1967-01-20

PRIVILEGE


Mr. Frank Howard (Slceena):: Mr. Speaker, I should like to rise on a question of privilege concerning an article which appeared in the Ottawa Citizen yesterday, January 19, written by Charles Lynch, an old and dear friend of mine I might say, entitled "Speeches we can do without".
Part of Mr. Lynch's article reads as follows:
But there are ministers whose speeches are approached with expectation-and such a one is John Turner, the Minister without Portfolio-


Some hon. Members:: Hear, hear.


Frank Howard: The article then continues:
-by general agreement a rising star in the ranks of the Liberal government.


Some hon. Members:: Hear, hear.


Frank Howard: The next paragraph reads:
Alas, even the youthful Mr. Turner, the supposed swinger of the treasury benches, can go dead on us.


Some hon. Members:: Oh, oh.


Frank Howard: Mr. Lynch's article indicates that a particular speech which the hon. member for St. Lawrence-St. George made at a meeting of the Dominion Marine Association was in effect a cream puff speech which contained nothing of substance. The speech made by the minister the other evening at that meeting in Montreal contained one of the most important declarations regarding the field of shipping and the shipping industry to be made in Canada. In that speech the minister declared that for the first time in Canada's history, even though the authority has been in the Canada Shipping Act probably since confederation, the government is going to establish manning scales for ships plying the lakes, and will concentrate in the first instance on departmental ships and large modern lakers used by private industry.
This declaration will serve the purpose of saving the lives of many Canadian sailors and
will prevent a great deal of damage to the industry itself.
I will not conclude my question of privilege by moving a motion, but if I were to do so I would do so by paraphrasing the words of Mr. Lynch and say "Please, Charlie baby, from now on read all the words of the speeches". [DOT] (11:10 a.m.)


Mr. Speaker:: Order, please. I hesitate to prevent the minister from replying to the speech just just made by the hon. member for Skeena, but on reflection I am sure he will recognize that there is no valid question of privilege. I shall not refer to the citiations which might be to the point. Considering also that the matter was not followed by a motion, I suggest to hon. members that we should not proceed further with the matter.



MR. BENSON-NEWSPAPER PICTURE BEARING WRONG NAME

Hon. E. J. Benson (Minisler of National Revenue and President of the Treasury Board):: Mr. Speaker, I would like to rise on a question of privilege.


Some hon. Members:: Hear, hear.


Edgar John Benson: In yesterday's Le Droit a picture of me appeared, and underneath it was the name of Dalton Camp.


Some hon. Members:: Oh, oh.


Edgar John Benson: I would simply like to say that there is no similarity whatsoever between Mr. Camp and myself. He hasn't any hair.



NORTHERN AFFAIRS AND NATIONAL RESOURCES

[Stage Direction]
Fourth report of standing committee on northern affairs and national resources-Mr. Badanai.
[Note: Text of the foregoing report appears in today's Votes and Proceedings.]

['I have not received the report yet. Just as soon as I have I will make it available to the the house.\nInquiries of the Ministry']
Hon. Robert Winters (Minister of Trade and Commerce):: Mr. Speaker, I beg leave to table
January 20, 1967

Inquiries of the Ministry the list, in alphabetical order, of members of the newly established export advisory council, and pro forma copies in English and French of the letters of invitation which were sent to the members. The first meeting of the council has been called for February 6.


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


Some hon. Members:: Agreed.



[Stage Direction]
On the orders of the day:
Mr. T. C. Douglas (Burnaby-Coquiilam):: Mr. Speaker, may I direct a question to the Minister of Transport. Yesterday I drew his attention to a Washington dispatch which quoted Ross Flannigan, chairman of a Quaker action group, alleging that Air Canada had refused to accept shipments of medical supplies which the Quakers wanted to send to North Viet Nam. I asked the minister at that time if he would make inquiries of Air Canada and find out whether these allegations were correct.


Hon. J. W. Pickersgill (Minister of Transport):: Mr. Speaker, I had inquiries made of Air Canada and was informed that they had received a request for free or reduced rate transportation for medical supplies to be shipped by Air Canada to Moscow destined for North Viet Nam.
Under the IATA regulations, resolution 200, paragraph 2c, member air lines are allowed to send "any person or supplies to provide relief in case of general epidemic, disaster or other calamitous visitation but not transportation to or from zones of military operation". Air Canada as a common carrier cannot refuse and has not refused to accept revenue shipments of this nature, but it is prohibited from providing free or reduced transportation under the IATA regulations. The Russian air line Aeroflot is not a member of IATA and therefore I assume would not be limited in the same way.


Thomas Clement (Tommy) Douglas: I have a supplementary question, Mr. Speaker. Is my understanding of what the minister said correct, that the only reason for refusing to handle these medical supplies was the request that they be shipped either free or at a reduced rate, and that if the Quakers were willing to pay the regular rate Air Canada would be willing to carry these supplies?


John Whitney Pickersgill: Perhaps the hon. gentleman was not listening very attentively because, as I said, there was no refusal by Air Canada. Air Canada was requested to provide free or reduced transportation. The goods were not offered for transport at the regular rates, and I indicated in my answer that if they were Air Canada, as a common carrier, would have accepted them.


Mr. David Lewis (York South):: Mr. Speaker, yesterday I asked the Minister of Trade and Commerce whether his attention had been drawn to a report in the Toronto Star in which it was alleged that Mr. Somer-field, chief counsel of the treasury department, foreign assets control, of the United States has said that his department has forbidden Canadian subsidiaries of United States pharmaceutical organizations to sell anything to the Quakers for shipment to North Viet Nam. The minister said that he had not seen the report, and I will quote him from page 11976 of yesterday's Hansard:
I have not seen the report, Mr. Speaker. When I do see it I will judge what action, if any, should be taken.
May I ask the minister now whether he has seen the report and what action, if any, he intends to take.


Robert Henry Winters: Mr. Speaker, I have seen the report, in fact I have a copy of it before me now. I got in touch at once with our embassy in Washington through the regular channels. The embassy then was in touch with the United States government, and has been advised that neither the department of state nor the department of treasury of the United States government has issued any special directives to United States drug companies to instruct their subsidiary companies in Canada to refuse to sell medical supplies for transmission to North Viet Nam. As the hon. member knows, in the United States there are foreign assets control regulations and North Viet Nam is one of the prohibited areas. However, there have been no recent developments with respect to trading by Canadian companies, and the United States is well aware of our attitude in this regard. It is understood that the Canadian Friends' Service Committee finds no difficulty in obtaining from Canadian companies the medical supplies which it needs.


David Lewis: I have a further supplementary question, Mr. Speaker. The minister may have noticed in the report which he says he
January 20. 1967	COMMONS
has in his hands an alleged statement by Mr. Somerfield that there are regulations on the books prohibiting United States pharmaceutical firms in Canada or elsewhere from selling supplies to North Viet Nam without permission. The report apparently uses the words "from us", which I assume means from the United States' authorities. If so, is the minister or the government prepared to make representations to the United States authorities that we expect corporations in Canada to act in accordance with Canadian laws and not in accordance with the laws of a foreign country?


Robert Henry Winters: Yes, Mr. Speaker. The United States government is well aware of the attitude of the Canadian government on this matter, as I have stated on previous occasions. This is one of the subjects we brought up in a very forceful way at the time we met with the United States ministers early last year. They know very well our point of view on extraterritoriality. In this instance no harm appears to have been done to Canadian interests. Nevertheless it is something which we regard as very serious and which we intend to keep before the United States authorities.


David Lewis: So far without results.


[Stage Direction]
On the orders of the day:
Mr. Howard Johnston (Okanagan-Revel-sloke):: My question is for the Prime Minister, Mr. Speaker, and I should like to ask if he has had an opportunity of looking into the story concerning the World Health Organization sanction against Rhodesia?


Mr. Speaker:: Order. I do not think the question as asked can be accepted at the present time.


Howard Earl Johnston: I asked this question of the Prime Minister yesterday. At that time he said he had not had an opportunity to look into the matter, but he would do so and report to the house. My question today follows upon that, so I am asking if he has done so.


Right Hon. L. B. Pearson (Prime Minister):: I have not received the report yet. Just as soon as I have I will make it available to the the house.
Inquiries of the Ministry



PUBLIC SERVICE


[Stage Direction]
On the orders of the day:
Mr. Gerard Laprise (Chapleau):: Mr. Speaker, I wish to put a question to the hon. Minister of Energy, Mines and Resources.
My question stems from the reply given to me on January 11 last by the parliamentary secretary to the minister when I asked how many French speaking and English speaking civil servants there were in the department.
Can the minister tell us whether he intends to foster the hiring of French speaking employees in his department; can he also tell us-


Mr. Speaker:: Order.


Gérard Laprise: - whether he intends to increase the number of mining news being published in French?


Mr. Speaker:: Order. The question is general in character and may not be asked at the present time.



FINANCE


[Stage Direction]
On the orders of the day:
Mr. Eric A. Winkler (Grey-Bruce):: I have a question for the Prime Minister. Can he inform the house what action he expects to take with respect to the government's revision of the Bank Act and possible retaliation by the government of the United States?


Lester Bowles Pearson: Mr. Speaker, the Bank Act is before a committee of this house, and that committee is dealing with it. It will proceed in the normal way, I hope, and will reach this house before long. We are not concerned with what my hon. friend has mentioned in our consideration of this matter.


Mr. Eldon M. Woolliams (Bow River):: My
question arises out of the Prime Minister's answer. He has said he is not concerned. Can he inform the house whether there have been any repercussions from the amendments to the Bank Act which are before the committee in so far as our own chartered banks are concerned which are doing business in states
12034	COMMONS
Inquiries of the Ministry like California, where they hold quite a share of the business?


Lester Bowles Pearson: The matter is before the committee and this aspect of the problem can undoubtedly be brought before that committee by those concerned. I do not feel I should comment on it in the house while the matter is before the committee.



CANADIAN CENTENNIAL


[Stage Direction]
On the orders of the day:
Mr. Reynold Rapp (Melfori-Humboldi-Tis-dale):: I have a question for the Secretary of State. Can the hon. lady inform the house what procedure will be followed in presenting certificates to citizens who are 100 years old? Will the certificates be presented on a certain day, or at the time those citizens reach their one hundredth birthday?


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


Reynold Rapp: Mr. Speaker, would you allow me to rephrase my question to the Secretary of State. Will certificates be presented to those citizens I have mentioned at the end of this month?


Hon. Judy V. LaMarsh (Secretary of State):: Mr. Speaker, the certificates will be delivered to all hon. members of the house on and after the 23rd of the month, when they have been signed by the Governor General and framed. It is then up to individual members of parliament to arrange an appropriate presentation time convenient for them, for the press, and particularly for the honoured individual who has reached the age of 100 years.



CANADIAN BROADCASTING CORPORATION


[Stage Direction]
On the orders of the day:
Mr. David MacDonald (Prince):: My question is for the Secretary of State. In view of the recent renewal of the television series "Wojeck" by the Canadian Broadcasting Corporation and the overwhelming response to the succeeding series "Quentin Durgens", with the additional great good it is doing for parliament and the country, will the Secretary of State convey to the Canadian Broadcasting
[Mr. Woolliams.l
DEBATES	January 20, 1967
Corporation the keen desire of many to see this series renewed as well for next season?


Mr. Speaker:: Order. I am sorry I am preventing the Secretary of State from making statements today, but this question should be placed on the order paper.



BROADCASTING


[Stage Direction]
On the orders of the day:
Mr. Auguste Choquette (Loibiniere):: Mr. Speaker, I should like to put a question to the Secretary of State, and I am ready to raise the matter at ten o'clock, should the minister want to give a more elaborate answer.
Here is my question: does the government intend to implement the recommendations of the Canadian Association of Broadcasters to amend sections 17 and 18 of the Broadcasting Act regarding political programs that private stations pass up because they are not technical enough to be interesting?


Mr. Speaker:: Order. The hon. member
admitted himself that this question could be discussed more properly at ten o'clock.



IMMIGRATION


[Stage Direction]
On the orders of the day:
Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, I wish to address a question to the Acting Minister of Manpower and Immigration. I have been requested to ask this question by a number of persons across Canada, including some well known members of our party and trade unionists.
In view of the fact that the official publication of the German National Democratic Party extols the accomplishments of Hitler, who according to this newspaper was defeated by "war criminal Churchill", does the minister consider this statement grounds for the refusal of admission to Canada of Adolf von Thadden in the interest of national security?


Hon. J. R. Nicholson (Acting Minister of Manpower and Immigration):: Mr. Speaker, I would just point out that most of the material quoted by the hon. member is argumentative but as acting minister, I will be pleased to pass on the question to my colleague, the minister, and have him consider it immediately.
January 20. 1967	COMMONS



EXPO '67 SUGGESTED INVITATION TO HIS HOLINESS THE POPE

[Stage Direction]
On the orders of the day:
Mr. Maurice Allard (Sherbrooke):: Mr. Speaker, I should like to direct a question to the Secretary of State for External Affairs.


Some hon. Members:: Hear, hear.


Maurice Allard: I thank the members of the Liberal party for their applause; it is probably a follow-up to the applause given the Minister of Manpower and Immigration (Mr. Marchand) a few days ago.
My question is as follows: In view of the fact that reports from Vatican City seem to indicate that Pope Paul VI may come to the World's Fair between June 11 and 15 next, would the government agree to extend an official invitation to His Holiness to come to Ottawa, not only as a religious leader and as head of the Vatican state but also as a major advocate of world peace?


Hon. Paul  Marlin@Secretary of Slate for External Affairs: Mr. Speaker, as the hon. member should be very well aware, we were recently informed by the Apostolic Delegate that it would be impossible for His Holiness the Pope to come to Canada this year.



LABOUR RELATIONS


[Stage Direction]
On the orders of the day:
Mr. H. A. Olson (Medicine Hat):: Mr. Speaker, I wish to direct a question to the Minister of Labour. Is he aware that royal commissioner Ivan C. Rand will be going to Australia on February 1 for a month long study of the labour arbitration courts in that country as an alternative to strikes? If so, is anything being done or suggested by the federal Department of Labour so that the findings and recommendations of this highly respected authority on labour-management matters can be made available to the house when considering new labour disputes legislation?


John Robert (Jack) Nicholson: shall take the question as notice, Mr. Speaker.
Inquiries of the Ministry INQUIRY AS TO REPORT OF TASK FORCE
On the orders of the day:


Eldon Mattison Woolliams: Mr. Speaker, I wish to direct a supplementary question to the Prime Minister. Just before the Christmas recess the Prime Minister indicated that he might be considering asking Dean Woods for an interim report on this particular subject in reference to employer-employee relations and management-labour disputes. Has he anything to report on that now?


Lester Bowles Pearson: Mr. Speaker, I hope the task force which has been set up to deal with this matter will be able to make an interim report on certain important aspects of their work. Their final report will take a good deal of time. I hope it will be possible to get an interim report, but they are not in a position to submit one yet.



MARITIME UNIONS TRUSTEES-REQUEST FOR TABLING OF CORRESPONDENCE

[Stage Direction]
On the orders of the day:
Frank Howard: I have a question to ask of the Minister of Labour. On motions the other day when the minister made his announcement about the extension of the life of the maritime unions trustees I asked him if he would not be willing to outline to the house the projects the trustees had not yet completed, and whether he would be prepared to table correspondence between himself and the trustees relating to their reappointment.


Mr. Speaker:: Order, please. I think the hon. member is asking for a lengthy and protracted statement from the minister. Perhaps that part of the question relating to the tabling of documents is in order.


John Robert (Jack) Nicholson: There is no reason that I know of why the documents should not be tabled. The trustees file an annual report each year, and we have had an interim report. If the house is interested, I could table the interim report and my two letters including the one of acknowledgement. I shall be pleased to do so early next week.



VETERANS AFFAIRS


[Stage Direction]
On the orders of the day:
Mr. R. A. Webb (Haslings-Fronlenac):: Mr. Speaker, I wish to direct a question to the
January 20, 1967

Inquiries of the Ministry Minister of Veterans Affairs. Because widows and dependants were not included in the minister's announcement of November 14, many hon. members are receiving an ever-increasing amount of mail and inquiries regarding a possible increase in the allowances for the widows and dependants of veterans. Would the minister please advise the house what are the plans of the government?


Hon. Roger Teillet (Minister of Veterans Affairs):: In the first instance, Mr. Speaker, widows of course are included in the increase. There is no question about that. The basic rate is increased, and it applies to widows. The exceptions in this particular case were the dependants of living veterans, and as I indicated in reply to a question earlier, we are making a study of this. We granted the interim increase pending completion of that study, and I cannot give an indication at this time of when the study will be completed.


Mr. F. J. W. Fane (Vegreville):: As a supplementary question, may I ask the minister does he realize that the increase which was given to married veterans amounts to about 7i per cent or 8 per cent, and not the 15 per cent that it was supposed to be?


Mr. Speaker:: Order, please.



UNEMPLOYMENT INSURANCE


[Stage Direction]
On the orders of the day:
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, may I direct a question to the Minister of Labour with reference to the maximum rates of benefit under the Unemployment Insurance Act. It is eight years since the maximum rates were set and five years since the Gill committee recommended an increase. Can the minister say whether an increase will be proposed this year by the government?


John Robert (Jack) Nicholson: 
Stanley Howard Knowles: A supplementary question, Mr. Speaker. Can the benefits be raised by regulation? Would that not require an amendment to the act?


John Robert (Jack) Nicholson: That Mr. Speaker, I am afraid, is a question of law which I am not in a position to answer.



ADMINISTRATION OF JUSTICE


[Stage Direction]
On the orders of the day:
Mr. Robert Stanbury (York-Scarborough):: have a question for the Solicitor General. Has the government received a request from the chairman of the metropolitan Toronto police commission for federal legislation to control wire tapping, which the chairman as reported in this morning's Globe and Mail describes as a growing peril to personal freedom?


Some hon. Members:: Hear, hear.


Hon. L. T. Pennell (Solicitor General):: Mr. Speaker, I am not in a position to say that I have received such a communication, but I should be glad to look into it and advise the hon. member.


Robert Douglas George Stanbury: A supplementary question, Mr. Speaker. In view of this report and reports of recent United States action in this field, and today's report that Senator Robert Kennedy intends to introduce legislation to reform the entire United States approach to this problem of eavesdropping, will the government not consider referring to the justice committee the subject matter of my Bill No. C-45, that there may be a full public review of the seriousness and extent of electronic intrusions into the lives of our citizens?


Lawrence T. Pennell: Mr. Speaker, this is a large problem that may relate not only to criminal investigation but also to security matters. A royal commission has been appointed to look into security measures. Discussions are continuing between the departments of the Minister of Justice and the Solicitor General, and I am not prepared to commit myself on the proposition put forth by the hon. member.
January 20, 1967

DEATHS OF PRISONERS BY SUICIDE On the orders of the day:


Mr. Ralph Cowan (York-Humber):: I have a question for the Solicitor General. Inasmuch as a prisoner in Cornwall committed suicide by hanging, another prisoner in Stratford committed suicide by hanging, and two prisoners in federal penitentiaries in Canada committed suicide by hanging during the Christmas holidays, I ask if the cabinet is taking extra precautions to see that convicted murderers serving life sentences have extra guards so they will not be able to double cross the cabinet by hanging themselves.


Some hon. Members:: Oh, oh.
Inquiries of the Ministry HIGHWAY SAFETY



REQUEST FOR INFORMATION ON SNOW TIRE STUDS

[Stage Direction]
On the orders of the day:
Mr. Barry Mather (New Westminster):: My
question is for the Minister of Industry and relates to motoring safety. Has the minister's department on file research information about the beneficial effects of snow tire studs? If so, when will this information be given to the general public?


Hon. C. M. Drury (Minister of Industry):: Mr. Speaker, I am not sure what research information may be on file, but I shall have inquiries made.



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
David Samuel Horne MacDonald: My question is to the right hon. the Prime Minister. Can the Prime Minister tell the house what action his government will take as the result of the telegram he recently received from leading representatives of the Canadian film industry which asks for immediate attention and action with respect to Bill C-204, which has been sitting on the order paper since June 20?


Lester Bowles Pearson: Mr. Speaker, one reason for the difficulty in giving immediate attention to this and other matters will be made clear in a few minutes.


Some hon. Members:: Oh, oh.



RESEARCH


[Stage Direction]
On the orders of the day:
Mr. David Orlikow (Winnipeg North):: wish to direct a question to the Minister of Industry and ask him whether in the light of representations made this past week by the Ontario Medical College about the critical shortage of medical teaching staff caused by lack of research funds the government will give new consideration to sharply increasing the grants for medical research.


Charles Mills (Bud) Drury: Mr. Speaker, as the Prime Minister has said a number of times the government in the next period intends to increase substantially grants for research in medical and other fields.



NATIONAL FILM BOARD


[Stage Direction]
On the orders of the day:
Mr. R. W. Priltie (Burnaby-Richmond):: have a question for the Secretary of State of which I gave her notice. Has the minister received a protest from the international union of motion picture photographers complaining that the National Film Board is going beyond its mandate in making a full length feature film for the C.B.C? If so, what reply has she made?


Mr. Speaker:: Order, please. I suggest that question should be put on the order paper.


Robert William Prittie: Mr. Speaker, I wonder whether you would reconsider your ruling on the question I asked earlier of the Secretary of State. It has to do with an important matter, since the union in question is threatening to boycott production of this National Film Board feature in theatres throughout North America because it believes the board is in competition with private industry. I believe the Secretary of State has an answer in this regard.


Julia Verlyn (Judy) LaMarsh: I thank the hon. member for having given me notice of this question. I have seen Mr. Cole of I.A.T.S.E. and listened to his complaints. He did complain that the present activities of the National Film Board were not within the provisions of the act. As the hon. member knows, as a minister of the crown I am not in a position to give a legal opinion, but anyone may look at sections 9 and 10 of the National Film Board Act and see that this sort of endeavour falls within them.
January 20, 1987

Inquiries of the Ministry
Mr. Cole has demanded that a collective agreement be signed with his local in Toronto, a demand which the film board has rejected on the grounds that the board will not instruct its employees to join any particular union. In fact, I am informed that the employees of the film board have joined other unions, particularly Le Syndicat General du Cinema.
Mr. Cole has also threatened to prevent distribution of the film now being prepared, and has even threatened to disrupt further an infant industry which all hon. members have indicated they would wish to see flourish in this country. It seems to me that it would be a most short sighted approach on the part of cameramen and other individuals associated with film making, to cause a disruption which would sabotage the efforts of government and prospects for the industry to grow in Canada.



AGRICULTURE


[Stage Direction]
On the orders of the day:
Frank Howard: I wish to direct a question to the hon. member for Essex South in his capacity as chairman of the agriculture committee and ask him whether, in the preparation of the tour the agriculture committee will make, consideration was given to taking the committee to Prince Rupert that it might see the lack of grain loading facilities there-


Mr. Speaker:: Order, please. Perhaps the hon. member would like to ask that question at ten o'clock.



SKIING-RETURN OF NANCY GREENE THROUGH LACK OF FUNDS

[Stage Direction]
On the orders of the day:
Herbert Wilfred Herridge: Mr. Speaker, In view of the assurances given to the house by the Minister of National Health and Welfare with respect to funds being made available for the national ski team in Europe, and in view of the UPI press report in the Journal of yesterday from Austria which states that Miss Greene will miss the next alpine ski classics as she has to return home next Monday because her ski association does not have enough money to support her season long stay in Europe-


Mr. Speaker:: Order, please. Can the hon. member ask the question?
[Miss LaMarsh.l


Herbert Wilfred Herridge: I have just reached that point, Mr. Speaker. Would the minister mind taking up the subject of this rather disturbing press report?


Herbert Wilfred Herridge: A question supplementary to the one I addressed earlier to the Minister of National Health and Welfare. Would the hon. gentleman mind checking into this somewhat disturbing story?


Hon. A. J. MacEachen (Minister of National Health and Welfare):: I will be glad to check, but I am sure the situation is as I stated the other day. The national ski team made a request for assistance to finance its competitions in Europe. The request was fully met, and since the first report appeared in the newspapers we have checked further with the national ski association whose president has confirmed that funds were made available as requested and that the team will complete its competition schedule. I will make a further check because of the hon. member's keen interest in the success of Miss Nancy Greene.



TRANSPORT


[Stage Direction]
On the orders of the day:
Thomas Clement (Tommy) Douglas: should like to ask the Prime Minister whether he has received a telegram from the council of the city of Sept lies, Quebec, expressing outrage at the proposed increase in the tolls on the St. Lawrence seaway and asking the government for some assurance that before any action is taken in this regard they, and other interested parties, will be permitted to make representations.


Lester Bowles Pearson: Yes, I have received that telegram couched in very firm language, and a reply is being sent.


Thomas Clement (Tommy) Douglas: Can the Prime Minister tell the house the nature of the government's reply?


Lester Bowles Pearson: I will be able to do that after the reply has been made. It will be made very shortly.


Thomas Clement (Tommy) Douglas: Can the Prime Minister give the house the assurance which is being asked by the council of Sept lies, that an opportunity will be provided for public hearings or for representations to be made by interested parties?
January 20, 1967


Lester Bowles Pearson: I shall have to deal with that matter in my reply; I do not have the telegram with me. I hope the hon. member can wait for a short time; later I will be in a position to answer his question.



OATS AND BARLEY-INQUIRY AS TO FINAL PAYMENT

[Stage Direction]
On the orders of the day:
Mr. E. Nasserden (Rosthern):: My question is addressed to the Minister of Trade and Commerce. Can the minister indicate when we may expect an announcement on the closing of the oats and barley pools and the amount of the final payment?


Robert Henry Winters: I expect to be in a position to do that very shortly.



INQUIRY OF THE MINISTRY

[Stage Direction]
On the orders of the day:
Hon. J. A. MacLean (Queens):: I want to ask the Secretary of State for External Affairs a question. Has he any comment to make on the statement which appeared in the press within the last couple of days-I believe it was in the Ottawa Journal-that he had conceded that he may have made a statement at a public meeting to the effect that in certain circumstances and with certain reservations, on some occasions at least, two and two might make four?


Hon. Paul Martin (Secretary of Slate for External Affairs):: I would concede that kind of point.


Some hon. Members:: Oh, oh.



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
John Whitney Pickersgill: Before you leave the chair, Mr. Speaker -I have been advised that there would be general agreement to forgoing the private members' hour today, and to an adjournment of the committee for lunch from 1.30 p.m. to
2.00	p.m. Perhaps, for the convenience of hon. members, so they might know the arrangements, this could be so ordered now, if my interpretation is correct.
Transportation


Hon. Gordon Churchill (Winnipeg South Centre):: There is some uncertainty with regard to this. The house leader on this side is unavoidably absent today. I was not informed about these arrangements. I appreciate that we should have a lunch hour; the minister's health is sufficient reason for that. But whether we should forgo private members' hour week after week is another matter. Private members are surrendering their rights in this house by so doing.


Some hon. Members:: Hear, hear.


John Whitney Pickersgill: I was advised by the whip that the usual discussions had taken place among the whips and that there was an understanding. I am sorry if there was no such understanding reached. The hon. gentleman's chief whip is not here at the moment.


Gordon Minto Churchill: The whips may reach understandings like this, but the people who have to speak in the house are not always the whips; that is the trouble.


Mr. Speaker:: Order. There is obviously no agreement. It is my understanding that no order is made by the house either as to an adjournment at noon or as to the forgoing of the private members' hour.



TRANSPORTATION


[Stage Direction]
The house resumed, from Thursday, January 19, 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, new section 336 of clause 53 of the bill, with an amendment by the hon. member for Winnipeg South, was under consideration. The proposed amendment is as follows:
That a new subsection be added as subsection (2| of section 336 as follows:
A shipper of goods in respect of which the rates in effect on the 1st day of January, 1965, were class and commodity rates subject to the Freight Rates Reduction Act, shall be deemed to have no alternative, effective and competitive service by a common carrier other than a rail carrier or carriers or combination of rail carriers.

January 20, 1967
Transportation
On clause 53-


Mr. Horner (Acadia):: I was speaking when the time came tor adjournment last night, and I should like now to continue my remarks and summarize what I believe the effect ot this amendment would be.
[DOT] (11:50 a.m.)
In order to benefit from this particular clause one must have no alternative effective competition. He then must apply to this board and assert and prove that he is in a captive position. I should like to make this very clear. This is what caused the minister to be in difficulty yesterday. A person cannot just apply in order to be classed as a captive shipper. His rate may be 300 per cent above the variable cost so he would very much benefit if his rate was governed by this particular clause; but he cannot just apply, say that he wishes to become a captive shipper, and all of a sudden become one. He must assert and prove that he is in a captive position. In order to prove this he must declare that 100 per cent of his commodity will move by a given railway.
The effect this amendment has on this clause is that it broadens the definition of captive shipper and broadens the definition of captive locality. I think it is a very worth while amendment because of the phrase "alternative effective competition". In effect the clause says "Let us accept everybody who had to ship goods under class and non-competitive rates when the Freight Rates Reduction Act came in; let us accept them as being in a captive position, and let us accept them as being captive shippers". This then would allow these people and these areas to apply for and receive the maximum formula, if it would benefit them.
Last evening the minister said he thought this maximum formula clause would benefit very few. He said in effect that it is of very little benefit. If the clause were broadened as suggested by this amendment a greater degree of protection would be given to the western parts of Canada and the maritime region. I say this because if one goes back to the 196465 committee reports at page 968 it will be found from the waybill analysis which is set out there that, apart from grain moving under Crowsnest pass rates, nearly 60 per cent of all the freight moving into and out of western Canada moves under class and non-competitive rates. The same is true in respect of the maritime area.
From a study of the same report one can ascertain that from eastern to western Canada 44.4 per cent of the freight moves under class
[The Chairman ]
and non-competitive rates which were frozen under the Freight Rates Reduction Act. Without this broadening amendment this clause in the bill has the effect of throwing to the wolves the freight rates of western Canada and the maritimes. It has the effect of saying that we now think there is competition out there but it has not been proven.
The government has been convinced by the railways. This is part of the agreement the minister made with the C.P.R., and which he read out on January 12. Not too long ago, in outlining this point, the minister mentioned that he felt the C.P.R. now should pay taxes on various property out there. This is part of the agreement the minister made. He said we are not worried about western Canada and the maritimes any more. He said we accept the fact that there is competition there. There is not absolute competition there, because they still are shipping goods under non-competitive rates.
If this amendment is not accepted the effect will be that freight rates will go up 50 per cent within five years on goods moving into and out of western Canada and on goods moving into and out of the maritimes. It will even have the effect of increasing the freight rates in and around the maritimes. Some 55.8 per cent of the goods shipped on railways moving in and around the maritimes moves under class and non-competitive rates. Without this amendment to this clause those rates will go up and up because in this bill there is no protection for this area. We all know that in the period between 1948 and 1958 freight rates increased 157 per cent. If this amendment is not accepted I predict that within five years from the passage of this bill freight rates in Canada in these particular areas at least will go up by 50 per cent.
Every member in this house should be aware of the fact that transportation plays a major part in the final cost of any goods. The mining association said that transportation accounts for 50 per cent to 70 per cent of the cost in respect of the final product. We have seen in the past year the effect of inflation. With the passage of this bill we would be adding fuel to the inflationary fires. If this amendment were accepted there would be some protection. The inflationary fires still would be there, but they would be smoking rather than burning brightly. I urge the members of th's committee to consider this amendment very seriously, because it gives some protection to the areas of Canada which are still being developed, namely western Canada and the maritimes. Without this amendment
January 20, 1967

freight rates will go up and the inflationary fires will burn.


Mr. Sherman:: Mr. Chairman, I do not intend to prolong the debate in respect of this clause any longer than is absolutely necessary. I think the clause and the proposed amendment have had a fair hearing by the government side of the house. I submit that most of us are prepared to have the question put in respect of this amendment without any further delay.
I should like, however, to say two or three things in support of the amendment I have moved. I do not intend to recapitulate the argument I have made on this subject. I first articulated it on December 21, buttressed it on Tuesday of this past week, and elaborated on it further yesterday. It would be unnecessarily repetitive and redundant for me to go into it in further detail on this occasion.
The province of Manitoba has stated its case. The key to the issue is the definition of captive shipper. The hon. member for Acadia has said that the proposed amendment broadens the definition of captive shipper. At the same time he says the proposed amendment provides a definition of captive shipper which at the present time is missing from the proposed legislation. I was interested to hear the hon. member for Medicine Hat say last night that since the amendment he proposed failed it now is necessary to patch up the clause as it is written in order to make the best possible job out of a bad thing.
This is a laudable sentiment and one to which I subscribe. I submit, however, that this is the whole purpose of the amendment I have put forward. The purpose of the amendment is to patch up this part of the legislation in order to make clear and precise what the legislation is talking about when it refers to captive shippers and the difficulty in respect of the application of the maximum rate formula. That is precisely the purpose of the amendment.
The greatest weakness is the lack of a proper definition of the term "captive shipper". Expert after expert, such as the professors who were retained by the provinces of Manitoba and Alberta, when appearing before the committee on transport and communications, made the same point.
[DOT] (12 noon)
The western provinces themselves in their submission, and witness after witness who appeared before the committee, made the same
Transportation
point, that the legislation fails to define adequately a captive shipper. The minister has said, and I subscribe to his views, that competition is a vital and desirable thing. He has indicated that he and his colleagues are attempting by this legislation to provide a healthier climate for competition in western Canada. We on this side of the house subscribe to the same philosophy, but perhaps to a greater degree than the minister. I am certainly in favour of competition.
What we are arguing is that in this particular context the prairies, where the regions are disparate and scattered, so far as bulk commodity shippers are concerned, there is virtually no such thing as competition. We are not talking about an environment of competition or a competitive climate; we are talking in large part about a monopoly situation enjoyed by the railway companies.
What we are attempting to do here is build in some protection for the bulk shippers in western Canada who, in that particular region of this country and on this continent, since the beginning of our existence as a nation have been dependent on and captive to the railway companies. That is the entire purport and philosophy behind the amendment I have moved. We want competition, but at the present time in the climate of commercial enterprise and regional settlement which exists in the west there is not an adequate environment for competition. The railway companies do not have competition; they have this entire business in the palms of their hands.
Under those circumstances and in that context we say bulk commodity shippers on the prairies deserve, indeed vitally require, some protection, and we suggest that by this amendment some of that protection would be provided.
Let me refer once again to the case made by the province of Manitoba in respect of this point when it referred to the fact that during its deliberations and in its pronouncements the royal commission on a number of occasions referred to the Freight Rates Reduction Act is evidence of the determination of the parliament of Canada that the class of noncompetitive commodity shippers were shippers to whom the term "captive" could apply. Those are the shippers that the parliament of Canada determined should be relieved of the excessive burden caused by the last general freight rate increase in 1958.
We say in effect that virtually all western shippers of bulk commodity goods are captive shippers, and we suggest they should not have

January 20, 1967
Transportation
to manifestly establish that fact before this commission because the Freight Rates Reduction Act of 1958 already affords them that status. We say they should be able to maintain that status and enjoy whatever benefits accrue to them.
That is the purport and intent of the amendment I propose, and I heartily endorse it to the minister and his colleagues on the government side of the house. I thank the minister for his kind attention to my argument.


Mr. Soulham:: Mr. Chairman, it is not my intent to put off the vote on this amendment, but not having been able to participate in the debate on this new section until now, and because I was a member of the standing committee on transportation and communication, I feel compelled to say I support the amendment proposed by the hon. member for Winnipeg South. Suffice it to say that other hon. members of the committee, including the hon. member for Medicine Hat, the hon. member for Acadia, the hon. member for Saint John-Albert and the hon. member for Winnipeg South in his strong argument have elaborated in great detail on the reasons we should seriously consider new section 336 of Bill C-231.
It has been pointed out and emphasized how important it is that some consideration be given to that large percentage of people using our transportation system in western Canada who are considered as captive shippers. To emphasize this fact I should like to refer to the summary of recommendations presented by the standing committee. Many witnesses supported this contention during evidence given to the committee.
Let me list some of the associations and bodies which were represented by witnesses during the hearings of that committee. The list includes the British Columbia Federation of Agriculture, Canadian Co-operative Wheat Producers Limited, Canadian Industrial Association, Canadian National Railways, Traffic League, Canadian Manufacturers', Canadian Pacific Railway, Canada Steamship Lines, Canadian Trucking Association, Coal Operators Association of Western Canada, the Liberal party of Manitoba, the Manitoba Branch Lines Association, the Maritime Transportation Commission, the Mining Association of Canada, the National Farmers' Union, the province of British Columbia, the province of Saskatchewan, Shell
[Mr. Sherman.J
Canada Ltd., the Windsor Chamber of Commerce, the Winnipeg Chamber of Commerce and Wabush Mines.
That is not the complete list, because this summary of recommendations only covers hearings to November 8. It is very interesting to note that of the witnesses representing these 20 organizations, almost half put particular emphasis on new section 336. This new section was referred to at pages 5 and 6 of the summary of recommendations by the Canadian Traffic League; at page 9 by the Canadian Manufacturers' Association; at page 13 by the Canadian National Railways; at page 15 by the Canadian Pacific Railway and at page 24 by the Canadian Trucking Association. Very strong recommendations were made by individuals representing these associations. Many references have been made to the very worth-while brief presented by the province of Manitoba, and that brief gives a great deal of detail in respect of the importance of this new section.
At pages 29 and 40 the province of British Columbia dealt at some length with this new section, and it was dealt with by the government of Saskatchewan at page 41. At page 45 it was referred to by the Winnipeg Chamber of Commerce, and by Wabush Mines at page 46. I could go on at great length listing these references but I do not wish to take up any more time of the committee. I do appeal to the minister and members on the government side of this house to give serious consideration to the implication of and the basis for amendment moved by the hon. member for Winnipeg South. Thank you very much Mr. Chairman.


Herman Maxwell Batten: Is the committee ready for the question?


Some hon. Members:: Question.
[DOT] (12:10 p.m.)
Amendment (Mr. Sherman) negatived: Yeas, 40; Nays, 68.


Herman Maxwell Batten: Order. I declare the amendment lost. Does this complete the discussion of new section 336?


John (Jack) Henry Horner: No.


Mr. Schreyer:: Mr. Chairman, I should like very briefly to put to the minister the suggestion that even though the amendment just proposed to subsection 1 of new section 336 has been defeated, it is still not too late to make other improvements to the section so it
January 20, 1967

will be more fair in its effect and more effective. I suggest to the minister that even if he did not see fit to accept the amendment which would have given a more comprehensive definition to the term "captive shipper," that is one thing; but he should still give serious thought to the formula itself which will be applied by the commission in giving some protection to those, presumably very few, shippers who will be regarded as captive under the terms of this legislation.
Obviously, under subsection 2 of new section 336 the formula is that the commission shall set as a maximum a rate determined by taking the variable cost to the railways and adding 150 per cent to that variable cost. The rate shall be determined in this way. It was aptly demonstrated yesterday by other speakers and myself that it is very possible, in fact likely, that the railways, in the majority of cases where they are hauling commodities shipped by captive shippers, will be enjoying a mark-up in the order of 300 per cent and 400 per cent. I say this because the maximum rate formula, based as it is on variable cost plus 150 per cent and determined from a standard of a 30,000 pounds carload lot, will mean that in instances where the haulage is in carload lots of 70,000 pounds, 80,000 pounds,
90,000	pounds, 100,000 pounds or heavier, the mark-up will in fact be 300 per cent or 400 per cent.
In no case these days do the railways haul commodities in full carload lots of a weight less than 60,000 pounds or 70,000 pounds. When we look at the table given to the committee by the Manitoba council, and by Professors Williams and Borts, we find that the mark-up of the railways when they are hauling, under this formula, 70,000 pounds or 80,060 pounds carload lots is, as I said and I repeat again and again, in the order of 300 per cent, 400 per cent or even more. To have a maximum rate formula which allows for this kind of mark-up is simply incredible; there is no other word to describe it. It is unacceptable in every respect.
I hope the minister will see fit to accept the proposition that the formula ought to be changed so that the mark-up of the railways, when hauling goods for captive shippers, will be of an order that is deemed reasonable, just and permissible. A mark-up that is hovering around 300 per cent and 400 per cent is certainly not reasonable or just, and should not be regarded as permissible by members of this committee who are here to protect the public
Transportation
interest and the interest of shippers, particularly those shippers who are captive to the railways because of location or any other circumstance.
Therefore, Mr. Chairman, in order to bring this matter to a head and get the sense of members of the committee, I move:
That clause 336 subclause (2) be amended by deleting the words "150 per cent of the variable cost as the fixed rate applicable to the carriage of the goods" in lines 21 and 22 and substituting the following: "the percentage difference that total permissive earnings are to freight variable costs plus an amount computed as being the cost of capital applicable to the carriage of such goods."
Speaking to the amendment, I wish to say that if accepted it would do two things. It would remove this fictitious formula which, as I have already said, would have the effect of giving the railways the opportunity to derive unconscionable mark-ups-and I think that is the proper word-on the carriage of commodities hauled for captive shippers. In addition, it would remove what I consider to be a rather basic anomaly in this section. The basic anomaly, in my opinion, is that under the terms of this formula the railways will be able to consider the cost of capital to be a variable cost and will be able to obtain a mark-up of 150 per cent on the cost of capital. The railways are not in the banking business, and it seems to me strange that they should be able to take advantage of a formula to actually make money on money. I thought this was a function of our banking institutions and not our transportation companies.
If the cost of money is to be computed into variable cost, that is fine; but the railways should not be allowed to earn a mark-up of 150 per cent, and it may be even more, on the cost of money to them. To try and articulate this point a little more precisely I would say that the cost of the money to the railways, which is deemed to be part of their variable cost, should be treated in this way; the railways should be allowed to recover the cost of money to them, but they should not be allowed to charge a rate that will give them 150 per cent of the cost of money to them. If my amendment were accepted it would remove this anomaly.
During the committee stage and the ensuing discussion in this chamber I did not hear the minister put forward any defence of the proposition that the cost of money to the railways should be brought into this formula so the railways could receive a return of 150 per cent of the cost of money to them.
Transportation

January 20, 1967
[DOT] (12:20 p.m.)


John Whitney Pickersgill: Mr. Chairman, I do not see anything in the amendment which would be out of order, but that is about the only thing I can say in its favour. In the first place I do not think that without some kind of definition of permissive earnings, which is not in the bill at all, it would be a very workable amendment, and I indicated last night how difficult I thought it was to determine permissible earnings in a situation that was part competitive and part regulated. I thought there were great difficulties about that.
My real objection-and I can put it in one sentence-is that the recommendation is based upon careful studies of the royal commission, and I am not yet satisfied that the hon. member for Springfield and whoever may be his advisers should be substituted for the people on whose advice the bill is based.


Edward Richard Schreyer: Mr. Chairman, the minister may very well be right when he says that he has more confidence in his advisers than in my advice or in that of the people who advise me. But I say to the minister that he has not as yet come to grips with the argument that a formula which allows for a mark-up of 300 or 400 per cent to the railways is unacceptable.
The minister has seen the projections which have been made by those who have studied the likely effects of this particular formula. It has been said by several speakers that if this section passes as it is now worded its effect will be that maximum rates will be set by the commission which will allow the railways to charge a rate giving them a mark-up up to and beyond 400 per cent. Does the minister think that just because this formula happened to have been recommended by a royal commission, that in itself is sufficient reason to consider it as the right formula? Does the mere ipse dixit of a royal commission make something right in itself?
Let us hear from the minister some logic and reasoning in defence of this formula. To hide behind the skirts of a royal commission report is something which I did not think this particular minister would want to do. The minister has a long career behind him and an impressive reputation as one who has demonstrated on many occasions in the past the ability to defend his position. He has not shown any logic or just cause why we should accept this formula except to say that the commission recommended it. I say that the mere ipse dixit of a royal commission is not in itself sufficient reason to accept a clause of the bill.

I do not suppose the minister is disposed to do it, but I would like him to defend the position that we should accept a maximum rate formula which would allow mark-ups up to and beyond 400 per cent. This is the crux of the matter.


Louis Ralph (Bud) Sherman: I would like to support the argument put forward by my colleague from Manitoba, the hon. member for Springfield. Surely the day of the robber baron is over. It seems to me that there is no place in this commercial and competitive context for profit mark-ups in the neighbourhood of 400 per cent, 500 per cent and even 600 per cent.


John Whitney Pickersgill: The hon. gentleman is not really serious when he speaks about profit mark-ups. He will appreciate, as I am sure all hon. members do, that the reason for the 150 per cent is to make a contrbiution to fixed costs. Hon. members must be aware that very frequently bulk commodities are the only commodities carried on a particular railway line. If one takes the ratio of 30 per cent of variable costs and 70 per cent of fixed costs, it is not a question of profits but of paying the expenses of the railway.
I am not here to defend the railways; I am here to try to get a decent bill. But I do not think we should call things by names that suggest something different from what they are.


Louis Ralph (Bud) Sherman: It is all very well for the minister to say that these are not profits, but according to the frustrations we have encountered when we have tried to find out the costing figures involved in the arguments advanced by the railways it was impossible to tell whether or not these are profits. However, I will accept the minister's interjection and call maximum rates mark-ups over actual variable costs. The fact remains that the figure of 150 per cent is not substantiated in any of the testimony that was brought forward before the standing committee. The figure of 150 per cent appears in the royal commission report and, as officials of the province of Manitoba pointed out, it was an arbitrary determinant which is nowhere supported in the commission report, nor is it contained in the published studies of the commission. The province of Manitoba was denied railway cost data to verify the accuracy of the figure or the impact of an alternate percentage factor subsequently dealt with in the Manitoba brief. This is the nub of the argument advanced by the hon. member for Springfield in his amendment, that nowhere
January 20, 1967

in any of the evidence presented to the standing committee or to the committee of the whole house has any reasonable justification been given for the selection of the figure of 150 per cent.
I know the minister does not have much faith in the philosophical argument brought to these deliberations by Professor George Borts, who was one of the witnesses appearing on behalf of the province of Manitoba. Although I know the minister has profound respect for the arguments and presentation of Professor Borts, he does not seem to subscribe to the philosophical basis from which the professor started. That is his prerogative. However, I would like to read into the record a recommendation which was made by Professor Borts as a possible alternative to the cost formula. He made several recommendations, but one of them was the following. He recommended a cost formula which specified a percentage mark-up over the variable cost of carrying the traffic at its actual weight. He would use the actual weight of the traffic, not the fictional 30,000 pounds shipment. The percentage mark-up over variable cost would then relate the desired revenues of the railways to their actual variable costs. He said that whether the right mark-up is 50 per cent or 150 per cent he does not know; it would depend on the level of earnings the commission specified for the railways. He said:
As part of this alternative, one might also rewrite into the bill the non-discriminatory rate provisions, and treat these as an additional protection to the captive shipper over and above the protection which he is already receiving from the maximum rate.
[DOT] (12:30 p.m.)
These provisions would assure the captive shipper a percentage mark-up over variable costs which did not place him at a competitive disadvantage with traffic of similar competitive circumstances. It would be a matter for regulatory procedure-
This gets back to the philosophical point mentioned a moment ago.
-to define in each case, but it would nevertheless provide captive shippers with more protection than they are likely to receive under the present bill.
That is one man's opinion, and I am the first to concede that the minister's opinion may be a more valid one, a more practical one. However, I wanted to put that opinion on the record because it was part of the peripheral argument advanced by the province of Manitoba. It relates to the crux of the amendment moved by the hon. member for Springfield, and the fact that the 150 per cent figure 23033-762 i
Transportation
is entirely arbitrary, unsupported by any evidence or any documentation. This is the point at issue in the amendment proposed by the hon. member for Springfield, and I support the proposal he has offered to the committee.


Horace Andrew (Bud) Olson: During the course of the
committee hearings there were many instances in which the hon. member for Springfield and I agreed on the desirability of imposing some form of maximum rate control on a basis that would be reasonable and fair, not only to the shipper but also to the railroads involved. I agree also that there should be a relationship to permissive earnings in so far as these captive shippers are concerned so these earnings will not make a disproportionately high contribution toward capital and profit of the railways.
I am afraid, on reading this amendment and taking the words substituted for the 150 per cent, that I find it very difficult to understand how this provision could be applied. I do not believe it would be a good thing for the house to pass a law that would be difficult if not impossible to apply.
I agree with the member, too, that this arbitrary figure of 150 per cent over variable costs on a 30,000 pound car, for example, is not fair. It is an arbitrary figure and in some cases, by the use of the balance of the formula contained in new section 336, as has been pointed out so well by the hon. member for Springfield, one finds it may reach even 300 per cent or 400 per cent over variable costs. At the moment I do not understand the meaning of the substituted words, "the percentage difference that total permissive earnings are to variable costs".
I do not quite understand how these words could be applied. Perhaps the hon. member can give us some additional explanation. If these words simply mean that the variable costs for this particular movement would be met, that is one thing. If they mean that there will be some permissive earnings over and above variable costs, that is quite another thing. Then, of course, he adds "plus an amount computed as being the cost of capital on the carriage of goods". If this wording means the railways would be able to set a rate or the commission would be authorized to set a rate that would only meet the variable costs plus an amount computed as being the cost of the capital, then in my opinion that is not fair.
I do not hold any brief for the railways or any other company. However, I believe that any company in Canada, whether it is a railroad or any other kind of company, should

January 20, 1967
Transportation
have the right to make a profit on its investment for the shareholders. I believe also that it is desirable for the company to earn a profit so it can take care of expansion and keep up with what we hope will be a growing Canadian economy. If there is no accumulation of profit going into the capital fund there will be no incentive to expand or to modernize by purchasing new equipment.
Unless there is some additional explanation that will satisfy me that this clause can in fact be applied fairly and without too much difficulty, I am afraid I cannot support it. I would not like to be a party to including in a bill something that just cannot be applied with fairness to both the shipper and the railway.


Mr. Bell (Saint John-Alberl):: I want to indicate my support for this amendment. As has been stated, this is the crux of the bill and is the great weakness inherent in this legislation based on the MacPherson commission report. Hon. members will recall that last night many of us put on the record our fears that excessively high rates will probably take effect for these bulk shippers, mainly in the western part of Canada. While there may be some argument about the details, I think this is the best amendment that has been suggested. I know I tried to think of some amendment that would deal with this problem, so I commend the hon. member for Springfield for bringing forward this suggestion. He has my support.
First of all, the main point made by the professors in their brief, before they even began their detailed discussion, was that this was a measure that did away completely with rate control. In doing so, however, no account has been taken in any way in the b 11 of the level of earnings the railway company should have. The hon. member for Medicine Hat has just mentioned he is not against the railways making a profit, therefore we should not get into any sort of formula that ties them down in this regard. I agree, generally, that the railways should be allowed to make a profit; it is necessary for their shareholders. However, we are referring to a particular part of the operat'on of these railways. I do not think they should go hog wild and make all their profit on this type of activity alone. Th:s is the reason I support some sort of limit. I believe this formula is the be~t that has been put forward.
The hon. member for Springfield and others who have spoken have made reference to the figures. The minister cannot get around the figures that were put on the record by the
[Mr. Olson.1
professors. I referred to them last night. There was a 400 per cent mark-up on a 30,000 pound load, which we have admitted certainly is a small load for a bulk shipper today. What the percentage would be when you got around
200,000	pounds, I do not know. This is where the money is going to be made. The province of Manitoba made this as clear as possible. The one big objection to this measure is that there is no limit on these excessive rates. I have asked the minister three times what protection there is for the western economy and misused resources. The only answer he has really given has been that these rates are not even up to the maximum now, as though that were the end of the argument.
We had testimony from the hon. member for Macleod, one of the great economists in this house, who pointed out in very precise language how any economist could juggle these costing figures back and forth between fixed and variable costs. I do not think anybody knowing his experience would challenge what he said in this regard. I support the amendment. Mention has been made of the 150 per cent, which has no substance. There has been no defence of it. It has been pulled out of the air.
[DOT] (12:40 p.m.)


John Whitney Pickersgill: I am sure the hon. gentleman does not want to refer to the late Mr. MacPherson and the other eminent commissioners as pulling something out of the air. That gentleman was charged by the government which was supported by the hon. member with advising the government to the best of h's ability, as were the other commissioners, after getting a lot of expert help; and one of the experts was the same expert who helped our standing committee. Mr. MacPherson was one of the greatest westerners of our time and he certainly was not against the west. He and his fellow commis-s oners gave as their judgment that this was a reasonable formula, and I do not think that it is unreasonable for me to feel impressed by that argument. I have not seen anybody produce a formula that is better.
I am not an economist or a mathematician but I can do simple arithmetic, and I say that if you vastly reduce the variable costs by having heavy car loadings instead of light car loadings, the contribution to constant costs or fixed costs would have to be a much higher percentage of the variable costs in order to be the same absolute amount. That is why these percentages are very fine as propaganda but
January 20, 1967

no accountant would accept them as an accurate reflection of the ratio between two things.
The percentages depend on what you start from but I have never pretended, and I do not pretend now, that there is likely to be any very great protection for bulk shippers in the maximum rate formula. That is why we strengthened clause 16 in order to provide what most hon. members thought was a pretty adequate protection.


Louis Ralph (Bud) Sherman: Would the minister not concede that when the MacPherson commission, arbitrarily or otherwise, accepted this figure of 150 per cent the future of the railroads was clouded in considerable doubt, at least their financial future, and that the situation has sharply changed in the intervening nine years?


John Whitney Pickersgill: There is no doubt that what the hon. gentleman has said is quite correct. There is also no doubt that in the intervening nine years the constant costs of the railways have gone up tremendously. That is why we are asking for $100 million subsidy to be paid by the taxpayers of Canada at the present time, something which was not being paid at the time that commission was appointed.
Those constant costs have to be met by somebody, either by the taxpayers or by some shippers, and I suggest that the shippers of bulk commodities, most of whom are large corporations whose own business is not regulated by boards and commissions and who are allowed to make whatever profit they can, should make some contribution to those constant costs and not leave it all to the small shippers or the taxpayers.
In the strengthened clause 16 I think we have given pretty adequate protection to the shippers of bulk commodities but I do say, and Professor Borts agreed with me, that there probably is some protection in this maximum rate formula. I read the testimony previously and I am not going to repeat it. It is that kind of shipper, the shipper who is now paying the maximum rate, who I believe will get some protection from this clause as it stands at present. I have not argued that the bulk shippers will, since they are not paying the maximum rates now.


Thomas Miller Bell: By continuing to speak the minister has answered the argument he made to me. He has admitted that the MacPherson commission report is already nearly ten years old-
Transportation


John Whitney Pickersgill: No, about six.


Thomas Miller Bell: -and parts of it are even much older than that.


John Whitney Pickersgill: No, it was only appointed nine years ago and it did not report for about four years.


Thomas Miller Bell: I have great respect for the ability and experience of Mr. MacPherson, but I also have my suspicions about which member of the commission arbitrarily set these figures of 150 per cent and
30,000	pound load. From our discussions today and last night we know that the increase with respect to a 30,000 pound load is about 700 per cent. We are now talking about 200,000 pound loads. Surely there must be a little bit of error in the 150 per cent.
It is true that some of these figures may have to be set arbitrarily, but since parts of the MacPherson report are nearly ten years old the minister should recognize that in the interim we have perfected computers and there would be no trouble in feeding information into them and finding out more of the truth with respect to these matters. It was computers which enabled the professors to determine this 467 per cent mark-up figure. We discussed this matter with the professors at length during hearings held by the standing committee.
The minister has mentioned the cost of money. This also is a problem. A full limit cannot be placed on that, but I do not see why, with modern methods, some figure cannot be computed that would be reasonable and satisfy the requirements of this amendment. I have asked the minister this question four times already and have not received a direct answer. Again I ask, and this is the crux of the complaint by the province of Manitoba, how are we going to limit these rates that will rise sky high for bulk shippers and drastically affect the economy of western Canada?


Edward Richard Schreyer: Obviously there will be no meeting of minds with the minister on this matter, but I would like to assure the hon member for Medicine Hat that the amendment is not designed to deny any reasonable level of profit to the railways. Obviously if a privately owned corporation is to be allowed to continue in operation it must not be deliberately starved by government policy. What would be the point of that? If the government wished to take it into public ownership that would be another thing, but if it is a matter of public policy to allow it to continue in private

January 20, 1967
Transportation
operation then it would be sheer madness for any government to starve it to the point where its resources and assets are so dissipated that it cannot operate with efficiency and economy.
What the amendment intends is really along the line of the arguments and recommendations made to the standing committee by counsel for Manitoba and by Mr. Frawley, counsel for the province of Alberta. I would refer the hon. member for Medicine Hat to pages 2770 and 2771 of the minutes of the standing committee, where the meaning of the concept of permissive earnings and reasonable returns was discussed with Mr. Frawley.
[DOT] (12:50 p.m.)
The amendment intends to expunge from the legislation the formula which is based on a mythical foundation, and to substitute for this mythical, fictitious, arbitrary formula one that will reflect variable costs plus-and I emphasize this-plus an amount which would show a reasonable level of return. There is a reliance here on the good judgment of the commission, but I would sooner have it this way than be put in the untenable position of agreeing to a clause setting up a formula for the charging of rates, the basis of which it is completely impossible to evaluate.
Judging by the likely effect of the formula, it allows for an unconscionable mark-up. The minister is right in saying that clause 16 is more important than this clause. He says we should not be too concerned with the formula; but it is in the bill, and it will be looked to as offering a measure of protection that is almost completely non-existent.


Mr. Cantelon:: Mr. Chairman, while I am not in entire agreement with the suggested amendment, because I think it has faults, I think it is better than section 336 which is based on the arbitrary 150 per cent and the equally arbitrary 30,000 pound limit for cars. Arguments have been repeated. We have tried to show that conditions on which this section are founded are unfair and unsatisfactory, especially in the way they attempt to control the rates the railways can charge. We all feel that a railway, being a public business and in essence a monopoly, requires regulating. We also feel, as this bill tries to show, that railways ought to be allowed a legitimate profit. The problem arises in the use of the word "legitimate".
The minister told us carefully that the 150 per cent will not create hardship because it

will not affect the large bulk shipper. I wonder if his interpretation is correct. That figure, it is almost certain, will have an indirect effect on rates charged and on the negotiating of those rates between large bulk shippers and the railways. For that reason I do not believe that 150 per cent is a wise figure to select. But I find it difficult to determine what figure should be selected. Perhaps it would be better to eliminate the percentage and adopt the suggestion of the hon. member for Springfield. This, of course, will entail difficulties, and undoubtedly there will be difficulty in regulating the figures he selects. The real problem is, what shall be the total permissive earnings? This has been considered in the past and a rough percentage has been used. We can use those, I think, when we try to set up total permissive earnings.
I think the last part of the amendment is wise; I do not think there is anything wrong with it at all. The provision-
-plus an amount computed as being the cost of capital applicable to the carriage of such goods.
-is logical and legitimate.
In the committee we tried to obtain information from the railway. We wanted to know what it considered should be the cost of capital. The railway has been as intractable in that regard as it has been in giving figures about its variable costs. As the railway has refused those figures, the committee found difficulty in arriving at a proper figure. As a committee we had not the power to insist on being given these figures. I doubt if it would have done serious harm to the railway, as the railway suggested, had we been given them.
I think the large shipper, the one who will negotiate with the railway, probably has a fair idea of what the costs of the railways are in moving his goods, and the railway has a fair idea of how much it can charge without eliminating the profit of the shipper completely. The railway knows it cannot charge more than the traffic will bear, but it can charge all that the traffic will bear. Under these circumstances it is better that we have this type of amendment which does not work on that basis. The 150 per cent figure will allow the railways to charge all that the traffic will bear.
As has been stated, there are large bulk shipments of up to 200,000 pounds, such as you have in the product industry, and the percentage figure becomes astronomical. The present section enables the traffic to be charged an exorbitant rate.
January 20, 1967

Those are my reasons, stated in a general way, for supporting the amendment. I have not quoted the opinions of Professors Borts and Williams, the opinion of Mr. Frawley appearing for Alberta, or the Manitoba submissions. These gentlemen had opinions similar to those I have stated. As specific arguments have been advanced there is no purpose in my repeating them. I would take up time and I do not want the minister to feel I am doing that.
Again I want to say that I do not like the original section 336. I do not like the 150 per cent and I do not like the way it is arrived at; I do not like the 30,000 pounds, and I do not like the way that was arrived at. I like none of these things even though they were derived from the MacPherson commission report.
To say that that commission was appointed by another government is to draw a red herring over the path of its results. Surely, no matter what government appoints a commission, the findings of that commission, which is an impartial body, ought to be accepted by any party. Either we agree with the results or we disagree. I may be in a minority, but I cannot agree with the results of the MacPherson commission. I do not feel that sufficient competition exists on the prairies and in the maritimes to justify section 336. For that reason I continue to express my displeasure with that section, and I am prepared to espouse this amendment. If we cannot completely rid ourselves of new section 336, perhaps we can emasculate it to the point at which something more drastic will be done. On this ground alone I am prepared to support the amendment.
[DOT] (1:00 p.m.)


Mr. Dinsdale:: I was not a member of the committee which studied this subject so I do not have the broad background of information which many hon. members possess, but the conclusion I have reached from this discussion is that we are all in agreement here that it is difficult even for the experts to determine the cost variables in the transportation industry. The minister has indicated as much in his comments.


John Whitney Pickersgill: I do not think I have ever indicated anything of that sort, and I do not share that view.


Walter Gilbert Dinsdale: The minister has denied it, but his earlier comments gave me that impression. This impression is confirmed by the fact that even the so-called experts who appeared before the committee had difficulty in
Transportation
assessing the cost factors and the cost variables. The figure of 150 per cent in this section seems to be an arbitrary one which was recommended in the initial MacPherson commission report. It is for this reason that I support the amendment which is before the committee at the present time.
The transportation picture, particularly the railway picture, has changed substantially in recent years and it would seem to me that the statutes governing it should contain more flexible features such as the one recommended in the amendment put forward by the hon. member for Springfield. In the second place, the arbitrary figure flies in the face of government policy as expressed not only by the present government and the previous government but by all the governments of the prairie provinces, which have as one of their objectives the diversification and decentralization of industry in the prairie region. Transportation represents a major cost factor and has been one of the major causes of difficulty in the past, as the minister knows, and if there is so much uncertainty about determining the precise cost pattern of the railways it would be much wiser, I suggest, to err in favour of the developing new industries on the prairies.
The present government has set up a designated area program.


John Whitney Pickersgill: Mr. Chairman, I would not normally wish to restrict the hon. gentleman from making a general speech on this bill, but we have been discussing this measure for a long time. There is an amendment before us and it seems to me we might stick to the amendment which involves a choice between two ways of measuring a maximum rate formula and which has really nothing to do with designated areas or anything of that sort.


Walter Gilbert Dinsdale: I am surprised at this attempt by the minister to restrict my comments. This is the first time 1 have taken part in the discussion. I am amazed at the minister's attempt to limit my freedom of speech in this regard, particularly when the subject concerns my own province of Manitoba in a vital way and when the minister himself has indicated that there is uncertainty as to the actual cost picture. I do not intend to make a speech. I merely wish to indicate my support for the amendment which, I believe, deals as effectively as possible with section 336 in an attempt to make it at least reasonable in relation to the objectives of the legislation before the committee.

January 20, 1967
Transportation
This section is actually the heart of the bill, and if we fail to do something about it now in terms of the amendment a further opportunity is unlikely to occur for a long time to come. I suggest that the minister should take his stand in terms of the best interests of western Canada which will depend so largely on the effects of this new transportation legislation.


Horace Andrew (Bud) Olson: I understand that the hon. member for Springfield wishes the commission to have authority to fix a rate equal to the variable cost of the carriage of the goods plus a percentage for permitted earnings plus the capital cost. With this whole concept I agree. But when I look at the words "the percentage difference that total permissive earnings are to freight variable costs" it appears there is a relationship between the percentage difference which permissive earnings bear to freight variable costs, and with all due respect to the hon. member's intentions, which I think are good, I cannot apprehend that this amendment would in fact do what it is intended to do. I would not like to play any part in placing upon the statute books of Canada something which would not be interpreted as intended, notwithstanding my agreement with the intent of the hon. member.


Thomas Miller Bell: This is my final question. What is the minister's answer to the suggested C.P.R. formula with regard to the cost of money? He has drawn attention to the difficulty attaching to his whole formula in connection with the cost of money and the like.


John Whitney Pickersgill: I think this is an abstruse question to get into and I hope the hon. member is not trying to lead me down any garden path. I have always understood that in variable cost certain capital is used and in constant costs certain capital is used. That capital costs something. Rail cars are part of variable cost and they cost something, and railway lines, which are an element of constant cost, also cost something. In each case they cost something to put there and they would cost something to replace when depreciated. It is a proper element of variable cost to charge what the capital is worth, not the value of the capital in capital terms but a rent for the capital which is used. Anyone who has bought or sold a motor car knows that part of the cost of operating the car is depreciation. The total costs have to be apportioned between the variable and constant costs. I am sure accountants might argue about this. Here, however, it is a matter for arbitration. But I submit that this is not something which is in
[Mr. Dinsdale.)
issue between the two amendments. The hon. member for Springfield is an intelligent and clear-headed member of the house-
[DOT] (1:10 p.m.)


Eldon Mattison Woolliams: Do not flatter him like that.


John Whitney Pickersgill: He is. I also think he is sometimes wrong-headed, but that is another matter. I am sure the hon. member for Springfield would agree that his amendment depends as much on a determination of the variable cost as does the clause which at present is in the bill. So there is no issue in respect of variable cost as between the amendment and the bill.


Gordon Minto Churchill: The minister is aware that the hon. member's constituency is being eliminated before the next election. Is he now opening the door for him to join the Liberal party and take the first step toward the Senate?


John Whitney Pickersgill: Perhaps the hon. member for Winnipeg South Centre could be appointed to the Senate along with me and then the hon. member for Springfield could run in his constituency.


Thomas Miller Bell: Mr. Chairman, there is one point I might make about the minister complimenting certain members. I hope I do not fall in the category of those who receive too many compliments because I know the minister's strategy. He is attempting to drag them in and give them credit for these points in the bill, but when the complaints come in he will say that the hon. member for Springfield and the hon. member for Medicine Hat are the ones who are to blame.


John Whitney Pickersgill: Mr. Chairman, if I can only get this bill through the house I will take all the blame for it and will not blame any hon. member.


Thomas Miller Bell: So far as I am
concerned we can now have the vote on this subject. I should like, however, to make a point as to the formula for the variable costs with regard to investment. I wish I had the hon. member for Macleod here to help me in respect of the difficulty I have concerning economics.
There are times when we wish to go into the matter of the cost of money and the return on investment and it is impossible to obtain this information. We are told that the figures fluctuate and so on. In this day and age when facts can be thrown into a computer
January 20, 1967

and an answer obtained I do not see why we cannot obtain answers in respect of costs.


John Whitney Pickersgill: The difficulty is that you must know what the question is.
Amendment (Mr. Schreyer) negatived: Yeas 16; nays 46.


The Deputy Chairman:: Does this conclude consideration of new section 336?


Thomas Miller Bell: I have the old bill before me and I would refer to section 336(10) concerning the matter of reporting to the governor in council. I think the minister might say something about his hopes and aspirations in respect of this part of the bill.


John Whitney Pickersgill: If it is understood that we are not reopening the matter, I might say I agree to a certain extent with hon. gentlemen who have criticized the formula. I should like to see how it works and see what the experience will be. In such a review I would hope that the commission would also review the experience under clause 16 of the bill to make sure that there is adequate protection for shippers who do not have the competition of the market place or the competition of another carrier. I am sure that is the intent in this new section.


Thomas Miller Bell: During the committee sessions the minister made quite a case in respect of the matter of costing techniques.


John Whitney Pickersgill: There is a later clause on that.


Maurice Rinfret: The committee will now proceed to the consideration of new section 337.


Horace Andrew (Bud) Olson: Mr. Chairman, I do not wish to move an amendment to new section 337, but I should like the minister to take into consideration that all through the hearings of the committee we were denied costing data and information in respect of the variable costs with regard to the movement of commodities on the railways. This is the section which deals with exchange of information between carriers. I make a plea to the minister that he take another good hard look at the reasons that were advanced for the withholding of this costing data. I do not think the committee performed its function well because members did not have available to them all the factors in the formula. The most important of these is the variable cost data. I would hope that the minister would take a further look at this
Transportation
matter to determine whether there is any valid claim that the variable cost data in some way are the property of the railways and that it would be wrong for this information to be produced.
We know, for example, that the variable costs concerning a passenger train, the Dominion, were in fact made public; there was no problem about that. I do not think this harmed the railway. A certain amount of this data was made public during the hearings before the MacPherson commission, particularly with reference to the movement of grain. I still cannot understand the reason there is objection to this information being made available. After all, if there are to be committee hearings in respect of this matter, then under our system someone must appear and argue the other side of the case. Surely this person should have this information. Usually it is the provinces who appear on the other side. If they are not supplied in advance with this information from the railways, then surely they will be at a severe disadvantage when really what they are attempting to do is stand up for the public interest as they see it. I am making the plea that the minister take a close look at this situation to see whether there is any valid reason for the withholding of this costing data.
[DOT] (1:20 p.m.)


John Whitney Pickersgill: This matter can be discussed when we are on another clause. I have made a very careful examination of the whole bill to see whether there is any case in which a railway company might be seeking financial assistance or support or might be seeking to have a rate established publicly where these costs would not be made public, and there is none. The bill provides that, the only kind of information that should be kept confidential is that information in respect of matters about which a railway company or anybody else was not seeking to have action taken. If there was a prima facie case made under clause 16, for example, and the commission decided that was so, all the relevant information would have to be made public at the hearing.
The only defence I know of for keeping cost data confidential would be the situation where there is what I in my simple-minded way prefer to call a bargaining factor, but which is called competition in the market. I do not see why the Aluminum company would be entitled to know what the railway companies costs are, and the railway companies would not be entitled to know the financial circumstances of the Aluminum company. I do not

January 20, 1967
Transportation
think that would be a fair burden to place on the railway company. If the Aluminum company was a captive shipper and was seeking protection under this law then no information the commission obtained relevant to its determination of that question should be kept confidential.


Horace Andrew (Bud) Olson: I should like to discuss one point which possibly should be discussed during our consideration of another clause but perhaps I can discuss it now and avoid the necessity of referring to it again. I hope there will be a much expanded cost accounting division under the transport commission than exists under the Board of Transport Commissioners. When I say "expanded" I mean a far greater and larger division. If the new branch obtains figures regarding what it considers variable costs, will that information be proprietary to the railway company or will that be regarded as public information?


John Whitney Pickersgill: Any information obtained by the commission would be the property of the commission. I think it would be better to discuss this situation when we are considering another clause which contains an express provision dealing with this matter. Perhaps instead of attempting to answer the question now I should deal with it during our consideration of that clause.
The commission might have information it was not willing to disclose to the railway company, and I can conceive of circumstances under which the companies would not be entitled to that information. For example, the commission might want information from shippers and those shippers might have a perfect right to have that information kept confidential so far as the railway companies are concerned. That kind of situation could arise. However, I think the point should be dealt with when we are considering the appropriate clause.


Thomas Miller Bell: I should like to ask the minister one question now that he has referred to this subject. While we have not been assessing our position in the last two days as we did originally, in looking ahead I can see that our main discussion will be relevant to costing. That is the main item to be considered before we reach the important part of this bill which deals with port parity.


John Whitney Pickersgill: Costing will be considered under clause 70.


Thomas Miller Bell: In view of the fact this subject has been mentioned I thought

perhaps we could deal with it before taking a break. The minister does look as though he needs a sandwich. Perhaps we could finish this part and discuss port parity this afternoon.


John Whitney Pickersgill: I certainly would like to have clause 53 completed before we talk about sandwiches or anything else.


Richard Russell Southam: The hon. member for
Medicine Hat has referred to one of the most sensitive areas so far as this new transport bill is concerned, that of variable cost information. Before this clause passes there should be general agreement in the house that an amendment or a recommendation by the minister should be made to satisfy people in general that when we set up this legislation which is perhaps 30 years overdue certain problems will be solved.
The Interstate Commerce Commission has managed to solve certain problems and I think we should take more leaves out of their book. We are not the only country in the world with transportation problems. Professor Borts and Professor Williams, two of the most competent experts in this field on the North American continent, have spent half their lives studying these problems. I asked them a question as a member of the committee and in their answers they said the United States commission does have access to costing data which is kept confidential in the interests of private enterprise. If that commission finds this type of formula workable we should think seriously of applying the same principle here.


John Whitney Pickersgill: Perhaps I could interrupt the hon. gentleman and suggest that we discuss this during our consideration of clause 70 which relates directly to this subject of costing. New section 377 is really not related to costs except in the sense that it empowers the two railway companies to meet the provisions of this act to exchange cost data. It has nothing to do fundamentally with costs.


Louis Ralph (Bud) Sherman: I should like to ask the minister whether or not this subject should be dealt with under new section 387C which comes within clause 70. It seems to me the whole subject of cost data is dealt with there in detail.


John Whitney Pickersgill: That is exactly what I was referring to in my suggestion which I hope is agreeable to the committee.
January 20, 1967


Richard Russell Southam: I am agreeable to that suggestion, but I felt that while I was in the chamber I should not like the opportunity to pass of expressing my opinion on this very important and sensitive part of the legislation.
Clause as amended agreed to.
Clauses 54 to 58 inclusive agreed to.
On clause 59-


Mr. Forreslall:: Mr. Chairman, I should just like to say-


John Whitney Pickersgill: If the hon. member does not mind, perhaps before he speaks I should offer an amendment to clause 59, the nature of which I indicated the other day.
[DOT] (1:30 p.m.)
My faithful colleague the Postmaster General is here to move this amendment. I must say I am becoming increasingly grateful to the Postmaster General. The purpose of this amendment is to make obsolutely sure that everything now in the law of Canada in any act of parliament with respect to the rates and the traffic through the Atlantic ports, the ports of Halifax and Saint John, continues to be part of the law. Therefore there will be no question that by any kind of inadvertence any act of parliament will have been repealed by some provision of this law. I think I should read the amendment:
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
(a)	by renumbering clauses 58 and 59 on page 54 thereof, as subclauses (1) and (2), respectively, of clause 58; and
(b)	by inserting immediately after clause 58, as renumbered, the following new clause 59;-
It is done in this way to avoid renumbering all the clauses in the bill. The present clauses 58 and 59 repeal something and they are just being combined into one clause. This is the substantive part of the amendment:
"59. Section 343 of the said act is amended by adding thereto the following subsection: Preference on export rates.
"(2) Nothing in this act except section 334 shall be construed to affect any obligation imposed upon any railway company subject to the jurisdiction of parliament by any other act or any agreement made pursuant thereto requiring the company
(a)	to maintain rates on export traffic moving through any Canadian seaport located in the 'select territory' as defined by sections 2, 7 and 12 of the Maritime Freight Rates Act at a specified level, or at a level specified in relation to other rates; or
(b)	to route export traffic through Canadian seaports."
Transportation
I think that does the two things that I suggested it was the desire of the government to make sure were done, that is, to safeguard any rates that exist by statute or exist pursuant to any statute, and to safeguard any routing that is required by the law at the present time. In other words, it is to make amply sure that no rights that now exist are taken away from any of the ports in the select territory. Of course, the ports principally affected and principally concerned are those of Halifax and Saint John.


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


Herman Maxwell Batten: Order. A few moments ago the committee passed clause 58. The amendment now before us deals with clauses 58 and 59. Perhaps the committee would agree to reconsidering clauses 58 and 59 for the purposes of the amendment now proposed. Is that agreed?


Some hon. Members:: Agreed.


Herman Maxwell Batten: Therefore I shall read the amendment proposed by the Postmaster General.


John Whitney Pickersgill: Mr. Chairman, I wonder whether you could dispense with reading the amendment.


Thomas Miller Bell: Mr. Chairman, I wish to raise a point in connection with the amendment. I wonder whether the minister has any flexibility left in him. I know this has been a tough bill. However, we have just seen this amendment for the first time and it is impossible to comment on it now in the way we would like. Could we not have a half hour, or even 22J minutes until two o'clock, in order that we may have a chance to assess the amendment? It is quite complicated, this is the first time we have seen it, and it is important to Halifax and Saint John. I do not know how we can deal with it intelligently on such short notice.


John Whitney Pickersgill: I had hoped, of course, that the proposition I understood was agreed to, and that I was rather disconcerted to find was not, which was made originally would have ensured this. We really have spent a long, long time on this bill and 1 am very anxious to make progress on it. If I could have got the hour between five o'clock and six o'clock, to which I thought everyone was at one stage agreeable. I would have been very happy to have an adjournment. But I just hate to lose all that time.

January 20, 1967
Transportation


Stanley Howard Knowles: Twenty minutes?	done instantly is just nonsense. Therefore I
suggest to the minister that he use a little Mr. Pickersgill: A great deal has happened common sense. in this house in 20 minutes, and not very long	'
ago.	Mr. Cote (Longueuil): Oh, oh.


Gordon Minto Churchill: That was good for the Liberal party.


John Whitney Pickersgill: We will have to go through a great deal of paraphernalia to do it, but if hon. members would be agreeable to coming back at two o'clock I would not wish to appear to be stubborn and unreasonable.


Gordon Minto Churchill: Mr. Chairman, the minister is now getting into a better frame of mind. He is worried about the passage of this bill but over 70 per cent of the bill has now gone through.


John Whitney Pickersgill: No.


An hon. Member:: Three weeks.


Gordon Minto Churchill: No, it is two weeks, and we have passed over 70 per cent of the pages of the bill. What more can the minister expect with respect to a bill of this importance that is transforming the transportation policy of this country?


John Whitney Pickersgill: Well, Mr. Chairman-


Gordon Minto Churchill: Let the minister stop talking and listen for a little while. He talks too much. He is always talking and will not listen to others, and if we want to say something he complains. I support the hon. member for Saint John-Albert in suggesting that we should have an opportunity to examine this amendment and the clauses should stand. It is fantastic for a minister to rise and read a complete change in the bill and then want us to pass it without any debate or examination. We have responsibilities here just as he has. I do not think we should be asked to pass this amendment after the expiration of only 20 minutes. I believe the clauses should stand until much later when we have had an opportunity to consider this matter and what the effect of the amendment will be.
We have to look at the bill as it is now written, see the changes that this amendment implies, and discuss with our colleagues what should be done. The minister is going too far in asking us to give way and pass something now because we have spent so many days on this bill. Suppose we spend four weeks on the bill? We would be justified in so doing because of its effect on the transportation policy of Canada. The idea that everything must be


Gordon Minto Churchill: Groan if you like, Postmaster General. I say, use a little common sense and take some time off for a luncheon adjournment. It puts people in better humour. Then let us get on with the bill. If we complete this bill early next week the minister and the government should be thoroughly satisfied. We have our responsibility to the people of this country and we are going to assert that responsibility. I for one will not consent to passing this amendment after the short space of 20 minutes.


John Whitney Pickersgill: I made no such suggestion, Mr. Chairman. I suggested that we agree to rise for 20 minutes.


Gordon Minto Churchill: Why just 20 minutes? Why don't we take 30 minutes?


John Whitney Pickersgill: I thought I was being agreeable; I was accepting the suggestion made by the hon. member for Saint John-Albert.


Some hon. Members:: Hear, hear.
[DOT] (1:40 p.m.)


John Whitney Pickersgill: After all, I understood that in so far as this particular part of the bill was concerned the hon. member was leading the house for his party, which seemed to be quite agreeable to the suggestion I made until the intervention of the hon. gentleman. I really think that in this particular context it was a little gratuitous of him to do so because I had agreed precisely to what the hon. gentleman had asked for. I am not suggesting that one minute after we come back we can expect to have this clause passed, and indeed if the hon. member for Saint John-Albert and his colleagues who are particularly interested in this matter, because of the interests of their constituencies, would prefer to stand this clause and go on to consideration of some other clauses, that would also be quite agreeable to me. However, what I was doing was to concede that I would not rely on the rules of the house and that we would take a little time off if that was generally agreeable. I still hope we can do that.


Gordon Minto Churchill: I just want to say, in view of the minister's reference to it, that there was a misunderstanding this morning and I offer my
January 20, 1967

apology to the hon. member for Saint John-Albert, to the whip of our party and to the minister if he wants it, since I was not aware of the arrangement that had been made. I do not think it was a very good arrangement and I thought it had been made some other way. I think the house should not be pressed too hard, particularly on a Friday, just because the Liberal party slipped up the other day. I will resist such pressure.


Thomas Miller Bell: I offer the suggestion that after we recess, and the time of that recess is fast dwindling away, we stand this clause and proceed to the consideration of other clauses such as the one on tolls for example. The minister is so eager that he did not understand the implication of my suggestion to him that we could deal with the matter of tolls and costing techniques.


John Whitney Pickersgill: I am quite willing to let the clause stand and to come back to it at such time as the gentlemen opposite would like after some other clause is passed.


Thomas Miller Bell: I have
checked with the hon. members for Halifax and we are agreed on our dissatisfaction with this section. The result will be an all-afternoon filibuster. If there is any threat in what I said, the minister can take it as he likes.


John Whitney Pickersgill: I do not know what more I can do. I have accepted every suggestion that hon. gentlemen have made but they insist on being rude to me. I have said that I would let this clause stand and go on to other clauses. When the hon. gentlemen are ready to come back to it, I will be quite agreeable to doing so. I do not know what more I can do. If there is any way in which I can humble myself further I would be very glad to try.


Mr. Patterson:: Would it not be wise to follow the suggestion that has been made, namely, to stand this particular clause, proceed to others and at a later hour come back to it.


Herman Maxwell Batten: May I suggest to the committee that pursuant to the agreement made a few moments ago we stand clauses 58 and 59 since the amendment deals with both? Is there agreement to that?


Some hon. Members:: Agreed.
Progress reported.


John Whitney Pickersgill: Mr. Speaker, I think it is the wish of the house to recess for refreshments and for an improvement of our general
Transportation
dispositions. If it would be generally agreeable I think we could come back at 2.15.


Mr. Speaker:: Is there agreement with that suggestion?


Some hon. Members:: Agreed.




[Stage Direction]
The house resumed 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.
Herman Maxwell Batten: Pursuant to the order just passed, I do now leave the chair.



SITTING SUSPENDED


[Stage Direction]
The committee resumed at 2.15 p.m.
Herman Maxwell Batten: Before the committee rose at 1.45 an amendment had been moved by the Postmaster General dealing with clauses 58 and 59. It was agreed at that time to stand those two clauses. Is it the wish of the committee to proceed with the amendment or to proceed to clause 60?


John Whitney Pickersgill: I think it was understood that the proposed amendment would stand until such time as hon. gentlemen opposite were willing to come back to it at the conclusion of some other clause. I suggest, therefore, we should go ahead with clause 60.
[DOT] (2:20 p.m.)
Clauses 60 to 69 inclusive agreed to.
On clause 70-


John Whitney Pickersgill: Mr. Chairman, I should draw attention to the fact that clause 70 deals with costing and I understand there are a number of hon. members who wish to make some observations about it.


Horace Andrew (Bud) Olson: Mr. Chairman, the new cost accounting department or branch that will be set up by the transportation commission will be very desirable. The minister answered some questions about this when we were dealing with new section 337, and I think he said that any data gathered by the new costing

January 20, 1967
Transportation
division would not necessarily be made public if it were only for the use of the commission. Can we be assured that in any case where provinces or other public authorities have an argument to advance on costs, the cost data gathered by the new cost accounting branch will be made available to them so that they may have an opportunity of examining it prior to the hearing before the commission?


John Whitney Pickersgill: That actually is not covered by this clause but in one of the clauses dealing with the commission. There is a provision, notwithstanding the fact that normally certain information would be kept confidential, information that the commission required for its own purposes, that it may nevertheless make that information public. I can assure the hon. gentleman that the commission has the power to make public any information that is given to it if it considers that it is in the public interest to do so. However, there might be occasions where the commission, in order to reach its own conclusions, wished to get some information and it would not feel it was necessary to make it public. But where there is anything in contention obviously no decision could be reached on the basis of information that was not available to both parties involved in the dispute.


Horace Andrew (Bud) Olson: In the past the provinces have had to go to great expense to arrive at variable costs. The minister knows the story well of how the railways appeared before the MacPherson royal commission and claimed a short-fall or deficit of $17 million with respect to the movement of grain from the prairies under the Crowsnest rates. In order to challenge those costs the provinces of Manitoba and Alberta hired experts to examine the figures, and those experts claimed that instead of a $17 million short-fall there was in fact a $500,000 net profit. I am not saying that the MacPherson commission accepted the experts' figures, but I think it decided on a short-fall of about $2 million instead of the railway's claim of $17 million. If the provinces have to establish cost figures will they have to go through that kind of performance again?
The minister has said that if the figures were given in evidence then obviously the information would be made public, but I think the commission should make the figures available to provinces, municipalities or any other organizations vitally interested before the hearing is held. It should not be left to the discretion of the commission to decide whether this information should be released to such
parties. I believe there should be a provision in the bill stating that the results of this cost accounting shall be made available to parties seriously concerned if they wish to challenge costs advanced by the railways.


John Whitney Pickersgill: Without knowing the actual circumstances it would be very hard to make a specific statement, but I do assert that where any information which the railways submitted to the commission was in any way in contention, or directly relevant to any contention properly before the commission, then that information would have to be available to any interested party. But it is conceivable that, for example, the commission itself may try to establish some point in relation to the railways in which no other party is interested. The commission could insist that the railways provide it with information in order to reach its own conclusions of its own motion in such a case, and in those circumstances if the railways wanted the information kept confidential, and there was good reason for that, the commission would not release it. There is no question about a matter which would be essential evidence coming before the commission. I am told that section 387C allows the commission to use cost information and to reveal it if it is kept in a form which could not be used to the disadvantage of the railway.
[DOT] (2:30 p.m.)
The hon. gentleman may recall that at the time of the MacPherson commission, and perhaps he followed these things more closely than I did, a good deal of information was made available to the provincial governments that was not made public. I had a fairly recent experience myself with a commission that I had caused to be appointed in Winnipeg with respect to the air maintenance base. We had an understanding that certain information would be made available to the government of Manitoba, information of a proprietary character which the government, by agreement with us, was not to make public. They could use that information for the preparation of their case. It is quite conceivable that some situation like that might arise where a matter was not directly in contention, where the information was not directly required but where it was required by way of an analogy, comparison or something like that. The information might be made available to a party on the understanding that it would not be published to the advantage of third persons not interested in the case. I do not even envisage that as being likely to happen.

January 20, 1967


Horace Andrew (Bud) Olson: My question may be hypothetical but I can think of cases where the arithmetic is very real. Let us take the case of the potash producers in Saskatchewan or the people who ship sulphur to the west coast from Alberta. If they appeared before the commission and claimed that they were paying a disproportionately high contribution under their toll to capital and profit, because of the provision in the bill affecting this matter the transportation commission has the power to deal with it. They have the power to remedy it.
I am told that potash shippers at Esterhazy, Saskatchewan, are paying approximately $9 a ton from their shipping point to the seaport at Vancouver or wherever the product is loaded. The variable cost for the movement of grain from points in this area to Vancouver is around $3 or slightly less than $3 a ton for the same movement. Let us assume that the variable costs for moving potash and grain are approximately the same, because there is about the same weight per carload. It might be argued that the variable costs for moving grain are slightly higher than the costs for moving potash because of the differences in cars, and so on. Following up my assumption it appears that potash shippers are paying for variable costs plus 200 per cent.
I think it can be argued by the province of Saskatchewan that such a charge is prejudicial to the economy of that province and that the contribution above variable costs is unreasonable. If the figures will not be made available how is the province to make a case in defending its economy? Will it do what Manitoba did, hire cost analysts to do the job that the transportation commission has already done? This thinking holds true for shippers of sulphur in Alberta. Sulphur may be shipped by pipe line but it is not being so shipped now. If the province of Alberta is of the opinion that on this commodity too high a contribution is being paid to the railway, that too much is being paid toward capital and profits above variable costs, then I think it has a justifiable case because the province wants to see its sulphur industry expanding.
The minister will agree with me that any commodity, potash, sulphur or lumber, must get to market at competitive prices. That is vital to the economy of the area in which the industry is. The provinces, therefore, have a justifiable right to get the most favourable rate for shipping that is available.
Transportation
I come back to section 387C which reads in part:
Where information concerning the costs of a railway company or other information that is by its nature confidential-
The point is that the Aluminum Company of Canada, to use the minister's example, may be in a better negotiating position if it knows the costs of the railway and the railway does not know its costs. What I am trying to say is that we do not know what is meant by the words "by its nature confidential". I am concerned that some cost data to be gathered on a continuing basis, I presume, by the costing department of the transportation commission may not be made available to interested parties because the railway may say that such information by its nature is confidential.
I have no amendment ready to move but I hope the minister will say to the transportation commission that the government feels that costs of this nature should be made available to interested parties who act in the public interest of a community, a province or a region.


John Whitney Pickersgill: I can conceive of several kinds of situations arising under the legislation-and I know the hon. gentleman will say that this is a totally unrealistic case-where a shipper with no way of shipping goods except rail would get a rate from the railway he was dissatisfied with and apply to the commission to have a rate set. The commission, if it were satisfied that he had no alternative economical way of shipping goods except by rail-this would not be hard to determine-would have the duty of determining what the maximum rate should be, and it would be a matter of simple arithmetic for the shipper who would have the right, even though he did not exercise it, to have the rate determined, to ascertain certain figures. All he would need to take is two-fifths, if my arithmetic is correct, of the rate that was set and that would determine the basis of the variable costs. It would not be a big problem. Even if the board did not give him the variable costs the 150 per cent would be put on. Even if the resulting rate is astronomically high, as some hon. members have suggested it would be, the shipper would still know what the variable costs were as established by the commission. In a case like that there would not be a complicated way of finding out costs.
[DOT] (2:40 p.m.)
The other case, the only specifically defined aspect of the public interest, is where someone

January 20, 1967
Transportation
alleges that the rate he is given places him at an undue disadvantage having regard to geography and things of that sort. Here all the rates are public anyway. The shipper takes one rate and compares it with another, then goes to the commission and says he is at an undue disadvantage. The question of costs does not really enter into this at all; it is a question of whether the rate in one case, having regard to the conditions, is lower than in another case. I cannot easily envisage a situation where there would be costs relevant to a contentious issue in which it was sought to establish a rate and where the information could be kept confidential. Such information, it seems to me, would be essential to the determination of the issue. However, it is never possible, especially for someone who has never presided over a tribunal in his life, to envisage all the contingencies which might arise.


Horace Andrew (Bud) Olson: The minister has given us the best possible argument in favour of the point I am trying to make. He is saying that if someone wishes to find out the variable cost of moving his goods he can do so by applying for a maximum rate under section 336. In my opinion a person would be stupid to try to have such a rate applied to bulk shipments because he would be both-
Mr. Pickers gill: The hon. gentleman did not understand me. The shipper could apply for a rate but he would not have to accept a rate. It would be a very easy way of finding out what he wished to know, if there were no other way.


Horace Andrew (Bud) Olson: But this is not the kind of legislation we should have on the books. The only way in which a shipper or a municipality or a province can find out what these variable costs are, so that they can make a case under clause 16, is to apply for a rate to be set under section 336. Why should it be necessary for these people to go through various motions which take a great deal of time and cause a great deal of involvement, when they do not want the rate anyway. I suggest that the wording of clause 16 is such that if any shipper is paying a rate which returns to the railway the variable cost plus 2 or 3 hundred per cent, he has a valid case for arguing that the public interest in his region or area is prejudiced, not in relation to some other rate but simply because the rate in excess of the variable cost is too high.

Consider the effect in the world market-I am thinking particularly of potash and sulphur-when the freight rate from the point of origin to the shipping point amounts in many cases to 50 per cent of the sale price of the commodity at seaboard. Any unreasonable charge above the variable cost is in fact prejudicial to the industry concerned and to the area in which the industry is located.
The minister has told us that one way in which a shipper can find out facts which concern him would be to ask for a maximum rate to be set under section 336. We have to take account of the experience in the United States where the basis of these rates, whether for the movement of grain or passengers, is not treated as secret information.


John Whitney Pickersgill: The hon. gentleman is quite wrong. In the United States, if I recollect correctly, the figure given is a composite one based on a whole lot of rates. In normal circumstances the variable costs of a particular railway in relation to a particular shipment are never given unless required by law for some specific purpose.


Horace Andrew (Bud) Olson: I do not disagree with that. But the minister knows well that these composite averages do not vary very much and can be relied on to a great extent even though they do not spell out the actual movement in which a particular shipment may be involved. The fact is that the information is made available. And, of course, the Interstate Commerce Commission which looks after these matters has its own accounting staff and the commission itself challenges the data as well as the arguments which are advanced by the railways. This is not the case in Canada, or at least it has not been the case in the past in hearings before the Board of Transport Commissioners and I have to presume that similar practices will be followed in the future. I can see no provision in this bill for the appointment of a "devil's advocate" to challenge these assertions.
In the past it has been the responsibility of the provinces in particular, as well as of other interested parties, to act as adversaries in these hearings. I do not have an amendment to offer but I ask the minister once again to make sure that responsible people such as the representatives of regions, provinces and municipalities, as well as other organizations which represent a large section of the public interest, will not be faced with the necessity of gathering information as to cost entirely on their own. The information which the railway has, as well as the information available to
January 20, 1967



the costing department of the new commission, should be made available to them. We are talking about section 387C. I trust the minister will appreciate the justice of getting the commission to co-operate with such bodies as I have mentioned. After all there is no point in duplicating the effort and expense which will be necessary in order to obtain this information. When a rate is being challenged and a hearing is to be held, surely all this information should be made available to the parties concerned.
I suggest also that the railways be given the benefit of any figures which might be in the possession of the commission's costing department in advance of the hearing so that they can study them and state their case if they do not agree with them. I hope the minister can assure us that there will be no duplication in the work of gathering this information.
[DOT] (2:50 p.m.)


Mr, Bell (Saint John-Albert):: Mr. Chairman, may I break up this tete-a-tete. If the hon. member for Winnipeg South could be heard, we might supply an amendment.


John Whitney Pickersgill: I am sorry, Mr. Chairman; I did not hear the hon. member.


Thomas Miller Bell: The hon.
member for Medicine Hat has been complaining that he does not have an amendent to bring forward regarding the matter. If the hon. member for Winnipeg South might be heard, we would supply an amendment.


John Whitney Pickersgill: Before he is heard, perhaps I might make any amendment unnecessary by the sufficiency of my explanation. I would doubt this, but I might attempt it. Because of the change which is envisaged in the bill we find it hard to accept emotionally the fact that the minister of finance, whoever he may be, under the terms of this legislation will have the most profound interest in seeing that these figures are accurate. Throughout the whole of this bill we have the principle recommended by the MacPherson commission that what is to be provided in the national interest should be paid for out of the national treasury.
Therefore the Minister of Finance, if he is to be a responsible minister, will have quite an incentive to do this because he would not wish to collect and pay out tens and hundreds of millions of dollars unless there is thorough justification for it. One element of railway costing will not be sufficient. There must be knowledge in respect of every aspect of the cost. Therefore I doubt that any situation
Transportation
would arise in which the commission would not feel it had a duty in this regard or would not be prodded by the representatives of the executive into discharging that duty in the interest of protecting the federal treasury. This will create a situation different from the situation which has prevailed up to now. Mind you, that does not mean that a shipper or a provincial government may not challenge the commission's figures or the railway's figures. Should they do so, I do not think in those circumstances anyone would suggest that the federal treasury should subsidize them to be devil's advocates. At least I am not prepared to introduce legislation to that effect.
The second point is that we are charging the commission with the responsibility of seeing that the information given to it by the railways is audited and checked. The commission can require from the railways any information it wishes. There is one other thing which the hon. gentleman mentioned that we should think about. We do not say to a wheat farmer that he should be allowed to make only a reasonable profit. He can make just as much profit as is possible in all the circumstances. I admit that most of the time it is not adequate. Still there is no law which limits it. Also, there is no law limiting what profit the International Nickel Company can make, what profit the sulphur producers can make or what profit the potash companies can make. In the case of these exporters we say they should sell their product for all that the traffic will bear, because this helps our balance of payments. We want them to do this.
In the competitive sector it seems we are telling the railways that we do not want to be handing out millions of dollars to them in the form of subsidies. We are telling them we want them to go out and make their own living. We cannot at the same time say that if they earn more than a certain amount in these competitive activities, it is unreasonable. In the situation where the shipper has no choice but to use the railway, then that is another matter and in this case the railways are treated as a public utility. We know the difficulty; all of us have been troubled by it. The hon. member for Winnipeg South, the hon. member for Medicine Hat and the hon. member for Springfield took up a good deal of time this morning on this matter. I am not criticizing them because this is the very essence of the whole thing, that is, where the line should be drawn between those shippers who have no bargaining power vis-a-vis the railways and those who have.

January 20, 1967
Transportation
I think many of us, because we are adults or old men like I am, have formed our habits when we were young and therefore do not realize that today the Canadian railways do not have anything like the bargaining power they had in the period between the first and second world wars and in the period before the first world war. Had the situation not changed, there would have been no justification for the whole MacPherson approach to this matter. Most of the shippers in the country today can drive a harder bargain with the railways than the railways can with them. That is a fact in our economic life with which most of us have not caught up because we were brought up in an environment when this was not true. Therefore, in our desire to protect those who need protection we must not prevent the railways earning what they can when they are providing a service to those who do not need to be protected, because if we are to be able to provide reasonable freight rates for those people who are at the mercy of the railways, and if we are to be able to insist on reasonable freight rates without placing an undue cost on the treasury, we must let the railways earn their living in the other area where the protection is not needed.
That seems to be the whole basis of this very complicated double concept. We could do what the United States authorities are still doing. They profess to be the greatest exponents of private enterprise in the world but they still treat their railways as though they had to be regulated. The hon. member for Medicine Hat thought that I was a little unfair yesterday. Perhaps I was a little extreme, but one of the difficulties in respect of bringing in American experts to talk about the Canadian approach to this matter is that they speak in terms of the context of an entirely regulated railway system.


Louis Ralph (Bud) Sherman: Would the minister permit a question?


John Whitney Pickersgill: Certainly.


Louis Ralph (Bud) Sherman: On the point concerning regulations, does the minister not agree that new section 387C is unnecessarily regulatory and paternalistic because it says that the commission, when it obtains cost information from any railway company in the course of any investigation under the act, shall ensure that such information shall not be published or revealed in such a manner as to be avaiable for the use of any other person? It is my understanding that under the Railway Act as

presently written-and I think the Manitoba government made this point in its submission to the standing committee-there are no prohibitions placed on the discretion of the commission or any regulatory authority where this type of information is concerned.
[DOT] (3:00 p.m.)
No one is recommending or insisting that this cost data must be published, and certainly I am not demanding that it necessarily be made available to shippers. In order for a shipper to understand adequately and intelligently commercial problems with which he is confronted, I think that this cost data in many instances should be made available to him. I do object, however, to the fact that this particular part of the bill regulates the commission in respect of the discretion it must employ so far as cost information is concerned.
I suggest to the minister that new section 387C be eliminated and that the discretionary powers of the commission in respect of this kind of data or information be preserved as they are now preserved under the Railway Act. That act does not prohibit the commission from using its discretion so far as cost information is concerned. Obviously the legislators of the Railway Act anticipated that the commission or regulatory authority would exercise discretion and responsibility where cost data which might be inequitable in a competitive situation was concerned. The Railway Act leaves this whole matter up to the discretion of the regulatory authority or the commission, if you like. This proposed legislation says that the commission must do such and such with this information and make sure that such and such else is not done. In other words, it prohibits the commission from doing certain things and actually regulates the exercise of the commission's discretion.
The minister has placed a great deal of emphasis on regulation and the difference between the United States system and ours. I respect those differences and say, Vive la difference so far as Canada is concerned, because there is a great deal about those differences which I would like to see preserved. There are benefits which accrue to our society because of those differences. In this case there seems to be a clear case of paternalism of requirement. The commission is being inhibited and prohibited from exercising its own discretion where cost information is concerned.
I do not know whether I am in order but if I am I will again refer to the question I
January 20, 1967

originally posed. If I am out of order I will yield the floor to the minister.


John Whitney Pickersgill: I think the hon. member rose to ask a question when I had the floor. I suggest it was a rhetorical question, but I should like to point out that new section 387C relates only to information which by its nature is confidential. Any information which the law requires the railway companies to furnish, or the commission to obtain, is not by its nature confidential and therefore this provision does not apply. It would only apply to information which was of a confidential nature.
I am sure the hon. gentleman is aware of the arrangement which was made in respect of the royal commission which studied the situation regarding the overhaul base at Winnipeg. Under an agreement proprietary information which belonged to Air Canada was made available to the government of Manitoba on the understanding that it would read it in order to prepare its case but would not use it or reveal it.
This commission may need certain information about the competitive activities of a railway company in order to compare that information with information relating to captive shippers. For example, the commission might want to know the cost of some competitive operations in order to make a comparison with the cost of a non-competitive operation. Information in respect of the cost of a noncompetitive operation would be information which ought to be made available to a shipper or other interested party in order that they could see whether they were being fairly treated.
It would not be fair to the railway companies in their relations with their customers to make public information about some other situation which the commission may need in order to form a reasonable judgment. That is not the kind of situation we envisaged in respect of this provision. It does not in the least inhibit the commission from making any information public that the railway companies are required to make public under the law.


Louis Ralph (Bud) Sherman: I have virtually outlined my reasons for moving the amendment I now intend to move in the rhetorical question I asked the minister. I accept at face value and in good faith everything the minister has said about cost information so far as the commission is concerned, but it seems to me, and
Transportation
probably I am again acting as a sort of advocate for the position the Manitoba government took on this issue, that new section 387C reflects the attitude toward making cost data available for public information that the railways have taken since their beginning and since confederation.
At every turn the railway companies have resisted legitimate requests for certain cost data. I need not remind anyone in this house of that fact, but for the sake of getting things straight I should like to refer directly to the Manitoba brief. I want to emphasize this point and place it on the record, and I do so by referring to the dispute over cost data which took place a few years ago.
During the sittings of the royal commission the railway companies resisted all attempts by the provinces of Manitoba and Alberta to obtain the cost data which would have permitted a critical analysis of a grain cost study submitted by the railway company. In its submission to the standing committee the province of Manitoba had this to say:
The commission ordered the railways to make full disclosure of costs relative to the export grain study and required that data be submitted regarding passenger service losses. The committee will recall-
That was the standing committee, but the same could apply here. Let me continue:
-that because rail cost data was made available the alleged variable cost was reduced from $98.1 million to $70 million. Since any losses were to be met by the federal government the availability of data resulted in direct savings to the federal treasury of many millions of dollars.
I do not think I need labour the point as it has been well made and I am sure is appreciated and understood by everyone on both sides of this house. The whole question of the availability of cost data from railway companies has stuck in the craws of members of this committee for a considerable number of years, particularly when studies, investigations and legislation of this kind have been concerned. Let me reiterate my opinion that new section 387C reflects the attitude that the railway companies have adopted all along to requests to furnish and publish cost data. Frankly I cannot see how any harm would be done by making this cost data available to shippers who depend so critically on the railways for the conduct of their commercial enterprises.
With that in view and in support of the argument I put forward in my rhetorical question to the minister I move:
That Bill C-231 be amended by the elimination from clause 70 of section 387C.

January 20, 1967
Transportation
I have already spoken about this amendment but I should like once again to voice my contention that there is an unnecessarily paternalistic quality regarding the regulatory measures contained in this particular section so far as such information is concerned. It is my opinion that the legislation would be strengthened, the position of shippers in this country would be strengthened, and in general the economy of the west would be better served if this section were eliminated from the bill.
[DOT] (3:10 p.m.)
I was interested in the attitude of the hon. member for Medicine Hat toward this particular section and subject. When we were discussing section 336 yesterday I noticed that after listening to my remarks he wondered whether I would have the courage to offer any kind of improvement or amendment to repair that faulty section of the bill. I did make an attempt to repair it with the amendment I moved earlier which was defeated today, as the committee knows.
In this context, I would have been interested in seeing the hon. member for Medicine Hat recommend some particular in which this section of the bill could be improved. He made no such suggestion; he said he had no such amendment to offer. That leaves the way clear for me to offer this amendment as a means of repairing this section of the bill which I feel militates against the best interests of the shippers in western Canada.


Maurice Rinfret: Order. It is moved by the hon. member for Winnipeg South that Bill C-231 be amended by the elimination from clause 70 of new section 387C.


John Whitney Pickersgill: Mr. Chairman, I do not think it would matter a very great deal, in practical effect, whether this amendment was accepted or not. As long as we appointed competent and responsible members to the commission. I would assume that they would respect the confidence of anything they received in confidence and that they regarded as properly and appropriately confidential, whether or not they were expressly told by parliament to do so.
I think, however, it is not unreasonable for us, in seeking to be fair to one section of the community also to seek to be fair to another section of the community. I believe that when we are telling the railways that we do not want to subsidize them, that we want them to earn their own living, we should not do anything that will give them the feeling that they

will be inhibited in doing so. I do not agree with hon. gentlemen opposite who say that they think a shipper, in his bargaining with the railway, should be told what the railway's costs are to help him make his bargain to obtain a lower rate unless the railways are told what the shipper's financial position is so that the railways can decide how much he can afford to pay. The idea that the International Nickel Company needs to be protected from the railways is something that I find a little hard to swallow. Even in Thompson, Manitoba, I do not think they need protection; I think they are pretty well able to look after themselves. In fact, I think their bargaining power is probably greater than that of Canadian National Railways.
I believe the presence of this clause in the bill would reassure the railways in this respect. There would be less resistance to providing this kind of informaton, which the commission really must have if it is to do its duty properly, if the railways knew this information was protected by statute. For that reason, and because I cannot see any circumstances in which this clause would inhibit the publication of anything that was properly in contention-because there is no question that information will not be confidential when it is a matter of a subsidy being paid to the railways for any particular purpose-I do not feel disposed to accept this amendment. If it is decided that a subsidy should be paid to the railways, we in this house would have to know, for example, what was the cost of passenger services before this measure would permit the Minister of Finance in certain circumstances to subsidize the railways to some degree. We would have to know what the costs were or we would not pay the subsidy; that is for sure.
In any case where there is any payment made by the treasury, or in any case where the rate will be determined under clause 16, it obviously cannot be determined in any reasonable fashion without the knowledge that is essential for the determination of this question. In this regard, if it was shown that a rate was contrary to the public interest, and the commission was satisfied that there was a prima facie case, that information would not be confidential because the railway would have to establish its case and provide this information publicly.
The only thing this clause seeks to do is afford protection in the case where there is bargaining between the railway and a shipper. We do not think it is fair to insist upon information being available in one case and
January 20, 1967

not in another. I do not feel very strongly about it, but on balance I have a feeling that if we removed this provision it might create a presumption and feeling that we were not concerned about it. I am concerned about confidentiality being maintained, and for that reason I am not disposed to accept the hon. member's amendment.


Edward Richard Schreyer: Mr. Chairman, I support the amendment but not for the reasons the hon. member for Winnipeg South gave in proposing it. I do not see anything wrong with parliament giving specific terms of reference to a regulatory agency or a quasi-judicial body. New section 387C gives to the commission, to the regulatory agency, specific terms of reference with respect to the question that certain information shall be made public. I do not see anything wrong with our giving such instructions. But the reason I support the amendment is that I think the kind of instructions we are giving to the commission here are wrong. I do not, on very basic, philosophical grounds, agree with the premise that we can justify a growing amount of administrative secrecy. I believe that if an administrative agency or quasi-judicial body is to arrive at decisions and make orders, it should do so, but it should make the basis for its decisions as widely known to the public as is possible.
It is quite a few decades ago since a former president of the United States said he believed in open covenants openly arrived at. While the analogy may not be perfect, I think it is certainly a guide line that we should be following in large part in this chamber. What possible reason can there be for an administrative agency deriving and soliciting information, accumulating it, looking at it, appraising it, coming to a decision, and refusing to make public the foundation information upon which it based its decision or order?
The minister likes to repeat his argument that the railways should not be obliged to give information to the shippers any more than shippers should be obliged to give their profit and cost position to the railways. But I suggest that there is a fairly important difference. On the one hand the shippers are to be regarded as entrepreneurs and on the other hand the railways are to be regarded more in the nature of providers of a utility service. I suppose that this philosophic difference between the minister and certain hon. members on this side of the house is the reason that we have taken rather important opposing positions with regard to many clauses of the bill. I
Transportation
submit that the railways are providing a service that is in the nature of a utility service and as such they do not have proprietary rights to the same extent as would entrepreneurs under our economic system.
[DOT] (3:20 p.m.)
I should also like to say that the minister could offer a compromise. Half an hour ago or more he referred to the fact that when he appointed a special committee to investigate the reasons for the removal of the air maintenance base at Winnipeg it was understood that the special commission of investigation would make certain information otherwise confidential available to the government of the province of Manitoba. I suggest to the minister that it would be better to have the provision in the bill-although I do not like this I still think it is an improvement and I offer it as a compromise-stating that information which is to be regarded as confidential cannot be made available to any other person, qualified or modified so as not to apply to the crown acting in the right of any province. I do not think it is a good idea to make these special arrangements and accommodations with the government of a particular province. I strongly feel that the crown, acting in the right of a province, has the right to demand information which is available to an agency of the federal government if the provincial government is to be able to exercise its functions.


John Whitney Pickersgill: Would the hon. member accept the converse of that proposition?


Edward Richard Schreyer: Yes, I do, Mr. Chairman. I suppose this may lead us into quite a protracted debate but I suggest that if we are to practise co-operative federalism we should try a little harder to respect the legitimate demands of the provinces when they ask for information so that the governments of the provinces can act in the best interests of the people. One need only look at the briefs submitted by the governments of Manitoba and Alberta to see that time and time again reference is made to the fact that in investigating or evaluating the legislation now before us they were unable to do a proper job because they did not have certain crucial information. The submission of the Manitoba government, which I believe is over 200 pages long is simply replete with references to the fact that that government was not able to get the information which they required.
I do not suppose that the minister at this stage is likely to accept any compromise suggestions, but in choosing between keeping

January 20, 1967
Transportation
this section intact and deleting it entirely perhaps it would be a sensible compromise to keep it but at the same time to make special provision ensuring the right of the crown acting for a province to receive certain information. In any event I shall vote for the amendment because I support it on basic philosophic grounds, namely, that the less administrative secrecy there is the better.


Horace Andrew (Bud) Olson: Mr. Chairman, the Minister of Transport said that the Minister of Finance would be keenly interested in seeing that all of the costs are accurate because any inaccuracies may result in losses to the public treasury. I accept this. I am sure that both the federal government and the provincial governments will wish to protect the interests of the taxpayers. However, the variable costs to which I am referring may relate to freight for which there is no subsidy and yet the rates may still be prejudicial to the public interest of a province, a community or a region.
The second point I wish to make is that so far as section 387C is concerned it deals with all kinds of information, not only cost information, and there may be some validity in the minister's contention that some of the information given by the railways to the commission does not necessarily have to do with cost data and should not be made public. What troubles me is that variable costs have been proven to be confidential. Even the standing committee of the House of Commons could not get variable cost data from the railways. In my opinion the present Board of Transport Commissioners does not have the facilities for gathering and computing this data itself without the support of the cost accounting departments of the railways. The railways refuse to give it. This is the point in question. After the commission is set up we hope that it will not have to rely completely on the information supplied to it by the costing departments of the railways. We hope that when there is a particular problem under study the commission will not have to rely entirely on the railways but will have sufficient competent staff to do the job itself. This is one reason that 1 think we should have this amendment, because so far all that the minister has said, in support of the railways' contention, is that they regard variable costs as confidential.
Another point which troubles me is that if this section becomes law we may be putting

the commission in a very difficult position because the section states in part:
-such information shall not be published or revealed in such a manner as to be available for the use of any other person.
If some information supplied by the railways were published by the commission, even if it were stated in doing so that it could not be used to the advantage of some other person the railways could say later that they had provided this information and had reason to believe, or in fact could prove, that this or that customer or even their competitor had used this information for their benefit. If such a case occurred the commission would have acted in contravention of this legislation.
For that reason I wonder whether we should not rely on the good judgment of the commission rather than on this section and not force the commission to take extra precautions in publishing or making available any information. I think that this may be a good reason for accepting the amendment because if the section as it is presently worded is left in the bill the commission will be forced to be overcautious. I think it would be better if we relied on the minister's capability to appoint competent men to the commission and then relied on their ability to decide what should or should not be revealed.


Reginald (Reg) Cantelon: I wish to say immediately that 1 support this amendment and that I find the arguments advanced by some hon. members to be most appropriate. In the first place I agree with the philosophy on which the hon. member for Springfield based his arguments. Since the railway is a monopoly in some areas, particularly in the maritimes, I feel that the MacPherson royal commission was in error in allowing it to set its own rates. I feel we ought to have a reasonable opportunity to know upon what basis the railway sets its rates, so I support the philosophical basis put forward by the hon. member for Springfield a few moments ago.
[DOT] (3:30 p.m.)
There is another factor which I believe is important in this connection, and that is if the railway is allowed to charge any rate that it likes, according to competition, this could result in area discrimination. I hope the railway would not do this. As a responsible public operation, of course, I feel that the Canadian National would not do this. However I believe it would be possible, perhaps through lack of good judgment, to discriminate against an area. This could be done more easily if the
January 20, 1967

costing information of the railway company were not open to consideration by people who were interested. This is another reason why the proposed section 387C is bad. The railway figures will not be given consideration if this proposed section is approved.


John Whitney Pickersgill: If the hon. gentleman would not mind my interrupting, I may say he would not be correct in that assumption. If someone alleged under clause 16 that there was area discrimination, and made out a prima facie case, any information the railways had to produce to disprove that case would not be confidential information. It would be information the railways would produce to prove their case, and they would produce it in open court.


Reginald (Reg) Cantelon: I am glad to have that explanation from the minister, but I think it adds further weight to what I have been saying. If this is true, then why do we really need proposed section 387C? If there is any injustice, we can consider it under clause 16, so surely there would be no need for this new section 387C.


John Whitney Pickersgill: I think I can answer that in one sentence. The commission, itself, may want confidential information for its own purposes about the competitive operations of the railways, operations that are not in contention by anybody. The railway, when it is directed to provide that information, is surely entitled, just as income tax payers are entitled, to have this confidential information about their business operations kept confidential. This is the only reason for the provision, and absolutely the only reason.


Reginald (Reg) Cantelon: I am glad to have that explanation from the minister. I do not believe it violates the basic principle upon which I am arguing that the railway is, in effect, a monopoly so it is unwise for us to have such information kept confidential. In this connection, I should like to quote briefly from one of the briefs presented to the committee. I do not believe it was a particularly good brief in many respects. I refer to the one presented by the province of Saskatchewan. In very few instances does it in any way quarrel with the bill. I should like to quote from page 2241 of the committee report dealing with costing procedures, sections 387 to 387C of this bill:
Bill C-120 recognized that the recommendation by the royal commission on transportation revising costing procedures would have to be developed by a regulatory authority. The government of
Transportation
Saskatchewan reiterated in its 1965 policy statement that it was not satisfied with the grain costing study carried out by the royal commission on transportation;-
Here, I should like to interject that this is the kind of statement we meet again and again. The people concerned with costing studies were not satisfied with those studies. I continue:
-nor was it satisfied with the study carried out by the railways.
I would say they were probably even less satisfied with those studies.
Saskatchewan strongly supported development of new and improved standard costing procedures. These procedures were to be established, in the view of Saskatchewan, not only for the movement of commodities such as export grain but, as the bulk of traffic on prairie branch lines is export grain, would also have direct application in the determination of whether or not a branch line of railway was operating at a loss. Saskatchewan took the view that public hearings by the Board of Transport Commissioners to establish the fundamental principles, or procedures of costing, should be held at which all interested parties would be heard.
I take it this is the provision to which the minister was referring when he referred to clause 16 and said there would be public hearings.
Bill C-231 provides for determination of costing procedures by the new commission, after which the commission may receive submissions and conduct neanngs on those procedures.
Here is the crux of the whole of this recommendation.
Saskatchewan, however, holds to the view that when costing procedures are being reviewed all interested groups must be given a hearing on this very vital aspect of the legislation.


John Whitney Pickersgill: Well, that is required by the bill, as the hon. gentleman knows.


Reginald (Reg) Cantelon: Yes, that is correct; it is required. The point is, if this information is going to be kept completely confidential, I cannot see how it can be given.


John Whitney Pickersgill: There would be absolutely nothing confidential about costing procedures. What we are talking about here is information about specific costs in relation to some particular situation; that is all that this clause relates to. It certainly relates in no way to costing procedures, which have to be the subject of a public hearing and open to crossexamination. The commission, you see, has to decide the procedures for calculating costs, and in that way we will get a final decision on

January 20, 1967
Transportation
what is a variable cost and what is a fixed cast.
This is one of the first things the new commission will have to do when it is set up. This is going to be the subject of a separate public hearing. Moreover if the railway contends that some fixed rate is non-compensatory, they have to produce information to prove it, and that would not be confidential. The information that would be confidential would be information about transactions between the railway and its individual customers. If you destroy the confidentiality of that, you will not just destroy the confidentiality of the railway's information but you will also destroy the confidentiality of the customer's information.


Reginald (Reg) Cantelon: I listened to this explanation with a great deal of interest. I wonder if we might just refer to what, in my opinion, is a different attitude. I should like to refer to page 2250 of the committee report where the Quebec North Shore and Labrador Railway offered a rather complicated set of figures to support its argument. These figures indicate the effect a particular type of traffic would have on costing figures. In that connection they were particularly interested in the 30,000 pound load and the difference this would cause in the operation of the railways. They offered figures to show what it would mean if there were a load of 190,000 pounds. Here we have a similar case to that which the minister mentioned a moment ago. This is a particular type of traffic. In fact it deals with a particular segment of that traffic, and they gave us figures whereby we could determine what the effect of the load would be. If they did not consider it necessary to keep these figures confidential, then I would like to know why should any other figures that the railways offer-
[DOT] (3:40 p.m.)


John Whitney Pickersgill: I do not recall the particular circumstances. Was the Quebec North Shore Railway before the committee? It must have been some day when I was not there. I remember representatives of Wabush Mines appearing before the committee and making representations about the Quebec North Shore Railway, but I do not recall the railway appearing.


Reginald (Reg) Cantelon: This was Wabush Mines, and its representatives were giving figures from the Quebec North Shore and Labrador Railway.


John Whitney Pickersgill: Those must have been published figures, or figures that the railway had no objection to releasing. In effect that railway has only two customers, one the Iron Ore Company, which is owned by the same people who own the railway, and the other the Wabush Mining Company. Therefore it is probably not too difficult to arrive at the figures.


Reginald (Reg) Cantelon: The point is that Wabush Mines is a captive shipper of that railway, but in spite of that it was able to get these figures and submit them to us. If they could do that without hurting the railway, then with respect to new section 387C there is an analogy and there is really no reason why, in the national interest, we could not have the figures disclosed to enable the customer to determine whether he is being overcharged or not. It is for this reason I feel that new section 387C should be eliminated.


Mr. Nowlan:: I have just one question for the minister. In his view, what would be wrong with having some disclosure to other government boards like the Atlantic Development Board, the Halifax Port Authority or the National Harbours Board? There will be an interrelationship between these boards, which are also creatures of the federal government, and the work being done by the new transport commission. I wonder why the new section is so restrictive. The information will go only to the transport commission and that commission will often, I am sure, work in conjunction with these other agencies. There should be a relationship between it and the Atlantic Development Board and the National Harbours Board. What is the objection to giving the information to them?


John Whitney Pickersgill: I think it is the usual objection to disclosing people's private business to somebody else. Where governments require citizens-and even railway companies are citizens-to disclose their private transactions, such as for income tax purposes, it has been the practice in this parliament and this country generally that that information is treated as confidential.
The hon. gentleman will notice that this new section refers to information that is by its nature confidential, and it is the commission which will determine whether the information is by its nature confidential. For example, if a railway had to show its costs in some competitive traffic it might be very helpful to the competing trucking company to know exactly what those costs are, so that it would know how far it could go to undercut the railway in
January 20, 1967

getting the traffic. That, by its nature, would be confidential information, and it has always been our custom, when such information is required by a public body for some public purpose, to treat it as confidential. Any information that is required with respect to a railway's functions, that affect a third person, would not be confidential.


Thomas Miller Bell: Mr. Chairman, since this is the first time I have had the floor after the lunch recess I would like to take this opportunity to thank the minister for the few moments he allowed us to get a bite to eat. If there were any doubts in his mind about the value of the recess, I would like to point out that the minister himself was so rejuvenated by it that he talked almost incessantly for almost a full hour after the recess. Surely therefore there was some value in the recess that we had.


John Whitney Pickersgill: A negative value.


Thomas Miller Bell: I must also commend the government for the fine attendance of its members in this chamber on a Friday afternoon. The 68 members who are present and who voted on the last two amendments deserve credit for making the sacrifice of being present. It proves that we have finally convinced them of the importance of this bill. When I see such big wheels as the Minister of Trade and Commerce and the Secretary of State for External Affairs here on a Friday afternoon, it leads me to wonder who were bawled out the most two days ago, members of the cabinet or backbenchers.


John Whitney Pickersgill: Mr. Chairman, the strict relevancy of this to the amendment is apparent to all of us.


Thomas Miller Bell: Well, the minister knows that I am reluctant to venture into western matters when speaking on this bill. I have a particular interest in maritime affairs and I do not wish to make extended remarks on an amendment that, though it has some application generally, affects the west the most.
However, the confidentiality of documents and information is a big subject. It is one that we consider quite frequently in parliament on motions for the production of papers. Some years ago when I had a deep interest in this subject I formed a firmly held opinion about it, but considering the present matter before us I think we need to bring our thoughts up to date. In the old days we used to say, "Oh well, it is of a confidential nature and might do 23033-763
Transportation
damage to the competitive position of a private company. Therefore we cannot disclose it."
Both when in government and in opposition I have always avoided voting for any motion that would cause the production of confidential information. When the Conservatives were in office I recall that on two or three occasions the hon. member for York South forced motions that would have meant production of information from the C.P.R., when discussing a railway bill, information that I thought would have been detrimental to its business and that we did not have the right to disclose because it was a private, independent company. I also recall that a former minister of transport, who was then in opposition, supported the government at that time. But even having that background, I believe that the old role of automatically falling back upon the confidentiality of documents needs further examination.
With respect to this matter of costing figures I think that the words of Professor Borts, as recorded in volume No. 40 of our standing committee proceedings, are significant. He says this at page 2864, dealing with the section we are asking to be deleted:
[DOT] (3:50 p.m.)
Section 387C proposes to protect the confidential nature of cost data obtained from a railway company. The hearing procedure would be hampered by the inability of interested parties to obtain information from railways affecting questions of cost. It is not clear how a fair and impartial hearing can be held when a chief party to the hearings, namely the railways, can withhold cost information from interested parties outside the commission. This issue of confidentiality becomes of immediate importance whenever an interested party before the commission has a complaint involving cost. Cost enters into considerations of abandonment of uneconomic branch lines, the determination of deficits in the grain traffic, compensatory rate levels passenger deficits, and so on. In each case, interested parties must be able to examine commission staff and examine statements and testimony presented by other interested parties.
That excerpt speaks for itself.


John Whitney Pickersgill: I think it does. I would say, in none of those instances would the information be confidential, notwithstanding Professor Borts.


Thomas Miller Bell: I wish to mention something we have already debated and I shall be interested in hearing an explanation about this. Professor Borts goes on to speak about the situation in the United States. Other hon. members have already referred to this. If in the United States, with keener competition between the railways than in this

January 20, 1967
Transportation
country, cost data is made available, why cannot it be made available here?
The final point Professor Borts made is that this section will hamper the method by which the commission can deal with this matter. As I have said when speaking on other amendments, the minister and the government are giving the commission great authority to do many things. It will have bureaucratic power, but essentially it will not have our trust and confidence. In little ways the commission is being denuded of important powers which would create greater confidence in it. Perhaps the minister can speak about this if he is so excited, and so rejuvenated from his sandwich of a few minutes ago. I would refer the minister to section 314D at page 30 of the bill, which is as follows:
The commission may, ... publish ... the traffic figures ... regardless of whether the figures pertain to branch lines for which applications for abandonment of operations have been filed with the commission but protecting, so far as it is practicable to do so, information that is by its nature confidential-
Is this not an open invitation for someone to disclose figures, and receive protection in that disclosure? Yet in the section we are now considering there is a blanket refusal to do this. We cannot get any figures from the commission.


John Whitney Pickersgill: In the one instance they are traffic figures, and in the other they are figures of cost. I have said again and again, in my opinion the only kinds of cost figures envisaged here that are in their nature confidential are those figures of so specific a character that they would or might provide an advantage to the customers or competitors of a railway. Information required for the determination of public matters, such as whether a subsidy should be paid to a railway, or the fairness of a rate, would not be confidential and would be published.


Thomas Miller Bell: We have asked the railways and we have asked many experts if there might be some way for costing figures to be made available. We ought to have some assurance about techniques being used. I feel that the amendment might be useful; it might provide some compromise.


John Whitney Pickersgill: That would be possible. The hon. member is speaking of information that would not be confidential. If you have a composite of a number of things that would be fabricated by the commission itself, you would not be disclosing confidential information. At least you would have to be a smart

fellow to draw any conclusions from that. This is to protect specific information that all businesses, regardless of their nature, consider confidential.


Thomas Miller Bell: If a principle is involved, why does the minister in one instance say, "so far as it is practicable to do so" the commission may do some things, and then in the other instance, not give an opportunity to do this.


John Whitney Pickersgill: Because traffic figures,
generally speaking, are not confidential. There is no important element of confidence in them, except where there is one shipper only on a line. Then the figures might be important. Normally traffic figures are different from cost figures.


Thomas Miller Bell: At least the minister is attempting to answer the question. The phrase I referred to is an open invitation for disclosure, even if only of traffic figures.


John Whitney Pickersgill: Sure.


Thomas Miller Bell: I shall close now. The minister has admitted that there might be some possibility in the future of opening up this subject, that needs a new look. The amendment does not necessarily mean that all figures will come out, but it takes this section out and enables the commission to do what it wants to do. I feel we must have more trust and confidence in the commission.


Richard Russell Southam: I do not want to belabour the point under debate. As a former member of the committee on transport and communication I have listened to many witnesses who time after time have stressed what this sensitive area of cost accounting means to the legislation before the house, and to the shippers using the transportation systems of Canada. The hon. member for Saint John-Albert stole my thunder because he quoted what Professor Borts had said, and I had intended quoting the same words.
As I think I said earlier today, Professors Borts and Williams were two of the most competent witnesses before the committee. They had spent many years preparing themselves academically for the role in transportation they play on this continent. Manitoba was fortunate in having them as witnesses.
In supporting the amendment of the hon. member for Winnipeg South, to section 387C,
January 20, 1967

let me follow the quotation of the hon. member for Saint John-Albert with another quotation, to emphasize the need of getting away from the confidentiality aspect. Nine years ago when the MacPherson royal commission studied the problems of transportation and prepared recommendations, an argument arose about actual techniques of costing. Professor Borts goes on to say this-and this follows what the hon. member for Saint John-Albert has mentioned:
Much has been made in the past of the need to protect the confidential nature of operating cost data of the railways. The railways have argued that public knowledge of such information would place them at a competitive disadvantage with respect to other modes, namely truckers. The competitive position of the railways vis-a-vis the trucks is supposedly defended by a general ignorance of rail variable costs. The railways feel that if the trucks had such knowledge, they would know which areas of rail traffic are vulnerable to rate competition. Following this argument, the trucks would speedily act to cut rates on such traffic and drive the rail service out.
I find this to be ludicrous and a coloured picture of competition in the marketplace. The rails over time have lost high-rated traffic to the trucks because of the constant pressure of competition pushing both shippers and truckers to find those commodities and services where truck can displace rail. It has not been necessary for these parties to know rail costs. All that is needed is a truck rate and truck service which is better than the rail rate and rail service. That a more perfect knowledge of rail costs would cause additional loss of traffic to the trucks is a hypothetical statement without empirical foundation.
[DOT] (4:00 p.m.)
It will not be possible to carry out the costing activities required in this act if rail costs are to be kept confidential. For the costing activities required in this act will necessitate the determination of system average cost scales for the railways, as well as the determination of long-run variable cost for particular items of traffic and branch lines. How can the commission make such information publicly available without revealing rail cost information? How can it carry out its mandate without making such information publicly available?
This is a positive statement made by a man who is highly qualified to comment on this type of legislation. He says that it will not be possible to carry out the costing activities required under this act if railway costs are to be kept confidential. "Is the commission to operate in secret?" he asks. This is a most pertinent question.


John Whitney Pickersgill: I believe the hon. gentleman is repeating a mistake to which I referred a moment or two ago. I think Professor Borts did not understand what is intended by this clause at all. Information of a general character which is required for the general
Transportation
purposes of the commission is not information which is, in its nature, confidential; it is information required in the public interest and it simply would not be covered by this clause at all.


Richard Russell Southam: I am sure the minister is perfectly serious when he advances that point of view, but on several occasions in the committee when questioning witnesses, particularly from the C.P.R. we noticed that they stated emphatically that they did not wish to give certain information. Professor Borts expresses his point of view very strongly, even though the minister does not agree with it. With reference to this very section, he goes on to say-and I believe this is worth putting on record for the benefit of the minister and of the officials responsible for the drafting of this legislation-
1.	The commission should be instructed to carry out costing procedures necessary to satisfy the requirements of sections 314 , 329 , 334 and 336. In addition, the commission should be instructed to determine the profitability of any undertaking by comparing the revenues from that undertaking with the long-run variable costs.
2.	Such cost information is to be made freely available to all interested parties in matters relating to commission hearings under sections 314. 329 334 and 336.
3.	Interested parties will have the right to examine material prepared by commission staff and examine material presented by other interested parties.
His fourth recommendation, squarely stated, was that section 387C should be deleted altogether.


John Whitney Pickersgill: I suggest to the hon. gentleman that Professor Borts is an economist and a railway expert, but he is not a legislator and he is not a lawyer, and what the hon. member has just read to the committee is a perversion of the clause-a total perversion of it. In all the hearings with respect to branch line abandonment, and with respect to anything the treasury may have to put up, and in any contention about the facts of a particular situation which might come before the commission, the information would not be confidential at all. But the commission might require some further explanation about an analogous or different situation which was not en jeu, which was not at issue, and which there was no earthly reason to make public. This is all that was envisaged.
Sometimes I almost wish we had never put the clause in at all. If we took it out now, people reading this debate would be bound to argue that nothing was confidential, and that

January 20, 1967
Transportation
is where my difficulty arises, the only difficulty I have with regard to the amendment.
The hon. member for Winnipeg South is not here, but he might have left power of attorney with somebody, and if he would withdraw his amendment for the total removal of the clause we might be able to put in a phrase which would meet the situation, words which would indicate clearly that this confidentiality would apply only where the matter in dispute was one purely between two parties, and had no bearing on the public issue involved-something of that sort. I do not think there is really much difference between us here in the committee, and we seem to be spending a lot of time on something which is really a minor point.


Richard Russell Southam: I can sympathize with the minister's point of view and I can understand his anxiety to make progress. On the other hand, we must realize that after 60 years we are studying one of the most complicated, far-reaching and important pieces of legislation which this government, or any government has introduced, and when the minister says he almost wishes he had left this clause out he is exemplifying the thoughts and suspicions felt by a great many people.
The minister referred to railway branch line abandonment. In western Canada we are faced with a rash of applications for the abandonment of branch lines, and the problem to which I have referred is bound to arise, in future, in this connection-how the railroad arrives at certain figures for profits and losses. Incidentally I should like the minister to tell me upon the basis of which formula the government arrives at this map of railway lines which are to be retained until 1975. Were these lines chosen for retention on the basis of the volume of grain carried over them? Was the figure of 50,000 bushels a mile the figure used in reaching this determination? I should also like to ask the minister where he got this information. Was it confidential? Did he accept the figures offered by the railway companies? How logical is this formula? Is it to become a rule of thumb, as some have suggested, or has there been a secret agreement between the government and the railways?


John Whitney Pickersgill: It was not even discussed with the railways. This is covered in a clause which has already been passed, and I gave an extensive answer to the hon. member for Qu'Appelle the other day on the point which the hon. member has raised. I know that the hon. member for Moose Mountain would not

mind looking at Hansard to find out what was said, and if he is not entirely satisfied with my statement, well, we still have clause 1 to consider and on that clause I will be glad to elaborate on any point which has not been covered.
But as I say, this was not even discussed with the railways. It was discussed with officials of the wheat pools and with representatives of some farm organizations, and there was indirect discussion with representatives of the provincial governments as well as with people who were interested in preserving the lines. It just so happens it was never discussed with the railways at all. We did not see that it was really any of their business, because in the case of any of these lines which are not going to pay we are asking parliament to make up the losses, anyway. What we were concerned about were the social and economic factors involved.
[DOT] (4:10 p.m.)
While we should not get away from what is immediately before us, I think what is before us is a very narrow clause. If there should be some way in which to deal with this so as to indicate that in no way should the public interest be allowed to suffer, I would be prepared to put something in this clause to this effect, if someone could find a suitable wording. I wonder whether this would be a possibility.


Richard Russell Southam: I thank the minister for informing me that he already has answered some of my questions when answering a question asked by the hon. member for Qu'Appelle. Of course the hon. member for Qu'Appelle represents a constituency adjacent to mine, and probably he was expressing the same fears the people there had expressed to him. I do not wish to be repetitive. I could go back and quote the evidence given by dozens of witnesses on this point. When I rose to speak it was my intention to support the amendment moved by the hon. member for Winnipeg South. I am ready to support that amendment when it is put to a vote.


David Lewis: Mr. Chairman, if the amendment which is now before this committee should be voted on, I would enthusiastically support it. I do not, however, hold the view held by many members in this house with regard to confidentiality. I believe that if the practices and the facts relating to business transactions in this country were more known by the people of Canada, a great many of the difficulties with which we have been faced in
January 20, 1967

this parliament and in other legislatures would be avoided. The hon. member tor Saint John-Albert was quite right in saying that back in 1952-1953 I moved a motion during the sittings of one of the standing committees of this house to the effect that the C.P.R. produce a contract. I remember that the Minister without Portfolio, the hon. member for St. Lawrence-St. George, at that time supported the C.P.R. in its stand that it ought not to file that contract with the committee, even though the very thing we were discussing-the building of another line-depended upon it.
It seems that we are spending a great deal of time on this, when perhaps there is not as much disagreement as there may on the surface appear to be. I have spoken to one or two hon. members about this. After the amendment is voted on I should like to ask the minister whether he would agree, as a compromise, to the addition of certain words to the present new section 387C. I do not usually go in for compromises.


John Whitney Pickersgill: I thought the hon. gentleman was a professional mediator.


David Lewis: I am not sure I am a professional mediator, but I have mediated. In some situations mediation is useful, I am not sure that it is in matters of principle. One of the things which worries me about the wording in this section as it now stands is what is meant by the words "information that is by its nature confidential". The minister continually says that a matter which is not by its nature confidential is not going to be effective. What is by its nature confidential, except what somebody thinks is by its nature confidential? That somebody ought to be the commission, and of course it will be the commission. I am wondering whether members of the committee might find the following suggestion acceptable: "Unless in the opinion of the commission such publication is necessary in the public interest".
What we would have then would be a general prohibition against such information being revealed in such a manner that it would be available for the use of any other person. This would provide even in such a case, if in the opinion of the commission the information is necessary in the public interest, that the commission would be empowered to publish it. Assuming my amendment is as sensible to others as it appears to be to me, perhaps we could end the discussion and reach agreement.
Transportation


John Whitney Pickersgill: It so happens that simultaneously with the hon. gentleman's suggestion I have received advice from a higher realm that we might add the words, "unless publication in the opinion of the commission is necessary in the public interest". There seems to be a meeting of legal minds here. I wish that I had been bright enough to have put this suggestion forward in the first place. Unfortunately the hon. member for Winnipeg South is not here. I wonder whether there might be agreement to defeat the amendment on division so that we do not have to have a count. I will then be very happy indeed to accept this amendment which has been suggested by the hon. member for York South.


David Lewis: I should like to know, when the minister said that he had received advice from a higher place, whether he was speaking merely in physical terms.


John Whitney Pickersgill: Yes; in physical terms. The remark may have been made in levity, but there was no sense of levitation.


Edward Nasserden: Mr. Chairman, I am not going to oppose what has been suggested by the minister, but I do think this would leave the commission open to a great deal of controversy. What is a matter of public interest in the mind of one person, may not be a matter of public interest in the mind of another person, or may not be a matter of public interest in the minds of those in another section of the House of Commons. This would bring about a wide difference of opinion. The persons making the decision would have to be very wise persons in order to be able to make the decision without finding themselves in a controversial position.


John Whitney Pickersgill: That is right. Judges always have to be wise persons.


Thomas Miller Bell: I agree with the hon. member for Rosthern that there will be a great deal of pressure on the commission in making a decision. The members of the commission will have to decide what definition of public interest they will use. They will have to decide whether they will use the one we have here, some common law definition, or some judicial definition which has been on the books for some time. I think we should give the hon. member for York South credit in respect of his suggestion. Whenever there is a discussion like this in parliament, although the board may not pay any attention to what we say, I think a discussion like this might

January 20, 1967
Transportation
scare them so much that they may not publish anything. We might derive some good from it in that regard.


Herman Maxwell Batten: Is the committee ready for the question?
Amendment (Mr. Sherman) negatived on division.


David Lewis: Mr. Chairman, I hate to take this away from the minister's advisers who are not on the floor. However, I move as follows:
That clause 70 of Bill No. C-231 be amended by deleting the period at the end of section 387C on line 33, page 55 of the bill and substituting therefor a comma and adding thereto the following words:
"unless in the opinion of the commission such publication is necessary in the public interest".
Mr. Chairman, I wrote this out by hand on a piece of paper, so I am afraid I do not have copies of it.
[DOT] (4:20 p.m.)


John Whitney Pickersgill: Before the question is put, sir, let me say that I am not sure the hon. member has the right copy of the bill. As I look at new section 387C his amendment would refer to page 61, line 35.


David Lewis: I may be looking at the original bill, and I apologize for that error.


John Whitney Pickersgill: Perhaps the amendment could be corrected by changing it to read page 61 and line 35.


Herman Maxwell Batten: Would the hon. member for York South permit the Chair to make the necessary changes?


David Lewis: Certainly, sir, and I apologize for having had the original copy.


Thomas Miller Bell: Mr. Chairman, if the hon. member for York South has a copy of the original bill I suggest he should hang on to it, because they are becoming valuable these days.


David Lewis: If I have one, Mr. Chairman, it is a document that is confidential in its nature.


John Whitney Pickersgill: I would be glad to autograph it for you.


Herman Maxwell Batten: The amendment has now been corrected to read in part "in line 35 at page 61 of the bill".
Is it the pleasure of the committee to adopt the said amendment.


Some hon. Members:: Agreed.
Amendment (Mr. Lewis) agreed to.
Clause 70 as amended agreed to.
Clauses 71, 72 and 73 agreed to.


John Whitney Pickersgill: Perhaps the committee
would agree to stand clause 74 for the moment. I have an amendment I wish to propose to this clause. It is not quite ready as yet but I hope to have it shortly.


Herman Maxwell Batten: Is it agreed that clause 74 stand?


Some hon. Members:: Agreed.
Clauses 75 to 82 inclusive agreed to.
On clause 83-Status of former chairman of Air Transport Board.


J. Michael Forrestall: Mr. Chairman, a number of members are very interested in this vital aspect of transportation in Canada. Because this is the only clause which would permit questions relating to air transport, would the minister agree to stand this clause? I am sure this would not involve much discussion.


John Whitney Pickersgill: Let me make an alternative suggestion to the hon. member. Clause 1 has been stood, and it sets out the general provisions of transport policy. Clause 83 is a very limited and technical clause. I am sure that any question which would be in order during our discussion of either clause 82 or clause 83 would be more likely in order when we return to a discussion of clause 1. I would not take exception to a reasonable discussion on that clause.


J. Michael Forrestall: On that understanding I am agreeable to the passage of this clause. I thank the minister for his concern and charity.


[Stage Direction]
Clause agreed to.
On clause 84-Members of Canadian Maritime Commission.
Thomas Miller Bell: Just to slow things down for a minute, Mr. Chairman, let me say that this clause refers to the Canadian Maritime Commission. There has been reference to railway companies, pipe lines and other modes of transportation but we have not had much discussion about water transportation. Perhaps we will be discussing export rates in the maritimes before we conclude this afternoon, but I should like to ask the minister to indicate the duties of the Canadian Maritime Commission because they have been
January 20, 1967

revised recently. Perhaps the minister, as an old Newfoundlander who can get nostalgic about the sea, could tell us what he envisages in the future for Canada in respect of matters concerning the merchant navy and the Maritime Commission. Perhaps he could assume that the house is full of landlubbers and expound on this subject for a moment or two.


John Whitney Pickersgill: Mr. Chairman, the hon. gentleman overwhelms me. First he gets up and says I must have had too much lunch because I talked for an hour afterwards. Now when I am trying to keep quiet he invites me to say something that would be entirely out of order.


Thomas Miller Bell: It is a matter of timing.


John Whitney Pickersgill: No doubt it is and-I very nearly said something I would have regretted.


Mr. Byrne:: That is what he wanted you to do.


John Whitney Pickersgill: As the hon. gentleman knows, the Maritime Commission formerly had the function of dealing with subsidies for shipbuilding. It was felt at the time the subsidies were revised that it would be more appropriate to have this function transferred to the Department of Industry, where it now rests. The result is that some staff of the Maritime Commission will be transferred to the Department of Industry for this purpose.
The Maritimes Commission will continue to carry out all its functions which relate to transport. It advises the government in respect of subsidies for ferry and other services. It is engaged in one activity at the present time, and I am sure this will warm the heart of the hon. member for Saint John-Albert. The chairman of the Maritime Commission is actively engaged in discussions with the Canadian Pacific Railway in relation to a certain water crossing that is very important to the hon. gentleman and to the hon. member for Digby-Annapolis-Kings. I hope we will be able to make concrete proposals to parliament before too long in this regard.
[DOT] (4:30 p.m.)


Thomas Miller Bell: Mr. Chairman, I thank the minister for that encouraging news about the ferry in the Bay of Fundy. If Canada moved ahead in merchant shipping matters, if we realized that we had a destiny in the sea, and it was possible to make plans for a merchant fleet and the like, would the new commission with its usurpation of the function of the Maritime Commission, and the
Transportation
other authority it may pick up, have the power to deal with the question of conference rates and matters of that kind? I am not speaking now of matters that may come under the Maritime Freight Rates Act, port parity, and the like; but I have always felt that because Canada has not had the ships with which to back up our case at conference tables when negotiating water conference rates, and so on, we have always got the short end of the stick.
I wonder whether the minister envisages a greater interest in water conference rates and the like, on behalf of Canada, because of the institution of this new commission. I express the hope that this new, massive bureaucratic agency will be active in this area. We have some fears about what may result and what may even take place in a detailed way within the new commission, but I think all hon. members of the committee generally agree that something had to be done about our transportation system. There is approval at least of the part that sets up the commission, but I hasten to add this qualification. This matter comes to mind because I noticed in the paper the other day that there are moves afoot again to break up the ministry of transport. I see the Minister without Portfolio is in the chamber, who has some interest in transport. He is acting minister of everything, as well as being junior minister of transport. I hope he will understand when I say-this is not meant to slight him-that I think we should still have, particularly in view of this legislation, one Minister of Transport.


John Whitney Pickersgill: Hear, hear.


Thomas Miller Bell: Perhaps both ministers will be glad to hear that, but I did not want to appear to be against either one of them. I still believe there should be a single ministry. I believe that this new commission, with its great powers in respect of all modes of transport, must be under one minister. I think this will keep in line the element of competition amongst the members of the commission, for one thing. They will take over their new duties, I hope with handsome salaries. They will all be experts, but they will be oriented toward one mode of transport in nearly every case. I would be afraid that a real tug-of-war might ensue between different members of the commission in an effort to obtain concessions in their particular field. I refer to the old, civil service Parkinsonian attitude wherein they will all be trying to

January 20, 1967
Transportation
build up their own field of interest and activity. Therefore I hope that in this regard there is still only one Minister of Transport.
We are in the dying days of this legislation. I notice the smiling face of the minister. I hope he is still with us for a while after this legislation is passed.


Mr. Nesbitt:: He is going to take a long time to die.


Thomas Miller Bell: I am not sure whether the hon. member for Oxford said "he" or "it" is going to take a long time to die. I am not sure whether he meant the minister or the legislation.


Wallace Bickford (Wally) Nesbitt: Like Charles II. Not the minister, though.


Thomas Miller Bell: We are in a
much better mood in the late hours of this afternoon than we were before we had that sandwich. Having said what I wanted to say about the make-up of the commission, and the worry I have of competition among the different modes of transport, I want to repeat what I said at the beginning of my remarks, namely that this nation, which has such a large coastline-it is about the second longest in the world-should pay greater attention to our shipping industry. The minister took some action, and rightly so, in setting up a Canadian coast guard. This is all to the good. It is true that the government is involved in most of the vessels that we have, and it is unfortunate that private enterprise should not play a larger part in this development. All through our discussion of this legislation we have detected a great concern on the part of the minister for private enterprise. I may have disagreed with the minister in detail, but I am pleased to see this attitude; I think it is what we want in a country such as Canada. But let us give all forms of transport a chance to develop. In closing, Mr. Chairman, I merely express the hope that the new transportation commission, the 17-man board, will be strong, forceful and will bring to the fore that sector of our transportation system that for some reason or another has been sorrowfully neglected in Canada.


Herman Maxwell Batten: Shall clause 84 carry?


[Stage Direction]
Clause agreed to.
Clauses 85 to 88 inclusive agreed to.
On clause 89-Pending proceedings.
Edward Richard Schreyer: Mr. Chairman, in my opinion clause 89 reads in a rather disturbing way. I

believe this feeling is shared by other hon. members who have received letters from organizations in western Canada that are concerned about the procedure to be followed with regard to the abandonment of lines that are not part of the protected grid. I know the minister has on several occasions been asked to clarify this point, and each time he has been asked to clarify it once and for all. I refer to the practice that will be followed once this bill passes. Will those applications for abandonment which are before the board at the present time be heard and considered under this bill, or will they be considered under the existing legislation? As I read clause 89, it seems to indicate that, notwithstanding the new procedures that are to be followed with respect to abandonment, those applications already in the works shall be heard under the old procedures.


John Whitney Pickersgill: Mr. Chairman, I have answered that question before, but I am glad the hon. gentleman has raised it because I can give the assurance on this clause that I gave before. I do not think it would be reasonable, since these applications have been in for years, to ask the railways to start all over again making the applications and to ask the commission to start all over again, thus causing delays in the gathering of information. I gave an undertaking, and I hereby repeat it, that as soon as possible and before any hearings are held, after this bill has received royal assent I will ask my colleagues, and I already have their approval, to accept my advice to cause an order in council to be passed to prescribe that the procedures under the new act with respect to the hearing and disposition of these applications will be followed. That means that the actual applications will not have to be re-made and any technical requirements that have been met up to now will not have to be wastefully repeated, but that any and all hearings will be held under the new procedures prescribed in this act.
[DOT] (4:40 p.m.)


Edward Richard Schreyer: Mr. Chairman, the minister's compromise is one that will neither satisfy nor anger anyone. On balance I think that perhaps it may please to a small degree those who have been concerned.


[Stage Direction]
Clause agreed to.
On clause 90-Continuation of orders, etc.
Thomas Miller Bell: Mr. Chairman, I had a reference on my desk which I cannot find for the moment-there is so much
January 20, 1967

propaganda coming and going on this legislation. During the hearings the minister, in answer to a question about costing techniques-this might not refer to the clause which we are now considering, but it is only a brief matter and I think the minister would want to clarify it-spoke about a guarantee to set up public hearings on costing techniques. I think the minister would want to take this opportunity to state in a general way what he has in mind for those who watch these things in detail.
It may be that the bill incorporates some direction with regard to this matter. Without opening a debate I would like to hear the minister repeat to the house what he said in the committee.


John Whitney Pickersgill: The committee concentrated so much of its attention on section 387C of clause 70 that it did not pay much attention to sections 387A and B, and I am not inviting anyone to do so now. The procedures for costing are prescribed in clause 70 and I think that what will be contained in the bill itself if it is passed-and I am beginning to be a little more hopeful-is far more useful than any assurance I gave in the committee. However, I did give an assurance that there will be public hearings to establish costing techniques at which every interested party will be represented. This is contained in the bill.
Clause agreed to
Clauses 91, 92 and 93 agreed to.
On clause 94-Coming into force.


John Whitney Pickersgill: I have an amendment to offer on clause 94. There are some highly technical amendments that are required to clause 94 consequent upon the amendments that we have made to clauses 20 and 21. I will read this amendment and if any elucidation is required I will be glad to supply it. The amendment reads as follows:
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
(a)	by inserting immediately after clause 93 on
page 71 of the bill, as reprinted, the following: Amend- "94. The acts and portions of acts set ments	out in the schedule are repealed or
and	amended in the manner and to the
repeals extent indicated in tne schedule.";
(b)	by renumbering clause 94 thereof as clause 95; and
Transportation
(c)	by striking out line 29 on page 71 of the bill, as reprinted, and by substituting therefor the following:
"Sections 80 to 90 and section 94 shall come into force on".
Unless hon. members wish an explanation of that amendment I can assure them that this is a purely technical drafting matter.


Julia Verlyn (Judy) LaMarsh: Mr. Chairman, I so move.


Herman Maxwell Batten: Is it the pleasure of the committee to adopt the said motion?


[Stage Direction]
Amendment agreed to.
Clause 94 as amended agreed to.
John Whitney Pickersgill: Mr. Chairman, before we go on I wonder if the committee would be willing to go back to clauses 58 and 59. The hon. member for Saint John-Albert promised us a real feast of reason and flow of soul. Could we take part II of the bill which we omitted earlier, and on which I doubt there will be much debate, and dispose of it?


Thomas Miller Bell: Mr. Chairman, we have made good progress and we are in a better mood now, but the pipe line experts in our party did not think this matter would be coming up at the present time. Therefore I would ask the minister to stand that part of the bill.


John Whitney Pickersgill: It is quite agreeable. There is one other clause in the early part of the bill that was held over because we did not want to pass it until section 336 was passed, and that is clause 16.


Thomas Miller Bell: I think clause 16 deserves to be held over until Monday. If the minister wishes us to express ourselves on clauses 58 and 59, this would be quite agreeable, as we are very unhappy with the matter of port parity. I think it would be of some help to the minister to hear the thoughts of the hon. member for Halifax with regard to this matter.


John Whitney Pickersgill: That would be agreeable to me. I thought there was some reluctance on the part of the hon. gentlemen to go on with this matter this afternoon, but if that is not the case I would be agreeable to reverting to clauses 58 and 59.
On clause 58:


J. Michael Forrestall: Mr. Chairman, the minister's suggested amendment was outlined to us earlier and I will not go into it in depth, except to put on the record for week end study the

January 20, 1967
Transportation
shortcomings which we see in it as it is now worded. It seems to us that in his amendment the minister has taken the line of least protection of some of the traditional rights in ordinary times. To state it very briefly, let me say that I see four obvious shortcomings in the bill. I would hope that the minister might give thought to what I will say, together with the senior officials of his department. The first one deals only with export traffic and we are well aware of the arguments on both sides, although we wish that exports were included.
The second shortcoming of the amendment is that it accepts the provisions of section 334 which, by any stretch of the imagination, does nothing more than negate the provisions which we are trying to preserve.
[DOT] (4:50 p.m.)
The third shortfall is that it deals in no way at all with port parity with northeastern Atlantic ports in the United States, such as Portland, Boston and Baltimore.
The fourth shortcoming in it, which we can see from a cursory examination, is that it restricts any protection to those ports as defined within the select territory areas. We feel that now is the time for the maritimes to stand up on their hind feet and ask for that to which not only are they entitled, but without which the economic end of our port facilities is in sight, and that is the inclusion or extension of select territory definition which may well come under proposed section 329A, the definition of eastern ports. I just throw these suggestions out to the minister in the hope he will consider them. In other words, so that the minister will know to what lofty heights we aspire, we would like to see total port parity of all eastern ports.
When we start a study in depth of this provision on Monday, the minister will know the heights to which some of us, in our ignorance, are going to aspire. He will know it is not born out of malice. Since it is close to five o'clock, perhaps we should leave this for the minister's consideration over the week end. There is one other point I should like to mention, so the minister will be aware of it. We intend over the week end to attempt to draft at least two amendments and possibly three, one of which will possibly be a substitute for the shortcomings in this bill. It is not possible to draft one amendment, so we will have to go into a whole series of amendments in order to bring the provision into line with the desires of eastern Canada.
There is no way of even beginning to touch the basis upon which we will make our appeal

to the minister, and to those on the other side of the house, particularly those who represent maritime constituencies. We have only seen a small number of these representatives in the house during the last two or three days. We hope that when we begin this study in depth on Monday we will hear from some of the other maritime members, particularly those from Newfoundland who are vitally concerned, although they do have special protection. I hope the minister will not take these remarks in other than a spirit of generosity, but we serve notice that he cannot expect any reading from scripture but rather some hardnosed facts, which we feel he should acknowledge.


Thomas Miller Bell: I should like to support the hon. member for Halifax on this matter. Halifax and Saint John stand together in this instance, even though they compete for port business. The minister has brought forward an amendment, and I must confess I have only had a chance to look at it hastily. We were concerned this afternoon with some of the other important sections of the bill. I think everyone will admit that we made good progress and we all discharged our responsibilities. One could consider that the minister brought forward this amendment merely to start a debate, and that he really was not serious about it. This is what the hon. member for Halifax and I choose to believe at the moment.
As a result of a quick look at this amendment, we believe it falls very far short of what we expected. At this late hour, I do not want to go into the history of the difficulty of our ports. Everyone knows that Halifax and Saint John, as well as the provinces of Nova Scotia and New Brunswick, went into confederation on the promises that were made in confederation speeches to the effect that these ports would be preserved. This promise has been incorporated in various ways into statute law.
In so far as this amendment is concerned, the minister says that if there is anything by way of port parity protection for Halifax and Saint John in the existing law, he hopes nothing in this legislation will interfere with it. If the minister were sincere about this matter, then he should have caused a full review of every statute in this country, every board of transport decision and every related matter, to ascertain just what there was in our existing law which provided protection for our ports. Having done that, and having seen as I am sure he would have seen, certain
January 20, 1967

Transportation
built-in protection, I think he should have gone on from there.
The St. Lawrence seaway made our competitive position worse. Business is going farther inland in this country. We see business going by our door, and this is not a happy situation. This winter the ports of Saint John and Halifax have had a bad year, their worst year so far. Some of the tonnage figures are not bad, but they relate to bulk cargo. There is no trans-shipment activity, which is lucrative for our longshoremen and for the economy of this area.
When the minister is relaxing this week end and mulling over the success he has had in putting through the different clauses of the bill, he should give consideration to bringing forward something better for port parity, otherwise Monday is going to be another sorrowful day, such as he had two days ago when the Liberal party was humiliated in its move to wipe out the Crowsnest pass rates.


John Whitney Pickersgill: I wonder if, in the same conciliatory spirit in which the hon. gentleman has just been speaking, there might be any disposition on the part of the committee not to see the clock so that he may continue in his seductive vein? I am sure the rest of us would love to hear him.


Thomas Miller Bell: No, we have had a good day and I think the rights of private members should be preserved. If the minister does feel we are a little hard on him, I have fairly good news for him. I can tell him that the hon. member for Acadia may not be coming in until later on Monday night. The conclusion from that is that the minister had better be good in the early part of Monday, otherwise we will speak to the hon. member.


John Whitney Pickersgill: I wonder if the committee would bear with me for just one minute to make a suggestion which I would like hon. members from the Atlantic provinces and particularly the hon. members for Halifax and the hon. member for Saint John-Albert, to ponder. It will be recalled that we made certain amendments to clause 16(3). Perhaps I should read them so they will be in Hansard:
(a) whether the tolls or conditions specified for the carriage of traffic under the rate so established are such as to create
(i) an unfair disadvantage-
[DOT] (5:00 p.m.)
Perhaps I do not need to read subparagraph (i), but subparagraph (ii) reads:
(ii) an undue obstacle to the interchange of commodities between points in Canada or an unreasonable discouragement to the development of primary or secondary industries or to export trade in or from any region of Canada or-
And this is really the new part.
-or to the movement of commodities through Canadian ports; or"
This would mean that if there were any undue obstacle or if it were alleged there were any undue obstacle to the movement of commodities through Canadian ports, by tolls or conditions specified for the carriage of traffic, this matter could be taken before the commission, and a hearing be held, following which the commission would have power to issue an order to correct that situation.
I think that the hon. member for Halifax who has spoken might feel that if I had not done this, probably I should have done it; but since I have done everything that the law officers can think of to preserve all the rights that there are under the law, it would seem to me that in these principles we are setting out in clause 16, which enable the commission to interfere with competitive rates, or rates set by the carriers, and to establish tolls or other conditions, this would be something that would give the shippers, and those communities and provinces, something more than just the existing law on which they could rely, and that certain other advantages might be had or might be of interest.
I would be prepared to have one of my colleagues make such a motion on Monday if, upon reflection over the week end, hon. members seemed to think that this would be a useful addition to the bill. I myself am inclined to think that it would be.


Herman Maxwell Batten: I would like to crave the indulgence of the committee for a moment to refer to the work done in committee last Monday. When there was a discussion on clause 20 an amendment was moved to introduce a new clause 20 and to renumber old clause 20 as clause 21. As the procedure appears in Hansard at page 11861 it would appear that the new clause 20 was introduced but no consideration was given to paragraphs (b) and (c) of the amendment to renumber the clauses.
I apologize to the committee for allowing this to slip by me, and I think it would tidy up
January 20, 1967

Juvenile Delinquents Act our procedure if I now asked the committee to agree to these two paragraphs.
On clause 20.


Herman Maxwell Batten: Does the committee agree now that clause 20 on page 12 of the bill, as reprinted, be renumbered as clause 21?


Some hon. Members:: Agreed.


Herman Maxwell Batten: Also, will the committee agree that clause 21 and the heading thereto on page 13 of the bill, as reprinted, be struck out?


Some hon. Members:: Agreed.
On clause 42.


John Whitney Pickersgill: I wonder if I could have the same indulgence for just a minute to have a similar technical change made. It will be recalled that an amendment was moved by an hon. member on the other side-for the moment I cannot recall who it was-to clause 42 which read in part:
-the governor in council may take such legislative or other action-
When I accepted the amendment, entirely without advice, I entered the reservation that I thought it could be tidied up by the Chair, but I am told that the Chair can only tidy up punctuation. Could it be agreed that instead of reading "the governor in council may take such legislative or other action" it should read "may cause to be taken such legislative or other action"? It would save a little time on Monday if we could agree to that now.


Herman Maxwell Batten: Does the committee agree to the suggested change as put forward by the minister?


Some hon. Members:: Agreed.
Progress reported.


Mr. Deputy Speaker:: It being five o'clock the house will now proceed to the consideration of private members business as listed on today's order, namely, public bills and private bills.



JUVENILE DELINQUENTS ACT


Frank Howard: the second reading of Bill No. C-13, to amend the Juvenile Delinquents Act.
[The Chairman.]
He said: Admittedly, Mr. Speaker, this bill only tackles one of the many problems relating to our younger people and the relationship they have with the law. Last year an interdepartmental committee report, dealing with many other aspects of the situation, was made public. The bill before us is one that was prepared some time ago. If you look at its front page you will notice that we are now only four days from the anniversary of its first reading, and it was prepared long before then.
The Fauteux committee which examined certain penology matters more than ten years ago made a certain comment which is reprinted in the explanatory notes to this bill, and I think I would be unable to put things more succinctly than did Mr. Justice Fauteux in his report. I quote the following comment from page 27 of his report, as reproduced in the explanatory notes:
Young Offenders
It is an astonishing fact that under the present law in Canada, it is possible for a child under the age of sixteen to be convicted of a criminal offence in an adult court and be sentenced to a lengthy term of imprisonment in a penitentiary. This can happen in any of the many areas where the Juvenile Delinquents Act is not in force ... In our opinion legislative changes are needed immediately to provide that no person under the age of sixteen years shall be committed to penal institutions where adult prisoners are confined, and we recommend accordingly.
The force of that recommendation is underlined by reference to "immediately." That committee saw no reason why immediate action should not be taken.
[DOT] (5:10 p.m.)
In 1956 this committee reported to the minister of justice. Though many recommendations of the Fauteux committee have gone by the board, and have in some cases been ignored by successive ministers of justice, it is a sad commentary on the government, on parliament, on sociologists and on anybody who has any real concern for the position of our younger people in our society that the report and recommendations of Mr. Justice Fauteux have been ignored for so long, when he himself said that legislative changes were needed immediately. They were needed in 1956, and before then.
The purpose of this bill is to put into legislative effect the recommendations of Mr. Justice Fauteux, that it will not be possible for a child to be committed or confined to a penitentiary where adults are imprisoned. No one will argue that it benefits younger people to be incarcerated in a penitentiary with
January 20, 19G7
hardened criminals who have committed crimes of all varieties and intensities. The general consensus throughout the nation, throughout the western world, is that it is undesirable to place younger persons in contact with people who have spent many years of their lives following the pursuits of crime, and in the penitentiaries. If for nothing else, penitentiaries are excellent places for an apprenticeship in crime. As I have said earlier, it is sad that this situation should prevail for such a long time without legislative action being taken about it.
We have had for some time the report of the committee on juvenile delinquency. I had postponed proceedings with respect to this bill since the committee made its report, hoping that the study which I thought the Solicitor General said would take place would reach a conclusion. I hoped that we should see the beneficial results of that study come to the fore in a legislative way in the relations with the various provinces. It seems that the study has not yet been completed, because we have not heard anything about it. It would appear that the study will not yield full or partial results during this year. There is no reference to action being taken on the report of the committee on juvenile delinquency in the legislative program which parliament has been asked to consider.
The report of the committee on juvenile delinquency is one of the most urgent problems confronting this nation. The Bank Act, which we are to deal with at some time in this session, is inconsequential when compared with the value that our younger people have in this society, and with the manner in which we treat them, and the things we do in disregard of their legitimate interests in this nation. The current bill before us, the transportation bill, vital through it is, is inconsequential when balanced against the needs of the younger people, and the need of this parliament to do something worth while with respect to young people who come in conflict with the law.
There is a crucial time in a person's life, the formative years, when society can help that individual. At that time society can help a younger person to overcome difficulties. That is the time when young people need help, because their paths either will lead to crime and successive years in penitentiaries, or down what we call the straight and narrow-in other words, into the main stream of social action. If we miss that crucial moment, all the successive attempts at rehabilitation

Juvenile Delinquents Act come to naught. The statistics on recidivism in our penitentiaries, the efforts which, with little effect, we make toward rehabilitation, the attempts we make at penological reform, whether in connection with the construction of institutions or practices within those institutions, show that there can be relatively little beneficial effect once a person becomes confirmed in his attitude toward society and toward the law.
That is why I say that, important as the transport bill may be to some, important as the Bank Act is, these are matters of no consequence when balanced against the value we should place on our young people, and the assistance we ought to give them at that crucial moment in their lives when they may overcome whatever psychological barriers or difficulties are confronting them.
This is why we have waited impatiently to hear what the government plans to do constructively with the extensive report of the committee on juvenile delinquency. I do not expect this bill will receive a fate different from that of other bills which have come up during this hour. In fact I feel it might be desirable if it were not given second reading, because the problem is much broader than this particular aspect of it. I hope however that at least we may be able to have a full round of comment about the general situation confronting our younger people, and their relationship with the law, as well as the application of law enforcement and penological methods. I hope the Solicitor General may say something with respect to the study taking place within his department about this important committee report.


David Samuel Horne MacDonald: Mr. Speaker, I have waited for some weeks to speak in the house during private members hour on this item of legislation. We should be thankful to the hon. member for Skeena for putting it on the order paper and for drawing this particular aspect of the problem of penology to our attention.
While I would support his bill heartily, let me say at the outset, as the hon. member said a few moments ago, that we are looking at just one aspect of a large problem. We are trying to straighten out what has become an increasingly bad social anomaly. If there is any area today in our country which has been kept very much in the dark and allowed to proceed at a slow rate of progress, in terms of our understanding of man, it is the area of what we do with social or criminal offenders.
January 20, 1967

Juvenile Delinquents Act [DOT] (5:20 p.m.)
I feel strongly, as does the hon. member for Skeena (Mr. Howard) that by and large we have ignored all the new concepts which have come within our grasp during the last half century; we have made virtually no use of our new understanding of the best ways in which to deal with those who offend against our laws. Of course, I realize that we are dealing this evening with young people under the age of 16 who-though most people in Canada would find it hard to believe-are at this moment in prison side by side with some of the most hardened criminals who operate in this country. And this is done in the name of justice, or in the naive hope that we may be able to return to society young men who have somehow been chastened and reformed as a result of their experience. If there are those in this country today who are wondering where criminals are trained, developed and further motivated, they will find the major source not on the street corners or in the poolrooms, or in the shady lounges, but in institutions operated by federal and provincial governments -jails, prisons and penitentiaries.
I can speak about this from personal experience, for it was my duty during my student days in theology to work as a prison chaplain, to meet and talk with men in prison and watch some of them in their progress toward a full-time life of crime. I think a lot of nonsense has been written and produced on television screens to illustrate the ways in which people embark on a criminal way of life. From time to time we are told in lurid detail about people who come from good homes and who, because of some quirk, or unexplained desire, commit some act of crime. However interesting this may be, it is not a realistic picture.
At least 90 per cent of those who opt for a criminal way of life usually come from homes which are not very well organized, homes which are not strongly held together and which afford little support for an individual. In the beginning, very often, the crime is nothing more than a foolish act which led to a sentence of, perhaps, 30 days. It is during the serving of this first sentence that a life of crime is seriously contemplated.
I am sure that if one entered the great majority of county and provincial prisons this evening he would find young fellows barely old enough to shave, sitting on wooden benches talking to men of 45 and 50, men who have "been around," who know what the score is, who have discovered the short cuts and who have become habituated to a life of


crime punctuated by frequent sporadic terms of imprisonment. This is the situation which prevails not only in provincial prisons but in federal penitentiaries. Not only do we persist in causing relatively innocent offenders to associate with hardened three-time, six-time and ten-time losers, but we place them in an environment where it is almost impossible for them to avoid learning from their associates what further crimes might be perpetrated upon release. When we talk blandly about putting people behind bars to protect the rest of society, it is shocking to think that three out of every four of those who are presently behind bars will commit some further offence after their release, and be locked up once again.
I ask: What in God's name is the use of a system which affords almost no degree of protection for those who are free in society or to those who are now in prison and will at some point be released? We do all this in the name of justice. We have the extremely naive belief that through an arrangement of this kind men will be reformed, though it has been shown again and again in our era that hostility produces hostility, and that punishment produces reaction and violence. What do we gain by teaching young people in their teens that if they commit some anti-social act expressing their hostility to society, society will turn on the heat by exposing them to hostility exerted by social pressure?
This is why I say that in dealing with the bill sponsored by the hon. member for Skeena (Mr. Howard) it would be folly on our part to ignore the wider problem which exists-the increasing pressure on our society because our prisons, as the figures tell us, are in most cases becoming increasingly occupied, our penitentiaries swollen to overflowing.
Yet we have not dealt with the nub of the problem. The nub of the problem is as old as our civilization itself. We are supposed to believe that when a person commits a criminal act in this ocuntry, the essential thing is that he must be punished. A good deal of the feeling which prevails in our country toward those who commit crimes was expressed during this session when we were discussing whether or not to abolish capital punishment. We did not take that opportunity. Speeches were made ad nauseam to the effect that we must always be sure we punish people who perpetrate crimes in our society. For what reason? Ought we to do this because it is our intention to teach them a lesson? Well, if three out of four people who enter prison
January 20, 1967	COMMONS
commit further crimes after their release, we have not taught them much of a lesson in my opinion. Is it because we intend to wreak a little vengeance upon them, just as might be done in private confrontations? If we feel that way, that is fine, but we should recognize that these people are being confined not for an altruistic reason, or in order to reform them, but simply because public vengeance must be taken. If this is the limit of our understanding of the problem, then all I can say is that I am sorry indeed for our society.
It was interesting to relate this attitude to the attitude of mind of our society 100 years ago toward the mentally deranged. Hon. members may have read in books or magazines that a mentally deranged person a hundred years ago was considered to be filled with an evil spirit, and it was thought that the best thing to do was to whip him, or otherwise torment him, in order that he should come to his senses. Hon. members may recall some of the horrible things which were done to people who were incurably insane in the name of medicine, and of good health.
Is this the level of understanding we have reached today when dealing with the mentally sick? It is not. When a person has a nervous breakdown or loses touch with reality, do we punish him? No; we are anxious to secure the best medical attention at the earliest moment so that, if at all possible, he can be restored to health. With the knowledge and expertise now available to us I hope we are coming quickly to the realization that in dealing with those who offend against society it is no longer enough to punish them or lock them away in some dark corner.
[DOT] (5:30 p.m.)
We must come to the realization that those who commit crimes are sick. They are not sick in the sense one is sick when a thermometer is put in his mouth and it is found that he has a high temperature. They are not sick in the sense that you can submit them to a questionnaire, and if they answer too many questions in a strange way you know their minds are not functioning properly. They are, however, sick in terms of not being able to live in a healthy way with the rest of society. This is a new kind of sickness which we must come to understand. It is a type of sickness which may start whith a young boy of six years of age when he decides that he wants to pick things off a shelf in a store because he wants something. Or it may be the type of sickness which develops in a man 55 years of age when he decides he can alter the ledger books in some
Juvenile Delinquents Act way and escape with thousands of dollars. Nonetheless, this is a sickness.
When we start to think in this enlightened way we will be able to do away with these damp, dark, infested holes that we call centres of justice and reform. We will be able to do away with these drab grey buildings which we think in some way protect society and reform the individual. I would hope that this bill would give us the opportunity to wrestle with this very deep social problem. I would hope that we would not run away from it and that we would not just tinker with it. I would hope we would use in an enlightened way the very best methods available to us today to help people who are socially sick, whether they be young or old. Then we might not have the situation in this country, as has been said again and again, where a young man who is 19 years of age is locked up for two years because he broke into a gas station, is let out again after 18 months, decides to steal a couple of cars, is locked up for another five years until he is 26 years of age, is let out again when he is 26, steals another car, and then is locked up again for nine years. This person's life at this stage has become a life of living like a common animal between four walls, and with bars on the windows.
This is not the type of life that was intended for any human being. It is not the life which was intended for you or me. I would hope that the government would take both this bill which is before us, and the thoughts I have expressed, under very serious consideration. In closing I might say I would hope that the penitentiary committee which was set up during this session, would become more active than it has been to date. Certainly very few meetings have been held since this session began, and now this session has gone on for 190 days. There does not seem to be any indication that they have taken this problem seriously.
I for one will look forward to a great deal of attention and a great deal of interest being given to this problem, because it stands as one of the greatest social problems which faces our country today.


Mr. Leonard Hopkins (Renfrew North):: The
social problem which is dealt with in Bill C-13 and the recommendation in respect of the repeal of subsection 2 of section 26 of the Juvenile Delinquents Act I am sure are topics which will appeal to all members of this house. All of us have a humanitarian interest in this. What shocks me greatly about this whole situation is the fact that there are many

January 20, 1967
Juvenile Delinquents Act fields in respect of which we impose laws governing youths of a certain age, but in what other fields do we have laws to protect our youth from certain aspects of our society? At the provincial level of government our laws provide for a curfew in certain cases, so that youths of a certain age must be off the street at a certain hour. We have laws which say that with some exceptions, they must attend school until they are 16 years of age. We have laws which state that youths cannot possess alcoholic beverages. They cannot purchase alcoholic beverages until they reach age 18 or age 21. They must be a certain age before they are entitled to hold a driver's licence. They must be a certain age before they can qualify for elective office. They must be a certain age before they are entitled to handle firearms.
We have not, however, placed a limit on the age at which they can be placed in a prison or other institution with adults who, as the hon. member for Prince (Mr. MacDonald) has mentioned, are hardened criminals. I should like to compliment the hon. member for Prince for bringing out many of the social problems which are involved in dealing with these people in our modern society.
I think there are five major areas which should be considered when we discuss juvenile delinquency. One is the home. I am very much inclined to agree with the hon. member for Prince in this regard. I think that in these television programs the youths who become involved in crime in the first place are portrayed as being persons who have come from good homes. I believe the greatest enemy of our youth today possibly is poverty and the slum areas which exist in our cities across Canada. Where children are brought up in homes under responsible parents, and where there is an obvious communication between the parents and their children, one does not find that these children go very far astray.
I remember one particular case which arose during my teaching career. A young boy ran away from home. The father and mother did not seem to have any particular interest in locating him because they thought it would do him a lot of good to stay out all night, so that he would get hungry and perhaps want to come back home again. This was a case where there obviously was no communication.
Then there is the church in our society. I think this is a very important aspect, so far as juvenile delinquency is concerned, because every person in our society must have a certain faith, something to lean on in time of

trouble. Youths who are brought up in good homes usually are those who have attended church regularly, and they receive some excellent guidance there. At this point I should like to say that I have no respect for some of the television programs and some of the individuals who appear on television programs. Some of these people are agnostics who in our modern day society seem to think that it is important to knock religion on every possible occasion. When we knock religion and knock our traditions, we are knocking the base from under our society.
The third aspect is the school. Education is a very important factor. We must train our youth to play a useful role in society. I think our teachers could play a very important role in dealing with student problems by keeping in close contact with the home. The friends and associates, not just inside the prison walls, as was mentioned by the previous speaker, which the youth has in every-day society are very important to him. The youth can help those friends and associates, and they in turn can help him. Another important aspect is the society in which the youth lives. Advances in science and technology in the last few years have had a tremendous impact on our way of life. These advances have also had a great effect upon our humanitarian efforts.
[DOT] (5:40 p.m.)
An hon. member mentioned that some laws which existed 100 years ago, both in England and here, were laws of persecution. No one in this house has a persecution complex, I am sure, but laws change more slowly than scientific approaches and technological understanding. My point is that when we adopt legislation of the kind now before us we should make sure that facilities and institutions are available to effectively take advantage of such legislation.
Like the hon. member for Prince, I want to compliment the hon. member who placed this bill before us. It always does us good to look seriously at situations and bring them to the attention of the individuals concerned. In support of the Solicitor General who has taken a great deal of interest in this matter, despite what some people may think, it was almost five years after the parliamentary committee studied juvenile delinquency before the report was tabled in the house. One should not be surprised that a final decision has not been made by the government.
Many conflicts of interest are involved in this matter of juvenile delinquency. Many aspects are outside the constitutional authority
January 20, 1967
of the federal government. During the past few years we have observed many examples of the difficulties involved in governing a country on a federal basis. Many things must be dealt with jointly by the federal and provincial governments. Before the recommendations of the report of that committee can be implemented a great deal of consultation will be required, and I may say that considerable consultation has already taken place. Many financial problems will have to be solved, including those in relation to financial assistance to provinces.
The report is divided basically into three parts. The first part deals with the Juvenile Delinquents Act, which is a federal statute; yet the administration of juvenile courts falls within provincial jurisdiction. The second part deals with federal-provincial relations. Part III deals with a research department which can be administered by either the federal or provincial governments. This presents another problem which must be solved. Plans and arrangements must be made so that programs dealing with juvenile delinquency and related prison reform can work effectively and efficiently in practice as well as in theory.
Let me quote from the final report of the Committee on Remission Service of 1956. This particular part is referred to in the bill now before us. I quote from page 27 of this report, which states in part:
It is an astonishing fact that under the present law in Canada, it is possible for a child under the age of sixteen to be convicted of a criminal offence in an adult court and be sentenced to a lengthy term of imprisonment in a penitentiary. This can happen in any of the many areas where the Juvenile Delinquents Act is not in force. Some provincial authorities have been authorized by the Prisons and Reformatories Act to make limited efforts to deal with this class of offender but the situation in Canada is, however, far from satisfactory.
The next paragraph indicates that in the year 1955, 14 persons under the age of 16 years were admitted to Canadian penitentiaries. Those 14 individuals are important to our society, and particularly important to other individuals of the same age group.
A very important paragraph of this report can be found at page 60, reading as follows:
A person who is sentenced to penitentiary does not begin to earn statutory remission until he arrives at the institution. Cases frequently occur where such persons are detained in the county jail so that they will be available as witnesses, or for some other reason, who will not earn remission while so detained.
Certain recommendations appear at page 87 of the report in respect of this very important
Juvenile Delinquents Act subject. I should like to quote several of these recommendations or goals to be achieved, and I will begin with (c) which refers to-
-a concentration of effort on treatment by way of training, rather than the near imposition of punishment; this is especially so in the case of special classes of offenders, particularly youthful offenders and persistent offenders;
Recommendation (d) sets forth as another goal the-
-specialization of institutions and specialization of methods of treatment, with a concentration of professional staff in the areas where it is most needed.
That is the very crux of this matter. We must employ sufficient number of specialists to work with these individuals so that these offenders do not continue to return to our prisons.
Another goal is set forth in (f) which calls for-
-a planned policy of recruitment and training of professional staff.
That is a necessary supplement to (d). The final goal or feature set out in this recommendation is (g) which asks for-
-a willingness to make full-scale experiments in all phases of the correctional system.
Let me turn to page 88 of this report and read several of the recommendations which appear there. I shall begin by reading No. 13 which states:
In any case where a convicted person is between the ages of 16 and 21 or where a maximum term of imprisonment of two years or more may he imposed, no offender should be sentenced to any term of imprisonment without consideration, by the court, of a pre-sentence report.
[DOT] (5:50 p.m.)
Then No. 16 reads as follows:
Appropriate legislative amendments should be made immediately to provide that no person under the age of 16 years shall be committed to penal institutions where adult prisoners are confined.
Here I should like to refer back to something I said a few moments ago, namely that we make laws to keep out teenagers out of pool rooms, we make laws to keep our teenagers out of beverage rooms and other phases of our society, but we must implement a law that does not allow our people under the age of 16 years to associate, within the bounds of prison walls, with hardened criminals. Recommendation No. 20 reads as follows:
The federal and the provincial governments should give serious consideration, in expanding their systems of penal institutions, to the establishment, on a medium security basis, of such additional institutions as may be required.



January 20, 1987
Juvenile Delinquents Act
Then No. 38:
Some means should be found to provide specialized after-care for particular types of parolees, such as sex offenders, drug addicts, alcoholics and psychopaths.
In my concluding remarks, Mr. Speaker, I should like to again pay tribute to the hon. member who brought this private bill before us and to the Solicitor General, who is in every sense a humanitarian individual, who is deeply interested in this matter and is doing a great deal of work in this regard. I know it will not be long before this problem is cured in our society. We cannot build schools to educate youth and at the same time have prisons which contain hardened criminals in which our youth are educated in a different direction from the way we want them educated in our society.


Mr. S. Perry Ryan (Spadina):: Mr. Speaker, I should like at the outset to compliment the sponsor of Bill No. C-13. I feel that his moral and social aim in this connection is very commendable. but when, in his concise fashion he aims at only section 26(2) of the Juvenile Delinquents Act, perhaps his aim is not so good, at least in my humble opinion.
During the third session of the last parliament a somewhat similar attack on the Juvenile Delinquents Act was launched by the hon. member for Skeena (Mr. Howard) in Bill No. C-89. In that bill he attacked the act with respect to eight sections, I believe.


Mr. Peters:: On a point of order, Mr. Speaker, I would contend that the purpose of this bill is not an attack upon the Juvenile Delinquents Act. All it says is that the Juvenile Delinquents Act has a section in it which permits those charged under the Criminal Code to be removed from the protection of the Juvenile Delinquents Act. All this bill does is raise the age from 14 to 16 years, to give them this protection.
I doubt whether any member of parliament would deny the protection of the Juvenile Delinquents Act to a 16-year-old, rather than subjecting him to the mercy of the Criminal Code. I believe this is what we should be voting on in the next few minutes, and I do not think it should be the policy of the government to oppose this bill.


The Acting Speaker (Mr. Richard):: I would remind the hon. member who raised the point of order that the question has been very general up to this time. If some hon. members insist upon the discussion being more direct, perhaps this should be done; but I do not

think it is appropriate to raise that point at this time since the discussion has ranged from the beginnings of crime in youth as evidenced in the speech of the hon. member for Prince (Mr. MacDonald). However, I am sure the hon. member for Spadina (Mr. Ryan) will want to keep to the point.


William Arnold Peters: On the point of order, Mr. Speaker, I did not raise it against the wideness of debate. I was suggesting that the hon. member appeared to be saying that the purpose of this amendment was to launch an attack upon the Juvenile Delinquents Act, and I think this is not in keeping with the fact.


Sylvester Perry Ryan: Mr. Speaker, I cannot understand why Bill No. C-13 does not deal with section 13 (3) of the Juvenile Delinquents Act, which is a pretty analogous section. Recently a case was argued before the Supreme Court of Canada. I believe this case was from the province of Alberta. It attacked the constitutional validity of the Juvenile Delinquents Act. I think the judgment in that case has been reserved. In that event it is probable that our Department of Justice, our Solicitor General and our Minister of Justice are somewhat embarrassed at the present time with respect to doing anything in the way of amending the Juvenile Delinquents Act.
As I understand it, in that case there was a minor, quasi-criminal offence committed-I believe it was under the Highway Traffic Act-and a charge was laid under the Juvenile Delinquents Act, a federal statute, instead of by way of summary conviction. This is what started the whole question of whether the Juvenile Delinquents Act was ultra vires. A great problem is posed at the present time for our ministry in this connection. The report of the Department of Justice, which has been so much referred to, was brought down in the year 1965, I believe, but was not tabled until February, 1966. I see here the library filing mark which says "February 22, 1966." I understand that report took about five years to prepare; therefore hon. members will understand that a great deal is involved in this question.
The aim of Bill No. C-13 is to ensure that no child who has committed an offence shall, upon conviction, be confined in a place of imprisonment for adults. Of course no one disagrees with that. Section 26 of the Juvenile Delinquents Act already contains a provision to this effect. It goes on to say, in subsection 2:
This section does not apply to a child who has been proceeded against under the provisions of section 9.
January 20, 1967

Bill No. C-13 would repeal subsection 2 of section 26 of the Juvenile Delinquents Act. Section 9 of that act provides that where the child is accused of an indictable offence and is apparently or actually over 14 years old, the court may order that the child be tried by indictment in the ordinary courts if the court believes-


The Acting Speaker (Mr. Richard):: Order.


William Arnold Peters: You have succeeded in talking it out.


The Acting Speaker (Mr. Richard):: The
hour provided for the consideration of private members' business has now expired.
[DOT] (6:00 p.m.)



BUSINESS OF THE HOUSE

John Angus MacLean: I wonder whether the acting house leader could inform us of the order of the business to be considered in the house next week?


Mr. Turner:: Mr. Speaker, next week after the completion of the consideration of Bill
Business of the House C-231 we will deal with the following items: Order No. 117, an act to amend the Judges Act; order No. 79, An act to authorize the provision of moneys to meet certain capital expenditures of the Canadian National Railways System; order No. 104, proposed resolution that the standing committee on privileges and elections be empowered to study the Canada Elections Act and to report to the house such proposals as the committee may deem advisable; order No. 105, proposed resolution that the report of the committee on election expenses tabled October 11 last be referred to the standing committee on privileges and elections; and order No. 83, second reading of Bill C-220, an act to make provision for appeals to an immigration appeal board in respect of certain matters relating to immigration. These items will not be necessarily taken in that order, except of course for Bill C-231, consideration of which will be continued.


[Stage Direction]
It being five minutes after six o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Monday, January 23, 1967