1967-06-16

PRESENCE IN GALLERY OF CANADIAN VICTORIA CROSS HOLDERS

Mr. Speaker:: Order, please. May I be permitted to bring to the attention of hon. members the presence in the Speaker's gallery of a very distinguished and gallant group of Canadians, the holders of the Victoria Cross.


Some hon. Members:: Hear, hear.


Mr. Speaker:: The distinguished group will be joined later by our Sergeant-at-Arms.


Some hon. Members:: Hear, hear.
[DOT] (11:10 a.m.)



EXTERNAL AID


Right Hon. L. B. Pearson (Prime Minister):: Mr. Speaker, I should like to announce that Canada is sending-indeed, the movement has already begun-approximately $2.5 million worth of food relief to the Middle East. Of this $1 million worth of wheat flour will be sent for distribution to Palestine refugees through the United Nations relief and works agency. The remainder will go through the world food program to the Arab countries of Syria, Jordan, Lebanon and the Yemen to meet food shortages there.
As an immediate emergency measure the government has also matched an initial grant of $20,000 from the Canadian Red Cross Society to the international committee of the Red Cross for medical supplies to help meet urgent needs arising from the recent conflict.


Right Hon. J. G. Diefenbaker (Leader of the Opposition):: Mr. Speaker, what the Prime Minister has said will meet with general support. However, in addition to the sums to which he has referred and assistance by way of food supplies and the like, there is one paramount question which I should like the right hon. gentleman to consider, namely the terrible possibility that thousands of Arab troops in the Sinai desert apparently face an awful death because of lack of water.
I hope action will be taken with some urgency in this regard. The United Nations has been meeting in a rather desultory way. Nothing has been done by the United Nations to meet this problem, one which cannot be postponed. This is a matter of life and death; and whatever may be the views of people as a whole toward the Arab position if ever there was a case demanding action it is the frightful situation which has developed in Sinai. I hope Canada will give a lead. Apparently the nations of the United Nations are devoting themselves to other matters, but unless we take action immediately to provide some hope of survival for those, whatever their numbers may be, wandering aimlessly over the desert, a sorry situation will be created. This will lead in years to come to resentment which will fester with the passage of time.
We have aircraft in the Middle East. Cannot they be used to convey assistance? Cannot something be done to rouse the United Nations to action now? Delay can only result in disaster and that frustration which comes to hopeless men.


Lester Bowles Pearson: On a question of privilege, may I just say that this matter was raised yesterday by the hon. member for Calgary North and I had intended to deal with it on
orders of the day.


Mr. T. C. Douglas (Burnaby-Coquiilam):: Mr. Speaker, I am sure the people of Canada will support the expenditure which the Prime Minister has suggested for aid to refugees in the Middle East. The $2J million the Prime Minister has mentioned is a relatively small amount but it is a beginning, and I am sure, if on further investigation the government finds that more food and larger sums of money are required to help the refugees of this unhappy war, it will have the full support of the members of the house and of the country generally.
I would also like to associate myself with the plea which has just been made by the right hon. Leader of the Opposition with respect to the plight of the Arab refugees in the Sinai desert. Canada demonstrated when we were taking the Canadian forces in UNEF out of that area that we are capable of putting on a very efficient and effective airlift. I think the Canadian government might do well to

June 16, 1967
External Aid for Middle East offer the services of our air force and whatever helicopters can be moved to that area to take these people out of the Sinai desert just as quickly as possible. I know such a program, if the government were to undertake it, would have the wholehearted support of the Canadian people.
Whatever one may think about the reasons for the outbreak of hostilities, all of us want to see that human beings are protected against an agonizing death, also having in mind that any humanitarian actions we can take at this time will help allay some of the present bitterness and, we hope, might lay a foundation for better understanding in the future.


Mr. A. B. Patterson (Fraser Valley):: Mr. Speaker, we all realize that there has been increasing concern right across this country with respect to the plight of those who are facing starvation and death in the Middle East. We in this group would like to associate ourselves with the expressions of commendation on the fact that the government has seen fit to take immediate action to provide the sum of $2J million to assist in meeting this problem.
As has been pointed out, possibly this will just be a beginning, but I am sure any further contribution that is required will be recognized as worth while. However, I would like to ask whether there has been a concerted plan on the part of European and North American countries to join in this particular program. I think the program should be shared in by all, and not by just a few who perhaps are more than willing to step in and meet their responsibilities.



TRANSPORT AND COMMUNICATIONS


Mr. J. A. Byrne (for Mr. Macaluso):: Mr. Speaker, in the absence of the chairman of the standing committee on transport and communications, the hon. member for Hamilton West I have been asked to move:
That the first report of the standing committee on transport and communications, presented to the house on Tuesday, June 13, 1967, be concurred in.


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


Mr. Gregoire:: On division.
Motion agreed to on division.



HEALTH AND WELFARE


Mr. H. W. Herridge (Kootenay West) moved: for leave to introduce Bill No. C-136, concerning the termination of pregnancy by registered medical practitioners.


Some hon. Members:: Explain.


Herbert Wilfred Herridge: Mr. Speaker, the question of the termination of pregnancy has been the object of extensive study in the last few years, and also of legislation in several countries. Recently a bill has been introduced in the United Kingdom to amend and clarify the law relating to termination of pregnancy by registered medical practitioners. The present bill is inspired by its British counterpart and is for the purpose of allowing medical termination of pregnancy in certain cases under the surveillance of medical and governmental authorities.
I have consulted with interested persons and groups and with eminent counsel in the drafting of this bill, and while its principle is the same as other bills that have been introduced on this subject it includes some modifications of the United Kingdom bill related to Canadian circumstances. I am sure all hon. members will look forward to studying the details of the bill.
Motion agreed to and bill read the first time.
e (11:20 a.m.)



UNITED NATIONS


[Stage Direction]
On the orders of the day:
John George Diefenbaker: Mr. Speaker, it now appears certain that the United Nations general assembly will be convened. Therefore I should like to ask the Prime Minister, in view of the attendance at the assembly of Premier Kosygin and the probable attendance of General de Gaulle, whether he will be representing Canada at that meeting.


Lester Bowles Pearson: Well, Mr. Speaker, as yet no decision has been taken with regard to that matter. The only head of government who has indicated his intention to attend the special assembly is Mr. Kosygin. I will not be making a decision as to whether it is desirable for me to take the place of our ambassador in New York until we have more information from other governments concerning their intentions.
June 16, 1967


Thomas Clement (Tommy) Douglas: have a supplementary question, Mr. Speaker. In view of the fact that the meeting of the general assembly would appear to be an attempt to force Israel to withdraw its troops without any guarantees concerning its future security and existence; and in view of the fact that the Prime Minister himself from time to time has said that it would be advisable to have the four permanent members of the security council meet at the highest possible level, does the Prime Minister not feel that his presence as the head of the Canadian delegation would lend weight to any statement made by that delegation, and would also bring to the discussion his very wide experience in the field of Middle Eastern affairs?


Lester Bowles Pearson: Mr. Speaker, I certainly will not hesitate to go to New York if I feel my presence can be helpful there. I will be making up my mind on this matter over the week end. We are in consultation with many friendly governments as to how best we can proceed in the assembly.


Thomas Clement (Tommy) Douglas: May I ask a further supplementary question. In view of the fact that this meeting of the general assembly of the United Nations will be extremely important, can we get some idea from the Prime Minister as to what position Canada will take on the proposed resolution by the Soviet union, and an assurance from the Prime Minister that Canada will insist that any withdrawal of Israel forces must be contingent upon guarantees to Israel of its recognition by the Arab states, the sanctity of its borders and access to the sea?


Lester Bowles Pearson: I think perhaps, Mr. Speaker, any statement to be made in the house should be reserved until we see the nature of the resolution or resolutions that will be introduced. I assume that may be done tomorrow, when there is to be a formal session, or more likely on Monday. When we know what the resolutions are then perhaps that would be the time to make a statement in the house with regard to our position regarding them. At this moment, however, I do not mind repeating what I have already said, that any request for withdrawal of Israeli forces from the territory they have occupied certainly should be accompanied by effective international guarantees for the security of Israel.


Mr. D. V. Pugh (Okanagan Boundary):: My
supplementary question refers to the attendance of the Prime Minister at the United Nations. He mentioned that he was making a
Inquiries of the Ministry
decision and that it would be based on what other nations were doing. May I ask the Prime Minister if there will be a staying away or a going of the leaders of nations in a group, as they may decide?


Lester Bowles Pearson: What I had in mind when I spoke of consultation was the consultations that are going on with regard to the possibility of meetings behind the scenes at the United Nations as well as participating in the actual work of the assembly. Even if the Canadian delegate, the ambassador, the Secretary of State for External Affairs or myself were not down to speak on this matter until Wednesday or Thursday, it might be desirable to go there earlier than that because of the possibility of consultation.



INQUIRY AS TO REQUEST FOR PERSONNEL FOR TRUCE SUPERVISORY ORGANIZATION

[Stage Direction]
On the orders of the day:
Mr. H. A. Olson (Medicine Haf):: Mr. Speaker, I should like to address a question to the Prime Minister and ask whether the secretary general of the United Nations has requested personnel and equipment to strengthen the United Nations truce supervisory organization. If so, what has been Canada's response to the request?


Lester Bowles Pearson: Mr. Speaker, there has been no request made by the secretary general to Canada or, as far as I know, to any other government at this time for officers to strengthen the truce supervisory organization. I recall seeing a telegram from the commander of that organization to the effect that he had sufficient officers to man the truce supervisory posts that are in action at the present time, so presumably he has enough personnel for his present duties. As far as I know there has been no request for additional personnel.


Horace Andrew (Bud) Olson: A supplementary question, Mr. Speaker. I wonder whether the Prime Minister could advise the house whether the truce supervisory organization is active along all the frontiers between Israel and her Arab neighbours.


Lester Bowles Pearson: Mr. Speaker, I think-and I speak subject to correction-that it is active along those frontiers on which it was operating before the recent conflict, that is along the borders of Jordan, Syria and Lebanon.

June 16, 1967
Inquiries of the Ministry



VIET NAM-INQUIRY AS TO CONSIDERATION AT GENERAL ASSEMBLY MEETING

[Stage Direction]
On the orders of the day:
['Mr. Speaker, it is quite impossible to answer that question at the present time.']
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, my question is for the Prime Minister. Does the Prime Minister know whether the question of the war in Viet Nam will be discussed at the forthcoming session of the general assembly of the United Nations, either on the floor or behind the scenes? If so, what position will the government take?


Lester Bowles Pearson: Mr. Speaker, I do not know what will be discussed behind the scenes. Practically everything is discussed behind the scenes at the United Nations. As far as I understand, it is certainly not on the agenda of the special assembly, which is called for a particular reason not having to do with Viet Nam. Therefore I am not able to answer the latter part of the question.



[Stage Direction]
On the orders of the day:
R.ghi Hon. L. B. Pearson (Prime Minister):
Mr. Speaker, while I am on my feet I should like to reply to the question raised yesterday by the hon. member for Calgary North and again today regarding the disastrous situation in respect of certain Egyptians in the Sinai desert. When this matter was first brought to our attention we got in touch with the Israeli government. After all, the Israeli army is in occupation of this territory and these particular people we are concerned with are members of the armed forces of the United Arab Republic.
We asked the Israeli government for information concerning what is being done and indicated our desire to help in any appropriate way to meet this and related problems on other parts of the border. This morning I have received information that the Israeli authorities are taking all possible steps to avert human suffering. To this end, during the past few days they have been sending air search units to locate the distressed persons in the Sinai. They were parachuting water and food to them wherever possible, and aiding their movement westward toward the Suez canal.
One of the difficulties in connection with helping these people has been that the water pipe lines under the Suez canal had been cut off. It is open again by action taken by the

U.A.R. government and the international Red Cross, but for a time there was no fresh water getting across the Suez canal by these pipes.
John George Diefenbaker: For how long was that?


Lester Bowles Pearson: Just for a few days I think, Mr. Speaker. The Israeli authorities, as I said, were parachuting water and food to them wherever possible. Medical assistance has already been given in co-operation with the Red Cross. We have also communicated with the international committee of the Red Cross in Geneva to ascertain what they are doing with regard to this problem.
In so far as the refugees on the west bank of the Jordan are concerned, the Israeli government reaffirmed what our ambassador told us the day before, that the Israeli government had signed an agreement with UNRWA to co-operate with that agency in looking after the refugees along the Jordan river. Therefore, Mr. Speaker, I think we can get some reassurance from this information that the government in occupation of these territories is doing whatever it can to meet this terrible human problem. Certainly we will be glad to assist in any way we can.


Hon. D. S. Harkness (Calgary North):: wonder if the Prime Minister has any information as to whether the refugees in the Gaza strip and those west of the Jordan have sufficient supplies of food and drugs to keep them going while awaiting the assistance that we and other countries are going to give to them.


Lester Bowles Pearson: Yes, Mr. Speaker. A good many telegrams have come in overnight on this very point and other related refugee questions. From a first examination of these messages it seems the refugees in the Gaza strip are being looked after at the present time. There is no danger of a further breakdown in the distribution of food and supplies. There is enough there under the UNRWA machinery to take care of them until additional supplies arrive.


Alexander Bell Patterson: I think we all realize that Canada has been ready and willing to accept responsibility in various emergencies, but I should like to ask the Prime Minister now if any plan has been developed whereby the European and North American countries will co-operate in meeting the need which has been brought to our attention this morning.
June 18, 1967


Lester Bowles Pearson: Plans are being worked out for co-operation in this very important matter and all its aspects, including the question of refugees. It will take some time for these plans to be worked out even in respect of the immediate emergency. Telegrams I read this morning show that it is not yet quite clear what the emergency is in terms of first requirements.
I quite agree with my hon. friend that this is not a matter for any one country. It is a matter for all countries concerned, especially some of the big powers, if I may say so, who have so actively supported the United Arab Republic and the Arab states in this matter and should be perhaps even more interested than other countries in the plight of the U.A.R. forces in the Sinai desert.
Righl Hon. J. G. Diefenbaker (Leader of lhe Opposition): Mr. Speaker, the Prime Minister the other day stated in general that Canada's position is that it would be prepared to accept some Arab refugees. He said a study was being made of the subject, as I recall it. I now ask the Prime Minister how many thousand refugees Canada is prepared to accept.


Lester Bowles Pearson: Mr. Speaker, it is quite impossible to answer that question at the present time.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Mr. Barry Mather (New Westminster):: Mr. Speaker, I have a question for the Minister of Labour. Having in mind the fact that while there has been some increase in employment in Canada, at the present time there is an abnormally high unemployment rate, 57,000 above this time last year, can the minister say whether he expects this situation to improve, and are any steps being taken to that end?


Hon. J. R. Nicholson (Minister of Labour):: Yes, Mr. Speaker, 1 am hopeful that there will be some improvement. Two significant factors enter into the picture. One is the abnormal number of young people between the ages of 14 and 18 who have entered the labour force during the period in question, and the other is the sudden termination of the construction work at Expo in Montreal. A program of work in Montreal is already well advanced, and I hope it will go a long way toward correcting the situation in that area. In addition other steps are under study.
1597
Inquiries of the Ministry Mr. Thomas M. Bell (Saint John-Alberl): A
supplementary question, Mr. Speaker. Has the minister any hope for the maritimes, where the figures are very serious?


Mr. Donald Maclnnis (Cape Breton South):: Mr. Speaker, I have a question for the Minister of Labour arising from the answer he just gave, but first perhaps Your Honour will allow me to make the observation that I do not think the Minister of National Defence scared the child in the gallery we just heard crying.
My question to the Minister of Labour is, are the Department of Labour, the department of manpower or the unemployment insurance offices registering 14-year olds as unemployed in this country?


John Robert (Jack) Nicholson: Mr. Speaker, the unemployment insurance authorities and the National Employment Service are simply complying with the law.


Malcolm MacInnis: Child labour.


Malcolm MacInnis: Mr. Speaker, I have a further question for the Minister of Labour arising out of his previous answer. I should like to ask him what law under the Unemployment Insurance Act requires 14-year olds to be registered.


Mr. Speaker:: Order. The hon. member
knows he may not ask questions concerning the interpretation of statutes.


Malcolm MacInnis: Mr. Speaker, you ruled that I am not allowed to ask questions relating to the interpretation of a statute. My question was whether there is a statute on the books which would require 14-year olds to be registered.


Mr. Speaker:: That is also out of order.


John George Diefenbaker: Mr. Speaker, the minister having gratuitously made the statement, he should certainly be able to answer a very simple question. Are 14-year olds now being registered in connection with unemployment insurance?


John Robert (Jack) Nicholson: Not to my knowledge, Mr. Speaker.


Malcolm MacInnis: On a
point of order, Mr. Speaker, which arises out of the answer just given to the Leader of the



June 16, 1967
Inquiries of the Ministry Opposition by the Minister oi Labour in which he said that to his knowledge 14-year olds were not registered, may I point out that in his previous answer he stated that 14-year olds were being registered.


Mr. Speaker:: I suppose it is human to err. The minister has given a reply to the question asked by the right hon. Leader of the Opposition, and if there is a discrepancy between that and his previous reply I suggest there is nothing the Chair can do about the situation.



EXPO '67 POSSIBLE DANGER TO PUBLIC FOLLOWING EXPLOSION ON SITE

[Stage Direction]
On the orders of the day:
Mr. Gerard Loiselle (St. Ann):: Mr. Speaker, may I direct a question to the Minister of Trade and Commerce. We all know about the explosion yesterday at the Expo site in which one man was hurt. Can the minister inform the house and the public in general whether there is any danger to the millions of people who will visit the Expo site in the future?


Hon. Robert Winters (Minister of Trade and Commerce):: No, I do not think so, Mr. Speaker. The fireworks were set off within an area which was sufficiently protected so there was no danger to the general public. Every precaution will be taken to see that there will continue to be no danger to the public in the future.



FISHERIES


[Stage Direction]
On the orders of the day:
Mr. Eric Stefanson (Selkirk):: Mr. Speaker, I have a question for the Minister of Trade and Commerce. Does the minister plan on introducing legislation at this session of parliament based on the recommendation of the Mclvor commission that a fresh water fish marketing board be established?


Robert Henry Winters: Mr. Speaker, that matter is still under study with the provincial governments and other interested organizations. I cannot give any guarantee that legislation will be introduced at this session.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Hon. Gordon Churchill (Winnipeg South Centre):: Mr. Speaker, my question is for the Minister of National Defence. It is in reference to a question I asked three weeks ago, on May 25, which has remained unanswered, dealing with the role of our unified forces. The question I put then to the associate minister, but I thought in the interval the minister would bring forth an answer, was as follows:
Is the Canadian unified mobile force now available for-and I use the minister's own words-"putting out, containing or controlling incidents which might escalate into something more serious", and is the crisis in the Middle East the type of incident for which the force has been prepared?
I follow that with this question. Now that the minister has a better appreciation of the realities of modern warfare, is he going to revise this unrealistic policy for Canada's unified mobile force?


Hon. Paul Hellyer (Minister of National Defence):: Mr. Speaker, on the basis of any experience we have gained in the last few weeks we are convinced that the organization we are developing is the one that will be best suited to the needs of our country, and probably other countries as well, in the years ahead; and that the force we are developing will be available for any tasks which are assigned to it by the government of Canada in the interests of the Canadian people.


Some hon. Members:: Hear, hear.


Gordon Minto Churchill: As a supplementary question, Mr. Speaker, instead of generalities could we have a particular incident dealt with? How does the minister consider that the unified force would "put out, contain or control an incident which might escalate into something more serious"? Does that mean the Canadian armed forces would be fighting against both sides?


Mr. Speaker:: Order, please. I would think we are reviving a policy debate at this time, and I doubt whether the supplementary question posed by the hon. member for Winnipeg South Centre is in order.


Gordon Minto Churchill: On a point of order, Mr. Speaker, it is not reviving a policy debate. This statement was made by the minister on April 3, and it was an expansion of his earlier
June 16, 1967

statements on policy. It is very important, particularly when we are looking to the future as to what shall be done to maintain peace in the world. I want to know what the policy is.


Mr. Speaker:: I doubt that the question is the type that requires an answer today. If the hon. member feels it is important and of some urgency, the question might be placed on the order paper.


Gordon Minto Churchill: Mr. Speaker, it has been on Hansard for three weeks.


Lester Bowles Pearson: Put it on the order paper.



VETERANS AFFAIRS


[Stage Direction]
On the orders of the day:
Douglas Scott Harkness: Mr. Speaker, I have a question for the Prime Minister. In view of the fact that this has been designated as veterans week and that only an interim increase in veterans pensions was put into effect something over a year ago, this would seem a particularly appropriate time to announce what the final or complete increase will be. I wonder whether the Prime Minister is in a position to do that at the present time.


Lester Bowles Pearson: Mr. Speaker, it is certainly an appropriate time to raise the matter, but I am afraid it is not a time when I could possibly give an answer. I will give an answer as soon as I can.


Mr. Gerald Laniel (Beauharnois-Salaberry):: Mr. Speaker, my question is supplementary to the one posed by the hon. member for Calgary North and is directed to the Prime Minister. Can he tell the house whether he has heard the rumour that the legislation on veterans pension rates will be implemented before the end of the year?


Mr. Speaker:: The question may be supplementary but it is out of order.


Herbert Wilfred Herridge: Mr. Speaker, I have a supplementary question. Could the Prime Minister inform the house whether the cabinet is giving consideration at this time to an increase in the disability pensions and war veterans' allowance?


Lester Bowles Pearson: Mr. Speaker, as my hon. friend knows, I think, this matter has been under consideration.
Inquiries of the Ministry TRADE



INQUIRY AS TO FINAL DISPOSITION OF GENEVA AGREEMENTS

[Stage Direction]
On the orders of the day:
Mr. H. W. Danforlh (Kent (Onl.)):: Mr. Speaker, I should like to direct a question to the Minister of Trade and Commerce. In view of the fact that the present round of GATT negotiations at Geneva is being concluded and there is considerable concern about the terms of the agreements, may I ask the minister whether these negotiations will be continued if some of the signatories to the agreements find that the terms work undue hardship or will there be a lapse of time over a period of years before a new agreement can be contemplated?


Robert Henry Winters: Mr. Speaker, I would imagine that when the agreements are signed on June 30 or thereabouts they will be regarded as definitive. However, it is always open to any government to take action within the framework of the provisions of GATT if it feels that unnecessary hardship is being caused.



AGRICULTURE


[Stage Direction]
On the orders of the day:
Mr. Auguste Choquetle (Lotbiniere):: Mr. Speaker, my question is directed to the hon. Minister of Agriculture.
As a result of the farmers' march last month, it was decided to hold a day of study, presumably tomorrow. Can the minister tell us whether, on that day, discussions will bear only on the dairy policy or on the overall agricultural problem? Can the minister also tell us whether he intends to announce a new policy to the farm associations?


Hon. J. J. Greene (Minister of Agriculture):: Mr. Speaker, we are meeting the representatives of the farm associations this afternoon to discuss the dairy policy and also I think, the general farm policy.



TRANSPORTATION


[Stage Direction]
On the orders of the day:
Thomas Clement (Tommy) Douglas: Mr. Speaker, in the absence of the Minister of
June 16. 1967

Supply-Registrar General Transport I should like to direct a question to the right hon. Prime Minister. It has to do with the fact that the Board of Transport Commissioners is convening, here in Ottawa on August 1, a conference of all the parties interested in the abandonment of railway branch lines. I wonder whether the government has received any representations from those who may want to make recommendations, particularly farm organizations, as to the wisdom of holding the conference in the prairies and particularly in Saskatchewan where the greater number of affected lines are to be found. Can the Prime Minister tell us whether the government is giving favourable consideration to this reasonable request?


Lester Bowles Pearson: Mr. Speaker, I will have to look into that question and discuss it with the minister who, as my hon. friend may or may not know, has been indisposed this week.



INDUSTRY


[Stage Direction]
On the orders of the day:
Mr. Robert Muir (Cape Breton North and
Victoria): Mr. Speaker, my question is for the Minister of Industry. May I ask the hon. gentleman whether he is in a position today to announce any decision reached by himself or the government on the request made by the delegation which came from Sydney two days ago concerning the possibility of stockpiling steel in an arrangement with Dosco which would probably eliminate the expected lay-offs on June 18. I realize there has not been much time, but I wonder whether the minister has anything to report on this matter.
Hon. C. M. Drury (Minister of Industry):: No, Mr. Speaker; as the hon. member has pointed out there has not been sufficient time to consider this question, but we are working on it.

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



DEPARTMENT OF THE REGISTRAR GENERAL

[Stage Direction]
1. Departmental administration, $625,100.
The Chairman:: This vote will be found on page 456 of the blue book, and the details are listed on page 457.


Hon. John N. Turner (Registrar General):: Mr. Chairman, in undertaking my new responsibilities as Registrar General I want to say to the house at the outset that I am vitally aware of the importance of the task given me, and since this is the first opportunity I have had to speak in this capacity I want to thank all hon. members who have sent me letters or who gave me words of encouragement. I undertake to do my best in this new job.
Last year the former president of the Privy Council explained the rationale of the department in the reorganization bill which set it up. At this stage I should like to say that I had the opportunity of being acting minister in this department for some time during the time of Mr. Favreau's illness. In all my dealings with him, not only serving under him but as a member of this house, I found him to be a Christian gentleman, always a conscientious member of the house and a conscientious minister. I am sure every hon. member here shares my regret that he was constrained to seek relief from the heavy responsibilities which he had here as a minister and as a member of parliament, and wishes him, as I do, health and happiness on the bench of the superior court of the province of Quebec.
This department is designed to bring together several agencies which have a role in defining, shaping and directing public policy in the economic field. On the one hand we have the task of ensuring that our market system is competitive, alive and vital and that public interest is protected in matters re'ating to combines, mergers, monopolies, restricted trade practices, bankruptcies, patents, copyrights, trademarks, corporations and the securities field.
[DOT] (11:50 a.m.)
On the other hand we are just beginning to formulate the kind of role th->t within its constitutional jurisdiction the federal government can play in aiding and assisting the consumer to gain the maximum benefit and enjoyment under our economic system. There have been a number of federal agencies working in this field already Mr. Chairman, and our purpose will be to strengthen and co-ordinate their activities and to add whatever new programs are necessary to give the consumer full and equitable participation in-the market. In this fashion we link together the federal government's concern to see that both the supply and the demand sides of the market are healthy and in balance.
June 16. 1967

So, Mr. Chairman, I see a considerable role for this department. I feel it can help this country in responding to the many significant changes taking place in our economic life, and can contribute to the essential tasks of defining and refining the important relationships among business, the consumer, the investor and the government.
I think I should draw to the attention of hon. member the fact that certain key responsibilities of the department, or the subject matters lying within its jurisdiction, were referred last year, on July 22, to the Economic Council of Canada. The Economic Council was charged with studying certain important aspects of the responsibilities of the Registrar General. I think it would be useful if I read the terms of reference:
In the light of the government's long term economic objectives, to study and advice regarding:
(a)	the interests of the consumer particularly as they relate to the functions of the Department of the Registrar General:
(b)	combines, mergers, monopolies and restraint of trade:
(c)	patents, trade marks, copyrights and registered industrial designs.
That means, Mr. Chairman, that the consumer interest, the area of combines and mergers and the area of patents and copyrights have been referred for depth study by the Economic Council of Canada. It means that this department in bringing forth its policy must have due regard to the reference made to the Economic Council of Canada, and hopefully await the report of the Economic Council on several of these areas.
In the consumer field, in relation to a consumer division in the new department I am hopeful that the Economic Council will report very shortly. I would think the next priority would be in the combines area and then finally in the area of patents, trademarks and copyrights.
This is the first time that a department which was originally concerned with the legal aspects of government and government regulation has been linked to a vehicle of economic policy. So that we are combining for the first time, I would think, Mr. Chairman, the economic and legal tools for the furtherance of a department of economic policy.
Needless to say, in the department a considerable structure will have to be reoriented and built. In the consumer area, for instance, there are several agencies and various departments spread over the government service. In the Department of the Registrar General there has to be co-ordination, and personnel
Supply-Registrar General have to be recruited. The same feature, of course, applies in establishing a federal presence in the regulation of securities. We will also need to strengthen the bankruptcy forces, the combines forces and the corporate law forces of the department if we are to discharge the responsibilities which I am sure parliament and the Canadian people will rightfully impose upon us.
So one of my principal functions in the early stages, Mr. Chairman, is to analyse the structure from the basis of the best budgeting and program analysis possible in relation to the cost and benefits of the program that we hope to inaugurate and implement; and we will from time to time be seeking both internal and outside advice on these subjects.
I think it is important at the outset for members to recognize that the jurisdiction over many of the areas for which the Department of the Registrar General has authority is a shared jurisdiction with the provinces. This is particularly so in the corporate and securities field as well as in the consumer field. So that anything parliament and the government are able to achieve in these areas must be done in close co-operation with the provinces, and I undertake to achieve as best I can both full consultation and close co-operation with the ten provinces of this country.
I should now like to review some of the principal areas falling within my responsibility and for which I am rendering an account to this house. The first matter relates to bankruptcy. Members who have compared this year's fiscal estimates to last year's will notice that the increase in the estimates is due largely to an increase in staff from 27 to 72 positions in the bankruptcies branch as well as an increase from 81 to 102 positions in the combines branch. A close scrutiny of the estimates will reveal that virtually the entire increase in cost will be found to be the result of the increase in personnel and expertise in those two areas. Those increases, of course, reflect public interest and demand as they impose themselves upon the responsibilities that I have been given.

Bankruptcies have aroused much interest recently on account especially of the publicity that was given to some serious and most reprehensible abuses of the bankruptcy process which were uncovered in recent years. It must be agreed that these abuses are most serious and extremely reprehensible.
It is most important that we continue our policy of improvement in this field in order
1602	COMMONS
Supply-Registrar General that the confidence of our fellow Canadians in our system of free enterprise be not jeopardized. Furthermore, it is essential that the institution of bankruptcy itself be completely rehabilitated from the state of disrepute in which it has fallen in recent years, so that it may fulfil adequately the essential role for which it is designed in our modern society.
We intend not only to continue our policy, but accelerate the process of implementation of the measures which are necessary to achieve these goals.
The bankruptcy regional offices in Montreal, Toronto and Vancouver, the setting up of which had been announced at the time of the enactment of the amendments to the Bankruptcy Act in July 1966 have now been in operation for more than two months. The opening of these offices which are staffed with expert auditors and investigators, I am convinced, will be quickly recognized as one of the most progressive measures taken in a long time in the field of bankruptcies and will constitute our most effective weapon against abuses which have been uncovered in that field in recent years.
Although these offices have been in operation for a relatively short period of time, they already have, in many respects, proven their usefulness. With these regional offices in operation, we are in a position to intensify the much needed enforcement of the Bankruptcy Act with regard to offences of an administrative character. These offences, as announced by Hon. Lucien Cardin during the debate on motion for second reading of Bill No. S-17 to amend the Bankruptcy Act, are now prosecuted whenever necessary by the federal Department of Justice. We feel that it is most important that these offences be prosecuted vigorously if we want to stimulate in this field a sense of honesty and integrity which, in the past, has too often been lacking, not only on the part of some trustees but also on the part of some debtors and creditors alike. It is essential, by reason of the far-reaching effects of bankruptcy on debtors, creditors and society as a whole, that the integrity of the procedure be respected. We are prepared to take every step that may be necessary, not only to protect that institution, but also to ensure that it has the respect of all.


Some hon. Members:: Hear, hear.


John Napier Turner: Hon. members are aware, of course, that the federal government occupies only a portion of the larger field of criminal law enforcement when we are dealing with bankruptcies. In the last few years, we have

DEBATES	June 16, 1967
intensified our ties with the provincial authorities. Each level of government is now very much aware of the nature and extent of its responsibility and the improved lines of communication and co-operation that have been, and are still in the process of being developed will bring about, I hope, a much better enforcement of the law in this field. Let us hope that this aggressive approach will serve as a good deterrent on those individuals who are too prone to use the bankruptcy legislation for their own selfish and illegal purposes.
Before leaving this subject, however, I should like to emphasize that the role of bankruptcy regional offices is essential in this field. Its expert auditors and investigators have already proved their usefulness and particularly have had the opportunity to help certain provincial and municipal authorities which are often faced with most complex and difficult problems.
[DOT] (12 noon)
With respect to our bankruptcy legislation itself, I might mention that there are many indications that the amendments of July 1966 to the Bankruptcy Act have already contributed a great deal to correct the abuses that they were designed to remedy. I am not thinking only of the increased powers of investigation of the Superintendent of Bankruptcy but other provisions as well, such as those concerning reviewable transactions, proposals, etc. It must be appreciated, however, that the enforcement of the Bankruptcy Act and the amendments of 1966, however effective and useful they might be, are not, by any means, the complete answer to all of the problems that we are facing in the field of bankruptcy nowadays.
So many developments have taken place in the field of consumer credit, financing, debt collection, commerce and business since 1949 that our present legislation needs to be completely re-appraised and re-assessed in the light of present day conditions. Our approach to bankruptcy problems must be rejuvenated and new solutions must be devised.
As an example of this, I might mention the problem of the wage-earners' or consumers' bankruptcies which, with the ever-increasing rate of consumer credit, is becoming more and more pressing. We have to ask ourselves whether the solutions that have been devised, many decades ago, for the businessmen and the traders are adequate in the case of consumers and wage-earners of present days. We
June 16, 1967

also have to ask ourselves whether our present legislation keeps a proper balance between the opposite interests of debtors and creditors in our changing business and commercial world.
The 1966 amendments dealt with this problem of the wage-earners' or consumers' bankruptcies by providing for an orderly payment of debt. Those provisions have been in force in Alberta since April 17 of this year and, in Manitoba, since June 1. I am not sure, on the other hand, that it might not be possible to find yet a better solution than that contained in the 1966 amendments to the problems of bankruptcies by wage-earners or consumers.
At all events, the report of the three men committee set up to assist the department in its revision of our bankruptcy and insolvency legislation will be, I am sure, most valuable in our study of those problems. We have not asked the committee to study and recommend measures aimed only at mere patching up our legislation. Nor have we asked the committee only to clear up the ambiguities, to recommend a new arrangement of the provisions of the act or to include some partial solutions liable to remedy the most pressing problems, as was done in 1949 at the time of the last revision of our Bankruptcy Act. On the other hand, we asked the committee to make a thorough examination of the legislation, to consider the very assumptions and the underlying principles on which it is based, in the light of present day conditions and practices. We also asked the committee to review all the various machineries and procedures provided by our legislation and to report on any changes it considers necessary concerning our legislation and its administration. This applies not only to the Bankruptcy Act but also to the federal Winding-up Act, the Companies' Creditors Arrangements Act and the Farmers' Creditors Arrangements Act.
I am following very closely the work of the committee and I am in a position to say that it has been most active since its very inception in February 1966. It has already drafted a good portion of the new Bankruptcy Act which the committee will eventually recommend to the government.
However, it must be recognized that effective bankruptcy legislation and a healthy and vigorous administration is not a cure-all solution to the various and complex problems that insolvency may bring about in our modern society. These various measures of which I have just spoken, Mr. Chairman, must be coupled with other legislation that can afford

Supply-Registrar General a degree of protection that is outside the scope of an ordinary bankruptcy legislation.
The Canada Deposit Insurance Corporation Act would fall into this category, as would all these other measures that are primarily designed for the protection of the investors.

To summarize the present state of the policy on bankruptcy, important amendments to the Bankruptcy Act were enacted on July 11, 1966. The work of the advisory committee on bankruptcy also is progressing satisfactorily, though a draft bill completely revising the federal legislation in the field of insolvency and bankruptcy will not be ready for some time-probably not before early in 1968.
We have set up regional offices of the bankruptcy branch. They have been set up, since March, 1967, in Montreal, Toronto and Vancouver and are staffed by bankruptcy investigators and accountants. The role of these offices is to implement the work of the bankruptcy branch with a systematic audit program of trustees, and to investigate alleged cases of irregularities connected with bankruptcies, whether those have taken place before or after the bankruptcy.
The Royal Canadian Mounted Police is cooperating closely with the bankruptcy branch and the regional offices in cases where fraud and other offences of a criminal nature are involved. This summer, between July 9 and 22, we have organized seminars for bankruptcy branch officers at Carleton Place.
We have continued our careful review of trustees' operations, and the licences of more than 60 trustees have either not been renewed or have been restricted to the administration of the estates in their hands.
The bankruptcy branch has circulated bulletins to assist trustees in upgrading their performance. No new trustees have been appointed since April, 1965. An interim policy for the licensing of trustees will be adopted very shortly.
[DOT] (12:10 p.m.)
I should like to pass now to the corporations field where we are studying a general overhaul of the Canada Corporations Act. The purpose of the amendments we wish to incorporate in the act is to bring the federal act into line with the new Ontario legislation as it relates to insider trading, proxy solicitation and so on-amendments which were effected in Ontario in 1966-and the general disclosure of information for the protection of shareholders, particularly minority shareholders.
1604	COMMONS
Supply-Registrar General
The Canada Corporations Act is now more than 30 years old. Intensive study will be necessary to ensure that this act may continue to play a useful role in the development of a modern, outward-looking and efficient Canadian economy. Changes in legislation are therefore seen in the act. Though amended extensively in 1965 and slightly in 1967, it is due for a complete revision because of the growing importance of corporate law and recent developments in connection with disclosure of information in the securities field.
I wish to announce to the committee the establishment of a task force to study the provisions and working of the Canada Corporations Act. The director of the force is Dr. Robert W. V. Dickerson of Vancouver and the associate director is Mr. Robert J. Bertrand of Montreal. The task force will have the services of a number of people who have worked on recent studies for the federal and provincial governments such as the Carter royal commission on taxation and the Kimber and Lawrence committees in Ontario. I am causing a press release to be issued at this moment and hon. members will receive a copy which will contain biographies of all the fulltime and part-time members of the task force. The members have now been assembled and have already held two full two day meetings. The work has been assigned and I have asked the gentlemen involved to follow a critical path approach and to submit their report to me on the specific problems put to them by September 15.
Speaking about task forces in general terms I believe a great deal can be said in favour of bringing in authoritative people from the academic world to give advice and assistance in any field to be reviewed and 1 am delighted with the calibre of the men who have agreed to devote their summer to examining the problems I have described. I believe in mobilizing where possible all the brains in the country for the solution of specific problems, since by using this technique we can bring fresh ideas into government and marshal the views of various interested groups by means of what I call a filter process.
After the task force has reported I hope to submit its conclusions to a reviewing panel of practising lawyers, accountants and representatives of the various interests involved. Then, of course, the departmental officials of the government will consider the results, putting them through another filter, as it were, and finally, when the bill is put to the House of Commons, I expect it will be referred to an

DEBATES	June 16, 1967
appropriate standing committee where hon. members and members of the public may have ample opportunity to scrutinize it and suggest improvements. Our object is to enlarge the scope of the Canada Corporations Act to make investment in Canadian corporations as attractive as possible to Canadian investors and to ensure the most effective investment of resources in Canada.
I pass now to the securities field. A study of the subject within the government is now in its preliminary stages. We are continuing the work wh ch was undertaken last summer to analyse the role the federal government ought to play in this field. When I spoke during the federal-provincial conference on securities matters last April, I envisaged that the federal initiative would lie in four areas. First, the federal government should encourage the provinces to adopt uniform legislation across the country and do everything it could to bring about uniformity. Second, we should establish a central repository of information on security matters, and this we have undertaken to do. Third, the R.C.M.P. would establish a fraud investigation squad, and their services in this field would be available to all provincial securities commissions. Fourth, we should contemplate the establishment of a federal presence inasmuch as the parliament of Canada has jurisdiction over international and interprovincial trading. I want to say that a federal presence in some form is necessary in the national interest. Of course, the cooperation of the provinces is essential and should be sought.
I may say there were two federal-provincial meetings, one in April and one which ended only yesterday. Some very interesting discussions were held and I hope we can envisage uniformity and the virtual elimination of duplication of administration for the better regulation of the capital market in Canada so as to encourage Canadians to invest with confidence in the securities of this country.
Perhaps I may pass now to the field of patents, copyrights and trade marks. My department is also responsible for the administration of legislation dealing with intellectual property. As hon. members probably know, this field was the subject in the late fifties of an extensive study by a royal commission under the chairmanship of the late Mr. Justice Ilsley. The reports by the commission on patents, copyright and industrial designs were tabled in the house in the early sixties but action on them is still forthcoming. My
June 16. 1967

officials were about to recommend legislation in line with the commission's recommendations when further progress was withheld following the announcement last July by my predecessor that the government had requested the Economic Council of Canada to undertake a study of certain important aspects of the responsibilities of the Registrar General and his department, including patents, copyright and industrial designs. I have already drawn this to the attention of the committee.
In the area of copyright also, legislative changes are unduly behind schedule. A number of representations have been received from time to time on behalf of interested organizations urging the government to act upon some of the Ilsley commission's recommendations. The present act requires almost complete revision and here again my officials are prepared to proceed with the drafting of new legislation as soon as the Economic Council reports.


Herman Maxwell Batten: I must advise the minister that the time allotted to him has expired.


Mr. Woolliams:: I should like the minister to continue.


Herman Maxwell Batten: Does the committee give unanimous consent?


Some hon. Members:: Agreed.


John Napier Turner: I am grateful to the committee for allowing me to continue. This is my first opportunity to outline my responsibilities to the house in a comprehensive way.
While I am on the subject of copyright, I should like to speak briefly of the Stockholm conference which is to take place from June 12 to July 14 with the object of revising the Berne Convention which was last revised at Brussels in 1948. The Berne Convention is an international agreement with respect to artistic and literary rights. The Stockholm conference proposes to amend existing requirements for the protection of choreographic works, to broaden the definition of cinematographic works as well as to change the terms of protection afforded cinematographic works, photographic works, works of applied art and works of joint authorship. It also envisages special rules for the benefit of developing countries to facilitate cultural, social and educational expansion in these countries.
[DOT] (12:20 p.m.)
I might take this opportunity to announce that the government of Canada will have at 27053-103
Supply-Registrar General that conference an important delegation composed of officials from external affairs, officials of the Department of the Registrar General, representatives of the C.B.C. and of the National Film Board, as well as advisers from various private sectors.
Upon receipt of the final report of the special committee of the House of Commons on drug costs and prices, I immediately referred its recommendations to departmental officials and these have since been under intensive study. I want to take this opportunity, in my capacity as the minister responsible for the implementation of some of these recommendations, to congratulate the committee for the coherence of its report and for the research and fundamental review that the committee gave this very complicated and delicate subject.
The committee made a number of recommendations constituting a package program designed to bring about a lowering of the cost of drugs to the consumer. Some of these recommendations were directed to the government, some to the medical profession, and some to the industry, both the drug industry and the pharmaceutical industry.
My colleague, the Minister of Finance, in introducing his budget on June 1, announced the removal of the sales tax on drugs and other budgetary measures as part of a major government attack on high drug prices. These measures can only be a part of an effective program to reduce drug prices. The effect by itself of the removal of the sales tax and the lowering of the tariff, while beneficial and necessary to the general program of helping the consumer, will necessarily be limited. Indeed, according to the press some members of the industry have already indicated a somewhat extraordinary reaction to this action by initiating an immediate price increase.
Of the recommendations of the special committee directed to government, some would require legislation. These proposals will be considered on an urgent basis over the summer months and it is my intention that any necessary legislative measures will be announced to parliament in the autumn.
I have the responsibility, Mr. Chairman, of receiving the reports of the director of investigation and research of the combines branch. Turning now to developments relating to the Combines Investigation Act, as hon. members are aware and as I have already mentioned, the government requested the Economic Council of Canada to undertake a study of
June 16, 1967

Supply-Registrar General certain important aspects of the responsibilities relating to combines falling within the authority of the Registrar General of Canada.
When the estimates of the branch were before the house last year there was a discussion of the necessity for increase in staff. I said at the outset that the increase in our spending within this department over the last year related primarily to increase in staff within the combines branch and within the bankruptcy branch. With my full support a continuous program of recruiting professional staff has been in progress during the 1966-67 fiscal year, and the establishment in this respect was increased from 34 to 42 positions as of April 1, 1967. The actual strength on March 31, 1967, was 30 professionals, and since that time additions have been made and several offers of employment have also been made.
The director still considers that substantial staff increases are necessary to cope with the increased work of the branch but he is faced with the difficulty of recruiting, assimilating and training new staff, which necessarily places limits on the possibility of rapid growth of the branch. However, while the major part of the work of the branch must be carried out by officers on the permanent staff, the director from time to time has engaged special assistants for particular purposes and in appropriate cases is prepared to make use of outside assistants.
In increasing the staff of the branch particular attention has been paid to the question of staff for the research section. At the end of the fiscal year 1965-66, one officer had joint charge of the merger and monopoly section and research section, staff for research being drawn from the merger and monopoly section. The permanent professional staff of the section now numbers five, including an officer in charge and four economists, all these officials having joined the branch since April, 1966. In addition, two university professors and four graduate students have been retained by the section for the summer.
We are looking for new legal and economic talent, honed in commercial skills, to give more effectiveness to the branch.
The following research projects are presently under way: First, an inquiry into mergers in Canada in the post-war period 1945-1965, a very important and large scale analysis of all known mergers in the period, designed to assist the government in formulating any future policy in regard to mergers. Second, the branch is undertaking a study of service industries at present not


within the scope of the act, including professional sport. Third, the branch is undertaking a study of concentration in Canadian manufacturing industries.
I want to say that the department has an opinion from the Department of Justice that services are not currently within the ambit of the Combines Investigation Act but I would think, without trespassing on the reference to the Economic Council of Canada, that services constitute a considerable part of the gross national product and we should be thinking seriously about amending the act to embrace the service factor. I would also hope we could contemplate a stronger use of the trade and commerce clause, so as to give the act civil as well as criminal jurisdiction, and with a civil jurisdiction a power to insist on cease and desist orders.
We must also continue the scrutiny of the Combines Investigation Act as it applies to our exporting impetus because there is obviously a difference in the application of the act, recognized already by the statute, as it affects the domestic and export parts of our industry.
A matter of importance in the enforcement of the act has been the size of the fines imposed. While it has not been the general policy of the crown to ask for specific fines but rather to draw all relevant facts, including the seriousness of the offence, to the attention of the court, the policy now is that after obtaining and considering the recommendation of crown counsel in this respect he is instructed to request a minimum fine where the court invites a specific representation.
Until recently the largest single fine imposed was $25,000. In a recent case, however, individual fines ranging up to $150,000 were asked for by the crown. Although the maximum fine imposed on any individual company in this case was $75,000, the total fines amounting to $391,500, the crown is seeking leave to appeal against the amount of the fines levied.
Finally, Mr. Chairman, I would like to address the committee on the matter of consumer interest. As all members of the committee know, there was reference in the speech from the throne to the establishment of a department, or a reorganization of the present department, into a department of corporate and consumer affairs. The legislation concerning the minister's authority and the departmental name-wTe are not yet wedded to any particular name-will be introduced at the present session of parliament in the fall. The
June 16, 1967	COMMONS
contents of the bill will be made known in due course in the proper way, and at that time I would hope we could have a full debate on the scope of the department.
I want to pay tribute to the special joint committee of the Senate and the House of Commons on consumer credit prices. I think that the hon. member for Vancouver-Burrard and Senator Croll played an outstanding role, as did all members of the committee, in bringing the high cost of living and its relative aspects to the attention of the Canadian people and the House of Commons. I also want to applaud in particular members of the opposition who served on that committee, especially the hon. member for Vancouver-Kingsway, who played a very crucial part in its decisions.
Further, I want to pay tribute to the efforts of the Consumers Association of Canada and other groups who contributed to the work of the committee. This committee is in the vanguard of a revolution in the committee system. This committee broke new ground. The use of the committee system in this fashion allows wide public debate. I believe it allows members to be better informed and through them allows the public to be better informed.
I think it strengthens the independence and widens the knowledge and participation of members and the people in the development of public policy. It calls upon the experts and the technocrats, both within and without the government service, to account for and explain the basis behind the policy judgments and decisions. It, of course, allows the private sector and business to bring their views directly into the legislative process. I think this is a very encouraging trend indeed. I should like to see the committee reconstituted in the fall so it may continue its work.
[DOT] (12:30 p.m.)
The broad objectives of the consumer program which the government intends to develop are the following: First, to give the consumer a voice in government; second, by legislation, research and education to improve the quality of consumer demand and to place the consumer in a better position to protect his or her own interest and establish his or her own choice more effectively. I said before that no department of government will be able to protect the consumer. All we can do is put the consumer in a better position to protect himself or herself by assuring that the market forces are fair and equal and that there is as much research, information and public education as possible made available so 27053-1031
DEBATES	1607
Supply-Registrar General that the choices the consumer has to make in an increasingly complex economy are made clear to her. Third, we hope to provide for the orderly channelling of consumer submissions and inquiries which are made to government. Fourth, in consultation with the provinces we hope to work toward unification throughout Canada of a program of consumer protection. Here again it will be necessary to have the closest co-operation with the provincial agencies and departments which now, happily, are beginning to assume some responsibility for this area.
I should like to digress briefly to reply to some very interesting remarks made during the debate in reply to the speech from the throne by the hon. member for Vancouver-Kingsway. She took exception to the department having responsibility for both corporate and consumer affairs. She felt that consumers would be sacrificed to corporations. I hope I have stated her argument fairly and I hope she will contribute to this debate later this afternoon. I should like to say to her as respectfully as 1 can that I disagree. I should like to offer the suggestion to her that I feel she may be misconstruing the mechanics of the department. In order to put the consumer in a stronger position, two aspects of the market relationship must be scrutinized, that is, the supply aspect and the demand aspect, the seller or distributor on the one hand and the purchaser or buyer on the other.
On the supply side the whole field of competition must be looked into. There is the area of fair market practices; there is the area of disclosure so that there is sufficient information available for the investor or consumer. It relates also, on the supply side, to the methods which would enhance the validity of the consumer's choice. There is the matter of the method of packaging, labelling and weights and measures. All these aspects of the supply side involve corporations. They involve, on the part of companies and businesses in this country, self-discipline and selfregulation so that there are competitive forces at play and so that marketing practices are fair and not deceptive.
I would hope that by the concentration of this effort within a department of government we would be able to persuade industry and the mercantile interests to fulfil the objectives we have in mind. If we are unable to persuade them within our constitutional authority as a federal government, we have the power to regulate. This would involve the combines branch, the corporations branch, the securities branch and the bankruptcy branch.
June 16, 1967

Supply-Registrar General
On the demand side there is the necessity that the consumer be informed. This is the primary objective. It involves such things as education and research. The summary of my argument, therefore, is that in order to give the consumer proper representation and in order to give the consumer what protection we can within the limits of government we must have authority over both the demand and supply sides of the market relationship. Otherwise it would be ineffective.
It is not possible for me to state in greater detail at present the government's plans, because in accordance with what I have previously said we want to have the views and recommendations of the Economic Council of Canada when formulating the consumer program. As I said before, we hope these will be available shortly or at least before the fall.
In order to be effective the federal program must be developed carefully, deliberately and not hastily. I should like to suggest a number of reasons for this being so. The federal jurisdiction is limited in this field. We cannot, for instance, contempate direct controls such as price controls or the regulation of industry within this scope because ordinarily these are provincial matters. The federal government does not have jurisdiction over prices. Prices depend on competitive forces. We hope to ensure that the forces are truly competitive. Prices in general depend on the general economic and fiscal policies of the country. Second, we need to consult and liaise with the provinces. We need to do this in order better to supplement and integrate the existing and future provincial consumer programs. In the third place we must proceed carefully because it will take time to recruit and co-ordinate adequate staff. Finally, I believe it is a useful thing to know what we are doing before we do it, because I am very anxious that what we do shall become effective. It is all very well to go off in all directions like a chicken with its head off, but I feel this would only cause unnecessary distortions in marketing practices and would provoke more difficulties than it would solve. If I were to suggest something which perhaps is unCanadian, I might say I think we should have facts before we have policy. I intend to proceed with all deliberate speed in that fashion.
Within the consumers' interest, the department of the Registrar General will have responsibility for the relationship of business with the public, the investor and the consumer. We do not intend needlessly to interfere with the relationship between business and


the investor and consumer. We do not intend to tell the manufacturer what to produce. We do not intend to tell the retailer what to sell or at what price he should sell it. We do not intend to tell the worker where to work and we do not intend to tell the consumer what to buy. We believe in a free market economy. I feel that we should release the competitive forces. This means we must attack monopolies and prosecute seriously all price fixing. It means there must be fair selling practices. We need to do the best we can to ensure that there are fair selling practices. We believe in persuasion before regulation, but we believe in regulation if that becomes necessary. We intend to do that.
Finally, of course, there must be education of the public. The consumer must be equipped by all reasonable means to make valid choices and judge true prices. We hope we can make this a department for the average Canadian. I should like to say that we will place particular emphasis on ensuring that the lower income consumers, those under the poverty level, those who are on the fringe of poverty, those with disabilities and pensioners can expect to have the maximum purchasing power for every dollar.
In conclusion I should like to thank the committee for its courtesy in putting up with such a long statement. I felt that I should outline to the committee the general responsibilities of this department. I should like to say to hon. members through you, Mr. Chairman, that this is a new department. It is a department with an important effort, a pioneer effort. The interests of the consumer, the investor and the businessman are not the responsibility of the government alone but are the responsibility of all of us in all sectors of the economy. I want to say that all members of parliament have a direct responsibility. I welcome comments not only from the floor of the house but if at any time a member from any quarter in the house has any particular point of view to discuss we can meet on a formal or informal basis and discuss it. I welcome constructive criticism from all quarters in the house.
[DOT] (12:40 p.m.)
We seek in this department to become a voice for the consumer in the councils of government, but we also want to ensure that the business interests of the community are able to operate effectively and efficiently. The keynote of our approach is partnership between all the constituents-consumers, investors, business and government.
June 16. 1967

I should like to point out to the members of the committee that this is not an expansion of big government but a reorganization of the existing responsibilities of government. I was looking at the estimates before I came in here and comparing the revenues of this department against the expenditures. This department will cost the Canadian taxpayer, net, $1,278,500. This is a considerable sum of money. However, when that sum is considered in proportion to the $9.5 billion in the estimates we are not going to be one of the big spenders in government. I do not expect any appreciable increase in expenditures, and every increase will be directed primarily toward recruiting skilled personnel to help us achieve the objectives which I have tried to outline. I say this is a reorientation; it is a co-ordination of existing agencies.
I believe that the expenditures of government must be controlled and that priority in spending must be determined. It is on this basis that an effort such as this, being a new one within the federal government and an important one, needs the support, assistance and co-operation of all members in this house and of everyone interested in the problems with which we will be dealing. I say again that we welcome any suggestions and criticisms. We will seek the co-operation of everyone. I want to thank the committee.


Eldon Mattison Woolliams: I have listened with a great deal of interest, Mr. Chairman, to the minister who is a new minister with a new department. I believe he has given it a new look. I feel that the reorganization of some of these departments, particularly those related to this field, is a good thing because it means that some of these activities are being dusted off. As the minister said, some of them have been neglected for a long time. I am going to deal with the department in its various phases. The minister has responsibility for the general administration. He has responsibility for the Restrictive Trade Practices Commission which administers the Combines Investigation Act. He has responsibility for bankruptcy. He has responsibility for the corporations branch. He has responsibility for the patent and copyright branch as well as trade marks and a few other items which are thrown in.
I believe we have heard today a young man of the new generation. I have never been concerned too much about chronological age. I am more concerned about mental age and the ability of a person to keep abreast of the times. I think I can pay the minister this compliment. He is one of those men who
Supply-Registrar General belong to the new generation. Not only is he young chronologically but he is young mentally and is very aggressive and progressive. Mind you, I am going to make some reservations because even when we flatter each other we have to make reservations.
I would say to hon. members through you, Mr. Chairman, that we have been listening to a good advocate. After all, a counsel is a man who sells ideas just as a salesman sells products. I would say the minister is a great salesman. He ended up on the theme of great freedom without control. I am going to put forward particular criticisms of the department itself and what has gone on in the department, but not of the minister or the other members of the department. As I have said, they have dusted off a few of the things that needed to be dusted off. I will come back to that theme.
I still believe, in spite of what the minister has said, that this government-whether the minister has any responsibility for it I do not know-is bringing about more control of business than any government since confederation. I believe there is not much difference between Liberals and Conservatives when it comes to how we say things. However, I believe that the Liberals believe in control and regulation. This is the reason the minister ended on the theme he did because he is concerned that the public should know where he stands.
When I travel throughout this nation I find that businessmen, small and large, farmers and trade union people are concerned about government control and government regulation. Some of the great things the minister has recommended can be done without any element of control. We have today the biggest bureaucracy the country has ever seen. The figures for last year indicate that $1.57 billion was spent on bureaucracy in this country. When I use the word "bureaucracy" I am using it in the broadest sense. I do not intend any particular criticism of any of the members of our public service. I am one of those, and I have said it before, who believe we have probably the best civil service anywhere in the world.
I want to deal with a few of the important items raised by the minister, particularly the Combines Investigation Act. This act is certainly essential. I agree with the minister that just as we have to have a Criminal Code to set a moral standard for the people, so we have to have an act to set an economic moral
June 16, 1967

Supply-Registrar General Standard for business. There is always a danger-I know the minister is aware of it because of his experience as a lawyer prior to becoming a minister-in any group having power such as the Restrictive Trade Practices Commission has. The way the commission implements the law, the degree of harshness with which it is enforced, may prevent a company discussing matters which would enable it to be more efficient in competing with other companies at home or abroad. It was for this reason that when we amended the Combines Act at the time we were the government the then minister of justice, the hon. member for Kamloops, dealt with that very aspect. Certain exceptions were made for the fish industry so we could compete with Japan and other nations.
In so far as the Combines Investigation Act is concerned, the idea is to prevent any phase of business from getting a virtual monopoly. The interpretation of the act with regard to the word "virtual" is that degree of monopoly which is against the processes of law. It is unfortunate that in the past some of the great cases under the Combines Investigation Act, such as the sugar case and the brewery case, were dismissed because the evidence produced was not sufficient. In my opinion there was certainly a virtual monopoly in those cases from the layman's viewpoint, if not legally. As I say, those charges were dismissed, but that does not mean there were not competent lawyers prosecuting those companies.
In dealing with the Combines Investigation Act the minister talked about mergers. There are some mergers that may be very good and there are some which may create what I have referred to as a virtual monopoly. There is a new and, I think, dangerous trend today. I am as much against monopolies as I am against socialism. The kind of free enterprise which I think we should seek is one which would keep average-sized corporations in business. We oppose mergers of the kind where great monopolies in one field merge to control a whole industry, as in the case of the sugar industry in this country. When we have evidence of that the Combines Investigation Act should be used.
[DOT] (12:50 p.m.)
I want to mention something that I believe the Combines Act should look into, and I hope the minister will take note of this. The most expensive thing in Canada today, outside of paying income tax is dying. I have feceived letters about this matter. I am told
[Mr. Woolliams.J
that a monopoly exists today in the case of all the hardware that goes into making coffins. Some hon. members may feel this is a humorous topic, and perhaps it is. But because of this monopoly prices are set throughout the nation. I want to make sure that I do not leave the wrong impression in this regard. The fault is not that of the undertaker or the small funeral parlour in our cities, towns and villages. They have to pay a certain price for materials and that price if fixed. If you go anywhere in Canada you will find there is a virtual monopoly in respect of funeral prices today, not because of the undertakers but because of the monopoly in respect of hardware and the making of coffins.
The Combines Investigation Act should be enforced in this field. It may be found that those who control this monopoly-I will not name them here because I do not believe in carrying on an investigation in the House of Commons, and this information can be arrived at very easily-will be the cause of some sensitivity on the part of the government and other industries. An investigation may put the finger on the pulse of sensitivity in this respect. This virtual monopoly should be immediately investigated.
How much the Combines Investigation Act should be changed to fit new circumstances is something that can only be determined by the future progress of business in this country. I do not believe that the provisions of the act should be implemented too harshly. I am against the kind of decision that has been made in this regard. It seems, however, that the courts have followed this line. Where they found as a fact that there had been a virtual monopoly, say in the field of electrical supplies or plumbing equipment, even if the companies got together at a meeting in order to safeguard their businesses from insolvency and bankruptcy they were charged under the act. I was involved in one of those cases. The argument put forward by crown counsel at that time was that even if it was shown that the companies lost money they were still guilty under the act.
The act does not provide, of course, that there has to be a profit involved, but surely where companies in an industry because of new circumstances, perhaps automation or a change in the economic situation of the country, meet to solve some of their difficulties the act should not be too harsh with them. The act must be changed to fit new circumstances. Sometimes companies in an industry have to meet, and meet legally, in order to compete
June 16, 1967	COMMONS
for the domestic market and export trade. As I have said, if there were not some sort of combine in the fishing industry or other industries of this nation, we could not compete with the United States and Japan. We could not compete in this field if there were not some meeting and agreement among those in the industry. So much for the Combines Investigation Act, Mr. Chairman.
I now turn to the question of patents. This is an area where a young minister with young ideas can step in. Our patents are not recognized internationally; they are not worth anything outside Canada. I will use an example in this respect. A fellow named Goett in Calgary invented a new plow. It not only plowed the ground but pulverized it. You could go into a field cleared of brush and with this plow pulverize the roots and stumps to dust. This made the ground more fertile because the tree material was mixed with the soil. This was a new idea. This man came to my firm and asked us to obtain a patent for him. I have talked to many lawyers about this situation, and I am sure the minister is aware of it. After discussing the question with specialists in the city of Toronto I found that the only safeguard for this man, because big companies in the United States like Minneapolis-Moline and others wanted to get hold of the plow, was to patent the machine in Great Britain and then re-register it in the United States and Canada. This had to be done because the United States does not recognize a Canadian patent; they do not care about it. Words are only words and we can be too nice about these things.
This is only one of the many experiences I have had in the field of patents, and it is one field that needs to be dusted off and looked at very carefully. I hope the minister will give careful consideration to this question. To make patents effective we have to go to the authorities of the United States and Great Britain. It is a blow to our nationalism and our growth when a Canadian patent is good only in this country and is no good in Great Britain, the United States or anvwhere in the commonwealth. I know the minister has to be a little more careful than those of us who sit on this side of the house, but I am sure he will agree with me that Canadian patents are not worth anything outside this country. We are a nation of 20 million people but a Canadian patent does not mean much. In our trade with the commonwealth, the United States and other countries, patents are everything. Our patent law needs a complete overhaul.
DEBATES	1611
Supply-Registrar General
I now come to a matter that is perhaps slightly outside the jurisdiction of the minister, but, after all, he sits with the Minister of Agriculture. I own some registered horses. In fact, I have in Alberta a stallion that was imported from Wales by the Duke of Windsor. This stallion and the horses are registered as purebreds in Great Britain. I can register them immediately in the United States without any trouble. The colts from that strain of Welsh ponies are registred in Canada. The certificates in this country are much prettier; you get a great big star and a lovely signature. I sent the certificate to Washington and they sent them back and said they did not recognized purebred stock registered in Canada. I have letters to prove this. This does not apply only to horses but also to cattle. In western Canada particularly there is a great ranch industry with purebred cattle of all kinds. In order to protect ourselves we have to go to Great Britain to register them and then to the United States. I am fortunate that one of my colleagues is away today and it is my lot to discuss this topic. At one time these matters came under the jurisdiction of the Department of Justice and the Secretary of State. I have had some experience in this field.
These are three matters on which the minister can work. Let us get our patents recognized in the United States and Great Britain. Let us get certificates of purebred stock that are recognized outside Canada. Let us have a document that is recognized in the United States, Great Britain and throughout the world. If action were taken to improve the situation in these three areas a great deal of good would be done for the nation. People are constantly complaining about the problem of registering cattle as purebred. I know that this matter comes under the jurisdiction of the Department of Agriculture but it is very close to the field of patents and trade marks; it is in the same area of law.
I now want to say a few words about the branch of the department that will deal with corporations. It was refreshing to hear the minister discuss this topic so intelligently. This is indeed a big field because, as the minister pointed out, under the British North America Act securities fall within the jurisdiction of the federal government under certain conditions and in other conditions they fall within the jurisdiction of the provincial governments.
I believe that some of the problems that arose recently in Ontario, as a result of which companies went bankrupt and people lost their
June 16, 1967

Supply-Registrar General savings-and nobody in particular is to blame for this-were brought about because the provincial and federal officials were not quite sure of the ambit of their jurisdiction. As a result the provincial government waited for the federal government to do something and the federal government waited for the provincial government. Therefore the proposal of the minister is good; it is good philosophy. As I understood the minister-and I made a careful note of what he said and listened carefully to him-the government will work out with the securities commission and the provinces a system similar to that used in Ontario, which everybody recognizes is the soundest in Canada. We have copied it in Alberta. We should work out a plan, after liaison between the federal government and provincial governments, whereby we can administer securities without there being a conflict of jurisdiction.
[DOT] (1:00 p.m.)
I see it is one o'clock, Mr. Chairman. Will we take a break for lunch today? I would like one as on Fridays I am more hungry than on other days of the week.


Herman Maxwell Batten: Order, it being one o'clock the sitting is suspended until 2.30.
At one o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at 2.30 p.m.
Herman Maxwell Batten: Order. House again in committee of supply, estimates of the Registrar General, vote No. 1.


Eldon Mattison Woolliams: Mr. Chairman, at the adjournment I was speaking about corporations and securities. I said that perhaps the big problem at the time of the collapse of Atlantic Acceptance Corporation and Prudential Finance Corporation was that neither the province nor the federal government appreciated the jurisdictional aspects and nothing was done to warn the people who had placed their savings in those concerns about the economic and financial catastrophe which resulted.
The minister said that he does not want to regulate such concerns and it is true, I think, that most people would agree with him. The minister said that what we need is the kind of regulation that protects the Canadian investor. I am not one of those who go along with the arguments of my hon. friends to my left,

which are sometimes heard not only to my left but also in other parts of the house. When a person wants to invest his money in stocks he must accept the fact that some element of chance is involved. If he is not prepared to take a gamble he must confine his activities to a yield of 4 or 5 per cent in the bond market. But there must be a certain degree of freedom in the investment field so that people are encouraged to invest their money. If the field were too well controlled by the securities commission, you would never be able to change a private company which has certain objects into a public company and sell the stock to the public. Nevertheless, as I say, at the same time the public must be protected.
Before I leave the subject, Mr. Chairman, I dealt earlier in my remarks with the monopoly position that obtains in certain aspects of the work of funeral directors. I should like to put on record, because it is interesting, that preliminary investigation shows that there are 51 firms in Canada making caskets and 8 manufacturing embalming fluid. It is also interesting to note that only one or two firms control the manufacture of hardware for caskets. Therein lies the monopoly.
It is further interesting to note that there is no record of who the directors are of the National Casket Company of Toronto, which is also engaged in the manufacture of embalming fluid and accessories. Neither is there any record of other business details in connection with that company. The National Casket Company of the United States, which has its headquarters in Boston, has no Canadians on the board. Indeed, there is no hint of any Canadian connection. There is no business directory which shows that Mr. McConnell is connected with anything but publishing and sugar. There is a variety of material available, pro and con, in connection with the unnecessary and extremely high cost of funerals, but none of this material is more recent in date than 1960.
I think that this is a field which should be investigated immediately in order to ascertain who controls the casket and embalming fluid manufacturing companies in Canada. This would be, of course, the job of the restrictive trade practices branch. I have always found that when they conduct an investigation they do a very thorough and capable job. They have the kind of personnel we need in this field. I am not ignoring the services of the director of that branch when I say that, but I do know that the men working for him, some of whom have not been trained in the field of
June 16. 1967

law, do an exceptionally good job of investigation and inquiry in relation to preliminary matters which may lead to a prosecution.
1 should like to review one other matter before I go on to another aspect. I pointed out this morning that the statute relating to patents has been so long embalmed that if under its terms a Canadian applies for a patent for an invention and that patent is not registered properly in the United States or in Great Britain, someone else in either of those countries can copy the invention and sell the same thing back to Canada and there is nothing that can be done about it. In effect, it means that a Canadian has to ignore the Canadian statute and make sure that his patent is registered properly in the United States or Great Britain so as to protect his own interests.
I will now turn to the proposed department of consumer affairs. The minister mentioned drugs and the reduction in tax. I think that this problem is very well summed up in an article to which I should like to refer for a moment, because in my opinion drugs are the biggest racket there is. This is an extract from the Albertan for June, 1966:
Your friendly neighbourhood druggist is a spoke- often an unwilling one-in a free-wheeling, sugar-coated racket.
Each day hundreds of thousands of dollars are wrung out of Canadians for badly-needed prescription drugs, and almost without exception the customer shells out from two to ten times as much as he should.
There is a good example here to which I might refer:
[DOT] (2:40 p.m.)
A German company seized during the war, it was sold to private interests in 1952 for $29,000,000, and chalked up such fat profits that the owners got their investment back in 51 years. During this period the hottest item was an anti-arthritic with the generic name prednisolone. A package of 100 tablets cost the firm $1.57, wholesaled to druggists for $17.90, and retailed at $29.83.
In Calgary. That represented a mark-up of 1,863 per cent.
The same drug was available at the time from a small U.S. generic company at wholesale price of $2.70 per 100.
That was the price they charged instead of $17.90 per hundred.
Words are great. We have our committees and our investigations and they look into this and that and everything else. We want action. The Canadian people are crying for action so far as the drug industry is concerned. Today is the day of pills. That is what people take after going to the doctor. There is a shortage
Supply-Registrar General of doctors, and people are taking pills and drugs. As I say, today is the day of pills. If you have an ache here or an ache there, or a pain in this or that part of your body, pills are prescribed for you. This is the era of drugs. We have advanced far and drugs are helping to keep people healthy. The drug industry knows that this is the age of pills and it has moved into the racket. That is what it is.
We talk about medicare, but the great difficulty these days is not in paying the doctor but in paying the druggist. The doctor may charge you $5 or $10 for an interview but the druggist charges you $25 for the prescription. This is where the problem arises and this is what must be examined and dealt with. The drug industry is a monopoly. In Canada as well as in the United States it has become a racket, and in this country we have only scraped the surface of the problem.
The minister talks about the cost of living, but we must be fair. The Canadian cost of living has been increasing since 1963 and has increased at a much faster rate than at any other time since the war. When we talk of the cost of living we really are talking about consumer credit and the prices consumers must pay, and some of the responsibility for the increase in living costs must be borne by the government.
When the Conservative party formed the government from 1957 to 1962 there was somewhat of a recession in the United States which was reflected in Canada. The leading economists of that time agreed that there was a case for deficit financing. Yet today, when the economies of Canada and the United States are rising and are better than at any time since 1962, we have deficit financing. We have a deficit of $700 million and a new kind of budget. We do not know what would have happened had there been an orthodox budget. When one adds to that deficit the $600 million to be spent on medicare, which is to begin next July, the total deficit will be in the order of $1,100 million.
The minister talks about free enterprise. What is the matter with the country today? Why do we have these combines? Why do we have these monopolies? It is not because the combines investigation people are not doing their job but because governments-not only on the other side of the house but also formed from this side-have been bringing in, beyond the ability of the gross national product of Canada to bear, such grandiose plans that the government spending has necessitated high taxation.
June 16, 1967

Supply-Registrar General
In any small business the greater partner is the government. You cannot tax a small medical clinic, a small legal firm or a small business firm up to 50 per cent of its income and expect it to stay in business and compete with monopolistic groups that have a large turnover for their products. As a result, no matter in which Canadian city you conduct your research you will find the small storekeeper, the small druggist or the small professional man going out of business. I know of a firm of four people which employs a staff of six. Of those six, two are employed to fill out government forms.


An hon. Member:: Hear, hear.


Eldon Mattison Woolliams: I hear my left-wing friend saying, "Hear hear." He is happy.
The Dominion Bureau of Statistics sends out forms demanding that they be filled in and returned. Anyone failing to comply with such requests is subject to a fine. Added to that, employers are faced with income tax forms, unemployment insurance forms, pension documents. Two people are needed to fill out forms to take care of every four employees. In the big, automated businesses, machines cope with the demands of bureaucracy, demands which are ever increasing under this government. Small businesses, which have to hire employees to cope with this work, are being driven out of business. That is why we have monopolies. The cost of living is partly the responsibility of this government. The only real new wealth in Canada is not created by the government spending money but is brought about by the creation of capital from the production of goods in the nation.


An hon. Member:: Hear, hear.


Eldon Mattison Woolliams: I am glad that my hon. friend from British Columbia agrees with me. He does not always agree with me.
Now I come to the subject of bankruptcy. The minister told us about the new act and about the new set-up in the bankruptcy field. His speech was full of words and fine phrases, but there are other matters that I and other hon. members would have liked to hear about. Has there been any investigation into the group bankruptcies that we have heard about in this country? What about the lawyer, whose name for the moment escapes me, who 18 months or two years ago after investigating bankruptcies was murdered? Has that crime been solved? The Prime Minister talks about syndicated criminals and the bankruptcy racket. What has he done to bring about a solution of the crime?

The house spent some time during the last session of parliament debating capital punishment. The Liberals for once sent their whip home and we had a free vote. We voted against the abolition of capital punishment. I took the position that the government has power to commute and that the government, unless it abuses that privilege, is not flouting the law. Is that privilege to be exercised on behalf of syndicated criminals of the kind who murdered the lawyer or who murdered the 11 people who were discovered buried in lime in the Montreal district? Members of parliament voted to retain capital punishment so that society would have protection against such criminals. There must be some reason for crime to be increasing. The British are reviewing their criminal laws on the subject I spoke of earlier. Why should this matter once again come before this house?
I shall now return to the subject of bankruptcy. I hoped that the minister would give us information. It is true that we have a new act, but that does not mean to say that syndicated criminals in the bankruptcy field will not find ways to enrich themselves at the expense of Canadian business. That sort of thing has been going on for a long time. It is a racket.


Herman Maxwell Batten: Order, please. I must advise the hon. member that the time allotted to him has expired.


An hon. Member:: Go on.


Herman Maxwell Batten: Has the hon. member
unanimous consent to continue?


Some hon. Members:: Agreed.
[DOT] (2:50 p.m.)


Eldon Mattison Woolliams: I have only a few minutes to go. I have tried to summar'ze my remarks. I may be the only member from our party to speak on these estimates. We are trying to cut down the number of speeches. The minister may be glad to hear that I believe I am the only speaker from this party-there may be one other. So it is likely the estimates will get through quickly and we can turn to other business.
I was discussing bankruptcy. The former minister of justice, Mr. Cardin, set up a commission of three people to investigate the bankruptcy field. I should like to know what this commission had to say. I should like to have its report summarized for my benefit and for the benefit of the country. I notice
June 16, 1967

there is nobody in the press gallery so perhaps it will never be summarized. When we are absent they mention it, and I do not see why we should not do so when they are absent.


An hon. Member:: They can hear you upstairs anyway.


Eldon Mattison Woolliams: That will be very refreshing for them. Bankruptcy is a specialized field and I feel that special courts should be set up to deal with it. There are very few solicitors who understand the law relating to bankruptcy and, as a matter of fact, few judges understand it. In most districts the practice is to appoint one judge with special knowledge in this area and he does 90 per cent of the work. Of the small group of solicitors who understand bankruptcy law, few have knowledge of the criminal law, with the result that it is difficult for them to detect offences under the Criminal Code and prepare charges, when there is evidence of fraud, with the evidence necessary to bring cases before the courts of law.
In summary I maintain, in spite of what the minister has said, that the government has shown little more than a readiness to make regulations and regulate the lives of Canadians. We can point to examples. With regard to the pension plan, for instance, the nine provinces were told: This is what you will get. The former minister, now Secretary of State, told the premier of Alberta: If you don't like it, you will pay for it anyhow and you will not get the benefits. Hon. gentlemen over there are placing business in a strait-jacket as a result of increased bureaucracy and stricter control. They are increasing taxes, already heavy, as an indirect way of socializing business.
I hope, therefore, that when the minister comes to answer some of the questions I have raised he will get away from his beautiful phrases, dust off some facts and let us have some concrete information about the bankruptcy situation. Let him tell us what he is prepared to do with regard to patents. Let him tell us how he proposes to increase liaison between the provinces and his department so far as corporations are concerned. If he keeps these suggestions in mind I think he will be running a very efficient department.
I began on a note of commendation and I meant it. I think we heard this morning a new generation speaking in the House of Commons. I hope I have measured up to my
Supply-Registrar General responsibility by calling to the minister's attention some of the difficulties with which he will have to cope. He is new in this department. Every young man is out to make his name, and I know the hon. gentleman is no exception. He is politically ambitious, and it is no crime to be so. I wish him the best of luck. Maybe next year when the estimates are before us again he will be able to tell us that the patent law of Canada means something to Canadians, will be able to give us a full account as to how the bankruptcy law is operating to clear up crime and a full report on the legislation he has been able to work out with the provinces to control fraud in the selling of stocks and securities so as to protect Canadians who have invested in their nation and who have faith in their nation.


Mr. Howe (Hamilton South):: Mr. Chairman, listening to the statement made by the hon. member for Bow River about funerals and embalming I could not help contrasting the morbidity of those remarks with the enlightened observations of the minister, whom I congratulate. The house was certainly left in a different mood. I hope the hon. member for Bow River does not become too confused when he has to look to the right to the left.
I wish to speak about the cost of drugs in Canada, about combines and monopolies, about competition or the lack of it in the drug industry. It is my intention to discuss drug prices in the hope the government can produce legislation which will effectively lower the prices of drugs to Canadian consumers. The hon. member for Bow River made a casual reference to drugs. I intend to devote my entire remarks to that subject and will refer to the studies which were made by the committee and information which I myself have gleaned since the committee last sat. I believe the prices of drugs could be lowered by changing the patent law and by easing compulsory licensing regulations. By way of background I shall seek to explain why the price of drugs is today at such a high level.
It has been stated that drug prices in Canada are the highest in the world. Responsibility for this lies, in my opinion, with a monopolistic group known as the Pharmaceutical Manufacturers Association of Canada, referred to as P.M.A.C. for the sake of brevity. This is a combination or combine of 57 drug companies which manufacture 85 per cent of the prescription drugs used in Canada today. They do not compete with each other in price and I like to consider them as a
June 16. 1967

Supply-Registrar General private club to which a manufacturer can belong if his prices are high enough and if he is capable of making a brand name drug with a long name.
This association is monopolistic, as I have said, because there is no competition except in the volume of advertising directed to doctors. Doctors are swamped with advertising material to the tune of $5,000 per year per doctor. Efforts are made to influence them through direct mail advertising amounting to something like a pound of literature a day, most of which is thrown immediately into wastebaskets. The companies use advertising in journals, particularly medical journals including some owned and produced by themselves in which commercials are interspersed with bits of medical information. In addition, gimmicks are given out whose value is difficult to estimate. Certainly they have some value, though no medical information is contained to enable a doctor to decide scientifically which drug he should prescribe for a patient.
I believe-and this was not contradicted in the committee-that there is no direct relationship between the cost of manufacturing a drug and the ultimate selling price to the consumer. I should like to refer to a brief submitted to the special committee on drug costs and prices by the government of Alberta. It was written by Mr. Henry Steele, a professor at the University of Houston, Texas. It is one of the most comprehensive briefs I have ever read. It contains more than a hundred pages and I agree that it is an excellent piece of work. Referring to the Hoffman LaRoche submission to the committee, Mr. Steele states:
[DOT] (3:00 p.m.)
The submission relates that Bell-Craig, in its application for a compulsory licence for chlordia-zepoxide (the so-called "Librium") maintained that while it could not estimate its probable cost of manufacturing the drug very accurately, this was largely irrelevant to the selling price. Roche agreed without comment. The implication is clearly that prices need not be related to costs, and that the cost is so small relative to price that substantial variations in cost would have no significant effect on expected profit margins.
I quote further from the same brief:
Although the "broad-spectrum" antibiotics ail sell at virtually identical prices, production costs appear to differ greatly, at least on the basis of available cost information.
This, Mr. Chairman, certainly proves the point that there is no direct relation between the cost of manufacturing and the ultimate selling price.

When the P.M.A.C. group appeared before our committee I had in my possession at that time a list of 56 drugs with the manufacturers' selling prices to the retail outlet, the drug store, in England, compared with the cost that druggists pay in Ontario for the same drugs, according to the cost book. In this list of 56 drugs there was a differential in price of up to 20 times as much in Canada as in England. One particular drug was sold in Canada at $10 per hundred to druggists, while the same drug sold at 50 cents a hundred to druggists in England. The brand name was the same. The differential had nothing to do with generic manufacturing.
This posed a problem for the P.M.A.C. and their economist took one whole week end to work it out in order to try to give me an answer. In the answer he came up with he lumped together all 56 drugs on my list, not all of them having a price variation of 20 times as much, and devised a factor of the number of hours of work necessary in Canada compared with the number of hours necessary in England to buy this basket of drugs. Then he used this factor, which I believe was 2.4 or 2.04, and multiplied all the English prices by it. This did not bring them quite high enough, so then he went into various other explanations of their system of retail pricing, wholesale pricing, and so on. If we were to accept this explanation, then by the same token I would presume that if I went to India, or any other less developed country, I should be able to purchase a brand new Ford car for about $400, using this line of reasoning. I cannot see that this line of reasoning is acceptable in trying to rationalize the price of drugs in Canada today.
To cite specific examples, Smith, Kline and French is a drug manufacturing company which is a member of this private club. They manufacture a drug known as stelazine, and in 2 mg. size the subsidiary company in Canada was recently purchasing it from the parent company in the United States in dosage form, in other words, in completely manufactured tablets in bulk, all ready for bottling and labelling, at a cost of $1.32 per thousand tablets. These ultimately are sold to the consumer at $6.50 for 50 or $125 for $1,000. I make this out to be a 9,700 per cent markup. I know that labels and bottles are expensive and that pushing drugs is expensive, but I cannot see that a 9,700 per cent mark-up is justified.
I have with me today a book I recently got, printed in 1967, called "The Pill Conspiracy," by George Johnson. It is a very revealing
June 16, 1967	COMMONS
book and should be read by the minister if he is going to do anything at all about drugs. It has been stated that drug prices averaged out only come to double the average profit of over-all industry, which really brings a tear to your eye when you stop to think that the drug manufacturers can only make double the average profit at the expense of sick people.
This book takes individual companies to give a comparison, which is the only fair way of doing it. Based on percentage of sales, which in a sense is not a fair way of estimating profit-it should be figured on dollar investment-this book lists the top 50 industries as individual companies. It shows, for example, that Dupont makes a 22.8 per cent return, General Motors 22.8 per cent and I.B.M. 19.1 per cent. No. 4 on the list, at 35 per cent, was American Home Products Corporation, which owns two or three of our previously Canadian drug manufacturing companies. Smith, Kline and French, which I have just referred to, is No. 6 on the list at 33.9 per cent. All in all, in the top 50 there are six drug companies which are making profits at this level.
To give another example, Mr. Chairman, there is an antibiotic sold by Parke, Davis which, interestingly, is imported from Italy. It would not pay them to manufacture it themselves. They buy it from the very same place in Italy from which they complain we should not buy low quality drugs. They bring it over here, make tablets out of it, bottle, label and sell them. With duty paid the price goes from $1.52 per hundred to $51 per hundred. This leaves quite a bit of leeway too.
I would like to refer to patents in connection with this matter and in particular to Pfizer, a drug manufacturing company which instigated the use of some of our wide-spec-trum antibiotics. This will show what patents tend to do to drug prices. Pfizer's manufacture a drug known as terramycin, whose generic name is oxytetracycline. Its patent on the drug recently expired, something which has happened to very few modem drugs because patents last for 17 years. Pfizer was selling the drug at $16.76 per 100 250 mg. capsules, and here I am taking the liberty of changing shillings and pence into dollars and cents.
About April, 1966, Imperial Chemical Industries started producing and selling oxytetracycline under the trade name imperacin. Its price to druggists for 100 250 mg. capsules was $5.55, one third of Pfizer's price. Since then Pfizer's price has dropped from $16.76 to $12.58. It must not be forgotten that Pfizer had the advantage of having the market for a
DEBATES	1617
Supply-Registrar General period of 17 years and was known as the manufacturer of oxytetracycline.
In addition, these companies are protected by antiquated patent laws and patents which apply to the processing in Canada and by anti-dumping duties, prior to the budget earlier this month, which were based on class or kind imported into Canada. As I understand it, the word "class" has been eliminated and the duty is based now on kind only.
Manufacturers have a great deal of difficulty in acquiring a compulsory licence, and the initiator of a drug also has the advantage of new drug status for five years. There has been an actual example in history of a company which, having a compulsory licence applied for against it, in turn applied to be reinstated on a new drug status in order to protect itself against having a compulsory licence granted whereby another company could manufacture its drug. The idea of new drug status is to keep a drug under the control of the initial manufacturer so that any side effects can be reported and the food and drug directorate can take steps to remove the drug from the market, or whatever the case may be.
In order to ensure that drugs sell well and that the doctors are properly brainwashed by the brand name companies, these companies send detail men to doctors' offices in order to push the sale of their drugs. They do not really teach a doctor anything except the advantage of the taste of a drug, its colour, its size, and the brevity of the name of the drug they are pushing. Their second purpose is to disparage the use of generic drugs. They do not do this openly or overtly but nevertheless they give the doctor the feeling that any generic drug is second rate. The suggestion is that the doctor would not want to give his patient a second rate drug. Because doctors are very busy they are very vulnerable to such propaganda. It is easy to remember a trade name, and the doctor does not do the purchasing. The purchasing is done by the patient, so the price is of no real concern to the doctor.
[DOT] (3:10 p.m.)
At the same time the drug manufacturers, through the detail men, are providing the only form of continuing education that the doctors receive. The detail man brings the drug and the information right into the doctor's office. He brainwashes the doctor. He tells him that the only drug he should use is the one from his company. He does not tell the doctor anything about price nor does he suggest a price which should form the basis for competition. This leaves the doctor in the
June 16. 1967

Supply-Registrar General position of being the agent of the drug manufacturers. He does not buy the drug himself but he receives the advantages, if any, of all the advertising and all the gimmicks. Yet it is the patient who spends the money.
I should like to refer again to the book known as "The Pill Conspiracy" in order to read two paragraphs which appear at page 156:
The American companies took an intense interest in how the Italians could sell tetracycline anywhere near as good as the domestic brands for as little as $1.43 per one hundred.
The American Cyanamid Co., parent of Lederle Laboratories, soon discovered that some Italian brands were not almost as good, they were precisely as good-because they were precise copies of its patented product. It had no legal recourse in Italy, which has no patent laws, so it started investigating to find out how the Italians obtained the mold cultures and production knowledge essential to duplicating achromycin.
This is the trade name under which they sell tetracycline.
In a recent issue of the AFL-CIO News of May 13 there is an article by Sidney Mar-golius. One sentence reads as follows:
The F.D.A.-
The food and drug directorate in the United States.
-pilot study reports that 7.7 per cent of drugs sold under generic names, which it had tested, and 8.8 per cent of those sold under brand names failed to meet acceptable potency standards.
In other words, 8.8 per cent of the brand name drugs were unacceptable and 7.7 per cent were unacceptable among the disparaged generic names which it is suggested it is inadvisable for the doctor to prescribe. These companies have a great deal of difficulty acquiring a compulsory licence. They cannot obtain a compulsory licence on imported manufactured products. Basically the price is much less.
There is another example involving a tranquillizer. We seem to be in an era of tranquillizers. If you are not in it you are not taking tranquillizers. Equanil, which is the brand name for meprobamate, sells to the patient for approximately $10 per 100. The brand name drug is purchasable for $6 per 1,000. Tetracycline here in Ottawa-and I made inquiries to ascertain this-can be purchased by the druggist for $2.50 per 100 whereas the previous price he was paying was $18 per 100.
There is a problem here in respect of drugs which are prescribed by a doctor in their generic form, because the druggist is able to dispense either the brand name drug or the 
generic name drug. If he is going to make 40 per cent on the sale, it naturally will pay him to dispense the most expensive drug he has. It has been my suggestion-there are drug stores across Canada which are doing this -that druggists should dispense on a cost plus a professional fee basis. I realize that this will make the very cheap drug a little more expensive for the patient but it will make the more expensive drug much cheaper and will stop the temptation of the retail druggist to dispense the most expensive brand he has in his store.
I should like to refer again to the book "The Pill Conspiracy":
McKesson & Robbins put its generic tetracycline on the market at $6 per one hundred capsules- compared to $17.60 for the brand names-and the pharmacists of America promptly provided the public with an education as to their pricing practices.
They had been selling the brand names at about $5.70 for 16, for a profit of almost exactly 100 per cent. When McKesson & Robbins cut the wholesale price 66 per cent the pharmacies reduced the retail price to $4.40 for 16, increasing their profit to almost 460 per cent!
So one can see the advantage of what I have just said. It is acutely necessary that druggists get into the habit of dispensing on the basis of cost plus a dispensing fee. I should like to cite one more example from this book:
Senator Long found an even wider spread between the public and government prices for a reserpine brand named serpasil. As serpasil, he said, it cost the druggist $39.50 per one thousand. As reserpine, it costs the government 47 cents per one thousand. The cost to the patient is about $65, versus 47 cents that the government pays.
This is a large price spread. I do not see how the minister can do other than agree that there is a monopoly, a combine and almost everything there should not be so far as the P.M.A.C. group of manufacturers in this country are concerned.
Dr. Chapman, the director of the food and drug directorate of Canada, appeared before the committee and made the statement that generic drugs basically are just as good as name brand drugs. They have the protection of the new drug standards. The brand name companies maintain that if it is a brand name drug this means it is a quality drug. I suggest that the brand name does not mean quality. It is not a synonymous term. Quality is determined by how the drug is manufactured and not by the name which appears on the label or how pretty the bottle is.
June 16. 1967	COMMONS
[DOT] (3:20 p.m.)
There is one way that people can do something about lowering drug prices and that is by shopping for their prescriptions at various retail outlets. They will find a considerable difference in drug mark-ups at discount stores as a result of volume sales. The patient can also go to the doctor and ask for the generic name. The patient really has just one choice when he shops and that is the store to which he goes. If you go to buy a loaf of bread or a can of vegetables from a store you have two choices. You can go to whichever store you like and you can buy whichever brand you want, realizing that they are all expensive. In any event you have a double choice. With a prescription you have only one choice and that is as to which friendly neighbourhood drug store you take your prescription.
This means that we have a powerful moneyed group which is subsidized by the sick and partly by the doctors who are writing prescriptions because of the pressure exerted by this monopoly group. The expense of research is subsidized by the sick who can afford it the least.
I found out to my amazement that the P.M.A.C. did not like some of the things I have been saying, and I have proof of this fact in a letter I received about a month ago from the president of the P.M.A.C. I should like to put it on the record in sections and comment on them. It is from Dr. W. W. Wi-gle. Dr. Wigle was previously the president of the Canadian Medical Association and he was hired to try to add an air of decency to the Pharmaceutical Manufacturers Association. He starts off by saying:
Dear Dr. Howe:
As a physician I am amazed at the interpretation of your remarks printed in the Ottawa papers recently.
He referred to the interpretation of my remarks. Actually I said these things and there was no interpretation necessary. Today I believe I have made my point very clear so there is no need to interpret any of my remarks. They can be reported verbatim. The letter continues:
Having presented factual evidence to the parliamentary committee on which you served that the manufacturer's portion of the prescription dollar is 37J per cent I cannot imagine how a reporter would get the impression that a reduction (or the complete elimination) of the manufacturer's portion could reduce the price by 75 per cent. We quoted from figures supplied by the pharmacists' association, not the P.M.A.C.
I made the statement that drug prices could be lowered by 75 per cent, but this outfit has
DEBATES	1619
Supply-Registrar General the ability to twist figures around to make it look as though it is a charitable institution and that only 37| cents could be taken off the drug dollar. But it does not stop to think or purposely avoids stating that there are different kinds of dollars. I would be very willing to let these people have 37\ per cent of my drug dollar but it would be a great deal less than the one they have in mind. Perhaps they should have 40 per cent of my dollar if they need the money, but each dollar would be a lot smaller and there would be fewer of them.
Government offices invariably purchase drugs from drug manufacturers on a tender basis and almost invariably they buy generic drugs. If drug stores were to work on a Canadian formulary basis under which drug companies submitted tenders to the drug stores it would be amazing how far the 100 per cent they have in mind would drop. In some cases it would drop to 10 per cent. In this way drugs would reach the drug stores much more cheaply and the stores would only have to carry one brand. This would eliminate about 30 per cent now being spent on the advertising done by the drug companies.


The Acting Chairman (Mr. Tardif):: Order, please. I regret to inform the hon. member that his allotted time has now expired.


Some hon. Members:: Carry on.


Paul Tardif: Does the hon. gentleman have the unanimous consent of the committee to continue?


Some hon. Members:: Agreed.


William Dean Howe: Thank you, Mr. Chairman and hon. members. I will not take too much longer and I did not realize I had already taken so much time.
As I was saying, if a formulary basis were adopted and drug stores had the choice of buying any one of a number of brand products which were all equal, the quality having been determined by the food and drug directorate of Canada, with the elimination of the need for the space to store 20 different brands and the elimination of the 30 cents of the prescription dollar spent on advertising directed to the doctors, I am sure drug prices could be reduced by 75 per cent. I disagree with these distorted figures of the P.M.A.C.
The next paragraph of this letter reads as follows:
I wonder if the thousands of dollars (and the thousands of hours of work) spent by our industry in preparing information for your committee was all
June 16, 1967

Supply-Registrar General in vain. Did it fall on deaf ears? Do you accuse us of lying? It is impossible for me to understand your refusal to accept documented evidence.
Of the 37| cents of each dollar that they claim to spend on drug research, only 2 J cents is actually spent on research, with 11J cents being spent for promotion. As a result of all the money they claim they spend on research, there has not been a breakthrough in research in Canada in the last 15 years. Research in Canada is very small, even taking into account all the drug manufacturers and all the P.M.A.C. group, including the parent companies of all the subsidiaries. What these drug companies do is combine drugs and give them a different name. This gives them a new drug status and they are protected from compulsory licences for another five years.
Another thing these companies do is what is called molecular manipulation. They make a slight change in a product, possibly an antibiotic, and give it a different name. As a result they obtain a new patent which is good for another 17 years. This is the sort of thing they claim is costing so much money. They suggest that 2J cents per drug dollar represents millions of dollars spent on research. That being the case, imagine how much is spent on promotion if 11J cents per dollar is used for that purpose.
The last paragraph of this letter was of great interest to me. It states:
If your actions are designed to appeal to the voter, I wish you luck. If they are designed to increase your acceptability as a physician and scientist I doubt that you have impressed your colleagues in practice or academic circles or in industry.
I do not know whether that has any political connotations, but I am glad that he wishes me luck. The articles were published in Ottawa, not in Hamilton where my voters are. Is Dr. Wigle trying to say that my medical practice is going to be jeopardized in the future because I have spoken out frankly in an attempt to convey to the people of Canada the facts about the drug manufacturing hoax which exists in this country today? With particular reference to the brand name companies operating under the protective shield of the P.M.A.C., if what I said before was an attempt to solicit votes Dr. Wigle can certainly accuse me of this again because of what I have said today with greater emphasis.
I believe the government can reduce the cost of drugs by establishing compulsory licensing, particularly in respect of the importation of drugs. That was the basis of a recommendation of the committee. This would

inject competition into the industry. At this time there is no competition among members of the P.M.A.C. and there is no competition outside that organization. A monopoly is being operated and these companies are thriving. How can you rationalize a 9,700 per cent mark-up? How can you rationalize the government buying something for 27 cents which is sold at 100 times that much to private individuals?
I believe that Canadians, particularly sick people, deserve protection from this form of profiteering. The sicker a person is, the more drugs and money he needs. The more drugs he needs, the less he can afford them and the less he can afford to pay for this terrible profiteering. The drug manufacturers have perpetrated on the doctors of this country a brainwashing job to convince them to prescribe their drugs so they can continue to make for themselves and their shareholders an immense profit. The only way we can lower the price of drugs in Canada is to inject competition into the industry. I ask the government sincerely to do something to solve this serious problem. The minister spoke with all sorts of idealistic terminology, which I appreciate. However, if there is any sincerity in this regard something must be done to lower the price of drugs, and I think that this can be done by legislation.
[DOT] (3:30 p.m.)


Horace Andrew (Bud) Olson: Mr. Chairman, in rising to participate briefly in this debate I want to say through you, sir, to the minister that he has perhaps more than any other minister a great responsibility in his department and the branches assigned to his ministry in improving and maintaining the free, competitive economic system that we have in Canada. He has, as has been pointed out, under his jurisdiction the Bankruptcy Act, the Combines Investigation Act, the corporations branch and the patents branch. Taking all these together, there are probably more abusive practices in the free, competitive economic system which can be dealt with by one or other of these branches than by any other department of government. I hope the minister realizes the tremendous responsibility that he has to see that these abuses are dealt with as they arise, so that we can maintain the kind of economic system that many of us in this house as well as throughout the country value so highly.
I shall speak only very briefly on one aspect of these estimates. It is one that has been discussed quite a lot this afternoon. I refer to
June 16. 1967

drugs and the monopoly that many of us believe exists in this industry. Whether it is a monopoly, a combine or whatever makes no difference; the fact is that the result, in our opinion, is a far higher price structure at the consumer level than is necessary. The main question I want to pose to the minister this afternoon is: Why do we not take some action in respect of the many recommendations that have been made, not only by members of this house but by competent firms which have been retained by the governments of many provinces to carry out studies in this area?
There is no lack of evidence before this house in the form of findings and recommendations with regard to what the government ought to do and what action it ought to take to change some of our laws and effect a lowering of drug prices. We have, as the hon. member for Hamilton South pointed out, the submission of the government of Alberta which I think was excellent, although I was at the committee for only a limited number of hearings. The hon. member for Hamilton South was a member of the committee during all its hearings.
A large number of those recommendations were accepted by the committee and included in their report. That report has been before the government for quite a long time. We appreciate that when bringing down the budget the Minister of Finance announced he was going to remove the 12 per cent sales tax on drugs. He also mentioned that some of his colleagues would be introducing legislation to take care of some of the other recommendations. So far that is all we have. I should like the minister to know that his announcement has not changed the price of drugs very much. In fact, it has not changed the price of drugs at all. The fact is, if the rumours we hear are true, that it has increased the price of drugs until September 1, and they were too high before. I should like to refer the minister to one paragraph of the report of the committee; which can be found in Votes and Proceedings at page 1641:
Both the drug manufacturers and retail pharmacists offered the opinion before the committee that the benefits of a reduction in sales tax would be passed along to the consumer.
What a hope. However, Mr. Chairman, the committee was not quite as naive as would appear from that statement. The report says further:
However, the committee concludes that, without more effective operation of competitive forces than presently exists in the drug industry in Canada, the only certain result from removal of the tax would be a reduction in costs to the manufacturers.
Supply-Registrar General
What appears to have happened thus far is that rather than reducing the price by 12 per cent even at the manufacturers' level, the pharmacists and manufacturers have indicated that there might be an 8 per cent reduction or maybe a 5 per cent reduction in price. But they do not define on what that reduction will be based. Will it be on the basis of the prices that prevailed prior to the minister's statement in the house or will it be based on the prices in effect on September 1 when the sales tax will be removed? It certainly does not add up to very much benefit to the consumer if between June 1, when the Minister of Finance brought down his budget, and September 1-a period of three months-they raise the price by as much as they intend reducing it. There is, therefore, no reduction at all to the consumer.
I wonder whether the minister and his department are taking into account what the Pharmaceutical Manufacturers' Association, and perhaps even the local pharmacists, are doing to the price of drugs in the intervening period. It seems to me to be most unfair that we should give the local pharmacists, and perhaps the wholesale distributors of drugs, a three months' period to protect themselves against a loss in the value of their inventory, if they are allowed to nullify the minister's intention in this way. In my opinion this is not keeping faith with the intent of the minister's announcement and it is certainly not doing what is just.
The Minister of Finance could have reduced the price of drugs by withdrawing the sales tax at once, effective June 1 when he made the statement. But he did not. The reason he gave for not doing so was to allow a period in which the drug manufacturers could protect the value of their inventories. Now they are flying right in the face of that very reasonable action and are in the meantime raising their prices. The net price after September 1 will be no lower than it is today. In my opinion this is a disgraceful attitude for the pharmaceutical manufacturers and distributors to take. It seems to me it is not in keeping with the spirit or intent of the minister's announcement.
I intended to deal at some length with the summary of recommendations of the government of the province of Alberta, which is to be found in chapter V of their brief. I also intended to deal with the recommendations of the committee which can be found at page 1664 of Votes and Proceedings. However, the hon. member for Hamilton South has dealt
June 16, 1967

Supply-Registrar General with that matter and pressed for action in this regard. Therefore all I wish to say is that we believe we need action, and it is within the jurisdiction of this minister to take action, in respect of such things as compulsory licences for the importation of drugs. There is also the matter of the Patent Act. Amendments should be introduced so that the burden of proof in respect of any infringement of drug prices and patents would be on the plaintiif. Action in this field is long overdue but, as I said, I will not go into the matter any further because we have just heard about it. However, we would like the minister to tell us when we can expect some action which will result in a reduction of price at the retail and consumer level. So far this has not been evident.
[DOT] (3:40 p.m.)
I also want to say that I do not believe that changing the law respecting compulsory licences, or amendments to regulations or even the Patent Act, nor for that matter changes with regard to duties and regulations respecting dumping, will completely solve the problem and reduce the prices of drugs to a fair and reasonable level. I say that because it appears to me there is such a large integrated combine involved in the manufacture and distribution of drugs that simply to change some of these laws without adding an element of competition will not solve the whole problem.
I can give the committee some examples. I have some personal knowledge of retail practices with regard to veterinary drugs. I know that not so long ago when the feed stores began to sell veterinary medicines in larger amounts there was a significant decline in the price of these drugs. For example, a few years ago, around 1958, penicillin was selling in a 10 c.c. vial for $1.00. About 18 months after the feed stores and other livestock supply stores began retail sales of penicillin in 10 c.c. vials the price went down to 25 cents a vial and they were still making a profit of 20 to 25 per cent on the cost. Penicillin and streptomycin were selling at $1.50 to $2.25 for 10 c.c. vial, but within a very few months after they were made available for distribution in local feed stores the retail price went down to 60 cents in 100 c.c. vials and 39 cents for 10 c.c.
Vaccine for cattle was selling in local pharmacies at a list price of 35 cents a dose for what is commonly referred to as a three-way vaccine, that is, vaccine for partial immunization against blackleg, malignant edema and septicemia. Within a short time after large

scale distribution of this vaccine was made available through the local feed stores its price went down to 18 cents a dose. The price of two-way vaccine was reduced from around 18 cents a dose to less than 10 cents a dose. This vaccine is for the immunization against blackleg and malignant edema.
The same pattern is evident throughout the whole list of veterinary medicines, such as antibiotics. The hon. member for Hamilton South spoke about oxytetracycline. This drug is used extensively in veterinary medicine. Before it was made available to the local feed stores the price of this drug was two or three times higher than what these stores demand now. Such drugs as aureomycin and other types of antibiotics were reduced by as much as 70 to 80 per cent as soon as additional competition was developed at the retail level.
I am not suggesting that the local pharmacists were in fact able to reduce their prices but that pressures were exerted by the local feed stores in dealing with the wholesalers. We who were dealing in livestock supplies in Medicine Hat and Lethbridge were very much involved in this. As soon as the prices started to come down to somewhere around a 20 or 25 per cent mark-up these people were able to negotiate new prices with the wholesalers and thus were able to reduce their own prices which have remained at the lower level. The feed stores did not find it necessary to revert to the higher prices. This was not distress selling but simply a reduction of the price in line with a reasonable mark-up over the cost of production and distribution. We believe this is a sound, sane and just basis for setting a price on drugs rather than the way in which it is done now by monopolies through restrictive trade practices which dictate the price of drugs rather than basing them on the cost of their production and distribution.
I admit that there are some drugs even in the veterinary field which should not be handled by untrained or non-professional people. However, the reason I think there is a greater need for competition in this field can be illustrated by the following example. Another drug which was available to the local feed stores is called dyethylstilbestrol. Its use involves some danger. It is a synthetic sex hormone and there is some danger in its indiscriminate distribution. However, as long as these feed stores were selling it, its price was somewhere around 85 cents for a lOc.c. vial. The province of Alberta decided, quite properly, and I believe other provinces did also, that this is one drug which non-professional
June 16, 1967

people should not handle. The sale of this drug by local feed stores was therefore prohibited. What happened then? The price of the drug in injectable form gradually doubled.
I fully appreciate that drugs for humans should be handled solely by professional people so far as their retail distribution is concerned, even those that are completely fabricated in manufacturing plants. I know there is a danger in the misuse of these drugs if they are not handled by professional people who can give advice to the customer and consumer at the time of sale. However, I believe sincerely that something more should be done than the removal of the sales tax and changes in laws respecting licences, patents and tariffs. This matter may not fall within the ambit of this minister nor may it even be within the jurisdiction of the federal government but I am convinced, having knowledge of the widespread and complex nature of the drug combine, that we need more competition.
I wonder whether it would not be proper for hospital pharmacies to enter into the business of filling prescription drugs directly for the consumer regardless of whether the patient is in the hospital. I know that even today some of the local pharmacists complain that hospital pharmacies are able to buy a large number of drugs at a lower price than they can. This is one of the reasons that they are unable to come even close to the price that is charged to the hospital pharmacies. Who is responsible for that? Is it the manufacturers or the wholesale distributors? It does not make any difference to me who is responsible for the different price structure, the disparity between wholesale prices charged to the local drug stores and the hospital pharmacies. The fact is that the price should be based on the cost of production of the drug plus the cost of distribution, and nothing else. If the combine in the drug manufacturing and marketing business is not willing to make the changes that are necessary to reduce these prices to a reasonable level, then I believe we should take some action to set up a government agency for the distribution of these drugs.
Of course many of the provinces at the present time operate the hospital pharmacies. This could be one of the first steps. There was a time in the province of Alberta many years ago when it was felt that the price of automobile and fire insurance was exorbitant. It was too high and there was no justification for it. Therefore the province of Alberta set up an
Supply-Registrar General insurance company. Nobody had to buy insurance from the company but at least it was made available. The day that the company opened its office all of the insurance companies in the province found it expedient to reduce their premiums by 20 per cent. I think that some such step is required so as to shake up this industry and make it act reasonably.
[DOT] (3:50 p.m.)
I should like to close, Mr. Chairman, by suggesting to the minister that he get on with the task of bringing in these changes for which his department is responsible as quickly as possible. I suggest we carry out not an intensive survey but a review of the price of drugs at the retail level. If a reduction in the enormous mark-ups to which reference has been made in the committee reports and also by the hon. member for Hamilton South and the hon. member for Bow River today is not brought about, then I suggest we take further action to make sure that we are not going to have to pay these artificial prices for an interminable period into the future. I wish the minister well in making the changes which I am sure he intends to recommend to his colleagues, and I hope that he will be prepared to co-operate with the provincial governments and all those responsible so as to make absolutely certain that when our laws and regulations are revised the result will be lower prices on drugs for the consumer.


Mr. Isabelle:: Mr. Chairman, I decided to say only a few words on this subject, since the hon. member for Hamilton South (Mr. Howe), has already put forward very convincing arguments, summarizing somewhat the investigation of the committee on drug costs and prices in which we both took part some time ago and whose report was published just recently.
However, I should like to point out to the house that if we indicated in the report the policy to be followed, the federal government will surely not be able, even by amending certain pieces of legislation, to reduce the price of drugs before the provinces amend certain statutes, so that consumers are required to pay less for drugs.
Now, among the several recommendations of the committee, there is one especially that has perhaps been overlooked. It is recommendation 16 which reads as follows:
That the Canadian Pharmaceutical Association and all Provincial Pharmaceutical Associations. Faculties of Pharmacy and the Provincial governments should meet to discuss the practice of pharmacy in Canada, bearing in mind the following matters:
June 16, 1967

Supply-Registrar General
I shall spare you the rest. The most important one is that there should be interprovincial conferences grouping the various pharmacist and medical associations.
I should like to point out an extremely important matter, which may have gone unnoticed until now, that of the national suicide of the pharmacist profession in Canada. Indeed, if the profession does not revise its stand immediately, or as soon as possible, I am sure it will destroy itself and, before it does, drug prices will have poared.
In its recommendation No. 16, as I have said before, the committee suggests that the pharmacist associations meet, hold a round table conference, with a view to amending their laws or revising them in such a way as to provide for the setting up of a school to train technicians to assist the pharmacists. According to the law, there must be a graduate pharmacist in a drugstore to fill out prescriptions, and this means that pharmacists have to be on the job from morning till night, six days a week.
In such circumstances, I am sure no one wants to spend a whole lifetime in such a profession. But the pharmacist who owns a drugstore faces the dilemma of having to close his drugstore from time to time, or having to hire pharmacists who are not owners of drugstores, for $400 or $500 a week. This, of course, would cause the cost of drugs to rise considerably.
We know that it is one profession without technical assistants to help it. We know the doctors can count on the nurses. Radiologists have their technicians and the architects their draftsmen. These professionals can always count on someone to help them and for whom they are responsible.
[DOT] (4:00 p.m.)
In the field of pharmacy, the druggists are the only ones to fulfil this duty and they cannot delegate their responsibilities to others, because there are no schools giving special courses that could be followed by assistants wish.ng to help the pharmacists.
In view of the shortage of pharmacists today, existing legislation is to be implemented in the province of Quebec starting November 1, 1967 and I repeat that this will be suicidal for the pharmacist profession throughout Canada, since it will discourage the young people who will be facing a very difficult job and who will want to get away from this profession forever, because they are not interested in taking part in a suicide marathon.
Therefore, I appeal to pharmaceutical associations throughout Canada as well as to

pharmacists associations to bring pressure on their respective bodies for the purpose of amending that legislation which, I am sure, will be a national suicide for the pharmacist profession.
Although we have been the target of acid barbs, the fact remains that the recent report on drug costs is one of the best reports there is, as far as assistance to consumers is concerned, because Heaven knows that the use of pills is great in this fast-changing world, which no longer has time to stop and think and even less to eat, because use is now being made of substitutes, of the famous vitamin pills.
In concluding my remarks, Mr. Chairman, I wish to draw attention to the fact that the report on drug costs may require certain departments to consider amending certain legislation, but I do think that its basic purpose is to make sure that provinces, the associations and everybody will co-operate in order to bring about a change, within their respective fields, in what must be changed and in what the federal government does not have the jurisdiction to change. That is the only way we can bring about a real decrease in the costs of drugs.
It is useless to make speeches, or to say that drugs cost a lot in Canada. I believe that the price may be a little higher than it should be, but I do think from our investigation that the price of drugs is high in all countries.
Since it is one of the necessities of life, I think that those organizations have a greater responsibility than the federal government since, strictly speaking, it comes under provincial jurisdiction or of their college. It is up to them to start working first, and the federal government, I am sure, will follow suit, and make changes as may be necessary in the anti-combine legislation or the patents legislation or any other federal field.
It is absolutely certain that if we do not move towards a new ideology, mainly in the field of pharmacy, in order to change a little what is a century old, in the field of pharmacy as well as medicine, we will get nowhere, and any change which the federal government might make in that field will be of no avail. There will always be profiteers along the line who will benefit from the legislation by getting around it because if any particular group, such as the pharmacist association for instance, does not attend to its own business, absolutely nothing will be achieved and the price of drugs will keep climbing.
June 16. 1967

This is the very modest contribution I wanted to make; it is a simple warning to the College of pharmacists of Canada, to assume its responsibilities. For instance. 1 know that in the riding of Halton represented by the cha rman of the committee on drug costs and prices (Mr. Harley), a druggist being ill, his drug-store had to be closed because there was nobody to replace him.
Therefore, part of the Canadian people have to suffer because we apply an antiquated legislation which provides that a pharmacist must be present in the drug-store throughout the day to make up prescriptions. It shows that if we must allow part of the population to suffer, our legislation is deficient. If our legislation is deficient, it means that the Ontario College of Pharmacists Act is deficient as much as that of the Quebec College and that the colleges should be subject to reform because, in my opinion, that is the true basis, the true subject matter of all the very interesting discussions heard this afternoon from my colleagues. I am sure that if those colleges are conscientious enough to adopt all the proposed regulations, the rest will follow very easily.
It is said that the price of drugs is too high; it might be true. They are an essential need, as I said earlier, but there are many other areas where consumer prices should be investigated. However, that one is important because it affects the sick. When they are without any income, in short when they are bed-ridden and no one looks after them, they do not always have the money needed to have a prescription filled at the drug-store, and I am sure that those mainly responsible for that are the associations and colleges of pharmacists throughout Canada. As 1 said and as I will always say, they are the ones who have the key. the power, who authorize druggists to practise pharmacy as they now do in Canada.
[English 1


Harold Warren Danforth: Mr. Chairman, I had no difficulty in following with great interest the minister's speech today. As a matter of fact I was greatly impressed with the tremendous amount of verbiage, the beautiful phraseology and the descriptive words which were used in their most potent form to convey correct connotations. 1 wish to congratulate personally the artists who were responsible for the drafting of the speech. The minister shows, by the quiet dignity with which he delivered the speech, that he is a professional salesman. Were we not accustomed to searching deeply into the intent of such speeches we could
Supply-Registrar General have been lulled into a sense of security. On analysing the minister's speech of this morning one quickly realizes that the minister has become adept in his portfolio. His speech had more loopholes than one would find in the most extensive rabbit warren.
Various speakers from different parties today dealt with different aspects of the minister's portfolio. They emphasized the failure of some major financial institutions and the work of the committee that investigated drug prices in Canada. What the committee did shows, really, that various consumer groups across the country worked hard to uncover information. The government cannot take the credit for setting up the joint committee of the Senate and House of Commons to look into drug costs. That step was taken as a result of the publicity and pressure that was exerted by various groups of ladies across the country. I wish to commend those ladies for their efforts. What they did will serve more than one purpose. Not only did their efforts bring to the attention of members of parliament the fact that in certain consumer fields exorbitant prices were being charged, but those efforts enabled the consumer groups in the presentation of the briefs to gain a better understanding of the workings of standing committees of parliament. The ladies saw that not only was the committee interested in their problem, but also what must be the proper approach to a democratic government to attain redress for what they felt was a real grievance. They performed a real service to the country when they took time out from their busy lives to investigate, store by store and chain by chain, the differences in prices, also when they began in an earnest and direct manner to trace the basis for such differences and why there should be price increases from time to time. I am certain that Sherlock Holmes would have taken his hat off to the zeal and methods of the participants in the pursuit of their worth-while cause.
We tend to overlook the fact that though drugs and food are important, they play a part only in the consumer price index. The consumer protests were not only about food and drugs but about the prices of furniture, automobiles, new homes and the tremendously spiralling cost of land. The consumers dealt with all the goods and services our modern life demands. As I say, that is what the consumer groups were interested in. As a result of their work and as the result of the arrangements and sincere efforts of the standing committee the minister today got up and intimated that something, at last, will be done.
June 16. 1967

Supply-Registrar General He said that the government is considering seriously something that is outlined in the speech from the throne, setting up a department that would deal exclusively with consumer affairs. He told us that corporations, since they are so directly affected, would be included among the responsibilities of this department.
* (4:10 p.m.)
I believe many people in Canada today are much concerned at the tendency of this government to set up a task force, or a royal commission, or to develop a new department of government whenever a problem is referred to. The net result is to increase the tax burden borne by the people of Canada. I wonder whether the people of this country who are responsible for bringing this question to the attention of the government are really desirous of seeing a separate department set up under a minister. Is this what we want; or do they only want action to be taken by the government to make sure they will not be victimized by various sections of the retail industry which charge exorbitant prices? Would they not be satisfied if the desired result could be produced by an educational program, for instance, or by the enforcement of regulations which are designed to protect the consumer against the practices about which he is complaining?
When I had the honour to be president of the fruit and vegetables growers organization of the province of Ontario we were much concerned because consumers were being induced to buy imported products to the detriment of those grown locally. One of the methods we used to combat this situation was an educational program. A radio program was set up in Ontario called, I believe, "The Market Basket". Each and every day a hired professional shopper would announce to the housewives of Ontario the availability of locally grown produce at prices which represented a real economy to housewives. It was not long before favourable comments began to come in by the hundreds. This service was provided long after I had left office as president; I am not sure how long it continued. But it was educational, and it provided a service. Why not make readily available to housewives and shoppers information telling them how and why to buy Canadian meat, how and why to buy Canadian vegetables, how to understand the various grades and qualities, how to buy furniture, whether to buy a new automobile as opposed to an old one, where the best value is to be found in new homes, and what means of financing are [Mr. Danforth.l
most advantageous? Publications in these fields are for the most part already available. I have seen some of them and they go into great detail.
The most of making this information easily accessible to the housewives of this nation might run into hundreds of thousands of dollars when allowance is made for distribution, but even so I suggest it would prove far more economic than the setting up of a brand new department under a separate minister. I believe the minister today quoted a provisional figure of $1 million. Am I wrong?


John Napier Turner: No. The expenditures of the department as it now exists are $1.2 million.


Harold Warren Danforth: Thank you. It is my contention that if information of this kind were made available to housewives, particularly new housewives, there might be no need for such drastic action on the part of the government as is now proposed. I was much concerned about what the minister had to say with regard to certain aspects of this new department. He spoke at length of what it could not do, and I admire him for his honesty and frankness. He also told us what the department would not do-rightly so, in my opinion. He emphasized that it was the government's desire to interfere as little as possible with the normal course of business.
On the other hand, the setting up of a new government department in this field could have no other effect than to intrude directly into the normal operations of business; and we have found, to our bitter experience, that any time government action interferes directly with the normal course of business the net result is an increase rather than a decrease in prices to the consumer.
I wonder whether the government has sufficiently explored the powers existing under present regulations in the various departments concerned. If these regulations were applied more strictly, perhaps the results outlined by the minister as being desirable could be obtained. It is possible that we already have adequate laws on our statute books to take care of the situation and it is also possible we already have the personnel capable of enforcing such regulations.
Having been closely associated with the fruit and vegetable industry, I will use my own experience as an example of what I have in mind. When I visit a supermarket or a general store I naturally find it of interest to visit the fruit and vegetable displays to note the latest methods of advertisement, display and sales approach. I think everyone will
June 16. 1967

agree that tremendous advances have been made in all three of these aspects, especially in the past five years or so.
[DOT] (4:20 p.m.)
Here again lack of knowledge on the part of the housewife tends to increase the price she has to pay. I have seen examples relating to bins of cucumbers, a product with which I am familiar. As you know, they are sold singly or in two's for prices varying from 12 cents to 30 cents each when they are out of season. Then, I have seen cucumbers in bins containing not only first grade but also second and third grades, and even cooking cucumbers. Anyone familiar with the industry knows that the price varies to a tremendous degree.
It is a simple matter to bring such a thing to the attention of an inspector who will visit the store and take the necessary course of action to remedy a given situation. However, in the busy day-by-day workings of a large chain store, with the myriad of workers it employs, inevitably there will be a mixing of grades. Unless the housewife is familiar with this and can lodge a complaint, she will pay an exorbitant price for a second or third class article. I say once more that it is a matter of education, a matter of know-how, and not so much one of regulation. Stores try to provide a service but they cannot achieve perfection. In this day and age this is impossible, especially in view of the tremendous tonnage of goods that go through stores each day.
In conclusion, Mr. Chairman, I emphasize once more that I am not taking a stand to say it is absolutely unnecessary to develop a consumer affairs department: I am not aware of enough facts at present in order to take such a position; but I would ask the government not to let itself be stampeded into hasty action. Neither should it sit and do nothing. The consumers want action that will allow them to buy more with their shrinking dollar. My sympathies are with them in this regard. This is the basis of their dissatisfaction with the economy of the nation. Their dollars are buying less. The government's immediate task is to show it is sincere in its desire to make consumers' dollars go further.
I am not certain that the setting up of a new department is the answer. It will cause delay. We who sit in parliament are well aware that if a new department is established the first thing it will do is appoint a task force to make an investigation of the problem, and to see whether the points brought out by the standing committee are factual. This will result in many months delay. Therefore I would
Supply-Registrar General like the government to consider seriously some of the alternate methods I have proposed, to see if they have merit and will achieve the results that we and the consumers want.
This is a difficult subject. We cannot supply all the answers, but if we could show the consumers that we are aware of their problem and are willing to do something constructive about it, they will be satisfied that we are sincere and we ourselves will feel that we are doing something for the benefit of the people of the nation.


Mrs. Maclnnis (Vancouver-Kingsway):: Mr. Chairman, I first want to express appreciation of the new Registrar General who this morning outlined the work of his department in a very competent manner. We all hope for great things from this department. We are certainly glad to have a person of his youth, vigour, aggressiveness, ambition and many other qualifications in charge of it. It is precisely because of all these things, and because so much is hoped for from this department, that I am going to have some very blunt things to say this afternoon.
My fear is exactly the reverse of that of the hon. member for Kent (Ont.), who has just spoken. Apparently he is worrying lest the government go all out to create a department of consumer affairs. My fear is that the department of consumer affairs will remain a small etc. tacked on to the already overfilled Department of the Registrar General.
In order to allay the fear of the hon. member for Kent (Ont.), and to show the grounds for my own fear, I would point out that when the minister spoke this morning during his initial allotted 30 minutes he dealt with the Bankruptcy Act, the Corporations Act, the securities field, patents, copyright and trademarks. He gave only a tiny bow to the idea of establishing a consumer affairs section in his department. Then he got the indulgence of the committee to extend his speaking time, but even at that he spent only a matter of ten minutes on the whole field of consumer affairs. Therefore I believe the hon. member for Kent (Ont.), is unjustifiably afraid of the likelihood of there being established a new department to protect the affairs of consumers.
I am anxious to speak about this while the matter is still reasonably flexible. Last fall it was stated that the new department would look after bankruptcy matters, the Corporations Act, the securities field, and would draft legislation for the protection of the consumer.
June 16, 1967

Supply-Registrar General That was tagged on as a bit of an etc. during reorganization of the department.
I believe that what has happened in the interim should convince the government to go ahead and set up a full scale department of consumer affairs, with perhaps some other things tacked on to it. The hon. member for Kent (Ont.), has asked whether the consumers of this country want a plain department of consumer affairs, without corporations and all the rest added on to it? This morning the minister reasoned that in order to protect consumers, corporations have to be brought under the same department. I do not believe that for a minute, nor do consumers.
The prices committee had consumer organizations appear before it in Ottawa, and from Vancouver to Newfoundland. I did not hear one single consumer group that wanted anything other than a plain department of consumer affairs in order to protect the affairs of consumers. A former president of the Consumers Association of Canada, Mrs. Beryl Plumptre, put it very plainly when she said the affairs of such a department must be in the hands of consumer oriented personnel.
[DOT] (4:30 p.m.)
There is no doubt that there is a new idea which has been put forward in this country; that is, that even as there are departments for agriculture, fisheries, industry, and so on, the time has come when there should be one single department for no other purpose than to look after the interests of the whole population in its role as a consumer. I have said this before, but I should like to say again that I do not think we should drag the corporations into the consumers department, or vice versa. One might say that the corporations were there first-and they were, in respect of this department. However, to mix the consumers and the corporations in one department is simply the same as trying to have the lion and the lamb live peacefully together. This may happen in Utop a, but in our society if we were to invite the lion and the lamb to live together in one pen there would be one result: The lamb would lie securely inside the hon. and this would be a happy situation from the lion's point of view.
I do not think the consumers across this country want to see this kind of thing repeated. Th s afternoon we heard about the situation in respect of one field involving the consumers, that is the drug field. This is a field which is very close to the consumer. I believe this again indicates the need for a department, the sole purpose of which is to look

after the well-being and the affairs of the consumers, a department which would study ways to protect the rights of the consumers and their ability to live well.
I certainly believe in consumer education. I believe the recommendation as to prices was one of the strongest recommendations which was made by the joint committee on consumer credit. We recommended that a department of consumer affairs should set up in prime time on television, and in other forms of publicity programs, for the consumer. These programs should be designed so that they would acquaint the consumers with the facts about good buying habits, bargains, and so on.
I should like to emphasize, however, that education is not enough. We must have action. This department must have teeth, so that it will be in a position to protect the consumer. If we were to suggest that everything should be left to education, this would be the same as suggesting that in respect of highway safety we should scrap all the traffic lights, the traffic courts, the system of fines and the other methods used for the protection of traffic on the highway. The consumer, in respect of food, clothing and the other essentials, is in exactly the same position as the pedestrian.
During the hearings before the committee we found that in this world today we are not in the cracker barrel age to which many people in th s house too often give allegiance. It is not a nice place, where there are a lot of little stores and businesses competing against each other; nor is it a place where the results are for the good of the little businesses and the public as a whole.
We found that in the field of food production and distribution-corn flakes, meat products, soap, and so on-what we have in Canada today in each one of these lines of food and other products is a situation where these items are divided between two, three or four great, big firms. They divide the major share of this among themselves. They use every one of the promotional arts to the extent that they can afford them in order to get a larger share of the business and make the consumers pay for the additional cost of doing.
It makes me weary to hear people talk about the free competitive society in which we are living. The net and logical result of this type of thing is a situation such as we have in respect of the Weston interests. During the committee hearings, when we
June 16, 19G7

heard the story of the Weston chain we realized that the logical end of this fierce, free competition, buttressed by advertising and promotion, is monopoly, a situation in which the small businesses are driven out and in which the consumer is driven away because of her own helplessness, weakness and disorganization in the face of the most tightly organized system of obtaining goods and services that could be devised.
This is the situation which faces the Registrar General. I do not envy him his task of trying to cope with it, if indeed he does try to cope with it. I know he has the energy and the ability to do it, if he will, but I wonder whether we are going to see a St. Law-rence-St. George start out to combat the dragon of high prices and monopoly which stands in the way of the consumers, or are we going to see the sort of pale shadow-younger, of course, but equally pale for all that-that we saw in the person of his political progenitor, Mr. Mackenzie King, who, although he did not say "persuasion if necessary but not necessary persuasion", did say "conscription if necessary but not necessarily conscription". In any case, he did not say clearly definitely what he meant.
I hope we do not see that again. If this minister really is interested in surviving in the annals of Canada, he will go out and take advantage of this heaven sent opportunity to be the champion of the consumers across this country in the face of something which they themselves are quite powerless to handle, no matter how well organized they may be.
There is no need for some hon. members to think this is so hopeless that they might as well laugh as cry about it. This sort of thing must be handled in Canada. In our recommendations we made certain far reaching and excellent points, to which all of us subscribe. Our major recommendation was the idea of this department of consumer affairs, uncluttered by these other things around the edges of it, which unfortunately make up the lion's share of that department. That was our main recommendation.
I was glad this morning to hear the minister say-I cannot quote him because I have not seen his speech-that there would be studies made of the lower income group with a view to seeing what could be done to help give them access to a decent standard of living. As I say, I was glad to hear that because, Mr. Minister, I was afraid that you might be hanging on to the idea that if you leave the free competitive market untrammelled it 27053-104
Supply-Registrar General would add up to the greatest good for the greatest number.
I am glad to see that the minister has moved far enough ahead that he knows there are groups in our society who, through no fault of their own, are not in a position to earn enough money to obtain the food, clothing, and so on, which they need in order to be able to have a reasonable standard of living. I was very glad indeed to hear him say that consideration will be given to this type of thing.
In respect of the Combines Investigation Act the committee made the following recommendation:
Your committee noted that the Director of Investigation and Research under the Combines Investigation Act reported the discontinuance of a study of concentration in the food retailing industry in Canada on March 15, 1963 (Report of the Director of Investigation and Research, Combines Investigation Act for the year ended March 31, 1963). Your committee recommends that this study be resumed on a continuous basis and broadened to cover both food retailing and manufacturing in Canada with a particular view to examining concentration, market power and trade practices in the relations between retailers and suppliers.
[DOT] (4:40 p.m.)
I should like to ask the minister, if and when we have a continuation of this debate and set this up as another link to his department, whether that study of concentration in the food retailing industry in Canada, under the auspices of the Combines Investigation Act, is going to be resumed. This would be a step in the right direction, to deal with these monopolies or near monopolies which are sucking the life out of so many consumers today. I want to ask about some other things, and I believe this is the time to ask about the minister's policy and what he intends to do. I hope he will not adopt the habit of the Prime Minister of telling us that some board or another is looking into the situation. When some day this minister becomes prime minister, if he does, times will have changed, and he should be very careful to avoid doing those things that people are criticizing today. You know what Marshall McLuhan says about politicians: He says that far too often they give the answers of yesterday to the problems of today. If the minister is planning a long political career he should attempt to get the answers at least of today. I think he would be better advised to look for the answers that will be required tomorrow. If he shoots for those answers he will find it difficult enough to get them. It is difficult enough to get answers today from that group with which he is sitting.
June 16, 1967

Supply-Registrar General


Stanley Howard Knowles: Including the one alongside him.


Winona Grace MacInnis: What is the minister going to do to protect the consumer? I hope he does not copy the Prime Minister. Every time we ask what is going to be done to protect the consumer we are told that the Economic Council is going to make a report. The Economic Council can give advice and information, but let us not fool ourselves: Government policy is set by the cabinet. Now that the B.N.A. Act is getting a bit shabby and weak in spots I think we should look forward rather than backwards. Let us stop using the Economic Council as a new shield behind which we can nimbly jump and hide. This is what the government has been doing with the B.N.A. Act every time it finds itself in an uncomfortable position and does not want to make a decision. I do not think we should wait, as was hinted by the minister, for an Economic Council report. I want the minister to tell us what he is going to do to protect the consumer.
I have already referred to an investigation under the Combines Investigation Act regarding concentration in the food manufacturing industry. Is the minister going to see to it that this investigation is resumed, with a view to bringing out the facts about this situation? The people of Canada want to know what is being done, and they want an answer to this question. What is the minister going to do to obtain greater disclosure of the financial affairs of these large corporations? I hope he was doing something more than hinting when he indicated that he intended to see that there would be greater disclosures. I can take a hint but I would rather be told, even in a tiresome fashion, over and over again in plain English, what is to be done. I would like to see less beating around the bush.
What is the minister going to do about setting up a practices review board which will deal with all these abuses and gimmicks, such as trading stamps? Does he intend to go beyond what the committee felt was necessary? I refer to the setting up of a prices review board. One might say that the committee did not find a need in this regard, but let me suggest that there would not have been a reference in respect of the cost of food to the committee, had it not been for the tremendous agitation throughout this country about the increase in prices over the last 18 months.
The hon. member for Kent (Ont.), would not agree with me regarding many things I
[Mrs. Maclnnis (Vancouver-Kingsway) 1
have said, but he did make it abundantly clear that the housewives across this country initiated this study because of a great deal of agitating about the cost of living. What is the minister going to do about a practices and prices review board? Such a board could hear grievances in respect of unjustifiable price increases. It could require manufacturers and others to justify any increase in price, just as has been suggested in connection with drugs. The cost of drugs in Canada is probably higher than anywhere else in the world and something should be done about this situation.
What is the minister going to do regarding legislation in respect of the federal incorporation for co-operatives? Please do not tell me that the Economic Council or some other branch of government is going to look after this. The committee made a recommendation in this regard and I do not know whether this comes within the minister's juridiction. I see that the minister is shaking his head. Does this not come under your department?


John Napier Turner: Perhaps I might just intervene. I believe I stated in this house in answer to a question asked by the hon. lady's leader, the hon. member for Burnaby-Coquitlam, that we are contemplating a federal act for co-operatives. We are currently examining the constitutional aspects of them. Provincial consultation will be required because all the provinces are not of the same mind. Because of the close relationship between such an act and various corporate aspects, certain amendments will have to be considered at the same time. I made a similar statement to the cooperative association two weeks ago.


Winona Grace MacInnis: I
am glad to hear that statement, and I hope action will not be too long in coming. I know about the roadblocks that can be put in the way of legislation. This legislation was asked for 60 years ago, and since then there have been task forces, white papers, commissions, boards and committees, and perhaps even the Economic Council had a hand in this, although I am not sure of that. Practically every roadblock imaginable has been put in the way.
I am not suggesting there are not difficulties because of provincial differences, but we have a minister who is well on the sunny side of 50-and I know that because I looked it up today, to make sure I was right. I hope he will use his energies and abilities to devise some way of protecting the Canadian consumer. The present government sits peacefully on its-laurels?-and agrees to meet with the provinces any time they want a meeting. I do
June 16, 1967

not think that is good enough. We should have a federal department who will come up with ideas which it will present to the provinces at a meeting here or at any other convenient location. Let us not stand on protocol. Let us get together and cut through all these difficulties. I do not believe that all the roadblocks have occurred as a result of provincial difficulties or responsibilities. What has been lacking is the will to do something for the consumer, and I believe that if there was such a will the ways and means could be found.
I do not intend to take much longer, but I should like to refer to an editorial regarding this minister which appeared in the Vancouver Sun on April 26 and which troubles me. It states in part:
John Turner, the Liberal government's new Registrar General, has marked out a lot of work for himself and his new, expanding department. To fit its role of protecting Canadian consumers and investors, the department will have major legislation, whose main purpose, in the minister's own words, will be to see that the competitive forces of free enterprise have full sway.
That is not the main purpose so far as we in this party are concerned. We believe that the main purpose should be to see that the consumer of this country is protected. That is the first statement in this editorial that worries me. It then continues as follows:
Outside of the government, people have been busy interpreting young Mr. Turner's role in various ways-some according to their hearts' desires.
There are those who see his appointment as signalling a new and deeper plunge by government into business and investment.
One of those is the hon. member for Kent (Ont.) The editorial then states:
Others have seen him as a budding price czar, holding a protective umbrella over the heads of Canadian housewives.
I do not know how anybody in his right mind could ever see the minister as a price czar holding a protective umbrella over the housewives of this country, particularly after his statement which made it abundantly clear that in his view prices do not come within the jurisdiction of this government.


James Allen (Jim) Byrne: Hear, hear.


Winona Grace MacInnis: hope that applause is noted in Hansard because some day that hon. member may regret applauding at that particular stage.
[DOT] (4:50 p.m.)
The people of this country are anxious to see that these unconscionable prices are not
1631
Supply-Registrar General allowed to run sky high with nothing being done about them. The article continues:
If Mr. Turner has his way there'll be a tightening of bankruptcy regulations, and this will be all to the good.
I agree.
There also will be stiff penalties for price fixing.
Again, good.
Anti-combines legislation and staff will get a beefing.
Again, good.
Mr. Turner's eyes are cast far afield in this connection. He would bring "service industries" under combines regulation and might take a look into the affairs of the National Hockey League and the Canadian Football League.
I think that investigating even those sports is necessary business. The article continues:
But what has this to do with the price of eggs, the housewife may well ask. Wasn't this what the recent Senate-Commons probing was all about? The answer is that Mr. Turner believes the government has no responsibility for prices as such.


Eldon Mattison Woolliams: We want to get back to those nickel eggs.


Winona Grace MacInnis: Just listen to this, and maybe you will change your mind:
"We can't protect the consumer," he said in a recent interview. "We can only make sure he can protect himself." This, in Mr. Turner's view, will be made possible by furnishing both investor and housewife with information on which to make sound decisions.
That, Mr. Registrar General, is only half the problem. I agree that the consumer needs information in the world's worst way. The consumer knows that she is helpless today and far from knowledgeable in these matters. I suggest to the Registrar General that if his legislation is to be worth the paper it is printed on, it must be legislation to protect the consumer, legislation with teeth in it.


Eldon Mattison Woolliams: And regulations.


Winona Grace MacInnis: Yes, regulations where they are necessary. We had from Ontario a comment about the new legislation introduced in that legislature. It was said it was very far from what was required to protect the consumer in that province. It was called a toothless wonder. I do not want to see another toothless wonder, or a toothless blunder in this House of Commons.
It is said that hell hath no fury like a woman scorned. I suggest to the minister that should he lull the consumers into believing that he is protecting them, under the cloak of doing little things for them while doing big
June 16, 1967

Supply-Registrar General things for big business and protecting corporate affairs, and if he is spending his time on the corporate aspects of his department, he will consider that the saying, "Hell hath no fury like a woman scorned" is a vast understatement. When the embattled and organized consumers of this country descend about his ears or on the lawns of parliament hill, as did the farmers a couple of weeks ago, they will be armed with teeth, which we hope the minister will put into the legislation; they will come armed to the teeth. They will have those weapons which only women know how to use exceedingly well.


Mr. Prud'homme:: Mr. Chairman, may I ask the hon. lady a question?


Winona Grace MacInnis: Certainly.


Marcel Prud'homme: The hon. lady spoke
about Mackenzie King having said, "Conscription if necessary, but not necessarily conscription." Can she tell me what the co-leader of Quebec, Mr. Cliche, meant when he said,

"socialization if necessary, but not necessarily socialization".


Mrs.   Macimiis@Vancouver-Kingsway: Mr. Chairman, I will try to give some explanations to the hon. member. We feel that socialization is a remedial tool. But it is only a tool; it is not always and unavoidably a principle.
If necessary, we use the socialization tool or the co-operation tool, namely the co-operative. When necessary, we use other tools, as I have been saying for many years, and I believe that Mr. Cliche had the same thought in mind when he spoke as he did.


Some hon. Members:: Hear, hear, fTranslation]


Mr. Latulippe:: Mr. Chairman, I am glad to have the opportunity to say a few words about those estimates.
The price of drugs and the increased prices of all commodities have been discussed at length. Since the matter of the famous bankruptcies in Canada, especially in Quebec, has been briefly dealt with, I shall only discuss or set out our present bankruptcy system.
I should like to bring justice face to face with bankruptcies. I do not know whether there is injustice within justice, but something is wrong, something is amiss, and justice is not serving its purpose nor achieving its aim. Justice is not at the service of the people. Justice helps to exploit the various

public bodies or various companies in Canada.
So, if some people are to organize justice so as to make it just, they will have to take their responsibilities, because there is glaring injustice in the provisions of the Bankruptcy Act, and consequently in the field of fraudulent bankruptcies.
We cannot wait and let that social injustice remain any longer throughout Canada and, especially, in the province of Quebec.
The season of fat cows for the great fraudulent bankruptcy experts has come. This is the season in which business is thriving for those magnates of bankruptcies, for those great servants of finance or for those great people responsible for finance.
It is almost impossible to imagine the number of victims these crooks have been able to make for the past few years especially in the last four or five years.
By its size, by its solidarity, by the complexity of its organization, the racket of fraudulent bankruptcies has reached in our country such horrible, brutal and fantastic proportions that it may well throw all local trade into complete anarchy. The losses caused by these bankruptcies are enormous. Next to these gangsters we feel small, insignificant and lost before their atrocities.
These bandits who rub elbows with us, who thank us and crush us, have poisoned and altered trade to an incredible degree. For a lot of people, it is almost impossible to do business next to these people involved in fraudulent bankruptcies, who sell all kinds of merchandise at bargain prices, at ridiculous prices, who cut prices for years and years for those who deal honestly.


Stanley Howard Knowles: Five o'clock.


Henry P. Latulippe: Mr. Chairman, may I call it five o'clock?


Herman Maxwell Batten: Order. It being five o'clock, and in order that the house may proceed to the consideration of private members business, shall I rise, report progress and request leave to sit again later this day or the next sitting of the house, as the case may be?


Some hon. Members:: Agreed.
Progress reported.


Mr. Deputy Speaker:: Order. It being five o'clock the house will now proceed to the consideration of private members business as listed on today's order paper, namely public bills and private bills.
June 16. 1967

[DOT] (5:00 p.m.)



BAIL REFORM


Barry Mather: the second reading of Bill No. C-4, concerning reform of the bail system.
He said: Mr. Speaker, the purpose of the bill is to reform and improve the bail system of Canada. As is set forth in the explanatory notes of the bill, the measure aims-
-to asure that all persons, regardless of their financial status, shall not needlessly be detained pending their appearance to answer charges under acts of the Parliament of Canada, when detention serves neither the ends of justice nor the public interest.
This measure will permit poor people awaiting trial to be released without bond and will thus eliminate the arbitrary cruelty in the present bail system.
The no-bail release system established by this bill is limited to instances where the offence is not punishable by death or life imprisonment and in which the judge deems the defendant trustworthy.
The bill will also assure that persons convicted of crimes and infractions will receive credit for time spent in custody prior to trial against service of any sentence imposed by the court.
I intend to outline very briefly the detailed amendments proposed to the Criminal Code in line with the aim of this bill and also in line with the safeguarding of the powers of the court to compel the appearance of an accused. First however I would like to remind hon. members that the bill follows almost precisely the trail blazed last year in the United States when the President signed similar legislation into effect with these words:
It is a move to ensure that defendants are considered as individuals and not as dollar signs.
That our Canadian scales of justice are sometimes weighted not with mercy but with money has been apparent in the matter of before trial detention. A very detailed study of the situation was made in 1965 by M. L. Friedland of the faculty of law of the University of Toronto. I should like to quote briefly from the writings of Mr. Friedland. This is what he wrote:
In the setting of bail there is an undue preoccupation with its monetary aspects. The tragedy is that a large percentage of persons are unable to raise the bail that is set (two-thirds according to the Toronto study). The ability of the accused to marshal funds or property in advance determines whether he will be released and may have an effect on the outcome of his case.
The professional bondsmen and moneylenders operate more or less openly, and in my
Bail Reform
opinion their operations are open to criticism. Actually, the system does not do too much to ensure the appearance of the accused in court, and the people who lend the money reap substantial profits. Some accused, in order to raise the money, commit further offences while awaiting trial. The system tends to favour the professional criminal, who is more likely to know and be trusted by the professional bondsmen.
It seems to me that here is a field which requires reform. I would say that if money rather than character is not to determine justice, the accused should be released, if he is to be released at all, on his own recognizance, or, in appropriate cases, with recognizances by sureties in reasonable amounts recoverable if the accused fails to appear.
The bill which I am proposing as a means to meet and reform the existing bail system would make these specific changes in the Criminal Code, and I quote from the text of the bill:
...any person charged with an offence under an Act of the Parliament of Canada, other than an offence punishable by death or imprisonment for life, shall at his appearance in court, be ordered released pending trial on his personal recognizance or upon the execution of an unsecured appearance bond in an amount specified by the court, unless the judge determines, in the exercise of his discretion, that such a release will not reasonably assure the appearance of the person as required.
3. (1) When a judge makes such a determination, he shall, either in lieu of or in addition to the methods of release referred to in section 2, impose the first of the following conditions of release which will reasonably assure the appearance of the person for trial or, if no single condition gives that assurance, any of the combination of the following conditions:
(a)	place the person in the custody of a designated person or organization agreeing to supervise him;
(b)	place restrictions on the travel, association, or place of abode of the person during the period of release;
(c)	require the execution of an appearance bond in a specified amount and the deposit in the registry of the court, in cash or other security as directed, of a sum not to exceed 10 per centum of the amount of the bond, such deposit to be returned upon the performance of the conditions of release;
(d)	require the execution of a bail bond with sufficient solvent sureties, or the deposit of cash in lieu thereof; or
(e)	impose any other condition deemed reasonably necessary to assure appearance as required, including a condition requiring that the person return to custody after specified hours.
Clause 4 of the bill reads:
Any time spent in custody at the prison, penitentiary, reformatory or jail previous to the pronouncing of the sentence shall be credited to any person convicted of an offence.
1S34

June 16. 1967
Bail Reform
I believe, and I hope that hon. members will agree, that the proposed legislation gives the magistrate of the court adequate discretionary powers and powers to compel the appearance of the accused, while at the same time providing greater authority than is now the case for the court to judge the character rather than the money of the accused, in determining justice.
In conclusion I will say that failure to raise money should not be the reason for an accused remaining in custody. Deterrents against absconding should be vigilance of search, certainty of recapture and prosecution. It is my hope that the bill may find support and that hon. members may find sufficient merit in the subject matter of this proposal to refer it for more detailed discussion to the appropriate committee of the house, which might be the committee on justice and legal affairs.


Eldon Mattison Woolliams: Would the hon. member answer one question at this stage. Can we take the bill to mean that there would be an absolute requirement on the magistrate or the judge to make an order for release on the conditions which the hon. member mentioned?


Barry Mather: No, Mr. Speaker, I think it would give sufficient leeway and discretion so that no such requirement would have to be made.


Eldon Mattison Woolliams: May I ask the hon. member another question? I read in clause 2 of the bill the words: "Shall, at his appearance in court, be ordered". I wonder whether the hon. member gave some thought to these words.
[DOT] (5:10 p.m.)


Mr. Robert Stanbury (York-Scarborough):: Mr. Speaker, Bill C-4 raises the question which has been in the minds of many lawyers and legislators for some time, about the justice of the bail system in this country. The hon. member for Rosedale (Mr. Macdonald) referred to this problem in some detail during the debate on the speech from the throne at the beginning of this session, and I am glad to see that the hon. member who is sponsoring this bill has taken up the challenge and has made a proposal to the house which will perhaps encourage early attention to this matter by the government.
The speech from the throne indicated that amendments to the Criminal Code would be proposed during this session. I hope that provisions relating to release pending trial

will be part of these changes. The objectives sought by this bill can perhaps be accomplished largely, if not entirely, by amendment to the Criminal Code. It seems unnecessary to pass a separate bill, such as this one proposed by the hon. member. It is the practice under the Criminal Code in many areas of Canada, which is not as flexible as the hon. member would like nor as most commentators on this problem would like. The bill before the house, however, emphasises the desirability of release pending trial, and to this extent I think the bill serves a very useful purpose.
The Criminal Code is based on the principles of English law which recognize that, as a general rule, a person should retain his freedom pending a decision on any charge made against him. The author of the report to which my hon. friend referred. Professor M. L. Friedland of the University of Toronto, in a speech delivered to the John Howard Society of Kingston on February 22, 1966, pointed out that the concept of bail which he advocated is the one envisaged by the Criminal Code and the one presently in operation in England. Professor Friedland claimed that the practice in the administration of justice in the province of Ontario, or at least in Toronto where his study was undertaken, was "an undesirable and unjustified gloss on the traditional concept of bail". It may be, therefore, that little change in the Criminal Code is required and that what is required is extensive change in the practice of the local authorities in applying the terms of the Criminal Code.
I think that the hon. member who sponsored this bill did not go as far as the hon. member for Rosedale (Mr. Macdonald) went, because as reported at page 306 of Hansard for May 16 last there is a recommendation by the hon. member for Rosedale in these terms:
My recommendation, therefore, is that the provisions of the Criminal Code requiring that an accused person be taken into custody for a broad spectrum of offences should be sharply curtailed and that many offences should he exempted from the necessity of custody and therefore of bail.
What the sponsor of this bill does attempt to do is to put the emphasis on the release of prisoners rather than on their detention. The general effect of the present sections of the Criminal Code is that the court may release an accused on bail on his own recognizance with or without a deposit or with or without sureties. Aside from the special case of offences punishable by death or life imprisonment, the proposed bill would make it the general rule that an accused must be released without
June 16. 1967

having to find sureties or deposit money. Second, the conditions under which sureties, cash deposits or other restrictions could be imposed would be limited to the case where the judge considers that release without bail will not assure attendance of the accused at trial.
Certainly, Mr. Speaker, there have undoubtedly been abuses under the present system. It has been pointed out by the hon. member for Rosedale and by Professor Friedland that in far too many cases, certainly in the Toronto area and I assume elsewhere in Canada, proceedings under the Criminal Code too often are commenced by arrest rather than by summons.
In a submission to the Canadian Committee on Corrections the John Howard Society had this to say:
The practice of allowing bail is obviously to put the accused at the least inconvience until his guilt or innocence is established. However, there is a crucial problem related to the establishing of the amount of bail. A bank robber might be willing to forfeit a large amount put up through the receipts of his crime whereas a $50 bond may be an impossibility for a maried man on a low income. Thus the poor, the homeless and the friendless may be discriminated against. If unable to face the economic and social distress of incarceration while awaiting trial the accused may borrow money for bail which might leave him v/ithout funds to retain a lawyer, putting him at an immediate disadvantage in court.
The Society recommends: a much broader use of an accused's own recognizance; bail set at a minimum amount consistent with the likelihood of his appearing in court; consideration of the accused's economic situation in determining bail; use of bailbondsmen to be discouraged as the part payment put up by the accused is probably sufficient in itself; the establishment of an investigation bureau in large metropolitan areas, where the accused is not likely to be well known, to establish quickly his economic position.
Similar recommendations were made by the John Howard Society to the McRuer royal commission inquiry into civil rights in Ontario. In the Society's brief to the McRuer commission it said it might be argued that the practice with respect to bail negates the presumption of innocence until proven guilty, or to the contrary, that it supports this presumption by placing the defendant at the least inconvenience until he is proven guilty. The considerations which determine the granting of bail and the amount of surety should be based upon the probability that the defendant will appear in court to face trial, that he will not commit other offences while at liberty, that he will not intimidate witnesses and that he will not remove or destroy evidence. I Suggest that all of these purposes can be
Bail Reform
served without resort to the practice that has been so common, particularly in the Toronto area, of placing undue emphasis on money as the basis for release from custody.
[DOT] (5:20 p.m.)
Professor Friedland, in speaking to the John Howard Society of Kingston said that detention before trial had been one of the most neglected areas in the whole administration of criminal justice. He pointed out that questions concerning bail and custody arise only where the accused is arrested rather than summonsed. He reported that the overwhelming majority of accused persons in Toronto who had been charged with criminal offences were arrested rather than summonsed. The authorities in Toronto have attempted to correct this situation, but perhaps an amendment to the Criminal Code along the lines suggested by the sponsor of the bill and the hon. member for Rosedale would encourage that process of reform.
I think that the sponsor's proposal, for the committee on justice and legal affairs to study this problem, is reasonable. There should be an examination of the other side of the coin. The association of police chiefs should be given an opportunity to make representations to members of parliament so that the difficulties, as seen by the police, can be explored. Members of the legal profession and other interested groups should be given an opportunity to express their opinions. It seems to me that this problem ought to be attacked by parliament in this session if possible, and when changes are introduced in the Criminal Code I hope that bail will be one of the subjects of change.
I wish to quote briefly from an editorial in the Toronto Daily Star of April 28, 1967, which seems to put the problem as well as I have seen it put by any speaker or writer. In saying what it did the Star referred to something which affected constituents of mine. It said:
The futility of the bail system in Canadian courts was perfectly illustrated by the case of James Royal here this week.
Royal was charged with rape, and committed for trial in the Supreme Court. Bail was fixed at $3,000. A friend of Royal's persuaded a Scarborough couple to post it for him, although they did not know the accused.
Royal failed to appear for trial, and has apparently left the province. His bail was accordingly forfeited. Chief Justice Gale reduced the forfeiture, but the Scarborough couple will still have to pay $2,000.
What purpose did this whole procedure serve?

June 16, 1967
Bail Reform
The posting of $3,000 did not prevent Royal from fleeing the jurisdiction. It will not make it any easier to track him down and arrest him.
The only effect has been to subject a couple, whose sole offence was to be too trusting, to a heavy penalty.
Yet at the same time many people who are charged with much less serious offences and who have no intention or likelihood of fleeing to escape trial, are kept in jail, sometimes for months, because they or their relatives cannot raise the required cash or property bail.
Would it not be simpler and better, when a man is committed for trial, for the magistrate to consider whether he can safely release the defendant on his own recognizance-that is, on his undertaking to appear before the court on the day set?
In the majority of cases, release on these terms would be quite safe. The average defendant, especially if he has a job and family, is not likely to take to flight and become a fugitive from justice for the rest of his life.
There are instances where, because of the extreme seriousness of the charge, or the defendant's past record, or for some other reason, there is real cause to fear that he will skip out.
In that case it may be necessary to keep him in jail until the trial. In the James Royal case, for example, it might have been wiser to keep the accused behind bars.
But, the decision to hold or release the accused should be based on the circumstances of the case and the man's position and reputation-not, as it is now, or whether he can raise a specified amount of money or persuade someone else to put it up for him.
The presence or absence of a bail bond, we suspect, has little or no effect on a defendant's decision to stay or run away.
The bail system, in fact, is one of those medieval survivals which encumber our courts, and which make no sense under modern conditions.
The time is overdue to eliminate it.
The sponsor of the bill has performed a service in bringing this matter to the floor of the house, and the hon. member for Rosedale has contributed much to the consideration of the problem. I think that the committee on justice and legal affairs should have an opportunity to consider it and I hope that the Minister of Justice will see to it that the committee has that opportunity.
I hope, too, that we shall see an amendment to the Criminal Code later in this session, and that the ideas contained in the present bill as well as those ideas that are contained in the remarks of the hon. member for Rosedale, the suggestions made by the John Howard Society and those of Professor Friedland will be considered in framing a more liberal Criminal Code which better reflects the traditions of British justice than does our present code, and the practice under it, in Canada.
[Mr. Stanbury.l


John George Diefenbaker: Mr. Speaker, this is the first occasion in many, many years-


Some hon. Members:: Hear, hear.


John George Diefenbaker: -that I have spoken on a private member's resolution, or bill. I do so because of my impression, gained over years at the bar, that in the field of bail there has been a series of shortcomings that all of us should have looked into long ago.
I must say at once that the hon. member for York-Scarborough in his summation at the end of his remarks and in quoting the editorial from the Toronto Daily Star has clearly enunciated the situation.
I have frequently argued in favour of private members being able not only to present their views but to have the opportunity of seeing their resolutions passed, if parliament is to be preserved.
Hon. members spend a great deal of time-and I am speaking of private members-in preparing bills and resolutions. They have one bite at the apple for one hour, and that is the end. Too frequently, almost without exception, their bills die a natural death.
I hope that a different fate will await the bill introduced by the hon. member for New Westminster (Mr. Mather). He has presented his case with ability and humanitarianism. We know that no amount of bail will prevent those who would escape from getting away if the opportunity offers itself.
[DOT] (5:30 p.m.)
I can think of examples which readily occur. I think of Hal Banks who today sojourns in the salubrious areas of the United States. Convicted in Canada, sentenced to five years, let out on bail for $25,000, he finds it much more in tune with his sensitivities to be abroad. What is $5,000 a year to anyone receiving the salary he receives, or received in the past?
There is also John Doyle who was found guilty in the United States of a fraud against the securities laws of an American state. He came back to Canada, to Newfoundland, where he is free and beyond interference. He engages from time to time in political "fixing" about which I can go into detail if anybody wants information on the subject. But there he sits, a respected financier who owed the Canadian government literally millions of dollars in income tax according to the Department of National Revenue, back in our midst living the life of a respected gentleman
June 16, 1967

because he was able to secure bail following his conviction.
Too often the possession of great riches or the ability to put up a large amount of bail places certain people in an advantageous position while the poor must remain in custody. There are various cases to which reference can be made. I can think of one in the last few weeks. The hon. member who preceded me mentioned Toronto. I do not think Toronto is in any different position because, after all, Toronto has rightly earned the description "Toronto the Good"; that is what it was called in my boyhood days in the east of the city, and no one wants to take away that description today. What the hon. member has described as taking place in Toronto takes place in other parts of the country.
I would respectfully suggest that this bill should not be talked out, and I will not contribute to that occurrence. I believe it should be passed with one qualification-that it should be examined carefully in committee in the manner proposed by the hon. member for York-Sear borough (Mr. Stanbury): Every discretion is left to the judge or the magistrate before whom an application for bail is made in order that the appearance of the person concerned may be assured. We should not allow poverty to be a passport to prison even for a matter of months prior to trial.
The judge has wide discretion. The safeguards are here. The trend in criminology today is not to imprison in cases where it is possible to be reasonably assured, following a first offence, that the ends of justice will be met without the imposition of imprisonment. No one should be sent to prison for any period of time if the judge before whom an application for bail is made can be given a reasonable assurance that the person concerned will turn up for trial.
I say to the hon. member who introduced this bill that strong criticism can be levelled against all of us for not having brought about years ago the implementation of the plan he presents. There may be shortcomings in certain parts of it; there may be alterations which should be made. But the principle deserves to be accepted, and that is what second reading is for. I give my unequivocal support to the purpose, the objective and the general idea which is inherent in this bill and I hope that the house once and for all will show that private members' bills shall not be subject to the guillotine, in a round about manner, by being talked out when they have in them so much to commend as has this bill before us.
Bail Reform
The hon. member for York-Scarborough has made a perfect case for this bill and I feel sure he must have been speaking for the Liberal party in what he had to say. This matter should not be left in a state of suspended animation; it is something which deserves the support of all. It is above political considerations. Bail is granted in all types of cases. I have had bail granted in murder cases when the judge concluded that the evidence at a preliminary hearing was not of such a compelling nature that there was a full and complete case made out. The bail was quite small, as a matter of fact-$5,000. It could have been raised in the two cases to which I referred earlier, but very often bail of even $50 is too much to impose.
No matter whether an individual is acquitted thereafter or not, the fact that he was kept in jail before his trial leaves on him a stigma which remains for years. I ask for support for this bill and at the same time I add once more my appreciation to the hon. member for having brought forward a measure which deserves general support.


Mr. Georges C. Lachance (Lafontaine):: Mr. Speaker, I should also like to add a few comments about that interesting bill introduced in the house by the hon. member for New Westminster (Mr. Mather).
I am very happy that the Leader of the Opposition (Mr. Diefenbaker) agreed to say a few words about that matter, in view of the fact that he said that it had been a long time since he had last taken part in a debate on private members' hour, and all the more so since his reputation as a criminal lawyer is very well known.
However, Mr. Speaker, I do not fully agree with the Leader of the Opposition when he says that since the bill is proposed on private members' hour, it should necessarily be passed by the house. I have too often heard him say that a matter should be studied very closely before being approved by the house, to agree with him that after an hour's discussion a bill proposed by an hon. member should necessarily be passed.
Even if I sincerely commend the hon. member for New Westminster for having submitted to the house this bill whose object is to correct abuses in the legal field, I have to confess that it does not come up completely to my idea of the amendments which should be made to existing legislation, and especially the Criminal Code as far as the release of the accused until the end of his trial is concerned.

June 16, 1967
Bail Reform
In my opinion, this bill originates from natural laws for the prevention of abuses, but it leaves everything to arbitrary action, and too much has been left to discretion for too long. I take the liberty to draw from the vast experience I acquired in the practise of my profession since I had the opportunity to act as assistant attorney general for the province of Quebec, in Montreal, for some time.
Even though I performed those duties for only a short time, that is, for two years, I realized that some provisions in this act concerning the release of accused persons had to be changed.
First of all, I am willing to admit that an accused is presumed innocent until proved guilty by the court, that such person must necessarily enjoy all the advantages of his innocence and, thus, of his freedom, whenever possible.
Let me summarize briefly the present bail system. A person may be released pending the conclusion of the court proceedings either on his own recognizance or on a personal bail for a certain amount, or on bail supplied by a third party on real or personal property, or on a personal bond or a bond supplied by a third party.
[DOT] (5:40 p.m.)
Doubtless much could be added, could be said on the matter, but my time is rather limited. I should like to mention however, that bail, considering present-day progress, should be related, first, to the cost of prosecution and next, to the compensation awarded the victim or victims of the offence.
Police work and communications systems being as perfected as they are, Mr. Speaker, I do not think the accused stands a chance of getting away and evading the due processes of law. But, and this is very important, should it happen, costs incurred by the Crown or by the person suing privately should be guaranteed, up to a point, and the victim or victims should receive compensation if the accused were to disappear. Therefore, I suggest that those are the two major considerations on the basis of which bail should be set.
In view of the fact that the costs of prosecution are not very high, I fail to see clearly why bails of $10,000 or $15,000 should be granted, unless it is necessary to pay compensation to the victim. In such a case, the amount involved should be much larger.
The setting of a $20,000 bail to prevent people from getting away is, in my opinion, something which should not be taken into

consideration nowadays, especially when you consider that there are several bills on the order paper to the effect that compensation should be paid to the victims of criminal attempts or offences. A solution to the problem would be that, if a person disappears, the bail money be given to the victim as compensation and to cover the costs of the crown or the fees of the private prosecutor.
Mr. Speaker, in the course of the last few days, during a meeting of the commission of inquiry into the administration of justice in Quebec, I said that the Human Rights League had submitted an interesting brief, recommending that justices of the peace be appointed for a judicial district or districts, in order to receive information, hold hearings, adjourn proceedings and grant bail. These justices of the peace could arrange their sittings in such a way that a person could be set free on bail at any time of the day and on any day of the week.
The same brief-I am speaking of the Human Rights League because this is recent-mentioned the case of a lawyer who had to make eight or ten telephone calls before he was able to reach a judge at 11 o'clock at night to have someone freed on bail.
I often had the same experience myself when, at nine or ten at night, I had to make telephone calls to find a judge with the necessary competence to grant a $50 bail to a person who, for example, had been arrested, say, for speeding.
I have always thought that it was unfair and inconsistent with the spirit of the law. Now, if the Criminal Code were amended to enable the judge to sit during the night or at any time, that would help to solve the problem, but it would still be better to determine the granting of bails in advance through an amendment to the Criminal Code. Otherwise, I do not see how this problem can be solved.
The fact of having ten statutes conflicting with the Criminal Code is inconsistent with the spirit of the law, especially from the practical point of view. It would be advisable, for any minor violation, to determine the penalty for a warrant of arrest. Furthermore, Mr. Speaker, that amount could be determined according to the seriousness of the violation as well as the above-mentioned considerations and proportionately to the costs of the proceedings and the compensation of the victim of an offence. In this way, it would not be necessary to disturb a judge at 11 o'clock at night or to make ten telephone calls to set up
June IS, 1967

a $50 bail and release the accused. When it is impossible to reach a judge, or when the person arrested does not have the means to retain the services of counsel, he spends the night in jail, quite often even the whole week.
I have found by experience that this happens regularly. We must be practical. I quite agree with all the principles involved in the statute, but we must also be practical when it comes to methods and procedures.
I believe, Mr. Speaker, as I said before, that a summons should not be delivered in all minor cases, but I think-and I do not quite agree with the mover of this bill-that bail should be required even where the offence is punishable by death or life imprisonment.
There have been cases, in my personal experience, where people were charged with a crime punishable by death or life imprisonment who obtained bail, and rightly so. Such a bail has been granted on very rare occasions and only after due reflection and serious consideration of the record of the accused and of the offence. I do not see why this type of crime should be automatically excluded. Mr. Speaker, there is still much to be said on this question. I think that, up to now, the judges have been allowed to set the standards of bail.
From my own experience again, I may mention that I have yet to meet a lawyer who, on the morning of an appearance in court, or at any other time, could determine in advance or know how or when his client would be freed, or why he should not be.
Criticism must necessarily be avoided. The arbitrary and the abuses must particularly be avoided, and only through a much greater consideration of this question and, I must admit, not only through a suggestion that everybody be freed in the future, except in rare cases, can this problem be solved.
The hon. member for York-Scarborough (Mr. Stanbury) suggested that this bill should be submitted for consideration to the standing committee of the house. I fully agree with him. Not only that, but I am convinced that it should be submitted to the committee on justice and legal affairs. This matter has been under consideration for too long and it is too vital to the freedom of individuals to let such anachronisms subsist.
The Leader of the Opposition was right in saying that we should be ashamed for not having legislated on this matter long ago. I hope that we will have the opportunity to 27053-1051
Bail Reform
consider a government bill amending the Criminal Code in that respect.
More than that, we should not wait until a revision or a complete reform of the Criminal Code is made to solve that problem, because it is urgent. If, after studying that problem in committee, we can get directives, I feel that the government will have to propose amendments. If need be, the government should introduce a bill even before the committee has submitted its report. I am convinced, besides, that the government has in the Department of Justice a bill already prepared about that. It is a matter of time and of knowing when such a bill should be introduced in the house.
I think that the leaders of the various parties should come to an agreement so that a bill in that respect can be introduced by the government and even discussed by the committee of the whole House of Commons.
It is too important a matter. The Bill of Rights is flouted every day in our courts of justice, as concerns the release on bail of the accused.
And I would certainly be one of the first to approve any legislation by the government which could improve that matter of bail in our courts of justice.
[DOT] (5:50 p.m.)


Stanley Howard Knowles: Mr. Speaker, in view of the fact that it has been urged on both sides of the house that the subject matter of this bill be sent to the standing committee on justice and legal affairs, I wonder whether the house would entertain such a motion. I have the appropriate motion written out, but there is no point in moving it just for the purpose of adding to the debate. However, if it expresses the will of the house I should be happy to move, seconded by the hon. member for Kootenay West (Mr. Herridge):
That Bill No. C-4 be not now read a second time, but that the subject matter thereof be referred to the standing committee on justice and legal affairs.


Marcel Prud'homme: Mr. Speaker, I-


Stanley Howard Knowles: Let Mr. Speaker read the motion.


Marcel Prud'homme: He may read it, but I wish to speak on the motion.


Mr. Deputy Speaker:: Order, please.

June 16, 1967
Bail Reform


Marcel Prud'homme: I think it is six o'clock, Mr. Speaker.


Mr. Deputy Speaker:: Order, please. It has been moved by Mr. Knowles, seconded by Mr. Herridge:
That Bill C-4 be not now read a second time-


Marcel Prud'homme: Mr. Speaker, I have something to say


Mr. Deputy Speaker:: Order, please. Will the hon. member please resume his seat. It has been moved:
That Bill No. C-4 be not now read a second time, but that the subject matter thereof be referred to the standing committee on justice and legal affairs.


Stanley Howard Knowles: Question.


Marcel Prud'homme: Mr. Speaker, I see, of course, that it is already past six o'clock, but I would have liked to say a few words on the bill. There is no doubt in my mind that hon. members on this side of the house will do anything possible under the circumstances to inform the Minister of Justice (Mr. Trudeau) of the purpose of the amendment which is the subject of this debate.


Mr. Deputy Speaker:: Order, please. The hour for the consideration of private members business has expired. It being six o'clock, this house stands adjourned until two thirty o'clock in the afternoon of Monday next.


[Stage Direction]
At six o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Monday, June 19, 1967