1967-02-24

PRIVILEGE


Mr. Ian Watson (Chaleauguay-Huniingdon-Laprairie):: Mr. Speaker, on a question of personal privilege, on Monday of this week I asked the Solicitor General a question related to reported activities of the Central Intelligence Agency in some international affiliations of the A.F.L.-C.I.O., and I referred with tongue in cheek to possible infiltration of the New Democratic Party by the C.I.A. through the C.L.C.'s international affiliations.
My question arose out of an article which appeared on the front page of the February 20 issue of the Christian Science Monitor. Last night I was amazed to learn that Claude Jodoin, C.L.C. president, had issued a press release which stated in part:
The inference made in the House of Commons by Mr. Ian Watson (Chateauguay-Huntingdon-La-prairie) that unions affiliated to the Canadian Labour Congress may have accepted funds from the Central Intelligence Agency for operations in Canada is completely unjustified.
I would like to make it clear that no such inference was contained in my question. Furthermore, I take strong exception to Mr. Jodoin terming my question unjustified. Despite the apparent attitude of the C.L.C. executive, members of unions in my riding, affiliated with the C.L.C. and international branches of the A.F.L.-C.I.O., are most interested in knowing whether the Central Intelligence Agency has infiltrated Canadian unionism through United States internationals.
Mr. Jodoin in effect is saying that I, as a member of parliament, do not have the right to ask this question. This, Mr. Speaker, is an affront to the basic parliamentary privileges of every member of this house.
[DOT] (11:10 a.m.)



PROCEDURE


Mr. Bernard Pilon (Chambly-Rouville) moved:: That the following members compose the special committee on procedure appointed January 25, 1967: Messrs. Asselin (Richmond-Wolfe), Baldwin, Brand, Faulkner, Knowles, Langlois (Megantic), Mac-Eachen, Nugent, Olson, Richard and Stewart.


[Stage Direction]
Motion agreed to.


Hon. E. J. Benson (for fhe Minister of Finance) moved: that the house go into committee at the next sitting to consider the following resolution, which has been recommended to the house by His Excellency:
That it is expedient to introduce a measure to provide for the payment to provinces out of the consolidated revenue fund, for each fiscal year in the period commencing on the 1st day of April, 1967 and ending on the 31st day of March, 1972, of provincial revenue equalization payments and post-secondary education adjustment payments, and for each fiscal year commencing on or after the 1st day of April, 1967, of provincial revenue stabilization payments and succession duty payments: to authorize tax collection agreements with provinces and to amend the Established Programs (Interim Arrangements) Act to extend for an additional three years the interim period relating to the health grants program.


[Stage Direction]
Motion agreed to.

[Stage Direction]
On the orders of the day:
Hon. J. A. MacLean (Queens):: Mr. Speaker, I should like to address a question to the Secretary of State for External Affairs and ask whether the hon. member for Dollard (Mr. Goyer) was reflecting a change in government policy when, in a speech delivered in Montreal recently, he called for an end to United States bombing of North Viet Nam,

February 24, 1967
Inquiries of the Ministry the eventual departure of United States forces and Canada's recognition of mainland China.


Mr. Speaker:: Order, please. It may be that members of the house would like to hear the answer which the Secretary of State for External Affairs wishes to give, but I think I should bring to the attention of hon. members that it is not in order to ask questions about statements made outside the house by members. According to practice questions may be asked of the Prime Minister concerning statements made outside the house by cabinet ministers. A member may wish to ascertain whether such a statement reflects government policy; but this does not extend to statements made by individual members.


Hon. Marcel Lambert (Edmonton West):: Mr. Speaker, may I ask, as a matter of information, whether this includes parliamentary secretaries?


Mr. Speaker:: I am referring to the rule in Beauchesne which specifically refers to cabinet ministers. The point raised by the hon. member is of interest, but I do not think it applies to this particular case.


Marcel Joseph Aimé Lambert: On previous occasions the present administration has insisted that parliamentary secretaries speak for the government.


John Angus MacLean: Mr. Speaker, I might rephrase my question and ask the Secretary of State for External Affairs whether there has been any recent change in government policy with regard to external affairs similar to what I have mentioned.


Hon. Paul Martin (Secretary of State for External Affairs):: No, Mr. Speaker. The question my hon. friend asked was based upon a report which contained a portion of what I said when I spoke to students at McGill University. If my hon. friend will examine that report together with the full speech he will see, of course, that there was no change in government policy.



UNEMPLOYMENT INSURANCE


[Stage Direction]
On the orders of the day:
Mr. David Lewis (York South):: Mr. Speaker, my question is for the Minister of Labour. I should like to ask him whether he has received a telegram from Mr. Gordon Lambert, chairman of General Motors U.A.W.

council, protesting the depletion of their supplementary unemployment benefit fund before transitional assistance benefit payments are made. I would ask the minister what his reply has been to that protest.


Hon. J. R. Nicholson (Minisier of Labour):: Mr. Speaker, I mentioned in reply to a question put to me some weeks ago that further representations had been made by the representatives of the United Automobile Workers to several of my cabinet colleagues and myself. I said we were giving serious consideration to the representations to see whether there should be any further change in the TAB program that was announced last fall. The submissions are still under study. I will be replying to Mr. Lambert later today, but as yet no change has been decided upon. If and when any change of government policy has been decided upon, it will be announced.


David Lewis: A supplementary question, Mr. Speaker. Is the minister aware-since he received the telegram he obviously must be- that the supplementary unemployment insurance fund is depleted to about 40 per cent, and that the workers concerned are worried about there being enough in the fund to meet the needs of workers laid off during the period of change over in models? Does the minister contemplate discussions with General Motors to replenish the fund that is being depleted?


John Robert (Jack) Nicholson: I have nothing to add to my earlier answer, Mr. Speaker.



NATIONAL REVENUE


[Stage Direction]
On the orders of the day:
Edgar John Benson: Mr. Speaker, a few days ago the right hon. Leader of the Opposition raised a question with regard to a statement in the Auditor General's report, and I promised to answer it at the first opportunity.
The statements contained in the Auditor General's report to the effect that a certain Canadian vehicle manufacturer had failed to meet the ratio requirement of the motor vehicle tariff order, 1965, and as a result had become indebted to the crown in an estimated amount of $2.4 million were apparently based on information which was available at the time of the preparation of the report. The amount mentioned was in fact a tentative
February 24, 1967

determination. However, further review of the matter on the basis of information which has become available indicates that the manufacturer in question has not failed to meet the ratio requirements and has not, therefore, incurred any indebtedness to the crown in this regard.


Hon. Michael Starr (Ontario):: A supplementary question, Mr. Speaker. I would ask the Minister of National Revenue, does he mean by giving this answer that the Auditor General does not know what he is talking about?


Mr. Speaker:: Order, please. The question is not a proper one.


Edgar John Benson: On a question of privilege, Mr. Speaker-


Mr. Speaker:: Order, please. I suggest to the minister that he should not reply to this question.


Paul Joseph James Martin: It was a wholly improper question.



FINANCE


[Stage Direction]
On the orders of the day:
Marcel Joseph Aimé Lambert: Mr. Speaker, my question is to the Minister of Finance. Can he tell the house definitely whether the report of the royal commission on taxation will be released today; and if so, are there any copies in the hands of the communications media under pre-release restrictions? Third, what arrangement will be made, in the event of the report being tabled, for hon. members to obtain copies at the earliest opportunity today, not next Monday?


Hon. Mitchell Sharp (Minister of Finance):: Mr. Speaker, it is my intention to table the report at 6 p.m. tonight at the close of our proceedings. 1 understand that the chairman of the royal commission has made arrangements to brief the press under security regulations. That is not being done by the government.


Marcel Joseph Aimé Lambert: A supplementary question, Mr. Speaker. Will arrangements be made that copies will be available and can be picked up by hon. members after six o'clock?


Mitchell William Sharp: I will look into these arrangements, Mr. Speaker, and see that this is done.
Inquiries of the Ministry POLLUTION



INQUIRY AS TO INTRODUCTION OF LEGISLATION

[Stage Direction]
On the orders of the day:
Mr. G. H. Aiken (Parry Sound-Muskoka):: Mr. Speaker, I have a question for the right hon. Prime Minister. In view of his statement yesterday in Toronto that legislation concerning water and air pollution will be brought before the house this year, can he indicate when it may be put on the order paper?


Right Hon. L. B. Pearson (Prime Minister):: No, Mr. Speaker. I said I hoped a lot of the things I mentioned would be decided during the year.


Gordon Harvey Aiken: May I ask the Prime Minister whether he expects it to be this session or the following session?


Lester Bowles Pearson: Mr. Speaker, I should think it would have to be in the autumn.



CANADIAN CONSTITUTION


[Stage Direction]
On the orders of the day:
Mr. Heward Grafftey (Brome-Missisquoi):: Mr. Speaker, my question is directed to the right hon. Prime Minister. In view of the action taken in the Quebec house yesterday, adopting Premier Johnson's suggestion to reconstitute their parliamentary committee studying the constitution, and in the light of the point of view of other provinces, would the right hon. Prime Minister ask the officials in the federal government who are studying constitutional reform to speed up their work so we can form our own parliamentary committee here in Ottawa to study the constitution?


Lester Bowles Pearson: Mr. Speaker, I hope the interdepartmental work going on in regard to this very important matter will be completed before long and submitted to the government. I think that would be the best time for the constitution of a parliamentary committee before which the government could appear with its recommendations on this matter.



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, my question is for the

February 24, 1967
Inquiries of the Ministry Prime Minister and is similar to the one asked by the hon. member lor Parry Sound-Muskoka, having reference to the speech made by the Prime Minister at a gathering of some sort in Toronto last night. Does the answer the Prime Minister gave with respect to air and water pollution also apply with respect to legislation on divorce, birth control and abortion? Will such legislation be placed before parliament this year?


Lester Bowles Pearson: I had these matters in mind particularly since they were the first items I mentioned, namely divorce legislation and amendments to the Criminal Code to deal with the other two matters which my hon. friend mentioned.


Stanley Howard Knowles: Will they be placed before parliament this year?


Lester Bowles Pearson: That is our hope and our intention.


Mr. Raymond Langlois (Meganiic):: Mr. Speaker, while we are speaking about the future may I ask the Prime Minister whether he has given consideration to bringing in during this session or early next session legislation dealing with the establishment of the office of ombudsman in the federal government?


Lester Bowles Pearson: Mr. Speaker, I will have to look into that matter.


Gordon Harvey Aiken: have a supplementary question in connection with the divorce legislation. Can we be assured that no legislation will be brought before the house until the joint special committee of the Senate and the House of Commons has reported?


Lester Bowles Pearson: Yes, Mr. Speaker, we would wish to wait until that report has been received.



TRANSPORT


[Stage Direction]
On the orders of the day:
Mr. J. O. Bower (Shelburne-Yarmouth-Clare):: Mr. Speaker, I have a question for the jovial, energetic and maritime-oriented Minister of Transport. Has the minister received, and if so will he give favourable consideration to, a representation from the Board

of Trade of Yarmouth, Nova Scotia, requesting his department to put on, during the coming summer months only, a second ferry which is believed to be available and suitable for the purpose, to supplement the services of the motor vessel Bluenose on the Bar Har-bor-Yarmouth run, taking into account that in this peak season the traffic demands for both truck and passenger car transport overwhelm the capacity of the Bluenose which, I might note, is now operating without a deficit.


Mr. Speaker:: Order, please. The hon. member knows that questions should not be preceded by speeches, however short, and in view of the fact that the reform he is advocating would only apply next summer I should think perhaps the question might be placed on the order paper.


John Oates Bower: Mr. Speaker, since a lot of planning and many arrangements will have to be made if the supplementary ferry is to be put on, there is some urgency to my request. The urgency of the question also lies in the importance to the maritime provinces of the tourist business, in which I am sure the Minister of Transport is interested.


Some hon. Members:: Hear, hear.


Mr. Speaker:: I am sure all hon. members are impressed by the forcefulness of the hon. member's representation, but he knows that if he cannot wait for as long as it sometimes takes to get an answer to a question put on the paper he can always discuss this matter in the adjournment debate.


John Oates Bower: Ten o'clock, Mr. Speaker.


Michael Starr: Mr. Speaker, I rise on a point of order. My point is that I am sure the minister has got the gist of the question, and in view of its importance he may want to reply even though it was lengthy.


Mr. Speaker:: Order, please.



SHIPPING


[Stage Direction]
On the orders of the day:
Mr. Robert McCleave (Halifax):: My question is also for the Minister of Transport, and I will withhold the adjectives until I have received his answer. Will the minister consider accepting the urgent request of the Canadian Merchant Service Guild, presented by Robert Cook, its national president, to restore the lightship at Sambro station on the
February 24, 1967

approaches to Halifax harbour, in the light of recent tragedies in that area?


Hon. J. W. Pickersgill (Minister of Transport):: I think, sir, I ought to have expert advice before I attempt to answer a question so technical as that. I want to assure the hon. gentleman I will take it into immediate consideration.


Mr. J. M. Forrestall (Halifax):: I have a question supplementary to the one asked by the senior member for Halifax related to the tragic loss of 18 lives last Tuesday. Is the minister aware of an exclusive radio broadcast over radio station CHMS, Halifax, last night in which it was brought to light that the Department of Transport was aware of the need for a sound alarm in this area and had so indicated in January, 1965, and was then in the process of proceeding to correct what was an obvious lack of safety devices in that area?


John Whitney Pickersgill: I did not hear the broadcast, and I am grateful to the hon. gentleman for bringing it to my attention.


Mr. T. S. Barnett (Comox-Alberni):: I
should like to address a question to the Minister of Transport, Mr. Speaker, which is related to the questions addressed to him by the members for Halifax. In view of the fact, as I understand it, that there are some technical questions involved in the matter of a lightship versus a radar buoy in this situation, when the minister receives a report on this matter from his technical experts will he make that report available to members generally because of the implications it may have not only for this situation but for other coastal areas?


John Whitney Pickersgill: I am flattered by the unexpected attention I seem to be getting, and grateful. I think the suggestion the hon. member has made is quite a reasonable one, or at least it sounds reasonable. I will think it over very carefully.


EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
Michael Starr: I wish to address a question to the Prime Minister. Is he planning a meeting with President Johnson, either in Washington or elsewhere, and
Inquiries of the Ministry have any steps been taken to set up such a meeting?


Lester Bowles Pearson: Yes, I am looking forward to seeing the President on the afternoon of March 8.


[Stage Direction]
On the orders of the day:
Michael Starr: I have another question for the Prime Minister, Mr. Speaker. I want to say to him that I was very sorry indeed to learn that he has cancelled his Caribbean trip. I want to ask him whether the reason for that cancellation involves an impending cabinet shake-up, including a change in the portfolio of national defence.


Mr. Speaker:: Order, please.



AIRPORTS


[Stage Direction]
On the orders of the day:
Hon. Gordon Churchill (Winnipeg South Centre):: My question is for the Minister of Transport. Is the minister taking any action with regard to installing extra escalators at Winnipeg airport, in an endeavour to acquire a reputation for action?


John Whitney Pickersgill: I suggest-


Mr. Speaker:: Order, please.



TRANSPORT


[Stage Direction]
On the orders of the day:
Mr. Maurice Allard (Sherbrooke):: Mr. Speaker, I should like to put a question to the hon. Minister of Transport.
Due to the fact that several tragedies have occftrred at railway crossings and that 4,000 Dorion residents have submitted a petition to the government, does the hon. minister intend to adopt a new government assistance policy with a view to eliminating grade-crossings as much as possible and increasing accident prevention, measures?


John Whitney Pickersgill: I think perhaps because of the very great public interest in this matter, underlined by the tragic accident at Dorion, I

February 24, 1967
Inquiries of the Ministry should remind the house of an undertaking I gave on behalf of the government when the government received the federation of mayors and municipalities, that the new transport commission would be asked to review fully the policy with respect to level crossings. However, if in the meantime there are any exceptional situations that appear to warrant exceptional action, there will be no hesitation on my part in recommending it to my colleagues and I feel quite sure I would get a sympathetic hearing.


Mr. Lloyd R. Crouse (Queens-Lunenburg):: A supplementary question, Mr. Speaker. Has the minister any report to give the house on the investigation into the head-on collision of the Ocean Limited which occurred near Springhill?


John Whitney Pickersgill: I am afraid, Mr. Speaker, that I have no report at the moment.



AGRICULTURE


[Stage Direction]
On the orders of the day:
Hon. Theogene Ricard (Sainl-Hyacin-ihe-Begoi):: Mr. Speaker, I have a question for the hon. Minister of Forestry and Rural Development.
Could the hon. minister indicate whether the members of the Canadian Feed Grain Board have been appointed?


Hon. Maurice Sauve (Minister of Forestry and Rural Development):: No, Mr. Speaker. I answered a similar question about ten days ago. I informed the house at that time that I expected the names of the members of the board would be announced before March 15.


Raymond Langlois: A supplementary question, Mr. Speaker. In order to avoid bringing up the same subject too often, would the minister agree to tabling a list of the names of the members when they are appointed?	[DOT]


Maurice Sauvé: Their names will be made public as soon as they are selected by the government.



NATIONAL SECURITY


[Stage Direction]
On the orders of the day:
Mr. Barry Mather (New Westminster):: Mr. Speaker, I have a question that I want to ask

the Solicitor General. Is the issue of wire tapping one which in the minister's opinion will be investigated by the royal commission on security matters?


Hon. L. T. Pennell (Solicitor General):: Mr. Speaker, I do not wish to appear disrespectful to the hon. member, but I have no doubt that the commissioners will place a reasonable interpretation upon their terms of reference. It would be highly improper for me to express an opinion on this while the commission is at work.



AIR CANADA


[Stage Direction]
On the orders of the day:
Gordon Minto Churchill: Mr. Speaker, I have a question for the Minister of Transport who is so co-operative today. Will the minister discuss with the officials of Air Canada the advisability of the full utilization of the repair and maintenance depot at Winnipeg before expanding similar facilities at Dorval?


John Whitney Pickersgill: That seems a quite reasonable request, sir.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Mr. R. R. Southam (Moose Mountain):: Mr. Speaker, I have a question I should like to direct to the Minister of Labour. The urgency of my question is related to a public statement made by the Minister of Labour the day before yesterday, when he quoted figures indicating that work stoppages in Canada were twice as frequent in 1966 as in 1965 and that 411,000 workers were involved in 629 strikes and lockouts in 1966, resulting in a time loss of-


Mr. Speaker:: Order, please. Would the hon. member kindly pose his question.


Richard Russell Southam: Can the minister advise the house whether he or the government are taking any steps to prevent a recurrence of this serious situation and the resulting loss to our economy?


John Robert (Jack) Nicholson: Mr. Speaker, it is too bad that in his preface to the question the hon. gentleman did not read the last paragraph of the press item,
February 24, 1967

which would show that percentagewise there had been a drop. Actually there were, as everyone knows, some unfortunate work stoppages of major magnitude in 1966. There were an unusual number of collective agreements in the private sector as well as in the public sector that came up for renewal in 1966, and I would hope they are now behind us. Certainly at the present time employment is at a very high level, and so is production in factories and works generally across the country.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Mr. J. P. Nowlan (Digby-Annapolis-Kings):: Mr. Speaker, my question is directed to the Minister of National Defence. Has the downward manpower drop-out curve in the forces levelled off because of a five year freeze on releases from the forces?


Hon. Paul Hellyer (Minister of National Defence):: Mr. Speaker, there is no such freeze-*


Mr. Speaker:: Order. It seems to me that the question asked by the hon. member includes an inference or an allegation, and in that form I am wondering whether it is acceptable.


John Patrick (Pat) Nowlan: Mr. Speaker, I wanted to ask a supplementary question in any event. Because of service requirements has a five year freeze been imposed on the release of graduate pilots?


Paul Theodore Hellyer: Mr. Speaker, when the government of Canada gives training so expensive as that required for pilots, doctors, or any officers given university or post-graduate courses, it is felt that there should be some reasonable return to the people of Canada on that investment. I think this is a general policy which is being developed and which applies to all cases where special training is given, such as under the regular officers training plan.


Mr. G. L. Chafierion (Esquimalf-Saanich):: A supplementary question, Mr. Speaker. May I ask the minister whether this investment was considered when the 500 pilots were forced to leave?


Paul Theodore Hellyer: Yes, Mr. Speaker.
Supply-Finance



INQUIRIES OF THE MINISTRY

[Stage Direction]
On the orders of the day:
Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, I wish to address a question to the Prime Minister. I regret that I did not sent him notice but I have been harassed this morning with a lot of complimentary telephone calls. If the hon. member for Kootenay West were to receive an invitation to visit Taiwan, would he be able to visit the other points visited by the right hon. gentleman's parliamentary secretary so that the opposition's point of view would be presented in those areas?
Righf Hon. L. B. Pearson (Prime Minisler):
He certainly would, Mr. Speaker-at his own expense.


Mr. R. A. Webb (Haslings-Fronienac):: Mr. Speaker, I should like to direct a question to the Solicitor General as Acting Minister of Justice and ask him whether he would make inquiries with regard to an Ottawa firm the directors of which filed bankruptcy proceedings, yet are basking in the sunny south during the winter months at the expense of the Ottawa public.


Mr. Speaker:: Order. The question is not very clear, but if there is urgency to the question and it could be made a little clearer, perhaps it could be put otherwise it should be put on the order paper.

The house in committee of supply, Mr. Batten in the chair.



DEPARTMENT OF FINANCE LOANS, INVESTMENTS AND ADVANCES

[Stage Direction]
L30e. To provide for the purchase, acquisition and holding by the Minister of Finance of securities issued by the Canadian Corporation for the 1967 World Exhibition pursuant to subsection 1 of section 12 of the Canadian Corporation for the 1967 World Exhibition Act and to subsequently dispose thereof, $21,000,000.
J.-H.-Théogène Ricard: Mr. Chairman, has the minister any statement to make?


Mr. Winters:: I have no formal statement to make, Mr. Chairman. This is the amount of money that is required to finance the Canadian corporation for Expo through to the point where it will be self supporting from its own revenue. Under the provisions of sector.r.

February 24, 1967
Supply-Finance
12 of the Canadian Corporation for the 1967 World Exhibition Act there is power to draw down moneys on a loan basis guaranteed by the government of Canada and the government of Quebec. So far there has been a total of $175 million borrowed against debentures. This amount of $21 million, making a total of $196 million, will see Expo in sufficiently good financial position to support itself until revenues start to flow from the turnstiles and other sources.


J.-H.-Théogène Ricard: Mr. Chairman, we on this side of the house have no intention of causing the least delay in the passing of supplementary estimates with regard to Expo '67.
However, I feel a few comments are necessary and I will only take a few minutes of the time of the committee.
We must remember, Mr. Chairman, that the government is carrying on the work of the Progressive Conservative government, with respect to Expo. In this as in many other endeavours, the present government, is treading a beaten path, in the best interests of Canadians. Our initiatives, while we were in power, continue to have beneficial effects upon the people, and we are happy to see that the government is following in the footsteps of its predecessors, as regards Expo.
Since this is probably our last opportunity to express our views concerning Expo '67, I believe this is the appropriate time to give credit to those concerned. We must admit that the province of Quebec and the city of Montreal owe it to the Leader of the Opposition (Mr. Diefenbaker) for having accepted that Expo '67 be held in the metropolis of Canada. I should also like to mention the contribution of the mayor of the city of Montreal, who co-operated fully. In fact, Mr. Drapeau travelled all over the world playing the part of ambassador; I feel that he also deserves some of the credit due to those responsible for Expo.
Expo '67, Mr. Chairman, is a colossal achievement; it is a monument to science, architecture and engineering. I believe this is the appropriate occasion to recognize the tremendous amount of work done by those who master-minded Expo; this achievement enhances not only their personal reputation, but also the reputation of Canada itself.
The success of Expo will contribute to the success of our country. Expo will play an

important part in making the Canadian people known far beyond our borders. I feel it is essential that we concentrate on making a success of this major event in the life of our country, and it is both a privilege and an honour to belong to a country like Canada.
During the next few months, millions of visitors from all over the world will converge upon our country. If my information is correct-and I believe it is-at least 62 countries have already reserved space at this world exhibition. This, I believe, is the greatest number of countries ever to take part in a world exhibition. This sole consideration, I feel, is reason enough for those who are responsible for Expo to take pride in the work accomplished and expect the operation to be an unqualified success.
Mr. Chairman, Expo is not solely the business of the province of Quebec nor of the city of Montreal. Expo '67 is the business of every Canadian; every Canadian should take an active part in it. This event will bring additional income particularly to the province of Quebec and to the city of Montreal and thus, each will contribute to the prosperity of the other.
We have heard certain remarks on the development and the additional amounts earmarked for Expo. There has been some concern over the fact that the funds voted for Expo have been over-spent; to my mind, this is not surprising, since it was surely most difficult to forecast within a thousand or a hundred dollars, the final cost of the development of Expo '67. Anyone with the slightest experience in construction should be aware that there is often a large gap between the estimated and the actual cost. I had a similar experience last year when I had some repairs done to my home and when the bills came in I was not too surprised to discover that my estimate was doubled. If this is true in private enterprise, it should not be surprising to find the same thing in a public undertaking in which three levels of government are involved, particularly when it is realized that the operations have been carried out over a relatively long period of time.
Mr. Chairman, there are many factors contributing to the increase in the final cost of Expo and even if the cost is much higher than the estimate, according to our information, if it is compared to the cost of development of other world fair sites, the comparison is still to Canada's advantage.
February 24, 1967

[DOT] (11:50 a.m.)
Various factors led to an increase in the cost and even to delays in the development of the Expo site and Expo in general, and the government must be blamed for several of them. They had unfavourable repercussions due to a lack of planning or accuracy on the part of the government.
It is a well known fact that strikes delayed the work and increased the cost, and building materials also cost more. The railway strike and the longshoremen's strike in the Montreal harbour not only delayed the work but had other harmful results. And finally, I would not like to put all the responsibility or blame on the shoulders of the Minister of Trade and Commerce (Mr. Winters) and the Minister of Industry and Defence Production (Mr. Drury), but I must point out that the II per cent tax levied by his colleague the Minister of Finance and Receiver General (Mr. Sharp) also had very disastrous results for Expo. Consequently, because of the 11 per cent tax on building materials, the final cost of Expo is greatly increased. The government must take full responsibility for that. Had it not been for that harmful 11 per cent tax whose withdrawal we requested on many occasions, the minister would not have to ask for so much money today. Two months away from the opening of Expo, it would be ill advised to take action which would entail the complete failure of Expo.
I said it and I repeat it: we must do all we can to make sure that Expo '67 will be a big success. The minister must see to that. He is justified to watch closely how public funds are spent.
I do think that the members of my party have full confidence in the minister, as I have. I am sure he will perform his duties with as much care as he can. I ask my colleagues on all sides of the house to say or do nothing that could impede the success of Expo '67, for Canada's image abroad could be eroded.
So let us make Expo '67 our centennial project and let us pool all our efforts and good will so that, through Expo '67, Canada's good name may be echoed in all parts of the globe.


John Angus MacLean: Mr. Chairman, may I ask a question of the minister for clarification. Can the minister give the committee any idea of the receipts received from the sale of advance passports for Expo? Are the receipts
Supply-Finance
from these sales available to the corporation, and have they been taken into account in arriving at the figure before us?


Robert Henry Winters: Mr. Chairman, the receipts are of the order of $20 million. That money is available to the corporation and is being taken into account when requesting this additional $21 million in the form of a loan.


Mr. Hales:: May I ask a question for clarification. As I understand it, Expo has issued these securities to get money to operate. The Department of Finance has bought these securities and they remain the property of the Minister of Finance on behalf of the government of Canada. These are guaranteed bonds. By whom are they guaranteed?


Robert Henry Winters: They are guaranteed by the federal government and the government of the province of Quebec.


Alfred Dryden Hales: Are the guarantees not related to the percentages of money put up by the three partners who went into the Expo operation? Were the loans or moneys put up by the city of Montreal not guaranteed? Do the guarantees apply to the government of Quebec and to the government of Canada; are those guarantees based on the original deal?


Robert Henry Winters: The same guarantees apply. There is a supplementary, tripartite agreement whereby any surplus or deficit in Expo will be either paid to or borne by the federal government on the basis of 50 per cent, the provincial government on the basis of 37J per cent, the remaining 12.5 per cent being applicable to the city of Montreal. But, Mr. Chairman, the guarantee is only of the two senior governments.


Alfred Dryden Hales: If there is a loss will the loss be shared in those proportions?


Robert Henry Winters: Yes. The losses will be shared in those proportions under the tripartite agreement.


[Stage Direction]
Item agreed to.
Resolution reported and concurred in.

[Stage Direction]
The house in committee of ways and means, Mr. Batten in the chair.
["Item 130 on today's order paper is the motion having to do with the appointment of a special committee to deal with hate propaganda. I understand there is agreement to pass this motion now. If that is agreeable, I should like to ask that it be called now.\nBusiness of the House HATE LITERATURE"]
Lawrence T. Pennell: Resolved, that toward making good the supply granted to Her Majesty on account of certain expenses of the public service for the fiscal year

February 24, 1967
Ways and Means
ending the 31st day of March, 1967, the sum of $21,000,000 be granted out of the consolidated revenue fund of Canada.


The Chairman:: Shall the resolution carry?


Some hon. Members:: Agreed.
Resolution reported and concurred in.
Mr. Pennell thereupon moved for leave to introduce Bill No. C-271, for granting to Her Majesty certain sums of money for the public service for the financial year ending the 31st March, 1967.


[Stage Direction]
Motion agreed to, bill read the first and second times and the house went into committee thereon, Mr. Batten in the chair.
[DOT] (12:00 noon)
On clause 2-$21,000,000 granted for 1966-67.
['Agreed.\nResolution reported and concurred in.\nMr. Pennell thereupon moved for leave to introduce Bill No. C-271, for granting to Her Majesty certain sums of money for the public service for the financial year ending the 31st March, 1967.']
Mr. Bell (Carleion):: Mr. Chairman, may we have, from whichever minister has responsibility for this legislation, the assurance that this bill is in the standard form and contains nothing that is not usual in such an appropriation bill.


Miss LaMarsh:: I might say, Mr. Chairman, that I do not have a copy of the bill before me, but the bill which was prepared under the aegis of the Solicitor General I think can be safely accepted as being in the proper form. The Solicitor General has stepped out of the chamber for a moment, but he will return shortly.


Mr. Bell (Carleton):: Surely there must be some minister who has read the bill and who is able to give what are the standard assurances. Here we have a situation where no minister is present who is in charge of the financial arrangements of this government. I say it is contempt of the House of Commons for the government to have here only ministers who are not prepared to answer a question in respect of an appropriation bill which is the very essence of parliamentary democracy. The Minister of Finance and the President of the Treasury Board, or somebody who is informed, ready and able to answer the question, should be here.
I think the bill had better stand. I suggest we should rise and report progress until some minister is here who is prepared to answer what is an ordinary question.


Julia Verlyn (Judy) LaMarsh: Mr. Chairman, quite obviously I do not have responsibility for this bill. My hon. friend has been a member of this

house for some time and, despite the pyrotechnics he is indulging in, he should be aware that there are in the house at present five ministers, two members of the privy council, and half a dozen members on the hon. member's side of the chamber. There is no contempt whatsoever. The five clauses in the bill are clearly of the types which are contained in every such bill. They are easily read and very clear in intent. I suggest to my hon. friend that while we appreciate the histrionics, there is no question but that this bill is in the usual form. I am quite prepared to say it is in that form, and my hon. friend need have no apprehension in that regard.


Richard Albert Bell: It is not a matter of histrionics. I have been in this house a long time, and I have sat on the other side. I have never known an occasion when an appropriation bill has been presented without this assurance being given by the Minister of Finance, the parliamentary secretary to the Minister of Finance, or the President of the Treasury Board. If there is no one here who is prepared to give this assurance I am prepared to move that we rise and report progress until there is a minister here who can give us this assurance in respect of a bill, which is vital and fundamental to the powers of the House of Commons.


Julia Verlyn (Judy) LaMarsh: I have just given that assurance. Perhaps the hon. member was giving such consideration to what he had in mind and was saying that he did not hear me say that. I gave that assurance. We have another minister here now. Under the administration of which my hon. friend was a member I can remember occasions when there were not five or six ministers in the house.


Richard Albert Bell: Perhaps the Minister of Public Works would give the assurance.


Julia Verlyn (Judy) LaMarsh: I have given it twice.


Richard Albert Bell: The hon. lady gave the assurance after confessing that she had not read the bill.


Julia Verlyn (Judy) LaMarsh: Mr. Chairman, I am sure the hon. gentleman is capable of reading the five clauses. He might not have the bill before him, but I have; and the moment I looked at it I realized it was quite safe for me to give that assurance because I noticed that it is in the usual form.


Herman Maxwell Batten: Shall clause 2 carry?


Some hon. Members:: On division.


[Stage Direction]
Clause agreed to.
February 24, 1967
['On division.']
Herman Maxwell Batten: Shall clause 3 carry?


Some hon. Members:: On division.


[Stage Direction]
Clause agreed to.
['On division.']
Herman Maxwell Batten: Shall clause 4 carry?


Some hon. Members:: On division.


[Stage Direction]
Clause agreed to.
['On division.']
Herman Maxwell Batten: Shall clause 5 carry?


Some hon. Members:: On division.


[Stage Direction]
Clause agreed to.
['On division.']
Herman Maxwell Batten: Shall the schedule carry?


Some hon. Members:: On division.


[Stage Direction]
Schedule agreed to.
['On division.']
Herman Maxwell Batten: Shall clause 1 carry?


Some hon. Members:: On division.


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

Lawrence T. Pennell: the second reading of Bill No. C-267, to amend the Judges Act.
He said: Mr. Speaker, I rise in the hope that we have passed through the eye of the storm and will be in calmer waters.


Thomas Miller Bell: I hope the minister has read the bill.


Lawrence T. Pennell: I can give that assurance to the hon. member.


Richard Albert Bell: That was the trouble with the earlier bill.


Lawrence T. Pennell: The main purpose of this bill is to revise judicial salaries. The judiciary is such a vital component of our system that any bill dealing with the judiciary is a bill of importance. Salaries of the judiciary have not been revised since August, 1963. The proposed increases are clearly set forth in the bill for those judges for whom parliament has a legislative responsibility under the British North America Act, and require little comment except perhaps to say that an attempt has been made to fix judicial salaries at such a level as will permit the maintenance of the very high
Judges Act
standard of our judiciary without at the same time creating any question of doubt that those who do serve in this way do so out of a profound sense of and desire for public service. Percentage or uniform increases are not being proposed. Rather, an attempt has been made to increase salaries where justified in relation to the importance of the duties and responsibilities connected with the judicial office.
[DOT] (12:10 p.m.)
In addition to the general increases we are proposing we also are making provision for the payment of an additional salary of $2,000 subject to certain specified conditions. Speaking generally, this additional sum is to be paid to all judges except those who receive from a province any annual or periodic compensation as a judge of a superior or county court. In certain provinces such as British Columbia, Alberta and Ontario, judges do receive payments in varying amounts as judges of the superior or county courts. New section 20 of clause 1 will not deprive them of these provincial payments, but if they continue to receive them they will not receive the additional salary provided by parliament. In this way an attempt is being made to equalize the salaries paid to the holders of these important provincial judicial offices. It is not easy, Mr. Speaker, to formulate the criteria by which judicial salaries should be assessed. The government have given the matter sustained consideration and have come to the conclusion that the amounts are on the whole reasonable and fair.
In addition to the salary revisions the bill deals with one or two matters that should be mentioned. We are proposing to broaden the law relating to travelling allowances. In essence, the proposed changes will permit judges to be paid their actual expenses when they travel on official business as judges, whether they travel to hold court, to sit in chambers or for any other official purpose. We are also proposing some estate tax relief for the widows of judges who receive annuities under the act. The proposed new provision is for all practical purposes the same as the one found in the Public Service Superannuation Act as amended in 1960, and the intention is to deal with the tax payable on pensions of judges' widows in the same way as pensions payable to public servants.
Finally, we are proposing to broaden the provisions of the law to make it clear that

February 24, 1967
Judges Act
judges can act as commissioners or arbitrators, etc., if there is either a federal or provincial statute authorizing them to do so, as well as in cases where, as at present, there is proper executive authority from the governor or lieutenant governor in council. However, judges who do undertake these special duties will be permitted to receive only their actual travelling and other expenses while away from their ordinary places of residence, if these expenses are paid by the governments concerned.
It will be seen that judges will still be permitted to engage in extrajudicial duties in proper cases, but that they will not receive anything more for doing so than they would have received had they been performing their ordinary judicial functions. The result will be that judges who do undertake extrajudicial duties cannot be accused of doing so for pecuniary motives or personal gain at the expense of their brother judges who in some cases are required to assume additional judicial burdens as a result.
Before concluding, Mr. Speaker, I should give notice that when the house comes to clause 4 I shall seek an amendment for the purpose of clarifying the provisions respecting annuities. The amendment, to put the matter shortly, will clarify the fact that the salary of the judge for the purpose of calculating the annuity includes the amount of any additional salary provided by new section 20 of clause 1.


Richard Albert Bell: Mr. Speaker, next only to freedom of debate in this parliament the independence of the judiciary is the cornerstone of our Canadian democracy and our freedoms. Founded upon the Act of Settlement, the principle of judicial independence is a gift of Britain to the democratic world second only in importance to her gift of parliamentary institutions.
Judicial independence means, in my submission, simply that judicial functions should be performed in an atmosphere in which there is no hope of gain or preferment on the one hand, and no fear of punishment, intimidation, restraint, discipline or retribution on the other. The judge must be in a position where he can fearlessly uphold the law and the cause of justice without being influenced in any way by the effect of his decisions on his own personal career or fortunes. Norman Ward in the fourth edition of Dawson's "The Government of Canada" puts it rather neatly at page 449:
The judge is placed in a position where he has nothing to lose by doing what is right and little

to gain by doing what is wrong; and there is therefore every reason to hope that his best efforts will be devoted to the conscientious performance of his duty.
On the same page the learned author in one short paragraph epitomizes the Canadian concept of the judiciary, and I venture to quote this paragraph:
The judge will thus usually begin with the twin assets of character and ability, and these become the foundation on which the indirect appeals are based. He is paid a substantial salary, which not only removes some of the obvious temptations, but frees him from financial distractions. The importance of his office is continually stressed; his own rectitude and sense of fairness are invariably assumed; the dignity of the court and the respect accorded his office are rarely, if ever, challenged; his social position is always assured. These efforts to accentuate the eminence of the office are made infinitely more effective by the fortunate regard which the legal profession has for the judiciary and its ingrained habit of regarding a seat on the bench as the crown of a legal career. Thus some of the very men who build up the tradition may be induced to accept judgeships a few years later, influenced to a material degree by the tradition which they themselves have helped to create. Not the least important result of this prestige is its effect on the public, who have come to accept it-[DOT] and with some justification-at its face value, and who see in judicial independence a greater promise of justice than could be obtained through the application of ordinary political sanctions.
As I see it, the intention of this bill is to uphold and strengthen these precepts which are so clearly set forth, and in that light it must be tested. Canadians at all levels of income concede readily that judges of all courts should be paid such salaries and provided with such pensions for themselves and their dependants as will assure not only full financial independence but will be attractive to leaders of the bar to accept judicial appointment; for without financial independence other aspects of independence are illusory or hallucinatory.
It becomes a matter of judgment as to what the levels of salary must be to achieve those universally accepted objectives. For myself, I believe that if there is to be error it should be on the side of generosity. When we are in committee of the whole we can examine in detail with the Solicitor General the scale of salaries proposed by the bill, ascertain more closely than he has stated on second reading the principles upon which the figures are based, and decide then upon their wisdom. Consequently at this stage I refrain from detailed comment upon the salary levels proposed.
But I believe I should point out that there is an ever-growing problem of persuading
February 24, 1967

February 24, 1967
Judges Act
for the province, or for acting as arbitrator, referee, conciliator or mediator, and the prohibition of payment to him for such duties of any additional emolument except out of pocket expenses.
My understanding is that this will not now apply in Ontario, because supreme court justices receive $4,000 per annum from the province and county court judges receive $3,500. However, to make provision for payment of an extra $2,000 to county court judges in Ontario, as I understand the section, all the legislature of Ontario would need to do is to provide that $3,500 is payable to them qua surrogate judges, as is done in Manitoba. Thereupon the $2,000 under section 20 of the bill would be payable. But that, of course, is in the discretion of the legislature of the province.
In this particular I want to state my firm objection to what I may describe as moonlighting by judges. With the new salaries proposed I believe that only in cases of greatest urgency should judges be permitted to accept outside employment. In most courts there is a heavy backlog of work, much of it created by judges accepting non-judicial assignments as royal commissioners, arbitrators, conciliators or the like. These extra judicial duties are prejudicial to the independence and impartiality of the judiciary, and should be stopped.
Indeed, I believe my friend Mr. Justice Wishart F. Spence may unwittingly have performed a great public service last year, because I believe that never again will a justice of our highest court either be asked to accept or actually accept appointment to a commission with political undertones.


Some hon. Members:: Hear, hear.


Richard Albert Bell: Personally I hope that never again will a justice of the Supreme Court of Canada be appointed to any royal commission at any time. You will remember, Mr. Speaker, that I have on the order paper private members' Bill C-237, which would have the effect of preventing any judge of the Supreme Court of Canada from accepting any extra judicial appointment. In arbitration, conciliation and mediation work in employer-employee relations it is exceedingly difficult for a judge to avoid being tagged as either a labour man or a company man. It is hard for him to avoid public attacks as a result of his activities. Indeed, the constant use of judges for arbitration and conciliation has, at least in the province of Ontario, divided the bench into the "haves" and the "have nots". The

"haves" are those who are regularly engaged in outside non-judicial assignments at worthwhile fees, and the "have nots" are those whose talents are not sought in this field or those who on principle refuse to accept nonjudicial work.
My hope is that this legislation will result in actually restricting judges to their judicial knitting. It is true that there will have to be panels of arbitrators, mediators or conciliators, but I suggest they will have to be created from the non-judicial world, from the academic world, from members of the bar and elsewhere. I suggest most earnestly that judges must be sent back to their courtrooms. If this is the by-product of these increases and of other amendments in the bill, it will be most worth-while in the national interest.
My views on the excellence of the Canadian judiciary have been frequently expressed in this chamber and I do not intend to repeat them this morning. Without necessarily approving the particular increases or the scale of increases proposed by the bill, we welcome any legislation which will strengthen the independence and impartiality of the Canadian judiciary, for thereby we strengthen the nation.


Herbert Wilfred Herridge: Mr. Speaker, I rise as a lay member of the house to say that I have listened with great interest to the speech by the hon. member for Carleton I thought he was very logical in his approach to several of the problems or principles related to this bill. I must say that he almost brought tears to my eyes when he dealt with the way lawyers are required at certain times to give up very substantial incomes and sacrifice themselves for the public good for the salaries being provided under this bill. Those who do it I think should have the gratitude of members of the house and of the people of Canada for accepting great reductions in income in order to serve the people of this country.
[DOT] (12:30 p.m.)
The other point I wish to mention, Mr. Speaker, is the reference to moonlighting. As I sat here it struck a responsive chord in the members of this party who are normally used to earning their living with their hands and the sweat of their brows. I thought there was great merit in this suggestion. During my experience I have known some excellent judges who have undertaken this work of conciliation, on arbitration boards and other commissions. I do think the member was
February 24, 1967

correct in stating there was the possibility of a judge being tagged as a labour judge, a management judge or having an opinion in one direction or the other. I wholeheartedly support this suggestion that judges should not be required to undertake these extra functions.
With these few remarks, Mr. Speaker, as an ordinary, hard working man, I resume my seat.


Mr.   C.-A. Gauthier@Roberval: Mr. Speaker, just a word to say that we fully agree with the hon. minister as to the increase proposed by the government.
I shall certainly not pity our judges' fate, but I want to say that they deserve salaries just as much as international sportsman and any kind of television performer.
I think that they have the most thankless job in the country and besides, we have to consider the fact that the majority of them are the greatest technicians in the country and that they play an essential role.
I should like to call the attention of the house to the appointment of some judges. If their duties are most important, I think that they should be appointed according to the duties they will have to perform. However, I will confess frankly that when we see appointed to the bench people that we used to know and hobnob with in the past and who were considered as rather poor lawyers, because of their political affiliation, it is not likely to inspire a great deal of confidence in the people, in some cases.
We want judges to get the salary they deserve, but we also want them to be equal to their task. That is why I say that appointments should be made sensibly. As a matter of fact, when appointing a judge, any government should first consider the qualifications and the honesty, of a candidate, before taking into account his political allegiance. Mr. Speaker, I trust that the situation will improve in the future.
Judges of the Supreme Court and of other courts will get a small annual increase of $5,000. This is not to be disdained; indeed, it should prompt them to carry out their duties year round instead of accepting all types of subcontracts. A judge who gets $35,000 or $40,000 per year has enough to live on, I think, especially if the new legislation provides for travelling expenses, living allowances and all kinds of exemptions. It is said that a judge needs an increase to provide for his family. I think that when a lawyer is
Judges Act
appointed to the bench, his family is quite independent of his salary, and with $35,000 or $40,000 per annum, he can discharge his duties 365 days a year, without looking for other fees, outside his functions as a judge.
To some extent, I think this is why we seem to be short of judges, especially in our district courts. Some cases drag on for one, two, and even three years. People say: there are too many cases before the courts, judges are scarce and have no time to hear these cases. I believe, Mr. Speaker, the government should do some checking. I would be anxious to know, at the end of the year, the total number of hours each judge has devoted to his work, as compared with his salary, for I am aware that there are several judges -fortunately, several of our judges are very serious-minded-who have their duties at heart, but some others take life easily and they are not working as much as they should.
I would like to find out at the end of the year the total number of hours during which they sat and heard cases; it would be surprising. Even the government would be surprised, as far as some districts are concerned. After all, judges are being appointed to render justice to the people, to do justice to the ones who wish to appear before them, but if they devote only three, four or five hours to the hearing of cases, I believe that at the end of the month or of the year, there will be 50 or 60 per cent of the cases which will not have been heard.
I believe such a situation is due to the sluggishness on the part of judges. They care more about getting their salary-a fairly healthy one-than about hearing cases that have been entered on the roll and should be heard during the year.
I did not know exactly how many judges there were; then I see the list for Quebec, and I quote:
(a)	The Chief Justice of Quebec;
(b)	Eleven puisne judges of the Court of the Queen's Bench;
(c)	The Chief Justice of the Superior Court;
(d)	The Associate Chief Justice;
(e)	Seventy-three puisne judges of the Superior Court-
I wonder why we have more judges than Ontario. I also see here the list for Ontario, and I notice that this province has fewer judges than Quebec. I do not know whether this is because people in the province of Quebec are more difficult to deal with than in Ontario, but even so the fact remains that there are 73 judges of the Superior Court in

February 24, 1967
Judges Act
Quebec and only 24 in Ontario. I do not know whether-


Thomas Miller Bell: Is the hon. gentleman not aware that there is no county court in Quebec?
[DOT] (12:40 p.m.)


Mr. Speaker:: Order. I would suggest to the hon. member that he is now making a detailed study or analysis of the bill. The point he is raising now should be discussed when the bill is studied in committee.


Mr. Gauthier:: Mr. Speaker, I only wanted to give an idea of the over-all situation, which gives rise to a question in my mind. I also wanted to point out that, generally, in spite of a larger number of judges in the province of Quebec, we get less service from them than the citizens of Ontario get from theirs. That is the point I wanted to make in order that the government might be aware of that sad state of affairs. We have much to complain about, in Quebec, with regard to certain judges.
Once again, I congratulate the vast majority of judges who really deserve their salary, for only the minority, namely 15 or 20 per cent of them, do not carry out their responsibilities. In spite of this, I believe that percentage is high enough to call the attention of the house to the situation and I trust that in the future the government will keep a lookout with regard to the work performed by the judges.


Robert Jardine McCleave: Mr. Speaker, I want to make a very brief point to the Solicitor General, and my point is this. A separation recently took place in Nova Scotia with the creation of an appeal division with three judges and a trial division with six judges. At the moment nine judges replace a system which employed seven judges. The arithmetic of this change has had the effect of removing one of the trial judges, and I suggest this is something the Solicitor General and the attorney general of Nova Scotia might well wish to consider, perhaps after some consultation with the newly appointed chief justice of the appeal division, Hon. L. D. Currie, who was recently chief justice in the trial division and who would therefore be aware of the problem which had been created.

The reason this problem is a little acute at the present time is that it frequently happens that one of the three appeal judges has to remove himself from hearing an appeal because of his involvement in the case when it came on for trial. There are also other reasons why one of the members of a three man appeal court may feel he should not be sitting on a certain appeal. This can be remedied by bringing up a judge from the trial division to fill in on a temporary basis and hear the appeal, but this has the effect of putting more pressure on the judges of the trial division. I think this is a matter the Solicitor General and the attorney general of Nova Scotia should consider, I suggest in consultation with the chief justice of the appeal division and other judges as well.
I should like to make a further point, one which has been made several times and made very well by the hon. member for Carleton. There is a group of judges who do not partake of extra-judicial functions such as sitting as conciliators, mediators and the like, and this has created the rather awesome burden of trying to keep the court calendars and trial work up to date.
I suggest, Mr. Speaker, that we seriously consider that judicial independence of judges means much more than financial independence. It should also mean that none of them is put in the position of carrying such a work load that his ability to deal properly with cases is impaired because there is simply too much work to do.


[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-Salaries of Judges of Supreme Court of Canada.
Richard Albert Bell: Mr. Chairman, I wonder whether the minister would now elaborate briefly on the principles which were adopted by the government in reaching the scale of increases set forth in this clause. While he is doing this would he also deal with the other point I made, which concerned the increasing disparity between the salaries of supreme court judges and county and district court judges.
While I am on my feet I might say to the hon. gentleman for Roberval that if he will examine the bill he will find there are 118 federal judges in the province of Ontario and 88 federal judges in the province of Quebec. What I think the hon. gentleman did not appreciate was that in the province of
February 24, 1967



Quebec there are no county courts. He will find that there are 83 judges in the county courts in Ontario, which with 35 supreme court judges brings the total to 118 federal judges, whereas in the province of Quebec there are only the superior court judges totalling 88 in number.


Lawrence T. Pennell: Mr. Chairman, before dealing with some of the questions raised by the hon. member for Carleton I wish to compliment him on the eloquent address he made, and to concur in general with his remarks about the judiciary and the sacrifices they make in accepting an appointment to the bench. The hon. member mentioned the case of Lord Kilmuir, and that Lord Kilmuir while a practising member of the bar was earning $115,000 per annum. The recent increase in the salaries of high court judges in the United Kingdom brings the salary of a high court judge up to $30,000, which confirms the point made by the hon. member.
As I stated earlier, Mr. Chairman, it is not easy to formulate the criteria by which judicial salaries should be assessed. It is not done on a percentage basis or by an across the board increase. We try to even it out according to the responsibilities of the office. The supreme court judges will receive between $28,000 and $30,000, depending on the province in which they serve. This compares with the figure of $30,000 in Great Britain I mentioned a moment ago.
So far as the county court and district court judges are concerned a difficult problem arises. The salaries paid county court judges under provincial legislation are such that in some provinces the additional salary is caught by clause 20 while in other provinces it is not. In other words, Mr. Chairman, the salary paid by the provinces in some cases is free from the deduction of $2,000.
Perhaps I may put it in another way. I believe that in some provinces the county court judges will receive, over and above anything that is paid to them under the federal statute, the amount paid to them under the provincial statute. In other provinces they will have to forgo the amount paid to them under the provincial statute if they accept the full amount under the federal statute. So no matter what course we adopted we were still going to have disparity in the salaries of county court judges across the country.
I did have the pleasure of meeting with a number of representatives of the county court judges, Mr. Chairman, and I appreciate the problem. I suggested at the time that I enter
Judges Act
into private consultation with the attorneys general of the various provinces to see whether the provincial legislatures will consider amending their statutes to enable the federal government to bring uniformity to the salaries of county and district court judges. On reflection I would say, with respect, that this seems to me perhaps to be the most desirable way in which to approach this rather difficult subject.
The hon. member for Carleton also raised the point about pensions and with genuine concern suggested we should be 'a little more generous in this connection. The government was perhaps a little reluctant to move any further under this bill, because in fairness I think the pensions of all public servants should be considered and given equal study before any action is taken. There has been study of this point from time to time.
[DOT] (12:50 p.m.)
On the question of extrajudicial duties, I think this meets the point the hon. member has in mind, namely that the members of the judiciary should concentrate on the discharge of their official duties rather than on extrajudicial activities. The act does permit judges to undertake extrajudicial duties if provision is made on in a statute of the legislature or of parliament, but they can only be paid in respect of those duties if remuneration is made available by the provincial or federal government.
I believe the hon. member for Carleton dealt effectively with the question raised by the hon. member for Roberval. As he pointed out, in the province of Quebec the superior court judges discharge many of the functions which are performed by county court judges in Ontario. In addition, magistrates in Quebec perform some of the duties performed by county court judges in Ontario. So the number of persons engaged in judicial functions is relatively the same per capita in these provinces.
I should like to take this opportunity to express my gratitude for the devotion and sense of public service with which the judges in Quebec and elsewhere are discharging their duties.
I believe I have answered most of the questions which were raised, but if there are some I have overlooked-


Robert Jardine McCleave: Yes. I did ask a question which the minister has not dealt with.


Lawrence T. Pennell: I apologize to the hon. member for Halifax; I overlooked the point he made. I find merit in the suggestion he put

February 24, 1967
Judges Act
forward, and I think it would be proper that the Minister of Justice should consult with the attorney general of Nova Scotia with regard to it. I will bring this matter to the attention of my colleague and urge it upon him.


Thomas Miller Bell: I am not sure the minister has dealt effectively with the point I made about the disparity between salaries paid to supreme court and county court judges in the province of Ontario. The position, as I understand it, is that both receive an amount from the province, so neither bench would be entitled to draw anything under clause 20, the extra $2,000, unless the legislature amends the existing legislation.
The position is that the supreme court judges draw an amount of $4,000 from the Ontario legislature, and the county judges get $3,500. The addition of these amounts to the amounts proposed in this bill would mean that the supreme court judges would receive a total of $30,000 and the county judges $22,500. This in fact increases the disparity between the two benches; there is an increase of $5,000 for the supreme court and $3,000 for the county court. This represents a widening of the disparity, whereas in my opinion the reverse should be the case. I am not sure that the Solicitor General and the Minister of Justice have dealt as generously with the county judges, relatively, as they should have done in the circumstances.
I understand that the minister intends as a concomitant to introduce an amendment whereby pensions will be based upon an amount including the $2,000. In cases where these judges are receiving sums from the province they will not be entitled to a pension based on the $2,000, and I suggest this is a serious factor. In my opinion the minister should give more consideration to the position of the county court judges.


Lawrence T. Pennell: I appreciate the point made by the hon. member for Carleton. Perhaps I can elaborate on the question. Supreme court judges in the province of Ontario receive, as I understand it, an additional $4,000 from the province for performing their duties as high court judges. The county court judges receive from the province $3,500 and, if I am correct, this covers their duties as surrogate court judges. I respectfully suggest that if the provincial act was drafted so that they received say $2,500 as surrogate court judges and $1,000 for county court duties, the $2,500 set aside for surrogate duties would not be

caught by the clause we have been considering. This would be an effective way of bringing the salaries of Ontario county court judges closer to those of high court judges.
If we were to adopt any other approach it would mean that in provinces where the provincial statute is drafted so that the amount paid is not caught by the provisions of clause 20, the county court judges in that province would be receiving an amount much closer to the supreme court scales than in other provinces, and we would still have the problem of disparity.


Richard Albert Bell: The point is that at the present time the total dollar income of a county court judge in Ontario including the federal payments and the provincial payments is $5,500 lower than that of a supreme court judge. Under this legislation it will be $7,500 lower. The minister has been thinking more in terms of percentages than in terms of amounts, and I rather think he should have worked on the basis of amounts.


Mr. Baldwin:: The hon. member for Carleton said most of what can be said when he spoke on second reading. No better proof of his eloquence could be forthcoming than the admission by the hon. member for Kootenay West that my hon. friend had brought tears to his eyes. This, I thought, was impossible because in the years during which I have been observing the hon. member for Kootenay West, it seems to me he had surely shed all the tears it was possible for him to shed.
I wish to touch on this distinction between county or district court judges and supreme court judges. My view is that the situation in Quebec is far better than it is in other provinces. I have always felt there should not be the present distinction. There is often an inclination among some people to measure the quality of justice which litigants receive by the extent of the jurisdiction possessed by the judges, and sometimes this involves the question of salaries. One of the difficulties the Solicitor General faces is that the extent of a judge's duties is fixed largely by the provincial legislatures. It is my feeling that this might be the subject of discussion at a conference of attorneys general looking toward the removal of the barriers which now exist.
As a solicitor I have sometimes raised the amount of a statement of claim by a thousand dollars so as to get a case from one court into another. This is frequently done. Surrogate court work and the handling of estates are matters for the provinces. They might wish
February 24, 1967

eventually to appoint their own people to handle these matters, as they have done by the appointment of masters in chambers in some districts.


The Deputy Chairman:: Order. I am sorry to interrupt the hon. member but pursuant to an order of the house made last Monday this committee stands adjourned until two o'clock?


SITTING SUSPENDED
[Stage Direction]
The committee resumed at 2 p.m.
Herman Maxwell Batten: Order, please. The hon. member for Peace River.


Gerald William Baldwin: Mr. Chairman, before this committee in its infinite wisdom decided at one o'clock there were better places for hon. members to spend their time than in committee, I had been dealing with the distinctions between supreme court and country court judges. I said that I admired the system prevailing in Quebec where there is no distinction between judges. There superior court judges deal with matters which in other provinces are divided between supreme court and county court judges. It is for the provinces and not for the federal government to say how the courts shall be organized and how they shall deal with their work. I hope that at some time this subject may be discussed at the meetings which take place between the Solicitor General, the Minister of Justice and the Attorneys General. I think it is desirable that the ultimate objective of having no distinction between judges be achieved.
While we are not allowed to say what proceedings have taken place in committee it is no secret that in the joint committee on divorce where we have been considering proposed changes in our divorce laws most of the briefs which have been presented and made public have shown the wisdom of conferring the right to dissolve marriages on county, district and supreme court judges. As work piles up it will be most desirable to bring together under one judge the jurisdiction of supreme court and district court judges, leaving the provinces free rein as to the way estate and surrogate work and debt collection are handled.
Another point I wish to talk about is dealt with in clause 1. I refer to the payment of the additional $2,000 which is to be included in
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the new section 20 of the Judges Act. New section 20 in part reads as follows:
-an additional salary of $2,000.00 per annum as compensation for any extra-judicial services-
I take it that the extra work referred to is extra work which the judges will perform as judges. I also take it that this follows the recommendations made over a number of years by the public accounts committee. For a number of years that committee, during examination of the Auditor General's report, has commented about supreme court, county and district court judges having been assigned to extrajudicial duties as conciliators, members of arbitration boards and so on. They have received $40, $50 or even $100 a day, ostensibly earmarked as living and travelling expenses. I feel that these payments have contained an element of remuneration. The view that the Auditor General and the public accounts committee have consistently taken for four or five years is that payments of this kind do contain an element of remuneration. Both the persons who received this money and the government which approved payment thereof would therefore be in direct violation of the Judges Act as it then stood, because that act provides that apart from his salary no judge should receive any remuneration.
[DOT] (2:10 p.m.)
During the hearings of the committee we had the pleasure of having the deputy minister of justice appear before us to give us his view, but quite frankly I might say that we were not satisfied. However, as I understand it this clause will now cover that situation. It was not that we objected to judges receiving these payments but rather that we objected to their receiving them in the way in which they did, since they contain an element of remuneration. There is ample justification for them. It has been brought to our attention that in some cases judges who have received such payments have filed income tax returns in which they included a portion of the $60 or $100 a day they had received allegedly as living allowance. In their income tax returns they included part of these amounts as income.
I think this provision brings to an end a very undesirable situation. As the hon. member for Carleton pointed out, a distinction was created between judges because while some judges engaged in this type of work and received very substantial additional remuneration their colleagues on the bench were compelled to carry out most of the judicial duties.

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Therefore an additional arduous burden fell upon some judges because of the absence of some of their colleagues who were engaged in these other duties.
For this reason I hope the Solicitor General will confirm that this provision does take care of the objection which the Auditor General and the public accounts committee have expressed over a number of years. I hope that the attempt to introduce what can only be described as an element of remuneration in the living and travelling allowances of judges engaged in extrajudicial duties will now cease.


Lawrence T. Pennell: Mr. Chairman, first I should like to say that I concur with the hon. member for Peace River that there is a trend toward a division of judicial duties as he suggested. I am also pleased to be able to confirm his understanding of the purpose of this bill regarding payment to judges who are engaged in extrajudicial duties.


Mr. Leboe:: Mr. Chairman, before this matter is dealt with by the committee of the whole I should like to ask the Solicitor General whether he does not feel the time has come when methods of appointment to the judiciary other than the one now followed should be seriously looked into. It seems to me that in his eloquent words this morning in connection with the judiciary the hon. member for Carleton might have included the fact that judicial appointments usually are made from those persons who happen to be friends of the government in office at the particular time. Although it may be said that one does not know whether a certain person is a friend of the government, I still say that in terms of practical politics we know what the score is. Perhaps the Solicitor General might indicate what he thinks might be a suitable alternative to appointments to the judiciary almost always being made from among those who are friendly to the government.
I am not a lawyer but from a logical point of view I certainly agree with the hon. member for Peace River that it does seem that some steps should be taken to ensure that the divisions existing in some of the provinces so far as the judiciary is concerned are eliminated so that a direct allocation of service can be made in respect of the judiciary. This might be spelled out and specified more clearly so that the members of the judiciary might be able to give better service to the general public.


Lawrence T. Pennell: Mr. Chairman, the hon. member has raised what one might almost call the annual question which comes before the house whenever we are dealing with matters related to the judiciary. Without in any way reflecting upon what considerations may have entered into the appointment of judges before I assumed any responsibility in that regard, I wish to assure the house that the number one consideration to my knowledge has been the experience, character and learning of the person who is appointed to the bench. I would be less than frank, however, if I said there were no other considerations, but I wish to emphasize that to the best of my knowledge the primary considerations have been the character and learning of the individual. I might go further to indicate that in my experience inquiries have been discreetly made about the individual concerned and as to whether or not he has ever been before the dicipline committees of the various law societies. Generally speaking the person who is appointed has been endorsed by a bencher or other high ranking member of the Law Society. The Law Society, after all, includes persons who have the best knowledge in this regard, and is the governing body of the legal profession in the respective provinces. I suggest to the hon. member that the Minister of Justice is performing his duties in this regard in a very able manner.
While I am on my feet I might be permitted to advise the committee that I seek to amend clause 1 of the bill. First of all, on page 5 of the bill I would seek an amendment to new section 19. Where it now reads in subsection (e) of new section 19, "Seventeen judges and junior judges of the county courts", it should read, "Eighteen judges and junior judges of the county courts". This is applicable to the province of British Columbia. Since the preparation of this bill an additional judge has been added to the number of county court judges in the province of British Columbia. I believe the house carried the resolution the other evening. The text of the amendment I should like to have made is printed at page 13 of Votes and Proceedings of February 21 last. I would ask that this amendment now be put.


Mitchell William Sharp: I so move, Mr. Chairman.


Lawrence T. Pennell: I apologize to the house for not having copies of this very minor amendment.
February 24, 1967

[DOT] (2:20 p.m.)


Bert Raymond Leboe: Mr. Chairman, I should like to get back to the question I raised a moment ago. While I very much appreciate what the Solicitor General has said about the care with which members of the judiciary are picked, my concern is about the limited scope in practice in picking these individuals. I believe we are limited in scope by the practice of looking for those who are friends of the government. I hope the government will give serious consideration to finding a different way of selecting the judiciary. We would be burying our heads in the sand if we did not realize in spite of the eloquent speech of the hon. member for Carleton, that there is a great deal of dissatisfaction about these appointments because of the suspicion that surrounds the way in which members of the judiciary are appointed.
I believe that not only should the judiciary be, as I believe they are, very capable and honest individuals doing a good job but they should be appointed in a way that would leave them beyond suspicion. I think this is one of the things the government should look into in order that our judiciary will not be suspect because they belong to a political party and because a friend of the government secured their appointment over someone else who was just as competent but was not a friend of the government.


Lawrence T. Pennell: Mr. Chairman, the only reply I can give is that to my personal knowledge there have been two appointments to the bench since I have been a member of the government where the appointees were not, in the words of the hon. member, friends of the government. I admit frankly, as I said earlier, that there are other considerations that enter into these appointments.
While I am on my feet, Mr. Chairman, if I may ask the indulgence of the committee I should like to propose another amendment, unless the previous amendment has not yet been dealt with.


Herman Maxwell Batten: Perhaps the Chair should first put the previous amendment to the committee. Is the committee ready for the question?


Some hon. Members:: Question.


Herman Maxwell Batten: Shall the amendment carry?
Amendment (Mr. Sharp) agreed to.
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Stanley Howard Knowles: Mr. Chairman, may I say a word on clause 1 generally, although part of what I had in mind to say has perhaps been covered. First may I note that when the hon. member for Cariboo was speaking a little earlier this afternoon he used a phrase and then added a couple of words as an afterthought. The phrase referred to "men", and then he said "or women"; that was the afterthought. I should like to ask the Solicitor General, how many of the judges whose salaries we are providing for in this bill are women?


Lawrence T. Pennell: Mr. Chairman, I am in the unenviable position of not being able to give an answer to that question. I know that the county court judge of the county which I have the honour to represent in this house was a lady but unfortunately she retired for health reasons not very long ago. I am not aware at the moment of any woman sitting on the bench in Canada.


Mr. Rapp:: Yes, in Saskatoon.


Lawrence T. Pennell: I am not aware of any woman sitting on the bench in Ontario. But I am advised by my colleagues that in respect of other provinces there is at least one county court judge, namely in Saskatchewan.


Reynold Rapp: In Saskatoon.


William Heward Grafftey: This is a question for the royal commission.


Lawrence T. Pennell: However, Mr. Chairman, I am not answering the question of the hon. member, who asked me how many of our judges are women. I am not able to give him an answer.


Stanley Howard Knowles: Let me put it this way, Mr. Chairman. Does the Solicitor General know of any judge of any court higher than a country court who is a woman?


Lawrence T. Pennell: I cannot give a single instance of a woman sitting on the superior or supreme courts of this country.


Julia Verlyn (Judy) LaMarsh: Mr. Chairman, I may be able to help my hon. friend. There has never been a woman superior court judge appointed in Canada; indeed, there has been only one in the entire commonwealth and that is in the United Kingdom. There is at the present time one county court judge, Judge Mary Batten, in Saskatchewan.


Reynold Rapp: And Judge Mary Batten is a very capable judge.

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Julia Verlyn (Judy) LaMarsh: Judge Mary Batten was appointed by this administration and she is only the second woman in Canada to he so appointed. A woman was appointed to the position of citizenship court judge in Halifax. She was also appointed by this administration.


Stanley Howard Knowles: Mr. Chairman, I am afraid the Secretary of State has revealed sensitivity on a point that was not in my mind at all. I was not raising the question of how many appointments of women had been made by the present administration; I was asking this question in general terms having in mind the whole history of the country. I suppose all I can say with respect to the embarrassing position in which I have put the Solicitor General is, page Ann Francis.


Julia Verlyn (Judy) LaMarsh: Hear, hear.


Stanley Howard Knowles: I should like to ask one or two more questions, if I may, though it may be that one of the questions I have in mind was covered in the answer the Solicitor General gave to the hon. member for Peace River. As the Solicitor General knows, I am sure, there is on page 38 of the current Auditor General's report a section which deals with the question of living allowances paid to federally appointed judges. Does the Solicitor General consider that the changes he has made in this bill take care of the problem about which the Auditor General has made his complaints?


Lawrence T. Pennell: Mr. Chairman, perhaps I can best answer the question by giving a very brief explanation of what is covered by this bill. Under this bill a judge will be permitted to perform extrajudicial duties but he will only be paid for his travelling and out-ofpocket expenses. He will not receive any additional remuneration; he will continue to receive the same salary he would have received had he been performing judicial duties. I believe that meets the point raised by the hon. member.


Stanley Howard Knowles: To put it in specific terms, Mr. Chairman, the Auditor General complained about rates of living allowances from $50 to $100 a day. Of course, the complaint was that there seemed to be an element of remuneration in an amount of that quantum, to use the language of the lawyers. When the Solicitor General says that from now on there can be paid only the actual out-of-pocket living and travelling expenses, does he mean that these flat allowances of $50, $60 or $100 a day, which were included in some of the

orders in council appointing judges to special assignments, will be discontinued?
[DOT] (2:30 p.m.)


Lawrence T. Pennell: That is my understanding.


Stanley Howard Knowles: Mr. Chairman, I have one other question and it also arises from the Auditor General's report. On page 39 of the report for the fiscal year ended March 31, 1966, there are a couple of paragraphs concerning admiralty courts. I should like to read a sentence or two starting with the second paragraph;
An examination during the year of all of the Admiralty courts disclosed a number of weaknesses in administration, including inadequate records, intermingling of federal and provincial funds, retention of the interest earnings by some of the registrars, fees improperly paid to the provinces, etc. Our report to the Department of Justice pointed out the need for more careful definition of the financial arrangements for these courts and for the establishment of adequate financial records. These matters are now under study by the accounting advisory service of the comptroller of the treasury.
I should like to ask the Solicitor General whether this matter is also being taken care of by the Department of Justice?


Lawrence T. Pennell: Mr. Chairman, I believe that effect is being given to this recommendation as it is only in three provinces that the salaries of admiralty district judges are being increased. They are unchanged in the other provinces. It would therefore appear that the department is looking at the duties being performed by the various admiralty district judges and acting accordingly.


Stanley Howard Knowles: I think that the criticism of the Auditor General goes a little further in that it relates to the administrative practices of these courts. 1 do not wish to embarrass the Solicitor General with facts with which he may not be intimately familiar, but perhaps he will ask his officials to take note of these paragraphs in the Auditor General's report.


Lawrence T. Pennell: I will do so, Mr. Chairman.


Mr. Muir (Cape Breton North and Victoria):: Mr. Chairman, I just want to take a few minutes of the committee's time to refer briefly to remarks made by the hon. member for Cariboo. First of all I wish to point out that I am not a lawyer and up to the present time I have not found it necessary to employ one to defend me. Of course I do not know how long that will last. However, the point I wish to make centres around the word
February 24, 1967

"suspicion" mentioned by the hon. member for Cariboo in reference to appointments to the judiciary. I do not think that is a very good word to use. Frankly I do not know why it should be used.


An hon. Member:: Do you wish to use a stronger term?


Robert Muir: I certainly would not refer to the judiciary in stronger terms or in any really critical terms because I have always had a very high respect for the men who serve that profession in Canada. I do not understand these people who wrap themselves up in white robes of purity and say that judges are suspect. For instance, only recently in Nova Scotia Mr. J. L. Dubinsky, Mr. Gordon S. Cowan and Justice L. D. Currie received new appointments in the judiciary. These men worked very hard and for many years, possibly for the Liberal party. I do not see anything wrong with that. They are entitled to their way of thinking. Are we to eliminate from politics all people who are lawyers? However, I do admit that there may be too many of them in the house. Are we to keep all lawyers away from politics and prevent them from working for political parties? What wrong is there in a lawyer working for a political party? Certainly the men whom I have mentioned, because their appointments have taken place in recent days, are all distinguished men who have served their country well, particularly chief justice L. D. Currie.
Let us take the case of the Solicitor General himself, to my mind one of the finest and most capable men that ever held that position in Canada.


Some hon. Members:: Hear, hear.


Robert Muir: I am sure that he is appreciated by all parties. He presents himself well both inside and outside the house and he is most co-operative and courteous at all times. Should we say that because of the fact that he served his party and served as a minister in the government, when the day comes when he no longer holds his office he will be suspect?


Bert Raymond Leboe: I object to that, Mr. Chairman.


Robert Muir: I believe I have the floor.


Bert Raymond Leboe: Mr. Chairman, I have a question of privilege. I object to having the hon. member put words in my mouth. I said no
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such thing. I suggested that the general public regard certain things with suspicion, which is the privilege of any individual no matter what his status may be. He has the privilege of regarding with suspicion anything he wants. To say that this situation does not exist does not accord with the facts.


Robert Muir: I do not profess to be as brilliant as you are Mr. Chairman, but I am wondering what the question of privilege is.


Bert Raymond Leboe: You did not hear what I said.


Robert Muir: I regret I aroused the ire of the generally quiet and considerate hon. member for Cariboo and I certainly apologize, but of course if the hat fits he can wear it.
I think what I have said bears repeating. From time to time we hear that so and so is suspect because he works for the Liberals or for the Conservatives. What is the crime in doing that under our system of government? What is wrong with it?


Bert Raymond Leboe: I never said there was anything wrong with it.


Robert Muir: If this is the case then every member here is suspect, whether he is a lawyer or a coal miner, because he may be appointed to a higher place at some time.


Mr. Winkler:: Some may be more suspect than others.


Robert Muir: However, to speak more seriously, I will say that I have every respect for the judiciary of this country regardless of whether they were appointed by the previous Conservative government or by the Liberal government. I believe that no reflection should be cast on the judiciary.
There may be the odd occasion when a problem arises but after all judges are human beings just the same as any other person. I am sure that if you explore any party, fraternal organization, service club or church you will find people who are not acting in the way they should. Once again let me say that when the day comes that the present Solicitor General ceases to hold his office, surely the fact that he was a Liberal cabinet minister and served his party and the country well will not prevent him from receiving any type of appointment in the judiciary. Of course I am not buttering him up because I am trying

February 24, 19S7
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to get something out of him as there is very little that he can do for me or my constituency. If he were the Minister of Public Works or the Minister of Transport I might be doing so, but this is another matter.


Thomas Miller Bell: I understood the
Solicitor General intended to propose an amendment. This may be an appropriate time for him to do so.


Lawrence T. Pennell: Thank you, Mr. Chairman. First of all I wish to say that I thank the hon. member for Cape Breton North and Victoria for his generous remarks. I should say, with sincerity, that if the illustration had been left to me I could have looked across the floor of the house and picked better examples.
I should like to move an amendment which reads as follows:
That clause 1 of Bill C-267, An Act to amend the Judges Act, be amended by adding thereto the following subclause:
(3) Sections 4 to 7 and sections 9 to 19 of the said Act as enacted by this section shall be deemed to have come into force on the 1st day of March, 1967.
[DOT] (2:40 p.m.)
The purpose of the amendment is to permit judges who retire between March 1 and June of this year to have their pensions calculated on the increased salary. In the case of a county court judge it would be $19,000 but it would not include the additional $2,000 which is established by the new section 20.


Mr. Fairweather:: May I ask if this provision would assist the widow of the late chief justice of Nova Scotia with her pension? I hope it would.


Lawrence T. Pennell: I regret to advise the hon. member that it is my understanding it would not. It would only cover those who retire between March 1 and June 1. There has to be a cut-off period, and whatever period is chosen it works to the disadvantage of some otherwise deserving individual. This is an unfortunate fact of life.


Mitchell William Sharp: I so move.


Maurice Rinfret: Shall the amendment carry?
Amendment (Mr. Sharp) agreed to.


Richard Albert Bell: There are two matters I should like to mention. The minister has by his amendment taken care of the increase in the number of judges in British Columbia. Doubtless he will have observed from the

morning newspaper that first reading was given yesterday in the legislature of Ontario to a bill to increase the number of judges of the high court to 26. Does the minister think he might take judicial notice of the legislation and perhaps seek an amendment now so we would not have to come back to this matter on another occasion? We would be prepared to have the resolution adopted by unanimous consent to cover the particular situation.
The other situation is that this proposed new section 20 has been exempted from the amendment just carried. Will the minister indicate why he has chosen the 1st day of June, 1967 as the operative date for the proposed new section 20?


Lawrence T. Pennell: If I may deal with the last question first, Mr. Chairman, the date of June 1 was selected to give the judges an opportunity to make an election as to whether they preferred to receive the additional salary under new section 20 or reject it and accept the allowance from the province. This date also permits the provinces a period in which they may revise their own legislation if they so desire dealing with the point raised earlier in the debate.
In so far as the first point is concerned, I am grateful for the spirit of co-operation manifested by the hon. member for Carleton. If I am hesitant about accepting his suggestion, it is only because I am not satisfied that all the steps have been taken in connection with the provincial legislation. It might be somewhat presumptuous on our part to take steps here when there are still certain formalities to be cleared in the provincial legislature. I do appreciate the offer of co-operation.
Clause as amended agreed to.
Clauses 2 and 3 agreed to.
On clause 4-Regulations re payment of inheritance taxes, etc.


Lawrence T. Pennell: I seek to make an amendment to clause 4. The amendment I seek would mean that the present proposed new section 30 in clause 4 would be renumbered new section 30A and there would be a new proposed section 30 which would read as follows:
30. For the purposes of the provisions of this act respecting annuities, there shall be included in the salary of which a judge was in receipt under this act at any time after the coming into force of section 20, the amount of any additional salary provided for by that section whether or not at that time such additional salary was being paid to him.
February 24, 1967

Then, of course, this would be followed by the renumbering of the present proposed section 30 as 30A. The purpose of the amendment is to clarify the fact that the pension of a judge will be calculated on his salary, including the additional salary that is paid to him under new section 20. If I may use an illustration, because the basic increase is $3,000 a county court judge will receive $19,000. Then, according to new section 20, he will be paid an additional $2,000 which will bring his salary up to $21,000.
Since certain provinces are paying their judges an additional salary the judge has to make an election. Either he accepts the $2,000 under this provision or he accepts the additional salary payable under the provincial legislation. The county court judge would receive the basic $3,000 increase bringing his salary to $19,000. I would expect that most of them in Ontario would prefer to accept the $3,500 from the province rather than the $2,000 provided under the new section 20. This would bring their gross salary up to $22,500. However, their pensions will be calculated on $21,000 so that every county court judge in Canada will have his pension calculated on the common figure of $21,000. This amendment was introduced because there was some doubt expressed whether it was clear the additional salary of $2,000 was included in the amount for calculation of pension.


Thomas Miller Bell: I gather from what the minister has said that if this amendment were not introduced there might be a difference between the judges in one province and another. In one province the calculation could have been on the basis of $21,000 and in another province it could conceivably have been on the basis of $19,000. This amendment will make the basis of calculation uniform across the country.


Lawrence T. Pennell: The hon. member for Carleton has put the matter succinctly.


Mitchell William Sharp: I so move.
Amendment (Mr. Sharp) agreed to.
Clause as amended agreed to.
On clause 5-Acting as commissioner, etc.


Mr. Fulton:: I should like to come back to the general matter of the acceptance by judges of appointments to extrajudicial functions. I fully support the position taken in this matter by the hon. member for Carleton and I certainly support any moves such as are
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reflected in this bill to discourage the acceptance by judges of appointments to nonjudicial functions. However, I do not believe the bill goes far enough. Accordingly I have an amendment to offer to clause 5 which I think would carry this provision a further step along the way.
The general arguments against acceptance by judges of appointments to extrajudicial functions have been made already, so I will not do more than summarize them. They are first, that with the pressure of litigation and business which is properly the function of judges this practice imposes an extra burden on those judges who do not take such appointments. It is also unfair to litigants when delays occur because judges are not available to dispose of their cases.
[DOT] (2:50 p.m.)
An equally undesirable result is that the way we have been inclined to appoint judges to boards and commissions-I use the word "we" advisedly; I am not singling out any government-has brought them into political controversy and has lowered the standing and reputation of the bench. The outstanding example, of course, has already been referred to by the hon. member for Carleton, the inquiry of which Mr. Justice Spence was appointed commissioner. But there are other cases where we have been all too prone to appoint judges as chairmen of conciliation and arbitration boards and to make appointments of the kind where the judge in question is bound to be criticized by one or both parties to a dispute. In addition, where awards are bound to come back to parliament or to one of the legislatures and be subjected to political controversy or political settlement, judges are brought into relationship with the parties in a role they should not have, and also inevitably into the centre of political dispute.
I feel very strongly, Mr. Chairman, that both the federal and provincial authorities should be precluded from so appointing judges. I remember that when I was minister I said to myself that I would not do it, that I was opposed to it in principle, but without a legislative prohibition the pressure-if you like, the habit-was such that I was not able to resist the trend as successfully as I had intended and as I had hoped. I am quite satisfied that whatever may be the approach in principle on the part of the Solicitor General and his colleague, the hon. gentleman will also be unable to resist the pressure

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unless there is a stronger legislative prohibition than the one presently contained in the bill.
Clause 5 actually proposes, in my view, a weakening of the restraint on the appointment of judges to this kind of function because it removes the requirement that the consent of the governor in council of Canada be obtained before a judge can accept such an appointment. While not a prohibition, it provided at least some restraint. I think that we should in fact go further, and provide that neither federal nor provincial levels of government may make this kind of use of members of the judiciary unless the appointment is specifically authorized by a statute of the federal parliament or one of the provincial legislatures. I do not think there should be the discretion which this clause still contemplates leaving to the governor in council or lieutenant-governor in council in making an appointment even though the appointment in question may not be authorized by statute.
If you amend the bill to prohibit appointments without specific statutory authorization in the first place, you would have the protection of inertia; you would have to introduce legislation to authorize an appointment. It would of course be possible to amend the labour code here and in the provinces, but this would be subject to the natural disinclination to introduce legislation into busy legislative assemblies.
In the second place, the attention of the members of the legislatures would in each case be directed to the propriety of authorizing judges to serve in the capacity which the legislation might contemplate. I would hope and expect that the legislators in both provincial and federal parliaments would accept the principle that except in special and rare cases judges should not be asked to assume duties which are not part of their ordinary judicial function, and for the reasons I have outlined; so that they would look critically at any such proposed legislation.
There is one particular aspect of this matter that I want to mention. It is frequently said, at times when this principle is being discussed and the point of view I have put forward is under consideration, that it would be very difficult to carry on the process of labour conciliation and arbitration unless we had judges available to serve as chairmen of arbitration and conciliation boards. I think, Mr. Chairman-I hope the minister will agree with me, and I think the members of the

committee will-that in the present atmosphere it has become quite evident that the bench is indeed being brought into disrepute because of the dislike of labour unions in particular for the kind of decision which is given in these adjudications. We now have labour leaders declaring they have no confidence in the impartiality of the bench. That is a statement which, of course, I absolutely reject. There is no foundation for it; but it is symptomatic of a very undesirable situation and is proof positive of the fact that because of the use being made of the judiciary in these extrajudicial functions the bench is suffering a loss of reputation, of regard and of stature in the community.
Therefore, Mr. Chairman, I think it becomes an inescapable and an urgent responsibility of this parliament to act to prevent any further development along those lines. I think it is incumbent upon this parliament and this government, as well as upon provincial legislatures, instead of following blindly this pattern of reaching out and asking judges to accept this kind of appointment, rather to build up a panel of permanent chairmen within the cadre of the labour departments, both federal and provincial, who will be available for appointment at a moment's notice as chairmen of conciliation and arbitration boards. In this way we would establish a group of people who will acquire an expertise and a skill in the issues involved in industrial disputes and who will have the confidence of both sides to such disputes.
This would be a most important and I think essential beginning toward a system of having not only chairmen of arbitration boards available but of building up a permanent judicial process for dealing with labour disputes. It would be a judicial process although not part of the present court system. Indeed, I think labour disputes should be dealt with by a separate judicial process which would have the confidence from the outset of both sides to disputes and would also have the result that adjudications would protect the interests of society as well.
For these reasons, Mr. Chairman, I think it is essential that we now make a firm legislative prohibition against the appointment of judges to these kinds of functions, and I therefore move:
That clause 5 of the bill be amended as follows:
1.	By deleting from the proposed section 38 (1) (a) the words "or he is thereunto appointed or so authorized by the Governor in Council" where they appear in lines 24 and 25;
February 24, 1967

2.	By deleting from the proposed section 38 (1) (b) the words "or he is thereunto appointed or so authorized by the Lieutenant-Governor in Council of the province" where they appear in lines 29 to 32;
3.	By adding the following as subsection (2) of section 38:
"(2) This section does not apply in any case where a judge was appointed commissioner, arbitrator, adjudicator, referee, conciliator or mediator before the coming into force of this section".
As you will appreciate, Mr. Chairman, the effect of the first part of the amendment would be to take out the power otherwise expressly reserved to the governor in council to appoint or authorize the services of a judge in these non-judicial capacities. The second part would remove the similar authority given the lieutenant-governor in council of a province. So unless the appointment were authorized with respect to matters within federal jurisdiction expressly by a statute of the parliament of Canada, a judge could not be appointed, or in the case of matters within provincial jurisdiction, if my amendment carries such appointment would have to be expressly authorized by a statute of the legislature. It would not be open to the governor in council to exercise a discretion and to reach out and make an appointment of a judge to a conciliation or arbitration board unless the appointment was so authorized by statute.
The effect of the third part of the amendment would be simply to preserve the appointment and authority of any judge who had been appointed before the amendment comes into effect. I would not want to go so far as to render nugatory anything that had been done under an appointment that was hitherto legal. The effect of the amendment, therefore, would be that when presently appointed judges have completed their work no such appointment could be made in future unless expressly authorized by statute.
[DOT] (3:00 p.m.)
I hope the minister will accept the spirit and purpose of the amendment. There may be some technical flaws in it. If there are and if he will point them out to me, I will be glad to accept modifications which achieve the purpose sought. But I believe it to be clear and acceptable in principle that judges should not be allowed to accept these appointments unless they are specifically authorized by a statute of the parliament of Canada or of the provincial legislatures.


Lawrence T. Pennell: I appreciate the spirit in which the amendment is proposed. As I understand it, the purpose is, first of all, that the time of judges should be conserved by ceasing
Judges Act
to employ judges in non-judicial capacities and, in the second place, that judges should not be called upon in connection with labour disputes unless statutory authority is given by an act of parliament or of the legislatures.
Though the intention is a worthy one I cannot but think of a recent experience in the province of Saskatchewan if I remember correctly where both parties to a dispute made a request of the Attorney General that a particular judge be appointed to deal with it because of the special confidence they felt in him. It seems to me that if we were to agree to the amendment proposed by the hon. member we should no longer find it possible to accede to a reasonable request of this nature.
I agree, that the occasions on which the governor in council or the lieutenant governors in council should call on judges to undertake non-judicial duties ought to be restricted to a bare minimum. As the hon. member suggested, such appointments do expose judges to risks of the kind he mentioned. However, I believe we should continue to give the governor in council and the lieutenant governors authority to appoint judges on the rare occasions when it would be clearly be in the public interest to do so. When both parties request a particular judge, surely we should not deny a course of action which might quickly settle a dispute. Otherwise it might drag on for months.


Edmund Davie Fulton: To deal with the minister's brief reply, may I suggest to him that the illustration he has given does not really support his argument or weaken the proposition I have advanced. I suggest to the minister in all seriousness that if a judge could not be appointed in the case he mentioned the parties would readily have agreed on someone else, especially if the provinces were encouraged to build up panels of permanent chairmen as part of the cadres of their labour departments.
If we do not stop appointing judges we shall never build up these cadres of men who will be available for appointment as chairmen of these boards. We can go on saying that there are all sorts of particular cases where judges would be suitable, but if judges could not serve others could be found. It is the principle which is important here and I do not see how the principle can be preserved except by agreeing to an amendment such as I have moved.

February 24, 1967
Judges Act


Stanley Howard Knowles: Mr. Chairman, we do not often get an opportunity to speak in committee of the whole with so many faces opposite. It is a temptation which is difficult to resist, now that so many members have come in.
We understand the motives behind the amendment moved by the hon. member for Kamloops and we are in agreement with some of the things he said when introducing it. Obviously that is a prelude to suggesting there is something to be said on the other side. We agree that the load placed on the judiciary because of the acceptance of these outside appointments is perhaps a heavy one and that the services of judges should be used sparingly for this kind of work, or maybe there should be more judges.
We also agree that there are certain kinds of inquiry to which the appointment of judges is not desirable because they do not add to the respect with which the judiciary is held by the public. At the same time, I believe the amendment proposed by the hon. member for Kamloops goes too far. I do not agree with him that a hard and fast line can be drawn between the kind of issues which get into the courts and the kind of issues which never get into the courts of the land but which require judicial and impartial determination.
The standard complaint to make, of course, is that judges should not be used in connection with labour disputes. I submit there are occasions when a labour dispute is just as important as any issue which comes into a court. There are times, as the Solicitor General has pointed out, when both sides feel that the resolution of a dispute can best be made by someone with the experience of a judge, by someone who has the reputation for impartiality which goes with sitting on the bench.
I think the kind of warning which has been sounded against appointing judges to a good many of these boards and so on is one which should be sounded. But it is not a good principle to say that judges should never be available for employment in connection with labour disputes or special problems which may arise in our country.
[DOT] (3:10 p.m.)
I believe that the actual wording of the amendment proposed by the hon. member for Kamloops is too ironclad. It leaves no loopholes for a special circumstance. An issue might arise in a provincial or national setting when the legislature or parliament is not in session to pass the necessary act. If the

amendment as proposed were carried there would no no possibility, even by order in council, of appointing a member of the bench to one of these positions mentioned, no matter how badly he might be needed.
I am ready to say that the kind of warning sounded on this matter is good, but I believe the amendment goes too far. We shall vote against it.
Amendment (Mr. Fulton) negatived: Yeas, 27; nays, 50.


Maurice Rinfret: I declare the
amendment lost.


Thomas Miller Bell: Before the clause carries could the minister say what acts of the parliament of Canada at the present tune expressly authorize a judge to act as a commissioner, arbitrator, adjudicator, referee, conciliator or mediator? When the bill was drafted the minister obviously must have known what these acts were. I think the committee should know the precise authority under existing statutes.


Lawrence T. Pennell: I am sure the hon. member would not expect me to carry a list of the acts with me. I do not have such list. Speaking from memory, I believe the municipal act says that the county court may act.


Thomas Miller Bell: That is a provincial act and I spoke of acts of the parliament of Canada.


Lawrence T. Pennell: The clause refers to federal and provincial legislation. There is the Expropriation Act, and other acts. I could cite a number of provincial acts giving power to judges to act as arbitrator and adjudicator. The power is given to the county court of the county in which the action arises.


Thomas Miller Bell: With respect, the minister has not mentioned a single act of the parliament of Canada. He did refer to the Expropriation Act but matters dealt with under that act come by way of information laid before the Exchequer Court of Canada. The proceeding is entirely judicial. It is not an inquiry. There is no mediator or conciliator there.
I have no doubt that before the bill was drafted the minister was fully aware of the acts. The officials in his department would know the acts of parliament relevant to my question and would inform the minister. The acts I refer to are not provincial acts. I do not think it is our business to delve into the
February 24, 1967

provincial situation, but I think we should know what the minister understood on the advice of his officials.


Lawrence T. Pennell: I believe the Inquiries Act is a federal act and provides that a judge may act. I always try to be perfectly frank with the house. In all my nakedness I stand here; I cannot give the hon. member specific acts. The validity and the force of this clause do not turn on the Solicitor General's ability to name specific acts. I am satisfied that if this matter were not dealt with in the manner we have dealt with it the effect would be to jeopardize future actions by the lieutenant governors and governor in council in legitimate circumstances.


Thomas Miller Bell: The minister is confusing things and confusing me. He speaks of action taken by the lieutenant governor or the governor in council. That is not the point. The minister has spoken of the Inquiries Act. That act provides for the appointment of a commissioner. It does not say that the commissioner shall be a judge. There is nothing in that act which is express authority to a judge to act. With great respect, the Inquiries Act is not relevant to my question.
I am not trying to embarrass the Solicitor General. He has brilliant officials in the gallery. I cannot understand why he did not bring them to the floor of the house to assist him. I was glad to see that the President of the Treasury Board had no such inhibition earlier this week. The Solicitor General is asking the committee to approve this clause without saying what are the acts of parliament which expressly authorize a judge to act as commissioner, arbitrator, adjudicator, referee, conciliator or mediator on any inquiry, commission or other proceeding, to use the exact language of the clause.
That language was not included in the draft idly. Obviously somebody must have studied the situation and said: "These are the statutes where there is express provision to do these things." This has nothing to do with the power of the governor in council.
I do not want to delay the legislation because I approve of it in general, with the exception of this clause. I ask the minister to undertake to give me a list of the acts of parliament I asked for in the very near future and before this bill has had royal assent.


Lawrence T. Pennell: Mr. Chairman, I find the hon. member's request reasonable. He has cooperated well in the passage of this bill and I
Judges Act
cannot take exception to anything he has said. I am pleased to give the undertaking he requests.


Maurice Rinfret: Shall clause 5 carry.


An hon. Member:: On division.


[Stage Direction]
Clause agreed to.
Clause 6 agreed to.
Title agreed to.
Bill reported.
The Acting Speaker (Mr. Rinfret):: When shall the bill be read the third time?
[DOT] (3:20 p.m.)


Some hon. Members:: By leave, now.


Some hon. Members:: No.


Lawrence T. Pennell: Mr. Speaker, I would appeal to the hon. member for Kamloops that we be permitted to proceed with third reading now. If the hon. member cannot see his way clear to allow this, I will take no exception. However, there is some urgency because I understand there are several judges who are nearing retirement age and I would hope that no unforeseen delay would cause loss of income to retiring judges. Therefore, I make a special appeal to the hon. member's sense of fairness and justice.


Edmund Davie Fulton: Mr. Speaker, far be it from me to place any member of the bench in a position of such jeopardy as that outlined by the minister. I am very glad to have what might be called a sort of death-bed repentance by proxy.


The Acting Speaker (Mr. Rinfret):: When shall the bill be read the third time?


An hon. Member:: By leave, now.


Some hon. Members:: Agreed.


Lawrence T. Pennell: the third reading of the bill.
Motion agreed to and bill read the third time and passed.


SMALL BUSINESSES LOANS ACT AMENDMENT
Mitchell William Sharp: the second reading of Bill No. C-270, to amend the Small Businesses Loans Act.
He said: Mr. Speaker, first I should like to thank hon. members of this house for the
13458	COMMONS
Small Businesses Loans Act Amendment very unexpected and very welcome applause. I expected it from this side of the house, but from the other side it is a particular pleasure.
I wish to express my deep gratitude.
At the resolution stage my parliamentary secretary gave a description of the purpose of the bill which is before us. His remarks will be found in Hansard for February 16 beginning at page 13139. I do not intend to repeat what he said and I am sure the house would not expect me to do so.
I should like to make a brief summary. The bill extends the Small Businesses Loans Act for another three year period. It already has been in effect for six years. At the same time it enlarges the application of the act by broadening the purposes for which guaranteed loans may be made. The principal changes are as follows: First, to enable the owner of a retail store to obtain a loan to finance the purchase of the building in which he is located. This removes an anomaly which existed in the present act. I am sure that everyone would wish this anomaly removed. Previously the owner could purchase premises across the road but could not buy the building in which he was located. The second change enables loans to be made to small business enterprises in the construction, transportation and communications industries as well as in manufacturing, wholesale and retail trade and services. The third change is to amend the definition of an eligible small business enterprise as one whose estimated annual gross revenue does not exceed $500,000. The limitation in the present act is $250,000.
These amendments, I believe, will enable the Small Businesses Loans Act to make a greater contribution to the needs of small enterprises in this country.


Alfred Dryden Hales: Mr. Speaker, we appreciate the brief introduction the minister has just given us to the bill now before us. We have very little more to say at this time, since many members of our party spoke on this legislation when it was at the resolution stage. At that time they expressed their general support for the bill and for what this act had done in the past. They were very much in accord with the changes, particularly in view of the fact that we introduced this type of legislation in 1961 when we were the government. We have been glad to see this act amended once or twice previously and we now are glad to see it revised once more so that it will become more applicable to the needs of the small businessman who certainly requires such support. Other points will be

DEBATES	February 24, 1967
discussed when we reach the clause by clause consideration of the bill. Therefore I do not propose to hold up the progress of the bill at this time.


Herbert Wilfred Herridge: Mr. Speaker, I shall be quite brief at this time, which is my usual practice. We support the principle behind the proposed amendments. I remember that prior to the introduction of this legislation by the Conservative government in 1961 small business organizations throughout the country had made frequent requests for legislation of this type. I do not think there is any doubt that this is good legislation. At this time I cannot resist at least congratulating the former government for introducing it into the house in 1961. Since that time there have been several amendments as a result of experience and I think that generally the act has proven to be very satisfactory.
[DOT] (3:30 p.m.)
I am very interested in the application of the act. I have had conversations with many bank managers in my constituency, particularly in the smaller communities. I have found them most co-operative. They did not lend money unless there was a sound basis for the loan but they were co-operative in that they were anxious to do what they could to assist the smaller businessman. I have here the fifth annual report on operations under the Small Businesses Loans Act for the year ended December 31, 1965. To show how sound in principle this program is I should like to read this paragraph:
Since inception to December 31,	1965,	14,050
loans amounting to over $127 million were made by the banks under this legislation. During this period payments have been made to the banks under the guarantee provision in respect of 25 claims amounting to $139,954.
I think this clearly demonstrates that the government of the day was fully justified in introducing the act and expecting it to operate soundly and to the advantage of the small businessman. I rose particularly to mention that the chambers of commerce and the unions in the Kootenays are very interested in the development of secondary industry. This act could be of assistance to persons interested in such development. I refer to small manufacturers and those interested in the development of the tourist business and recreational facilities.
Only this morning I received a letter from the Nelson Chamber of Commerce dealing with this question. We have a large smelting
February 24, 1967	COMMONS
business in the riding, a mining industry and a forest industry but there is a place for the development of secondary industry, particularly in the smaller communities. 1 will give the minister one experience of mine in this respect. I went into this question very carefully with firms in Ontario which are interested in the manufacture of furniture, because we have large quantities of excellent quality birch in the district. The birch you see in Ontario looks like weeds compared with the birch we grow in our country.
I remember on one occasion shipping ten carloads of birch logs 32 feet in length and 2 feet in diameter at the top. I mention this to illustrate the size of the timber that grows in southeastern British Columbia. Millions of feet of birch are being destroyed at the present time as a result of building the dams on the Columbia river. The timber is simply being piled up and burned. I did everything possible to get people interested in establishing a furniture industry in the district in order to use the birch and other woods there which are very suitable for the manufacture of various types of furniture. However, I was completely unsuccessful in that respect owing to the fact that for some unknown reason the Okanagan district has been declared a designated area. That is a rather ambiguous term, Mr. Speaker, but anyway it qualifies for certain assistance in the development of new industries such as write-offs, grants and so on.
There is a great demand for the development of secondary industry in the smaller communities. These industries need financial assistance in order that they may become stabilized. When the dams and other large construction projects are completed in the constituency I have the honour to represent, this program will be more necessary than ever. There are in the area people very interested in developing accommodation for tourists, particularly in the summer months. There are others interested in the development of a small pottery industry. We have in my area excellent clay which could be used in the manufacture of pottery on a small scale, something similar to what has been done in other places in Canada. We also have in our district six hot springs; two or three are owned by people who would like to develop them further. This could be done if they were extended credit under the provisions of this act.
I mention these matters to bring them to the minister's attention and arouse his sympathy with respect to the needs of the district I
Small Businesses Loans Act Amendment have the honour to represent. I shall be writing him later on this question to see what he can propose with respect to the development of secondary industry and business in Kootenay West and Kootenay East. The people of these two constituencies are working together on these problems because they affect the whole area as a region rather than just one constituency.


Mr. W. M. Howe (Wellinglon-Huron):: Mr. Speaker, I said a few words on this subject when we were at the resolution stage. We put forward some suggestions then which I thought would be implemented with regard to areas in which the provisions of the bill might be improved to make it more acceptable and used to a greater extent than has been the case in the past. We appreciate the increase in the number of people who will be able to benefit from this legislation, but we wonder whether the loan ceiling of $25,000 is realistic. If it was realistic in 1960 I do not think it is realistic in 1967, particularly when one considers the construction, transportation and communications industries and others of that size which need a great deal more money than the ordinary retail merchant or the small manufacturer.
I was hoping that when the minister spoke today he would deal with this question. When the parliamentary secretary to the minister spoke at the resolution stage on February 16 he said, as reported at page 13141 of Hansard: All the more reason why we must expect businesses needing over $25,000 and those having a turnover exceeding $500,000 to have plans that require financing beyond the scope of the Small Businesses Loans Act.
After all, Mr. Speaker, if we are going to raise the potential turnover of a small business to $500,000, in my opinion a maximum loan of $25,000 is not sufficient. I have often wondered whether the government has considered applying a scale of charges whereby a certain interest percentage would apply on the first $25,000 and then there would be a small increase in the percentage on, say, a further $25,000. If this were done I believe more people would participate in the program and it would be more beneficial to those in the construction and transportation businesses in particular. Twenty five thousand dollars would not buy a bulldozer for use in the construction business, or a cement mixer or large machinery of this type, and in the transportation business many trucks cannot be bought for $25,000.
13460	COMMONS
Small Businesses Loans Act Amendment
I wonder whom the government discussed these amendments with and whether they went to the Retail Merchants Association, the chambers of commerce and people interested in small business to obtain their ideas as to ways and means to make the legislation more workable. The parliamentary secretary also said when speaking on this matter at the resolution stage, as reported at page 13140 of Hansard:
Of course, it is not an unimportant amount and it has probably been quite beneficial to borrowers. But it might be possible that it is not a valid sign of the entire potential demand which could exist for such loans.
He was there referring to the amount of money which had been lent under this program. So the government admits that there is a potential demand for more loans. When the hon. member for Kootenay West was speaking I was thinking of the suggestion I made in this connection. I suggested that perhaps a certain amount of the fund be set aside to provide working capital, because in small businesses this is an area where businessmen experience difficulty. To become established and obtain credit takes a certain length of time, and the small businessman often finds himself in trouble in this respect for one, two or three years. He experiences difficulty because he does not have enough working capital to carry him over this critical period. These are two important areas which have not been covered in this bill.
[DOT] (3:40 p.m.)
There is one other matter which I should like to raise at this time. The parliamentary secretary indicated in the statement he made at the resolution stage that he was not sure whether the rate of 5.5 per cent could be retained and that this would be decided after passage of the new Bank Act. Now that the Bank Act bill is out of the committee I wonder whether the minister could give us a more definite statement on what the rate on these loans will be. Will it stay at 5.5 per cent or wiU it go up to 6.5 per cent? It has to be kept in mind that a lower rate of interest on these small business loans will make it possible for more people to participate. I hope that before second reading of the bill the minister will take note of our suggestions and give them his consideration.


Mr. B. S. Mackasey (Parliamentary Secretary to Minister of Labour):: 13462	COMMONS
Small Businesses Loans Act Amendment which will be coming before us, in the discussion of which in the finance committee I have been privileged to participate, indicate that the chartered banks of Canada have a particular role in our economy. They are synonymous in our thinking with stability. We are very proud of their record compared with that of the banks in other countries.
On the other side of the coin I think that the banking institutions of this country have a responsibility to Canadians and that responsibility extends as well to small businessmen. Some of the speeches made at the resolution stage by the hon. member for Wellington-Huron (Mr. Howe) and other Conservative members, as well as by the hon. member for Waterloo South (Mr. Saltsman) and other members of the New Democratic Party, indicate that they have the same idea as I do that the banks have a moral obligation to help the small businessman. There are, I believe, close to 500,000 small businesses in this country which are not getting a fair share of the banking facilities that are supposed to be at their disposal. I am not sure what the solution is. I suggest to the minister that he take a good look at the interest rate. I cannot understand those in this house who believe they are helping the small businessman by setting the interest rate as low as possible. If they would talk to these businessmen on the week ends they would find that the barrier these people face is not the interest rate but how they can get their hands on money from the chartered banks or other institutions of which they are a little suspicious, perhaps unjustly so.
While I endorse the amendments I believe they in no way shape or form overcome the weaknesses which existed in the act, one of which is indicated by the reluctance of the chartered banks to co-operate or to live up to their moral obligations so that the small businessman in each community has a chance to grow. I would have liked to see some provision in the act which would have permitted small businesses to obtain funds for mergers with other small businesses. Big businesses merge and unify. One of the problems of the small businessman is that he has surplus capacity sometimes or lacks a sales staff and this could be rectified easily by merging with another small business. I think that this might have been one welcome addition to the act.
In conclusion, Mr. Speaker, I hope the minister will realize that on the one hand we sponsor the Industrial Development Bank
[Mr. Mackasey.l
DEBATES	February 24, 1967
from which one can obtain a loan at a rate of well over 8 per cent, whereas the chartered banks can provide this service at a rate of interest that is lower. However, the small businessman cannot get a loan there. If this act is going to be of service to the small businessman, then we have to be very realistic about setting a rate of interest, a prerogative which lies with the minister. Secondly, we have to use some type of moral suasion on the chartered banks to co-operate for the benefit of the small businessman.


Mr. A. B. Patterson (Fraser Valley):: Mr. Speaker, I want to speak very briefly in support of the principle of the bill now before the house. Like the family farm to which we have made reference on so many occasions, small business has been in the past and continues to be one of the important and desirable factors in our economic life. We all know that in recent years there has been an increasing emphasis on business. This is true in practically every phase of life. We talk about big business, big firms and big products. This type of thinking has even moved into ecclesiastical circles. We talk about big church organizations. My theory is that there is a danger in equating the idea of size with efficiency and progress. I suggest it is not always indicative of efficiency or progress. People put huge units in opposition to small units in our society.
In my view the so-called small businessman has made and continues to make a very worth-while contribution to our way of life. He should be encouraged and assisted in the efforts he is putting forth. When my colleague the hon. member for Okanagan-Revelstoke (Mr. Johnston) spoke at the resolution stage of the bill he referred to the fact that on many occasions the small businessman operates as a convenience to the respective communities in which he may function. Unfortunately, I suggest that too many of us just use the small businessman as a convenience after the large business places have closed for the night or when the housewife runs short of one or two items. In such case the comer grocer is very convenient. However, we think he should be more than a convenience and as such he should receive encouragement and assistance in carrying on his operations. Not only does he provide a convenience but he also provides a personalized service in many cases which is not found in the larger units. I am sure we all appreciate the fact that these
February 24, 1967	COMMONS
businessmen who operate in our communities are providing a service that is not only convenient but is personalized as well.
I believe, as I have said, that we must do everything we possibly can to assist the small businessman to carry on his operations, make a living for himself and his family and make the contribution to the community he desires to make. The small businessman is not there just to make money. It is true that he has to make money in order to survive and provide for himself, but I believe he takes pride in being part of the community and rendering a service. I believe we all appreciate and recognize that. Perhaps we should recognize the additional burdens that are placed not only upon him but on larger units as well. The small businessman has had to become a bookkeeper for the government with regard to pensions, taxes and all these other things. He is burdened to a considerable extent with bookkeeping, accounting and other activities on behalf not of himself but of various levels of government. Perhaps there should be some way in which this is recognized when he is taking care of his tax return.
[DOT] (4:00 p.m.)
I believe there are other ways in which he should be assisted, but I think that the provision of capital is a very essential requirement. A short time ago I read that there are approximately 4,000 small businesses which go out of business every year, and I think this is a rather serious situation. I realize many reasons may contribute to business failure. For example, perhaps a businessman did not make sufficient preparation before going into business to assure that he would be able to continue his operations. Perhaps he did not have enough capital in the first place in order to provide adequate facilities.
Nevertheless, Mr. Speaker, I am convinced that inability to acquire sufficient capital at various stages of a business operation is one of the factors which forces the small businessman to the wall and which puts him on the labour market. He must have access to sources of capital to meet emergencies which may arise. He must have sufficient capital to expand his business or to face the competition that he meets today. Some small business operators say that they are not afraid of competition from large concerns if only they are able to obtain the capital required to expand their business facilities to meet that competition. I think it is absolutely essential that they do receive the assistance that is required in this connection. Then, of course, working
Small Businesses Loans Act Amendment capital is also necessary to help small businesses to continue to serve their community and help our economy.
As I have said, Mr. Speaker, we support the principle of the measure now before us. However, even though there has been some expansion of the categories of businesses covered by the legislation, I think the legislation is still too restrictive. There are other types of business operations that I believe should be incorporated within the provisions of this bill. Therefore, Mr. Speaker, although the minister has widened the legislation a little further this time I hope that in the very near future he will see fit to bring others within its scope. As I have said, it is still too difficult to obtain capital not only under this legislation but also under other pieces of legislation.
Reference has been made today to the Industrial Development Bank. Relatively small businessmen or industrialists have approached the bank for loans, yet there seems to be a repetition of the old saying that if you do not need money you can get it, but that if you do need money you cannot get it. This has apparently been the experience of all too many in their endeavours to secure capital under the provisions of various pieces of legislation, and I believe it is also true in this particular case.
The hon. member who preceded me pointed out that perhaps part of the responsibility lies with the banks, because of their hesitancy in lending money under the interest rate prescribed. Perhaps they are more interested in lending large sums than small sums, owing to the cost of administration. Nevertheless I believe it is still too difficult for small businessmen to obtain the capital that is required, and that we ought to accommodate them in this regard by enabling them to borrow the money required to carry on their operations.
We have noted the increase in the estimated gross revenue from $250,000 to $500,000. Perhaps smaller businesses are more in need than those with a gross revenue above $250,000. However, Mr. Speaker, as I say, we support this particular provision. On the other hand we also put in an extra plug for the more humble businessmen, because of their greater need. We support of course the extension of the operations of this act for a further period, and we may have some other comments to make when the bill is before committee of the whole.


George Louis Chatterton: Mr. Speaker, my remarks will be brief.
13464	COMMONS
Small Businesses Loans Act Amendment Naturally I support the proposals made by the minister as far as they go, but I submit that they do not go quite far enough. I assume the minister will agree that perhaps the act has not been made use of to the extent that was anticipated when it was passed. The mere fact that the original limit on loans set in the act was $300 million over a period of three years and that up to the end of 1965 only $127 million of that amount had been taken up is an indication of this. This means that an amount of $25 million a year or so is being taken up.
Furthermore, Mr. Speaker, the number of loans which are being made seems extremely small, something in the order of 2,000 to 3,000 per year. Obviously there must be some reason why this act has not been used to the extent anticipated. I realize that the purposes for which loans can be made are limited and no doubt this has been a factor. Therefore a broadening of the act in this respect by the present bill is commendable.
Like the hon. member for Hamilton West (Mr. Macaluso) I also have the feeling that in many cases banks have been rather loath to lend money under this act. In some instances I know that banks have talked the proposed borrower out of obtaining a loan under the terms of this act and have given him a loan under the provisions of the Bank Act. I am not a suggesting that the minister should raise the rate, but I think he could inquire whether banks are prepared to lend money at the rate prescribed. It would be more advantageous for a small businessman to get a loan even at a slightly higher rate than to be unable to get a loan at all.
My main criticism of this bill, Mr. Speaker, is that it does not increase the maximum amount of the loan that may be made. It is true that the average amount of loan up to the end of 1965 was less than $10,000. Nevertheless I have personal knowledge of at least two cases in my riding where a loan could not be obtained because an amount of more than $25,000 was required.
I have checked with officials of the minister's department, Mr. Speaker, but they have no first-hand knowledge of how many applications may have been submitted and rejected because the amount of loan was restricted to $25,000. They have no way of knowing except from inquiring of the banks how many turned down loans for this reason. Banks report to the government of course only on loans actually made.

DEBATES	February 24, 1967
Therefore, Mr. Speaker, it seems to me logical that since the gross revenue has now been increased to half a million dollars from a quarter of a million, the maximum amount of loan available should be substantially increased also, and I hope the minister will give this his consideration. I see no objection to increasing the amount from $25,000 to, say, $50,000, a higher rate of interest being applied on the second half of that amount. This is being done today under the Farm Credit Act and the Veterans' Land Act. I think the minister would be well advised to increase the amount of the loan and then at his discretion to set a higher rate of interest on that part of the loan wich would exceed $25,000.
[DOT] (4:10 p.m.)
I hope the minister will give consideration to these points and that later, in his closing speech, he will tell us, from the information he has available to him, why this act has not been used to the extent originally anticipated.


Mr. Melvin McQuaid (Kings):: My remarks, too, will be brief. I am confident the minister will find that these proposed amendments will meet with general approval all over the country. I think it is recognized that we are a country of small businesses. I have no recent data available, but statistics published not long ago indicated that of the 37,500 manufacturing industries or establishments in existence at that time some 35,000 could be placed in the category of small business, employing fewer than 99 people each.
I know that in the Atlantic area from which I come, the greater the number of small and prosperous industries we have the sounder will be our economy. I often think it is better to have 20 businesses employing 50 people each than to have one employing 1,000 people. This is why I am confident that every encouragement should be given to people who wish to open small businesses and small enterprises.
There is one deficiency that I see in the act as it now exists, and I should like to draw it to the attention of the Minister of Finance (Mr. Sharp) so that he may give it whatever consideration he sees fit. As I read the act today, no provision is made for the advancement of the guarantee on loans to buy existing businesses. The amendment before us would, if it is true, allow a guaranteed loan to be made for the purpose of buying premises. If a young man wished to enter business, this loan would be available to him. Under the existing provisions he would be able to get a
February 24, 1967	COMMONS
loan in order to buy the fixtures and equipment and to make the necessary renovations. But as the act is drafted at present I see nothing which would allow the banks to guarantee a loan for the purchase of an existing business. I think this is an important consideration because there are many young men who would like to enter the small business field, and who see an opportunity to do so when someone who has been engaged in a particular enterprise wishes to get out of it.
Unfortunately, even with the amendment proposed today by the minister, a guaranteed loan cannot be made for this purpose under the act. I would therefore suggest to the minister that it would be of tremendous benefit to small enterprise if now, while we have the act open, some provision could be made whereby a guaranteed loan could be obtained from the banks for the purpose I have outlined.


Gordon Harvey Aiken: wish to make a few comments of a general nature on this bill. I presume we shall shortly begin a clause by clause discussion.
The purpose of the bill before us is limited. It extends the provisions of the Small Businesses Loans Act to construction, transportation or communications. It extends the duration of the act and expands its scope so as to include the purchase and construction of premises. There are two matters I should like to refer to the minister's attention and the first relates to the limitations which are placed on the amount of the loan which can be made.
When the original bill was passed some five years ago, $25,000 was considered adequate for what the government had in mind. At that time there was no other fund to which small business could turn for public assistance. This applied particularly to the type of business in which I am interested, the resort business and the service industry. The bill did serve a purpose, though perhaps it has not been as successful as we had hoped.
I think the time has come when we should expand the provisions of this act far beyond anything the present bill proposes. I believe we should raise the ceiling on these loans because $25,000 is not enough in the case of many of these businesses. I believe the time has come when provision should be made for refinancing. In my view the only reason the small Businesses Loans Act has not been as successful as originally hoped is that in many cases the people who make application for loans need to pay off smaller existing encumbrances before proceeding with the work they
Small Businesses Loans Act Amendment have in mind. I may say there are very few businesses today which do not have some sort of mortgage or encumbrance against them.
As the bill now reads, the full amount made available must be used for the purpose of the construction and modernizing of premises; none of it can be used for refinancing. There certainly has to be a limit but I think, for a reason. I shall mention in a few moments, that the time has come to permit a certain amount of refinancing to be undertaken.
I say this because the only other source of guaranteed government loans available to most people, the Industrial Development Bank seems now to be restricting its credit to small businessmen. Both the Small Businesses Loans Act and the Industrial Development Bank have their shortcomings. The former does not permit the use of any money for refinancing. The I.D.B. does, but it has been my experience in the last year or so that the bank has been greatly restricting its loans to private industry and to small business. Indeed, loans have been restricted to the point at which the system has lost its effectiveness. There is a wide gap at the present time between transactions which are covered by the Small Businesses Loans Act and those which are handled by the I.D.B. Years ago there were signs that the Industrial Development Bank would be useful to small manufacturing firms, small tourist industries and the like. But during the past year there has been a change of attitude or a change of direction. Time after time I have been unsuccessful in getting the bank to do what the act it should do-assist in development.
The people running it have established themselves as bankers and they are not doing the development job they should be doing for small business. I do not wish to go too deeply into this aspect of the subject because you might call me to order, Mr. Speaker, but I would point out again that there is a tremendous gap between what is intended under the Small Businesses Loans Act and what the I.D.B. does. There does not need to be such a gap because there is sufficient authority under this Act to permit loans for the expansion of premises, and there is authority vested in the Industrial Development Bank to handle a lot of industrial loans. The authority is there but it is not being used.
[DOT] (4:20 p.m.)
I can think of four or five industries which are ready to move, but which have been tied up with Industrial Development Bank red
13466	COMMONS
Small Businesses Loans Act Amendment tape, to the point where they cannot do their job. The bank is acting as a banker and not as an agency of the government. For this reason I appeal to the minister to close the existing gap between the Small Businesses Loans Act and the I.D.B. The authority exists. The idea is to help the businesses that want to begin or improve production in Canada, also to help our export business.
Let me give an example of the gap existing between the provisions of this bill and the functions of the I.D.B. A company manufacturing entirely for export applied to the I.D.B. for a loan. At that time it had received a letter from the Minister of Trade and Commerce (Mr. Winters) asking it to step up its export business for the 1967 centennial year. The company had also applied to the area development agency, and had been approved. The Minister of Trade and Commerce had requested it to set up its business, the area development agency had authorized it to proceed with expansion, but the I.D.B. procrastinated for six months, fooling around with red tape. Eventually the firm had to abandon the expansion for 1967. All its business was export business.
A gap exists, and needs to be closed. I could cite other examples, and I have already spoken to the minister about one or two instances. I feel, and feel strongly, that the Industrial Development Bank is not doing its job, and that the Small Businesses Loans Act is not functioning in those areas where the bank does not function. Between the I.D.B. and Small Businesses Loans Act, and their failure to meet certain needs, the development of industry, in Canada, particularly small industry, is being held back. I do not know what can be done to persuade them.
I appeal to the minister to do what he can to make the Small Businesses Loans Act as effective as possible. If the measure before us is all that can be proposed at this time, then let us pass it. If the Industrial Development Bank will not do the job it was set up to do namely, development loans, then the Small Businesses Loans Act should be expanded to do the job the bank ought to do. The bank tangles everybody in red tape.
Let me cite another example. The company in question tried for six months to obtain a loan. In February of 1966 the company applied to the I.D.B. for a development loan. The bank did nothing until November. When the Ontario development agency was set up the company went to it and obtained a loan in three weeks. The point is that the I.D.B.

DEBATES	February 24, 1967
ought to have provided that loan. This is just one example out of half a dozen.
I know that the minister does not tell the I.D.B. how to run its show. He does not like to tell the bank to make a loan to this or that person. If he did that sort of thing it would put all its applications on his desk. Nevertheless I appeal to the minister to tell the bank to get off its rear end and to help develop industry in this country.


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


Mitchell William Sharp: Mr. Speaker, I wish to thank hon. members who have contributed to this debate. My reply will be brief. A good deal has been said about the size of loans and whether it would not be wise in this act to increase the limit above $25,000, just as we have increased the eligibility of businesses by increasing the volume of business that makes them eligible from $250,000 to $500,000.
It will interest the house to know that in the last three years the average size of a loan under this act has been less than $10,000, though the upper limit was $25,000. It is even more interesting to note that the great bulk of loans has been in the range $5,000 to $15,000, which shows that the upper limit of the size of loans has not been a particularly limiting factor. Indeed the demand has been for much smaller loans.
Somebody asked whether the proposed amendments had been discussed with the retail merchants. I can answer in the affirmative. The Retail Merchants Association of Canada made representations to the government that the upper limit should be $50,000 rather than $25,000. The association on examination, however, was unable really to substantiate the need for the increase in the upper limit. Indeed they said that they would consider an increase of much smaller proportions to be quite adequate.
We did consider the possibility of raising the limit above $25,000, but in the light of the figures I have given to the house I think it will be understood that we do not consider that this was a major factor affecting the usefulness of this legislation.
Various members have spoken about the rate of interest. There has been general support for greater flexibility in the interest rate, that the banks might be encouraged to make loans to businesses under the guarantee provided by the act. Until the Bank Act provisions
February 24, 1967	COMMONS
are approved it will be difficult to know on what basis to fix the rate of interest.
May I suggest to the house three general considerations that I believe are highly relevant and that will to a large extent govern the regulations when they are ultimately promulgated. I think the maximum rate should be sufficiently high to preclude the banks discriminating against the use of this guaranteed facility by small business, in favour of other borrowers. Second, the rate must be lower than the rate at which banks normally lend to businesses by a differential wide enough to preclude the banks putting all small business loans under the guarantee.
The original .5 per cent differential below the prevailing rate achieved this end. Of course, if the banks are given greater freedom under the Bank Act the rates will have to be changed accordingly. We believe too that there should not be too wide a difference between the rate under this legislation and the Industrial Development Bank rate on small loans.
As hon. members know, the I.D.B. rate at present is around 7.5 per cent to 8 per cent. Loans have recently been made at higher rates. I can assure the house that the interest rate will be looked at in the light of making the act as widely available to small businesses as possible.
[DOT] (4:30 p.m.)
The hon. member for Parry Sound (Mr. Aiken) voiced complaints about the activities of the Industrial Development Bank. Since you did not choose to consider this as being out of order, Mr. Speaker, perhaps I might be permitted to make a brief reply. As the hon. member said, the Minister of Finance does not govern the activities of the Industrial Development Bank, and I do not believe he should. I believe there is a good deal of advantage in having the Industrial Development Bank removed from political pressures, by having it a subsidiary of the Bank of Canada. However, it will interest my hon. friend to know that representations were made to me the other day by an association of financial companies complaining to me that the Industrial Development Bank was being so active in the financing of small businesses that in fact it was taking business away from organizations which would be able to do the job, if only they were not subjected to such unfair competition from a government agency. So, Mr. Speaker, I think there are two sides to this problem.
Small Businesses Loans Act Amendment


Gordon Harvey Aiken: Mr. Speaker, may I ask the minister a question, more or less in clarification. Would he not agree that if the Industrial Development Bank would limit itself to those companies who need some assistance in their development, then the ordinary lending institutions could handle loans which are easily within the limitations of commercial transactions. In other words the Industrial Development Bank and the Small Businesses Loans Act administration could assist many of the companies which otherwise could not get credit. In fact the Industrial Development Bank is involved in these safe loans and is leaving alone the marginal businesses which should be helped.


Mitchell William Sharp: I will see that the comments of the hon. gentleman are brought to the attention of the bank. Generally the question has been asked, why is the act not being used as extensively as it might be. There are several reasons. First of all I believe that the range of businesses which are eligible for loans has not been as wide as it should be. The purpose of this bill is to correct that defect. Second, I believe monetary conditions have developed in such a way that the banks have not had the incentives which they might have had to make loans under the provisions of this legislation.
When the Bank Act revisions are made I hope the regulations in respect of the interest rate will be such that they will provide the banks with the necessary incentive to ensure that small businesses do obtain the advantage of the government guarantee which is available under this legislation.
Finally, questions were asked concerning the reason the provisions of this act are not available for the establishment of new businesses. I can only reply that that is not its purpose. It was not introduced for that purpose. I believe it would be a mistake to enlarge this act so that it would enable people who are not now in business to finance the establishment of a business. There are other facilities which exist for that purpose, notably the Industrial Development Bank. If we feel, however, that existing facilities are not adequate for the purpose, I suggest that we should look to legislation other than the Small Businesses Loans Act for the remedy.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Batten in the Chair.
13468	COMMONS
Small Businesses Loans Act Amendment
On clause 1-"Small business enterprise."
William Marvin Howe: In my remarks I said that I wondered whether in respect of these amendments the minister would consider the possibility of increasing the amount of the loan. This has been suggested by the Retail Merchants Association. I wonder whether consideration might be given to raising the amount of the loan and charging a little extra interest for the extra $10,000, $15,000 or $25,000.


Mitchell William Sharp: Mr. Chairman, as members of the committee probably realize, this is only one means by which small businesses can be financed. The purpose is to provide loans of up to $25,000 at preferred rates of interest because of the existence of the government guarantee. I do not think any purpose would be served by having a higher rate of interest on loans in larger amounts. That in fact now is provided for by the banks themselves, which can lend any amount of money they wish to a business, and charge what rate of interest they will within the law. I suggest to the hon. member that his suggestion would not be a practical way to accomplish his purpose. Had we thought that the $25,000 limitation was unnecessary under present circumstances, or undesirable, we would have altered it. Our analysis, however, showed that it was not the size of the loan which limited the usefulness of the act.


Bert Raymond Leboe: Mr. Chairman, I wonder whether the minister would like to clarify his statement to the effect that the banks could charge what they will.


Mitchell William Sharp: I said, "within the law". The banks, however, can make loans to these businesses without the government guarantee provided by the act. The banks are free to charge what they will within the law.


Reynold Rapp: Mr. Chairman, I have one short question which I should like to address to the minister. Would the minister inform the house whether banks or other lending institutions can refuse a loan, even though the borrower qualifies for it but is not a customer of that bank or lending institution? Would such a reason enable a bank or other lending institution to refuse the loan.


Mitchell William Sharp: There is nothing in this act which compels a bank to make a loan. So I think I must say that the answer to that question is yes. The purpose of this act is to provide guarantees to banks so that they will

DEBATES	February 24, 1967
be more disposed to make loans. I do not think we could pass legislation which would require a bank to make a loan.


Alfred Dryden Hales: Mr. Chairman, the minister has broadened this act to include construction, transportation and communication. I am wondering whether he would give consideration to extending the guaranteed loan provisions of this act to cover loans made to medical and dental clinics. I am sure that if the minister would pause to reflect on the situation which exists across our country, he would realize there is a great lack in the field of medical and dental facilities. All of us are aware that there are many young graduates who wish to start a practice in the medical or dental profession who find that the cost of setting up such practice, with the cost of new equipment today being what it is, is terrific.
In the dental field I believe the desired requirement for dentists is that there be one for every 1,000 persons. We are a long way from reaching that target. I believe there is only one dentist for about every 3,000 persons. If we look at the figures in respect of the medical profession, I think we would find that the percentage would be about the same.
[DOT] (4:40 p.m.)
I think there is a great need in Canada for medical and dental services and anything we can do to improve the situation will be a step in the right direction. I would like the minister to review this question and see if he cannot add a provision to include medical and dental clinics. I would like to hear the minister's views on this matter.


Mitchell William Sharp: Mr. Chairman, I am myself awaiting some clarification of the point. Obviously the act as it now is, or as it will be amended, does not cover professions; but I am not quite certain what the meaning of "service" is in this connection. Perhaps the hon. member would wait until I receive some advice.


Mr. Kindt:: Mr. Chairman, I should like one more category to be added to this clause that of veterinarians. It is one that is extremely important to livestock men. There is a graduate in veterinary science in my home town and there is one in an adjacent town. These men graduated from Guelph with a degree in veterinary science and one of them wanted to establish a small clinic in which to carry out his practice. He could not obtain a loan from the bank and came to me and others asking us to sign a note to assist him in borrowing
February 24. 1967	COMMONS
the money necessary to enable him to establish a clinic.
Eventually he obtained the necessary backing for a loan, but it was out of the good graces of others that he was able to do so. I do not think that veterinary science graduates who wish to borrow money, and who have behind them some capital, should be placed in the position where they are unable effectively to carry out their responsibilities in this field because they are not able to obtain loans from regular banks. I believe that veterinarians should be included, with dental and medical services, in the provisions of this bill. I support the hon. member for Wellington South who asks that medical and dental services be included, and I would ask the minister to add graduates in veterinary science.


Melvin James McQuaid: Mr. Chairman, I wonder whether the minister would consider introducing an amendment to subclause 3 of clause 1 of the bill so that the provisions of the act could be extended to those who wish to purchase an existing business, including stock as well as premises. This would not be putting another business into operation. I would suggest that such a provision should apply only to an existing business. In this way a young man who wished to set himself up in business and had a chance to purchase an existing business in the community in which he lived could obtain a guaranteed loan in order to purchase not only the premises, the fixed and movable equipment, but also the stock contained in the business.
I believe that such a provision would be of tremendous benefit to a young man who wanted to set himself up in business, and it would not add to the number of businesses already existing in the community.


Mitchell William Sharp: As I said, Mr. Chairman, I do not think this would be the place to make such a provision. If this house believes that it would be appropriate to have legislation other than that now in existence to enable people to get started in business or to buy existing businesses, I would suggest that it should be done through legislation other than the Small Businesses Loans Act, which has as its purpose to increase the availability of term credit from the chartered banks to small businesses, to assist them in financing a wide range of capital improvements. That was the purpose of the act, and I believe that should remain its purpose.


Mr.   Pafterson@: Mr. Chairman, I should like to ask for clarification on one aspect of this 23033-852J
Small Businesses Loans Act Amendment bill. The provisions of the act are being expanded to take in several categories in addition to those previously outlined, including construction, transportation or communications. The explanatory note states:
The purpose of this amendment is to extend the guaranteed loan provisions of the act to cover loans made to small businesses engaged in construction, transportation or communications.
The explanatory note in connection with clause 5 reads:
The purpose of this amendment is to authorize the minister to define by regulations the meaning of the expressions "construction", "transportation" and "communications" for purposes of the act.
I believe there is some ambiguity here. Some people think this provision is concerned with construction businesses and they can obtain a loan under the act if, for instance, they want to purchase additional equipment in order to expand a business. Other people are inclined to think that it means construction and facilities for secondary industry and other types of industry. I wonder whether the minister would clarify this matter. Does it mean the construction business as such or construction as an activity?


Mitchell William Sharp: The intention here is to cover small contractors, people who are engaged in that kind of business.


Alexander Bell Patterson: Then it would not cover construction as far as facilities are concerned?


Mitchell William Sharp: No, Mr. Chairman. We are considering here the financing of a kind of business, and the kind of business is the business engaged in construction, which means, since it is a small enterprise, small contractors.


Alfred Dryden Hales: Mr. Chairman, I wonder whether we could proceed to clause 2 until the minister receives the answers to the questions raised in connection with clause 1.


Mitchell William Sharp: I now have the answer, Mr. Chairman. As I understnad the position, and it may be that I am misinformed, veterinarian, dental and medical clinics have not had difficulty in obtaining finance either through traditional sources or through the I.D.B. Professions, as I said, are specifically excluded. My officials in administering the act have not had, nor have I, representations relating to these professions. Personally I have not had any complaints that people who are setting up dental or veterinary clinics have had difficulty in financing the purchase of equipment. They may feel they have had more
13470	COMMONS
Small Businesses Loans Act Amendment difficulty recently than they have had in the past, but that is true of all businesses, because of the great competition for funds. But I am quite willing to listen to my hon. friend on this point.


Alfred Dryden Hales: Mr. Chairman, the need exists, whether it has come to the minister's attention or not. As the hon. member for Macleod said, the veterinarian people have had trouble in this respect; the banks sometimes do not provide these loans too freely. As I say, the need does exist, whether or not it has come to the attention of the minister. I would be pleased to move an amendment here if the minister thinks it woud be in order, but I do not wish to move it if he thinks it would be out of order. I have an amendment ready. Perhaps in order to allow the Chair to rule on it I should read the amendment. I move, seconded by the hon. member for Macleod:
[DOT] (4:50 p.m.)
That clause 1 be amended by adding thereto as subsection (8) the following:
"(8) Medical, dental and veterinary clinics.''


Mr.   Kindi@: Mr. Chairman, I would like to add a footnote by stating that while the minister may not have received letters from people trained in veterinary sciences, young people graduating from Guelph and other veterinary institutions, they do occupy a very vital role in curing brucellosis, in the administration of certain medicines and in the checking of livestock. I believe that these people should be included among those benefiting from the small loans act. As I said before, there are instances in my own home town and in neighbouring towns where graduates in the veterinary science who are starting out in their business are handicapped by being unable to obtain loans to acquire the necessary facilities for carrying on their business. When they graduate from college it is obvious that they do not have a great deal of money, and several years go by in paying off their university debts and building up their business.
Both they and the people to whom they give their services are handicapped when no funds are available for them to acquire the proper equipment, and other things which they need to carry out the veterinary science. I would ask the minister to consider this seriously because this is a measure which the livestock industries in western Canada would greatly appreciate and for which they have asked. This is an extremely small profession. There is a veterinary college at Guelph and I

DEBATES	February 24, 1367
think one is to be established in Saskatoon, but perhaps these are the only two such establishments in the Dominion of Canada. Most of our veterinary scientists have graduated from the Ontario veterinarian college. The number of veterinary scientists is so small that perhaps their needs for financing have not come to the attention of the Minister of Finance. In developing our livestock industry and other small businesses we should not look solely to the big interests and overlook the veterinary scientists who need working capital and funds as much as do the well established practitioners in the medical or dental field.


Mitchell William Sharp: Mr. Chairman, I should like to make two comments. The act does specifically exclude the business of a profession. I am not quite certain whether or not a clinic is a profession; perhaps it is run by technicians rather than by professional people. However, on the acceptability of this particular amendment I would draw your attention to the terms of the resolution, which specifically extend the guaranteed loan provisions of the act to cover loans made to small businesses engaged in construction, transportation or communications. It seems to me that the amendment goes beyond the principle embodied in the resolution.


Herman Maxwell Batten: Order. The amendment moved by the hon. member for Wellington South introduces into the bill a provision whereby medical, dental and veterinary clinics will be considered under the provisions of this bill. The purpose of the bill which we have before us, as explained in the resolution preceding the bill which was passed on December 13, 1966, is to extend the guaranteed loan provision of the act to cover loans made to small businesses engaged in construction, transportation and communications. I consider that the amendment moved by the hon. member for Wellington South is irrelevant both to the resolution preceding the bill and to the bill itself. I regret therefore that I must rule the amendment out of order.


[Stage Direction]
Clause agreed to.
Clauses 2 and 3 agreed to.
On clause 4.
Gordon Harvey Aiken: I should like to ask the minister what is the figure representing the maximum amount. It is said here that the new guarantee will amount to $300 million. Can the minister tell us what is the figure at the present time? I note from the return made recently
February 24, 1967

that the losses are actually less than .1 per cent. It would seem that we need not be too concerned about setting a limit. I wonder whether the minister could tell us what it is at present.


Mitchell William Sharp: Mr. Chairman, I am not quite certain that I understand the question. The total amount of loans made in 1966 was $20 million, and that figure added to the amounts in the two previous years would give the limits under the previous $300 million quota. We are now beginning a new $300 million quota and therefore the number of loans made since January 1, since we are dating this back to that time, would be very small indeed.


[Stage Direction]
Clause agreed to.
On clause 5.
Alfred Dryden Hales: Mr. Chairman, I have one short question. According to this clause the minister can spell out what construction, transportation and communications mean. Would he care to say whether community antennae businesses would be considered under communications?


Mitchell William Sharp: I think so, Mr. Chairman. One of the exclusions in the present act which seemed most illogical, was small radio stations. I would think that we will promulgate the regulations in such a way as to cover community antennae as well as small radio stations.


[Stage Direction]
Clause agreed to.
Clause 6 agreed to.
Title agreed to.
[DOT] (5:00 p.m.)
Bill reported.
Mr. Deputy Speaker:: When shall the bill be read a third time?


Some hon. Members:: By leave, now.


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


Mr. Mcllrailh:: Item 130 on today's order paper is the motion having to do with the appointment of a special committee to deal with hate propaganda. I understand there is agreement to pass this motion now. If that is agreeable, I should like to ask that it be called now.
Business of the House HATE LITERATURE


ESTABLISHMENT OF JOINT COMMITTEE TO CONSIDER CRIMINAL CODE AMENDMENTS
[Stage Direction]
The house resumed from Wednesday, February 22, consideration of the motion of Mr. Mcllraith:
That this house do unite with the Senate in the appointment of a special joint committee to study and report upon amendments to the Criminal Code relating to the dissemination of varieties of "hate propaganda" in Canada as set out in Bill S-49, intituled: "An Act to amend the Criminal Code";
That 12 members of the House of Commons, to be designated by this house at a later date, be members of the said committee; and that standing order 67(1) be suspended in relation thereto;
That the committee have the power to call for persons, papers and records, to examine witnesses, to report from time to time, and to print such papers and evidence from day to day as may be ordered by the committee; and
That a message be sent to the Senate informing that house that the House of Commons do unite with the Senate for the above purposes.
Motion agreed to.

George James McIlraith: If it is agreeable to the house I should like to announce the business for Monday at this time. We will bring forward for consideration item No. 83, the resolution of the Immigration Appeal Board matter; item No. 120; item No. 128; item No. 119; item No. 129; then the resolution that will come on the order paper on Monday but which appears under government notices of motion today; then Items Nos. 133 and 134.


Eric Alfred Winkler: That is enough.


George James McIlraith: I thought I would indicate the business for Monday and Tuesday.


Mr. Deputy Speaker:: The house will now proceed to consideration of private members business as listed on today's order paper, namely, public bills and private bills.



DIVORCE


Mr. Andrew Brewin (Greenwood):: Mr. Speaker, I have consulted with representatives of the various parties in the house, and I believe this motion is not controversial at all. I move:
That the subject matter of Bill No. C-264 be referred to the special joint committee of the Senate and House of Commons on divorce.
February 24, 1967

Criminal Code Amendment


Mr. Deputy Speaker:: Does the house give consent to the hon. member for Greenwood (Mr. Brewin) to move this motion?


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.


Mr. David Orlikow (Winnipeg North) moved: second reading of Bill No. C-33, to amend the Criminal Code (wire tapping, etc.).
He said: The purpose of this bill, Mr. Speaker, is to amend the Criminal Code in order to revise the old common law offence of *eavesdropping. At the present time the only penalty for wire tapping is to be found in the various provincial telephone acts wherein the penalty ranges from a maximum of six months imprisonment in Manitoba to a maximum of one month in Ontario. Some of the other provincial telephone acts contain no provision for dealing with this type of offence.
The greatest testimony to the value of this bill is the fact that the bill was originally introduced into this house by the present Solicitor General (Mr. Pennell) before he took that important office. When he became Solicitor General, I looked at the bill and made certain small revisions in it. It is now evident that in many parts of Canada eavesdropping, wire tapping or electronic bugging as it has been called, is being carried on very extensively both by police agencies and private organizations.
Some weeks ago the Attorney General of the Province of Ontario, Mr. Wishart, admitted in the Ontario legislature that the Ontario Provincial Police were involved in wire tapping. He made the comment that he urged the federal government to amend the Criminal Code to permit wire tapping by police and law enforcement agencies under certain conditions. He urged the federal government to outline the conditions under which such wire tapping would be permissible. While I am not certain, Mr. Speaker, that it is really necessary for the police to have this authority, I do recognize the problem which police and law enforcement agencies have to face. I have therefore included in clause 2 of this bill a provision which would spell out the right of the police to appear before a judge of a superior court, to give the judge reasons for requiring the right to wire tap, and for the

judge to grant an order giving the police such right.
The fact is, Mr. Speaker, that in the last couple of years, from one end of Canada to the other, we have had evidence that wire tapping is being used. It is being used in a way which infringes very definitely, I submit, the fundamental right which every citizen ought to have to privacy. In British Columbia there is now a royal commission investigating wire tapping. I do not want to comment on the reasons which led to the establishment of the royal commission, nor do I want to say anything about what the royal commission may find. I do want to say that an R.C.M.P. officer made a statement before the royal commission that he had received training in the R.C.M.P. organization on methods of wire tapping. He had been involved in wiretapping, not in the particular case being investigated but in other cases.
[DOT] (5:10 p.m.)
In the city of Saskatoon evidence came to light several years ago that the only telephone which could be used by people who were locked up in the city jail had been so "looked after" that the police could listen in and record conversations by prisoners, or people kept in custody even though not convicted, including conversations of a confidential nature with lawyers. I submit that this is quite improper.
During the hearings before Mr. Justice Dorion in the province of Quebec the R.C.M.P. officers gave evidence that they had equipment which they can and do use to record conversations carried on over the telephone. During the time of the F.L.Q. bombings-and I do not for a moment minimize the seriousness of those occurrences and the difficulties experienced by the police-according to the information I have, police officials in the city of Montreal tapped at least 200 telephones in order to attempt to get information about the people involved.
It may be that these techniques are necessary, Mr. Speaker. If they are, I submit that it is incumbent upon the police and the attorney general of a province, as well as upon the Minister of Justice (Mr. Cardin) and the Solicitor General (Mr. Pennell), to make a case that they are necessary. First of all, they should change the law to permit wire tapping. Second, there should be included in such changes methods by which the police and other agencies with legitimate cause to wire tap can do so legally. I submit that unless this
February 24, 1967	COMMONS
is done it is not only morally wrong but is indefensible and should be prohibited by law.
In 1964 a Toronto Star columnist, Mr. Ron Haggart, disclosed detailed information about wire tapping by R.C.M.P. officers in the city to Toronto. The leader of this party, the hon. member for Burnaby-Coquitlam (Mr. Douglas), as well as myself, asked detailed questions of the then minister of justice, and this practice was denied. Yet both Mr. Haggart and a responsible lawyer in Toronto, Mr. Frank Nasso, wrote to me giving the details. I submitted the letter of Mr. Nasso and the columns written by Mr. Haggart to the then minister of justice. I know he had his difficulties and became ill later, but he never did reply to the very serious charges being made that wire tapping was going on.
Not only that, Mr. Speaker, but the minister of justice at that time denied that the man named in the charges was an official of the R.C.M.P. According to Mr. Nasso, this man stated that the owners of the building had given him permission to instal wire tapping equipment because he was investigating an excise case. In fact he never did have the permission of the building owners and in fact was trespassing, yet nothing was done. The matter was ignored by the minister of justice, who as I say never did reply to my letters.
I might also mention, Mr. Speaker, that the Bell Telephone Company admitted that even if they had received information that the police were engaged in wire tapping they would not have instituted any action that would lead to prosecution of the police. Perhaps this is understandable from the point of view of the Bell Telephone Company or any other company, because there are no laws to prohibit wire tapping. This is the purpose of my bill, Mr. Speaker.
I submit, Mr. Speaker, that there is sufficient evidence today that wire tapping is carried on both by the police and by private agencies. There is no law to prohibit it. If wire tapping is a necessary practice, then the Criminal Code should be amended to spell out to the people of Canada that this practice is necessary. It should not only detail when wire tapping is necessary but why it is necessary, and it should outline the kind of steps police or any other agencies which require to engage upon wire tapping should and must take before they carry on their operations.
I submit that the implications of wire tapping are so serious that it ought not to be permitted without an order from a supreme court judge, and this is precisely what I am suggesting.
Criminal Code Amendment
As I said earlier, Mr. Speaker, the principle contained in this bill was introduced into the house and endorsed by the present Solicitor General. It has also been endorsed and adopted by newspaper editors from one end of Canada to the other.
Before I sit down, Mr. Speaker, I want to put on the record very briefly the views of some newspaper editorial writers in this country, both Liberal and Conservative in allegiance. The Toronto Globe and Mail for December 9, 1966 carried an editorial headed "Laws for dangerous snoops", and I should like to read the last paragraph:
Obviously, there is a need for laws to restrain electronic eavesdropping-not just for private individuals, but for the police, the military, and everyone. Bugging is an invasion of individual privacy; the dangers of permitting such an invasion to go unchecked are far greater than those involved in depriving private and public investigative agencies of a useful tool.
An editorial entitled "The big ear is listening" appeared in the Toronto Star on September 5, 1964 and carried the following statement:
What is needed is an amendment to the Criminal Code that would ban all electronic or mechanical eavesdropping. The only exception would be made for police eavesdropping with the permission of a superior court judge.
This is precisely what I am proposing, Mr. Speaker.
In an editorial headed "Wire tapping" in the Toronto Telegram for Friday, May 13, 1966, which was after the Solicitor General had been asked questions about wire tapping, questions which he did not answer, three choices are listed for the minister which I think are quite logical and commend to him, though unfortunately he is not here this afternoon. They are as follows:
1.	If the R.C.M.P. resorts to wire tapping, which is illegal under the Criminal Code,-
I interject to say that I think they are wrong in this regard, too.
he must put an end to this practice, for the force is breaking the law. He should also announce this action to parliament and the country.
2.	If the R.C.M.P. is not engaged in wire tapping, he should clear it of this suspicion at once by making a statement in parliament.
3.	If Mr. Pennell believes that wire tapping is a necessary method of investigation, he should admit this. He should then introduce legislation to make it legal for the R.C.M.P. and other police forces to carry on this practice.
It has been suggested, Mr. Speaker, that we cannot deal with this question because the royal commission on security will be dealing
February 24, 19S7

Criminal Code Amendment with it. That may well be so. However, I submit that if the law enforcement agencies of this country believe that in security cases the police require to resort to wire tapping, then they ought to say so. This contention is not in contradistinction to what I am proposing in this bill. If the law enforcement agencies can prove a case, then I submit that by passing this bill parliament can give them the right to take action.
[DOT] (5:20 p.m.)
I submit in closing that it is wrong for police agents no matter how responsible they may be to arrogate to themselves the right to decide when and where and in what circumstances they will listen to telephone conversations carried on by any citizen of this country, because I submit there is not a person in this chamber or outside this house who cannot remember at least one occasion on which he discussed matters over the telephone which would be extremely embarrassing if they came to the attention of any other person. I submit that this kind of eavesdropping is wrong in principle and that it should be stopped, and this is the purpose of my appeal.


Mr. Russell C. Honey (Durham):: I want to take a few minutes in which to consider what is involved in the bill before us. The hon. member for Winnipeg North (Mr. Orlikow) has used many arguments in favour of the principle of the bill but I think there is probably no one in this chamber who would disagree with that principle. There are, however, some details on which I have suggestions to make.
My primary criticism, indeed, is that the bill does not go far enough. I would prefer that this house were dealing with Bill C-45, the bill introduced by the hon. member for York-Scarborough (Mr. Stanbury) which covers such things as electronic listening devices which are not dealt with here. However, the principle is good and it is really not necessary to convince those of us who sit on this side of the house that in principle this is desirable legislation and a good step to take.
Nevertheless, I would suggest to the hon. member, though I realize he will not agree with me, that it would be prudent and wise for us on this side of the house, and indeed for all hon. members, to wait until the commission which will undoubtedly consider these questions in relation to national security has reported. We might also do well to wait until the royal commission set up by the British Columbia government has completed

its work. It is fair to say that the hon. member has ancitipated this suggestion because he himself referred to the commission set up in British Columbia.
I might also say that I am generally in favour of this bill because there is some confusion attaching to the legal aspects of intrusions on privacy. There are areas with which our common law does not deal and with regard to which we have no legislation. The bill before us will make it an offence, not being a sender or receiver of a telephone or telegraph communication to wilfully, and by means of an instrument-this is where I criticize the measure as being too narrow in its application-intercept, or record a telephone or telegraph communication. Then the penalties are set out and provision is made for an exception by authority of an order of a judge of a superior court. A further provision makes it an offence, except in certain circumstances, to disclose any information concerning the application for the granting or denial of an order.
I wish to refer quickly to the law in the United Kingdom because I think it is in a more satisfactory state in this area than is our law in Canada.


Herbert Wilfred Herridge: We can learn a lot from the United Kingdom.


Russell Clayton Honey: I have to agree with the hon. member. This is one of the reasons I am taking a minute or two to review their law. There are very few of us in this house, certainly very few common law lawyers in this house, who would argue with the hon. member when he says we can learn a good deal from the mother country in regard to the law.
The origin of the power to intercept communications can only be surmised, but this power has been recognized from very early times and has been recognized as lawful by a succession of statutes covering the last 200 years or more. There is some difference of view among United Kingdom lawyers as to the authority to intercept telephone messages.
According to one view, this power is identical with the power to open letters and rests on the ancient power to intercept communications. Another view is that it derives from statutory authority. The power to intercept communications is exercised in the United Kingdom for the prevention and detection of serious crime and for the preservation of the safety of the state.
Turning from this brief summary of the United Kingdom law, I note that the sponsor
February 24, 1967	COMMONS
of this bill has already alluded to the unsatisfactory situation in Canada where we have left what little legislation there is to be enacted by the provincial legislatures. The law in Canada is not nearly as clear as it appears to be in the United Kingdom. As I have said, the English law seems to base the power of the executive to intercept communications upon the power to open letters. The only statute we appear to have in Canada under federal authority, and which might be relevant, is section 41 of the Post Office Act, chapter 212 of the Statutes of Canada, 1952. There is no power under that act at all to intercept or open letters, except letters coming into Canada, even by police or government agencies for the purpose of national security.
Thus, we do not have this parallel power upon which the law in the United Kingdom is founded. The prohibition against interception of telegraphic and telephonic communication seems to be broader and I can refer the house to section 6 of the Telegraphs Act, chapter 262 of the Statutes of Canada, 1952. There is a good case for some form of legislation in Canada if for no other reason than to clarify the law.
It is undoubtedly the case that certain segments of the criminal element exploit the practice of wire tapping for illegal purposes. The problem is likely to be a growing one, as the hon. member for Winnipeg North said. It is likely to increase to an alarming degree. Provisions should be set out in the law to deal with electronic devices. The use of anything being used for the interception of telephonic or telegraphic communications should be rigidly controlled by an act of this parliament. To justify interference with the privacy and liberty of the individual Canadian there must be strict proof for the necessity of such interference. This proof must be established before a competent judicial authority.
I shall have something to say about this point in just a moment. I think we ought to follow the broad principle covered by my remarks. The power of interception should be granted and used for the prevention and detection of serious crime and for the preservation of the safety of the nation.
[DOT] (5:30 p.m.)
I shall go into detail. My criticisms, I hope will be taken as constructive criticisms, because I do not criticize the principle of the bill. Clause 2 seeks to add section 429A to the Criminal Code. It seems to me that it would not be advisable to require proof only of
Criminal Code Amendment offences punishable by ten years imprisonment. Offences with a lesser punishment ought to be included under these provisions. For instance, we might consider frauds upon the government, municipal corruption as defined under sections 102 and 104 of the Criminal Code; we might consider the sending of false messages, or indecent and threatening telephone calls dealt with under sections 315 and 316 of the Criminal Code. We might also deal with organized gambling, under the gambling provisions of the code. All these offences carry penalties of less than ten years. I think the Criminal Code should be amended in the way I have suggested, to bring in these lesser offences. On some of these lesser offences it might be proper to make application for an order giving power to eavesdrop.
Another criticism I have is that in clause 2 the application must be made before a judge of superior court jurisdiction. This ought to be considered further. I do not say this order should be returnable before a justice of the peace, as under section 429, of the Criminal Code. Search warrants are obtained from a justice of the peace. I think the order should be made returnable to an official higher than a justice of the peace, but lower than a superior court judge. In some areas of Canada it is often difficult to have access to a judge of the superior court. It seems to me that we could rely on the judicial function of a county or district court judge. County judges should have concurrent jurisdiction with superior court judges. This is important, as I said, because it is often difficult to have access to judges of superior court jurisdiction.
The other matter I mention criticizes a detail of the bill, not its principle. Again I refer to clause 2. It seems to me the provision that the order extend for one month is much too rigid. I suggest to the sponsor that this provision would inhibit the investigation of suspected offences. I think a three month order ought to be considered; possibly a six month order would be better. The investigating officials would not be hampered by having to come back to a judge after a month for an extension of the original order.
I conclude by saying that in principle I think this legislation is desirable. I think the bill ought to go farther than it does. It should cover items of electronic intrusion I mentioned earlier. All hon. members should support the measure when the point is reached where the house may make a decision. That point will probably be reached when we are
February 24, 1967

Criminal Code Amendment able to read the report of the royal commission dealing with security matters, and after we have given the commission an opportunity to recommend what should be done about the matters we are now considering. We should also read the report of the British Columbia royal commission on this subject. As I say, when we have read these reports we shall be in a position to enact legislation along the lines of the bill before us.
For the reasons I have already suggested, the bill should be changed. In general, however, the legislation should be enacted. It should be operative in respect of the new devices of this electronic age which intrude on the privacy of the Canadian people.


Gordon Harvey Aiken: Would the hon. member permit a question? Does he think that the royal commission on security will deal with the subject of this debate?


Russell Clayton Honey: I have no more reason to think it will deal with this subject than my hon. friend has. From the terms of reference under which the royal commission was set up, it seems reasonable to assume that it would want to consider these matters, because they pertain to the security of Canada. I think my assumption is reasonable.


Herbert Wilfred Herridge: Criminal Code Amendment
But he stopped when it came to defining the legal complexities in outlawing bugging.
Webster testifying before the royal commission into invasion of privacy, was asked to give his interpretation of the meaning of privacy.
It was, he said, the right to khold a conversation without being spied on.
Commissioner R. A. Sargent said he wasn't trying to start an argument, but in his view it would be difficult to legally define the meaning of the word "privacy". "It can take many forms," he said.
Replied Webster: "To me any person who eavesdrops without authority, by electronic device, is guilty of invasion of privacy."
The fact was later brought out that unfortunately a corporal of the R.C.M.P. and a former member of the force co-operated together to advise Mr. Pat O'Neal, as he was then known, how to proceed to bug a convention being held by another union. That is, of course, the reason for the investigation being conducted in Vancouver. We cannot say very much about that investigation, we have to await the report of the commissioner; but it has stirred a very healthy interest in this question.
It also stirred the interest of the hon. member for Kootenay West, Mr. Speaker. I have spent over two months consulting trade unions in British Columbia, other persons and legal gentlemen who are not members of the House of Commons. On Monday I hope to introduce a bill that is the result of a considerable study of the practice in the United States and in Great Britain in dealing with this kind of issue. As I say, I hope to introduce this bill next Monday, and it will be termed an act respecting the right of privacy. I must say that this bill was not drafted off the cuff, as it were; a great deal of time was taken on this question and I consulted persons whose opinions I respect very much indeed.
Mr. Speaker, I see that the Prime Minister (Mr. Pearson) has now entered the chamber. I am quite confident he has something interesting to tell the house. Therefore, I again express my support for the principle of the bill and am grateful for this opportunity for members to express their opinions on it. I trust that not later than the receipt of the report of the royal commission investigating security the government will take action to amend the Criminal Code to protect the rights of all citizens of Canada.


Mr. D. S. Macdonald (Rosedale):: Mr. Speaker, it has been a useful exercise, discussing this question of wire tapping. We have just heard an interesting presentation by

the hon. member for Kootenay West (Mr. Herridge) concerning his fellow British Columbian, Paddy O'Neal and his fall from grace. We found this very interesting.


Herbert Wilfred Herridge: Excuse me, Mr. Speaker. To be quite correct, the name is Pat O'Neal. They are two different people.


Donald Stovel Macdonald: I very much appreciate being corrected by the hon. member.
I thought just to complete the record it might be useful to complete the hagiography, I suppose one should say-the study of the lives of the saints-and should put on the record the attitude of the C.C.F. government of Saskatchewan in connection with this matter. As the hon. member will recall, this question was dealt with and is on the record of Hansard for June 21, 1965, at page 2736. It stands as a monument to the interest of the hon. member for Winnipeg North (Mr. Orlikow) in this question.
The hon. member for Winnipeg North had at that time described the practice followed by the R.C.M.P. in connection with the Rivard case as being morally wrong, as he said here today. I had the opportunity to point out to him that the identical practice had been followed by Hon. Robert Walker, the former C.C.F. attorney general of Saskatchewan and a close colleague and associate for at least five or six years of the hon. member for Burnaby-Coquitlam (Mr. Douglas).
Hon. members will recall that there was certain discussion of efforts to bribe Hon. Robert Walker, and he issued a press release pointing out that he in fact had a recorder attached to his telephone. Although the hon. member for Winnipeg North has said this practice is morally wrong, I would point out that the C.C.F. attorney general of Saskatchewan had a recorder attached to his telephone. He said he had been engaging in this practice. One of the more interesting aspects of that debate occurred when I remarked:
As hon. members will recall, what the hon. member described was not a wire tap but a recording. In fact, it was the same practice used by the government over which the hon. member for Burnaby-Coquitlam presided when he was premier of Saskatchewan.


Mr. Douglas:: That is not true.


Donald Stovel Macdonald: Then in that event, if the hon. member will listen, I should like to read a statement made by the former Attorney General of Saskatchewan, Hon. Robert Walker, as reported in the Saskatoon Star-Phoenix for December 17, 1964.
I thought it might be useful to have that little incident on the record to show that
February 24, 1967	COMMONS
when hon. members of the New Democratic Party introduce these arguments with respect to wire tapping, they do so from an intimate knowledge of the practice, a practice which was followed right into the office of the former C.C.F. Attorney General of Saskatchewan.
May I for a few minutes refer to the bill itself. I notice that the hon. member who has introduced the bill has used the-


Mr. Speaker:: Order, please. I regret that I have to interrupt the hon. member, but the time allotted for the consideration of private members business has now expired.


George James McIlraith: Mr. Speaker, I would ask that the house revert to motions for the purpose of tabling a document.


Mr. Speaker:: Is this agreed?


Some hon. Members:: Agreed.



FINANCE


Mitchell William Sharp: Mr. Speaker, with the leave of the house I should like to table the report of the Royal Commission on Taxation. It was delivered to the Prime Minister (Mr. Pearson) on Wednesday of this week. There are, as hon. members will see, six volumes in English. There are four full volumes here of the French version, plus the conclusions and recommendations in French of the two other volumes, namely volumes 4 and 6. When we have received volumes 4 and 6 in the French language, they will of course be tabled promptly.
As the house can plainly see, this is a very long report on the result of an inquiry that has been under way since the commissioners were appointed in September, 1962. The majority of the commission, I am informed, has recommended many novel and important changes in our tax laws, which are complicated and interrelated. It will take a long time for hon. members and the public to read these
Report of Carter Commission reports and to assess the recommendations and arguments pro and con. There will inevitably be many differing views as to what should be done about the proposals.
[DOT] (6:00 p.m.)
The government intends to study the report and the views expressed on it during the next few months, before reaching conclusions about the recommendations made by the commission or alternative suggestions from other sources. In the meantime, we do not intend to comment upon the substance of the report, nor indicate our intentions concerning its recommendations. Any premature comments, or forecasts of our intentions on these matters, could have substantial effects upon markets and upon business decisions. There will no doubt be uncertainty in some of our markets and in some industries during the period that is necessary to come to wise decisions after public discussion of these important but contentious issues.


Mr. Speaker:: Has the minister leave to table the report?


Some hon. Members:: Agreed.


Stanley Howard Knowles: Mr. Speaker, may I ask the minister whether he was able to make the arrangements to which he referred this morning to have copies of the report delivered to all members immediately?


George James McIlraith: Mr. Speaker, I wonder if I may explain to the house that arrangements were made to have copies of this report delivered to each member of the house immediately it was tabled. The messengers are in possession of the copies now and they will be delivering them momentarily.


Stanley Howard Knowles: We can hardly wait to get to our offices.


[Stage Direction]
It being five minutes after six o'clock the house adjourned, without question put, pursuant to standing order.
[The following item was passed in Committee of Supply this day:]

[Stage Direction]
L30e
[Stage Direction]
Monday, February 27, 1967