that the premium rate for an insurance policy is $1 per acre. Under the current legislation the farmer pays 80 cents and the federal government pays 20 cents. Under the amendment the farmer will now be required to pay only 75 cents, with the federal government paying the remaining 25 cents. This action should go some distance in reducing to the farmer the costs that will be associated with the upward movement in the level of coverage. It means that farmers across Canada taking out policies under this program will, on the average over the long term, receive a return of $1 for every 75 cents they pay into the program, since 50 per cent of the administrative expenses are also paid by the federal government and in all agreements to date the other 50 per cent is paid by the province concerned.
Under the existing legislation the coverage is limited to crops. Thus what might loosely be called production units such as apple trees or stands of perennial forage crops cannot by themselves be covered. Yet losses of these production units can have very severe and far-reaching effects for producers. In the case of fruit trees, not only does the farmer lose the crop for that and several ensuing years but he suffers direct financial loss in having to replace the trees that have been lost through adverse weather. A parallel situation exists for many other crops including certain long-term forage stands.
Another and somewhat similar problem exists in the case of summerfallow. In certain

July 7, 1966
Crop Insurance Act
areas land that has been summerfallowed during the previous year with attendant costs accruing to the operation sometimes cannot be seeded because of excess moisture. The amendments make provision for coverage for losses of this kind. For this extended coverage, as it is called, the amendments authorize the making of contributions by the federal government equivalent to those made for crops per se.
Two minor amendments are included. The first of these alters slightly the deductible amount payable by a province under the reinsurance scheme. Under the present legislation the deductible, that is, the amount that must be paid in indemnities by the province before the federal reinsurance becomes operative, includes the premium receipts for the year, reserves from past years and an amount equal to 2J per cent of the total liability of the province under policies in force. The amendment reduces the deductible amount payable by the province by the amount of any reinsurance premium that it may have paid in that year. This is considered necessary since, because of the method of payment of the reinsurance premiums at the end of any insurance year, the amount of money in the fund for the payment of indemnities has been reduced by the amount of reinsurance premiums paid by the province.
Under the present wording of the act a province with no reserves for the payment of indemnities would be in the position of having to pay an amount equal to the reinsurance premium from its own resources together with the 24 per cent deductible before the federal government would share in the cost of further indemnities.
For the success of any program one of the most important features is that its users understand it fully. This was clearly brought out during the resolution stage of this bill by the hon. member for Mackenzie (Mr. Korchin-ski) who indicated that there was great need for more information on the program at the producer level. Accordingly, the act is also being amended to provide that agreements with provinces specify the manner in which policyholders are informed as to the benefits accruing to them because of participation in the program.
During the debate on the resolution stage of the bill the hon. member for Medicine Hat (Mr. Olson) asked why the experience of P.F.A.A. had not been fully utilized in the development of crop insurance. He also asked for assurance that P.F.A.A. would not be discarded or the act revoked at the present

time. The experience of P.F.A.A. has been used extensively in the development of crop insurance programs. The yield statistics and the administrative experience of the P.F.A.A. organization have been available and continue to be available to any province to assist in the developing of their crop insurance programs. In addition, the present director of crop insurance is a former director of the Prairie Farm Assistance Act. He is thus able to bring to the development of crop insurance the knowledge and experience gained by that organization in a period of 25 years.
I agree with the hon. member for Medicine Hat that the Prairie Farm Assistance Act should remain in effect until such time as experience has given farmers an opportunity to judge the relative merits of crop insurance and P.F.A.A. for themselves. I suggest to the house that we can depend on farmers to indicate by their participation in crop insurance programs which of these measures, in their opinion, offers the most useful protection.
In summary, then, the amendments increase the maximum permissible level of coverage from 60 per cent to 80 per cent, permit coverage on the basis of individual farm yields as well as area yields, increase the federal contribution to premiums from 20 per cent to 25 per cent, and permit coverage for fruit trees and perennial plants.
These are amendments which I am confident will result in a most useful and workable crop insurance program being made available to Canadian farmers.


Eric Alfred Winkler: Mr. Speaker, I realize it is not exactly six o'clock but so there will be no interruption of a speaker I wonder whether I might now suggest to the house that we move to the consideration of private members' bills. There is a disposition to pass a number of bills which were sent to the standing committee this morning and have been reported. Almost all of them deal with churches and church organizations. There is one exception but I understand there is a disposition to pass it as well. That bill stands in the name of the hon. member for Halton (Mr. Harley). These bills are Nos. S-33, S-18, S-29, S-37 and S-39. If there is unanimous consent to pass these bills perhaps that could be done and then we could return to the business now before the house.
[DOT] (6:00 p.m.)


Mr. Speaker:: Is that agreeable?


Some hon. Members:: Agreed.
July 7, 1986


Mr. Speaker:: I understand the hon. member for Saint-Hyacinthe-Bagot is now calling it six o'clock.


J.-H.-Théogène Ricard: Yes, Mr. Speaker.



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Speaker:: Pursuant to provisional standing order 39A it is my duty to inform the house that the question to be raised at the time of adjournment tonight is as follows: The hon. member for Prince Edward-Lennox (Mr. Alkenbrack), Expo '67-inquiry as to representation of agriculture.
It being six o'clock the house will now proceed to the consideration of private members' business as listed on today's order paper, namely notices of motions, private bills and public bills. I understand there is unanimous agreement of the house that we now consider private bills.


Some hon. Members:: Agreed.


Mr. Peters:: As specified in the hon. member's request.


Mr. Speaker:: We will consider the private bills specified by the hon. member for Grey-Bruce. Is that agreed?


Some hon. Members:: Agreed.



PRIVATE BILLS


[Stage Direction]
Bill No. S-33, respecting United Baptist Woman's Missionary Union of the Maritime Provinces-Mr. Coates.
Bill No. S-18, to incorporate Canadian Board of Missions of the Church of God (General Offices; Anderson, Indiana)-Mr. Smallwood.
Bill No. S-37, to incorporate Mennonite Central Committee (Canada)-Mr. Enns.
Bill No. S-39, to incorporate Lutheran Church in America-Canada section-Mr. Winkler.

[Stage Direction]
The house in committee on Bill No. S-29, to incorporate the International Society of Endocrinology-Mr. Harley-Mr. Rinfret in the chair.
Clause 1 agreed to.
Crop Insurance Act
On clause 2-Objects.
William Arnold Peters: Before this bill is passed I would just like to say that I am very pleased with the fact that this international society of specialists in endocrinology has decided to locate its headquarters in Canada mainly because its secretary general, who is a doctor in one of our Montreal hospitals and also a professor at McGill University, is a Canadian. I think it is a credit to Canada and particularly in keeping with the recognition which the Canadian medical profession has received from the international brain and heart organizations. I think our medical profession should be proud of this fact.


Mr. Cameron (High Park):: May I say, Mr. Chairman, that it is time that the hon. member for Timiskaming extended the same courtesy to other bills on the order paper as he has to the one we are now dealing with.


[Stage Direction]
Clause agreed to.
Clauses 3 to 11 inclusive agreed to.
Preamble agreed to.
Title agreed to.
Bill reported and read the third time and passed.
[DOT] (6:10 p.m.)
Eric Alfred Winkler: Mr. Speaker, before we move back to regular business I should like to thank all members of the house for their co-operation. It indicates to me that we are very efficient in the dispatch of business in this house, and I cannot agree with the pessimists that we will be unable to complete the balance of the business.


Mr. Deputy Speaker:: Order. By agreement the house will now revert to the business interrupted at six o'clock, second reading of Bill No. C-208.



CROP INSURANCE ACT


[Stage Direction]
The house resumed consideration of the motion of Mr. Greene for the second reading of Bill No. C-208, to amend the Crop Insurance Act.
J.-H.-Théogène Ricard: Mr. Speaker, Bill No. C-208 gives me an opportunity to make a few remarks and I do not intend to delay unduly the business of the house.

July 7, 1966
Crop Insurance Act
We welcome the introduction of this legislation in the house, since it merely supplements the one we had proposed ourselves while in power. We give our hearty support to the improvements that will be made in the existing legislation. If I meant to be nasty,
I would avail myself of this opportunity to say that the hon. minister has stolen a plank from our platform, since before the November 8 election, one of our electoral slogans was the improvement of the Crop Insurance Act so as to make it more readily available to farmers.
As the minister wishes to take advantage of such an improvement, we heartily support his efforts and hope the legislation will be enforced as soon as possible.
For a certain group of farmers, this measure is extremely important. In order to show the importance of crop insurance, I would just like to recall the two hail-storms that affected recently my constituency as well as that of the hon. member for Chambly-Rouville (Mr. Pilon). As to the havoc created in my riding, in the sole parish of Saint-Pie de Bagot, many farmers have seen the efforts of many months of work completely ruined.
Crops of farmers cultivating beans, peas, tomatoes, com, strawberries and even tobacco were heavily damaged on the evening of June 17 last. For instance, the bean crops of 35 farmers were affected and the assessment of the damage is between 80 and 90 per cent, while the damage to the acreage varies between four and 40 acres. These figures give a clear idea of the damages.
When crop insurance will be put into force, it will surely be a relief to the farmers who are at the mercy of the vagaries of weather.
Another disaster also struck the orchards in one part of my riding as well as in the riding of my friend from Chambly-Rouville, as I said earlier.
I have here a brief sent me by the secretary of the Societe Pomologique et Fruitiere du Quebec in which it is stated that 5,300 acres of orchards were damaged by the two storms on June 14 and 17 last. Representations are now being made to get subsidies from the federal and provincial governments.
Even if crop insurance were put into force immediately, the farmers and the apple growers concerned would suffer heavy losses.
Before closing, I would like to ask the minister to whom I wrote to receive favourably the representations which will

undoubtedly be made by the Quebec Minister of Agriculture.
I hope that this bill on crop insurance will get the full support of the house and I assure the minister of my full co-operation.


William Arnold Peters: Mr. Speaker, I am sure everyone will be interested in the proposition contained in this amendment to the Crop Insurance Act which has already been amended once since it was originally passed. It was passed in 1959 and amended in 1964. It is now being amended for a second time in a major way.
The Minister of Agriculture (Mr. Greene) can perhaps learn a lesson from the two pieces of legislation which he recently brought into the house, namely, the so-called $4 milk policy and this piece of legislation. In both cases there is the presupposition that the federal government has no jurisdiction in this field but that jurisdiction must be exercised by the provinces and that the federal government should hold out to the provinces a carrot which is large enough to provide an incentive to the provinces to do something about the situation.
I am aware of the fact that the Prime Minister (Mr. Pearson) during the election campaign last year indicated to the farmers, particularly in Timiskaming where he started his campaign, that the federal government was going to solve the problems we were experiencing in that area where there was an almost total agricultural disaster as a result of weather conditions. Hay had been lost, and this was followed by the loss of a large portion of the grain. In some areas almost a 100 per cent loss of hay and grain was suffered by the farmers.
The promise made at that time was that assistance would be available as soon as it was asked for. A hasty retreat was then beaten because this request could only come from the provincial government. The minister of agriculture of the province of Ontario told the farmers there were so many disaster areas in the province that if the riding of Timiskaming, which is almost identical geographically with the district of Timiskaming, were declared a disaster area, numerous areas throughout Ontario which were seriously affected would also ask for assistance and the province of Ontario would not be able to pay its share and assistance would not be forthcoming.
July 7. 1966

[DOT] (6:20 p.m.)
If there had been an insurance program in effect it would have covered the major cereal crops as well as the forage crops in Timis-kaming. In addition, it would have looked after the drought areas in Renfrew and eastern Ontario. These farmers would have found themselves in a position of being able to ask for fairly sizeable payments as the result of the provisions contained in the bill before these amendments were introduced.
There is an indication that such an insurance program as Is being undertaken by the federal government will probably be a good thing, but whether or not provincial governments will be able to conduct a successful crop insurance program that will be within their means is something else again. The situation in Timiskaming, in my opinion, has been drastic. It has been drastic in other areas and not merely because of a disaster in one year but because of the cumulative effect of disasters over a period of years. The Minister of Agriculture is well aware of the situation because of conditions in his own area over a period of time.
If we pass this legislation we are again asking the provinces to do something. We are adopting a philosophy that has been apparent in Canada, particularly when governments want to adopt it, of saying that something lies within provincial jurisdiction but at the same time passing overriding legislation in other areas. The minister mentioned P.F.A.A. I was interested in the detailed investigation of P.F.A.A. which occurred when the officials of that organization were here. They were asked whether recommendations had been made for the extension of this type of program all across Canada and in other fields. They have had a fairly good record in western Canada of preventing disasters at what we in Ontario would consider a reasonable cost. I am referring to those areas in particular where there is not a one-crop economy.
In the riding of Timiskaming a farmer will put about one-third of his farm in hay. There will be a considerable acreage put into hay and quite often it is allowed to go to seed. We have been producing about half of the timothy seed in the province of Ontario during the last two years. A great deal of the farm land in the area is put into either hay or seed production. Another one-third of the area is put into mixed grain and the remaining third is usually put into ensilage or temporary pasture which will be broken up in the fall. Therefore in the area there is a variety of
Crop Insurance Act
cereal production as well as forage crops.
This production is augmented by several other cash crols such as corn, potatoes and vegetables.
I have found that when farmers have discussed crop insurance they have discussed it in terms of the total crop. I am pleased to note that Ontario has taken steps to bring forage crops under their crop insurance scheme. However, if a farmer insures hay he will probably find the cost is more than the risk warrants. If he insures corn the same condition arises. If you are feeding beef cattle or dairy cattle and you are not operating your farm for off-farm sales but as a production unit, you can cut some of your grain for forage if your hay crop is a failure.
You can increase the amount of grain you feed your cattle and probably utilize the straw. Therefore the loss that you would suffer in total agricultural production would not be exceptionally great. For this reason the farmer feels it does not pay him to insure these crops. In the last three years in Timiskaming, particularly last year, what happened was that some farmers had a total loss. They did not get any hay and they lost their total grain production. They were not even able to get any straw that would cover their need for bedding material. The loss for these farmers was almost total; yet to guard against this loss they would have had to insure the grain, the forage crops and probably the pasture as well. The cost, therefore, is not sufficient to warrant the carrying of this type of insurance.
I believe the federal government has a responsibility in this area. What amuses me is the fact that we say we have jurisdiction in one field and yet not in another. I do not consider the prairie provinces to be a provincial unit. They still have representation on a provincial basis individually. I believe, therefore, that the Prairie Farm Assistance Act did take into consideration the fact that these were three provinces for which the federal government was able to provide crop insurance on a limited basis. If it was possible to have jurisdiction to enact the Prairie Farm Assistance Act, it should be possible also to enact a crop insurance program. I believe the reference to provincial jurisdiction is an excuse for not implementing federal legislation.
I would be very happy, Mr. Speaker, if the Minister of Agriculture would decide to enact a crop insurance program that would cover all the provinces of this country, and let the

July 7, 1966
Crop Insurance Act
Supreme Court declare it ultra vires. I know the province oi Ontario is not going to challenge the legislation because that government has been plagued ever since it thought of a crop insurance program in trying to find a program the farmers would support. I believe it is fair to say this program will not get the support of 50 per cent of the farmers. This is not an indication that 50 per cent of the farmers in Ontario do not need crop insurance. I think it is safe to say that about 90 per cent of the framers in Ontario are in desperate need of crop insurance that will allow them to count on at least the 80 per cent return which it is within the statistical ability of the crop insurance program to provide. I should like to see a real shuffle in the federal government in terms of the legal advice it receives. I know that when four or five constitutional lawyers get together you will get four or five different points of view. [DOT] (6:30 p.m.)
I should like to see an action with respect to the matters I have raised brought before the Supreme Court. Sometimes, however, it makes little difference what happens in the end result because the problem usually crops up in a different way next time.
We must face the problem of providing the type of insurance that is not tied entirely to payments made to a provincial agency. We shall have to operate this program on the basis of income. The crop insurance will have to be in terms of the income that is involved in the crop. I believe that there are ways in which this can be done.
I am sure the minister will agree that the insurance premium will not be collected as easily as if one were to levy, say, one cent per bushel going at the elevator or by doing it under any system similar to P.F.R.A. It will not be that easy. No matter whether the agricultural commodity involved is hay, feed grain, seed or any other crop that is handled as a direct sale, or whether it is something that comes from a farm production unit such as beef, poultry, swine or any of those commodities involved in the field of milk production, a percentage system based on the price of sale of those commodities I think could be worked out to enable the premiums to be paid as the sales of the end products are made. In this way the program could be universal and could be applied to all farmers.
I know that the Department of Agriculture will not recommend this. As we have heard in the committee on agriculture, forestry and rural development, the department has had

considerable problems in making arrangements in various fields of farm endeavour to get farmers registered in the various programs. I suggest the program would further complicate the department's problems immeasurably.
I am concerned that those in my area who need insurance most are the ones who can least afford it. It may be true that many farmers cannot afford to have this program if they have to insure a number of commodities. It is easy if you can insure one particular crop such as wheat, hay or corn. That is particularly so if you are in an area that is involved with only one particular commodity. I am sure this is true around Delta and in some of the southern ridings where tobacco is grown.
I suggest to the minister that the program will not work better now than before but that it will be extended to an additional number of farmers. What we are really doing is holding out a carrot not to the farmer but to the provincial governments so that they may implement this sort of program.
I have been critical of crop insurance since we first passed the legislation because I do not think it is universal and because I do not think it can be universal, not because the farmer does not want it but because he thinks he cannot afford it and that it is not designed for his particular need.
The federal government having raised its contribution, I think it is worth while to bring under the Crop Insurance Act fruit trees and perennials. They are found in limited areas in Canada and are a one-industry crop. It will not be difficult to insure crops in these areas under this act. The amount of money involved in losses and the amount of money that will be demanded as a premium by the provincial government will probably make this program feasible in those areas. They will benefit from this sort of insurance, and I am very pleased that this amendment has been included in the over-all amendments to the act. This amendment will be beneficial and is an answer to the requests of associations that have come before parliamentary committees in the past asking for this extension. These associations have shown us the unique problems of one industry areas that are dependent on one very perishable dommodity.
I would be remiss in my duty, Mr. Speaker, if I failed to ask the minister if he has taken into consideration a bill I have on the
July 7. 1966

order paper which will be increasingly important in this field as days go by. The bill proposes to the Department of Justice and other departments the national licensing and regulating of rain-making equipment. I should like the minister to draw an inference from what happened in his own area of the country. For several years the Renfrews were plagued with a very serious drought of long duration. The provincial government as a last resort, and it will admit it was a last resort, brought in rain-making equipment. I can remember being in the Ottawa valley at fair time. I am sure most members agree that the weather in southern Ontario is at its best at that time. Most of the fairs, including many little fairs in the Renfrew area, were rained out because of not only minor showers but torrents of rain. The farmers of that area not only had drought for four or five months throughout that year but because of the intervention of the Ontario Department of Agriculture they were deluged with rain in the latter part of the season. So they had two disasters in one year.
I admit I am exaggerating but I am raising the matter so that hon. members may consider this proposition. If the federal government undertakes to cover disasters with crop insurance and allows agencies not connected with the Department of Agriculture to interfere with the elements and bring about disasters, it will have to pay the losses caused by such disasters. I can remember the tears that were shed last year when we wanted to adjourn the house to discuss this matter.
There is some indication that we can interfere in a limited way with the elements. We may find ourselves, on the one hand, agreeing by government action to a situation with regard to which, on the other hand, because the elements have been interfered with, we have agreed to pay compensation. It is a little like saying that we will insure all the houses in an area that are burned down but we will not get rid of the arsonist in the area who is burning everybody's houses. You cannot insure the house if you cannot take care of the man who wants to burn it down.
I have raised these matters because I think they must be considered. I do not know how many farmers will take advantage of this program. It is very hard to put a figure on the damage that might be anticipated through natural causes and it is very hard to extend the liability to damage brought about by other causes.
Crop Insurance Act
[DOT] (6:40 p.m.)
The minister showed considerable initiative. At any rate, shortly after his appointment he was brave enough to take on the C.P.R. With a temperament of this type we would expect him to encourage the federal government to give more positive leadership in fields such as crop insurance and not to content itself with providing substantive legislation as a basis for action by provinces which may desire to make use of it in a limited way. We are paying a large percentage of the money and the provincial governments get the credit. At least under P.F.R.A. in days gone by the federal government got the credit and, moreover, used the patronage machine to great advantage. Today this aspect of the legislation has grown less important and it may be more of a liability than an asset.
Today we should look at these things from a national point of view and ensure as far as we can that real initiative is taken by the provinces, many of which are now unwilling to assume liability. In Timiskaming last year we, like other parts of Canada, were facing disaster conditions and very often farmers were unable to cope with the situation. As a result farmers in my area had to borrow money to buy seed. Germination from the corn harvested last year was less than 10 per cent. They had to obtain bank loans to buy hay which cost as much as a dollar a bale. I know that similar conditions existed in the Ottawa valley. I say we must provide more positive protection against disasters of this type than we have in the past.
As I say, I support this legislation because I believe it is creeping in the right direction. But I hope the minister will come back to parliament in the fall after considering this matter with the other agricultural ministers of Canada and present to the house a much more extensive form of insurance which will take into consideration not only the loss of crops but the income farmers receive from the sale of their products. If he does this I believe he will receive the support of most members of the house as well as the backing of all farm organizations for bringing into being a program which is likely to prove much more equitable to all concerned.


Mr. Raymond Langlois (Meganlic):: Mr. Speaker, the hon. member for Timiskaming (Mr. Peters) has touched on many of the points I had intended to raise. First, I should like to teU *he minister how pleased I am

July 7, 1968
Crop Insurance Act
that there is at last a policy to extend crop insurance to the eastern provinces. This program enabled western farmers to survive in a great many instances when they needed help, though I still have some hesitation about its application generally.
I was glad to learn that the ceiling is to be raised to 80 per cent. Crop losses in western Canada cannot be assessed on the same percentage basis for purposes of insurance as those in eastern Canada. Losses incurred in eastern Canada seldom result in a yield going below 60 per cent. Nevertheless they can be disastrous. Western farmers too must be pleased with the higher ceiling and with the provision which is being made to cover a wide field of farm production, including both raw products and modified products.
It is true there are many products that need to be covered. One is feed grain which is sold to nourish dairy cattle, beef cattle, poultry and swine. In the eastern regions of Canada there are a great many varieties of farming while in western Canada, at least in the prairie provinces, production is limited to beef or grain. In British Columbia fruit growing is important. There are a great many orchards in Ontario and in Quebec as well as in the Maritimes. In the Maritimes large crops of potatoes are grown and this crop too should be covered by the insurance program.
I do not know exactly which agency in Quebec will deal with this plan. So far I do not believe there is an agency in existence. But I shall be watching to find out how this process works. The federal government will be handing out money to the provinces to cover the losses incurred by farmers and, as the hon. member for Timiskaming mentioned, I certainly hope that without unnecessary interference in provincial affairs the administration here will keep a watchful eye on the manner in which these moneys are dealt with.
I have been a witness to some of these federal-provincial goings-on. The provincial authorities had a high hand in them but when it came to helping those who needed help there was a little favour shown to one and a little disfavour to another, or what we commonly call patronage. This should not be the case. If this is a public insurance plan no consideration should be given to political affiliation. When a farmer suffers from crop failure he needs help and usually he needs it immediately, not in three or four years time. A farmer in eastern Ontario seeds in the spring and in all likelihood he needs the

money from that crop to pay his debts. Some farmers have been waiting for a year or more for back payments on dairy products. If there is to be a similar delay in handing out crop insurance payments the prospect is an unhappy one. It may be said that payment will be made eventually. But in the meantime farm creditors are pressing and farmers cannot wait that long. For this reason I hope payments under this scheme will be made as quickly and as fairly as possible.
[DOT] (6:50 p.m.)
Another difference between agriculture in eastern Canada and western Canada is the price per acre paid for land. In the east farms are smaller and prices tend to be larger, though, of course, there are high prices and low prices. Production on the farms of eastern Canada, particularly in Quebec except for the Richelieu valley, is largely confined to poultry, swine, beef cattle and dairy cattle. Wheat and grain production do not amount to much because the land is not suitable for that purpose. The farmer has to depend on pasture and forage, and if crop insurance does not cover all these things it is useless to him. As the hon. member for Timiskaming said, the purpose of crop insurance is not to make money on it. Its purpose is to help a farmer get through a bad year without going into debt. As matters stand now, if some mishap occurs many farmers have to leave that industry.
In my own region there are some poor farms. Beef cannot be raised on stones. These farms are useless for growing crops or hay. Even mountain goats would have difficulty surviving on them. But some good farms in the area have closed down because of crop losses. I hope the provincial government of Quebec will expedite its legislation and work in co-operation with the federal government. Farmers must be helped in many ways whether they are engaged in the production of beef, swine or feed grain. If a farmer loses his hay crop and has to import feed at high price from a distance he may as well stop farming, considering the price he gets for his cattle today.
Judging by the energy the minister has displayed I am sure he will do his utmost to provide a better standard of living for the agricultural sector of the economy and without discrimination between east and west. Western Canada has appreciated crop insurance for some years, but the program will have to take into consideration different factors in eastern Canada where farms are
July 7, 1966

smaller and there is a greater variety of production.
I hope the minister will keep a vigilant eye on the provincial governments to see that they do not start fooling around with the funds given by the federal government. I hope the provincial governments will not delay in making payments to farmers in distress. If they do delay the farmers will have gone out of agriculture completely.
The remarks made by the hon. member for Timiskaming about rain-making machines caused me to smile because he said the provincial Department of Agriculture in Ontario sort of ordered things about to get rain. The former minister of mines and natural resources in Quebec, Mr. Rene Levesque, authorized the placing of these machines and I know that where he did there was plenty of rain. One year the hon. member for Chapleau (Mr. Laprise) swam around his constituency, and the same thing happened in Lac-Saint-Jean.
I do not know how good these machines are but I do know that where they were operated plenty of rain fell. In fact, where previously we had a drought we ended up with a flood. Both conditions are equally bad. There should be some control over the use of these machines in order that they will not produce more damage than they are designed to prevent.
When payments are made under crop insurance I hope they will be just and honest without taking into account a farmer's political affiliations, and I emphasize that last point because in the past there has been some discrimination. We look forward to the passage of Bill C-208, and after it has been in effect for some time and experience has been gained in its administration we shall look forward to future amendments to the legislation.


Mr. H. A. Olson (Medicine Hat):: Mr. Speaker, I appreciated the minister's answers to some of the questions I raised when the resolution was being discussed. I know that some of the people in the department have had a great deal of experience in the administration of P.F.A.A., particularly one official, and what I would like to know is whether the minister and his officials gave serious consideration to expanding P.F.A.A. so that it could provide a measure of crop insurance.
The $800 maximum that is available now certainly does not cover even the basic cost of putting in a crop on most farms, and of
Crop Insurance Act
course it is not applicable to all the areas in Canada. But with the experience which the personnel of P.F.A.A. have in its administration and the data contained in office records, it seems to me the government could have moved into crop insurance in a better way than by having each of the provinces plow new ground in trying to develop a satisfactory crop insurance program.
The minister has not indicated whether serious consideration was given to extending P.F.A.A. into other areas of Canada, increasing the levy presently being imposed on farmers, including other products in addition to cereal grains, and increasing the benefits provided. Crop insurance is essentially a plan to provide payments to remove the element of tragedy or disaster resulting from the loss of a crop in any one year. It is not intended that payments be large enough so that farmers would find it profitable to operate under crop insurance. In 1939 payments under P.F.A.A. were as low as $300. They now go up to $800 but, as I said previously, this does not cover the cost of putting in a crop. But it does provide that the farmer does not have to go on municipal relief.
[DOT] (7:00 p.m.)
If they have crop losses year after year such as happened in one part of my constituency for seven years in succession because of hail storms and so on, then even with the assistance of P.F.A.A. it is necessary for the provincial and municipal governments to provide additional service. I will just leave that for a moment. I am pleased to support the part of the bill which changes the coverage from 60 to 80 per cent.
In clause 3 there are amendments allowing the amount of the insurance to be effective on any crop in an area, or on any farm in the area. It is to be based on the average yield of the crop or on the farm, whichever is the greater. I suppose the details of administering this part of the amendment to the act will be left up to the provincial government and the provincial crop insurance administration. However, I should like to point out that there is a really serious administrative problem here in trying to establish what the average for a crop may be on a single farm experience. When the act will say from now on, if this bill passes, that it is permissible to issue insurance and to pay benefits on a single farm experience, it is not clear to me how this is going to be arrived at. Are we going to ask the farmer to keep records? That is.

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Crop Insurance Act
one way to determine what the average crop may have been for that farm.
It seems to me in this regard that we might be entering an area where losses in yield may fall within the category of losses over which a farmer had some control; in other words, he might be following poor farm practices. If he were able to buy insurance based on the average for that entire area, which naturally would include a number of farmers who practiced proper husbandry and who had reasonably good crops year after year, his would be a farm unit within a whole group which would be able to obtain insurance at the same rate as his neighbours who were practising good farming methods. Almost continually every year he would be collecting insurance.
I do not see anything in the federal act which prevents this kind of abuse. I raise this point because I know in certain parts of Saskatchewan, and even one or two places in Alberta, charges have been made that there are farmers who simply farm for the dry bonus, the P.F.A.A., and scratch in a crop in the spring without any particular diligence in so far as seeing that a good job is done, because they can collect P.F.A.A. in the fall. I am not saying this practice is widespread, because I do not think it is; but there are a few, and this irritates the good farmers who are around them.
Unless I am incorrectly interpreting this part of the bill, any farmer may buy insurance at the same rate in an area based on the average yield of the area or the farm, whichever is greater. If the average for the entire area is greater than the average for his farm, a farmer will be able to buy insurance up to 80 per cent of the average for the area. There probably are cases where an individual farmer may have been unable to produce 50 per cent of the average in the area, and if he continues that kind of practice, then he can collect 30 per cent every year.
I think we should be a little more careful and not allow this kind of abuse to creep in.
I suppose when the minister replies he is going to suggest that the provincial crop insurance legislation and administration ought to be set up in a way which would prevent this happening. But, Mr. Speaker, so far as the federal legislation is concerned this is permissible. I think this is something we should be careful about.
There is another point I should like to mention to the minister and the parliamentary secretary. In a number of statements the

minister has indicated that the federal government apparently is rather anxious to expand crop insurance to as many areas as possible, and very quickly, so that it will be unnecessary for the federal government to move into an area with emergency assistance in an emergency year. Because of the problems involved in working out the details, we come to a situation where we have a federal crop insurance scheme in respect of which it is unfair for the federal government to try to force crop insurance at an accelerated pace by withholding assistance for emergency purposes. I do not believe that a crop insurance program is something which can be forced.
I would hope that the pilot projects which now are operating in Alberta, and to some extent in Saskatchewan where they have been in it a little longer, and even in Manitoba, will not be forced to expand because of this kind of attitude. There will be agricultural years, not only in the prairies but in many other parts of Canada, when there will be disasters due to weather, drought, flood, hail frost, or other reasons. I think the federal government should be disposed to co-operate with the provincial governments in taking care of these emergencies without holding up the crop insurance program and saying that it will take care of these things, because up until now six out of the ten provinces have not even tried it at all. Even in those areas where there have been pilot projects going for some time, both the provincial departments and the farmers concerned are not satisfied there is sufficient experience to say that it is entirely satisfactory.
In closing, Mr. Speaker, I just wish to say that I think we are a long way from having worked out all the details of a completely satisfactory crop insurance scheme, taking into account the variations in climate, soil conditions, and also the many products that are produced in Canada. Therefore, I would hope that we do not try to move too quickly. I would hope also that we do not disregard programs such as P.F.A.A., which have been satisfactory in the past. I should like to see some change of attitude; that is, a recognition that the federal and provincial governments have a responsibility to deal with emergencies when they arise. I should not like to see it suggested that we are going to withhold this because we want to get crop insurance in as quickly as possible. If there was some kind of near perfect scheme, near perfect bill, and near perfect administration in existence at
July 7, 1966

the present time, then I think there would be some justification for this attitude. In the meantime I do not believe it is fair to force on provinces or municipalities some kind of an alternate scheme to meet emergencies, in view of the fact that these schemes are far from perfect at the present time.
[DOT] (7:10 p.m.)


Mr. W. H. Jorgensen (Provencher):: Mr. Speaker, I do not intend to take up a great deal of time, but I do wish to say that I am pleased by the amendments now before us. Perhaps I am in a somewhat different position from the three preceding speakers, because in the late 1940's I was instrumental in urging Manitoba farmers to press the provincial government to carry on an examination of the possibility of adopting a crop insurance program. As a matter of fact, I owned a grain farm, and I spent my winters travelling through the province encouraging farmers to take some action. As a result of the action taken the provincial government set up a commission in the early 1950's to study the whole question of crop insurance.
At that time I had made some examination of the programs that were in existence in the United States. I presented a brief on behalf of the farm organization to this commission, in which we recommended certain things in respect of a crop insurance program. That commission quite rightly recommended that a crop insurance program be set up, but only if there was federal assistance made available. No such assistance was forthcoming from the Liberal party, which was in office until 1957.
In 1957 this party assumed office and that year a bill was presented and enabling legislation was passed. In 1959 the province of Manitoba embarked on a crop insurance program on a trial basis. Test areas were set up throughout the province in order to gain the experience necessary to implement a crop insurance program which would be successful.
The hon. member for Medicine Hat (Mr. Olson) went to great lengths to point out the need to go slowly on this measure. As a matter of fact, the government of the province of Manitoba has urged these amendments on the federal government because in its experience it feels they are necessary in order that it may expand its crop insurance program to cover more crops, giving a wider range of coverage.


Horace Andrew (Bud) Olson: Mr. Speaker, I rise on a question of privilege. I did not say that the federal
Crop Insurance Act
government should go slowly in dealing with these amendments. I suggested it should proceed slowly and cautiously before extending crop insurance to areas where it has not existed before. I am sure the hon. member wants to be fair.


Warner Herbert Jorgenson: I accept the hon. member's explanation of what he intended to say, but his explanation does not make sense, because in the final analysis the provincial government requires this legislation in order to adopt or enlarge crop insurance programs. This decision rests with provincial governments, and rightly so. The provinces must decide what crops should be covered and what areas should be covered.
The hon. member for Timiskaming (Mr. Peters) was advocating a national crop insurance program on the one hand, while on the other complaining because farmers could not participate in existing programs. If they cannot participate in a program that has been developed by a provincial government to suit a province's needs, surely it is unreasonable to expect them to participate in a program that is supposed to have national application. The experience that is necessary for the development of crop insurance programs must be gained in particular areas where the crop insurance is to be applied.
I do not wish to assume the minister's task of explaining some of his comments, but because of my experience-I happen to be one of the few farmers in this chamber who has participated in a crop insurance program in my province-I do know something about crop insurance and I should like to make a few comments.
I cannot follow the arguments advanced by the hon. member for Medicine Hat, who suggested that P.F.A.A. should be expanded in relation to a crop insurance program. At the same time, he complained that farmers in certain areas were taking advantage of P.F.A.A. by sort of dipping their fingers into the till. If we enlarge the provisions of P.F.A.A. to cover crop insurance across the country, we would be creating a greater opportunity for this sort of thing to take place.
The hon. member for Medicine Hat also complained that certain farmers may not be following good farming practices, yet would benefit to the same extent as others. He suggested that some provision should be adopted to prevent this from happening. Under the Manitoba crop insurance measure

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there is a provision which allows the Manitoba crop insurance corporation to exclude any farmer from coverage if it is felt he is not following good farming practices. In the final analysis the determination as to whether or not a farmer is going to participate in a crop insurance program must be left to the farmer himself. This is one of the strongest arguments against a nationally applied insurance program. Only by looking at insurance rates applicable in certain areas and by considering crop prospects can a farmer decide what type of crop he is going to grow, and whether or not it will pay him to take out crop insurance. For that reason and many others the type of program that was developed in 1959, now being amended, is the type of program that in our experience in Manitoba works to the best advantage of the farmers, and those people charged with the responsibility of administering it.
This bill provides that summerfallow will be eligible for insurance coverage. This was not so in the past. Again I do not wish to take credit for the adoption of this principle, but I must say that for years I urged the Manitoba provincial government to adopt this type of amendment. In many instances in my area the farmers were not able to seed crops because of excess moisture. That is one condition that could arise to prevent the seeding of a crop. It is rather difficult to apply this type of insurance to second year crops because one has no way of knowing whether or not a second year crop can be sown. Even at this time, when the amendments are now before us, there has been a change in respect of summerfallow. This is the result of improved marketing conditions for grain. Many farmers now are not putting any land in summerfallow, but because of reasons beyond their control they are going to be in the position, of not being able to collect insurance if they fail to seed a crop in a particular year. In this area perhaps the minister will have to project his thinking further. I am not criticizing the amendment-I think it is a good one-but we have reached the point where we should consider action on a larger scale.
[DOT] (7:20 p.m.)
There can be no objection to the raising of the coverage from 60 to 80 per cent. However, I doubt very much there will be many farmers on the prairies who will wish to participate in a program on such an increased level of coverage. In connection with that, I should like to ask the minister a question with which he might deal in his statement. I wonder whether he could supply us with

figures in regard to the increase in the premium rate when the coverage is raised from 60 to 80 per cent. In other words, could he tell us what are the premium levels at the present time and what they will be in the future. I am sure his officials have done some calculations on this matter and can provide us with the answer.
So far as the intention of the federal government to increase its participation in the premiums is concerned, again they are behind the times because the 5 per cent increase in the federal government's contribution to the premiums has already been swallowed up by the application of the 11 per cent sales tax on farm machinery, by the increased interest rates which will accrue as the result of the recently stated intentions of the government, and by the increased cost of living. And so the farmer gains nothing from this 5 per cent increase, although the minister may try to take credit for doing something that is supposed to have some appeal.
I was rather amused at the reply which the minister gave to some previous observations which were made during the resolution stage of the bill. Clause 3 of the bill contains a provision under which the provincial governments are asked to specify the manner in which the province will inform each person to whom a policy of crop insurance is issued of Canada's participation in the insurance scheme under which the policy is issued. The minister said that the reason for this provision was that the hon. member for Mackenzie (Mr. Korchinski) in his statement during the introduction of this resolution outlined the need for greater effort in informing farmers of the program. I can just see the minister, after listening to these appeals by the hon. member for Mackenzie, dashing out to his officials and saying: "This clause must be inserted". I suspect, Mr. Speaker, there is another motive which is apparent to all of us behind this amendment, but I will not go into it.
In summing up, Mr. Speaker, let me say there can be little if any objection to the amendments that are now before us in this particular bill. We support them, although we question the value of certain measures that are proposed in the bill. I am thinking in particular of the 5 per cent increase in the premium rates which has already been dissipated, and the clause, which I have just mentioned, dealing with the publicity angle. However, I wish to assure the minister that we on this side of the house, intend to support the amendments that are now before
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us. We hope that more provinces across Canada will avail themselves of the provisions of this legislation in implementing crop insurance programs for the provinces, or for the commodity groups within the provinces. We think this is worth-while legislation which will be of tremendous assistance to the farmers.


Mr. Robert C. Coates (Cumberland):: I do not
intend to spend any time on this bill, Mr. Speaker. First of all I wish to say that I was very impressed by the comments made by the hon. member for Provencher (Mr. Jorgenson). They were like a breath of fresh air, after the statements made by the three previous speakers, who went on at great length and really said very little.
I should like to ask the minister whether, in commenting on the amendments, he might inform us of Nova Scotia's interest in moving into this field and providing this type of insurance to those farmers who might find this legislation to be of benefit to them. I may say that in Nova Scotia we do not have large farming operations; we have a good deal of mixed farming. In those areas crop insurance is of no great value because the types of losses we suffer are never so extensive as to offset the premiums.
However, the inclusion of fruit trees in the coverage under the act will be of real benefit to the fruit growers in the Annapolis valley. I think much interest will be shown by those farmers in participating in such a scheme. Farmers in my constituency will also be especially interested in the coverage of perennial plants such as blueberries and strawberries. Cumberland county is one of the major blueberry producers of the maritime provinces. I believe it is the largest producer, to quite a substantial degree, and in recent years we have noticed an increase in the production of strawberries, which might also be covered by this legislation. This additional coverage will therefore be of great interest to the farmers. May I also point out that farmers are at present participating in a more specialized way of producing for the frozen food plants, which have been increasing in number.
I will therefore appreciate hearing anything the minister might have to say which would indicate the attitude of Nova Scotia with regard to these amendments.
tTranslation]


Mr. Jean Berger (Montmagny-L'Islei):: Mr. Speaker, if you allow me, I should like to make a few remarks regarding Bill No. C-208.
Crop Insurance Act
Coming from a mostly rural riding, it is only natural that, like my colleagues, I should be interested in a legislation designed to improve the Crop Insurance Act. Considering the several disastrous years we have experienced lately, especially with regard to agriculture, of course, our interest in this bill is quite understandable.
I know that other members who do not share my political views, had the opportunity to speak at the resolution stage. Going through Hansard for June 21, I found that some members from Quebec were prevented, for lack of time, from showing their interest in the matter.
A few, last minute items of information make it possible for me, first of all, to congratulate properly the Minister of Agriculture for his interest in a situation which surely deserves our fullest consideration.
Obviously, the improvements which will be brought about will be a valuable contribution to the output of our farmers. I knew for a fact that Quebec-I am referring to the administration which has now been superseded-had indicated its intention to introduce crop insurance in the province of Quebec, but no legislation had yet been brought forward to implement such a hope entertained by so many of our farmers. I am convinced that with the increasing and imperative consideration agriculture requires, the new administration will also examine the problem. Meetings such as we witnessed today, between the federal and the provincial Ministers of Agriculture bode well for certain agreements. Some aspects of Bill C-208 have especially interested me, namely section 3, subsection (2), paragraph (fa) which reads:
-specify the manner in which the province will inform each person to whom a policy of crop insurance is issued of Canada's participation in the insurance scheme under which the policy is issued; [DOT] (7:30 p.m.)
This is one more commendable step which I support readily; it might do away with the goings on that have occurred too often in the past where, under joint programs, the federal government unfortunately did not get the credit it deserved in the case of similar legislation. This happened not only in my province but also in others where the provincial authorities have used such legislation to their sole benefit. I believe this provision

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Crop Insurance Act
will convince our constituents that their representatives in Ottawa-which we call at home the far-off federal capital-consider at least the problems which face them.
This increase from 20 to 25 per cent of the federal government contribution in respect of the premiums is praiseworthy. I trust that when circumstances allow in the future, and with the blessing of the Minister of Finance (Mr. Sharp), the contribution can be increased again perhaps, so that more help may be given those provinces which are less fortunate than others.
I also notice, with regard to extended coverage, that it is stipulated in clause 5A(l)(b) as follows:
-loss arising when the seeding of summer-fallowed land intended to be used to grow an insured crop is prevented by excess ground moisture, weather or other agricultural hazards.
I did not have time to discuss the matter at length with the minister, but several weeks ago I had the opportunity of advising him in writing of a rather special problem, in my riding at any rate, with regard to the fairly extensive damages caused each year, and even twice a year, to fodder crops by migratory birds on their arrival or departure, on the islands in my riding and especially on the south shore.
The problem is this: we have, and with reason it goes without saying, laws protecting migratory birds, which laws were introduced by the Minister of Northern Affairs and National Resources (Mr. Laing). Migratory birds are of great importance to the economy of my riding which is always in need of help, like many others of course. We want to protect the Canada goose, but if our farmers' crops are devastated completely when the birds swoop down on their fields, or on the strand, the farmers should be allowed to include those losses under the crop-insurance program. I am thinking in particular of the inhabitants of the islands whose crops are more severely affected by what constitutes, after a fashion, a devastating pest.
Of course, looking at it from the standpoint of sports, particularly during the hunting season in the fall, we are always pleased to welcome, for the greater part, our neighbours from the surrounding constituencies, from the city constituencies, even people from Montreal, and in particular the many Americans who, each year, have the good habit of hunting migrating fowl in our area. Then we are faced, if you want, with measures to protect

that sector of our economy, but also to handicap it. I would be very pleased if this item was included in the improvements to the Crop Insurance Act, in order to kill two birds with one stone or two good birds with two stones, if you will, Mr. Speaker.
The reason I took part in this debate was simply to thank those who had the excellent idea of making further improvements to this act. We know that a first improvement will open the way to others, and I dare hope once more in concluding these brief remarks that the new administration which took over in our province, will carry on with the good intentions at least shown by the previous administration to introduce, as soon as possible, in the province of Quebec, which, I am convinced, surely needs it, legislation with such an important scope in the interest of the agricultural class, which was unfortunately neglected for too long and not sufficiently assisted.
I hope these few remarks will be taken into consideration, and I wish to assure the minister that, thanks to the assistance and the valued advice his department will provide us with, and mainly the information that the Department of Agriculture will be pleased to forward to us occasionally, we will be able to become happy and particularly skilful propagandists who will succeed in selling the idea to a greater extent in our province, so that the Quebec farmer may benefit from legislation which will be entirely to his advantage.


Mr. Terence Nugent (Edtnonlon-Slraih-cona):: I am prompted to rise, Mr. Speaker, because of the remarks made by the hon. member for Medicine Hat (Mr. Olson). It seemed to me that in his handling of this subject he really illustrated the hesitancy that has characterized the lack of action of the government of Alberta. He remarked that, this legislation is far from perfect; that he was afraid that in the event the farmers had insurance they would not be able to come to the government for help in case of disaster; that he did not consider the scheme feasible as it is now. All of these remarks, Mr. Speaker, are occasioned by what I believe to be a fundamental failure to grasp the general idea behind this measure.
Of course it is not perfect. This is a new field. We do not have a model or a pilot program because of the varying climatic conditions and the different crops grown in
July 7. 1966

Canada. It was thought the most feasible insurance scheme that could be worked out would be one worked out by each province, cognizant of its own conditions and problems. The federal government therefore merely provided the vehicle by which they would co-operate with the provinces in any scheme that the provinces developed. The federal government would share the cost, allowing the provinces, because of their special conditions, to develop the scheme. Certainly if the hon. member for Medicine Hat had paid any attention to the idea behind the development of the scheme, we would not have heard the speech that we did hear. It is left to the provinces to develop the type of insurance scheme, the type of coverage best suited for that province. The scheme might only cover certain areas or certain crops; it may only be taken a certain distance and the province would find that would be about the limit of the practical coverage needed.
The whole idea was that the scheme would have to be developed by the province itself. I say the attitude of the hon. member for Medicine Hat is reflecting the slowness of our own provincial government in Alberta, which only last year started to take a tentative look at this act. They should have been developing ideas as they have been doing in Manitoba for the last four or five years, and by now we might have a substantial number of farmers receiving some benefit from this act. I cannot for a moment imagine how the hon. member could use the argument that these farmers, having been covered by insurance, would be unable to ask for aid in case of some disaster. He is probably referring to the number of times that farmers, because of drought or flood, have had to come to provincial and federal governments, hat in hand, and ask for special grants. I suppose that is a nice position in which to have the farmers. Certainly I cannot understand the hon. member's failure to realize the number of minor tragedies -minor because they are isolated-where the losses suffered by individual farmers would be alleviated by insurance. These are instances where it is not a serious enough matter nationally, perhaps even provincially, for the provision of any other source of aid.
[DOT] (7:40 p.m.)
I do not want to take any further time of the house, but I do hope that the province of Alberta might go to the province of Manitoba now, find out what they have learned, perhaps receive a lot of good help from them, and be able to make up for the last three or
Crop Insurance Act
four years which the province has wasted by not developing this scheme. They should start right away, as are other provinces, to develop a crop insurance scheme which would be of considerable benefit to the people of the province.


[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.
Warner Herbert Jorgenson: Mr. Chairman, several
questions were asked. I hesitated to ask the minister to do this on second reading, but perhaps he would be able to answer them now.


John James Greene: Mr. Chairman, there are two or three questions which I believe were pertinent and appropriate. I am afraid I cannot answer all of them because there are not complete or absolute answers to all of them.
The hon. member for Provencher asked a question with respect to the increase in premium by increasing the coverage from 60 to 80 per cent. I believe that was the question about which he was exercised. There is no categorical answer in this regard. It depends, of course, on the nature of the area being covered.
As hon. members know, the agreements with the provinces will prescribe the particular divisions of areas which are made, and alternatively, as conceived in the bill, this could even be on an individual farm basis. If a province, in its wisdom, saw fit, that would be an applicable method. The increase in the premium will depend on the nature of the area, the crop and the losses in the particular area. But certainly the increase from 60 to 80 per cent indicates a very considerable increase in coverage; and, like any other form of insurance, you pay for what you get.
I am sure that many farmers will find that the 80 per cent increase in a particular area which is growing a particular crop will be more than they wish to pay. I do not think that all of them by any means will want to buy an 80 per cent coverage policy. However, under the scheme they have the chance to buy even lower than 60 per cent coverage if they so wish.
I regret that I cannot give any categorical answer to this question. I am informed that in a high risk area, with probably a high risk crop, the difference between 80 per cent coverage and 60 per cent coverage could

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Crop Insurance Act
involve as much as double the premium; but
this is merely an illustrative figure. Certainly the cost would be higher, and in the case oi many crops it may well be that the farmers do not wish that type of coverage.
Judging from the many discussions which we have had, the added coverage is particularly attractive to growers, such as fruit growers, tomato growers and people engaged in these areas, where a 20 per cent loss represents a very serious loss. They are the ones who particularly require this coverage. I regret that I cannot be more categorical, but to the best of my knowledge there is no absolute answer to the question posed by the hon. member, except that which we will gain from experience.
The hon. member for Cumberland posed a question as to whether Nova Scotia is more likely to participate in crop insurance as a result of the amendments. My instructions are to the effect that, as a rule, when the maritime provinces suffer a loss it is not complete or total. Apparently the sovereign province of Nova Scotia enjoys such a salubrious climate that this type of complete catastrophe does not occur too often, or as often as in agricultural communities in other provinces.
In any event, Mr. Chairman, at the federal-provincial meeting which was held last February, I believe, to determine the directions in which the various provinces wished to move in the area of crop insurance, the officials from Nova Scotia indicated that the 80 per cent coverage in particular was of great interest to them. This is the specific aspect of this bill that seemed to indicate that it would be of interest to them, and that it might encourage the province of Nova Scotia to make further inroads into the area of crop insurance. I take it this is probably because of the fruit growing areas there. Since that time we have had no further indications as to what are the intentions of the province of Nova Scotia in this regard.
With regard to the hon. member for Medicine Hat, I am not going to give him a hard time, as did the hon. member for Ed-monton-Strathcona, but I will try to answer one or two of his questions. He was concerned that the premium structure might be conceived on an area basis, whereas the amount payable on loss would, on the other hand, be returnable on a farm unit basis. I may not have made that too clear in my original presentation.

This could not be the fact. The premium
structure has to be conceived either on one basis or the other. Either the premium structure in the provincial agreement may be on an area basis, in which event the loss ratio or risk in the particular area is calculated actuarially and both the premium and the return in the event of loss are based on an area basis, or alternatively, if the provincial agreements so prescribe, the coverage may be on a per unit or per farm basis, in which case the premium is calculated on the risk for that particular farm unit in light of the number of years required experience. The loss is then based similarly on the premium paid. In other words, you cannot have it both ways. Either your premium is based on an area basis, in which event so is your loss; or your premium is based on an individual farm unit basis, and so is your loss.
[DOT] (7:50 p.m.)
I might point out that this latter incentive in the act may not be achieved in all provinces overnight. It may well be that before a premium structure can be conceived on a per farm basis, some considerable experience is going to be needed before an actuarial calculation which is meaningful can be arrived at. But the aim toward a per farm coverage is, I think, a very desirable one, as pointed out by the hon. member for Medicine Hat, in that this will be the ultimate encouragement to the individual who is a good farmer and has an efficient production. He can insure his own farm according to the productivity and risk of that particular unit, which in the case of the efficient and productive farmer costs obviously less than if he insured on an area basis, where he may have to take some less efficient farmers in with him in the calculation of the premium structure. So, I think the hon. member points to the ultimate idea, namely a per farm coverage on an experience of a sufficient number of years determined adequately and actuarially, which will enable the good farmer to buy his coverage more cheaply than if he were less productive.
I do not need to tell my friend, who is extremely knowledgeable in this area, that this matter has been one of the complaints with respect to P.F.A.A. The good farmer pays in and never collects, and the others take money out almost every year. Twenty five years out of 27 I think is the record. This is the reason for having this matter within the ambit of this statute, so that ultimately coverage can be made on an individual basis. Such coverage will be most economical for the
July 7, 1966

effective farmer, and it will encourage
efficiency, because efficient farming will lead to a lower premium structure. In very much the same way, if you have not had an accident for 25 years driving your car, and if nobody under 25 years old drives your car, your insurance will be at a much lower rate than it would be if you were a high risk.
I might also remind the hon. member that the premium structure has to be approved by the provincial government, and therefore here we have to safeguard to the effect that the premium structure, when conceived under any agreement, will be sound actuarially. As a result greater participation in this scheme will be encouraged.
Those, I think are the major questions of which I have made a note, Mr. Chairman.


[Stage Direction]
Clause agreed to.
Clause 2 agreed to.
On clause 3-
Horace Andrew (Bud) Olson: Mr. Chairman, this is the clause about which I questioned the minister, and I am grateful for the additional information he gave a moment or two ago.
I wish to raise another point, for clarification. We talk about premiums and we talk about payments. I think the minister must agree that a third factor is involved in these insurance policies. The coverage now will be up to 80 per cent on a farm or on an area, whichever is the greater. This, however, is not going to happen in all cases. Certainly if clause 3 is passed, this will be permissible within the ambit of the premium, the coverage, and the award that may be paid.
Although it does not say so in clause 3, may I ask the minister whether a farmer may purchase insurance on the basis of the 80 per cent coverage of an area, and then collect, if there is an award, on the basis of the performance of his individual group?
If you take that paragraph apart, it says: -the amount of the Insurance to be effected on any crop in any area or on any farm in any area, which shall not exceed eighty per cent of the average yield of the crop in the area or on the farm, whichever is the greater,"
It does not say that it has to be on the same basis. The premium is something else if there is a group premium, and this can be adjusted for an individual farm, or with respect to an individual farm experience over a ten year period. Perhaps that would be a high enough period for anybody attempting to abuse this to be prevented from so doing.
Crop Insurance Act
I wonder if it is possible for a farmer to buy the insurance on the basis of the 80 per cent of the average crop in the area, and then to collect on the basis of his single farm experience?


John James Greene: Mr. Chairman, it is my understanding that if the coverage is taken on 80 per cent of the area, that then the premium structure is on this basis, and the loss will be an area loss and not an individual loss. But, if you cover an individual farmer, then you pay your premium on the ten year average on a farm once the statistics are available with respect to that farm. The loss then could be on an individual unit basis. At least that is my understanding.
I must admit that the section does not make that specifically clear. It is my understanding, in any agreement, that that is the interpretation which will clearly be made of the section, because any other basis I do not think would be actuarially sound.


Horace Andrew (Bud) Olson: Will it be necessary, then, for a farmer to elect at the beginning of the year, or when he buys the policy, as to whether the award will be made to him on the basis of an area group loss, or on the basis of his individual farm loss, whatever the reason of that loss. Would the farmer have to take that option when he pays the premium in the first place? Would he have to decide whether the loss should be collected on the area or on the single farm basis?


John James Greene: Mr. Chairman, it is my understanding that the specifics of the coverage will be covered in the federal-provincial agreements. In the early years, in all probability, there will not be sufficient statistics to determine what will be the acturial structure per individual farm. We will not have 10 year or 25 year records for each individual farm in the early stages of the program. If my understanding is correct, in the early years of the program in most provinces a per farm or per unit policy will not be available until the statistical data has been built up, and the records have been built up over a period of years to enable an actuarially sound program for individual farms to be conceived.
When that day comes you will have your choice, I understand, in electing what to do. You may ask yourself: "Do I go in with my group and pay the lower rates, or do I take the alternative policy, which is now available, because they now have the data enabling me to be covered individually? If I am an efficient farmer, one who has never had any

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Crop Insurance Act
loss, it may be that I shall elect to go in on an individual basis." In that case the premium structure would be more attractive.
I think I should stress that we are not enunciating that individual policies on individual farms will be available in all provinces right off the bat. The legislation makes this permissible, once the provincial organizations controlling the actuarial part of the plan have determined that there are sufficient statistics to enable individual coverage to be entered into.
We are not indicating here-and I do hope there is no misunderstanding on the part of the public-that we can make individual coverage, or the choice as between individual and area coverage, available immediately.


Edward Nasserden: Mr. Chairman, I am not too
sure that the minister is certain of the facts he is stating. If he is, I am not too sure that the prospect he has held out is one that would be brought about by this legislation.
My view of this particular clause is that it sets out that if you have an area where you cannot get enough farmers to form a group insurance area, that the one or two farmers who wanted so to elect could elect to be insured on an individual basis. This sort of thing would provide the province with an opportunity of going ahead in a limited way with the act, as it developed.
It seems to me that it is a little far fetched to say that this act was designed to provide a group insurance plan based on an individual farm record basis, regardless of the individual farmer. That is a long, long way from what we have, and it certainly would be misleading to the farm population of Canada if they were to think that.
I have not, in the brief time I have had to look at this measure, formed an opinion whether this is a good or a bad idea.
[DOT] (8:00 p.m.)
Generally speaking, my first impression is that it would not be particularly to the advantage of the farming community to proceed on that basis. I may be wrong in this view and may wish to amend it later. But that is my first impression. Bearing in mind the plans which some of the provinces are bringing in, or want to bring in, I wonder whether this is one way of introducing crop insurance into areas where there are not enough people interested in the plan to form a substantial group at the present time.


John James Greene: Obviously we cannot solve all the problems in this one amendment. What

we are trying to do is this: We are attempting to give a wider degree of choice and a more attractive choice-to make the package more interesting and bring in as many people as we can. Obviously, the concept of crop insurance will have little success if farmers do not think they are getting a good deal, and refrain from using it. The act as it stands obviously failed to attract a sufficient number of farmers. For this reason we now seek to make the selection as broad as possible, so that many more farmers will feel that this is attractive, and in their interest, and will buy it.
A plan which had the support of less than 30 per cent of the farmers within a province would obviously not be doing the job properly. It is only when we get a substantial majority of the farmers covered that we can feel the measure has been worth while.
With respect to this question of area coverage and individual settlement I should like to say, so that the hon. member who has just spoken, as well as the hon. member for Medicine Hat, may be clear on this point, that provision can be made for both. In the latter circumstances the premium would certainly be higher, but it is possible within the scope of the act for a province to issue a policy envisaging this type of coverage.


Horace Andrew (Bud) Olson: Let me be clear on this point. Is the minister saying that if a farmer purchases coverage on the basis of 80 per cent of the average crop in an area, and if he elects to receive an individual settlement or award in the case of loss, such farmer would pay a higher rate than the area rate?


John James Greene: Those are my instructions. A province, if it so wishes, can provide for this kind of coverage, subject to the fact that the premium structure has to be approved by the governor in council. The premium structure must be calculated according to actuarial rules on an area basis, and a farmer would get coverage on his own farm based on those calculations. If such a policy were available, the premium would be higher.


Horace Andrew (Bud) Olson: I appreciate the minister's remarks to the effect that it would take some time to accumulate records required to set up the premium basis and the coverage offered. But suppose, in 1967, the first year by which these agreements would be operative, a farmer bought insurance on the basis of 80 per cent of the average yield in his area, at whatever the premium for that area happened to be. Then suppose that for some
July 7. 1966

reason he lost his crop because of a flood or a hailstorm confined, for the most part, to his own farm. He would not be covered because he had not elected an individual settlement when he bought his insurance.


John James Greene: If in its wisdom the province saw fit to make it available he would have that kind of alternative. Whether the province would do so we shall not know until the agreements have been settled. But it is possible to do so within the legislation as drawn up.


Horace Andrew (Bud) Olson: Turning to subclause (2) of clause 3, I note what the hon. member for Provencher has referred to as being, possibly, a little advertising. I do not know who the minister expects will get the benefit of this advertising but perhaps, in the back of his mind, he thought the credit might properly go to the Liberal party. Perhaps the minister would tell us what formula he intends to use to ensure that the provinces, who receive contributions under this measure, inform the farmers, who will benefit from this legislation, of whatever he thinks they should know.


John James Greene: I can assure the hon. member that I do not have in mind that there should be anything about the Liberal party, or even about the Minister of Agriculture, on the policy. But I think the farmers will support a measure of this kind better if they understand it completely. When everything is made clear, they are in a better position to pass judgement on it. I think it is extremely important that the policies should indicate clearly (a) the coverage (b) the actual cost of the premium and (c) who is paying for it, and in what proportion. This is the idea. It will be made clear within the policy so that the individual farmer can see exactly what he is getting, what it is costing him and what contribution is being made by agencies other than himself.


Horace Andrew (Bud) Olson: I take it the minister intends to state this on the back, or on the front, of every policy as issued. Is that the method by which he intends to make sure that every insured person knows where the contribution is coming from?


John James Greene: That is the thought behind it.


[Stage Direction]
Clause agreed to.
On clause 4-Definition of "extended coverage".
Thomas Speakman Barnett: Will the minister tell us briefly what the situation will be in the commercial
Crop Insurance Act
fruit growing areas of British Columbia when the proposed section 5A comes into effect? Since there is no commercial fruit growing in my constituency I am perhaps not as well informed on this subject as I should be. In a general way this provision for coverage against the loss of an orchard of trees could be important to many areas of British Columbia.


John James Greene: Here, again, the extent and flexibility of coverage will be subject to the agreement with the province but the idea, as I understand it, is to enable fruit farmers in particular to cover the loss of their trees, not only with respect to the cost of replacement of the trees but against loss of income in the interval before new trees become productive.
[DOT] (8:10 p.m.)
Again I think there will have to be a broad area of coverage in order to make the policies saleable and attractive, because I think there is a wide variety as to the method of operations, and as to the extent which tree farmers rely exclusively on fruit farms for their income. It would be a very expensive policy that would encompass one year's loss of crop, plus the cost of replacing the trees, plus six, eight or ten years before another crop was produced. There will have to be degrees of coverage available so that each individual farmer can select what is best suitable to his particular operation, bearing in mind what he can afford to pay.
The attempt being made here is to make the clause as broad as possible to enable the most flexible agreements to be entered into with the provinces, so that policies will give as wide coverage as possible. We have not tried to be dogmatic and specific. We appreciate what is best for one region may be different from what is best for another.


Thomas Speakman Barnett: Has the minister's discussion with British Columbia led him to believe that this clause will be applicable in that province?


John James Greene: In respect of losses in the fruit tree areas, we have had extensive negotiations with the minister in B.C. As the hon. member knows, serious losses occurred there in the very recent past, and the experience in B.C. has been important with respect to our drafting of this clause. I feel certain the clause as drafted meets the needs of the B.C. fruit growers, to the best of our ability to draft it.

July 7, 1968
Crop Insurance Act


Thomas Speakman Barnett: Part of the clause reads:
-loss arising from the destruction in whole or in part of stands of fruit trees or perennial plants other than trees-
Is nursery stock covered by this? Losses have occurred recently in the southern area of Vancouver island where nursery stock is quite an important part of the agricultural industry, and these losses were due to an invasion of the balsam woolly aphis. Some nursery stock has been rendered unsaleable, and in fact has had to be destroyed. Further, the holly growing industry is important in certain areas in that part of the province. Would holly trees be classified as fruit trees?


John James Greene: The judicial officers who advise me in these matters say that wording the clause in this way encompasses such plants and crops as the hon. member has referred to, including nursery stock. The intent is to cover that entire ambit. I am no longer in the legal business and would hate to hazard an opinion whether the draftsmen have been successful, but that has been the intent.


Thomas Speakman Barnett: I do not have the advantage of knowledge of the law that the minister has, but trees which do not bear fruit might be ruled by a law officer to be excluded from the benefit of coverage.


John James Greene: It may be that my hon. friend has discovered something which has not been thought of previously. I shall take the matter up with the officers to see that this is the correct interpretation. As laymen sometimes do, the hon. member may have stumbled upon a legal defect, but I shall take the matter up with the officers concerned.


Barry Mather: Will this clause be applicable to the small fruit growers in the lower mainland of B.C., such as strawberry growers, who were hard hit by crop losses a year or two ago?


John James Greene: I can assure the hon. member that the strawberry growers of B.C. were also very much in our mind because we heard much about their losses. I am not sure whether it is this particular clause which extends coverage to them, but I believe it does. Certainly they are covered somewhere within the ambit of the bill.


Mr. Johnston:: A few moments ago when dealing with the loss of fruit trees the minister referred to an amount of income from other sources. Would this enter into any complete crop insurance system? One of the

thorny problems with other aid programs is the amount of outside income which is taken into consideration. This is something that should be avoided and cease to be a factor in a crop insurance scheme. Possibly I misunderstood the minister.


John James Greene: I regret that I may not have made myself clear in this regard. I can assure the hon. member that under this legislation there is neither a means test or a needs test. The point I was trying to make is that we need the broadest possible flexibility with regard to coverage of fruit orchards in particular, a (8:20 p.m.)
I understand there are many people who have small orchards which do not represent their total income, but which is additional to their income. The rest of their income may be derived through other farming, or through work in industry, and they may have a few acres in fruit trees. Such a farmer may not wish to have as expensive a coverage as someone who depends for his entire livelihood on fruit trees. Therefore, I think the widest choice should be available so that the man who does not wish to buy comprehensive coverage may have available to him a more limited coverage at cheaper rates. He may not want coverage which is as expensive as that required by someone who is depending on the crop for next year's living. I believe the widest choice should be made available to the people.


Horace Andrew (Bud) Olson: With respect to subsection (b) of section 5A in clause 4, where it says:
-loss arising when the seeding of summer-fallowed land intended to be used to grow an insured crop is prevented by excess ground moisture, weather or other agricultural hazards.
I am wondering whether it will be necessary for the farmer to state his intentions early in the season. When will the administrators of the crop insurance scheme in the province have to know whether or not the farmer intends to seed this particular parcel of land? What I am most concerned about is the word "intended". I am wondering what will be the interpretation of this word and whether or not there will be a date. Will it be May 15 or May 30, or when will a farmer have to make it known to the administration that he did in fact intend to seed this land. Surely most farmers in most areas will not be purchasing an insurance policy until they have the crop seeded.
July 7, 1966


John James Greene: Well, Mr. Chairman, again this is one of the areas in respect of which up until now many provinces have thought it would be impossible to insure in any meaningful way. One of the reasons it has been difficult to expand crop insurance into areas such as this has been the doubt as to whether or not it would be practicable. The best answer I can give is that the purpose is to permit the provinces to carry policies which have the maximum flexibility, so that the coverage can be such as to enable the individual farmer to meet his needs. I do not think I can give my hon. friend an adequate answer in respect of subsection (b).


Horace Andrew (Bud) Olson: What I am particularly interested in is whether or not a farmer will be able to buy insurance after it is clear that he would not be able to seed the land because of excessive moisture.


John James Greene: My understanding with regard to that specific question is that the only time he will be able to buy that kind of insurance will be prior to the normal seeding time, and that it would not be available to him thereafter.


Alfred Dryden Hales: In respect of section 5(a), it is my understanding that this covers fruit, but the word "fruit" is not included here. It says "fruit trees", but my interpretation is that it covers the fruit crop.


John James Greene: Subject to correction, I believe one could include fruit under the existing act.


Alfred Dryden Hales: I should like to have the point cleared up as to whether or not fruit definitely is covered. In subsection (b), we have the expression "ground moisture". It is one thing to have an act and another thing to administer it. In this regard I think the minister will run into one of the greatest problems he ever has had in enforcing an act. What does excessive ground moisture mean? I can see the minister as a lawyer in a court room developing an entire case around what is excessive ground moisture. To me this phrase is very wide, and should be narrowed down much more than it is.
I also feel that if you are going to give crop insurance to people with summerfallow, and it is flooded over one year, probably because it has not been properly tiled, and then the next year it is flooded over again, that man should tile the land. Is he entitled to insurance? I think this will be very difficult to enforce. We speak of fruit trees. How will their value be established? They may be
Crop Insurance Act
young trees, half-bearing, or full-bearings trees. I think there is a real problem for the department in this.


John James Greene: Mr. Chairman, I have no doubt there will be problems. One of the small mercies within all this is that I will not have to administer it. It will be administered within the ambit of the insuring authority in the provinces. Again this is an attempt to broaden the scope of the act to enable the making of agreements which will give coverage in mixed farming areas in respect of fruit trees and forage crops which has not previously been available. In all fairness, and without taking anything away from the western farmer, I think I should say this act probably was more beneficial as previously drawn in respect of a one-crop farm, such as that which produces wheat.
The province of Manitoba used the act as it exists very extensively, and this was very encouraging. This is an attempt to break new ground in an area where up until now it has been thought that it would be too difficult to insure. Such being the case, I think undoubtedly there will be problems such as are envisaged by the hon. member. It must be remembered that in any particular area this must be actuarially sound; the losses must be covered by the premium structure. Certainly the insuring authority, be it a board, commission, or whatever administrative agency is created to administer the program, is going to have to assure itself that this scheme is acturarially sound.
With regard to the coverage involving excessive ground moisture, I think the policy itself likely will have to spell this out specifically. I believe we run into the same thing with a fire insurance policy which covers water damage. The arbitrating authority has to determine whether this is water damage caused to the items which are covered under the policy.
[DOT] (8:30 p.m.)
Certainly I am not trying to minimize in any way the difficulties or problems that will have to be faced in making available policies that give coverage for such things as excess ground moisture and an appropriate interpretation by the authority which will determine the loss-that of course will be the insuring authority-but I feel sure this measure will give an opportunity for broader coverage than presently exists.
While I feel very certain there will be difficulties such as the hon. member has

July 7, 1966
Ways and Means
envisaged, I do believe this measure will make coverage available on a sound and effective basis. In early years of coverage I am sure there will be some problems in respect of forage crops, and that there will be some people who will feel that the coverage has not been what it should be. This always happens in respect of insurance. However, I do believe that this is the only way we can give an opportunity for coverage, particularly to eastern mixed farmers to whom it has not been available before, because the act was not sufficiently broad.
I am not minimizing the difficulties envisaged by the hon. member, but I feel confident we will be able to work these things out and thereby afford a wide choice of coverage on a premium structure which will be advantageous to many areas of agriculture which are now not covered under the act.


[Stage Direction]
Clause agreed to.
Clause 5 agreed to.
Title agreed to.
Bill reported.
The Acting Speaker (Mr. Rinfret):: When shall the said bill be read a third time?


An hon. Member:: By leave, now.


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



WAYS AND MEANS

[Stage Direction]
House in committee of ways and means, Mr. Rinfret in the chair.
Edgar John Benson: Resolved, that toward making good the supply granted to Her Majesty on account of certain expenses of the public service for the fiscal year ending 31st March, 1967, the sum of $825,462,241.67 be granted out of the consolidated revenue fund of Canada.


Michael Starr: Mr. Chairman, I wonder whether the minister could assure the house that this resolution is in the same form as resolutions of this type have taken in the past?


Edgar John Benson: The bill to follow this resolution will grant full supply for the main estimates of the ten departments whose estimates have been approved by the committee of supply.

One of the things this bill will do is point up the extent of the accomplishment of this parliament during the current session. The committee of supply has approved the estimates of ten departments including Citizenship and Immigration, Defence Production, Forestry, Indian Affairs, Industry, Legislation, National Revenue, Post Office, Privy Council and Veterans Affairs. What we are proposing by this bill is that full supply be granted for these departments, the estimates of which have been approved by the committee.


Stanley Howard Knowles: Mr. Chairman, I think it should be said by at least one person that this is a welcome move and one which seems to me ought to have been adopted years ago. I refer to the approval of the estimates of those departments which have been finally dealt with by committee of supply. This should be noted in particular, in case someone makes reference in the press to the fact that we voted nearly a billion dollars in just a few minutes. What we are doing is finalizing what we have dealt with in great detail in committee of supply.


Edgar John Benson: Mr. Chairman, I should like to point out that what the hon. gentleman has said is quite true. What is happening now is in effect the culmination of a great deal of effort by members on all sides of the house in dealing with supply for the departments mentioned. Let me also say that it might be appropriate in future, after this house approves the estimates of a particular department, to introduce an individual supply bill, thus recognizing the fact that we have dealt with the estimates of that department for a complete year.


Stanley Howard Knowles: I have just one other comment to make. I take it that once we pass the bill to follow this resolution, any interim supply bill brought forward will cover a lesser amount than otherwise might have been the case?


Edgar John Benson: Yes.
Resolution reported and concurred in.
Mr. Benson thereupon moved for leave to introduce Bill No C-224, for granting to Her Majesty certain sums of money for the public service for the financial year ending the 31st March, 1967.
Motion agreed to and bill read the first time.
July 7, 1966


Edgar John Benson: the second reading of the bill.


William Arnold Peters: Mr. Speaker, I am in agreement with those who are pleased to note a change in the formula and that we are not agreeing to twelve twelfths of certain requirements. I suggest that this new formula should be followed, but that it would be more realistic to follow it twice a year, rather than after the estimates of each department.
I do not wish to make a speech, Mr. Speaker, but-


Some hon. Members:: Hear, hear.


William Arnold Peters: By popular demand I shall now have to make a speech, and I appreciate the invitation.
One of the departments covered by the bill is Veterans Affairs. There is a great deal of concern in the minds of many veterans because they will not have the opportunity of speaking about a certain problem following the passage of this bill, in view of the fact that it covers the total appropriation for the Department of Veterans Affairs.
The problem to which I refer relates to something we have been talking about for several days, the old age pension increase. Certain veterans feel that an increase in old age pensions will be granted in some provinces through the passage of supplementary legislation by provincial legislatures, and that 50 per cent of that increase will be paid by the federal government.
[DOT] (8:40 p.m.)
Of course this will be fine as far as it goes, but I am told that the veterans have already been informed that if they receive this supplementary benefit as the old age pension increase, then their war veterans allowance will be reduced by the same amount. It seems to me a very sad state of affairs that the Department of Veterans Affairs should send out this notice on a nation-wide scale to compensate for the information which has been disseminated by another federal department through the provincial election machinery, all of which is not normal procedure. I think it has been generally agreed by all members in this house that veterans allowance is a reward for services rendered, that it is not gratuitous but that it is deserved by the veterans. This payment is made under very strict conditions and in a limited number of cases.
Ways and Means
I should therefore like to know what remedy the Minister of Finance, or maybe the Minister of National Revenue, will apply to correct this situation in which provinces pay an additional supplement to the old age pensioners, and the veterans affairs department reduces the payment made under the War Veterans Allowance Act by a similar amount.
We have always tried to maintain the pension structure in such a way as to keep pace with the payments in other sections of our social security program. In my opinion the veterans of this country should not be the ones to be unfairly treated. For this reason I should like to receive some information regarding the intentions of the government in dealing with this problem, and an explanation of the stand taken by the Department of Veterans Affairs according to which the supplementary payments made by the province are deducted from the allowances of the war veterans. I do not wish to belabour the point, but I think it should be raised and answered because I think it is doubtful, unless pension legislation is introduced in this session, that there will be an opportunity to raise this matter.
This may be one of the reasons for the reluctance shown by the department in passing the estimates before this situation is clarified. I think veterans all across Canada should be assured that if there is any advantage to be gained from the additional amount being paid by the provinces, which I understand approximates $25, $12.50 of which would be paid by the government, this amount should not be reduced from the war veterans allowances.
What this measure means, in my opinion, is that the ceiling of the allowances which the war veterans collect is changed, old age pension and other forms of aid being included as income. They should therefore be assured that this limit will be raised sufficiently to allow the veteran the benefit of living in a particular province where this extra payment is made.


Edgar John Benson: I should simply like to say, Mr. Speaker-


Mr. Deputy Speaker:: May I point out that if the Minister of National Revenue speaks now, he will close the debate.


Edgar John Benson: May I say, Mr. Speaker, that the questions raised by the hon. member are

July 7. 1966
Ways and Means
certainly worthy of consideration by this government. I should also like to add that no government has been more sympathetic toward the position of veterans in Canada than has this government. The Minister of Veterans Affairs (Mr. Teillet) is a distinguished veteran. As the hon. member knows, he is now away in Europe paying proper tribute to individuals who gave their lives for Canada in the last two wars. I wish to assure the hon. member that the question he raised will be brought to the attention of the Minister of Veterans Affairs and of the cabinet in a most sympathetic manner.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Batten in the chair.
Gilles Grégoire: Mr. Speaker, we are told that there are no French copies of the bill. This is exactly the same thing that happened this afternoon.


Edgar John Benson: I understand there are copies of the bill in French.
Clauses 1 to 5 inclusive agreed to.
Schedule A agreed to.


[Stage Direction]
Preamble agreed to.
Bill reported.
Edgar John Benson: the third reading of the bill.


Gilles Grégoire: Mr. Speaker, before giving leave to proceed to the third reading of the bill-does this mean that from now on, when we come to supplementary estimates, as we are going to do immediately, according to the order paper, if we accept to proceed to the third reading of this bill tonight-we shall not be able during the study of supplementary estimates to analyse the expenses of the departments, the budgets of which will be approved tonight? Does this mean that, if we discuss supplementary estimates immediately afterwards, we shall not be able to deal with the estimates of the departments mentioned in the bill?
[DOT] (8:50 p.ra.)


Edgar John Benson: I should like to indicate what this

procedure means. It means that these estimates, which were approved by this house, will proceed to final approval through a supply bill. Where, for example, a department may require a supplementary estimate for any particular item, then of course that department will be available for discussion. If, for example, a department obtained its supply through this particular bill and had no supplementary estimates, then it is completed. I think, Mr. Speaker, that this is just and proper. If the committee has completely considered the estimates of a department, then unless that department comes back for further consideration by way of supplementary estimates, the consideration of that department should be completed. This is really the only way in which we can proceed in a businesslike manner.


Gilles Grégoire: Mr. Speaker, in view of the fact that supplementary estimates will come before us immediately afterwards and also that I would have a few words to say as regards one department, and I would not like to delay the business of the house by speaking to this bill, I would ask that the motion for the third reading be made tomorrow instead of today.


Edgar John Benson: I would like very much to have third reading of this particular bill so that it could go forward to the other place, where they might consider it. I would say, on behalf of the government, that if my hon. friend has anything to raise about any government department in this particular bill, the government will not object to his raising it tomorrow.


Gilles Grégoire: Mr. Speaker, in view of the goodwill of the Minister of National Revenue (Mr. Benson) and since what I had to say concerned precisely his department, I shall do so on consideration of interim supply with the permission of the Minister of National Revenue and, then, in view of the fact that the minister pledges to let me say a few words on interim supply about his department, we agree to give third reading immediately, if the minister agrees to our suggestion.


Edgar John Benson: That is quite acceptable; I am sure he could not say anything derogatory about my department.
July 7. 1966


Gilles Grégoire: Mr. Speaker, if the minister provokes me into it, I am ready to do so right now, and I believe that what 1 have to say about his department will bring a little shameful red to his cheeks.


[Stage Direction]
Motion agreed to, and bill read the third time and passed.

[Stage Direction]
House in committee of supply, Mr. Batten in the chair.
Edgar John Benson: I move:
Resolved, that a sum not exceeding $1,662,982,791.93, being the aggregate of-
(a)	four-twelfths of the total of the amounts of all of the Items set forth in the Main Estimates for the fiscal year ending the 31st March, 1967, laid before the House of Commons at the present session of Parliament, not otherwise provided for, except Finance Item 15 for which the proportion is three-twelfths, and Transport Item 103 and Loans, Investments and Advances Item L40 for which no proportion is granted-$1,252,481,028.67;
(b)	an additional four-twelfths of the total amounts of Dominion Bureau of Statistics Item 10, Mines and Technical Surveys Item 40, Loans, Investments and Advances Items L75 and L80 (Schedule A) of the said Main Estimates-$4,299,-333.83;
(c)	an additional three-twelfths of the total of the amounts of Mines and Technical Surveys Items 15 and 70 (Schedule B) of the said Main Estimates- $1,902,250.00;
(d)	an additional two-twelfths of the total of the amounts of Mines and Technical Surveys Items 55 and 75, Secretary of State Item 40, Loans, Investments and Advances Items L30 and L95 (Schedule C) of the said Main Estimates-$25,681,300.00;
(e)	an additional one-twelfth of the total of the amounts of Agriculture Items 5 and 55, Finance Item 10, Fisheries Item 10, Justice Item 1, Mines and Technical Surveys Items 20, 25, 35, 45, 60, 80, 85, National Film Board Item 1, Northern Affairs and National Resources Item 15 and Transport Item 5 (Schedule D) of the said Main Estimates-$16,293,-229.17;
(f)	seven-twelfths of the total of the amounts of all of the Items set forth in the Supplementary Estimates A for the fiscal year ending the 31st March, 1967, laid before the House of Commons at the present session of Parliament-$193,924,378.08;
(g)	four-twelfths of the total of the amounts of Agriculture Item 35a, Defence Production Item 20a, Finance Item 4a, Mines and Technical Surveys Item 40a, Transport Items 102a and 103a (Schedule E) of the said Supplementary Estimates-$5,709,522.67;
(h)	two-twelfths of the total of the amounts of Finance Item 15a, Mines and Technical Surveys Item 75a, and National Research Council, including the Medical Research Council, Item 10a, (Schedule F) of the said Supplementary Estimates-$8,459,-333.34;
Interim Supply
(i)	one-twelfth of the total of the amount of
Loans,	Investments	and	Advances	Item	L40a
(Schedule G) of the said Supplementary Estimates -$966,666.67;
(j)	seven-twelfths of the total of all the Items set forth in the Supplementary Estimates B for the fiscal year ending the 31st March, 1967, laid before the House of Commons at the present session of Parliament-$103,265,750.00;
(k)	four-twelfths of the total of the amount of
Loans,	Investments	and	Advances	Item	L32b
(Schedule H) of the said Supplementary Estimates- $50,000,000.00,
be granted to Her Majesty on account of the fiscal year ending 31st March, 1967.


Harold Warren Danforth: I cannot allow this opportunity to pass, Mr. Chairman, without trying once more to bring before the government the sorry plight of the agriculture industry and the trouble it is having with the gap between the cost of production and returns from the sale of products. I should like to dwell for just a moment tonight on the fact that men who have been engaged in this noble industry are selling their farms for whatever the market value may be, and going to the cities with their families to try to obtain employment in whatever fashion they can in order to provide a living comparable to that of their neighbours. I am very much concerned that here, in the province of Ontario as in the other provinces of Canada, we find men leaving the land in ever-increasing numbers.
Tonight, I should like to dwell for a few moments on the troubles of the dairy industry. I do not wish in any fashion to display partisanship in relation to this subject, but to point out as honestly and fairly as I can some of the major troubles facing this industry. Certainly the government should be concerned over the fact that in the last 10 months that there have probably been dispersed, principally in Ontario, as many valuable dairy herds as in the preceding five years. Certainly something is terribly wrong when these men put on the market blood lines that are the results of perhaps two or three generations of concentrated work. The same thing is happening in the poultry industry. In the last three or four years perhaps half of the small producers of eggs in the province of Ontario have gone out of production. They no longer produce eggs even for their own consumption, because they feel it is no longer economic under the conditions that exist today.
These are not the so-called marginal and submarginal farmers; these are professional farmers. These are good farmers. These are

July 7, 1966
Interim Supply
farmers whose family enterprises were the pride of the neighbourhood. What is wrong? Why are farm delegations approaching every provincial capital and the federal capital in the hope that some assistance of a financial nature may be forthcoming to relieve them of this terrible burden? I have before me a small table from which I should like to quote. It has been compiled by the Ontario Milk Marketing Board and I think, in some small measure, indicates what is wrong. I know there are many figures that can be cited pro and con. I know there are figures to show that dairy production units in Canada are receiving ever more money for their produce. These figures are available. However, the fact still remains that farmers are not receiving enough money to cover their expenses. These are figures put out by the Ontario Milk Marketing Board and they show that in the period 1955-65 the price received by farmers per hundred for milk has gone up 17 per cent. I believe it has. However, please note that in the same period farm wage rates rose 54 per cent; farm machinery prices increased 46 per cent; taxes and interest rates were up 58 per cent. The composite index for farm required goods and services rose 36 per cent. We do not need a mathematician to calculate that when this happens there is bound to be trouble in the industry.
[DOT] (9:00 p.m.)
There have been discussions in the house and questions asked of the Minister of Agriculture about his new dairy policy. There is no doubt in my mind and in the mind of every man in the industry that this government did try to do something to help the dairy industry. In other words the government was familiar with the problem which existed. But it has been found-I think there is general agreement on this on all sides of the house-that under the very workings of this policy not every farmer will get an average of $4 per hundredweight for his milk; this is not going to happen.
I would point out that the very report of the minister himself, whether intentional or not, and the advertisement carried in all of the trade papers in the field of agriculture across the country, led the milk producers to believe that they would receive a return of $4 per hundredweight for their milk. I should like to quote one of these ads put out by the Canadian Department of Agriculture, Ottawa, under the signature of the Minister of Agriculture. In large headlines it states:
The new federal price support benefits all milk producers. Average return $4 per hundred.

On reading this, any dairyman would be of the opinion that he is going to receive $4 a hundred average return for his milk. When he does not receive that price, even though you tell him to read the fine print or put up any alibi you want, whether it is right or whether it is wrong, the farmer concerned will be of the opinion that the policy is not working for him.
I should go on to read the fine print because I know the Minister of Agriculture would wish me to do so in order to be perfectly fair. It states:
The federal government, through export assistance and direct purchases of such products as butter, will create a demand which will enable processors to pay $3.25 per hundredweight of manufacturing milk with a 3.5 per cent butterfat content.
I must be absolutely fair to the Department of Agriculture and the minister, because I point out that it goes on to say:
However, the government has no authority to set the prices processors pay producers. It is in your own interest to negotiate the best possible price for your milk through your farm organization.
That statement was made and perhaps it is the fact. However, the fact still remains that when the government asserted that the factory would pay the farmer $3.25 per hundred for his milk, and that the government subsidy of 75 cents a hundred would bring the price up to $4 average to the producer, every producer of milk felt that that was true. But when he goes to the factory and does not receive $3.25 for 3.5 per cent butterfat content, but only receives $3.08, or $2.95, or $2.60, his arithmetic soon tells him that adding 75 cents to that price cannot give him the prescribed $4 per hundred, and he feels he is being gypped. He feels this program is not giving to him what it promised him, and if that is the case then something is drastically wrong.
I maintain, Mr. Chairman, that if this policy is not being and cannot be administered so as to guarantee $4 per hundred, then the headlines of this advertisement should not have been worded in this fashion-that the new federal support benefits all milk producers and gives an average return of $4 per hundred. I maintain that this headline is misleading. The department that administers this act has assumed that the average price paid to the producer of manufactured milk will be $3.25 per hundred and that a subsidy of 75 cents will give them $4.
It is very easy to go to every farmer who produces milk and explain small details. The federal government says that the guarantee
July 7, 1966

of $3.25 lies within the purview of the provincial governments. The whole program is based on a price of $3.25 f.o.b. factory. This is where we run into the greatest difficulty. The federal government says that the provinces should see to it that the price is $3.25. The provincial governments say that they have no right to ask for an additional subsidy because this would create unfortunate competition between provinces. They say they cannot guarantee a price of $3.25 by legislation. The provinces say that because the federal government is paying a partial subsidy and promoting the price of $3.25, jurisdiction lies within the federal government.
The farmer does not care which government has authority or where the responsibility lies; they know that they are not getting $4 per hundred for their milk. I agree with them that something is wrong. That is the kind of policy which is driving the farmer off the farm. What the farmer needs is dollars, and they cannot get them by unfulfilled promises, misleading advertising or from quarrels about jurisdiction. The time has come when this policy must be changed.
I was very encouraged yesterday to learn in this house that there was going to be a meeting between the ministers of agriculture of Ontario and Quebec and the federal minister to look into this question. I think that this is a step in the right direction. This is where we have to act. We must work as a coordinated body not as individual segments. In this way the farmers themselves will have more of an opportunity to express their views and influence the governments.
This meeting of minds is nothing new, Mr. Chairman. This is the program which was initiated in 1961 when we were the government. We felt that since Ontario and Quebec were the largest producers of dairy products in Canada, the only method from which we could derive a system whereby the producers would receive a fair return was by having a uniform policy with both the provincial governments and the federal government playing their part.
The provincial government of Ontario-and I must give them credit for this-carried out their part of the agreement and tried to establish through the Milk Marketing Board a price of $3.25 per hundredweight f.o.b. factory. Unfortunately in the province of Quebec, instead of the government then in power establishing this price which had been agreed upon, it turned to a policy of direct subsidization of 35 cents per hundredweight
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in the wintertime and 17J cents per hundredweight in the summertime, which threw the whole arrangement out of gear. It just could not operate in that way.
Yesterday, as I pointed out, we were encouraged by the fact that the minister of agriculture of the new government of the province of Quebec, as well as the minister for Ontario and the federal Minister of Agriculture are returning once more to the federal capital to look into this entire dairy program and into the reason that it is not paying $4 per hundred or more to the primary produces.
It is my hope that since he has a second chance the Minister of Agriculture will convince his colleagues that the policy which he has enunciated in its present form will not, and I maintain cannot, achieve the goal they were satisfied it would achieve.
I think that the ministers acted in good faith and were sincere in their belief-and I must give them credit for this-in advertising to the farmers, the primary producers, that they would receive $4 per hundred. But, Mr. Chairman, as a result of representations both outside the house and inside the house and from the provincial governments concerned, they must surely be convinced that other steps must be taken to guarantee the floor price of $4, which no one in this house on either side has, to my knowledge, has said that the farmers should not have. There seems to be unanimity of opinion in this regard; everybody feels that the farmers are entitled to this price.
[DOT] (9:10 p.m.)
My request to the government tonight is that it look at this matter in its proper perspective, that it make its own inquiries into the industry, and that it sees to the farmers getting what they want. The farmers who bring their problems to us are satisfied that they will not get what they want. And how is that, Mr. Chairman? How do they know they are not getting what they want? By the simplest and most positive way that I know. When they get their cheques in their hands, those cheques do not add up to $4. If the cheques do not add up to $4, then this is not a good policy. Farmers are not considered, whether the matter falls within provincial or federal jurisdiction. All they know is that they are not getting $4. My sympathies are with the farmers, Mr. Chairman.
Now that the minister has had an opportunity of learning what the problem is from

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the ministers of Ontario and Quebec, who are closely associated and connected with this matter and who are constantly meeting with members of the dairy industry, I hope that he has learned that the formula devised by the government is not working. I hope he will devise ways and means of achieving the objectives that all members of this house wholeheartedly desire, namely that the dairy farmers receive a minimum price of $4 per hundredweight.
It is to be hoped, Mr. Chairman, that the National Dairy Commission, as introduced by this government, will in 12 months have had an opportunity of achieving its desired purpose of administering the entire dairy industry in Canada.
In conclusion I want to say this: My plea tonight was on behalf of the dairy farmers. Every other segment of industry in Canada today is in a terrible economic squeeze, and something has to be done. Mr. Chairman, something has to be done now. Farmers face increased prices on everything they buy; they face increased taxes, higher labour costs, higher prices of farm machinery, and they are facing a desperate strait. When I see in my own neighborhood dairy herds that have been established for two or three generations being indiscriminately sold on the market because the family no longer thinks that it is economically feasible to keep those herds, there is something terribly, terribly wrong. As mentioned by the hon. member for Oxford, these herds are being exported out of the country. They are not being bought by neighbours, friends, or anybody going into business. They are lost to us.
I am sure the government can quote figures showing that the situation is not as bad as portrayed, and that production is almost the same as one year ago. The increase in production has been slightly under 3 per cent. This increase in production is caused by the fact that farmers are selling the less productive animals and keeping the more efficient ones. Farmers are deperate, trying in every way possible, by additives to feed, by fertilizing pastures and by a varity of methods, to increase production per annum in a desperate attempt to survive. This maintenance of production, as in many other sectors of the country, is not permanent. It is only temporary, because it is the last ditch stand of Canadian agriculture. Unless help comes from the provincial or the federal level this country will be importing all its food at a very high cost, to the shame of those men respon-

sible for the collapse of this once great and proud industry.


Eric Alfred Winkler: I would ask the hon. member a question, Mr. Chairman.


John James Greene: Did you give him notice?


Eric Alfred Winkler: No. I did not give you notice, either. Referring to the conclusion of the hon. member's speech, does he not feel, because of the constitutional problem in regard to subsidies and because of the minister's promise during the election campaign, that the minister should take over the total responsibility, not only as it relates to subsidies but also in whatever other areas are concerned, in order to bring the $4 a hundredweight to the producers?


An hon. Member:: That was a nice speech, Eric.


Eric Alfred Winkler: Thank you.


Harold Warren Danforth: May I answer this question? The fact remains that the quarrel about provincial and federal jurisdiction is of minor application in the field of policy. The federal government states, and I believe correctly, that within the law it cannot establish a price at any level, whether it be f.o.b. the factory or f.o.b. at the front gate of the farm. At least, the government cannot do this without going into the field of provincial jurisdiction. Perhaps this is so.
On the other hand the provincial governments claim, I think equally correctly and equally within the law, that if the federal government is taking measures under the Agricultural Stabilization Act to promote a price which this act says may be paid, but not "must be paid", then they will not accept the same degree of responsibility as they should.
If the government is providing a method of maintaining a price to the farmers by having legislation saying that it may, will, or can establish a price, but not saying it shall or that it must, the division is too fine, and the farmer understands only that he has got a certain number of dollars in his pocket. That is the attitude he takes.


Eric Alfred Winkler: The minister should keep his promise.
[DOT] (9:20 p.m.)


Edgar John Benson: As I should have done before, I should like to thank hon. members, including the hon. member for Kent, Ontario, for allowing me to introduce my resolution. I
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very much enjoy sitting here and listening to the hon. member for Kent, Ontario, criticizing the provincial government in Ontario.


An hon. Member:: You do not understand.


Eric Alfred Winkler: You are against the farmers.


Edgar John Benson: Not at all. I love all farmers having been a farmer in my youth.
Mr. Chairman, I should like to say, as I should have said when the resolution was introduced, that the resolution is with respect to interim supply in the amount of $1,662,982,791.93, which will carry us through to October 31, 1966, and deals with all departments other than the departments which were just previously approved by the House of Commons, with respect to expenditures for the current year.
These expenditures which are included as interim supply are amounts required by the departments in order to carry on their ordinary business until October 31, 1966. I wish to assure hon. members that the granting of supply with respect to individual items in these estimates will not in any way preclude debate on the particular items in future, when supply is brought forward in order to complete the matter.


Mr. Gauthier:: Mr. Chairman, I cannot let this opportunity pass without expressing my disappointment about the dairy policy of the present government.
When the minister announced the $4 per hundredweight policy, he assured us that all farmers would receive that amount. And even today we are still trying to make him understand that some farmers, or most of them, are not getting and will not get those $4. And in spite of that I notice that the minister seems convinced that the farmers who are not getting those $4 are probably to blame because, as it was said this afternoon in committee, if the producers, the processing plants do not pay the amount of $3.25, the farmers should bring some pressure to bear on the processing plants to get it.
That, Mr. Chairman, is an answer which surprised me greatly coming as it did from the minister. And he tells us to clear himself that the setting of the price by the plant is not a matter of federal jurisdiction. He is right about that. But such is not the case at all when he publishes in all the newspapers his announcement to the effect that from now on farmers will certainly get $4 per hundredweight for their manufacturing milk.
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And we are trying to prove to him-besides we have the evidence-that right now in my region it is impossible for the farmers to get those $4. As a matter of fact, I have here the photostat of a document showing the amount paid to a farmer; he gets exactly $2.86 per hundredweight plus 75 cents added to that. That is far from the $4 guaranteed by the minister. That is for one plant only and it varies from plant to plant.
Well, I say that the minister spoke to the newspapers to get some publicity. It would have been much better to say: We are just giving 75 cents and we are not responsible for the rest; we do not guarantee anything and it is impossible to guarantee anything because it is a matter of provincial jurisdiction. Once again you are getting into a provincial field. Therefore you cannot guarantee anything. All you can guarantee is 75 cents. Why not say it and then you will not get all the farmers mixed up. Just say: We are paying 75 cents. It remains for the provinces or the farmer associations to reach an understanding with the plants to get the best possible price.
Thus, you will not disappoint a whole region. The farmers tell us: They promised us $4 and look at what we are getting. It is not what they are getting now which is abnormal but the promises, the advertisements which have warped the farmers' views.
I wish to say to the minister tonight that we have proofs and that he must have some too because there have been complaints.
I have here the periodical La Terre de Chez-nous dated June 29; it is the organ of the Catholic Farmers Union, the largest farmer organization in my area. It states that the milk policy of Ottawa is inadequate. That is clear. It is inadequate. In this publication, the milk policy is discussed on two and a half pages. I shall not impose the whole thing upon you, but I shall read the significant parts. On the front page, it says:
At a regular meeting held in the head office, on June 6, the executive committee of the C.F.U. took note of the results of the recent efforts undertaken by its representatives in Ottawa. On that occasion, the members of the executive committee were informed that a meeting with the Minister of Agriculture in Ottawa, the Hon. J. J. Greene, produced no practical results.
Well, that is factual, sir. They came, they stated that they had obtained no practical results. It was then unanimously resolved to send a telegram to the Minister of Agriculture. The telegram was published in the

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June 15 issue of La Terre de Chez-nous. We are re-stating it here:
Hon. J. J. Greene Minister of Agriculture Ottawa
The C.F.U. executive committee, meeting this week in Montreal, has considered the latest development of the 1966-67 federal milk policy. It was also informed of the results of last meeting between yourself and Messrs. Lionel Sorel and Roger Perreault. The C.F.U. executive committee considers present Ottawa policy clearly unsatisfactory, because it will not ensure the remittance price of $4 per hundredweight for manufactured milk and particularly unfair to important groups of producers, such as cream shippers and producers whose milk is powdered through the cylinder process or processed into casein, etc. . . . Stop [DOT] (9:30 p.m.)
In such circumstances, the C.F.U. executive committee has decided to inform and warn all Quebec farmers and their regional and local organizations to consider means to obtain satisfaction, that is a guarantee by the Ottawa government of $4 per hundreweight for all industrial milk, in view of totally unsatisfactory results so far achieved regarding the demands and expectations of the producers. Lionel Sorel, General Chairman of the C.F.U.
Mr. Chairman, if these statements are not proof of the discontent and dissatisfaction of the Quebec farmers, I wonder what the minister is waiting for to at least try another survey and, for that purpose, the minister must first of all recognize that the farmers are not getting and cannot now get $4 per hundredweight.
I think the minister will have to meet again with the organizations, because if a price of 75 cents per cwt. is unsatisfactory, another basis will have to be established. If it is truly wished to help the dairy producer, he cannot be left any longer in doubt owing to the prices being changed from week to week by manufacturers, processors or, at least, the minister should not say he wants to help the farmers. Nowadays, farmers are expecting action from governments. One thing surprises me on the part of manufacturers. I wonder whether it would be possible, during federal-provincial meetings or conferences between Ministers of Agriculture, to see to it that a processor is obliged to pay a certain price, if a minimum price is finally to be established for the milk producer. Otherwise, I feel that any federal reform on the present basis is absolutely worthless, because it is realized that as soon as the federal government offers a 20 cent subsidy or increase, manufacturers and processors reduce their prices by 20, 25 or 30 cents.
Consultations will have to take place at all costs so that farmers no longer will be the victims of such haggling. Mind you, I am not accusing the federal government any more than provincial governments, but I say that some action will have to be taken so as to urge milk processors to stop any such haggling with, and pilfering of the farmers by all sorts of means. The latter is being shortchanged on the butterfat content, in a word, he is being cheated in every way in an attempt to recover 10, 20, 30 or 40 cents. It seems to me that the various Departments of Agriculture, both provincial and federal, should come to an agreement to try and guarantee a reasonable price to our farmers so that not only would they no longer be exploited but could sell their production at a fair price.
Mr. Chairman, I wanted to call this particular point-actually it is the one about which my electors feel most bitter-to the attention of the minister.
I do not know whether the situation is worse in Quebec than in the other provinces but, to my mind, the evil is widespread. According to some of the members on various committees, it seems general, and I do know that, as far as Quebec is concerned, all our associations are clamouring for help from the federal government. Let us start with something definite, then we can find out what the Quebec government can do in this respect.
One more word about the farmer to prove, in passing, that if Quebec farmers sometimes complain, they have a right to do so, because they are often treated most unfairly. We have proof of this in the report of the Minister of Finance (Mr. Sharp) on loans granted under the Farm Improvements Loans Act.
We have been saying for four years that when it comes to collecting taxes, Quebec is right there in the forefront, but when it comes to giving the people something in return for their taxes, then it is quite another story. In the field of loans guaranteed by the federal government, out of 46,285 loans made in 1964, Quebec has had exactly 873 compared to 1,224 in British Columbia, 13,528 in Alberta, 14,790 in Saskatchewan, 6,181 in Manitoba, and 8,473 in Ontario. And some claim that Quebec has its share, that Quebec is well protected. Well, if that is the general opinion, you can be assured, Mr. Chairman, that it is not the opinion of Quebec farmers. And the proof is there. Every time we can

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obtain details, we notice such glaring inequities with regard to assistance to farmers, the other provinces come first and the Quebec farmers get only the crumbs.
Well, I suggest that the present Minister of Agriculture will have to look after the province of Quebec if he does not want to lose support of 100 per cent of its farmers because if things do not improve, we will urge Quebec farmers to look after their own needs, to withdraw their federal taxes and to look after their own business as it is no use counting on receiving help from the federal department.


John James Greene: Mr. Chairman, I quite appreciate the fact that hon. members who have spoken are most concerned with the problems of the farm community, as indeed am I, and as I am very certain the government is. I quite appreciate that in many respects the farming community has not kept abreast of the burgeoning income and very prosperous and buoyant economy we have enjoyed in the last couple of years.
It may be in the nature of things that when an economy expands very rapidly, when industrial wages and industrial prosperity grow up at the pace they have in the past two years of full employment, the farm community is slower to catch up than many of us would like. Hence I share the concern of hon. members opposite for the needs of the farm community, for the importance in seeing to it that we have policies which enable the farmers of this country to enjoy the very high standard of living and the great economic opportunity that have been afforded to their confreres in the industrial world in the past two or three years under this administration.
But, Mr. Chairman, I think we do little service to the farm community, and I think I know enough of the farmers now and the integrity with which they are prone to behave, if their case is misrepresented. I think we do the farm community the greatest service if we put their case on a factual basis, and I have every confidence in the rest of the Canadian community, and the Canadian public at large, that if we put the case of the farm community on a fair, honest and upright basis, other sectors of the Canadian economy do not wish to be subsidized by that farm community.
[DOT] (9:40 p.m.)
I do not think other Canadians would want the farm community to live at a lower standard of living than they do. I feel sure that if 23033-466 i
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their case is put honestly and fairly before the Canadian public, the Canadian public would wish that the policies of government and otherwise would be such that the farming community would be able to enjoy every opportunity they enjoy in the other booming sector of the economy. Therefore, Mr. Chairman, I think it is incumbent upon me to set the facts and the record straight in this regard in the interests of the farmers of this country. I think that is the way they would wish it.
There has been some reference to the government's dairy policy. To the best of my ability I should like to set the record straight in this regard. In the first place, as has been said by many more able and better men than I, this is a very difficult country to legislate in in respect particularly to marketing legislation of any kind, by virtue of our constitution and the judicial interpretation of our constitution, especially the judicial interpretation of the constitution with regard to the farm marketing legislation made in the 1930's.
I think all would agree, as did the hon. member for Kent (Ont.) quite candidly, honestly and forthrightly, there is no power in the federal government to fix prices within a province. The other day I think the hon. member for Grey-Bruce read a portion of an article from the Canadian Farm Economics. Although I feel sure he did not do this deliberately-possibly it was because he did not have time to read it all-I believe he may have left some misconceptions on the record. He read from page 11 of the Canadian Farm Economics, volume 1, number 1, of April 1966, published by the Economics Branch of the Department of Agriculture. He read as follows:
The Federal Government has jurisdiction over the market for manufactured dairy products-
I believe the record indicates that that is as far as he read. I feel sure he would want me, in the interest of stating the whole picture correctly in Hansard to read the rest of the paragraph. That paragraph says:
The Federal Government has jurisdiction over the market for manufactured dairy products to the extent that products move interprovincially and into export markets.
I feel sure he would want me to add those latter words in order that the record be very clear that milk products of all kinds within a province are purely within the ambit of provincial jurisdiction.
Now, Mr. Chairman, we have had some representations by the hon. member who last

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spoke, and some inference by the hon. member for Kent, Ont., that the government's policy as announced and as advertised in some way misled or was intended to mislead. I should like to quote from my statement in this house when I enunciated the government's dairy policy on March 23 at page 3041 of Hansard. At that time I knew the interest of members opposite and knew that they would want to know exactly what this program was and how it would be carried out. The words I stated were:
The support level will provide for an average net return of $4 per hundred pounds-
As all advertisements have said.
-of manufacturing milk testing 3.5 per cent but-terfat content, basis f.o.b. the factory.
I cannot think of any way in which it could have been put more plainly than that. In order that there might be no misconception, no misunderstanding, and no delusions in this regard, I further stated as follows:
The policy will apply in general as follows:
For producers of manufacturing milk, the board-
This is the stabilization board.
-will take measures designed to permit processors to pay a price of $3.25 per hundred pounds for 3.5 per cent manufacturing milk. Direct payments to producers from the board of .85 cents, minus a 10 cent export assistance levy, will be used to bring producers' average net returns up to the $4 level.
Again, so that there might be no misapprehension and so that all members of this honourable house would have the policy as clear as crystal in their minds, I enunciated the following caveat:
However, the federal government has no authority to set the prices that processors pay to producers. I feel It is important, therefore, to stress that it is incumbent upon producer groups and boards to do all they can to see that this market price level is achieved.
I can think of nothing which could have been clearer than that. This is exactly what has happened and is what we have done. I feel sure that if hon. members wish to be candid about the policy, how it was enunciated and how it has come to pass, they will agree that we have done exactly what we said we would do, which was the only approach we could take within the ambit of our constitutional responsibilities.
Again, with regard to the needs of the farm community, let me make it very clear that this program means the farmers of Canada will get between 14 and 15 per cent more gross return for their milk, and therefore for

their manufactured milk, this year than they did last year.


Some hon. Members:: Hear, hear.


John James Greene: I heard considerable comment from the other side with regard to labour wage settlements which invoked an alleged 30 per cent increase over a two year period. I think that surely on this side of the house we can be rather proud that even though these wage increases for labour were very appreciable we were able this year to give to the dairy farmers of Canada the same increase in the nature of 15 per cent. I would point out, Mr. Chairman, that this involves the spending by the federal government of some $90 million which again is a very very considerable sum. I think it is an indication of the concern that this government has for the farm community of Canada, for the eastern farm community of Canada which had been so badly neglected in past years, that it saw lit to establish at the federal level a program that would benefit the dairy farmers of Canada.
Again let me set the record straight by placing some statistics before hon. members of this house. When we talk about the price of farming products let us remember that in respect of the dairy policy of the federal government in the days when the hon. gentlemen opposite were in office, just as now, the government did the only thing it could do at the federal level; it set the price f.o.b. the factory. So, any recriminations which are coming now are rather hollow in the light of the fact that when the gentlemen opposite had the responsibility their policy was geared to this basis just as it always must be at the federal level.
[DOT] (9:50 p.m.)
Let us see what has happened in respect of price since we have been in office. When we assumed office the net return to the farmer for manufacturing milk at the farm gate, at the farm house, was $2.70 in 1960. It was $2.68 in 1961-not too great improvement in that year by hon. gentlemen opposite. It was $2.64 in 1962-down 4 cents. That was not a very good year for the eastern farmers when hon. gentlemen opposite were in office. In 1963 it was up one cent to $2.67. In 1964 it went up to $2.77, and last year with the supplementary payments it went from $2.77 to $3.26.


Some hon. Members:: Hear, hear.


Harold Warren Danforth: May I ask the minister a question?
July 7, 1966


John James Greene: I do not have much time and I should like to complete my statement.


Harold Warren Danforth: The minister is misleading the house.


John James Greene: This year the price at the farm gate will average somewhere in the neighbourhood of $3.75 with an average transportation cost of 25 cents. This leaves an average price increase of 50 cents which is the highest in the history of this country.
I do believe that the records should be set straight. The United States to the south of us has the highest standard of living in the world and the highest wage structure. Wages in the industrial sector are such that our industrial workers crave parity with their counterparts in the United States. Let us compare what we have done for our dairy farmers in marketing milk with what has been done in the richest nation of the world.
As of April 1 this year when our policy became a $4 policy f.o.b. the factory, the United States policy-I am not criticizing them in any way because they are doing a wonderful job-was $3.50. Singularly important is the fact that just four days ago, three months after this government gave leadership in this regard, the United States amended its policy and pushed up their support level. They make no direct payments such as we do here, in order to keep the cost to the consumer down. The United States increased its support level so that in respect of 3.73 per cent milk, which is a higher percentage than ours, the level will be $4. With 3.5 milk the level would be somewhere in the neighbourhood of $3.75, or 25 cents lower than ours.
I am not saying for a moment that the needs of the farmers are not great or that we here in this house and this government need not do all that we possibly can to improve their lot. I have said on many occasions that I would be the first to agree that farmers of this country have not kept up on a commensurate basis with improved income conditions in this country, or with the lot of their industrial counterpart. Again the record should be set straight and I am sure the farmers would want it that way.
Let us see what the income of the farmer was when hon. gentlemen opposite were in government and let us see what has happened to it since. I refer to statistics contained in a pamphlet entitled "General Information on Agriculture in Canada", prepared by the economics branch of the Canada
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Department of Agriculture. It is dated October, 1965.
The total income of farmers in millions in 1959 was $2,791. It went down to $2,777 in 1960. That was not a very good year. It went up from $2,777 to $2,952 in 1961, an increase of roughly $180. In 1962 it went up to $3,116; in 1963 to $3,185 and in 1964 it went up to $3,456. Let me point out that during the period of time following our assumption of office the farmers' income position improved by 23 per cent.
Let us take a look at the cost of farm operations during the same period of time. According to the statistics I have in this same pamphlet farm costs during the same period increased by 22 per cent. Hon. members are 100 per cent correct, and I quite agree, that during the same period the industrial worker did not just hold his own as did the farmer; he surged ahead. This is the kind of thing we must do for the farm community as well.
I want to make sure that the complete story is told in an accurate way, and I know that hon. members, just as do the farmers, want the same thing. There has been some difficulty with respect to manufactured milk even since our policy was announced. I am not suggesting that we have achieved a millennium. I hope to do much more for our dairy farmers if I am able, have the ability and can see how to do that. Every farm organization in the country supported our policy which was based on the recommendations of the Federation of Agriculture and the Farmers Union of Canada. They approved this policy and I still believe that it is no worse two months later than April of this year.
What has happened in the interim to create the difficulties which have exercised hon. gentlemen opposite? The province of Ontario fixed a price, quite properly, as we anticipated it would. I commend the minister of agriculture of that great province for so doing. The province of Quebec has special conditions in respect of the production of casein, which is a submarginal product. Unfortunately that province, rightly or wrongly, felt it could not fix the price.
The province of Quebec decided to pay a special subsidy, as an hon. gentleman has said. I did not intend to discuss this matter until the hon. gentleman did so, because I think that is the source of many of the problems with which that hon. minister is faced. In any event, the payment of this extra subsidy in that province has influenced the

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Ontario dairy farmers to suggest that if Quebec can pay an extra subsidy of 17J cents in the summer and 35 cents in the winter, the rich province of Ontario ought to be able to do likewise. I do not intend to minimize the problems of the minister of agriculture of Ontario, but this is one problem he has encountered. I should like to see the day come when stabilization programs are completely federal, because I think they would work best that way. In any event, the province of Quebec decided in its wisdom to pay these subsidies and Ontario farmers are now asking for the same.
Some Ontario manufacturers increased the cost of transportation to the farmers and cut off the subsidies on farm storage tanks. The Milk Marketing Board of Ontario has now enacted a regulation to prevent added transportation costs from being tacked on the farmers' costs. Surely this is a clear admission that this is the responsibility of the province. They have now quite properly assumed that responsibility. With those facts being as they are, it would be completely incorrect to imply that these added costs of transportation were in any way within the control of the federal government.
I saw statistics today in respect of the province of Quebec which indicate that not everyone is receiving $4 per 100 pounds. There are marginal areas where there is no competition or market for milk, and because the province of Quebec has not seen fit to fix the price the producers in those areas are receiving less. On the other hand, these statistics show that 80 per cent of milk produced in the province of Quebec is being sold by the farmer for $3.25 or more. They are receiving in addition 75 cents per 100 from the federal treasury and 17J cents from the province of Quebec.
Eighty per cent of the milk is getting $4.17 or more from the province of Quebec.


Some hon. Members:: Hear, hear.


Gilles Grégoire: May I ask the minister a question?
[DOT] (10:00 p.m.)


John James Greene: I should like to finish my statement, first, if I may, and then I will answer all the questions you like.
I do not wish to minimize the difficulties with which the minister of agriculture in the province of Ontario is faced. I say, with all candour and irrespective of political persuasion, that I found him to be an extremely capable gentleman and a fine minister of

agriculture. I have tried to work with him, and I am sure he has tried to work with me in the best interest of the farming community. It is an unfortunate set of circumstances that the provincial subsidy paid in the province of Quebec has made life politically difficult for him. As I say, I did not intend to raise this matter or to add in any way to his problems until the hon. member for Kent, Ont., raised it in the house tonight, and I therefore felt bound to defend our position.
I do think that this problem between Ontario, Quebec and the federal government has to be worked out. I do not think they contribute to its solution by trying to shove the blame on to the federal government so as to get rid of the difficulty which exists between the two provinces. I realize that that is the name of the game, and that is what they are trying to do. I do not think this will contribute to an ultimate solution which will be in the best interests of the farmer. We have to arrive at some method whereby the stabilization program will be handled at the federal level without provincial subsidies upsetting the applecart. In saying this, I take the very same view as that taken by the Ontario minister in the current year. We may have to find some method of effecting the resolution of this difficult imbalance in Ontario. We have to look into the question of whether the support price enables the factories to pay $3.25, because that is the policy to which we are pledged. If the support price is not sufficient, we will review and revise it whenever necessary to enable the factories to pay that price.
I think, Mr. Chairman, that our policy is the best ever conceived. It is one that is even superior to the policy in the United States of America. It is the greatest increase that the dairy producers have ever received in any one year. I disagree with the allegation that the program has deteriorated in the last two months. It is what the dairy community of Canada wanted, and we have given it to them. I do not think we are doing any service by trying to tear down the federal program because of these teething problems that have arisen between Ontario and Quebec. I think this criticism will in the long run be doing a disservice to the farming community, rather than remedying the difficulties as we should all be trying to do.


Gilles Grégoire: Mr. Chairman, I listened to the Minister of Agriculture (Mr. Greene) most
July 7, 1966


John James Greene: I rise on a point of privilege, Mr. Chairman. In order that my hon. friend, who I am sure is not doing it deliberately, does not misquote me, may I say that I saw figures this morning which established that 80 per cent of the milk that is sold in the province of Quebec receives $3.25 or more at the factory. Again, the producers of this milk will receive the 75 cents from the federal government and 17.5 cents from the provincial government. This, of course, is f.o.b. the
Interim Supply
factory, as all the prices I have stated are, except the one set of statistics we transposed, to show the difference between 1959 and 1965.


Gilles Grégoire: Mr. Chairman, that proves exactly what I said earlier: the minister knows what happens in his office but he is unaware of reality. Besides, is the minister referring to manufacturing milk or fluid milk? Because we have here reports dealing with manufacturing milk, and the amounts indicated are not $3.25 but $2.86. I am asking again the minister if he is ready to stake his reputation on the fact that 80 per cent of Quebec farmers receive $3.25 per hundredweight, that is $3.25, plus 75 cents, plus 171 cents for their manufacturing milk. Is the minister ready to stake his reputation on that since he is the one who asserts that 80 per cent of our farmers receive-


Jean-Charles Richard (Jean) Berger: Eighty per cent of the production not of the farmers.


Gilles Grégoire: -of the production-


Jean-Charles Richard (Jean) Berger: Exactly, that makes a difference.


Gilles Grégoire: -receive $3.25, plus 75 cents, plus 171 cents. And I should like to know from the minister what he means by milk. Does he refer to manufacturing milk or fluid milk because the two are not quite the same.


John James Greene: I rise on a point of privilege again. I am not sure whether the translator is making the error or the hon. member is. I said that 80 per cent of the manufacturing milk that is sold in Quebec receives $3.25 at the factory without any subsidy. Now, how many farmers deliver that 80 per cent of the milk, whether it is 70 per cent of the farmers deliver 80 per cent of the milk or not, I have no statistics to show. I am only quoting statistics of which I am certain. I said 80 per cent of the milk receives $3.25 without a subsidy.


Gilles Grégoire: Mr. Chairman, would the minister tell me where he took his statistical data?


John James Greene: I saw the records at our conference with the provincial ministers, and I accept them as reliable. They came from the province of Quebec.
Interim Supply

July 7, 1966
[DOT] (10:10 p.m.)


Gilles Grégoire: Mr. Chairman, if the minister wants to quote statistics in this house, he should also be ready to give the source of such statistics. Otherwise, how can we know what they are worth? He did not quote the source of his statistics. What is the source of his statistics, that is what we want to know from the minister.


Mr. Trudeau:: Statisticians.


John James Greene: Mr. Chairman, they were used at the Quebec conference and I am satisfied they are correct. I do not know whether the hon. member has more authentic statistics. I have listened to some questionable evidence which he quoted earlier this evening, but if he has any more reliable statistics I would be interested to see them. However, if his statistics are no better than his usual fiscal theories they will not be too good either.


Gilles Grégoire: Mr. Chairman, I would like to ask the minister if one must conclude from this that the Quebec minister of agriculture, who was in Ottawa today, showed him statistics indicating that 80 per cent of manufacturing milk in the province of Quebec got a minimum $3.25 per hundredweight, plus 75 cents in the form of a subsidy from the federal government and 17J cents from the provincial government.
Must we conclude, Mr. Chairman, that those figures were given to him by the Quebec minister of agriculture?
Mr. Chairman, I think that our statistics are worth more than the minister's, because ours come from the farmers. As a matter of fact, they tell us: The policy of $4 per hundredweight of milk has never been applied and we are far from getting $4 per hundredweight of milk.
I think that the best statistics are what the farmer is getting. That is what I call statistics. The way they are compiled is probably another matter, but what the farmer is getting is what counts. Here is the concrete, realistic and practical fact of life: how much the farmer is getting for his manufacturing milk. Those are statistics for you.
Mr. Chairman, the minister has given us comparative figures. I would also like to give him the increase in the farmers' production costs.
Since the minister does not want to give us an answer, I would also like to have the opportunity to check if his statistics were given him by the provincial minister of agriculture. He told us: that was given us at a meeting with the provincial minister of agriculture, but he did not tell us if that was given him by the provincial minister of agriculture. That makes all the difference.
Mr. Chairman, we want to check the few facts given by the minister; we want to have the opportunity to pursue that matter and that is why I ask you to call it ten o'clock.


Some hon. Members:: Ten o'clock.


Maurice Rinfret: Order. It being ten o'clock, shall I-


George James McIlraith: Mr. Chairman, I wonder whether there is any disposition to go a little further with interim supply tonight for a few minutes.


Some hon. Members:: Agreed.


Gilles Grégoire: Ten o'clock.


Maurice Rinfret: Does the committee agree to proceed for a few minutes?


Michael Starr: Mr. Chairman, before we proceed I think we should know just when we should stop. It might not be fair to any other hon. member who might wish to speak if it was suddenly decided that we should call it ten o'clock.


George James McIlraith: I would prefer to go until eleven o'clock, but if members want to fix another period-


Michael Starr: Agreed.


Maurice Rinfret: Is it agreed by hon. members of the committee that we sit till eleven o'clock?


Gilles Grégoire: Ten o'clock.


Maurice Rinfret: There does not seem to be unanimous consent to enable the committee to sit.


Eric Alfred Winkler: Who is voicing objection? [Translation]


Gilles Grégoire: Mr. Chairman, I must tell you that personally I would have no objection to continue until eleven o'clock. The only reason why I asked to call it ten o'clock

July 7. 1966

is that I wanted to check some statistics given by the minister; I also wanted to check statistics about the increase in the cost of production. Even if we are to sit until eleven o'clock tonight, I would have no objection to doing it tomorrow, but since we are not going to finish tonight, I do not understand the request to extend the sitting.


Eric Alfred Winkler: Let us have a count.


Maurice Rinfret: It being ten o'clock, shall I report that the committee have considered a certain resolution, made progress thereon, and ask leave to sit again at the next sitting of the house?


Some hon. Members:: Agreed.
Progress reported.



BUSINESS OF THE HOUSE

George James McIlraith: Mr. Speaker, I move:
That the house continue to sit this day until 11 p.m.


William Arnold Peters: I object, Mr. Speaker.


Mr. Deputy Speaker:: May I refer hon. members to standing order 6(2). It is my duty under the standing order to request those members who object to rise in their places.
And more than ten members having risen.


Mr. Deputy Speaker:: I shall ask the Clerk to count.


Eric Alfred Winkler: I rise on a point of privilege.


Mr. Deputy Speaker:: Order, please. In accordance with the standing order, 11 members of the house having risen, the Chair will not put the motion.


George James McIlraith: Mr. Speaker, tomorrow we shall be considering the Canada Assistance Plan legislation, interim supply, and medicare.


Eric Alfred Winkler: I would have hoped we could have considered those items tonight.



PROCEEDINGS ON ADJOURNMENT MOTION

[Stage Direction]
A motion to adjourn the house under provisional standing order 39A deemed to have been moved.
DEBATES	7371
Proceedings on Adjournment Motion EXPO '67-INQUIRY AS TO REPRESENTATION OF AGRICULTURE
Mr. A. D. Alkenbrack (Prince Edward-Lennox):: Mr. Speaker, I bring a matter before the house this evening arising out of my question put to the hon. Minister of Agriculture this afternoon, in which I asked the minister if he would assure the house that the Canadian agriculture industry will have suitable and prominent representation in the form of displays and exhibits at Expo '67, which will be Canada's great centennial exhibition next year at Montreal. I am sure, Mr. Speaker, knowing the minister, that the answer to this question, as I hope, will be in the affirmative.
My question also arises as a result of the recent visit which some of us of this chamber, and members of the other place, made to the site of Expo. We were all very much impressed by the progress being made on this unique project, and I know that every Canadian wishes nothing but success for this great world's fair, this world in 1,000 acres, rising on the bosom of the St. Lawrence river, with our great Canadian metropolis, Montreal, as a backdrop, and truly the urban sponsor of this fair.
We know now that from April 28 to October 27, 1967, more than 70 nations will be exhibiting here in Canada their traditions and cultures, their industrial development, and their products, and of course all their hopes for the future.
[DOT] (10:20 p.m.)
Canada, in turn, will be showing her best to the world. Since in any brochures we have received I have not noticed any prominent mention of our third oldest primary industry, agriculture, that is why I have asked my question. As a result of this I would hope that this industry would have prominence at this fair.
I know all hon. members will agree that we must not only maintain, but that we must annually increase our export trade in agricultural products. I was particularly impressed this afternoon by the remarks made by the hon. member for Northumberland (Mr. Hees) when he spoke on the banking resolution and stressed the imperative value of export trade. Exhibits covering all our agronomy with each province represented under the suzerainty of the federal Department of Agriculture will be a most effective factor in promoting and increasing our export trade.
July 7. 1966

Proceedings on Adjournment Motion
Hon. members will agree that our oldest industry is probably fisheries, dating from the days of John Cabot. Our second oldest industry is the fur trade, dating from the days of Cartier and Champlain; and then the third in age, but most important of all, is agriculture, dating from the life of Louis Hebert, Canada's first farmer who tilled the rough and unwilling soil outside Quebec city in 1620.
The theme that has been accepted for this exhibition "Man and His World" is indeed an inspiration leading down through many lanes of endeavour-Man the Creator, Man the Explorer, Man the Producer, Man and the Community, and Man the Provider. Each of these themes is an attribute to agriculture. In these times when we are becoming, in a sense, more self-assertive and more confident in our accomplishments in our provinces and in our various communities and regions across this great country, this theme and its five sub-themes should certainly be the factor which will unite all Canada and all Canadians and all communities and all Canada's provinces heart and soul into one federal whole, as we play host to the world in our centennial year.
This is why I say that agriculture, now our most important primary industry, must have proper prominence at this exposition. Canada, barely one hundred years old and with a population of not quite twenty million is already, and has for a long time been, a "have" nation. For this heavenly blessing alone we should be very thankful. Think of the many nations of the world who are the "have-nots."
Here is our opportunity-the opportunity for Canadian agriculture to serve our fellowmen the world over, and to feed the hungry. Here is an opportunity for Canadian agriculture to feed our own people better because, in spite of our abundance, there are many people in Canada who can benefit from more food.
I represent the riding of Prince Edward-Lennox, famous for the products of the soil, the farm, the orchard and the dairy industry, and I know my people are always mindful of the importance of advertising and making known the value and high quality of their many and varied commodities.
We know that because of automation and more efficient farm machinery, one man can now produce as much as four did 50 years ago. But we are also concerned because of the fact that many of our broad Canadian acres
that used to produce food lie dormant and forgotten, their former agricultural masters now only a memory.
The responsibilities and the inspiration of Expo should be enough to urge Canadians and the Canadian agricultural industry into a rejuvenation, into reorganization of this industry to break new ground, and take our rightful place as the feeders of millions of hungry mouths in the world. That is why I urge the minister and the Department of Agriculture to bend all their efforts to this task.


Mr. Deputy Speaker:: Order. I must advise the hon. member that the time allotted to him has expired.


Mr. Bruce S. Beer (Parliamentary Secretary to Minister of Agriculture):: Mr. Speaker, I speak for the minister, and I am sure for the whole house, in expressing our appreciation to the hon. member for his very eloquent address on this most interesting and agreeable subject. We are all tremendously interested in Canada's 100th birthday, which we plan for in 1967. Associated with it, of course, will be Expo '67 when Canada will be putting her best foot forward, and displaying herself in this show window of Canada, for the world to see.
As the hon. member has said, agriculture is the third oldest industry in this country. It is fair to say that agriculture primarily developed this country, and certainly the group who played such an important part in developing Canada are not going to be missing when we celebrate our 100th birthday.
At Expo there will be a special agriculture pavilion in which the great wealth of our agricultural products will be displayed. Not only will the primary producers in agriculture be present, but a lot of corporate citizens who are associated with the agriculture industry and perform a great service to this country in the food business, the machinery industry, or in the dairy products industry will also be represented and pulling their full share of the load.
I am not exactly sure what the hon. member's question was, but I have pleasure in assuring him that Canadian agriculture will be represented and that we will be putting our best foot forward.
Motion agreed to and the house adjourned at 10.30 p.m.

Friday, July 8, 1966.