1967-01-18

FINANCE


Hon. Mitchell Sharp (Minister of Finance):: Mr. Speaker, yesterday the hon. member for Qu'Appelle (Mr. Hamilton) asked if I would table a copy of a letter from the First National City Bank to the former minister of finance. With the permission of the house I do so now.


Mr. Speaker:: Has the minister leave to table this letter?


Some hon. Members:: Agreed.



BANK OF WESTERN CANADA-SUSPENSION OF SHARE LIMITATION

Mitchell William Sharp: Mr. Speaker, I should like to reply to a question regarding the Bank of Western Canada that the Leader of the Opposition addressed on Tuesday to the President of the Treasury Board.
The charter of that bank, granted by this parliament, contains provisions that in most respects are similar to clauses 52 to 57 of the bill to revise the Bank Act that is now being studied in the standing committee on finance, trade and economic affairs. It provides for a limit of 10 per cent in the number of shares of the bank that a shareholder and his associates may own, subject to a provision that the bank may accept subscriptions for shares by residents without regard to this limit, but no such subscriptions may be accepted by the bank except in accordance with and subject to such terms and conditions as the Treasury Board may by order prescribe.
When the promoters of this bank appeared before the standing committee they disclosed the number of shares for which the associated group of shareholders proposed to subscribe and the relationship among the various corporations making up the group. This information appears in the minutes of the committee. The proposed shareholdings were again disclosed to the board in the request by the bank to accept subscriptions from this group in excess of the 10 per cent limit that would otherwise apply.
The terms and conditions contained in order 658,534 are, I consider, quite appropriate to deal with the situation in which the
founding shareholders propose to have a majority interest during the early stages of the operations of the bank. These include a requirement that all shares of the bank in excess of the 10 per cent of the total outstanding that are held by the associated group must be disposed of before January 1, 1977, unless an extension is granted by the governor in council.
[DOT] (2:40 p.m.)
The proposed shareholdings of the associated group are listed in the treasury board order, the contents of which were made public by the Bank of Western Canada and which I would be very pleased to table if it is the wish of the house. I understand that because of a reorganization there have been some changes of ownership within the associated group but no increase in the total shares to be owned by all members of the group as stated in the order.
I have the treasury board minute and if the house so desires I would be very happy to table copies in both English and French.


Mr. Speaker:: Is it agreeable to the house that the minister table the treasury board minute to which he has referred?


Some hon. Members:: Agreed.


Mr. Colin Cameron (Nanaimo-Cowichan-The Islands):: Mr. Speaker, the matter the minister has raised has given me some concern after reading about it in the newspapers and after being made aware of it as a result of the hearings before the committee to which the minister referred. I am somewhat disturbed by the implication in the minister's statement today that in the future this date of 1977 may possibly be extended still further. I am disturbed about it not only because it is in contravention of the act we now are in the process of passing through the committee but also because it lends further substance to the suspicions of the people of western Canada that this is not really a Bank of Western Canada because these institutions are based in the province of Ontario. I should like some assurance that the government would not permit this shareholding situation to continue beyond 1977, which seems to be generous in the extreme.


Mitchell William Sharp: I thank the hon. gentleman for his confidence that we will be in office in 1977.

January 18, 1967
Questions



QUESTIONS

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)

[Stage Direction]
Question No. 1,998
Mr. Isabelle:: 1.	How much has the National Capital Commission spent on expropriations, constructions, land development, etc., since 1949 in the city of Hull and the federal constituency of Hull?
2.	How many Hull residents are employed on a full time basis by the National Capital Commission, and how many are employed as seasonal workers during the summer months?


Hon. G. J. Mcllrailh (Minister of Public Works):: 1. The sums expended by the National Capital Commission on expropriations, construction, and land development between April 1, 1949, and March 31, 1966, in (a) the city of Hull totalled $4,043,087, and (b) the constituency of Hull, but excluding the city of Hull, totalled $48,675.
2.	The commission ordinarily employs 44 full time and 41 seasonal employees who reside in the city of Hull. It ordinarily employs 25 full time and seven seasonal employees from the municipalities of Gatineau Point, Gatineau, Templeton, and Buckingham.


RETURNING OFFICERS APPOINTED, SASKATCHEWAN
Mr. Soufham: 1.	On the basis of the redistribution of federal constituencies in Saskatchewan, have any returning officers been appointed?
2.	If so (a) how many, and under whose recommendation and authority were they appointed (b) what are the names and addresses of these appointees and on what date or dates were they appointed?


Mr. Albert Bechard (Parliamentary Secretary to Secretary of State):: 1. Yes.
2. (a) Thirteen, recommended by the Secretary of State under the authority of section 8 of the Canada Elections Act and section 27 of the Electoral Boundaries Readjustment Act. (13 Elizabeth II Chap. 31)
(b)
Constituency	Appointee and address	Dated	appointedAssiniboia	Mr. Dave Ayotte, Minton, Sask.	Sept.	2/66Battleford-Kindersley	Mr. Frank Herback, Unity, Sask.	Sept.	2/66Mackenzie	Mr. Louis Anton Yaworski, Rama, Sask.	Nov.	17/66Meadow Lake	Mr. Louis Vey, Spiritwood, Sask.	Sept.	2/66Moose Jaw	Mr. Robert Kern, 849 Elizabeth, Moose Jaw, Sask.	Sept.	2/66Prince Albert	Mr. Archie Anderson, Box 85, Spruce Home, Sask.	Sept.	29/66Qu'Appelle-Moose Mountain	Mr. Frank Mathers, Esteven, Sask.	Sept.	2/66Regina East	Mr. Calvin D. Abrahamson, 1840 McIntyre, Regina, Sask.	Sept.	2/66Regina-Lake Centre	Mr. Art Joa, Lockwood, Sask.	Sept.	2/66Saskatoon-Biggar	Mr. Douglas Hutchison, 1125 Avenue B. North, Saskatoon, Sask.	Dec.	1/66Saskatoon-Humboldt	Mr. Walter Pappenfus, Annaheim, Sask.	Sept.	15/66Swift Current-Maple Creek	Mr. Irving Hansen, 335 Herbert St. E., Swift Current, Sask.	Nov.	17/66Y orkton-Melville	Mr. Henry Graf, R.R. 1, Yorkton, Sask.	Sept.	15/66

January 18, 1967	COMMONS


RETURNING OFFICER, GASPE CONSTITUENCY
Mr. Keays: 1.	Who was the previous returning officer for the electoral district of Gaspe?
2.	Who is the new appointee?
3.	Who is or are the person or persons or association or associations or other organizations who recommended the present returning officer?
4.	Were any extra qualifications considered for the new appointment and, if so, what were they?


Albert Béchard: 1. Mr. Frederick R. Sams, P.O. Box 522, Gaspe, P.Q.
2.	Mr. Ludger Gagne, Ste-Adelaide-de-Pabos, P.Q.
3.	Recommended by the Secretary of State under the authority of section 8 of the Canada Elections Act and section 27 of the Elec-
Country
United Kingdom-1946	
(U.K. Financial Agreement Act, 1946)
Belgium-1946	
France-1946 (see note 1)	
Netherlands-1946	
(Loans under the Export Credits Insurance Act, part II)	
Ceylon-1958	
(Special loans to Colombo plan countries to finance the purchase of wheat and flour from Canada)
India-1963	
(For purchase in Canada of aircraft and associated spare parts)
China-1946	
Greece-1923	
Roumania-1922	
(Inactive loans) (see note 2)
As detailed in Appendix A	
(Special loan assistance for developing countries)
As detailed in Appendix B	
(Financing agreements under section 21-A of the Export Credits Insurance Act)
Questions
toral Boundaries Readjustment Act. (13 Elizabeth II Chap. 31).
4.	No.


LOANS TO FOREIGN COUNTRIES
Mr. Caouetie: 1.	To what country or countries has Canada loaned money with interest?
2.	What is the rate of interest?
3.	What is the amount of each loan and its duration?


Mitchell William Sharp: 1,	2 and 3.
The loans listed below are those which are carried in the public accounts and on which amounts were outstanding as at December 31, 1966.
Amount of Loan	Rate of Interest	Duration
(millions of Canadian dollars)	(% per annum)	
SI,185.0	2%	50 years68.8 253.4 123.9	3% 3% 2|% 1950-58	30 years 30 years 30 years3% 1959-70 3i% 1971-76	2.0	41%	9 years12.5	3i%	5 years52.5	3%	31 years8.0	5%	25 years24.0	4%	46 years46.3	295.9	6%	
Note 1-Includes interest on interim advances made prior to signature of loan agreement. Note 2-These loans are not currently revenue producing or realizable.
11938	Questions	COMMONS DEBATES		January 18, 1967
Appendix A:	SPECIAL LOAN ASSISTANCE FOR DEVELOPING COUNTRIES			
	Country	Amount of Loan	Rate of Interest	Duration
		(thousands of Canadian dollars)	(% per annum)	
Ceylon	
$1,000 1,500	i of 1% it	50 years incl. 10 years grace period aEcuador	
1,260	i of 1%	50 years inch 10 years grace periodEl Salvador	
3,240	1 of 1%	35 years inch 5 years grace periodGuyana	
1,800	nil	50 years inch 10 years grace periodIndia	
2,150	i of 1%	50 years inch 10 year grace periodJamaica	
700 925 600 500 800	i of i% u a	50 years inch 10 year grace period a a aNigeria	
3,500	1965-70: nil 1971-90: 6%	25 years inch 5 year grace periodPakistan	
23,363	i of 1%	50 years inch 10 year grace periodParaguay	
800	l of 1%	50 years inch 10 year grace periodTrinidad and Tobago	
650 400 400 500 800 340 750 350	1 of 1% (( it it it it	50 years incl. 10 year grace period it it il it it ilTotal..	
$46,328	

January 18, 1967 Appendix B:	COMMONS DEBATES Questions LOANS MADE UNDER SECTION 21-A OF THE EXPORT CREDITS INSURANCE ACT		11939
	Amount of	Rate of	
Country Loan	Interest	DurationArgentina	(thousands of Canadian dollars)	(% per annum) 6%	9 years incl.975	6%	3 year grace period 9 years incl.1,859	6%	1 year grace period 13 years inch336	6%	1 year grace period 5 years3,200	6%	11 years incl.Brazil	6%	1 year grace period 10 years incl.6,054	6%	3 year grace period2,400	6%	8 years incl.Ceylon	6%	3 year grace period 15 years incl.Chile	6%	3 year grace period8,520	6%	uGreece	6%	"India	6%	19 years incl.1,900	6%	4 year grace period 14 years incl.8,000	6%	2 year grace period 15 years incl.37,000	6%	3 year grace period 20 years incl.1,600	6%	5 year grace period 15 years incl.4,200	6%	5 year grace period 15 year incl.2,061	6%	4 year grace period 20 years inch8,000	6%	4 year grace period 20 years inchIsrael	6%	5 year grace period 13 years incl.Liberia	6%	3 year grace period 16 years inchMexico	6%	3 year grace period 8 years inch16,324	6%	1 year grace period 11 years inch27,027	6%	2 year grace period 8 years inch2,973	6%	2 year grace period 10 years inch3,016	6%	2 year grace period 6 years inch9,946	6%	4 mos. grace period 8 years inch9,838	6%	1 year grace period 8 years inch5,405	6%	3 year grace period 15 years inch23033-755	3 year grace period11940	Questions	COMMONS DEBATES	January 18, 1967Country	Amount of Loan	Rate of Interest	Duration(thousands of Canadian dollars)	(% per annum)	Pakistan	
6,351	6%	15 years incl. 3 year grace period6,000	6%	19 years incl.
3 year grace period
5,300	6%	20 years incl. 4 year grace period24,678	6%	21 years incl. 5 year grace periodPhillipines	
13,500	6%	12 years incl. 2 year grace periodTaiwan	
5,000	6%	8 years incl. 2 year grace periodUnited Arab Republic	
4,099	6%	10 years incl. 2 year grace period
Total


$295,934 LOANS TO FOREIGN COUNTRIES-METHOD OF GRANTING
Mr. Caouelle: In connection with question No. 2,220 relating to loans and interests (a) are such loans granted through chartered banks (b) if not, by whom are they granted?


Mitchell William Sharp: The loans referred to in question 2,220 were granted by the government of Canada.


C.N.R. EXPENDITURE ON TRAINING PERSONNEL
Mr. Godin: For the first nine months of 1966, did the Canadian National Railways incur expenditures for the training of 1,095 registered trainees and 37,123 workers employed in sales supervision, relations with customers, technical skills and trades and, if so, how much?


Mr. J. A. Byrne (Parliamentary Secretary to Minister of Transport):: The management of Canadian National Railways advise as follows: The company provides various types of training and retraining for employees, providing courses in apprenticeship, sales and customer relations, technical and skills, supervisory and management development, rules instruction, first aid, safety and fire prevention. Total cost: $1.7 million. 37,123 were given training and, of that number, 32,200 occupied non-supervisory positions.
fMr. Sharp.]


AREA DEVELOPMENT INCENTIVES, RIMOUSKI CONSTITUENCY
Mr. LeBlanc (Rimouski): Since the assent of the Area Development Incentives Act (14 Elizabeth II, chap. 12)	(a) have
any requests been made to the Minister of Industry to establish or improve industries in the riding of Rimouski (b) if so (i) have these requests been favourably received (ii) what is the amount, in each case, of the direct grant or the tax exemption allowed to each one of these industries?


Hon. C. M. Drury (Minister of Industry):: (a) Two applications for grants under the Area Development Incentives Act have been received from firms wishing to expand in the designated Canada Manpower Centre area of Rimouski which is located in the constituency of Rimouski.
(b) Of these, one application has been approved and the actual amount of the grant is now being determined. The second application is being processed.


B AND B COMMISSION EXPENDITURES ON RESEARCH
Mr. Coates: Of the $5,373,198.66 that was spent by the royal commission on bilingualism and biculturalism as of October 31, 1966, what proportion was spent on research?


Mr. John R. Matheson (Parliamentary Secretary to Prime Minister):: I am informed by
January 18, 1967



the royal commission as follows: Of the $5,373,198.66 spent to October 31, 1966, approximately 75 per cent, or $4,030,000, has been spent on research.


PAYMENTS BY B AND B COMMISSION TO RESEARCH CONSULTANTS
Mr. Coates: 1. As of this date, how much has been paid by the royal commission on bilingualism and bicul-turalism to L. Dion, D. Easton, J. Meisel, J. LaRiviere, A. Raynauld, W. Mackey and J. Ethier-
Questions
Blais, since they assumed positions as research consultants?
2. Were any of these individuals involved with the royal commission in any other capacity prior to, during or since, assuming positions as research consultants and, if so, what were the amounts paid to each involved in other work for the commission?


John Ross Matheson: I am informed by the royal commission as follows: The individuals named commenced work with the commission at different times. Payments made from January 1, 1964 to October 31, 1966 are as follows:
	Date
	appointed
L. Dion	Jan 1/64
D. Easton	Aug 1/64
J. Meisel	May 1/64
J. LaRiviere	Oct 29/64
A. Raynauld	Sep 11/64
W. Mackey	Jul 15/64
J. Ethier-Blais	Jan 5/65
Payment for		Total payments for travel
travel	honoraria	and honoraria$11,476.90	$44,925.45	$56,402.357,048.44	44,212.50	51,260.943,410.94	11,175.00	14,585.944,986.00	11,790.00	16,776.00940.03	26,850.00	27,790.032,885.53	7,810.00	10,695.531,357.70	8,541.57	9,899.272.	The following three people hold research contracts with the commission, as well as being research consultants:
Date contract approved
W. Mackey	Sep	11/64J. Meisel	Jun	10/64
(held jointly with Professor V. Lemieux)
A. Raynauld	Nov	20/64
Contract payments to date $13,856.73 25,000.00
10,975.00


COMPLAINTS TO TRANSPORT BOARD OVER LEVEL CROSSINGS
Mr. Orlikow: 1.	How many complaints have been received by the Board of Transport Commissioners from each province, in each of the past ten years, in respect to train stoppages at level crossings which bring about traffic tie-ups?
2.	Did the Board of Transport Commissioners investigate these complaints, and if any complaint was verified, what action did the Board of Transport Commissioners take?
3.	Were any of the complaints followed by prosecutions in the courts and, if so, when, where, and by whom were the prosecutions carried out, and what were the results of these prosecutions?


James Allen (Jim) Byrne: The Board of Transport Commissioners advises as follows: 1. Section 314 of the Railway Act prescribes that no 23033-7551
railway company, its officers, agents or employees shall wilfully permit any engine or car to occupy a public crossing for a longer period than five minutes at one time. The board does receive complaints from time to time involving breaches of this requirement. A statistical record of such complaints by provinces is however not maintained.
2.	Complaints which reach the board involving the excessive blocking of public crossings are fully investigated and where corrective action is indicated the railway company concerned is directed to take such action.
3.	The board has no record of any prosecutions in the courts during such period.


SINKING OF M.S. &quot;CABOT&quot;
Mr. Howard: 1.	What was the name of, and rank held by each officer and engineer who was aboard the M.S. Cabot when she capsized in Montreal harbour on or about December 16, 1966, and by whom was each such person employed?
2.	With respect to each such officer and engineer, by name, was he in possession of a certificate of competency and, if so, for what grade and rank in each case and what was the date of issuance thereof?
3.	As of December 15, 1966, was the M.S. Cabot exempted from any of the provisions of the Canada Shipping Act and, if so, what was the nature of the exemptions, the provisions of the said

January 18, 1967
Questions
act from which she was exempted and the date of each exemption?
4.	As of December 15, 1966, had any of the provisions of the Canada Shipoing Act, except as referred to in part 3 hereof, been waived or otherwise dispensed with either in so far as the M.S. Cabot was concerned or in so far as any of her officers or engineers were concerned and, if so, what was the nature of such dispensation, the provisions of the said act so dispensed with, the date of issuance of any such dispensation and, if related to a person, the name and occupation of each such person?


James Allen (Jim) Byrne: Mr. Speaker, the answer to questions 1 and 2 is as follows: J. A. Begin, master, certificate of competency as master coasting, No. 13577 issued February 24, 1934. J. L. Vigneault, first mate, certificate of competency master home trade, No. 22538, issued August 18, 1960. G. LeBlond, second mate, certificate of competency master home trade, No. 22081 issued April 27, 1959. Marcel *Cote, third mate, certificate of competency first mate home trade, No. 24302 issued July 25, 1966. Paul Bouchard, chief engineer, certificate of competency second class combined steam and motor, certificate C. 809 issued January 11, 1965. J. P. Collin, second engineer, certificate of competency third class combined steam and motor, No. C. 885 issued January 21, 1966 (off duty at time of accident). L. Dube, third engineer, certificate of competency third class motor, No. 3074 issued March 5, 1959. J. Girard, fourth engineer certificate of competency third class motor with fourth class steam and motor, No. 4685 issued November 1, 1966. J. H. Lavoie, fifth engineer, certificate of competency second class combined steam and motor, No. C. 902 issued March 10, 1966.


Mr. Starr:: On a point of order, Mr. Speaker, considering the lengthy reply the parliamentary secretary to the Minister of Transport is making I would ask that his answer be taken as read and printed in Hansard.


Mr. Speaker:: Is this agreed?


Some hon. Members:: Agreed.


Mr. Howard:: Just a moment. I do not see why the hon. member for Ontario should interfere with the rights of other people. He takes up enough time in this house.


Mr. Gilles Gregoire (Lapointe):: Mr. Speaker, question No. 2,168 has been on the order paper since last November 10, that is for over two months. Therefore, I wonder when the Secretary of State (Miss LaMarsh) intends to answer it.


Mr. Speaker:: Shall the remaining questions stand?


Frank Howard: I did not understand that the parliamentary secretary had finished answering the question before he was so rudely interrupted.


Mr. Speaker:: If there is no agreement about the suggestion of the hon. member for Ontario the parliamentary secretary might be allowed to complete his answer.


James Allen (Jim) Byrne: Thank you, Mr. Speaker. I shall continue. A. Roussel, maintenance engineer, no certificate of competency (off duty at time of accident). The foregoing officers and engineers were employed by Gulfport Steamship Company Limited, 1155 Dorchester Street West, Montreal.
3.	As provided for in regulation 55(3)(a) of the fire detection and extinguishing equipment regulations, smothering gas for fire extinguishing purposes in the holds was waived by virtue of the provision of steel hatch covers and effective means of closing all ventilators and other openings leading to the holds. Exemption granted during construction of vessel and dated April 9, 1965.
4.	No.


RAIL RATES ON LUMBER AND PLYWOOD
Mr. Reid: 1.	What are the rail rates for lumber and plywood between the Canadian lakehead and Toronto?
2.	What are the rail rates for lumber and plywood between British Columbia and Toronto?
3.	What is the proposed increase in rail rates for lumber and plywood in each of the two above cases?
4.	What, if any, protests has the Minister of Transport or the governor general in council received against this increase from persons or organizations in northwestern Ontario.


James Allen (Jim) Byrne: The Board of Transport Commissioners for Canada advises as follows:
1.	Competitive commodity rates for account all shippers
Lumber from Fort William, Port Arthur and West Fort William, Ont. to Toronto, Ont.
60 cents per 100 lbs., min. weight 50,000 lbs.
56	"	"	"	"	"	"	60,000	"54	*	*	"	"	"	"	70,000	"53	>>	>>	*	"	"	"	80,000	"
Plywood, no specific commodity rates in effect.
January 18, 1967

2. (a) Competitive commodity rates for account all shippers
Lumber
159 cents per 100 lbs., to min. wt. 50,000 lbs. Plywood,
184 cents per 100 lbs., to min. wt. 40,000 lbs.
(b) Agreed charge rates for account 116 different shippers.
Lumber and Plywood
156 "	>>
>>
T>	" " 50,000 "154 "	f)	" " 60,000 "151 "	i* >>
5J	" " 70,000 "147 "	iJ >7	" " 80,000 "145 "	>>
>>
>>	" " 90,000 "143 "	* >* >>	" " 100,000 "
3. (a) An increase of 10 per cent was placed on the rates from the lakehead effective October 10, 1966, but this increase was removed on November 14, 1966. (b) No increase has been made in the rates from British Columbia since December 31, 1964. (c) No information as to any proposed increase in these rates.
1. Comparison of housing construction with
	Gross	(A)
	national	Housing
	product	(new)
	(millions of dollars)	
1960	36,287	1,4561961	37,471	1,4671962	40,575	1,5871963	43,424	1,7131964	47,403	2,0281965	51,996	2,1331966	57,740*	2,116
Questions
4.	The board received a letter dated December 29, 1966 from the Department of Economics and Development of Ontario, protesting what was alleged to be a proposed 10 per cent increase in the rate on lumber from the lake-head area to become effective January 1, 1967. No such increase has been filed with the board or put into effect.


HOUSING CONSTRUCTION-TAX ON BUILDING MATERIALS
Mr. Laprise: 1.	For each year since 1960, what has been the percentage of housing construction as compared with the gross national product?
2.	What have been the total returns from the tax on building materials for each year since its introduction?


Hon. Judy V. LaMarsh (Secretary of Slate):: I am informed by the Departments of Trade and Commerce and National Revenue as follows:
gross national product, 1960 to 1966*
New Housing	(B) Housing	Housing (newas a percent-	(new and	and repair) asage of gross	repair)	a percentagenational	(millions of	of gross naproduct	dollars)	tional product4.0	1,913	5.33.9	1,951	5.23.9	2,100	5.23.9	2,257	5.24.3	2,605	5.54.1	2,752	5.33.7*	2,772	4.8*
* Gross national product estimate for 1966 is based on the level of the seasonally adjusted 3rd quarter and therefore subject to revision.
2.	Sales tax revenue is not separated as to products or categories. It is not possible therefore to furnish this information.


PRICES OF CHEESE AND POWDERED MILK
Mr. Godin: 1. What criteria are used as a basis in this country to set the price of (a) cheese (b) powdered milk?
2.	Is the price of such products higher in Ontario than in Quebec?
3.	If so, for what reasons?


Hon. J. J. Greene (Minister of Agriculture):: 1. (a) and (b). Numerous factors influence cheese and powdered milk prices. These include supply, demand, stabilization and marketing programs and the prices of other dairy products competing for the milk supply.
2.	The price of powdered milk is similar in the two provinces but, based on market quotations, cheese prices are at a slightly higher level in Ontario.
3.	Supply, demand and other market factors.

January 18, 1967
Motions for Papers


SPRINGHILL, N.S. PENAL INSTITUTION-CHAPEL AND VOCATIONAL TRAINING BUILDING
Mr. Coates: 1.	What is the amount of the contract for the construction of a chapel and vocational training building at the young offender's penal institution at Springhill, Nova Scotia, and who was the successful tenderer?
2.	How many additional tenders were submitted, by whom, and in what amounts?


George James McIlraith: 1. and 2. No contract has been awarded. Tenders are due on January 18, 1967 for construction of two chapels, an industrial building, a garage and a stores building.


MOTIONS FOR PAPERS
Mr. J. B. Stewart (Parliamentary Secretary to Minister of Public Works):: Mr. Speaker, notice of motion No. 198 is acceptable to the government. Would Your Honour please call notices of motions number 192 and number 193. I ask that the remaining notice be allowed to stand.


LABOUR (STANDARDS) CODE-DEPARTMENTAL CORRESPONDENCE
[Stage Direction]
Motion No. 192.-Mr. Howard:
That an order of the house do issue for a copy of all correspondence, telegrams or other documents exchanged between the minister or Department of Labour and any other person, group or organization, excepting any other department or agency of government, relating to the Canada Labour (Standards) Code or the deferment or suspension of any part thereof.
Hon. J. R. Nicholson (Minisfer of Labour):: Mr. Speaker, with regard to this motion I might say that the documents requested are very voluminous, representing the contents of several hundred files containing thousands of letters and memoranda going back to early 1965. Acceptance of this motion would also involve disclosure of the internal operations of many companies concerned including matters that are confidential and likely to affect their competitive positions in their industries. It would be contrary to normal practice to make public such information, and I hope that under the circumstances the hon. member is willing to withdraw the motion.


Frank Howard: Mr. Speaker, before the
Christmas recess the minister undertook to file, to table or otherwise to advise the house of the number of exemptions or applications for deferment that had been dealt with under

various dispositions. If the minister is still of the opinion that he is going to do that, and on the understanding that he will, perhaps I could withdraw this motion.


John Robert (Jack) Nicholson: I will be pleased to give that undertaking, Mr. Speaker, and will file the information covered by the statement made by the hon. member at the earliest possible date. Some of it could be filed very shortly but some may take a little time to compile.


Mr. Speaker:: Dropped.
Order discharged and motion withdrawn.


LABOUR (STANDARDS) CODE-CORRESPONDENCE BETWEEN DEPARTMENT AND C.B.C.
[Stage Direction]
Motion No. 193-Mr. Howard:
That an order of the house do issue for a copy of all correspondence telegrams or other documents exchanged between the Minister or Department of Labour and the Canadian Broadcasting Corporation relating to the application of the Canada Labour (Standards) Code or the deferment or suspension of any part thereof.
John Robert (Jack) Nicholson: Mr. Speaker, with regard to this motion, the correspondence between the Department of Labour and the Canadian Broadcasting Corporation with respect to the Canada Labour (Standards) Code also extends back to 1965. Moreover, it contains matters related to the internal operations of the corporation, including matters dealt with both in correspondence and related discussions that are of a confidential nature and affect the corporation's competitive position. Perhaps I might add that the C.B.C. did make an application for deferment of hours of work. That application, after careful review, was rejected by me as Minister of Labour on December 29 last. In view of these considerations I would hope the hon. member would withdraw this motion.


Frank Howard: Mr. Speaker, I wonder whether, in the light of the explanation, I might have time to read it in detail and consider what the minister has said and perhaps make a determination about it on another day. Could the motion stand?
Motion stands.


EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
Right Hon. J. G. Diefenbaker (Leader of the Opposition):: Mr. Speaker, would the Prime
January 18, 1967

Minister give the house a report on his reaction to the unusual request made by some 360 university teaching staff, mostly of the University of Toronto, asking for a ban on arms shipments to the United States until the Americans withdraw from Viet Nam?
Righl Hon. L. B. Pearson (Prime Minister):
Mr. Speaker, the discussion among the Secretary of State for External Affairs, myself and the delegation in question was confidential. The delegation left with me a letter to which I said I would be glad to reply in writing. Perhaps at that time, if they agree, we could table both their letter our reply. '


John George Diefenbaker: I do not understand these confidential meetings; but the press reports as follows:
Professor Hughes-
He is apparently the sponsor or originator of the idea.


Mr. Speaker:: Order, please. The right hon. gentleman knows, of course, that he can refer to press statements but they cannot be quoted as a preamble to a question.


John George Diefenbaker: Then I will ask the question more directly. Did the Prime Minister, as stated by Professor Hughes, express sympathy for the arms ban suggestion?


Mr. Pearson:: No, Mr. Speaker. I expressed sympathy and understanding with the point of view taken by the delegation in respect of their desire to bring the war in Viet Nam to an end, but there was no special sympathy expressed for that demand. Indeed, in our discussion of that particular request I pointed out that the export of arms and defence equipment to the United States was covered by our defence sharing agreement with that country, and we did not intend to abrogate that agreement.


John George Diefenbaker: Mr. Speaker, does not the Prime Minister feel it would be of assistance to groups such as this and to Canadians generally if once and for all this government would make a clear statement of policy setting out its views on the issue of Viet Nam, and giving a definition of the stand so uncertainly taken up to the present time by Canada?


Lester Bowles Pearson: That has been done more than once inside and outside the house.


John George Diefenbaker: Nobody understands it.


Mr. T. C. Douglas (Burnaby-Coquiflam):: have a supplementary question, Mr. Speaker.
Inquiries of the Ministry In view of the fact that the 360 professors in their petition pointed out that Canada is now selling some $300 million of arms annually to the United States under the defence production sharing agreements, and in view of the fact that they have asked that Canada follow the example of Sweden and stop such shipments until the intervention in Viet Nam has ended, is the government giving favourable consideration to this proposal? Will the government be making a statement shortly to the house as to what decision they have reached?


Lester Bowles Pearson: Mr. Speaker, it is not our
policy to stop the export of defence equipment to the United States or to other NATO allies in accordance with the agreements we have made with them. It was stated in one report that these shipments have increased by 82 per cent. The fact is that since 1965 they have only increased by 20 per cent whereas the imports of defence equipment from the United States into this country have increased by 120 per cent.


Michael Starr: What are we getting ready for?


Mr. Maurice Allard (Sherbrooke):: I should like to put a supplementary question to the Prime Minister in this connection. Since our sales of arms to the United States seem to have increased by 82 per cent in 1966, is it not the government's intention to ask for some changes in the Canada-U.S. defence production sharing agreements, so that our claims for peace in Viet Nam would not be merely rhetorical and our participation in the International Control Commission would be more consistent and effective?


Mr. Speaker:: I do not think the hon. member is putting a question. It seems to me he is making a statement or rather making representations to the Prime Minister. In my opinion, the question, if it is one, is out of order.


Mr. E. Nasserden (Rosthern):: I have a supplementary question for the Prime Minister. Now that he has admitted that the sales of defence equipment by Canada to the United States have increased by 20 per cent and that our purchases of such equipment from the United States have increased by 120 per cent during the past year, would he indicate to the house whether this was the objective in mind when Canada signed the joint defence sharing agreement?

January 18, 1967
Inquiries of the Ministry


Lester Bowles Pearson: No, Mr. Speaker, that was not in our mind at the time.


Mr. Henri Laiulippe (Complon-Fronienac):: Mr. Speaker, I should like to address my question to the right hon. Prime Minister.
Would the Prime Minister tell the house whether the government intends to confine its contribution to the Viet Nam war to the sale of armaments?


[Stage Direction]
On the orders of the day:
Mr. H. W. Herridge (Kootenay West):: wish to address a question to the parliamentary secretary to the Secretary of State for External Affairs. In view of the proposed program for the further development of power at the Grand Coulee dam in the United States on the Columbia river as the result of water storage facilities provided by Canada under the Columbia river treaty and protocol, in view of the glowing statements about this achievement in the western United States press, and in view of the statements by Canadian hydro economists that Canada should have received greater benefits from the Columbia river treaty and protocol as a result of this unexpected development, is the parliamentary secretary prepared to admit that Canada was sold down the river to the United States when the Columbia river treaty and protocol were signed?


Mr. Speaker:: Order. This is certainly a rhetorical question.



PARLIAMENT HILL


[Stage Direction]
On the orders of the day:
Mr. Real Caouetie (Villeneuve):: Mr. Speaker, I should like to direct a question to the Prime Minister. Could he tell the house whether he has received representations or even a petition from the parliamentary staff and from certains members about parking facilities on parliament hill.
Is this parking situation on parliament hill being studied in order to solve this difficult problem which affects several members and a number of parliament employees?

Is the Prime Minister in a position to tell us something about the parking situation?


Lester Bowles Pearson: Yes, Mr. Speaker, I have received communications of that kind and probably the Minister of Public Works has received more. However,
I think the present arrangements should be given an opportunity to show their usefulness.
I think they are an improvement.



FINANCE


[Stage Direction]
On the orders of the day:
Hon. E. D. Fulton (Kamloops):: Mr. Speaker,
I should like to ask the Minister of Finance a question concerning a mortgage or finance company which appears to be in very serious difficulties. Has the minister or the government any information with respect to the position of Depositors Mortgage Corporation which, according to today's La Presse, is involved in difficulties with respect to liabilities exceeding $25 million.


Mitchell William Sharp: Mr. Speaker, I was informed the day before yesterday about the difficulties of this company. I got in touch immediately with the superintendent of insurance, who told me that this is a Quebec company which is not subject to the supervision of the federal government.


Edmund Davie Fulton: I have a supplementary question for whoever is Acting Registrar General at the moment. Has the Acting Registrar General received any information with respect to a proposal said to have been made yesterday to the registrar of bankruptcy for the judicial district of Montreal by Depositors Mortgage Corporation, in which apparently the company has suggested an extension of time and accommodation to work its way out of these difficulties?


Hon. L. T. Pennell (Solicitor General):: In
the absence of the Acting Registrar General may I be permitted to say I was advised that the Acting Registrar General learned of the matter on Monday night, immediately upon the filing of the proposal in the bankruptcy division of the Superior Court of the district of Montreal. He at once instructed the superintendent of bankruptcy to have his regional officer in Montreal inspect all documents and interview the trustee of the proposal with a view to examining the nature of the assets
January 18, 1967	COMMONS
and liabilities to establish whether any irregularities may or may not have occurred.
The Acting Registrar General is now in Montreal and is meeting with officials of the bankruptcy division of the Registrar General's department.



REPORTED INCREASE IN GOVERNMENT EXPENDITURES

[Stage Direction]
On the orders of the day:
Hon. George Hees (Northumberland):: I
have a question for the Minister of Finance. In view of the fact that during the first eight months of this fiscal year government expenditures were $630 million in excess of those for the same period last year, does the minister consider that this is a satisfactory performance during a period when the government is urging other Canadians to cut back expenditures?


Mr. Speaker:: Order, please. The hon. member is asking for an expression of opinion on the part of the minister and I do not think the question is acceptable.


George Harris Hees: May I ask a supplementary question. In view of the expenditures made by the government during the first eight months of this fiscal year, does the government intend to start curtailing expenditures to try to keep government action in line with that urged upon other Canadians?


Mitchell William Sharp: All government expenditures are being made in accordance with estimates approved by this parliament. I have not heard from the other side the kind of support for economies that I think would be appropriate under these circumstances.



INDUSTRY


[Stage Direction]
On the orders of the day:
Mr. Thomas M. Bell (Saint John-Albert):: have a question for the Minister of Industry. In view of the bleak and discouraging picture of New Brunswick shown on television last night, particularly with relation to the lack of jobs and industry, will the minister again look over the industrial incentive program for that province, and particularly the exclusion of Fredericton and Saint John from the plan?


Charles Mills (Bud) Drury: assume the bleakness to which the hon. member was referring was of a political character. 23033-756
Inquiries of the Ministry I detected that myself. In respect of the industrial incentive program, I feel the hon. member will have gathered, especially from the reaction of the voters in Saint John, that the people are quite satisfied with the progress being made.


Thomas Miller Bell: May I ask a
supplementary question. Since I am not responsible for the government of the whole province of New Brunswick, does the minister think this plan is working in New Brunswick?


Mr. Speaker:: Order, please.



PROVISION OF SAFETY DEVICES ON CANADIAN AUTOMOBILES

[Stage Direction]
On the orders of the day:
Mr. Heward Grafftey (Brome-Missisquoi):: Now that the list of safety devices to be included on government purchased cars has been released it has been reported that the government has decided to consider legislation requiring the same devices on cars purchased by the general public. My question is to the Minister of Industry. Is the government now considering such legislation requiring safety devices on cars purchased by the general public?


Charles Mills (Bud) Drury: Mr. Speaker, the government has under active consideration a very comprehensive report made by a committee of persons well informed in matters of automobile safety and the practical steps that might be taken, given the solution of constitutional and other problems in Canada, with a view to improving automobile safety in Canada.


William Heward Grafftey: My supplementary question is, now that the government has published a list of government standards is legislation being considered by the government with regard to automobiles purchased by the public?


Mr. Speaker:: Order, please.


William Heward Grafftey: Is legislation being considered by the government?


Mr. Speaker:: Order, please.



NATURAL GAS


[Stage Direction]
On the orders of the day:
Mr. M. W. Martin (Timmins):: I have a question for the Minister of Mines, Energy and Resources. The question arises out of a

January 18, 1967
Inquiries of the Ministry story in this morning's Globe and Mail entitled "Trans-Canada faces prolonged hearing". In view of the fact that this article outlines the strong possibility of at least a two year delay in any action on the present government approved pipe line, is the minister prepared to announce to the house that the government is going to insist that Trans-Canada Pipe Lines stop playing cat and mouse with their Canadian customers and start immediately on the twinning of their present line?


Mr. Speaker:: Order. The question as asked is not acceptable.


Murdo William Martin: I should like to have it debated at ten o'clock.



INQUIRY OF THE MINISTRY

[Stage Direction]
On the orders of the day:
Mr. Alcide Simard (Lac-Saint-Jean):: Mr. Speaker, I should like to put a question to the Minister of Justice.
Could the hon. minister tell us whether his department intends to exercise its prerogative of absolute pardon in the case of a person who has committed only one offence during his life?


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


Joseph Alcide Simard: Ten o'clock, Mr. Speaker.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Mr. Howard Johnston (Okanagan-Revel-stoke):: I have a question for the Minister of Industry. Can the minister tell us when the studies currently being conducted by his department into the broadening of the scope of the designated area grants to include the tourist industry will be completed?


Charles Mills (Bud) Drury: Mr. Speaker, the analysis is presently under intensive preparation. I hope that within a month or so we might be able to produce some satisfactory basis for consideration of this question.


Mr. Eric A. Winkler (Grey-Bruce):: I have a
supplementary question. I should like to ask the minister if the revision will include the balance of Grey and Bruce counties.
[Mr. Martin (Timmins) .J


Charles Mills (Bud) Drury: I will take that under consideration, Mr. Speaker.



EDUCATION


[Stage Direction]
On the orders of the day:
Mr. J. M. Forrestall (Halifax):: My question is for the Minister of Manpower and Immigration, and I apologize for giving him such short notice. It arises out of a report in the Halifax Herald this morning in which the manpower department has been charged with paying for students' holidays in Bermuda. I wonder if the minister could first of all tell us whether this has been drawn to his attention, and if so what steps his department would be prepared to take to assure Canadians that their tax dollars are not being misused in this fashion.


Hon. Jean Marchand (Minister of Manpower and Immigration):: Mr. Speaker-


Some hon. Members:: Plear, hear.


Jean Marchand: I thank the hon. member for giving me notice. As he said, it was short notice and I did not have time to inquire into the case. I will do so as soon as I can, and perhaps tomorrow I can provide an answer.


J. Michael Forrestall: May I ask a supplementary question. Would the minister explain what the applause was about? I did not think the question would attract that much attention.


Edmund Davie Fulton: I have a related question for the minister. I am sure the minister was engaged in activities which prevented him from dealing with the notice he received, and I ask whether as a result of those activities he knows whether he was appointed leader of the federal Quebec party or just leader of the Quebec wing of the Liberal caucus?



INCOME TAX


[Stage Direction]
On the orders of the day:
Mr. A. D. Hales (Wellington South):: Mr. Speaker, I should like to address a question to the Minister of National Revenue. Is it a fact that employers, when submitting T-4 returns this year must report the first dollar of earnings of all employees?


Hon. E. J. Benson (Minister of National Revenue and President of the Treasury Board):: Yes, Mr. Speaker.
January 18, 1967


Alfred Dryden Hales: Would the minister not consider the same exemption that applies under the Canada Pension Plan, that is that anyone who works less than 25 days and earns less than $250 does not have to be reported?


Edgar John Benson: Mr. Speaker, this is a very difficult question to answer, but basically the problem involved is with respect to the Canada Pension Plan, where one employer might not be aware of how much an employee earned from another employer. We are very anxious that every employee of Canada should receive all the credit he deserves under the Canada Pension Plan.


Alfred Dryden Hales: A supplementary question.
Would the minister not let this exemption apply to transient and part time farm employees?


Mr. Speaker:: Order. The hon. member is making a representation to the minister instead of asking a question.


Mr. Lawrence Watson (Assiniboia):: Mr. Speaker, I should like to direct my question to the Minister of National Revenue. May I ask the minister whether his department will be sending out books of T-4 slips to all farmers in Canada immediately, so that every time they hire somebody on a casual basis for an hour or two they can get these forms filled in. May I also ask whether, if the information which is required is marked "Not Available", the department will get the necessary information from them?


Edgar John Benson: Mr. Speaker, I think my department is very reasonable in dealing with people, and it does not expect taxpayers to provide information that they cannot possibly provide. With respect to T-4 returns, these are available at all the district taxation offices in Canada. These are the T-4 supplementaries and the summaries.



THE CANADIAN ECONOMY


[Stage Direction]
On the orders of the day:
Colin Cameron: 
Mitchell William Sharp: Mr. Speaker, the government would, of course, have to decide from time to time whether it wished to intervene to ask companies not to increase their prices. In this particular case it is not the intention of the government to do so.


Colin Cameron: As a supplementary question may I ask the minister whether the government's decision has been based upon the receipt of any reliable information which would justify these price increases?


Mitchell William Sharp: Mr. Speaker, the government
requested the Steel Company of Canada to defer their price increases for a period of six months and other steel companies followed suit. It did not seem to the government that it would be justified in asking this industry to defer any increase for a further period.


Thomas Clement (Tommy) Douglas: supplementary question, Mr. Speaker. May I ask the minister whether during that six month period following the deferment the government had any study made of the production costs by the steel companies of Canada, and whether their decision not to ask them for a further deferment was based upon such a cost study.


Mitchell William Sharp: Mr. Speaker, the request to the Steel Company of Canada in the first instance was to defer their price increases in the interests of reducing the rate at which prices and wages were spiralling. They made that contribution, for which I think everyone should be grateful. While, as I say, the government might wish to intervene again at some time, that is not the intention at present.


Thomas Clement (Tommy) Douglas: A further supplementary
question. At the time the minister asked the companies to defer their price increases, did he not make the statement that the increase in wages in the steel industry was more than offset by increased productivity in the steel industry?

January 18, 1967
Inquiries of the Ministry


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


William Heward Grafftey: Mr. Speaker, I have a supplementary question which relates to cost of living and prices. Yesterday the government received further representations from a group of ladies. Did the government say they could do anything about the situation, and what remedies did they suggest?


Mr. Raymond Langlois (Megantic):: I have a supplementary question for the Minister of Finance in connection with deferment of price increases by steel companies. Does this also apply to nickel companies, particularly the Inco company, which increased the price of its nickel recently?


Mitchell William Sharp: The Minister of Trade and Commerce and I met with the nickel company some time ago. As a result of our representations the increase in prices announced at that time was, I believe, less than it would otherwise have been.


Colin Cameron: A further supplementary question. Do I understand from the Minister of Finance that the only consideration the government has in mind in making a decision whether to ask certain enterprises to defer increases in prices is-


Mr. Speaker:: Order. This question is not in order.


Michael Starr: May I ask the
Prime Minister whether the government is still giving consideration to the establishment of a prices review board.


Lester Bowles Pearson: Mr. Speaker, that matter has been under consideration from time to time, and we will be interested in reports from the parliamentary committee dealing with this matter before a final decision is taken.



FISHERIES


[Stage Direction]
On the orders of the day:
Mr. Lloyd R. Crouse (Queens-Lunenburg):: Mr. Speaker, I wish to address a question to the Minister of Fisheries. In view of the fact that the Republic of Korea has indicated its intention to enter the high seas salmon and other fisheries of the international north Pacific fisheries convention area, which could

thus impair or destroy the treaty, will the government take immediate steps to implement the 12-mile limit legislation, especially the establishment of base lines from geographical co-ordinates, for the protection of our salmon and other fisheries resources?


Hon.   H.-J. Robichaud@Minister of Fisheries: Mr. Speaker, while there are rumours to the effect that the Republic of Korea may engage in fishing operations on this side of the Pacific, there is nothing definite as yet. I want to assure the hon. member that every precaution will be taken so that no historic rights will be established by that country to fish off the west coast of Canada.


Frank Howard: A supplementary question, Mr. Speaker. May I ask the minister how he can prevent the Republic of Korea or any other country from establishing historic fishing rights on the high seas when it is already a matter of right that they can fish there?


Mr. Speaker:: Order. I suggest this question is argumentative.



CANADA PENSION PLAN


[Stage Direction]
On the orders of the day:
Edward Nasserden: Mr. Speaker, I have a question for the Minister of Agriculture. What action does the minister intend to take to meet the reported problem created by the Canada Pension Plan in so far as short term labour for farmers is concerned?


Mr. Speaker:: Order. This question is of a general nature and cannot be asked at this time.


Edward Nasserden: Mr. Speaker, I think it is quite an urgent matter. A number of farm organizations have been concerning themselves with the matter within the last day or two. Surely the minister has an answer to a problem which has arisen in many areas of this nation and is as pressing as that.


Mr. Speaker:: If the hon. member feels there is urgency and he thinks I am wrong, he can always give notice to discuss the question at ten o'clock.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Hon. Gordon Churchill (Winnipeg South Centre):: Mr. Speaker, I should like to ask the
January 18, 1967

Minister of National Defence whether he has any plans for alterations at naval dockyards in Canada for the accommodation or repair of United States nuclear submarines.
Hon. Paul Hellyer (Minisler of Naiional
Defence): No, Mr. Speaker. They have their own facilities for these repairs. It is not necessary for us to supply them.


EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
Mr. Robert Simpson (Churchill):: Mr. Speaker, I should like to direct a question to the Prime Minister. In view of the conflict which is occurring as a result of the treaties signed by the government of Canada and our Indian people and the Migatory Birds Convention Act, could the Prime Minister say whether consideration is being given to the advisability of asking the United States to renegotiate the migratory birds convention?


Lester Bowles Pearson: I would like to look into this question.



THE MINISTRY


[Stage Direction]
On the orders of the day:
Frank Howard: I wonder whether I could try to determine what duties and responsibilities, if any, have been given to the hon. member for Davenport, and so I ask him that question.


Mr. Speaker:: Order, please. The question is not acceptable.


Frank Howard: Then may I direct a question to the Prime Minister and ask the right hon. gentleman whether he recalls when he was on this side of the house complaining bitterly about his inability to direct questions to Newfoundland's Billy Brown.


Lester Bowles Pearson: I do not possess that kind of total recall.



POST OFFICE DEPARTMENT


[Stage Direction]
On the orders of the day:
Mr. David MacDonald (Prince):: I wish to direct a question to the Postmaster General. It
Transportation
relates to the recently announced pay increases for postmasters and their assistants, and to earlier increases to postal clerks and letter carriers. In the light of these increases to post office officials, is the Postmaster General giving serious consideration to allowing commensurate increases to the many thousands of rural route mail carriers?


Hon. Jean-Pierre Cole (Poslmasler General):: These rural route contractors bid for their contracts; they themselves fix the price for the service they give.


David Samuel Horne MacDonald: Since many of these contracts were negotiated years ago, and having regard to the rise in the cost of living since then, will the Postmaster General give this matter his serious consideration?


John Cole: We do, Mr. Speaker.
Every two years after the date a contract was issued, the contractor can ask for an increase, and usually we increase the amount paid. Usually contractors should be asked to bid every four years, but if they are doing good work we renew the contract.



TRANSPORTATION


[Stage Direction]
The house resumed, from Tuesday, January 17, consideration in committee of Bill No. C-231, to define and implement a national transportation policy for Canada, to amend the Railway Act and other acts in consequence thereof and to enact other consequential provisions-Mr. Pickersgill-Mr. Batten in the chair.
The Chairman:: When the committee rose last evening we were discussing new section 329 of clause 50 of the bill, with an amendment proposed by the hon. member for Winnipeg South Centre. The amendment is as follows:
That clause 50 be amended by striking out section 329 on pages 41 and 42.
Is the committee ready for the question?


Mr. Horner (Acadia):: Last evening I was saying a few words in support of the amendment. I should like to continue by summarizing as briefly as I can my reasons for thinking it would be detrimental to the position of western farmers if these rates were once again aired.
It appears obvious to me that the minister has gone to great lengths to make a deal with the railways. He has made an arrangement

January 18, 1967
Transportation
with the railways in which he has offered to give them something and they have offered to give him something in return. They are giving him very little, but under this particular clause we stand to give the railways a great deal. I should like to read what the minister said on this point to show how I reached the conclusion that he has made a deal, particularly with the C.P.R. As reported at page 11601 of Hansard, about half way down the right hand column, the minister said this, talking about the tax immunity granted to the C.P.R.:
We did make representations to them that this kind of immunity, which had been given in perpetuity, was not really the kind of thing that was very desirable in the twentieth century. The company did say that if they were allowed the kind of scope the government had said they were going to propose to parliament to enable the company to increase railway revenues, then tlm company would be glad to give up this immunity.
I should like to underline what was being said here. In essence the railway company pointed out that if they were allowed the kind of scope which the government had said it intended to propose to parliament, then the C.P.R. would be prepared to pay taxes on all their land across the prairies including, in particular, a number of cities in western Canada. This very paragraph outlines beyond a shadow of doubt that the hon. gentleman has been making arrangements with the C.P.R. in particular; and as Minister of Transport he would have included the C.N.R. in his arrangements.
I wish to read his words once more in order to make it clear that we have evidence that there was a deal, and that this particular clause was part of the deal. Under this clause we could lose more than is evident today, depending on the finding of the inquiry, and on the extent to which public opinion was aroused. The minister said-and I think this is worth reading again-
The company did say that if they were allowed the kind of scope the government had said they were going to propose to parliament to enable the company to increase railways revenues-
This would allow the company to pay taxes on all their property, particularly property in some of the western cities. Let me point out that this would amount to something like a million dollars a year in respect of each city out there.
So here is evidence that there was an arrangement, or a deal, made. I like the word "deal" because it suggests to a westerner that deals are sometimes shady. This deal could well be shady if the results of this inquiry 
come out on the wrong side of the ledger as far as the Crowsnest pass rates are concerned. That is the shady part of it, and I do not like it. I believe it would be much better if this section were to come out.


Mr. Pickersgill:: If the hon. gentleman has left that subject, would he permit me to say a word about it?


John (Jack) Henry Horner: I should like to continue. I want to see this transportation bill through as quickly as I can.


Some hon. Members:: Oh, oh.


John Whitney Pickersgill: I know the hon. gentleman does not wish to misrepresent anything. I would just like to say that the statement of mine which he quoted had reference to the public statements which had been made. It had no reference to anything privately said to any railway company but to the public statement to the effect that we intended to introduce legislation to free the railway rates and permit competition. It had no relation whatsoever, in any shape or form, to the Crowsnest pass rates.


John (Jack) Henry Horner: It is all very well for the minister to say that. That is why I prefer to call it a shady deal, because we do not know. Let us strike out this clause.


John Whitney Pickersgill: On a question of privilege, Mr. Chairman; the hon. gentleman and I have had amicable relations so far and I know he does not want to destroy them by questioning my word with regard to something I said myself. I am confident that the hon. member believes that the statement I have just made to the committee is a truthful statement.


John (Jack) Henry Horner: I am not doubting the minister's word. I am drawing attention to the provision which is included in this bill, the bill now before us. Whether he intended it to be in the bill does not matter. I do not think he did, because he says he did not. But it is in the bill now, and we do not like it. We do not like this section because it now becomes part and parcel of the arrangement the minister made, and it may be detrimental to the western farmer in the years ahead, particularly if public opinion can be aroused against these rates which were set so long ago.
[DOT] (3:30 p.m.)
Subsection 1 of the new section reads in part:
-at the level of rates referred to in subsection (2) and shall report such revenues and costs to
January 18, 1967

the governor in council and the amount of payments necessary, in the opinion of the commission, to assist such railway companies to meet the costs of operations-
Is this concerned with allowing the farmers to get their products to market and affording them equal opportunity to market their products? There is no mention of that, but that is what the Crowsnest Pass rates were intended to do in conjunction with the quota system.
This new section is concerned with the railway companies and that is why I think it was placed in the bill as part and parcel of the arrangement that was made. Some hon. members opposite may wonder why I get a little worked up over something like this, but the Crowsnest pass rates are the Magna Carta of western Canada. We see the thin edge of the wedge in this new section and this is why we are making a determined stand to try to convince the minister that it should be deleted.
I would be the first to say that the minister has really tried to be co-operative, and by this amendment we are urging him to be more co-operative. We will not mind if ten years from now the government and the minister, if he is still Minister of Transport, say: Let us have a review of the Crowsnest pass rates. By that time railway equipment may be modernized and there might be a possibility that the rates might be reduced.
The new section provides that a study of the rates must be completed within three years. What is the use of a three year study when we have just received the MacPherson commission report and that commission could not come to a conclusion on cost figures? As I mentioned in an earlier speech, a start has just been made on the modernization of the railways' grain movement plant. That modernization is only in the embryonic stage. Elevator companies are suddenly becoming concerned about the fact that they will have to build bigger elevators, and the railway companies are concerned about their outdated handling equipment.
As recorded at page 13 of the proceedings of the standing committee on railways, canals and telegraph lines of 1964-65, the former president of the C.N.R., Donald Gordon, said:
Yet, despite the fact that there have been many radical and fundamental changes in western Canada's economy since those explosive years, the system of grain handling established before the first world war-the collection, storage and transport of the prairie grain crop-has changed very little.
He went on to day:
Many of the existing country elevators are now well below the optimum size for the best economic
Transportation
costs of operation and also for the most economic
cost of trans-shipment by railways..The second
factor involves the economies that can be obtained through a program of elevator consolidation that would eliminate those existing elevators that are operating well below the size required to ensure lowest cost operation.
The proposed three year study will not be able to take into account the fact that the railways' equipment is outdated.
Because the Crowsnest pass rates were first established in 1898 and reaffirmed in 1925 there is a good deal of feeling across the country that they are outdated and must be increased. But as I pointed out previously, the cost of moving a cubic yard of dirt has not gone up because of automation. New, huge equipment has made the moving of earth more economic than by the old horse and slip method. Slow progress has been made in modernizing grain transport equipment, and if it were modernized possibly the rates could be lowered. But such prejudice has been generated against the rates that I believe it would be difficult to place any group of men on the board of review who had not already formed an opinion about them. How could such a group judge the rates if they have already subconsciously prejudged them?
From private conversations with members of the government I know that many of them have said, "You know very well that the rates are outdated and must be raised." I say they have formed opinions without any real study of the problem, and the general feeling is that the rates must be raised.
The Minister of Transport has guaranteed that as long as he occupies that position the rates will not be touched in any way. But that is no real guarantee. His parliamentary secretary, who may have aspirations to become minister of transport, gave plenty of evidence at three or four committee meetings of his feeling that the rates are outdated and should be raised. How do we know he will not be the next minister of transport? Someone says that is doubtful. For myself I say I hope he is not.
My sixth point is that the Crowsnest pass rates could provide a sizeable profit for the railroads if it were not for the quota system, but that has become part and parcel of the rates and should be maintained. The rates and the quota system are essential to give farmers equal rights to market their products.
Let us look briefly at the question of whether or not the railways are losing money. Before the freeze was placed on railway freight rates, which situation will continue to apply until this bill is passed, if railways wanted to
1IS54

January 18, 1967
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increase freight rates they had to apply to the Board of Transport Commissioners for permission. They had to prove that they were losing money, that they were not getting a proper return on their investment, and if they did that they could then apply a horizontal freight rate increase. I may have given an abbreviated description of the process, but that is what railways had to do when they wished to increase freight rates.
[DOT] (3:40 p.m.)
Let us look at the question and go back to the year 1957. The railways said they were losing money in the movement of grain. In 1958 a freeze on freight rates was imposed. In 1957 and 1958 the railways said that they were using the profits made in the movement of other goods to cover the losses sustained in the movement of grain. The freeze on freight rates has continued since that time and the railways have not been able to increase them. The movement of grain has doubled, freight rates have been frozen, but what has hap-ened? Railway profits have continued to rise. Even the C.N.R., which has a huge debt hanging over its head on which it has to pay interest, has been able to widen the difference between their operating costs and their total revenue. How can they come before parliament and say that this new section is necessary and that we should re-examine this aspect?
Another objection I have to this provision is that it states that the commission shall inquire into the revenues and costs. Then farther along in the subsection we see the words "and shall report such revenues and costs to the governor in council". There is no mention, as was the case in respect of Bill C-120, of what these costs are. Are these costs to be compensatory costs or the total cost which takes in all the fixed costs? There is no mention of this in the subsection.
In other words, if the commissioners saw fit to do so they could represent to the governor in council that the railways needed a marginal mark-up of another 30 per cent to cover the total of fixed and variable costs. Anyone who understands the principle of volume hauling understands that the greater the volume the less the charge for fixed costs. There is no mention of this in this section, but in the old bill there was mention of variable costs plus a $9 million expenditure toward fixed costs.
I have another point to make in respect of my request that this section be deleted. Who is going to speak? The railways will present

their facts to the board of review and the board will have to judge whether or not their costs have been met and how much the subsidy should be. The board will have to decide how much it should allow for fixed costs and how much it should allow for variable costs. Who will present the other side of the argument? In any court case both sides of the argument are heard. Who is going to rise and speak for the prairie farmers? The minister might say that the pools, the provincial governments or any other interested party will. But is that enough? An interested party may not feel that it is his responsibility to spend $1J million. This is the amount the Alberta, Manitoba and Saskatchewan governments spent in respect of the MacPherson commission.
Are we going to expect the Alberta, Manitoba and Saskatchewan governments to spend another $1J million and again bring in from the United States experts such as Mr. Borts and Mr. Williams? These two experts have already presented a brief but I imagine they would be prepared to do a costing study again if the provincial governments wished to hire them. This government is putting the prairie provinces immediately on the defensive. That is the reason I urge the minister to reconsider the decision he made last night that this section shall remain and that we shall vote on it. I urge the minister to wipe it out. Already the minister has been successful in taking our suggestions and having them redrafted. Let us change this three-year period to ten years. Let us include in the bill a phrase to the effect that the Crowsnest pass rates will extend until 1975.


Herman Maxwell Batten: Order. The time allotted to the hon. member has expired.


John Whitney Pickersgill: Mr. Chairman, I do not intend to speak at length because I am going to try to accept the excellent advice given me more than once by the hon. member for Winnipeg South Centre. There are, however, a couple of specific questions raised by the hon. gentleman which I really ought to answer before a vote is taken, if it is the intention that there should be a vote on this clause. The first question the hon. gentleman asked concerned what guarantee there is that the Crowsnest pass rates will continue. He said he believed that as long as I was the Minister of Transport they were quite safe. I thank him for that expression of confidence. But these rates are in the law; they cannot be changed unless a majority of members of parliament
January 18, 1967



are convinced that the law should be changed. That is the guarantee. Surely that is much better than a guarantee from me. I can also assure the hon. gentleman that my parliamentary secretary is more likely to go to the other place before I do, so I do not think he need worry about that particular problem.
In respect of the review I should like to say that the review is not of the rates. There is to be no review of the rates. If there should be a suggestion that there be a review of the rates 1 would vote against any such proposal. There is to be no review whatsoever of the rates; they are guaranteed in the present law and they are guaranteed in this bill. All that is to be reviewed is the cost in respect of carrying the grain. The reason this is in the bill, instead of the provision to pay the railways which was in Bill C-120, is that I am not convinced the railways should get anything. I am not convinced the railways are not making money from carrying grain. Therefore I would not put anything in this bill which in effect would ask parliament to pay them anything. All I have said is that we want to get the facts, that we should not pay them anything for three years. At the end of the three years, if the facts show that there is a loss then all this section says is that the commission should report to the governor in council and recommend that he take such action as he may see fit to take. It does not say that the loss shall be paid.
[DOT] (3:50 p.m.)


Mr. Woolliams:: Would the minister permit a question?


John Whitney Pickersgill: Yes.


Eldon Mattison Woolliams: In the review it would be difficult to determine the accuracy of fixed costs. You cannot ascertain properly whether grain is being carried at too low or too high a rate. Is not the weakness of the review the fact that you cannot really review anything. The railways-and I have appeared before boards-always say that fixed costs are allocated.


John Whitney Pickersgill: As a matter of fact the railways will not do that; the commission will do it. The commission will be appointed by the government. There is also the implication that the governor in council would ask parliament to make good the loss. Therefore the Minister of Finance will be a party on the other side. The farmers will not have to do this because the farmers rights are guaranteed in the bill. The person who will have an
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interest on the other side will be the Minister of Finance, and the commission will know that. They will know, if they find there are losses, that there will be an implication that these losses should be met out of the treasury.
Any government with any sense of responsibility will see to it that every submission made by the railways to this commission is subject to the utmost scrutiny. No minister of finance likes to pay subsidies to the railways or anybody else and then have to make himself and his government unpopular by imposing taxes. This, I think, is the real basis of the thing.
The hon. member asked who would speak on the other side. I say that it will be the Minister of Finance; it will also be the Minister of Transport. He is not the agent of the railways; he is the agent of the people of Canada. It is his duty and it is the duty of the Minister of Finance to protect the treasury. No government, with so many other ways of spending the taxpayers' money, will want to pay a nickel in subsidies to the railways unless they are thoroughly justified.
This bill gives a better guaranty to the farmers if section 329 is left in than if it is left out. With this section in the bill there is no reason for anybody to agitate to change the Crowsnest rates.
The railways will know that after three years the facts will be reviewed by somebody who is impartial, and if there is in fact a loss it would seem reasonable justice that it be made up. The railways therefore will have no motive to agitate to have the rates changed. If we have no provision for such a review, if we say we do not think it is necessary to have it, I suggest that the railway companies would, and probably quite justifiably, continue agitation. The fear that because this review will take place there will be agitation-and this is my opinion-is misplaced. If we had no review I think the railways would constantly agitate to have such a review. But if they know it will be held and if they know that this law safeguards these rights, as I have said a dozen times I do not think that any government I can foresee, not even-


An hon. Member:: Be careful.


John Whitney Pickersgill: -an N.D.P. government, in the unlikely event that we have one, would touch the Crowsnest rates.


An hon. Member:: What about the hon. member for Lapointe?

January 18, 1967
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John Whitney Pickersgill: I agree completely with the view that these rates are there and they are there to stay. The whole philosophy of the bill is that if in the national interest we ask the railways to perform certain functions they are entitled to perform those at a compensatory level. If we say they must do so at a level that is not compensatory, but it is still in the public interest to have it done, the railways should receive reasonable compensation for it. This does not provide compulsory compensation. They can come back to parliament-


Mr. Schreyer:: Would the hon. minister permit a question?


John Whitney Pickersgill: Yes.


Edward Richard Schreyer: Does the minister not concede that even if this section were not in the bill the commission could make a study of the economic aspects of the Crowsnest rates under clause 15, which has already been passed?


John Whitney Pickersgill: It would not be the same kind of review. If the hon. gentleman looks at clause 15 and the provisions set forth there, he will see it deals primarily with research.


John (Jack) Henry Horner: This section singles out the farmer. The government is singling out the farmer.


John Whitney Pickersgill: Perhaps I should say a word about that. It does single out the farmers. It says that the wheat farmer alone, or almost alone, of all the shippers in Canada shall have a fixed rate. In practically all other instances, though there are a few which have been temporarily frozen for one or two years, the railways may change rates so long as they have them high enough to be compensatory and below a certain maximum established to protect the public. We are saying that the grain farmers-and this includes more than wheat because all grains are specified here-alone are guaranteed a fixed rate that will not be changed. In that sense they are singled out.


Eldon Mattison Woolliams: Would the minister permit another question?


John Whitney Pickersgill: Perhaps when I have
finished. We are saying that if it is proven that because of that fixed rate there is a loss it will be competent to ask parliament to make up that loss. It is not as though we are leaving it up to the railways; the railways would have to earn the loss or make it good somewhere else. The view that Mr. MacPherson took, and

I share it with him, is that other freight shippers should not be expected to bear the losses in carrying freight for just some shippers. We say that if there are losses-there probably will not be-and if parliament says, you must carry these goods at that rate even though there is a loss, those losses should be borne by the community and not by some other group of shippers. That is the whole purpose of this part and it seems to me that it represents essential justice.


Edward Nasserden: Would the minister tell us whether he made a deal with the railways?


John Whitney Pickersgill: I do not know how many times I need to say that I made no deal with the railways or anybody else. I made a statement to parliament that we intended to introduce legislation to enable the railways to compete, to allow them to charge freight rates within a certain maximum and minimum. They would set their rates as other businesses do. That was not a deal. That was a statement of public policy.


Edward Nasserden: Would the minister tell us why he put this section in the bill?


John Whitney Pickersgill: Yes. I shall be glad to say so again. I put it in the bill because in the previous bill and in the bill drawn up by the previous government it was proposed to pay to the railways certain sums set out in the MacPherson report for the losses on the Crowsnest rates. An expensive royal commission, with one dissenter, said there were losses. The previous government drew up a bill which was never introduced. The hon. member for Winnipeg South Centre was correct when he said that since it was never introduced I have no right to presume it would have been introduced. I accept that. But the hon. member for Qu'Appelle and the former prime minister told us they had a bill ready to be introduced. That bill contained a provision that the railway would be paid for losses on the Crowsnest rates. I introduced a similar bill in 1964 and I am glad it did not pass. It would have been a great mistake to put in that provision. I do not think losses have been proven and that is why I changed it. That is why I took out the part dealing with payment to the railways and changed it to provide for an inquiry and review by an independent commission. That is why it is there. It is there for no other reason.
[DOT] (4:00 p.m.)


Edward Nasserden: Mr. Chairman, the minister indicated that he thought there had been a change of circumstances in the intervening
January 18, 1967

period. If he really believes that, why put this section in the bill?


John Whitney Pickersgill: Because it seemed to me just simple justice to do that. It seemed to me that if a royal commission says there are losses and you refuse to accept their verdict while basing most of your legislation on their report, it is not unreasonable to say that instead of my believing something or someone else believing something we should find out the ascertainable facts. It would be quite wrong to accept the railways view of this matter; I quite agree with that. But I do not think the railways should be excluded from presenting their case any more than anyone else.


Eldon Mattison Woolliams: Let us vote on it.


John Whitney Pickersgill: Mr. Chairman, I think we will not by further discussion change each other's views very much, and perhaps we should now settle the question since it has been put before us by the hon. member for Winnipeg South Centre and other hon. members and eloquently supported. Let us have a vote.


Some hon. Members:: Hear, hear.


Thomas Clement (Tommy) Douglas: Mr. Chairman, the Minister of Transport said, I hope facetiously, that if there was a New Democratic Party government even they would not dare change the Crowsnest pass rates.


John Whitney Pickersgill: I do not think I said they would not dare; I said I did not think they would.


Thomas Clement (Tommy) Douglas: Well, the minister says he does not think we would change those rates. I should like to point out to him that of course the New Democratic Party, and the C.C.F. before it, have been among the staunchest supporters of maintaining the Crowsnest pass rates because we have always believed that the shippers of grain, selling as they do in the world market and buying in a closed, protected market, are entitled to whatever assistance the Canadian people can give them to ship their goods to world markets at reasonable prices. We also believe that the railways, by virtue of the tremendous assistance given to them by way of tax exemptions, land grants and financial subsidies, can quite well afford to accept these rates as being fair and equitable for shipping grain.
This question has been the subject of discussion for decades. It was discussed before the Duff commission, the Turgeon commission
Transportation
and the MacPherson commission. Naturally the farmers of western Canada are very sensitive about anything which might affect the Crowsnest pass agreement.
I must say that this section does not in any way endanger the Crowsnest pass rates agreement, but I am not convinced by the minister's argument as to why he has placed section 329 in the bill. I do not understand why he has provided for an inquiry by the commission within three years, to look into the question of whether the railways are losing money because of the Crowsnest pass rates, and has required them to report to the governor general in council whether some compensation should be paid to the railways. I do not know why parliament should be asked to do this. If at any time the government made a study and decided that compensation was warranted, it could always bring this matter to parliament. Also, the commission itself may make a study any time it chooses or the railways I presume, could make application for a hearing in order to present a case for some type of compensation. But why this parliament should be asked to instruct the commission to carry on a study, the purpose of which is to compensate the railways if it can be proven that they are suffering loss as a result of these grain rates, really escapes me. All it can do is arouse the fears of the prairie farmers.
There are two points I wish to make to the minister. The first is that while this inquiry will not have to do with rates, nevertheless the farm organizations of the prairie provinces will naturally be concerned about the decision reached by the commission on this question. The railways will, of course, ask for the right to appear. They have probably the best experts on transportation and cost accountants in Canada. Who is going to present the other side of the case? To some extent the commission is the referee and acts for both sides.
I can tell the minister from experience in hiring people to appear before the Turgeon commission, and later the MacPherson commission, that the governments of the prairie provinces actually had to go outside of Canada to get top-flight cost accountants and economists in this field, because all the experts are either hired by the railroads or hold a brief for the railroads. It is a very expensive proposition. Who is going to present the case for the thesis which the minister has already expressed and with which I agree, namely, that the railroad are not losing money on the Crowsnest pass agreement? Who will do the

January 18, 1967
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cost accounting, who will do the analyses, which will be tremendous, in order to present that case?
The minister says that the government has a stake in this matter and will be very anxious, of course, not to have a recommendation calling for a subsidy because it will have to ask parliament to approve that recommendation. This is only partly true. The long-term result of parliament being asked year after year to pay substantial subsidies to the railways in order to compensate them for carrying grain for export at statutory rates will be public pressure for a change in those rates.


John (Jack) Henry Horner: That is exactly the point we raised.


Eldon Mattison Woolliams: That pits the farmers
against the rest of the people of Canada.


Thomas Clement (Tommy) Douglas: This will not only be a matter of the government asking parliament to vote money; it will be a matter of asking the taxpayers of Canada to fork over money for what will be interpreted in the public mind as a subsidy to the wheat growers of western Canada. This will be the beginning of tremendous pressure upon whatever government is in office to alter the rates so the taxpayers will not be required to make what may be a very large financial contribution to the railways.
This is what is worrying the farmers of western Canada. This is what will worry the governments of the prairie provinces. This is why someone would have to appear before the national transportation commission and do their best to prove that the railways do not require compensation and are in fact adequately paid under the statutory rates. But who is going to do this? As has already been said, the governments of the prairie provinces spent $1J million preparing and presenting their case to the MacPherson commission over the period of time that commission was sitting. I know that very large sums of money were spent in respect of the Turgeon commission hearings. Second, I do not think that either the provincial governments or the prairie pools should be required to carry this burden.
[DOT] (4:10 p.m.)
I have been sitting here trying to give the minister every possible chance to convince me that there is some merit in keeping this section in the act. I have already conceded that it does not jeopardize the Crowsnest pass rates. Therefore I am completely at a loss to understand why parliament should order the commission within three years to make an inquiry

into whether or not the railways are losing money and, if they are, to recommend to the government what payments should be made to them. If the government wants to accept its own responsibility for having an investigation and if, as a result of that investigation, it wishes to recommend to parliament that compensation be paid to the railways, that is their business, but I see no reason why the government should ask parliament to require the commission to make this study and this report which would enable it to say later that it was parliament which ordered the investigation and made it necessary for the government to require financial votes by the House of Commons in order to compensate the railways.
If the government wants to follow the course of action outlined by the minister it should do so on its own responsibility. It should not ask parliament to set out a course of action which it is not parliament's responsibility to lay down. That is the responsibility of the government.


Mr. Lewis:: Mr. Chairman, I do not want to prolong the debate but I want to add one or two words to what my leader has just said. In answer to a question by the hon. member for Springfield the minister said that clause 15 does not give the commission authority to make an inquiry.


John Whitney Pickersgill: I think the hon. member could not have heard me correctly. I said it did not give the commission authority to make the kind of inquiry that is envisaged in this section.


David Lewis: I just wish to say that the section which is before us is composed of two parts; one is the inquiry and the other is the recommendation for payment. So far as the inquiry is concerned I respectfully suggest that if it should ever be considered necessary the power to set it up is already contained under clause 15(1) of the bill, paragraphs (a) and (e) which read as follows:
(a) inquire into and report to the minister upon measures to assist in a sound economic development of the various modes of transport over which parliament has jurisdiction;
(e) inquire into and report to the minister upon possible financial measures required for direct assistance to any mode of transport and the method of administration of any measures that may be approved;
It is also contained under other subclauses of clause 15. I suggest that the real reason why section 329 is in the bill is in order to
January 18, 1987

have a provision in the bill carrying the implication which the minister admitted it carried, namely, that eventually there will be a charge on the treasury tor any losses that may be proven.


John Whitney Pickersgill: That is correct.


David Lewis: It is that implication to which I object, even though I do not represent a western constituency. I do not know whether there have been any losses but I submit that even if the railways could prove losses it does not necessarily follow that they would be entitled to compensation. The statutory rates are there.
The other day the minister spoke about the sanctity of the contract when I said that the C.P.R. should be made to pay its municipal taxes. May I remind the minister that the same contract and the same total picture exist today wherein the Crowsnest pass rates were granted at the time of the building of the C.P.R.


John Whitney Pickersgill: It was not the same contract.


David Lewis: No, but it is part of the story that in return for financial grants and other concessions made by the people of Canada grain was to be carried at the statutory rate which was established in 1897 or 1898. The reason I object to section 329, in addition to the other arguments which have already been put forward, is that if the railways were to prove, by the kind of calculations I have known the railways to use in such cases, not before transport boards but before boards of conciliation and arbitration, that they suffered losses it would not necessarily follow that they would be entitled to any compensation.
Everybody is anxious to have the vote, and so am I. However, let me emphasize that under the bill the commission has the power to institute an inquiry if it wishes to do so, but I object to writing into the act an implication that we would pay the railways any additional subsidies.


Some hon. Members:: Question.


The Deputy Chairman:: Is the committee ready for the question?
Amendment (Mr. Churchill) agreed to: Yeas, 59; nays, 58.


Maurice Rinfret: I declare the
amendment carried.
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John Whitney Pickersgill: Mr. Chairman, before we proceed any further I will have to ask that clause 50 of the bill be stood because certain implications are contained in the amendment which hon. gentlemen opposite might not wish to see in the clause. I am afraid that, without further amendments to the bill, the Crowsnest pass rates would no longer be fully guaranteed, as I pointed out last night, although no one seemed to pay much attention to me when I did. The definition of grain is contained in new section 329 and hon. gentlemen have removed it by the amendment which they brought in. I do not imagine that this was their intention in moving this amendment. Perhaps we could allow clause 50 to stand and go on to some other clause. Then I could give consideration to what the effect of the amendment would be and perhaps have something drafted that would ensure that hon. gentlemen opposite, by their votes, have not destroyed the Crowsnest rates.
[DOT] (4:20 p.m.)


Maurice Rinfret: Is it agreed that clause 50 shall stand?


Some hon. Members:: Agreed.


J. Michael Forrestall: I am sorry, Mr. Chairman, but while we are still on clause 50 I wanted to ask the minister whether or not we could deal with the proposed section 329A which is not affected by the amendment. Will the minister agree to standing that part of clause 50 affected by the amendment and perhaps permit us to discuss the other proposed section?


John Whitney Pickersgill: I think the committee did agree not to go on with clause 50 and I would prefer to stick with that decision. The committee could go on with other clauses. I really believe I am entitled to some time to give consideration to this matter in the light of the vote.


J. Michael Forrestall: I am referring to proposed section 329A. I asked the minister if it would not be in order to agree to stand that part of clause 50 affected by the amendment but allow us to deal with proposed section 329A.


John Whitney Pickersgill: I am sorry, I was interrupted and I did not hear the hon. gentleman's question.


J. Michael Forrestall: I am wondering whether the minister would agree to stand that part of the clause affected by the amendment, and does he agree it would be all right to raise certain matters related to proposed section 329A?

January 18, 1967
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John Whitney Pickersgill: I do not know whether there is something wrong with the system but I cannot make out what the hon. gentleman is saying. I cannot hear him.


J. Michael Forrestall: Perhaps there is something wrong with the system. All I am asking is whether or not we cannot at this time deal with certain aspects of proposed section 329A which, while it is imbedded in clause 50, is in no way affected by the amendment just passed.


John Whitney Pickersgill: I had asked that clause 50 stand and the committee agreed. I think we would make more progress if we were to go on with the other clauses and come back to this one after I am able to consider the implications of the vote just taken by the committee.


Mr. Olson:: Before we agree to standing clause 50, there are one or two things about it that are disturbing to me. I should like to make these comments now because the minister is going to reflect upon what has happened.


Thomas Miller Bell: Clause 50 has either been allowed to stand or it has not.


John Whitney Pickersgill: I wonder whether the hon. gentleman would agree that the clause has been allowed to stand and we will come back to it later?


Horace Andrew (Bud) Olson: I am not too late to speak. I think it requires agreement in the committee to stand this clause.


John (Jack) Henry Horner: It was agreed.


Horace Andrew (Bud) Olson: I have tried to get the floor for some time.


Maurice Rinfret: I do not believe there was agreement to stand clause 50 because the hon. member for .Halifax rose to speak and now the hon. member for Medicine Hat desires to speak before the committee has adopted the order deferring the clause.


Horace Andrew (Bud) Olson: Mr. Chairman-


John (Jack) Henry Horner: On a point of order, Mr. Chairman, there was agreement that the clause stand. The minister stood up and asked for agreement and agreement was given.


Maurice Rinfret: There was no agreement because the hon. member for Halifax made certain observations on clause 50.


J. Michael Forrestall: On a point of order, Mr. Chairman, it was not my intention to speak but simply to ask the minister a question.


Mr. Sherman:: When the hon. member for Halifax asked his question the minister replied that the clause had been stood.


Maurice Rinfret: With reference to the remarks of the hon. members, I do not believe the clause was allowed to stand. Having listened to the hon. member for Halifax, I think we should listen to the hon. member for Medicine Hat.


Horace Andrew (Bud) Olson: I do not want to make it difficult for you, Mr. Chairman, and I am in favour of allowing the clause to stand after I have asked the minister a couple of questions.


Thomas Miller Bell: It will be wide open then if we go on with it. There are no special rules.


Horace Andrew (Bud) Olson: The hon. member for Saint John-Albert-


Louis Ralph (Bud) Sherman: If the clause has not been stood, then the hon. member for Halifax should have the floor.


Maurice Rinfret: If the hon. member for Halifax wishes to speak after the hon. member for Medicine Hat he will be able to do so.


Horace Andrew (Bud) Olson: As I was about to say, because of what has recently happened there are a couple of things that are disturbing with respect to what is going to happen to this bill. I refer the minister to the amendment that was made and to the fact that proposed section 329A deals with flour moving for export through eastern ports. It appears to me that this movement is dependent upon a part of proposed section 329. When one looks at the meaning of grain and grain products it appears that the definition of grain is carried over into clause 329A. Of course there is a definition of flour; it means flour milled from grain.
I wanted to ask the minister, since he is going to review what has taken place and substitute something for proposed section 329, to give consideration to how much relationship there is between proposed section 329A and all these subsequent proposed sections, and the deleted section 329. I can see that it is going to be a difficult task to tidy up all the legal wording in this part of the bill so that there will be some protection for the Crowsnest rates. Unless something is substituted for one portion of the deleted section 329, there is going to be difficulty. As I said, I am concerned about what can be done to
January 18, 1967

make the language do what we all want it to do, provide a definition of flour, a definition of grain and maintain the protection under the Crowsnest rates.


Maurice Rinfret: Is it unanimously agreed that clause 50 be allowed to stand?


Some hon. Members:: Agreed.
Clause stands.
Clause 51 agreed to.
On clause 52-
[DOT] (4:30 p.m.)


John Whitney Pickersgill: I should like to get one of
my colleagues to propose an amendment to clause 52. This amendment is made because of representations that were received at the time the standing committee was meeting and further representations that have been made since, particularly from the mining association and some other interests. Representations were made that ten days was an unreasonably short time to allow for consideration before the new rates came into force. I came to the conclusion that this argument was sound and that it would not impose any great hardship on the railways or seriously interfere with their competitive position if it was changed from 10 days to 30 days. In conformity with this view I would hope that my colleague the Postmaster General would be good enough to move the following amendment. I leave out all the verbiage; the relevant words are "least thirty days before its effective date", which I would ask to have substituted on line 7 of page 45 for the ten days, as now appears.


Mr. Cote (Longueuil):: I so move.


Maurice Rinfret: It has been moved by the Postmaster General:
That Bill C-231, an act to define and implement a national transportation policy for Canada, to amend the Railway Act and other acts in consequence thereof and to enact other consequential provisions, be amended by striking out line 7 on page 45 thereof and substituting therefor the following:
"least thirty days before its effective date".


Mr. Ormision:: Mr. Chairman, I am very glad that the minister has seen fit to have this amendment moved. I think it is pretty obvious that the ten day period is far too short under almost any circumstances. I know that representations have been made by various organizations in this connection, and I am particularly concerned about the mining industry, especially the potash mining industry in Saskatchewan.
Transportation
The minister appreciates the fact that 90 per cent of the products of this company is shipped overseas and that sometimes longterm contracts are entered into. Contracts for two to five years are not unusual. If tariffs change and only ten days' notice is provided, surely this is insufficient. The minister will also appreciate that in these situations even 30 days might not be long enough. Negotiations have to be entered into with Canadian shippers and 30 days might not be a sufficient period to make the required adjustments.
I appreciate that this amendment is an improvement on the ten days now in the bill, but let me point out that in addition to the potash industry the pulp industry of Saskatchewan is also affected. Both industries are sending their products overseas and the market is very sensitive to fluctuations. When prices change the companies are placed in a very tight position vis-a-vis competitors. To have to find alternative means of transportation in the cases I have mentioned is impossible. These companies should be given even more than 30 days to adjust their prices or find alternative means of shipment.
I would certainly appreciate it if the minister would give this matter some consideration. The potash industry in Saskatchewan is only in its infancy and can make a great impact on the economy. The pulp industry of Saskatchewan is in its inceptive stages and the contracts entered into by the company were for a given price over a given period at specified rates. Certainly it would seem only fair, if there is to be any adjustment in rates with a consequent adjustment in over-all price, that sufficient time should be given these companies to negotiate a fair rate so that the price to the customer will yield that profit to the producer which was anticipated when the contract was made.
I cannot say very much more about this topic. It is up to the minister to give it consideration in whatever manner he sees fit. He has been very co-operative in the past and I hope that he will see fit to extend the 30 day period to 90 days so that the companies concerned will be given every opportunity to make the necessary adjustments.


Thomas Miller Bell: Mr. Chairman, may I ask the minister whether the period of 30 days was in the original act?


John Whitney Pickersgill: Of course, Mr. Chairman, the position is not quite the same. The whole situation has changed. There was a 30-day provision in the old act with respect to certain rates.

January 18, 1967
Transportation


Thomas Miller Bell: I do not have complete information but it strikes me that under this clause Canadian shippers are the ones who are being asked to bear the main brunt and will have to make the most serious adjustments. I am wondering whether even 30 days is enough.


John Whitney Pickersgill: This would not, of course, have any relation to the maximum rate formula because an application could be made to apply the maximum rate formula at any time.


Thomas Miller Bell: Mr. Chairman, my argument is this. A great deal has been made by the government about there being free negotiations on the part of Canadian shippers and the railways. I for one at first glance like this argument, but in view of the fact that the minister has been making quite a lot of this point about free negotiation and discussion and preserving the free enterprise nature of things, I for the life of me cannot understand why there is no agreement to give these people a longer period to adjust.
It could be that 30 days will satisfy the large bulk shippers who evidently are going to be affected by this clause. However, it is the same old case of the minister using an argument to support a particular amendment and reversing himself when another amendment comes along. In other words, if the principle that there should be free discussion and negotiation about these particular rates for the large bulk shippers is right, similarly there should be considerable time allowed for negotiation and ample opportunity given to adjust to these various tariff increases.


John Whitney Pickersgill: This question would not relate to any discussions. The railways would be able to carry on any discussions with any shipper at any time. This is the rate that the railways set. The rates are set and we provide that they cannot come into effect for 30 days in order to give shippers adequate recourse under clause 16. That is really what the effect of it will be.
It was represented to me that the 10-day period prescribed was too short. After giving the matter careful consideration I came to the conclusion that it would not be unreasonable, and would not really seriously impair the competitive position of the railways, if this change was made, though I do not think the railways are going to like this one bit. This seemed to be a reasonable proposition, which is why I have brought the amendment forward.


Thomas Miller Bell: I point out that I do not think the minister deserves a great deal of credit because this provision is the same as the original one. The minister has made no change from the original act which prescribed 30 days. The minister tried to reduce it to 10 days and got caught in the act so he is now going back to 30 days.
[DOT] (4:40 p.m.)


Horace Andrew (Bud) Olson: Mr. Chairman, I am not sure I understand this very clearly. Let me say at the outset, however, that increasing the period from 10 days to 30 days is certainly an improvement. It will give shippers sufficient time to comprehend that they will be faced by an increase in the rate. The minister told us that a shipper could appeal to the commission under clause 16. I want to ask him this question. Will the commission have power to suspend or freeze a rate in cases where an application is made by a shipper under clause 16? Commonsense tells us it would not be possible for a shipper to present himself before the commission for a hearing within the 30 days and for the commission to consider all the circumstances involved. It seems to me that more time will be needed and that within the 30 days the shipper might be required only to inform the commission. Would the commission have authority to prevent an increase in rates until the shipper had been heard?


John Whitney Pickersgill: It would have the authority to do so but it is not directed to do so. It could do so if it thought fit.


[Stage Direction]
Amendment agreed to.
Clause as amended agreed to.
On clause 53-
John Whitney Pickersgill: Once more I have an amendment to offer. There were representations made, at the time the standing committee was holding its hearings, with respect to certain lumber rates. The lumber rates are extremely complicated and I did not have the opportunity to consider all the implications of the suggestions made at that time.
The amendment relates to the freezing of certain rates in the select territory-the Atlantic provinces and the Gaspe Peninsula. There are two kinds of lumber rates, it appears. There are competitive rates which have a relationship to rates in northern Ontario and there are certain non-competitive rates. It is not my intention to recommend that something which was not frozen under the old law should suddenly be frozen now, and I do not
January 18, 1967

believe any hon. member would expect me to do so. But these non-competitive rates appear to have been overlooked in the drafting and the amendment I now offer would have the effect of freezing the non-competitive rates on lumber.
There will be no effect at all on the relationship with northern Ontario rates, something I would be loath to disturb because they are based on a competitive situation, and one does not want to be unjust to either region. This amendment would strike out line 44 on page 46 and and substitute the following:
Rates for lumber.
(3)	A commodity rate (other than a competitive rate) that was in effect on the 12th day of December, 1966, for a movement of lumber between points in Canada one of which is, or both of which are, within the "select territory" as defined by sections 2, 7 and 12 of the Maritime Freight Rates Act, shall be the rate in effect therefor after the coming into force of this section and shall continue to be the rate therefor notwithstanding anything in this act or any other act.
(4)	Subsections (1) to (3) shall be in-
This amendment does precisely what I said should be done and I will ask my colleague, the Postmaster General, to move it.


Joseph Julien Jean-Pierre Côté: I so move.


Thomas Miller Bell: Things are moving quickly and I must admit I cannot keep up. I take it that the two-year freeze the minister mentioned is part of the two-year freeze connected with particular groups of rates which we shall be considering when we come to a later clause. The minister wishes to make an exception, if I understood him correctly, because of competition in northern Ontario. If my impression is correct, this does not bother me. But what are the reasons for the additional amendment?


Edward Richard Schreyer: Does this amendment apply only to the area covered by the Maritime Freight Rates Act? I take it the amendment has nothing to do with any other area in the country?


John Whitney Pickersgill: That is correct. As the hon. gentleman knows, these rates were frozen for two years because the MacPherson commission lacked time to deal with certain problems in the Atlantic area, particularly with regard to the Maritime Freight Rates Act. Subsequently, with the agreement of the governments of the four Atlantic provinces the federal government instituted a study of transport in the area, and we expect to receive a report soon. It was felt that when the report of that study was complete there might
Transportation
be a need for substantial legislation to deal with this problem and that in the meantime it was only fair and reasonable to maintain the freeze on those rates which have previously been frozen in the select territory.


[Stage Direction]
Amendment agreed to.
[DOT] (4:50 p.m.)
Thomas Miller Bell: Mr. Chairman, I take it that the minister wishes to continue examination of the new sections contained in this clause in sequence. Many hon. members on this side have made a particular study of this clause and wish to speak on it. Would it not be advisable to stand the clause for the present? We were prepared to speak this afternoon on the port parity matter.


John Whitney Pickersgill: I think I have been very considerate of hon. gentlemen opposite at all stages. It is not unreasonable to proceed consecutively with these new sections, unless problems arise with respect to amendments such as the one that arose with respect to clause 50 on which, obviously, I shall have to seek some advice before being able to proceed. If a situation of that sort should arise with respect to clause 53 I would be in the hands of the committee. But since many of the subsequent clauses depend upon these new sections, these new sections were put in a certain order and I would appreciate very much if we could deal with them consecutively.


Horace Andrew (Bud) Olson: On a point of order, Mr. Chairman, are we going to deal with new sections 334, 335 and 336 in sequence or will the debate range back and forth among them?


John Whitney Pickersgill: I would be quite agreeable to meet the general consensus of the committee. I would be agreeable if it were thought more orderly to take each new section, 334, 335, 336 and 337, in sequence as long as it was understood that after we had completed discussion of one we would not go back to it. There is a marked difference in the subject matters of the first three, and new section 337 is just a dependent section.


Maurice Rinfret: Is there unanimous consent to proceed along the line suggested by the minister, namely, to consider each new section consecutively?


Some hon. Members:: Agreed.


J. Michael Forrestall: I would agree with that if the minister would include another provision, that in the event of subsequent amendments

January 18, 1967
Transportation
having a bearing on a section which had been discussed we could revert to the previous section.


John Whitney Pickersgill: I cannot foresee anything of that sort arising but if an amendment were adopted by the committee that made nonsense of a previous portion of a clause that had been discussed, the minister would have to ask the indulgence of the committee to go back to remove the nonsense.


Maurice Rinfret: Does that complete consideration of new section 334?


Some hon. Members:: Agreed.


Maurice Rinfret: The committee will now consider new section 335.


Mr. MacEwan:: Mr. Chairman, I do not propose to move an amendment to this new section. I am sure the minister will be glad to hear that, but I do want to reiterate some remarks I made on second reading. The Maritime Freight Rates Act is of assistance to the maritimes but, as I stated previously, because of trucking competition and other factors that assistance has been somewhat reduced. New section 335 calls for a two-year freeze on various rates in the maritimes, but what happens after that period of time?
The minister has stated that as long as he is Minister of Transport no action will be taken which will discriminate against the maritimes. That is all well and good but, as I suggested earlier, I would like to see something written into the bill to guarantee that no action would be taken after the specified two-year period which would discriminate against the maritime area.
As has been pointed out by the maritime transportation commission and members of this house, if the Maritime Freight Rates Act is to continue in force it will have to be amended in order to assist our area. I would like to see a provision in the bill stating that after the two-year study is completed no action can be taken by the government of the day until it has referred the matter to parliament. This subject was well covered in an editorial in the Saint John Telegraph-Journal of August 31 last year in these words:
A national transport regulatory agency can be a good thing-if it doesn't set up a stifling red-tape bureaucracy .... A national transportation policy based solely on "compensatory" freight rates (i.e., keeping only profitable lines operating) could do immense harm to the maritimes. So far, Ottawa seems to be keeping this in mind. It will be up to the Atlantic provinces to be sure their interests are protected as parliament legislates in this crucial field.

I should also like to quote a report which appeared in the Halifax Chronicle Herald of December 6 last year of an address by J. W. E. Mingo, chairman of the Halifax port commission, to an Atlantic ports day conference. Mr. Mingo suggested the establishment of a regional transportation board to protect ports and industries in the Atlantic provinces from the "sinister implications" of pending federal railway legislation. The report continued:
Mr. Mingo said there were approximately 24 months left before the new legislation would affect the maritimes. He counselled his audience to "use this time wisely" in an effort to ensure that the final bill will contain statutory guarantees to protect "the captive shipper" from crippling freight rates.
He went on to point out, as I have already stated, that rates are governed at present by the Maritime Freight Rates Act and said that the assistance provided by it is designed to place eastern manufacturers and shippers on a price parity basis with their central Canadian competitors. He expressed the fear that the new law would allow the railways to ignore regional economic problems and set rates solely on the basis of costs and profits, as set out in new section 334 and in the bill generally. The Atlantic Development Board has been of great assistance to the maritime provinces but if the benefits which flow from it are nullified by freight rate increases the effect on the area will be tragic.
The subject of port parity will come up for discussion later and at this stage I simply wish to repeat that there should be provision in the bill stating that the maritimes will not be prejudiced after the two-year study is completed. I agree with the minister that we shall have to await the results of that study, and I agree with his amendment to new section 335 and the including of coal and coke within the commodities covered by the two-year freeze. As I said at the outset, I am moving no amendment but I do impress upon the minister the necessity for something to be written into the bill to provide that there will be no discrimination against the maritimes. I impress upon the minister the fact that there is a need for something to be written into the bill. Otherwise, in a few years we may look back and wish that we had included something in black and white rather than relying on something that is in the air, so to speak.
[DOT] (5:00 p.m.)


Thomas Miller Bell: Mr. Chairman, I think I now have my thoughts straightened out. I should like to express some
January 18, 1967

views in respect of the two year freeze. At the beginning of the debate on the bill I recorded my thoughts in respect of clause 1 which deals with the objectives. I said I believed there should be a greater recognition of the statutory authority which exists to deal with transportation problems. In this regard some amendments were made by the minister which were not exactly of the type put forward by the Maritime Transportation Commission. It was, however, a step in the right direction and I felt that those in the mari-times who are concerned about such matters would be much happier.
At the same time, with regard to the two-year freeze I said that I belonged to the one group which felt that it might be better to allow these frozen rates to expire and thereby place the government of the day in the position of being forced to deal with the transportation study and recommendations. I still feel the same way, but there are some members of our group who believe it would be safer not to take a chance on that. They are prepared to include an amendment which in effect would continue the freeze longer than the two-year period. In other words, while I feel the expiry of the two-year freeze would put the government under greater pressure, others are of the opinion that it would be better not to take a chance on the vicissitudes of politics. They feel they should not take a chance on the government of the day acting. They would sooner have half a loaf. I suppose there is the same difficulty in this connection as there was in respect of the amendment we have just dealt with concerning the review of the Crowsnest pass rates, which was successfully resolved in favour of no review.
In connection with this subject I think it is worth while to place on the record some of the discussion which took place during the sessions of the standing committee on transport and communications with regard to these clauses. On Thursday, November 10, the executive manager of the Maritime Transportation Commission was on the witness stand. At that time the deputy minister of transport explained that the maritime freight rates themselves are statutory, and will continue until such time as they are revoked by the parliament of Canada, but that the two-year freeze would of course die a natural death at the end of that period. There would be a considerable period between the end of the freeze and the time when the transportation study would be produced and action taken.
Transportation
The hon. member for Digby-Annapolis-Kings asked a question in this regard which I think has some significance here. He was dissatisfied with or could not understand the minister's statement. He asked Mr. Dickson to explain it. Mr. Dickson said:
If I may try to explain, I think Mr. Nowlan's concern is that if you repeal any part of the Maritime Freight Rates Act you disrupt the competitive relationship of the maritime shippers with other shippers of Canada. It has been disrupted now, and no part of the act has ever been repealed. If no action were taken to improve the Maritime Freight Rates Act to make it more effective then, under the bill, our situation would just get worse and worse, at a steadily increasing pace. I think this is where the difference of understanding is.
This explains in better language than I can muster at the moment the fears that some persons have about the deterioration of the Maritime Freight Rates Act which is setting in. I am not particularly blaming the government at the moment but it is unfortunate that this study could not have been instituted some time ago so that the recommendations which would have resulted from that study could have been included in this legislation. If I may use the expression, we are really being asked to buy a pig in a poke. We are taking something sight unseen. We do not know the implications of what may come forward at a later time.
It may be that some benefit will accrue to the maritimes from this legislation but I for one have serious doubts. I believe freight rates are going to go up. It was implied even by the witnesses from the railways that freight rates are going to go up as a result of this measure. We know that freight rates are going to go up in the east and the west. While there is some protection in respect of certain rates under the provision we are now discussing, there will be a worsening of the situation for those who have anything to ship from the maritimes. There are not many people today who are in a competitive position in respect of shipping goods from the maritimes even to Canadian markets.
I think we should be very wary of some of the implications, even sinister, in this bill in respect of the position of those in the maritimes. Through the years I have tried to follow and sort out the competitive problems our manufacturers in the maritimes have had. I am certainly of the opinion that this bill will not assist us to any great degree. Having expressed these fears, I think others may have something more to say about the freeze.
Transportation

January 18, 1967
[DOT] (5:10 p.m.)


J. Michael Forrestall: Mr. Chairman, further to the remarks made by the hon. member for Saint John-Albert, I should like to emphasize the fears he has expressed and say that I should like to see something in the bill which at least would preserve our position in the maritimes so that we will not find ourselves worse off after the special study under the Maritime Freight Rates Act has been concluded. I hope the minister can accommodate in this section the formal amendment that will be spelled out in detail. Its purpose is to ensure that the maritimes do not lose anything. As the minister said when speaking about the Crowsnest rates, no minister of the crown will take from the west or the maritimes the traditional positions they enjoy. As has already been stated, though we support the principle that the railways ought to be able to derive adequate revenues to make their operations compensatory, and while such a state of affairs presents a desirable and possibly achieveable goal, we must not lose sight of the overriding principle set forth in the proposition that the national transportation system must be used as a meaningful instrument for national development and the development of regions.
The intent of the amendment we wish to move since there is nothing in the general provisions of the freeze to ensure that we shall be better or worse off once the freeze period ends, is to include in the act in specific wording the assurance that after the freeze ends the maritimes will not find themselves at a competitive disadvantage with the rest of Canada. I know how fond the minister is of the maritimes, and I hope he embraces this principle. As we come to subsequent amendments we shall deal in depth with the principle I have enunciated and show how it will have practical application under the legislation once it is passed. I urge the minister, because of the peculiar position of the maritimes in the economy of Canada and in Confederation, to recognize by accepting the amendment the proposition that the people of the maritimes ought not to be left worse off once the freeze period ends.


Mr. Nowlan:: I have not participated in the debate because so far our members on this side of the house have talked about matters that concern the west. Now that we are on clause 53 and wish to amend new section 335 we have reached a part of the bill that interests the east. The ending of the freeze as set

out in subsection 3 of new section 335 has caused real concern in the east for two reasons. The first of these is unavoidable; it is because this is a new bill. Regardless of the assurances of the minister and everything he has said in the house, the real intent of the bill, the real interpretation to be given to it, will not be evident until decisions are made on different points as they arise. This bill will have to be interpreted in regard to those points on which debate has taken place in the past few days. There must be judicial interpretations with regard to any legislation as fundamental as this which seeks to revolu-tionalize a basic industry. There must be judicial interpretations to determine exactly what the position is.
Section 335, so far as it concerns a freeze, causes real concern because in the Atlantic provinces there are the beginnings of industrial development. It is embryonic compared with the massive development in other parts of Canada, and it has problems of geography and resources that industries in other areas of Canada blessed with more financial bounty do not have.
One of the most inportant areas of cost in any industry has to do with transportation, and we do not want to be smothered suddenly by transportation costs. We do not want a blanket suddenly put over the transportation cost item, so to speak. Anyone thinking of developing or expanding an industry in the east does not know in which direction he should head, and so far as costs are concerned there is a great deal of uncertainty. Those industries just starting and those which have been there for a long time and are expanding do not know what effect the transportation study will have. Instead of the problem being clarified now we have to wait for two years. At the end of that time our businessmen will still not know where they stand.


John Whitney Pickersgill: I think the hon. gentleman is misinterpreting what the law is with respect to freeze rates being in effect for two years. That does not mean that there need be any delay or that one would inevitably occur. There is no reason, if the study is received in March, why the government should not propose legislative action by October of this year, and certainly by 1968. It would depend on how long it took to prepare the legislation.


John Patrick (Pat) Nowlan: The minister in his official position knows more about the problem than I do but I am concerned about this section.
January 18, 1967



Making my remarks as brief as possible I ask the minister if he will not consider an amendment to subsection 3 so that the historic position created by the Maritime Freight Rates Act will not be adversely affected regardless of the study. Frankly, at the moment I plan to move an amendment. The amendment I should like the minister to consider would delete subsection 3 of section 335 and substitute therefor the following words:
Subsection (1) shall be in force during the two years after the coming into force of subsection (1) and shall continue in force after the said two years unless, and until, the Maritime Freight Rates Act is amended to retain the historic intent and purpose of providing Atlantic provinces industry access to the markets of Canada without the handicap of distance.
Perhaps the minister can point out many errors in the wording of the amendment, but I should like him to consider it. Frankly, I cannot understand, unless I hear some elucidation from the minister, what harm this amendment will do. It will create some stability and put into the legislation the historic intent of the Maritime Freight Rates Act. I shall not make a longer speech and repeat what other hon. members have said.


John Whitney Pickersgill: I wonder whether the hon. gentleman would mind letting me look at his amendment and not move it until I have had a chance to discuss it.


John Patrick (Pat) Nowlan: That will be fine. I have only one copy; perhaps I ought to have it retyped. It would take only a moment. It is quite legible.


John Whitney Pickersgill: I promise not to destroy it.


John Patrick (Pat) Nowlan: It is not so great a work of art that I could not rephrase it.


Mr. Knowles:: It is on the record.


John Patrick (Pat) Nowlan: It is on the record, as the hon. member for Winnipeg North Centre has said. I should like the minister to consider it and the remarks I have made pertaining to the Maritime Freight Rates Act. If we cannot do this in legislative fashion I should like to speak further on the matter. I know that the minister would like to make progress with the bill. He has been very patient. I think this whole debate has been a classic example of how legislation should be made and refined, even though it has perhaps taken a little longer than some hon. members feel necessary. Those are the remarks I wish to make, Mr. Chairman, subject to the qualification that the
Transportation
minister consider this matter and the reservation that I have the right to reply when he announces his decision. I may not use that right, depending upon what the minister says. [DOT] (5:20 p.m.)


John Whitney Pickersgill: Mr. Chairman, I think I would have agreed pretty largely with the last observation of the hon. member for Digby-Annapolis-Kings, especially the complimentary reference to myself, if he had made it about two hours ago, but I doubt that I would be willing any longer to agree that the way this legislation has proceeded is a model of how legislation should proceed. However, I think I had better allow my wounds to smart quietly and deal with the suggestion, if I may call it that, of a possible amendment that has been put forward by the hon. member for Digby-Annapolis-Kings.
In order to deal at all adequately with the subject matter of the amendment I think I should make two observations. In all the observations made so far with regard to proposed new section 335 I think there has perhaps been a confusion of two things. So far as the Maritime Freight Rates Act is concerned, this bill touches it in no way whatsoever. That act is in exactly the force and effect in which it has been since the amendments were made pursuant to the recommendations of Mr. Walter Harris in his budget in 1957.
What this clause does is carry on the freeze of the railway rates themselves, which freeze has been in force since 1959. That freeze is going to be lifted everywhere west of Levis, but in the select territory this bill provides that it shall continue for two more years certain. Of course, parliament in its wisdom could extend that period or abridge it if it wanted to do so. If we decided to make some fundamental changes which made the freeze no longer appropraite, this could be done by a future parliament. In other words, we are saying that unless some express change is made so far as the Atlantic provinces are concerned, that is, in the select territory, there will be no change at all in the present situation as a result of this bill, with one relatively minor exception.
In other words, we are saying that because this study is going on, because it is nearly completed, and because in my view we want to stimulate the government, it is better to have this freeze for two years than to have the nagging stimulus that would prevail if the freeze were not in effect. I would be very

January 18, 1967
Transportation
much afraid, considering that the freeze was put on in 1959 and is still in effect in 1967, that if we did not have any limit on it there might be a disposition to leave the problem dormant and not get on with the job.
We could have done it either way. That is precisely the reason I decided to recommend to parliament that there should be this change. The only respect in which the rates in the maritime provinces in the select territory will be changed at all is that the freeze will not apply to less than carload lots. As hon. members know, the railways are amalgamating express and less than carload lot freight. After the most anxious consideration, the standing committee decided to recommend to the house that we remove the freeze on the freight part of that system. It seemed on balance that this was the best thing to do, and I admit that it was a fine balance. Some of the rates will go up, others will go down. Express rates will go down quite markedly and they will now, of course, come under the general regulatory powers of this legislation.
I came to the conclusion, after examining the best evidence I could obtain, that on balance we would get a better rate structure, more efficiency and more zeal on the part of the railways to handle this traffic well if they were freed than would otherwise be the case. I say this out of a rather long experience of spending my summers in Newfoundland waiting, waiting and waiting for things to arrive. If we can get a real express system for less than carload lots, it will be of far more use to the Atlantic region than freezing some rates that create a disincentive on the part of the railway to move the traffic fast. There are all kinds of people today who ship by air freight to the Atlantic provinces and pay three or four times as much because that is the one way to assure speedy delivery. I am dwelling on this point, Mr. Chairman, because I would not want any hon. member to say I had deceived the committee by leaving it out.
However, this provision for a freeze is there for two years unless parliament decides to do something different. I would hope we would just leave it that way. I do not think the hon. gentleman, in any event, would really want to move this amendment, because I do not think he would want to say that this freeze should be maintained until the Maritime Freight Rates Act is amended. I believe we will have to consider very carefully whether we want to amend the Maritime Freight Rates Act at all, even after the study. I would not want to put any language into this bill that implied some

kind of obligation to amend that act. That is the only operative part of the hon. gentleman's amendment. The rest of the wording expresses an intent with which certainly all of us who were elected in constituencies in the select territory heartily agree. But as the hon. gentleman, who unlike me is a learned member of the house, knows, it would have no legislative effect. It simply expresses an intent.
[DOT] (5:30 p.m.)
I feel, therefore, that in the form in which it is the hon. member's suggestion might very well lead to a misunderstanding in the Atlantic provinces, namely, that we were trying to commit parliament to amending the Maritime Freight Rates Act. We do not want any pigs in pokes, as the hon. member for Saint John-Albert said a short while ago. I do not think we want to suggest, until we know exactly how it is proposed, any amendment to the Maritime Freight Rates Act. I should not like to put any wording in the bill that implied that there was a sort of tendency to think that the Maritime Freight Rates Act should be amended. Maybe it should be but let us be quite sure before we commit ourselves. For that reason, speaking for myself, I would really rather not amend it at all. An alternative would be simply to strike out subsection (4), as it is now because of the amendment which was already accepted by the committee this afternoon with respect to lumber. I would not like to do that because I would prefer to have it retained as an incentive to the government to get on with the job and deal with the transportation problems of the region. That is the reason it is in here. On balance I would prefer to leave the two-year period knowing full well that parliament will still be in existence at the end of that period and that if we think the freeze is justified we would continue it. I would not want to see any suggestion or implication that the Maritime Freight Rates Act was going to be changed.


Howard Russell MacEwan: May I ask the minister a question? Did he say that the current study is just about completed?


John Whitney Pickersgill: I made inquiries and was told that it was hoped it would be ready by the end of March.


Thomas Miller Bell: I appreciate the fact that the minister will take another look at this amendment in giving final consideration to the clauses which have been stood.
January 18, 1987


John Whitney Pickersgill: I had not intended that at all. I have said what I intended to say and I hope we would dispose of it one way or another.


Thomas Miller Bell: It is up to the
mover of the amendment. It may be that the minister's flattery will work better on the maritimers than it did on the western members. I do not know. However, I would like to mention one point which the minister referred to now and again. He said that this legislation has nothing to do with the Maritime Freight Rates Act and therefore we are supposed to sit back and forget about that legislation so far as the maritimes are concerned. I have already said it is unfortunate that we have to consider this legislation without the knowledge to be provided by the transportation study, but I would also point out that all the maritime members are united in believing that our situation must be reviewed every time new transportation legislation which affects the entire country is brought in. I say this because our competitive position with central Canada, the heartland of this country, can be affected drastically to the detriment of the maritimes.
I am sure that the minister is familiar with the traditional case, most of the details of which I have forgotten, to which objection has been voiced by the Maritime Transportation Commission and other bodies. As hon. members know, we ship a lot of potatoes from the maritimes to central Canada. They are good potatoes and we want the business. This operation was being carried out under the Maritime Freight Rates Act. I think the preference amounts to 30 per cent on shipments going outside the maritimes and 20 per cent within the maritimes. Therefore there would be a 30 per cent reduction on potatoes from the maritimes to the competitive central Canadian market. This was satisfactory until, through some method which I do not suggest was illegal, competition brought about a reduction in potato rates within Quebec and Ontario. It is possible that this was acheived through agreed charges or some other method; I do not know. The result was that the 30 per cent reduction became insignificant.
I am demonstrating by this simple, classic example that this legislation does affect the maritimes and that we have a very real responsibility to know where we are going. This is the thought which I should like to leave with the minister with regard to this section. Of course we shall have to consider
T ransportation
the clause on port parity seriously when we reach it.


John Patrick (Pat) Nowlan: I certainly support some of the words of the hon. member for Saint John-Albert although I am not prepared to support all that he has said on this section. However, I find myself faced with the same problem with which he has been faced in the last few days, namely, that the minister's explanations are very beguiling. At times, as I listen to him, I am somewhat mesmerized and can understand the people of the east who, while listening to the sounds of a flute, are mesmerized by the movements of a snake in a basket. I am not suggesting there is a snake in the grass or a snake in the basket here but I can well understand the response of the reptile to the sweet music of the flute.
I think there is real concern about the Maritime Freight Rates Act among hon. members. The hon. member for Saint John-Albert pointed out the apparent holes in the minister's explanation because, unless the minister can educate me a little further, there will be an end to this legislation at the end of two years time and if no amendment is brought in to extend the Maritime Freight Rates Act the commission will have the power to set any rates it wishes and as long as there is a 30 per cent and 20 per cent preference in the select territory those rates can be moved up or down.
I was interested in the minister's statement about injecting a catalyst to stimulate further study of the Maritime Freight Rates Act because, according to my understanding of the evidence presented by Mr. Sinclair of the C.P.R. to the standing committee on transportation, and also I believe by officials of the C.N.R., they look with horror upon this two-year freeze. Mr. Sinclair went so far as to say that at the end of the two-year freeze rates will go up unless, as he said, economic measures are written into the legislation. Those rates can go up even under the Maritime Freight Rates Act. Mr. Sinclair agreed with me that the rates could go up regardless of the preferential rates within and outside the select territory.
I suggest that the matter is not as simple or transparent as the minister implied it was. Perhaps, as the minister said, he is not as fortunate as I am in being familiar with the law but he is certainly much more learned with regard to the procedures in the house and the history of this act. He has demonstrated this by his patience in the last few days.

January 18, 1967
Transportation
The railways are much better organized than individual complainants in the maritimes. At the end of the two-year period the presidents of the C.N.R. and C.P.R. will certainly harass the Minister of Transport if nothing further is done and, the people of the maritimes will be subjected to hearing the members of the new commission say to them: Boys, you have been getting a real deal. The rates that are set within the select territory are really depressed compared with the horizontally increased rates which prevail in Hamilton, Toronto and other parts of Canada.


John Whitney Pickersgill: The hon. member will recognize that if this bill is passed there cannot be more increases.


John Patrick (Pat) Nowlan: The minister is right and I will take back what I said previously. These are compensatory rates and there is no doubt that the Maritime Freight Rates Act permits certain rates. According to the officials of the railways these rates are not compensatory.


John Whitney Pickersgill: If I may continue the process of education which the hon. member so flatteringly ascribed to me, may I point out to him that the rates are supposed to be compensatory but if they are reduced by 30 per cent their compensatory character will not be affected because the payment is made out of the treasury. Therefore the argument that the rates being reduced by 30 per cent will make them no longer compensatory does not make it illegal to have such rates.


John Patrick (Pat) Nowlan: I want to thank the minister. Perhaps this process of education can come to an end. I wish to ask the minister a few questions and depending on his answers I may be satisfied. According to my understanding of the Maritime Freight Rates Act and this legislation, once the freeze comes to an end after the two-year period the rates within the select territory can be increased.
[DOT] (5:40 p.m.)


John Whitney Pickersgill: That is quite correct. The rates could go up. Once this bill is passed they can go up or down so far as that goes in other parts of Canada. This will be the regime when this bill goes through.


John Patrick (Pat) Nowlan: This is my point. These rates could go up without any parliament looking at the Maritime Freight Rates Act.


John Whitney Pickersgill: That is also correct. The rates could move up or down.


John Patrick (Pat) Nowlan: Without parliament looking at the Maritime Freight Rates Act?


John Whitney Pickersgill: That is quite correct.


John Patrick (Pat) Nowlan: I have two affirmative answers to these questions. Without any parliament looking at the Maritime Freight Rates Act the new commission will have the power to set rates. It could move rates up within the select territory. I feel, Mr. Chairman, that the maritimes obviously does have a very real interest in this particular provision.


John Whitney Pickersgill: There is one element that the hon. gentleman is perhaps leaving out and that is the whole objective and purpose of the study which is now being carried out. The people who are doing this study have been asked to advise the government upon what measures should be taken to improve the whole of transportation within the Atlantic provinces. The reason for this freeze is to keep the present situation unchanged until there is time for the government to recommend to parliament positive steps to improve the situation in the Atlantic provinces. These positive steps might conceivably involve other things. I hope they will not be limited to the Maritime Freight Rates Act. I hope they will not be limited to the Maritime Freight Rates Act. Perhaps I should not detail my hopes because I might be sticking my neck out. I think all hon. members from that part of the country know that I feel it is not just in the field of railways that we need improvement in transportation in the Atlantic region. It may well be that there are other ways in which we can do far more effectively what in 1927 the Maritime Freight Rates Act seemed the best way of doing.
It seems to me that if there is a deadline here any government that is in office is not going to want to lose its support in that region, if I may put it at its lowest terms. If nothing has happened in two years the government is not going to let this freeze lapse. If it were continued indefinitely there might be a tendency to say, well, other pieces of legislation affecting other parts of the country are more urgent, there is more pressure, so we can roll this over for another year. Quite frankly, because I honestly believe that having this deadline here will oblige a government to take dynamic action before the two years are up, I would rather see the two-year limit maintained.


John Patrick (Pat) Nowlan: I certainly appreciate the minister's words. If we want to carry on a debate
January 18, 1967

about all the other things that are necessary in transportation in the maritimes, the minister is familiar with the problem I have in my area of Digby in getting lobsters and other products shipped to Ottawa.
However, returning to the proposed section may I say that I feel there is not much difference between us. The minister has had a broader experience than I, but he must realize better than I that the fine words expressed in this chamber have induced the hope which has carried the maritimes to their present lofty position. However, the maritimes need to be carried further, and we need legislation. Frankly, as a maritimer I am in a somewhat exposed position. Whether the western members have more persuasive ability I do not know, but the fact of the matter is something has been done in regard to this bill in connection with the Crowsnest pass rates. When I go home and talk to our people they will say: Well, you have done a fine job; the two basic hallmarks of transportation legislation before the minister's bill came into force were the Crowsnest pass rates in the west and the Maritime Freight Rates Act in the east. The westerners have done something about their Crowsnest rates but what have you done?


John Whitney Pickersgill: We really have not changed the Crowsnest rates in any way whatever. We have just preserved them in the legislation and we have preserved the Maritime Freight Rates Act. The two are on an absolute basis of equality. However, we are doing something in this bill for the Atlantic area that we are not doing for any other part of Canada, and that is continuing the freeze on rates for another two years. The hon. gentleman, therefore, can put an extra notch on his gun.


John Patrick (Pat) Nowlan: We certainly need all the notches we can get. I do not believe the minister and I are in that much disagreement. Admittedly I may not be using the best phraseology, but I cannot follow the minister's somewhat bland suggestion that this situation has been protected. The minister knows, as the Prime Minister has mentioned, that we tend to forget the important things because of the crisis of the moment. We know the government is pressed and pressed, and I have not forgotten that there are certain limitations on the government which make it difficult to solve some of the problems of my area. I have not forgotten either that all this takes time.
Transportation
In my opinion the real catalyst for action is going to be the two railways which feel the present freeze is abhorrent. They are a much more unified force in getting to the minister than diffuse groups such as chambers of commerce and so on in the Atlantic provinces. We are not at cross-purposes. Obviously the minister wants somethmg done and something is going to be done under the transport study envisaged in the new legislation. Perhaps the minister would agree that in that study there is certainly going to be some attention given to amending the Maritime Freight Rates Act. The only thing is that there might not be any legislative effect given to this study and that is why I should like to see the freeze continue until the government has acted.
I think I express the fears of many people when I speak in support of the freeze continuing after the two years. The government could be faced with other serious problems two years hence. Goodness knows what the major problem will be then. It is fundamental that a government is not going to consider a problem unless it is getting some pressure. The way political parties are situated these days, it is difficult for some members to press the Minister of Transport about these problems. I submit we are not going to have a real look at the Maritime Freight Rates Act under this provision, but we would have a real look at the Maritime Freight Rates Act if the presidents of the two major railways were on the min ster's back.
The two railway presidents have already said publicly that they feel a two-year freeze is too long. They are responsible individuals but they are also businessmen. I feel duty bound to say that the suggested amendment is not going to harm the minister's intention. If the minister will reflect upon his experience here, he will appreciate the practical force of having two railway presidents on the minister's back after that two-year period if the government has not introduced legislation. If that is not the case, then the freeze ceases and the government goes about its business. I am afraid the minister may be lulling people into a false sense of security by saying that the Maritime Freight Rates Act is there and it has been there since 1927. The new transportation commission is going to be studying rates and making a whole new rates structure, so that the whole rate structure could go up relatively and still protect the 30 per cent and 20 per cent. To me this is a much more realistic danger and there would be less chance of government action. No government would

January 18, 1967
Transportation
want to move into this hornets' nest. We should have something in the bill to continue the existing situation. We would also have two very practical forces in the form of the two railway presidents who would be on the minister's doorstep every other day when the government failed to move.
[DOT] (5:50 p.m.)
How did this legislation get before this house over the last three weeks, Mr. Chairman? It was not because there was an outcry from the people in the east, the people in the west or those in Ontario. The legislation has appeared because it was thought about for many years. In fact, the Minister of Transport made several speeches about national transportation policy.


John Whitney Pickersgill: Would the hon. member like me to answer that question?


John Patrick (Pat) Nowlan: I was going to answer it for the minister.


John Whitney Pickersgill: The hon. gentleman forgets that the reason this legislation is here is that the previous government, faced with a horizontal increase in freight rates, decided to disallow the decision of the Board of Transport Commissioners and appoint a royal commission. The government asked the royal commission to deal with this problem. It was not the railways who asked for it; all they asked for was to be allowed to raise their rates. Under the law they were denied the right to do this. The royal commission was appointed fundamentally to deal with this problem. Unfortunately the royal commission did not feel that they had the time to deal with the special regional problems of the Atlantic area.
I decided to do my best to repair that omission and over a year ago I instituted this Atlantic transportation study. Other studies have been going on on the part of the Atlantic Development Board and other bodies. The hon. gentleman knows that with respect to the Digby-Saint John ferry we are actually engaged in discussions at the present time with the Canadian Pacific Railway. Since I have been Minister of Transport there has been no neglect of this particular sector. However, we are not yet in a position, until we have more information, to take the kind of positive steps he suggests.
It seems to me that the only difference between me and the hon. member is that I think the government would be more likely to
TMr. Nowlan.]
act if it knew that there would be one terrific outcry in the Atlantic provinces about the beginning of 1969 when this legislation was about to lapse, and therefore no government would dare let it lapse without taking some kind of constructive steps. On the other hand, if we continue this freeze indefinitely it will be a temptation to the government to roll it over for three or four more years.


Louis Ralph (Bud) Sherman: Would the minister permit a question? In his last reference to one terrific outcry which he suggests might be generated in the maritimes I am wondering whether he thinks this should be along the lines of the outcry raised in Manitoba in the Winnipeg area over the transfer of the Viscount overhaul base, and may I ask him whether he thinks the result might be the same?


John Whitney Pickersgill: The hon. gentleman's
analogy has a lot of manifest imperfections, but since it is totally irrelevant to the bill perhaps the hon. member for Digby-Annapolis-Kings and I had better get on with our debate.


John Patrick (Pat) Nowlan: I appreciate the minister's remarks, but I must say that the interjection by the hon. member from Winnipeg diverted a question I was going to ask the minister. Granted, Mr. Chairman, that the royal commission started this thing, but during the recent railway strike the minister's own words, and perhaps his secret hope, were that in face of the pressure created by the railway strike and another increase in costs which the railways faced this might be a good time to look at the whole question of a national transportation policy. These two situations were sort of held hand in hand.
This is where I differ with the minister. When this bill passes we will have a national transportation policy. Perhaps this was stimulated in one form by the MacPherson royal commission, but it was always a practical desire of the railways, who for the first time in Canada will now have the chance to charge compensatory rates with a certain amount of freedom. They must not be hedged in by too much legislation, though there must be some legislation in the national interest. But the stimulus of a national transportation policy will be stunted if we are still faced with problems created by the Maritimes Freight Rates Act.
The minister made reference to a review in 1969, which I suppose could even be in 1970 depending on when we pass the bill. But the
January 18, 1967

fact is that two years hence we will have to go through the whole performance again as a result of the Maritime Freight Rates Act provisions.


John Whitney Pickersgill: I do not pretend we will have to go through it until two years have passed, because I do want to see some improvement in this situation. I do not think that the Maritime Freight Rates Act by itself is good enough, but I do not want to do anything in the meantime to weaken the Maritime Freight Rates Act in any way. I am afraid that the language of the hon. gentleman's amendment would cast doubt upon the permanency of that legislation.


John Patrick (Pat) Nowlan: I appreciate that, Mr. Chairman, and I am going to make a suggestion. The minister said that since he has been Minister of Transport, which is since 1963, negotiations have been going on with the C.P.R. regarding the Digby-Saint John ferry. I am sure that if the minister peruses his files he will see documents and correspondence indicating that in 1963, before a certain change of government took place, almost exactly the same negotiations were being conducted between the federal government and the C.P.R. as to the state of the railway ferry service between Saint John and Digby, which the minister has publicly stated has is an essential service.
I come back to this. How in God's kingdom, with all the green apples there are, can you call an essential service a ferry system which does not carry anything more than a half ton truck. This is a problem that the government and the C.P.R. have known for 30 or 40 years. Therefore I am not deluded or taken in by the very plausible explanation given by the minister that come 1969 this problem will be resolved by government initiative. Governments are funny things. It depends on which government is sitting where because they are motivated by crises of the moment. If we do not do anything in legislative form to perpetuate something which will in effect be an irritant to the railways, then I suggest that 1969 will come and go and that the situation in the east will become even more adverse than it is at the present time. Certainly the negotiations taking place with the C.P.R. on the Digby wharf is no analogy. I am sure the minister can think of better ones. An agreement was almost reached in 1963 between the government and the C.P.R. in this regard, but certainly the problem has been with us for 20 or 30 years.
Transportation
I do not want to be difficult, Mr. Chairman, but I must have some assurance from the minister. I suggest to him that if he can assure me some action will be taken within the two-year period I might consider withdrawing my suggested amendment to section 335. I would take the minister's words at face value, and if action is taken on the transportation commission report before two years I do not think we need the two-year freeze. If action of this kind is taken and a report is made in March recommending that steps be taken which fit in with this national transportation bill, then perhaps we will not have to wait two years. During this two year period the plans of industry to develop will be stagnating. They will not know what is going to happen.


John Whitney Pickersgill: Would the hon. gentleman look at the obverse of that last statement? We can take the freeze out altogether and have a new regime right now. The whole purpose of maintaining this freeze is to ensure shippers in the Atlantic provinces that they will have these rates for two years and so that the government is given time to deal fundamentally with the problem.


John Patrick (Pat) Nowlan: Mr. Chairman, there is a lot of talk in Canada today about a pill. If an analysis of the situation was made by the government and solid recommendations were brought in, the people in the east would be much healthier if the freeze were not in existence and something else were written into the act.


John Whitney Pickersgill: I agree.
[DOT] (6:00 p.m.)


John Patrick (Pat) Nowlan: Then we are agreed. But to hold out a two-year freeze as some sort of salvation and as a solution to the transportation problems of the area is just a sugar-coated pill to delude people that this situation will continue ad infinitum. I should like the minister to consider writing in a provision which would enable the government to act. I should like to draft an amendment so that the government would have power to move within two years, though, knowing the delays which arise, I realize it might not be possible for the government to take the initiative within that period.
The only purpose of the minister's suggestion is to continue into the future a situation which has become a real irritant. I believe Mr. Crump or Mr. Sinclair said that two years was too long a period. The reason for this statement fs that there is no doubt the rates will go

January 18, 1967
Business of the House
up I believe the government should remove this sugar-coated pill and put something into the legislation so that if the report of this study becomes available before March they will be able to take action without the necessity of continuing this two year freeze.
I see that time is moving on, but I should like the minister to consider my remarks seriously because I do not think we are too far apart on this issue. As far as I am concerned I say: remove the two year freeze as long as there is a condition which allows for government action. At any rate we should know where we are going. At the present time we do not.
May I call it six o'clock?


John Whitney Pickersgill: Does the hon. gentleman not think we can resolve this issue and make a little progress?


Stanley Howard Knowles: You could.


John Patrick (Pat) Nowlan: We could resolve it if the minister would agree with me.


John Whitney Pickersgill: I agree with everything the hon. gentleman has said except one thing. I do not believe we should put any provision in the bill that something or other will last unless something which is hypothetical happens, when we do not know what the form of that leg'station will be. What the hon. gentleman wants, and what I want, is to see something a whole lot better so that we do not need to keep this freeze in the select territory. If the government is able to bring something before
parliament this fall, or in 1968, there is nothing to prevent parliament repealing the freeze at that time. But I would not want to put something in the bill which suggested that in a hypothetical situation this freeze would thaw, without specific action by parliament.


An hon. Member:: Six o'clock.


John Patrick (Pat) Nowlan: The only way in which this could be taken care of would be by the amendment I suggest.
Progress reported.



BUSINESS OF THE HOUSE

Michael Starr: Since it seems obvious that the minister has a great deal more to explain about this bill, would it be safe to assume that we shall be continuing our consideration of it tomorrow?


John Whitney Pickersgill: The leader of the house asked me to say that he thought it was desirable to proceed with this bill in committee for whatever time it may take tomorrow and that after consideration of the bill in committee has been completed, as I fervently pray it may be, we should take the other items which my hon. friend suggested last night. I do not have the Hansard in my hand, but I think hon. members know what they are and I hope we shall deal with all of them.


[Stage Direction]
It being eight minutes after six o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Thursday, January 19, 1967