PRINTING OF PARLIAMENT


[Stage Direction]
Mr. E. C. St. PERE (Hochelaga) moved that the first report of the joint committee of both houses on the printing of parliament be concurred in.
Motion agreed to.

Hon. FERNAND RINFRET (Secretary of State):: Mr. Speaker, in tabling a return to an order of the house passed on February 23 last with respect to Niagara River bridge, I would point out that all the correspondence has been brought down; but no reply has been given to the third question asked by the hon. member for Broadview (Mr. Church), because it relates to a matter of policy, which it is not customary for the government to indicate in advance.



PRIVATE BILL


[Stage Direction]
Bill No. 39, respecting the Dominion Association of Chartered Accountants.-Mr. Plax-ton.


[Stage Direction]
On the orders of the day:
Mr. H. J. BARBER (Fraser Valley):: Mr. Speaker, I would like to direct a question to the Minister of Labour (Mr. Rogers), which arises out of a problem facing the municipalities of the lower mainland of British Columbia. During the last three years a considerable number of families from the dried-out areas of Saskatchewan have been settling in that part of our province. Apparently they have sufficient to enable them to make small payments on property, but soon find themselves without any means of support and make application to the municipalities for relief.
According to statistics supplied to me by the Reeves' Association of Fraser Valley and which I have communicated to the minister, during the last three years fifteen municipalities have looked after 1,745 of these people, some municipalities looking after as many as 400. The problem is this: These families were on relief in Saskatchewan, paid I believe one hundred per cent by a federal depart-

War Veterans' Allowance Act
ment, and the government of British Columbia will not contribute toward relief until the applicant has been domiciled within the province for twelve months. The result is the burden falls 100 per cent on the municipalities; they must provide relief or pay transportation for these people back to their homes. Would it not be possible to continue the federal aid, through proper channels, until these families become settled and in a position to provide for themselves? There is no doubt that a large percentage of them will make good settlers if they are only given an opportunity.
Hon. NORMAN McL. ROGERS (Minister of Labour): Mr. Speaker, the hon. member was good enough to give me notice of this question. I shall be very glad to obtain the information and supply him with it as soon as possible.



SEED GRAIN


[Stage Direction]
On the orders of the day:
Mr. T. C. DOUGLAS (Weyburn):: Mr. -Speaker, I should like to direct a question to the Minister of Finance (Mr. Dunning). I wonder if the government contemplates action early enough this year to provide seed grain for the farmers on the prairies, or will it be necessary to wait until the Minister of Agriculture (Mr. Gardiner) has finished campaigning in Edmonton East?


Mr. McLEAN (Melfort):: That is a smart remark.	_
Hon. CHARLES A. DUNNING (Minister -of Finance): The intentions of the government in that regard are set out in an item already on the order paper, of which I am sure my hon. friend is well aware.



WAR VETERANS' ALLOWANCES


[Stage Direction]
The house resumed from Thursday, March 17, consideration in committee of Bill No. 35, to amend the War Veterans' Allowance Act- Mr. Power-Mr. Johnston (Lake Centre) in the chair.
On section 1-The South African war.
Mr. POWER:: Section 1 was allowed to stand as the result of certain representations to the effect that persons domiciled in Canada who served in the South African war in units [DOT]other than Canadian contingents might properly be brought under the provisions of this bill. I have now drafted two amendments to cover the matter. One is a substitute for paragraph (iii) of subsection 2. Paragraph (iii) reads:
(iii) In the case of the Canadian contingents serving in the South African war, the zone of military operations in South Africa in which Canadian contingents were engaged prior to the first day of June, 1902.
* I have substituted:
(iii) In the case of the South African war, the zone of military operations in South Africa in which the forces of the United Kingdom of Great Britain and Ireland were engaged prior to the first day of June, 1902.
That is in order to permit persons who served in units other than the Canadian contingents to come under the bill. It is proposed also to amend subsection 2 of the act by adding after subparagraph (ii) of paragraph (j) the following as (ii) (a):
Any person domiciled and resident in Canada immediately prior to the eleventh day of October, 1899, who served with the forces of the United Kingdom of Great Britain and Ireland in South Africa during the South African war; provided that such person landed in South Africa prior to the first day of June, 1902.


Mr. BENNETT:: I suggest that it might be desirable to use, instead of the words in paragraph (hh) "the war waged by the United Kingdom of Great Britain and Ireland. . as there is a great difference of opinion as to who started that war, the words "the war between the United Kingdom of Great Britain and Ireland and the Dutch republics." Does the minister not think that that change would be desirable?


Charles Gavan Power: I think it would be eminently desirable.


Mr. NEILL:: Will not the word "domiciled" promote confusion? Wouldn't "resident" be better? The question will arise, what is "domiciled"?


Richard Bedford Bennett: That is the whole point.


Charles Gavan Power: That is a very old question. The legal authorities in this chamber might very readily get into some kind of snarl if we started discussing the difference between residence and domicile. We have had the question up time and time again in connection with election acts, and I do not believe it has ever been settled to the satisfaction of everyone. But in this case we should, in my opinion, endeavour to stand by a fairly strict interpretation of " domicile." In its broadest sense I believe it would mean a person who was settled here with his family with the intention of remaining a citizen of this country,
War Veterans' Allowance Act

whereas residence would apply to a man who perhaps was here only temporarily while his family was living in some other country. In view of the fact that this is beneficial legislation and not intended to be too wide, we should restrict it to those who were really citizens of this country. Under the circumstances I believe that " domiciled " is the better word to use.


Alan Webster Neill: The object was, I understood, to provide for those who went to war, rather than to put it on the basis of domicile in Canada.


Richard Bedford Bennett: We could not justify this amendment at all if it were based on residence. As I have explained, the theory was that a man left Canada to go to the war and with the intention of returning to Canada. There are two elements which constitute domicile; the first is residence, and the second is the animus manendi, to use the language of the books. In other words there must be the intention on the part of the person who has resided in the country to make it his permanent home. The leading authority is the case of a very rich man from the United States who went to England and lived there for over twenty years. The House of Lords held that he was domiciled in the United States, because he always had the intention, as evidenced by his writings and his statements, of going back to the United States, and that was his home. The question there was one of succession duties. The hon. member for Comox-Alberni (Mr. Neill) with his usual legal astuteness, will grasp the point at once. The reason we are proposing to do something for a man who joined a force that was not a Canadian force is that he had resided here and went away with the intention of returning to Canada as his permanent home-these are the two factors that create domicile. He was therefore domiciled in Canada. If he had been a mere resident in Canada I fear we should have great difficulty in justifying the grant; we should find ourselves in a maze of complex difficulties. The language the minister has employed in the amendment is slightly different from that which I proposed to offer him, but I think his language is better calculated to indicate the thought I had in view. The action taken by the government will be appreciated by many who left here in good faith-because we were not then sending a contingent-joined British forces, and at the end of the war returned to Canada. The test of theiT ability to get money will be, did they come back to Canada at the end of the war or shortly after?
[Mr. Power.1


Mr. GREEN:: The words used in (ii) (a), "any person, domiciled and resident in Canada immediately prior to the eleventh day of October 1899," would not cover the man who went to England and enlisted in 1900 or 1901. Perhaps the wording should be the same as that used in the original War Veterans' Allowance Act: "who was domiciled in Canada at the time that he joined any such force." I think it would be better to have the wording the same for each class.


Charles Gavan Power: I do not understand the hon. member's objection. Does he mean to try to cover the case of the man who for some reason came to Canada say in 1900 after the war broke out and then decided to go back to England and joined a contingent there? That, I should say, is a very remote occurrence.


Howard Charles Green: That is the way the present act reads with regard to the great war.


Charles Gavan Power: Is it worth while, for about perhaps ten people, probably not more, to make an amendment?


Howard Charles Green: There may be only ten who are covered by the amendment, but surely they should receive consideration.


Charles Gavan Power: I do not think there is necessity for the amendment. The case suggested by my hon. friend would not arise. It would involve a man having been resident outside Canada, in England, let us say, at the time the war broke out, then coming here and remaining for a few months and returning to England to join the troops that were proceeding to South Africa, and then coming back to Canada. It is hardly likely that he would have the animus manendi, that my right hon. friend speaks of.


Richard Bedford Bennett: Those are the only words the books do use to cover it.


Charles Gavan Power: I can remember pleading a case before the circuit court in Quebec when I endeavoured to show that a man who was employed as a cigar maker in Toronto and had been so employed for twenty years was still entitled to be on the electoral list in Quebec, that since he had that animus he remained on the list. Some will say that he voted though he was absent.


Richard Bedford Bennett: His political predilections were fairly well defined. May I suggest that the words "and resident" would have to come out, because domicile involves residence.

War Veterans' Allowance Act


Charles Gavan Power: No. My cigar maker was resident in Toronto but was domiciled in Quebec.


Richard Bedford Bennett: I do not wish to join in any legal argument with my hon. friend, but I would point out that there can be no such thing as domicile without residence; there must be residence to constitute domicile. I remember Lord Haldane discussing the point once in a case in the Privy Council.


Charles Gavan Power: He does not know Canadian law.


Richard Bedford Bennett: But it goes beyond that; it is a matter of international law. The leading discussion of it is by a German named Savigny. The Winans case is one I had in mind, another being the case of Vanderbilt, who, it will be remembered, used to drive a four-in-hand to Brighton. The question of his domicile arose. The point I am making is that residence is a first essential ; the man must reside in Canada. My hon. friend is dealing with the question of domicile in an interprovincial matter, but in the matter that we are now discussing the veteran must reside in Canada and must have had the intention, evidenced by expression from time to time, of making Canada his permanent home.


Charles Gavan Power: I still have some doubts
as to the interpretation of residence and domicile given by my right hon. friend.


Richard Bedford Bennett: I will get the authority
and show it.


Charles Gavan Power: However, I am prepared
to have the words "and resident" omitted from the amendment, so that it will read: "Any person domiciled in Canada. . .".


Howard Charles Green: The South African war
lasted two or three years, and at that time there was extensive immigration to Canada from the British isles. Should we not cover those few men while dealing with the others?


Charles Gavan Power: Does my hon. friend know
one man who would come under any amendment that he would like to propose?


Howard Charles Green: I do not know of any who
would come under such an amendment, but perhaps the minister knows of some. Surely, however, the two sections I have referred to should be worded in the same way.


Sir EUGENE FISET:: I do not think
there would be any.


Richard Bedford Bennett: There are some in the
west.


Eugène Fiset: No. Most of those who did join the imperial units were attached at some time to Canadian units and therefore would come under the law.


Richard Bedford Bennett: The Strathcona Horse
was a Canadian unit in one sense, though not in another. I remember a number of Englishmen joined that unit long after 1899.


Mr. LOCKHART:: The minister seems to
appreciate the fact that there are many unusual circumstances, and hon. members have pointed out some of the exceptions that might arise. After all, this legislation is intended to cover as broadly as possible all cases that might come under the act. I could relate the unusual situation of one man who was in the South African war. Can the minister suggest under what clause the board has the opportunity of dealing with such exceptional cases?


Charles Gavan Power: What is the case my hon.
friend is referring to?


Norman James Macdonald Lockhart: I am referring to some of the possible cases that have been suggested.


Charles Gavan Power: I do not know of any such cases.


Norman James Macdonald Lockhart: Possibilities have been
brought to the attention of the minister. The hon. member (Mr. Green) suggested one case and I know of one pretty much along the same lines. Is there any provision in this bill empowering the board to deal with such cases? They are not being given that opportunity. The minister is hewing to the line as closely as possible.


Charles Gavan Power: That is not quite fair. In the first place, it was brought to my attention last year that a certain number of veterans who served in the Canadian contingent in the South African war might be indigent and might need to be looked after under the act, and in consequence of those representations I brought in amendments this year. Yesterday afternoon my hon. friend from Vancouver South (Mr. Green) stated a hypothetical case of men, resident or domiciled in Canada prior to the war, who served in some imperial unit. I said that I would take the matter into consideration and to-day I have brought in an amendment to cover that case. Now he brings to my attention a very remote hypothetical case of a man who had been travelling between Canada and England during the South African war, and whom he suggests we should cover. I do not know how to do it, and none of my hon. friends have suggested in what way
IFar Veterans' Allowance Act

the act should be amended to cover such a man. I submit that we have gone as far as possible.


Howard Charles Green: I simply suggest that we use the same language as is now used in paragraph (j) (ii) of the original act.


Charles Gavan Power: We agreed to that half an hour ago.


Howard Charles Green: No, the wording is different. In the original act it is provided:
Any former member of any of His Majesty's forces or of any of the forces of any of His Majesty's allies who was domiciled in Canada at the time at which he joined any such force for the purpose of the war and who served during such war in a theatre of actual war, . . .
In other words, an Englishman might have come to Canada in 1915 and in 1917 have gone back and joined an imperial unit; he is eligible for the allowance.


Charles Gavan Power: We are talking about the South African war.


Howard Charles Green: I am asking that the same provision be made for the South African veterans.


Charles Gavan Power: We have done so as far as we are able.


Mr. MacKENZIE (Neepawa):: I wish to congratulate the minister on having brought in this legislation. Sometimes it is difficult to decide who is eligible. I want to state a case that has come to my own notice and ask the minister whether he can give an assurance that it is covered. The man in question is No. 447, No. 4 squadron, Strath-cona Horse. He went to South Africa in 1899 and returned in 1901. He was wounded in the foot and hand and has a shrapnel wound in the forehead. He also suffered from dysentery and other sicknesses. Could 'the minister give any assurance that, if the facts are as I have stated, this man is eligible?


Charles Gavan Power: Certainly he is eligible, if he served with the Canadians in South Africa.


Mr. BETTS:: As to the point raised by the hon. member for Vancouver South (Mr. Green) the minister said that no member of the committee had suggested any way in which what my colleague wants could be done. But I can suggest a very simple way. If in the new paragraph (iii), subsection 2, which now reads " any person domiciled in Canada immediately prior to the eleventh day of October, 1899 " the words " domiciled in Canada at the date of his joining any such force " were substituted, or words conformable, the effect the hon. member seeks would be

achieved. Even if it touches only one case, or does not touch any, it would bring the new provision into conformity with the present section, and in any event would do no harm.


Charles Gavan Power: I am afraid it might deprive some who benefit under this amendment of some of their rights.


Frederick Cronyn Betts: How could it do that?


Charles Gavan Power: If the section passes as it is, I do not think there will be any great hardship.


Frederick Cronyn Betts: I am simply trying to get better legislation, as we all are, including the minister.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 3-Veterans to whom allowance is payable.
Richard Bedford Bennett: I have no suggestions to offer [DOT] to improve the language of subsection (c) as it now stands, except that the term " veteran " in the governing paragraph of the section would perhaps render unnecessary the repetition involved in some of the words in paragraph (c). But they are mere repetition, and cannot detract from the value.


Charles Gavan Power: I did take the opinion of the Department of Justice on my right hon. friend's suggestion, and they pointed out that he had perhaps inadvertently left out reference to " economic handicaps."


Richard Bedford Bennett: That is true. The hon. member for Comox-Albemi (Mr. Neill) directed my attention to that.


Charles Gavan Power: And that possibly it might still further restrict rather than broaden the paragraph.
The objection was made by the hon. member for London (Mr. Betts) that in the section as it is in the act at present dealing with persons over fifty-five years of age there is not the same reference to the unlikelihood of these people ever being able to maintain themselves in the future. I discussed that also with representatives of the Department of Justice, and they pointed out that in the paragraph to which he refers in the legislation as it exists at present it was not necessary to mention the unlikelihood of their being able to maintain themselves, because we specifically said that the veteran, in order to profit by that legislation, had to be pre-aged, disabled or generally unfit, and if he were all of those three it naturally followed that he was not likely to be able to maintain himself in the future. For that reason they advised that it

War Veterans' Allowance Act
would not have been necessary under the former act to add those particular words in order to get the effect which was desired, either broadening or restricting. The justice department is of the opinion that the amendment as submitted gives to the board ample scope to grant allowance to any veteran who cannot maintain himself and is unlikely in the future to be able to do so, regardless of the nature of his handicaps. That is, I think, the objective which we all want to reach. We all want to cover the case of the man who is incapable of looking after himself and who is partly disabled from obtaining work in highly competitive fields such as we have in Canada. I believe the suggested amendments as brought down in the bill cover that case.
We must leave something to the discretion of the board. Every hon. member who has spoken has told us that the board has in the past carried out its duties to the satisfaction of everyone, has been broad and generous and at the same time just. The greatest compliment we could pay to them would be to allow them to continue to carry on the work which they have been doing in the past without restricting them by any act of this parliament, by any change in phraseology. I think it is giving away no secret to say that the drafting of this legislation, which took considerable time and much thought and consideration, was done in collaboration with the chairman of the war veterans' allowance board.


Howard Charles Green: May we be quite certain that it is the intention of the government that all of the 5,100 odd men who were found to be wholly or partially unfit by the veterans' assistance commission are to be covered by this section as drawn?


Charles Gavan Power: Subject to investigation. I will not say that every one of those men will immediately get a war veterans' allowance, but it is the intention of the government to take in all the partially fit and the unfit. Whether an individual, Tom Jones, who was categorized as partially fit will come under this legislation, I cannot say. He should, but if for some particular and special reason known to the board he does not, I am not going to be responsible.


Howard Charles Green: But the intention is that that whole group will be covered?


Charles Gavan Power: Absolutely. This bill is
drafted with that intention.


Mr. MacNEIL:: Because of the point raised by the minister a few minutes ago I suggest the elimination of the last few words of subsection 2. They appear to be a direction to the board which limits the discretionary power
to which he has referred. I am content to see the 'board have ample discretionary power, but this is in the nature of a direction to use a certain test as to the availability of work. It seems to nullify provisions of paragraph (c) of the preceding subsection. Would not the minister be content to use the very language he used in committee yesterday, when he said he did not intend this act to apply to any veteran who in the opinion of the board is .physically and mentally fit?


Charles Gavan Power: That is exactly what the paragraph says. Let me read it:
(2) The provisions of paragraph (c) of sub section 1 shall not be construed to apply to any veteran who is, in the opinion of the board-[DOT]
Full discretion is given to the board.
-physically and mentally capable of maintaining himself if work were available.
That puts it on the shoulders of the board and the -board only to decide whether the man is physically and mentally capable. We are giving them the widest possible discretion.


Charles Grant MacNeil: Would it not be possible to leave out the phrase "if work were available"?


Charles Gavan Power: No, really we should have something like this in order that ex-service men generally will not be deceived by this legislation. I want it to be clear beyond the shadow of doubt what the legislation means; that it does not cover the man who is able to work, and the only way to do that is to write it into the bill. It would have been much easier for me, and the bill would perhaps have had a far better reception throughout the country, had we left that provision out. But I think we have to be fair to the ex-service men by telling them just who is to benefit and who is not, and it is for that reason this is inserted in the bill.


Frederick Cronyn Betts: I am very appreciative of
the trouble the minister has taken with this bill in holding over this section and in consulting the Department of Justice. I have the greatest respect for the opinion of the officers of that department, but in this particular case I do not agree with them. I do not think the new section 4 will give the board nearly as wide a scope as the old section. I hold that view because of the reasons advanced just now by my two friends from Vancouver. Therefore, I propose to move an amendment to the bill. In order that the record may be absolutely clear, I shall read the old section, the section which the government is now. proposing, and the amendment I intend tc suggest.

War Veterans' Allowance Act

The section dealt with by this bill is section 4 of the War Veterans' Allowance Act, which is chapter 48 of the statutes of 1930, as amended by chapter 48 of the statutes of 1936. This section reads:
Subject as hereinafter provided, allowances under this act shall be payable with the approval of the board to any veteran who, at the date of the proposed commencement of the allowance, has attained the age of sixty years or is, in the opinion of the board, permanently unemployable by reason of physical or mental disability, or having served in a theatre of actual war, has attained the age of fifty-five years and is, in the opinion of the board, incapable of maintaining himself because of disability, pre-aging and general unfitness, and in either case is, and has for the six months immediately preceding been domiciled in Canada.
Under that section the board is asked to consider whether an applicant is in its opinion incapable of maintaining himself for various reasons. There is no duty cast upon the board of considering the likelihood of an applicant becoming capable of maintaining himself. I turn next to the section proposed by the minister, being section 3 of the present bill, which reads:
(1) Subject as hereinafter provided allowances under this act shall be payable with the approval of the board to any veteran who has been domiciled in Canada for the six months immediately preceding the date of the proposed commencement of the allowance, and who
(a)	has attained the age of sixty years, or
(b)	has not attained the age of sixty years, but is, in the opinion of the board, permanently unemployable because of physical or mental disability, or
(c)	does not qualify by age or disability under the two preceding paragraphs, but having served in a theatre of actual war, is in the opinion of the board incapable and unlikely to become capable of maintaining himself because of economic handicaps combined with physical or mental disability or insufficiency.
I am critical also of subsection 2, which reads:
The provisions of paragraph (c) of subsection one shall not be construed to apply to any veteran who is, in the opinion of the board, physically and mentally capable of maintaining himself if work were available.
I shall not read subsection 3, because I have no quarrel with it. Allow me to review my objections. My submission is that the board is asked in every case to form an opinion whether an applicant is likely to become capable of maintaining himself. I submit that the board will find it far more difficult to grant allowances under these circumstances than it does under the present legislation. At present all they have to decide is whether an applicant is incapable of maintaining himself. This new phraseology makes it necessary for the board to find in addition, as a matter of carefully

considered opinion, that the applicant is unlikely to become capable of maintaining himself. The minister has said on more than one occasion that he is particularly desirous of giving the board the widest possible discretion. I agree that that is eminently desirable, but it seems to me that the only possible interpretation we can place upon this language is that it will have the effect of restricting the discretion of the board. It gives them one more point to consider and one more matter in connection with which they will have to form an opinion. Therefore, I say that it is not implementing what the minister has told us is his desire in the matter, nor is it in conformity with the recommendations of the veterans' assistance commission, as found on page 69 of their report. The recommendation in connection with unfit veterans reads:
That the War Veterans' Allowance Act be amended by removal of "age 55 years," where it refers to the granting of an allowance because of disability, pre-aging and general unfitness;
And further:
That the act be amended so as to permit a more liberal interpretation of legislation covering the granting of the allowance at any age to a veteran who saw- service in a theatre of actual war and who, because of his unfit condition, or other handicaps, is unable to maintain himself.
There is nothing in that recommendation about the likelihood or probability of a veteran becoming capable of maintaining himself. I submit that the present section is out of line with the recommendations of the veterans' assistance commission. It is also out of line with the resolution passed at the convention of the legion held in Fort William in February of this year. That resolution reads in part:
-and to ensure adequate assistance for those who saw' service in a theatre of actual w-ar and who are now by reason of economic conditions combined with their disability, tangible and intangible, resulting from war service, unable through no fault of their own to secure employment.
The minister had this to say in connection with that resolution, as reported on page 1039 of Hansard:
It mav be said that in passing this legislation we shall be fulfilling to the utmost the requests of the returned soldiers themselves as expressed through the dominion convention of the Canadian legion held in Fort William early in February-
My submission is that by reason of the phraseology which obligates the board in every case to consider whether a veteran is unlikely to become capable of maintaining himself, the minister's statement is incorrect.

War Veterans' Allowance Act
I should like to repeat that I am extremely appreciative of the work of the war veterans' allowance board and I am just as anxious as the minister that this board shall be enabled to operate in the future with completely unfettered discretion. But I do not want to place a board which has been doing good work in an embarrassing position. It has protected the interests of the soldiers and the treasury. It has held the scales in a nice balance between the two interests, and I say that a board constituted as is the present one would be very much embarrassed by regulations placing upon it the duty to consider in each case whether an applicant is likely to become in the future capable of maintaining himself. So far as veterans between the ages of fifty-five and sixty years are concerned, this provision undoubtedly narrows the benefits of the act. It makes the act more restrictive.
So much for a board seized of the right idea in dealing with veterans' administration. Suppose we were to put this legislation in the hands of a board unsympathetic towards veterans, as have been some boards and commissions of which we have had knowledge. I say we are placing in the hands of the board an instrument which would make it very easy for them to grant no allowances at all to the class of men the measure is intended to benefit. I would remind the minister that the personnel of boards changes from time to time, but the provisions we place on the statute books will stay there for some considerable time, and the removal of that which is not in the interests of returned soldiers would involve a great deal of difficulty and expense.
Therefore I move, seconded by Mr. Brooks:
That section 3 of the bill as printed, be amended by deleting the words "and unlikely to become capable" where the said words appear in line 33 thereof;
And by deleting subsection (2) of the new section 4, lines 30 to 39 inclusive of the bill as printed;
And by changing the number of the last subsection of the said new section 4 from (3) to (2).
That amendment, if accepted, would make the new section 4 read as follows:
4. (f) Subject as hereinafter provided allowances under this act shall be payable with the approval of the board to any veteran who has been domiciled in Canada for the six months immediately preceding the dale of the proposed commencement of the allowance, and who
(a)	has attained the age of sixty years, or
(b)	has not attained the age of sixty years, but is, in the opinion of the board, permanently unemployable because of physical or mental disability, or
(c)	does not qualify by age or disability under the two preceding paragraphs, but having served in a theatre of actual war. is in the
opinion of the board incapable of maintaining himself because of economic handicaps combined with physical or mental disability or insufficiency.
(2) An allowance shall not be awarded or continued under this act to a veteran or a recipient while such veteran or recipient is in receipt of an old age pension awarded under any proyincial old age pension legislation adopted in pursuance of an agreement made under the authority of the Old Age Pensions Act.
My submission is that if the present section is so amended the intention of parliament, of the legion convention, and of the minister will be fully carried out.


The DEPUTY CHAIRMAN:: The question is on the amendment.
Amendment negatived: Yeas, 24; nays, 61.


Norman James Macdonald Lockhart: The amendment has
now been declared lost.


An hon. MEMBER:: Yes.


Norman James Macdonald Lockhart: There is no reason to be proud of it, and I shall give the reason why.


An hon. MEMBER:: Nothing to be ashamed of, either.


Norman James Macdonald Lockhart: The amendment as proposed by the hon. member for London-


Mr. DUNNING:: On a point of order, there has been a vote on the question the hon. member is discussing.


Norman James Macdonald Lockhart: I am not speaking to the amendment. The amendment has been decided upon, and we are now speaking to the original section.


Charles Avery Dunning: That is right.


Norman James Macdonald Lockhart: These words still appear in the section: "-in the opinion of the board, physically and mentally capable of maintaining himself if work were available." If the minister will listen for a moment I shall give details with respect to the point I am trying to make, although I cannot give exact dates. We are attempting to take care of a large number of South African veterans. I do not recall the number; the minister has stated the number.
The two men I have in mind are partially disabled. They have never had relief or assistance of any kind, but through the influence of friends they have been able to earn a livelihood for themselves and their families. I am of the opinion that they will now come' under the section of this act which we have been largely discussing. I am not so sure that these men could have obtained employment if it had not been for influential friends helping them. Now if in the opinion of the board such work was available for these men, they may not be ligible under this act. That is the point I want to make clear. These
146S
War Veterans' Allowance Act

two men, now fifty-seven years of age, have been able to get work of a certain kind up to the present, but if they are unable to obtain this certain type of work in the future, I am afraid that in the opinion of the board they may not be eligible. The minister said earlier in the session that the board had not discretionary powers, that they had no latitude, but he has said since that they have latitude. I do hope that borderline cases of this kind, where the men are fifty-seven years of age or thereabouts will be able to get the benefit of the act even in the face of the wording of this section.


[Stage Direction]
Section agreed to.
The CHAIRMAN:: Shall I report the bill?


Frederick Cronyn Betts: No, Mr. Chairman, I have a further amendment to move. I move that a section be added to the bill dealing with the treatment in departmental hospitals of recipients of an allowance under the War Veterans' Allowance Act who are not in receipt of a pension.


Charles Gavan Power: I would point out that such an amendment would not be in order, because it would involve the expenditure of money.


Frederick Cronyn Betts: I think the point is well
taken, Mr. Chairman.
Bill reported, read the third time and passed.



FARMERS' CREDITORS ARRANGEMENT ACT


[Stage Direction]
Hon. CHARLES A. DUNNING (Minister of Finance) moved that the house go into committee on Bill No. 25, to amend the Farmers' Creditors Arrangement Act, 1934.
Motion agreed to, and the house went into committee, Mr. Johnston (Lake Centre) in the chair.
On section 1-Interpretation.
Charles Avery Dunning: Mr. Chairman, in connection with section 1, I am proposing an amendment which, for the convenience of members of the committee, I arranged to have printed in the votes and proceedings of yesterday. It is the only house amendment I intend to propose, and it is for the object of making it quite clear that with respect to lack of privity of contract, cases which have been before the board and have not been dealt with because of lack of privity of contract will not be debarred from being dealt with by the board from now on. Also it is intended to cover cases where the board refused to deal with and dismissed cases on account of lack

of privity of contract, and with a third case where the board of review declined to deal with non-privity mortgages but did actually deal with the farmer's other debts. I will ask my colleague, the Minister of Public Works, to move the amendment.


Mr. CARDIN:: I move, Mr. Chairman:
That clause 1 of the bill be amended by adding thereto as subsections (2) and (3) thereof the following:
"(2) If, in the case of a proposal filed prior to the commencement of this act, a debt secured by mortgage, hypothec, pledge, charge, lien or privilege on or against any property of the farmer '(hereinafter referred to as the secured debt) has not, by reason of the absence of privity of contract between the farmer and a secured creditor as herein defined, been dealt with by way of a composition, extension of time or scheme of arrangement, the farmer shall be entitled to have the proposal proceeded with or to file a new proposal, in either case, for the purpose of having the secured debt dealt with by way of composition, extension of time or scheme of arrangement in the like manner and with the like results as if this act had been in force at the date of the filing of the original proposal.
(3) In the case of a proposal formulated by a board of review prior to the commencement of this act whereby a secured debt was dealt with, the farmer shall, notwithstanding the absence of privity of contract between himself and a secured creditor as herein defined, be entitled to have such proposal confirmed by the board of review in the like manner and with the like results as if this act had been in force at the date of the filing of his proposal by the farmer."


Mr. DONNELLY:: There is one point on which I am not clear. A farmer owns five quarter-sections, against which there is a mortgage of eight or ten thousand dollars. He sells one quarter-section to another farmer for $1,700. The farmer who buys it pays up to a thousand dollars on this quarter-section; he is willing to pay the other seven hundred dollars and wants to get title to the land, but the mortgage company refuses to release it. Does this cover a case of that kind, or not?


Charles Avery Dunning: The question is a difficult one to answer, because it presumes a set of circumstances which relate not only to lack of privity of contract but to other conditions which are not dealt with by this section. A simple case of lack of privity of contract is that of a farmer who has bought a farm subject to a mortgage. The mortgagor, however, the one who has real relationships with the mortgagee by virtue of the mortgage document, is not before the board of review. The party before the board of review is the farmer at present living on that piece of land and trying to make his livelihood there. It has been held that the board of review has no

Farmers' Creditors Act
authority in connection with a proposal by the farmer who is living on the land to deal with that mortgage, because the farmer who is living on the land is not the mortgagor.


James J. Donnelly: He is not in this case, either.


Charles Avery Dunning: That, I think, is the simplest explanation of the law of privity of contract and the sort of case which causes most frequent difficulty. It is that difficulty which we are seeking to overcome in the section now under discussion; I do not know that I can go into the legal position of the case my hon. friend is assuming.


James J. Donnelly: Many cases of the kind I have just mentioned come before the board which they are unable to deal with. Take for example a man who buys a quarter-section of land and agrees to pay $1,700. There is a general mortgage against five quarters. The mortgage company refuses to release that quarter-section when the farmer is willing to pay the purchase price. I do not know how such a case is to be dealt with.


Mr. BOTHWELL:: It seems to me that the question referred to by the hon. member for Wood Mountain is easy to answer. The Farmers' Creditors Arrangement Act does not deal in any way with the situation presented by the hon. member. It is simply a matter of contract. In the first place the individual who bought that quarter-section had the opportunity of searching the title to the land, and had he done so he would have found the mortgage registered against five quarter-sections. He took his own chances when he bought a quarter with a mortgage sufficient to cover five quarters. The Farmers' Creditors Arrangement Act does not deal with that situation.


Mr. TUCKER:: I believe that by the amendment it does, because it is specifically stated, " a person holding a mortgage ... on or against the property of the debtor." It seems clear to me that if a person buys a piece of land covered by a mortgage and the mortgage covers other land besides the piece he bought, the mortgagee " holds the mortgage against the property of the debtor" within the meaning of the act and so is a "creditor" as defined by the amendment. In a case such as mentioned by the hon. member for Wood Mountain the board of review would, I feel satisfied, have full jurisdiction and could make an order separating the obligation and cutting it down to the amount it regarded as proper against the particular parcel owned by the farmer. I do not think there can be any doubt about that.
I should like to bring another matter to the attention of the minister. I do not know whether in the opinion of the law officers it is covered, but I read over the whole amendment to section 1 changing the definition of " creditor " and I doubt whether it would be held to cover such a case as this. A person might sell a parcel of land to A, A might assign the agreement to B, and B might have been farming that land for the last ten years and might have made substantial payments, but with no privity of contract between the vendor and B I doubt whether the definition as given in the proposed amendment covers the vendor in an agreement for sale in such a case, and I think it should, because he is in the same position as a person who buys land subject to a mortgage. To make it abundantly plain, I suggest there should be some such amendment as adding after " thereof " in the fourth line the following words, " or a vendor or his assign in an agreement of sale of property in which the debtor has an interest." Otherwise you are dealing with only half the problem, because many people who have bought land under agreement of sale need the benefit of this bill as much as people who took over land subject to a mortgage.


Mr. STEWART:: I think I see two serious objections to this amendment. In the first place it is retroactive; as I understand it, it applies to any farmer whose case has been before the board of review and whose application has not been dealt with because the relation of creditor and debtor did not exist between him and the mortgage indebtedness- he has purchased a farm with a mortgage on it; it is not his debt. Where such cases have been dealt with by a judge and he has taken the application out from under the act because there was no relation between debtor and creditor, or where the application or proposal has been rejected by the board of review or by any tribunal before which it came, can we go back and review all these from the beginning of this act, in 1934? That is the first question.


Charles Avery Dunning: Now, I have several
questions. I dealt as well as I could with that of the hon. member for Wood Mountain. With regard to that of the hon. member for Rosthern, I can only say that I am advised by the law officers that there is no difficulty whatever along the line that he indicates. As a matter of fact the boards of review have been dealing with agreements of sale cases, very many of them. We have hundreds of cases where-


Walter Adam Tucker: Not in Saskatchewan, where there is no privity.
Farmers' Creditors Act


Charles Avery Dunning: Well, in cases where there is no privity also in some of the provinces. That is my difficulty in dealing with this act; it has so many different phases in different parts of Canada. But I can assure my hon. friend that the view of the law officers is that the case which he has cited can be dealt with under the language here employed. I think I can dispose of the matter to his satisfaction by telling him that I will give instructions that his remarks shall be noted and the bill will not be passed a third time before consideration has 'been given to the point which he raised.
With reference to the question of the hon. member for Leeds, the intention is, as I stated, to give the farmer who on account of lack of privity of contract, has been denied approval of a proposal before the board of review, an opportunity to present his proposal again. It is intended also to give to the farmer in connection with whose proposal an adjustment has been made with respect to that part of his debts which could be dealt with by the board, but the board not having dealt with the part affected by reason of lack of privity of contract, the opportunity to go back again and say, "I was denied the full benefit of the act because of lack of privity of contract with respect to my secured indebtedness. Although I did get an adjustment in respect of my unsecured debts I want to come back, now that this amendment has been passed, and have the board consider what should be done with my secured debts which were barred from consideration previously because of lack of privity of contract." It is intended to cover that case and cases also where the board declined entirely to deal with applications because a lack of privity of contract existed. In other words, it is intended to put all farmers, from the commencement of the act, in the same position with respect to this question of lack of privity of contract.


Mr. GLEN:: I find that the amendments as now proposed by the Minister of Finance (Mr. Dunning) do not cover any proposed amendments to the act in general. It happens that I have a case which is of particular concern to me, but which has dominion-wide application in the administration of the act; and what I am anxious to know is whether under the amendments we now have I may discuss that case and deal with the rules as formulated under the act. When the discussion took plaee on the second reading it revolved around the question whether or not the bill should be sent to a committee. The idea was that it should pass the second reading and the Minister of Finance would
{Mr. Tucker.]
take into consideration whether or not it should go to a committee. Now we are in committee of the whole, and because I had not an opportunity on second reading to discuss the case I have in mind I should like to know whether I shall be given that opportunity now. I should like to state this case because I must admit that what I have to say is not entirely relevant to the amendments that are now before the house. At the same time I must ask for an opportunity to submit what I consider is a very important matter regarding the administration of the act in Manitoba.


Richard Bedford Bennett: It was understood that we would be able to discuss any proposals if the bill did not go to a committee.


Charles Avery Dunning: There is no doubt that the leader of the opposition (Mr. Bennett) has stated correctly the understanding, and perhaps the proper time to discuss such proposals as do not fall within the four corners of the amendments just suggested would be when the chairman asks us to approve the title, after we have considered the amendments now before the committee. If that is suitable it will facilitate the committee's proceedings and enable us to confine discussion to each section as it is taken up, the understanding being that general discussion of matters not within the scope of the proposed amendments may be had on the title.


Mr. TOMLINSON:: This is the first
opportunity I have had of noting this particular amendment, and I must say that I cannot agree with it. I know of one particular case-there may be many of them- where proposals have already been made, applications having been made to the official receiver under a conditional sales agreement with respect to farm stock and implements. The vendor, after the application had been made iby the farmer, proceeded under his lien, in a legal and proper manner, and sold the goods. This amendment, as I see it, would allow that farmer to make a further proposal as to that lien note or conditional sales agreement, after the sale or the repossession has taken place. I should like to be sure on that point because we have such a case, and I do not think it is fair to the vendor that he should be placed in this position. In my opinion it is one more notch in driving down the price of farms in Ontario. I cannot agree with this amendment, which makes it retroactive.


Hugh Alexander Stewart: I mentioned the retroactive feature of the amendment, which is very objectionable and will add to the con-

Farmers' Creditors Act
fusion that exists and the dissatisfaction that prevails in Ontario with the administration of the act. I do not want to go into details of the administration, which I think the minister knows is different in different sections. Some abuses have grown up in connection with the administration. Can the minister give us any idea how many cases would be reopened if this section were passed?
Another feature I had in mind is this. A man buys a farm subject to a mortgage which he has not made, a mortgage made by the man from whom he has purchased, and under this amendment he is entitled to come before the board and have that written down, have it considered, compromised. What position is the original mortgagee in with respect to the man who made the mortgage? His right, I submit, remains, assuming that the original mortgagor is worth the amount, to go to him on his covenant and recover on the covenant in that mortgage. A very nasty complication may arise in connection with that. In one case the debt is written down; the mortgagee gets only fifty per cent and he turns around and says, "All right, I will go back to the man who originally made the mortgage and get my other fifty per cent from him." That man is not before the board of review. The man who is liable on the covenant is not before the board; he is not asking that his debt be compromised. There is a complication there. I do not know in how many cases it might arise, but it is worthy of consideration in this connection, and I do strongly point out again the objection to retroactive legislation of this kind in such cases. In view of the dissatisfaction that exists in Ontario in connection with this act, the effects of it having been pointed out by members of this house on another occasion, the minister would be going a long way and probably counter to the majority of public opinion in Ontario if he enacted this legislation to be effective from this time only; and I am convinced that if he goes back and permits the opening up of those cases that have been disposed of he is certainly going counter to public opinion generally and to the opinion of a good many of the farmers themselves.


Charles Avery Dunning: In answer to the question regarding the number of cases that would be affected, our information is that there are about 3,000; that is to say, there have been 3,000 which have not been dealt with by boards of review owing to absence of privity of contract. There is, however, a further difficulty. I am advised that in Ontario some 400 cases have been dealt with notwithstanding lack of privity of contract and those 400 cases are
now in the position of being affected by- I had almost said upset by-a judicial decision of which my hon. friend is aware. In Manitoba by the same judicial decision some 150 cases which have been dealt with by the board of review would presumably be affected. That gives an idea of the magnitude and the variety of this problem. At present there are 3,000 cases which could be revived, if revival is the proper word, under the amendment now -being considered by the committee. If this amendment does not carry there are about 550 cases which have already been settled by boards of review which will be upset by the effect of judicial decisions in Manitoba and Ontario. That is my understanding.


Walter Adam Tucker: In order to get away from this objection about retroactive legislation, was consideration given to the suggestion that the right be given in such cases to make a second application? If that right were given it would also take care of the case of the farmer whose condition had changed or who did not get an order which he could carry out, say in Saskatchewan; it would give him a chance to have his case reviewed. While the act is in force there is no reason why people who did not get the same consideration as others should not have a right to apply again, if they make out a case to have their position reviewed. After all, a person can go through bankruptcy a second time, and I do not see why, subject to getting an order showing that one has a reasonable case for it, he should not be able to have a second order from the board of review under this act, while it is in force.


Charles Avery Dunning: There is one piece of
information which I did not give to the committee a moment ago, which I should give now as illustrating the problem. In addition to the figures I gave I am advised by the administrator of the act that no less than forty applications for foreclosure were made during the week following the giving of the decision of the Ontario appeal court.
With respect to the suggestion of the hon. member for Rosthern regarding second applications, rather than proceeding in this manner, the government has had to give consideration of course to the possibility of providing for second applications. And we had to give consideration to very many representations from creditors that they also would like a second chance, to upset orders already made by the boards of review. As usual there are two sides to the matter. The government has decided that endless confusion would result and the act be rendered useless if on the one hand we permitted second applications,
Farmers' Creditors Act

or on the other hand gave a right of appeal to a creditor which might upset an order of the board. This kind of legislation, as I said on a previous occasion, is most difficult legislation, but it is at the present time undeniably Useful in parts of Canada, and we are all desirous of continuing its benefits, but, as the leader of the opposition (Mr. Bennett) said the other day, it is predicated upon bankruptcy. We must not forget that it is based upon the bankruptcy powers of the federal government, and in dealing with it we must be very careful not to assume that it is entirely for the benefit of debtors. It is not. I think we cannot possibly entertain, much as we would like to do so in connection with individual problems which have arisen, any thought of second applications or on the other hand any thought of providing for appeals from the decisions of the board in the ordinary sense. Of course there are proper grounds for appeal, if in the opinion of any creditor the board has exceeded its jurisdiction or anything like that; I am dealing not with that kind of thing, but with appeals as ordinarily presented to me.
As illustrating the difficulties which do occur in connection with this matter, as to the farm which was the subject of the appeal in Ontario and on the basis of which the judgment was given with respect to the lack of privity of contract feature, that farmer has lost his farm to-day. It is gone and apparently there is no help for it. We have to our knowledge 3.000 cases in which lack of privity of contract constitutes a bar to the privileges of the act, 400 cases in Ontario alone where if this amendment is not passed the settlements made will be invalidated, and 150 cases in Manitoba would be put in the same position. As I say, illustrating the difficulty, over forty foreclosures were applied for in Canada in the week following the decision. We have tried to take into account all the factors on both sides, and while legislation of this kind is always extraordinary, we are dealing with a very extraordinary condition. The amendment proposed is, I think, moderate and reasonable, and, having regard to all the circumstances, the wisest thing this committee can do. I am not saying that we will not consider any suggestions which are made; I hope the committee will advance other suggestions, but I should like the committee to be fully aware of all the difficulties and the magnitude of them.


Richard Bedford Bennett: What would happen
to those foreclosure cases? Would they all be opened up?


Charles Avery Dunning: Presumably they are
opened up.


Richard Bedford Bennett: But if this proposed
legislation is enacted, what will happen to the actual foreclosure actions?


Mr. LAWSON:: Although the minister
may have a very sincere desire to help those whose cases have already been determined and who are in a situation where as a result of judicial decision the effect of those determinations is in doubt, I suggest that the amendment now proposed will create confusion more confounded.
Let me give an illustration. The hon. member for Leeds carried the 'point so far, I should like to take it a little further. What this amendment proposes to do is to remove the bar of lack of privity of contract so that a mortgagee is made a creditor under this act in the field of bankruptcy legislation and therefore within our jurisdiction, where the original mortgagor-we will call him a covenantor to distinguish him from the present owner.-where the original covenantor is no longer the present owner. Then the case cited by the hon. member for Leeds arises. The mortgagee now, by virtue of this amendment, being a creditor within the meaning of this act, avails himself first of what he can get under this act, and then sues the original covenantor. Under the law of Ontario the original covenantor then has a right of action- a property and civil right-to claim over against the person who purchased the property from him who was the original covenantor, with whom he has a covenant, either direct or implied, to assume his obligation under that mortgage. Cases have not been unknown in Ontario. I have one in mind-I cannot think of the citation-where a property passed from the original covenantor A to B, from B to C, and from C to D. Then your mortgagee brings an action. In that case the minister will see that here we would have the mortgagee getting say fifty per cent of his mortgage by an adjustment under this act, then suing the original covenantor for the balance, and getting judgment against him. Then the original covenantor may sue the person who purchased from him, and so on down the line. You have five persons involved whom you did not want to hurt, but you have hurt them all by your effort to help someone. Because of the four persons I have mentioned the one who happens to have enough assets to pay the mortgage is going to be stuck in the long run, with no redress. I am sure the minister does not want to introduce legislation which would impose an unfair burden on one class in order to relieve the situation for another class. I suggest that his advisory law officers have hardly thought their way through this pro-

Farmers' Creditors Act
posed amendment to the end. The minister might give serious consideration to the situation which the hon. member for Leeds has suggested.


Charles Avery Dunning: I admit at once that the whole thing is a headache; I do not deny that at all.


William Rae Tomlinson: Might I suggest that this matter could be handled by the local judge who would know the particular circumstances. Why could these farmers who wish to make a second application not apply to the judge of the local court? If, in his opinion, they had not received justice under the original proposal, he could then grant an order. This would take away the possibility of a case arising such as I mentioned where money had disappeared and property had changed hands.


Hugh Alexander Stewart: Let us assume that a farmer has got a compromise under this act and has not carried it out; can he, under this amendment, go back and ask for a second hearing when he has not carried out the one made before?


Charles Avery Dunning: I am quite sure the board of review would take into account the manner in which he had carried out the arrangement which had been made previously. We must remember that from that point of view this is a judicial proceeding presided over by a judge of the high court of the province. We must not assume that these judges would knowingly do an injustice. I think, when dealing with a difficult procedure, they would approach the matter from a high sense of duty. They cannot have all the matters before them at all times. Creditors do not always take the steps that they should to get all the facts before the board of review. That occasionally happens, although it is not so common with respect to corporate creditors who are usually well represented. Individual creditors are more common in the eastern provinces than they are in the west and sometimes they do not get all the facts before the board of review. Generally speaking, the creditor is well represented now that the act is thoroughly known.
With regard to the suggestion of the hon. member for Bruce, I doubt very much if making the right to go back in cases of lack of privity of contract subject to the decision of a county court judge would be really useful. I would point out that what my hon. friend says about the county court judge in Ontario knowing the people and so on would not be true generally of all Canada. The district court judges in the west have wide areas to
serve, and they do not have that intimate local knowledge to anything like the degree my hon. friend points out may exist in some of the older counties of Ontario. It is difficult to make legislation of this kind cover widely divergent conditions in various parts of the country.


Mr. THORSON:: The hon. member for York South has raised a serious objection to the amendment as it now stands and I submit that his objection should receive serious consideration. It might be dealt with by making some provision for the satisfaction or discharge of the mortgage when the farmer has paid the amount of the compromise settled by the board of review. In that way there would not be the chain of litigation pointed out by the hon. member. Some general provision might be made to cover similar cases of agreements and assignments of agreements. There could be a general provision to the effect that when a farmer has made a proposal and the proposal has been formulated by the board of review and he has paid the debt as fixed by the board of review, such payment shall operate as a discharge of the mortgage and of all the covenants contained in the mortgage. I think some such suggestion as that should be acted upon. Some such amendment should be made so that the chain of events pointed out by the hon. member for York South cannot happen. If it is decided that the amendment as printed in the bill will remove the bar of lack of privity of contract, then I think it follows automatically and as a matter of justice that all farmers should be dealt with in the same way. If from now on farmers are to have an opportunity of dealing with the person who holds a mortgage against their land, other farmers who have been denied that right in the past should be given an opportunity of taking the same action.


James Earl Lawson: In view of the support given to my suggestion by the hon. member for Selkirk, it may seem ungrateful on my part when I do not support his, but I am compelled to point out that the whole basis of the jurisdiction of this parliament in connection with this matter is insolvency and bankruptcy. In such legislation as this we are constantly trespassing on property and civil rights, but by virtue of the provisions of the British North America Act we have jurisdiction only when those rights come into the field of bankruptcy and insolvency.


Joseph Thorarinn Thorson: Or when they are ancillary or necessarily incidental.
Farmers' Creditors Act


James Earl Lawson: I am not so sure they go that far.


Joseph Thorarinn Thorson: I think so.


James Earl Lawson: In the illustration I gave of the four men, A, B, C, and D, insolvency or bankruptcy would relate only to the debtor and the one who is defined by this act as the creditor. There would be no element of insolvency or bankruptcy with respect to the intermediate men. Consequently I am afraid that if you try to legislate them, into either the loss of their rights or the removal of their obligations, you immediately get into the field of property and civil rights. Then your whole amendment or section would become ultra vires.


Mr. McNIVEN (Regina):: Does the order made by the board of review not contain the provision that the creditor shall accept the settlement in full satisfaction of his mortgage?


James Earl Lawson: That is beside the point.


Donald Alexander McNiven: How could he proceed all along the line against A, B, C and D? Before any action under the mortgage can be taken in Saskatchewan, a permit must be obtained from the debt adjustment board. The common practice is to permit foreclosure proceedings, but on the personal covenant no judgment can be obtained.


James Earl Lawson: By reason of provincial legislation.


Charles Avery Dunning: That is not the case in Ontario.


Donald Alexander McNiven: I understand
there is a moratorium in Ontario. I saw in either the Toronto Star or the Globe and Mail yesterday where the legislation had been extended. Mr. Macauley protested when this legislation was extended to the end of 1939.


Hugh Alexander Stewart: Not in the same terms.


Donald Alexander McNiven: He said we were jumping too fast. They also dealt with interest up to October 1 of this year. I thought the necessity for legislation of that kind had long since passed in Ontario. It seems to me that in the case cited by the hon. member for York South, he as mortgagee could sue one or other of the covenantors only if he still retained the property and was able to transfer it upon payment.


Some hon. MEMBERS:: No.


Joseph Thorarinn Thorson: No; that is only the case in Manitoba and Saskatchewan, by special legislation.


Donald Alexander McNiven: It is inherent in mortgage law.


James Earl Lawson: No. If the hon. member will permit me, he will agree with me when I state this:	The mortgagee must always
be in a position to deliver the mortgaged property to the mortgagor, if the mortgagor comes in and pays the debt. But where a mortgagee has proceeded by public sale, and he realizes so much out of the mortgage, after due notice to the mortgagor he can still sue the original covenantor on the covenant.


Donald Alexander McNiven: But not on
foreclosure.


James Earl Lawson: I shall first answer the question asked by the hon. member, and I am somewhat loath to do this, because I dread trying to give legal opinions extemporaneously. I would rather look them up.


Hugh Alexander Stewart: And without a fee, too.


James Earl Lawson: Yes; but one has to do this in the public interest. I should like to draw these facts to the attention of the hon. member: A mortgage in Ontario is a combination of at least two, if not three things. It is a combination of pledge and hypothecation whereby you transfer a fee .simple. The mortgagor has nothing left but the equity. Second, it is a contract, in which contract the mortgagor gives a personal covenant under seal to repay the mortgage money. The mere disposition of the hypothecation, or transfer of the fee simple, does not, of itself, wipe out the liability of the covenant under seal, unless it is done in a manner prescribed by the statutes of the province, in which event it may amount to a discharge of the obligations of the covenantor, as well as a discharge of the mortgage itself, and automatically a retransfer of the fee simple.


Donald Alexander McNiven: You have to
foreclose his equity of redemption.


James Earl Lawson: If you want the equity as well as the fee simple.


Charles Avery Dunning: There are three speaking at once.


Hugh Alexander Stewart: The more one considers
this legislation, the more difficulty arises.


Charles Avery Dunning: And the more you live
with it, as I do.


Hugh Alexander Stewart: We have to live with it,
too, but from a different angle. To my personal knowledge judges have on two or three occasions made orders that a mortgagee can proceed with the foreclosure of his mortgage because the relation of debtor and creditor did not exist between the farmer who bought the farm with the mortgage on it,

Farmers' Creditors Act
and who did not therefore come under the Farmers' Creditors Arrangement Act, and the other party to the contract. That mortgagee has proceeded to foreclose his mortgage and to sell his property. If this legislation passes, what position is he in?


Mr. PERLEY:: A few moments ago the
hon. member for Leeds made reference to a case where a debtor had not been living up to the terms of settlement. This brings to my mind many cases in Saskatchewan where, debtors having taken their cases to the board of review, decisions have been handed down and settlements made. But through no fault of their own those people have not been able to live up to the terms [DOT]of settlement. They have not been making any effort to beat their creditors, but they have been placed in that position because [DOT]of climatic conditions in the province, and because they have had no crops. Would the minister be willing to insert an amendment *whereby such debtor would not be considered in default, and might have the privilege to-


Charles Avery Dunning: Would the hon. membt_ permit me to interrupt? Possibly he was not in the chamber when we made the mutual agreement that we would endeavour to stick to the matter dealt with in the sections of the bill, on the understanding that when we came to pass the title, matters which were not dealt with in the bill, but which members believe should be dealt with, might be considered. To discuss that point again at this time would be confusing, and an opportunity will be afforded at the time I have indicated.


George Halsey Perley: I spoke because the hon.
member for Leeds had opened the matter.


Thomas Clement (Tommy) Douglas: I am in favour of the purpose behind the amendment, but its legal terminology has me almost as much confused as was the Minister of Finance a few moments ago when the hon. member for York South was mortgagoring and mort-gageeing.


James Earl Lawson: Well, that is scarcely a
tribute to my clarity.


Charles Avery Dunning: I think the hon. member
for York South was particularly lucid, if I may say so.


Thomas Clement (Tommy) Douglas: It may be necessary for the law officers of the crown, in company with the Minister of Finance, to make certain changes in order to meet the problems which have been raised in connection with litigation against mortgagees. But in any change which may be made I do hope the
minister will not forsake the principle stated in the amendment' namely to give the benefit of these amendments establishing a privity of contract, even if there is no relationship between debtor and creditor. I trust he will not permit that benefit to be taken out, and the retroactive value of the section lost.
There are two classes of people to be kept in mind. First of all there is the farmer whose case was not dealt with or whose case was rejected, who did not have a proposal formulated, who has had none of the benefits of the legislation and who through no fault of his own, but simply because certain provisions were not in the act which are now to be in it, is now debarred from the protection of the act. It would be manifestly unfair to refuse a man protection under the act merely because in days gone by it did not provide certain provisions it will now contain.
The other class of persons to be kept in mind are those who did have a proposal formulated under the act, but where there was no established privity of contract and who, as the Minister of Finance has said, are now in danger of having their cases upset. Although I believe the boards of review are sufficiently familiar with the circumstances with which they are dealing to make provision for the sort of thing I have indicated, when they are formulating a proposal, I hope the Minister of Finance will not remove the retroactive feature in the amendment he now proposes to the committee.


Walter Adam Tucker: Right along we have had in the act the difficulties raised by the hon. members for York South and Leeds. We might have a farmer who owed .money on a note to a bank. The note would have an endorser, and the farmer would apply for an adjustment of his debt. The debt would be cut down, say fifty per cent, and the bank would immediately turn round and demand payment of the balance from the endorser. Of course, that is the inevitable result of legislation like this.
Listening to some hon. members one is led to the conclusion that they must believe they can make an omelet without breaking an egg. No one would suggest you could give relief to certain debtors without seemingly injuring creditors, endorsers and guarantors. But there may be something in what the hon. member for Selkirk has said. I realize there must be grave doubts as to whether you can provide that the order of the board of review, when carried out, should discharge the entire obligation-even if it were also owed by a third
Farmers' Creditors Act

party-and whether that might be regarded as an encroachment on the field of property and civil rights and so beyond our jurisdiction.
There is something, however, in what the hon. member for Selkirk says, that one might say that it was necessarily ancillary to giving effect to intentions under bankruptcy powers. For an example that has brought home the situation to me in the last couple of years: Practically every farmer owing money to a bank has one or two endorsers, and the result is that so far as the banks are concerned the act is not helping them as much as it should, because those banks immediately turn round and demand payment from the endorsers. If they are substantial endorsers, the banks do not care to what extent the debtor's obligation is written down. If you are prevented from legislating effectively in the field of bankruptcy, as you are, by that situation, it seems to me it must necessarily follow that you would be held to have the power to enter	that field in order to make
good your intention in regard to legislating	in connection with bankruptcy.
In other words, you might be held to have that power as necessarily ancillary to your powers to legislate in bankruptcy. It is, I realize, a matter of grave doubt, and if it is to be considered at all I think it should be considered as well in regard to endorsers of notes, and so on, with respect to every individual who is liable under an obligation which is written down by the board of review. It would be a very fine thing if you could provide that the obligation so written down is the limit of the amount of the obligation of every party to the transaction. There was some suggestion that that was the effect of the law until we got decisions from the courts to the contrary; in other words, if a debt of $100 was written down to $50, that was the total amount which was owed by anybody, and if that note had been paid, there was no obligation on the endorser any more than the maker to pay any more than the S50. In other words, the face of the debt was written down to that amount. But the courts decided otherwise. Now if it was thought seriously by the courts that the legislation already passed possibly had that effect, they must have thought that parliament had the power to pass such legislation, and so I suggest that it is worth while giving consideration to the question whether, when a debt is written down, it should not be provided that that is the total amount of the debt owing by anybody, and there should be no recourse for any further amount against anyone.


James Earl Lawson: If I might be given just two more minutes, I promise to take no more time of the committee, but I should like to clarify my position. The hon. member for Rosthern has the happy or unhappy faculty of using terms which would leave on the country the impression that I was endeavouring, in the objections I have raised, to worry about the creditors instead of the debtors. My hon. friend has missed the point. The whole point I am raising is: Do we gain anything by relieving one debtor in order to pile all the debt on to another debtor? My hon. friend used the illustration that we cannot make an omelet without breaking eggs. That is not the point. All I was trying to point out was that you have the omelet and you cannot unscramble the eggs in the omelet and put the eggs back into their respective shells.


Joseph Thorarinn Thorson: I think the hon. member for York South has made a valuable contribution to the debate because he has pointed out a situation that will undoubtedly develop. I should like to endorse the proposal of the hon. member for Rosthern that the suggestion made by me a moment ago should be very carefully considered by the law officers of the crown. I submit that it cannot be reasonably contemplated that our legislation should result in the chaos that the hon. member for York South envisages, and therefore we must have power under our bankruptcy and insolvency jurisdiction to invade what would otherwise be the provincial field, so that chaos and confusion would not result. Consequently we must incidentally touch upon what would otherwise be property and civil rights. I make the submission with deference that the amendment that I suggested would be within our jurisdiction as being ancillary or necessarily incidental to bankruptcy or insolvency legislation.


Charles Avery Dunning: Mr. Chairman, I do not think I should press this section as amended to a vote to-day. This is one of the most difficult matters, and I should like to have the opportunity of submitting to the law officers of the crown the suggestions that have been made by various legal members here this afternoon.
With respect to the chaotic condition portrayed so clearly by the hon. member for York South, I disagree entirely that he mixed us all up. I admit that these matters are a little confusing to the lay mind, and in that respect I sympathize with the hon. member for Weyburn, but the situation delineated by the hon. member for York South was crystal clear. I would point out that section 5A of the existing act does clarify the posi-

Farmers' Creditors Act
tion of this legislation with respect to any possible infringement on property and civil rights. Section 5A reads:
No proposal under this act nor the approval or confirmation thereof shall release any person who, under the Bankruptcy Act, would not be released by an order of discharge if the debtor had been adjudged bankrupt nor shall the approval or confirmation of a proposal release any security given by any third person.
It is quite evident that the framers of the act had in mind the desirability of keeping clear of any possibility of unconstitutionality by invading the sphere of property and civil rights, but section 5A is not at all affected by what we are proposing. I merely suggest that.
With respect to the other suggestion from the hon. member for Selkirk and the hon. member for Rosthern in regard to drafting something based upon our old friend the ancillary powers' feature of the constitution, this, as is well known is always introduced by those of us who desire to make what we deem to be constitutional progress but are barred by what looks like the plain intention of the constitution. My hon. friends will forgive me for saying that; but I have been listening for twenty years to attorneys-general and others arguing about the constitution and the extent to which the ancillary powers' section of the constitution goes, and always those who want to do a certain thing like to see if we cannot make it ancillary to something which we have undoubtedly power to do.
The discussion this afternoon has been informative from the legal point of view. The government do not desire to depart from the intention expressed in this amendment for the reason that we are convinced that by and large the greatest good for the greatest number will result from some such action as is here proposed; or perhaps I should put it another way, that the least harm to the least number will result, after having examined all the practical circumstances we can and what has come to our attention in the reports from various provinces and from the boards of review. At the same time I should like to have the discussion of this afternoon submitted to the law officers of the crown and the section now under discussion held over to a future occasion, and therefore unless someone has something further to contribute on this particular point I would suggest that the section stand.


Joseph Thorarinn Thorson: The minister has made reference to section 5A of the act. It is section 5A which has caused some of the grief to which the hon. member for York South has made reference, and I should like to suggest
that section 5A might also be reconsidered by the law officers of the crown with a view to amendment of it.


James Earl Lawson: Section 5A as it stands, as the hon. member for Selkirk I think will agree, really and distinctly puts the secured creditor beyond interference, because it extends the whole power under this act only to the same extent that we have it under the Bankruptcy Act, and secured creditors are not interfered with under the Bankruptcy Act.


Joseph Thorarinn Thorson: That is why I made the suggestion.
Section stands.
On section 2-Deceased farmers.


Joseph Thorarinn Thorson: Mr. Chairman, I doubt the wisdom of section 2. It would seem to me that section 2 proposes to make a drastic interference with the general law relating to the administration of estates. Under this proposal it might happen that an insolvent estate which would leave nothing to any beneficiary of the estate would be dealt with by a board of review in such a way as to create for a beneficiary something to which he is not now entitled at all.


Richard Bedford Bennett: How would that happen?


Joseph Thorarinn Thorson: This was pointed out in a case in Saskatchewan-I have it here-in re Hockley, which was decided in 1936 and is to be found in volume 2 of the Western Weekly Reports of that year. It came before chief commissioner Maclean of the board of review of Saskatchewan. In that case the liabilities disclosed amounted to $20,843. The only assets of the estate were the land in question, five shares in a telephone company, and two townsite lots. The administrator had valuated all these assets at $10,700. The board of review points out that the estate is clearly insolvent; that there is no surplus over and above liabilities and therefore nothing left for division amongst the next of kin, and the board goes on to say that it is not one of the purposes of the Farmers' Creditors Arrangement Act, 1934, to reduce the liabilities of an insolvent estate to a point which would create some estate for division among the next of kin. This section would therefore, I respectfully submit, provide an estate for someone who might not be a farmer, for somebody who under the existing law is not entitled to any part of the estate. I think this goes beyond the essential and basic purpose of the Farmers' Creditors Arrangement Act.


Hugh Alexander Stewart: I agree with the statements made by the hon. member for Selkirk. The
Farmers' Creditors Act

original intention of the act was perfectly clear, namely to keep a farmer living and working and carrying on upon the farm under such conditions that he might foe able to continue and to pay his debts, and it would be in the interest of creditors that that should be done. But a reasonable compromise should be made. This goes a step further than the original intention of the act.


Walter Adam Tucker: The preamble of the act provides that "it is essential in the interest of the dominion to retain the farmers on the land as efficient producers." The amendment specifically proposes that it shall apply only where one of the beneficiaries is remaining on the land. It reads, "being satisfied that a member of the family of the decedent resides and will continue to reside upon the farm of the decedent and intends and is able to operate the same." That brings it strictly within the terms and intentions of the original act. In Saskatchewan, time after time, when farmers have died the family carries on upon the farm; it is known as practically a family farm, and the family, the head of the farm being dead, need help more urgently in order to carry on than they did when the head of the household was alive. It is just as important to keep that family there on the farm, farming it, as it was to keep them there when the head of the household was alive. That was the essential purpose of the act, and it is being carried out by this amendment.
I suggest, however, that there should be an amendment in order to carry the intention of the act fully into effect. The present amendment refers to the farmer who "was at the date of his death unable to meet his liabilities as they became due." The essential part was "at the date of his death." There are many cases throughout the country of farmers who died, probably in 1929 or 1930, in fairly good circumstances. The family carried on upon the land, endeavouring to farm it, and in many cases getting along fairly well; but at the present time they, like their neighbours, are unable to meet their debts as they become due. I submit that they should have the right to have ,veir case considered so that they can remain on the land as "efficient producers," and the amendment I suggest to the minister is that the subsection should read in this way, "whose legal representative from the assets of the said farmer's estate is unable to meet the liabilities of said estate as they become due." That would mean that all they would have to show would be that, when the legal representative applied under the act, at the time of application, which might be to-morrow, the legal repre-

sentative is unable to meet, from the assets of the estate, the obligations of the estate as they fall due. If the clause is left as it is now, many people who should have the benefit of this amendment will not get it, because there are many estates which cannot meet their obligations as they fall due today which could have met them in 1929 or 1930 when the estate came into being. While I suggest that consideration should be given to some such amendment, I commend the government most earnestly for the amendments they have proposed; they will certainly be very gratefully received by the farmers and people generally, at any rate in the province of Saskatchewan.


Thomas Clement (Tommy) Douglas: I am in hearty agreement with the sentiments expressed by the hon. member for Rosthern. This act was passed, as has heen said, to take care of insolvent farmers, and for that reason was found by the judicial committee of the privy council to be intra vires. There seems to me no reason, then, why families of deceased farmers or the legal representatives of such families should not receive the same benefits. A number of cases could be mentioned- the Hockley case, cited by the hon. member for Selkirk, is one in point-where a family endeavouring to carry on farming operations are denied the protection of this act by virtue of the fact that they do not come under the definition of "a farmer" as it is now contained in the act. I believe the amendment suggested by the minister would cover such cases. I know a number of cases where the husband has died, leaving the wife with a family of children none of whom is old enough to come under the definition of the act or to own the property, and to deny them the privileges of this act would be to make it impossible for them to continue as efficient producers on the soil, which is the object of this act.


Richard Bedford Bennett: Under the amendment the widow would be the member of the family who, residing on the place, would be entitled to the possession.


Thomas Clement (Tommy) Douglas: Yes. That is why I am in favour of the amendment. The widow or her legal representative would be able, under this amendment, to carry on with her young family the operation of the farm. That is why I support this amendment. But there is nothing in the section to say that this will be retroactive in the same way as the former amendment.


Charles Avery Dunning: Automatically so.

Farmers' Creditors Act


Thomas Clement (Tommy) Douglas: That covers the point. I have in mind this Hockley case and several others. These people would now, as I understand the situation, be permitted to remain on the land in view of the fact that the bar which affected them before is now removed. Is that correct?


Charles Avery Dunning: There is no doubt about that. I am advised that that is the opinion of the Department of Justice.


Walter Adam Tucker: I think there is a very real point in what I stated a moment ago.


Charles Avery Dunning: I am in very grave doubt about that. The hon. member supposes a case in which a man was solvent when he died, whenever that may have been. The estate may have been carried on by virtue of the terms of the will for twenty years or more, or any length of time, during a long period in which this act was not in force. The act came into being only in 1934, but we are asked to open the way for the executors of that estate to take advantage of these provisions because in their operation of the business they have arrived at a point where they need some adjustment. I am much more anxious to deal with the sort of cases that are familiar to all of us, where the farmer has died with an application before the board. That is the hardest kind of case. The widow has enough trouble anyway, particularly when she has small children and finds that all the proceedings which have been taken hitherto have become null and void. We want to cover that sort of case. Do we not also want to cover the other type of case where the man died insolvent but had not yet made an application. He died insolvent since-


Richard Bedford Bennett: He was within the act.


Charles Avery Dunning: He himself was within the act, but he died. To extend the act to the class of cases mentioned by my hon. friend from Rosthern would open up the field, and I cannot see the necessity for that. Certainly the important thing is to deal with cases of real hardship. It is not the intention at all to make the benefits of this act available to heirs who are not resident on the farm. The whole intent of the act is preserved in the proposed amendment. The widow or member of the family-and " member of the family " is defined-must satisfy the court that they can and will live on the farm, and in such case the court can make an order enabling them to do so. In all conscience, if we are willing by this legislation to provide means whereby a court can- make an order that a farmer may stay on his farm and operate it,
surely it is even more important that when he is dead and gone we should make it possible for his wife or son or somebody to have the advantage which the father would have had, had he lived. I earnestly hope the committee will see eye to eye with me, and adopt this amendment.


Joseph Thorarinn Thorson: I am in sympathy with the object sought by the amendment, but I point out that the amendment will confer benefits upon persons who were not contemplated originally by the Farmers' Creditors Arrangement Act.


Richard Bedford Bennett: Do you mean section 6A?


Joseph Thorarinn Thorson: Yes. There is the difficulty that, as a result of the operation of this amendment, estates will be created for persons who are quite outside the original scope of the act, which was to help efficient producers to remain on the land.


Walter Adam Tucker: In reply to the minister, there is this discrepancy which I would bring to his attention. If a person twenty years ago was insolvent and died, his personal representative could apply under this act; but if the man died five years ago and his estate was perfectly solvent when he died but became insolvent owing to recent conditions, his representative could not apply under the act. That is an inconsistency which, in my opinion, should be given consideration. There is no doubt that even if a man died thirty years ago and was insolvent when he died, his personal representative could apply under this act as it stands. But if he died five years ago, being solvent at the time, and his estate became insolvent subsequently owing to conditions that had arisen, application could not be made. I think some consideration should be given to this point and an effort made to extend the scope of the amendment and make it more consistent in this regard.
There is another point I would mention. It is provided that the legal representative of the decedent may apply to the court. I suggest that in order to cut down expenses the words "ex parte" should be inserted, so that there would be no necessity of proceeding by the more expensive method of notice of motion.


Richard Bedford Bennett: I agree with the observations of the hon. member for Rosthern. I was going to make a suggestion, not as regards the widening of the section but with respect to its inconsistency, which he has pointed out. Paragraph (b) of section 6A would have to read:	"Was at the date of
his death, since the coming into force of this act, unable to meet his liabilities as they
Farmers' Creditors Act

became due." The main act came into force in 1934, and it is clear that there is no answer to what the hon. member for Rosthern and the hon. member for Selkirk have said. You create a new class of those who died prior to 1934 and whose descendants can now take advantage of the act. I do not think that was intended; it would be manifestly unfair. I appreciate the intention, but there is no answer to what both hon. gentlemen have said in that regard. The minister will see the force of that at once.
On the second point which the hon. member for Rosthern has raised, I was going to suggest that there should not be any application at all to the court. I do not see why there should be an application to the court for the purpose of enabling the representative of the decedent to carry on his proceedings. He might use the authority of this act, rather than an order of the court. Should we add the expense of an order of the court? I agree with what was said by the hon. member for Rosthern in that connection. I wonder if it would be proper at the moment to make a few observations with respect to this statute? I might point out that there is no title to the bill. I did not call the attention of the minister to that fact when he suggested that general discussion might be had upon the title being passed. I know he did not intend by that observation that there should not be further discussion.


Charles Avery Dunning: I should have said, "at the conclusion."


Richard Bedford Bennett: Does the minister not think the section should stand to be dealt with further?


Charles Avery Dunning: The important question raised by the leader of the opposition, based upon the remarks of the hon. members for Selkirk and Rosthern, is in connection with paragraph (b):
Was at the date of his death unable to meet his liabilities as they became due.
The crux of the question is: Should we put in at that point, after the word "death," the words "since the coming into force of the Farmers' Creditors Arrangement Act," or should we amend the section in the manner suggested by the hon. member for Rosthern so as to make it applicable to all estates whenever and however created?


Richard Bedford Bennett: I hardly think we should adopt the latter suggestion.


Charles Avery Dunning: That is my point. My right hon. friend agrees with the hon. member for Rosthern as to the presence of the difficulty but not as to the extension of the remedy.
rMr. Bennett.]


Richard Bedford Bennett: I do not think so. I
agree with what the hon. member for Selkirk says in that regard.


Charles Avery Dunning: If I gathered correctly
the view of the hon. member for Selkirk, the difficulty would be met by making the paragraph read "since the coming into force of the Farmers' Creditors Arrangement Act."


Joseph Thorarinn Thorson: I think it was the hon.
member for Rosthern who spoke of that.


Charles Avery Dunning: That would not meet
the hon. member's point?


Richard Bedford Bennett: It would meet it as to the rights of those not intended to be dealt with.


Joseph Thorarinn Thorson: Yes, it would meet that.


Charles Avery Dunning: As to the application to
a court, it was thought that it would be better to have an ordinary court decision as to the question of intention to reside and all those matters which would constitute entitlement to apply to the board of review. The board of review being constantly engaged on matters of adjustment, it would be set by this to try a new sort of thing, as to intention and ability and all that. It was thought better to send the applicant to the court.
I think, however, in the light of the discussion so far, I had better let this stand for further consideration. I have not yet got an expression of opinion as to whether the words "ex parte" as suggested by the hon. member for Rosthern would cover that point as to application to the court.


Richard Bedford Bennett: If it is only a matter
of procedure, there are no rights to be affected, I think the hon. member for Rosthern is right; it should be done ex parte as a matter of saving expense. No one in particular is interested in that phase except the family itself and the board. If the minister concludes that an order of the court is essential-frankly I do not agree with him in that, but it is not a matter of importance- if we are to have an order of the court I think it should be done ex parte.


Charles Avery Dunning: The question of convenience enters in. "Court" here means district court or county court, and therefore is easily accessible to the party, whereas the mere business of getting before the board of review, when there is only one board in the province, is rather difficult. However, we shall let the section stand; the discussion has been enlightening and helpful.

Farmers' Creditors Act


Walter Adam Tucker: Before we pass on, I
support the leader of the opposition in regard to the suggestion that perhaps it is not necessary to have a court application at all; for if anyone applies under this section who has no right to come under it, that point could be raised before the board of review itself, which is presided over by a high court judge, and if he cannot justify his position as having a right to be there, no order will be made by the board of review. Even if you permit it to be done ex parte, it is putting people to unnecessary expense. I did not venture to suggest such a great change as the leader of the opposition has suggested, but I would be in favour of it if it could be considered.
On the other point, if you think of limiting this section to people who died after the coming into force of the act, which was July 3, 1934, you very seriously limit the effect of this section, because that is limiting it to people who died within a period starting a little over three years ago. I suggest that there is no particular reason to be so hard on people the head of whose family died during the period of this depression. If the suggested amendment were made, the family of someone who died in 1930, no matter how much he left his family in need of help by an act like this they would not be able to get the benefit of this amendment. I suggest that the whole purpose of the amendment is to make the act apply to estates as well as to individuals. All that an individual has to show is that at the time when he is applying he cannot pay his debts as they fall due. We should put the same test upon the representative of an estate, to show that when he is applying he cannot out of the estate pay the debts of the estate as they fall due. The limitation proposed by the minister would, I feel, sweep away practically half the benefit of this amendment.


Charles Avery Dunning: I do not agree with that. However, we shall let the section stand.
Section stands.
On section 3-Stay of proceedings.


Richard Bedford Bennett: A recent decision of the court of appeal in Alberta indicates that the provisions of the Bankruptcy Act with respect to failure on the part of a farmer or his successors t*o implement the terms of the composition create a situation which has led to some difficulty. Mr. Justice Ford dissented from the judgment of the court, which was delivered by the chief justice and concurred in by the other three justices of appeal. I have no doubt the department is familiar with that decision; the 51952-94
case was The Commercial Life Assurance Company of Canada v. Makary Strynadka.
Could not section 11 be extended so as to make it clear that there would be no difficulty about the point? The district court judge dealt with the matter in question. Payments had been ordered by the board to be made in 1936 and the farmer did make some payments, but defaulted in 1937; notice was given for a receiving order, and an order annulling the composition, extension or scheme of arrangement. The question that had to be decided was whethef or not such application should be made under the provisions of the Bankruptcy Act or under the provisions of the Farmers' Creditors Arrangement Act. The judgment of the court sets out at considerable length the relevant statutes, and concludes that the district court judge was right in refusing the order under the Bankruptcy Act. Mr. Justice Ford came to the conclusion that under the provisions of the act itself there was power to annul the composition. Now I have a clear appreciation- if one might rely on one's own memory about the matter-of what we intended to do by that act. It was intended that if the debtor did not carry into effect the provisions of the arrangement with his creditors, he might be placed in bankruptcy, and it was intended that it should 'be done under the provisions of the statute itself. Mr.. Justice Ford put the matter very fairly when he said:
The Farmers' Creditors Arrangement Act is the principal act and the Bankruptcy Act is the auxiliary. From the time when the farmer makes a proposal for a composition, extension of time or scheme of arrangement, his property is deemed to be under the authority of the court, limited of course within the terms provided, pending the final disposition of any proceedings in connection therewith, including the proceedings which may be taken in the case of failure to carry out the tei ms of a confirmed proposal. It seems to me that no other construction can adequately protect a farmer who has failed to carry out the terms of a confirmed proposal from being "put into bankruptcy" by reason of an uncontrollable default on his part. That, in my view, is the reason for the adding of subsection 3 to subsection 2 of section 2 and the only construction which gives subsection 3 its full limiting effect in favour of the farmer.
The result is that no proceedings can be taken under the Bankruptcy Act unless there is an unsecured creditor for $500. That situation does not develop in some of these cases. I think it should be made abundantly clear that the Bankruptcy Act does not apply in determining that question. The complaint which has been made by many people against the Farmers' Creditors Arrangement Act has been that there has never been a single payment made under compositions that were

Farmers' Creditors Act

arrived at, and as those payments had not been made and no bankruptcy followed the result was that merchants and small retailers complained very bitterly about the act itself. Might it not be possible in the section with which we are now dealing to make it clear that the application for the annulment of the composition is to be made under the provisions of the Farmers' Creditors Arrangement Act and not under the provisions of the Bankruptcy Act, which imposes limitations upon that right? I submit that is rather an important matter to consider because we do not want, on the one hand, to have it thought that we have accorded these extraordinary benefits and, on the other hand, that we are placing a premium upon a disregard of the obligations created by the person for whose benefit they were made. I think the minister will agree fully with that view. I think everyone wants to see the fair thing done between the farmer and his creditors. I suggest that possibly the minister might not be averse to the section standing in order to see whether or not a few words could be added at the end, as I think they could, to make it abundantly clear that in the event of failure this action would be taken. You will observe that an application could be made under the main act to deal with the situation in the manner provided, and recourse would not be had to the Bankruptcy Act for that purpose.


Charles Avery Dunning: The main reason for the delay in proceeding with the consideration of this bill was the fact that we learned of the Alberta judgment, just discussed by the leader of the opposition, and I felt it unwise to proceed in committee, particularly with the section now under discussion, without first having the best advice possible with regard to the bearing of the Alberta judgment upon what we were doing. The whole material and the reasons for judgment in the Alberta case of Commercial Life Assurance Company of Canada v. Strynadka were submitted to the Department of Justice. In order that the legal members of the committee may study it, perhaps I should place on Hansard the letter from the deputy minister of justice. It reads:
At the request of Mr. Gordon, I have studied the reasons for judgment of the court of appeal of Alberta in the case of the Commercial Life Assurance Company of Canada versus Strynadka with the object of advising you whether, in view of these reasons, an amendment should be made to the Farmers' Creditors Arrangement Act.
First, I have come to the conclusion that the reasons of Chief Justice Harvey are substantially correct. I do not think it was ever contemplated by parliament that a secured
[Mr. Bennett.)
creditor should, in the case of failure to carry out the terms of a confirmed proposal, have the right to proceed under section 19 (2) of the Bankruptcy Act; a secured creditor never had the right, under the Bankruptcy Act, to proceed under section 19 (2J in respect of his secured debt. .
Secondly, the rights and remedies of the secured creditor, once the proposal becomes binding upon all parties, are regulated by the law of the province; upon failure to carry out the terms of the proposal, the remedy of the secured creditor, in respect of his secured debt, is to resort to his civil rights as provided by the provincial law.
Thirdly, or, upon failure to carry out the terms of the proposal, the secured creditor may proceed by petition under subsection 3 of section 2 of the Farmers' Creditors Arrangement Act, but only, of course, in respect of that part of his claim which is not secured This unsecured claim must amount to $500 and the failure to carry out the terms of the proposal must have been due to causes within the control of the farmer.
I am advised that in the light of all circumstances the judgment in the Alberta case does not render necessary any amendment to the Farmers' Creditors Arrangement Act. Perhaps my right hon. friend would like time to consider this.


Richard Bedford Bennett: I read the judgment, and I cannot say that I differ with the view expressed by the deputy minister. As a matter of fact, I do not think we can avoid coming to the conclusion that inasmuch as the Bankruptcy Act does not provide that a secured creditor may make a declaration for bankruptcy, there is no doubt as to the soundness of the view he has expressed. On the other hand, I think it was the intention of parliament that where there had been a failure to carry out the terms of a settlement, any person affected by it might take steps to have the debtor declared a bankrupt. I am sure those connected with the department will remember the discussion which took place when we had the bill in hand. I remember there was some difficulty in drawing the statute and the rules so as to make it clear that default meant action to declare the farmer a bankrupt. That was the intention at any rate.


Charles Avery Dunning: I think that is the intention as expressed by my right hon. friend.


Richard Bedford Bennett: From the debates.


Charles Avery Dunning: I am reading from the act.


Richard Bedford Bennett: According to the judgment of the chief justice, the rights of the secured creditor have not been changed. That is really the basis of judgment. Mr. Justice Ford took the view-it was from his judg-

Farmers' Creditors Act
ment I should have said I was reading and not the judgment of the chief justice-that the act was a charter within itself and that there was a right to apply, even though it was a secured creditor, to have the debtor declared insolvent.


Charles Avery Dunning: In other words, the creditor has under this act rights which he did not have under the Bankruptcy Act.


Richard Bedford Bennett: Because he was subject to the reduction of his rights.


Joseph Thorarinn Thorson: A reduction of the debt; otherwise his rights remain.


Richard Bedford Bennett: A reduction of his debt; that is the correct term. The really extraordinary nature of this legislation is not that which deals with the ordinary creditor but that which deals with the secured creditor. There is no doubt about that. I do not think anyone will question for a moment that it was a most extraordinary thing to do. But it was done under extraordinary circumstances. The rights of the secured creditor are affected. There may be a reduction of his debt and the period within which the debt may be paid is extended. Having had that situation forced upon him, he now has conferred upon him the right to have the farmer declared an insolvent and bankrupt if he fails to carry out his obligations without due excuse. You will remember there is a provision to excuse him where the causes are beyond his control.
It is the secured creditors who feel that they have been dealt with harshly. Under the Bankruptcy Act they can value their security, but here they just have to take their chance with everybody. I must say that I have had brought to my attention a few cases which have caused me deep concern. As an example, a man may have saved $4,000 or S5,000 and loaned it to the least efficient farmer in his district. He who was the most efficient farmer now finds himself compelled to lose his money, sometimes to the extent of half, to the inefficient man who borrowed the money and who is now laughing at him. That certainly was never the intention of the legislation.


Charles Avery Dunning: And in many cases the
efficient man has been deprived of his own wealth which he had saved, through causes with which his efficiency had nothing to do.


Richard Bedford Bennett: I agree.


Charles Avery Dunning: There are many tragic
cases.


Richard Bedford Bennett: The bank, the loan company, the mortgage company and the private individual at times have had their debts
slashed in two. The period of time within which payment is to be made is extended sometimes from five to ten years. Under the circumstances should we not make it clear, beyond peradventure, that this provision is the one that governs? I do not think there is any answer to what the chief justice has said; the judgment of the chief justice is a matter of strict law. But I do not believe that was ever the intention of this 'parliament when dealing with the matter, because we have said that if we take away from a man something, then we also confer upon him a right.
Having taken away from him his property to the extent of 81,000 or $2,000, we have said that if the proposal formulated and accepted is not carried into effect, in the absence of good reason to the contrary, the debtor shall be subject instanter to bankruptcy. That was the theory of it. Automatically that result followed.


Charles Avery Dunning: Would it, in practical
fact, be of much use to the creditor, in the great bulk of cases?


Richard Bedford Bennett: I am frank to say to
the minister that at first I could not see why they were so anxious about it. My correspondent at one time-well, I can see no reason why I should not use his name-was Mr. McCuaig, who was a member of the former board. He was greatly perturbed about *the matter, as it affected some interest with which he was familiar. The answer to the minister is this:	If he is driven back to
the position of foreclosure, he cannot foreclose, because the law of the province prevents him.


Charles Avery Dunning: Yes, exactly, and by
changing this we are circumventing that provincial law.


Richard Bedford Bennett: Yes, quite, which, of
course, is the price paid for taking advantage of those facts, and a very proper price it is too. There never before was such a statute placed upon the statute books of this country.


Charles Avery Dunning: Quite right; I agree.


Richard Bedford Bennett: As a matter of fact, when we are dealing with the statute I shall tell the committee the story of it,- because it is a very interesting one. But there never was a statute such as this placed on our statute books before. It goes much farther than bankruptcy. If the benefits accrue, surely there must be corresponding responsibilities; and sometimes the only intention has been just to get an order.
51952-94J
Farmers' Creditors Act


Charles Avery Dunning: Some time there will be a day of reckoning.


Richard Bedford Bennett: Yes, quite. I had
presented to me a letter signed by a very large number of persons saying that in a given locality in Alberta-not the drought area of Saskatchewan-not a single proposal had been carried into effect by even the first payment being made. That is pretty hard, is it not?	*
Mark you, I remember very clearly the circumstances which brought about our adding to the statute a provision whereby if a man ttave a good reason why he could not pay, he was relieved from payment. But in the absence of a good reason, when a man's debt is cut in two-some of them have been; I know of one in my locality in which it was cut down to forty per cent of the whole- when that happens, should not the other liability attach?


Joseph Thorarinn Thorson: If I remember correctly, the court of appeal in Manitoba has held that all that proposal does is to cut down the amount of the indebtedness, and that if the farmer does not live up to the terms of the proposal, the secured creditor may take whatever steps against his security he could have taken before the proposal was made. Apparently that seems to be the case in Alberta. In our province foreclosure may take place if there is default under the terms of the proposal.


Walter Adam Tucker: I take it from what the leader of the opposition has suggested that what they had in mind when they passed the law was that a creditor, even if he had only $10 coming to him, could plunge a man into bankruptcy. Surely there must have been some intention to place a limit upon such action, because under the present Bankruptcy Act a secured creditor must have $500 owing over and above the value of his security, or unsecured creditors coming together in launching proceedings must have $500 owing to them. Otherwise a man could be launched into a bankruptcy court for a $5 obligation.


Richard Bedford Bennett: That well might be, and that is the reason the provision was there-if he could be so treated.


Walter Adam Tucker: But I submit that a man who has a very small obligation owing him should not be able to set in motion bankruptcy provisions, as he could do if the amendment suggested by the leader of the opposition were carried. If the purpose is to get around provincial moratoria laws, you of course do not get around them much by throwing a man into bankruptcy, because the moment a man

is thrown into bankruptcy and an attempt is made to vest his land in the secured creditor under bankruptcy provisions, he can immediately claim his exemption. Then they have to resort to foreclosure proceedings anyway.


Charles Avery Dunning: I believe we are on section 3.


Richard Bedford Bennett: The last section.


Charles Avery Dunning: No, section 3, and it might be permitted to stand. We have made some progress in developing points this afternoon. Sections 2 and 3 will stand. We have not yet passed a section. Then, section 4 provides for the appointment of one or more boards of review.
Section stands.
On section 4-Board of review.


James J. Donnelly: I wish to repeat what I said the other day with respect to the necessity for uniformity of decisions.


Charles Avery Dunning: We will take that into
account.


James J. Donnelly: And whether to have the members of the board interchangeable, or to have-


Charles Avery Dunning: It is a matter of administration, and it can be arranged.


James J. Donnelly: There should be regulations along that line.


Charles Avery Dunning: I wish we could do it as between provinces, but that is rather more than we can hope.
Section 4 agreed to.
On section 5-No new proposal after a certain date.


Charles Avery Dunning: This provision embodies one of the principles of the bill, one which everyone commended, and gives power to the governor in council to state by proclamation a date after which no new proposal shall be made or filed by any farmer, or accepted by any official receiver in any province. It is a provision similar to the one which brought the act into force by proclamation in the various provinces. It is thought to be the best solution of one of the worst difficulties we have.


Thomas Clement (Tommy) Douglas: How would a government decide as to whether or not a board of review should continue to operate in a certain province? Would there be consultation with the government of that province, or representations made to the board of review in that province?

Civil Service Act-Language Qualification


Charles Avery Dunning: Well, Mr. Chairman, I have given a great deal of consideration to the qualifications which could be put into the act with respect to this power, and I find it difficult to evolve any which could possibly be of sound application under the various circumstances which will prevail. I think I shall ask that section 5 be permitted to stand, because evidently one or two members wish to speak to it.
Before calling it six o'clock I should like to finish my answer to the hon. member for Weyburn. I think ultimately there is no other way than for the government to accept responsibility, undertaking such investigations as it may be able to, within a province, as to the circumstances prevailing there. In some provinces the governments do not wish to give an opinion on the matter. In other provinces they are quite emphatic. In some provinces the counties are expressing themselves vigorously in the matter. In other provinces farmers' organizations are expressing themselves. I think we must leave it-


Richard Bedford Bennett: And in all provinces individuals are expressing themselves.


Charles Avery Dunning: Yes, in all provinces, and most vociferously. I believe it is impossible to lay down any rule as to the considerations which would guide the government. I believe there will be sufficient check in this chamber on the possibility of making mistakes along that line. '
At six o'clock the Speaker resumed the chair and the house took recess.
After Recess
The house resumed at eight o'clock.



CIVIL SERVICE ACT


[Stage Direction]
Mr. WILFRID LACROIX (Quebec-Mont-morency) moved that the house go into committee on Bill No. 3, to amend the Civil Service Act.
Motion agreed to and the house went into committee, Mr. Johnston (Lake Centre) in the chair.
On section 1-Method and tenure of appointments.
Richard Bedford Bennett: The bill has been settled in the special committee, but I am afraid it has not been reprinted. I have the old bill here, but I think we can put it through very quickly as an agreement has been arrived at.


Mr. POULIOT:: Efficiency and good work.


Mr. LAPOINTE (Quebec East):: I have
just been handed a copy of the reprinted bill. The explanatory note explains the changes that have been made in the committee.


John Frederick Johnston: The amendment that was made in the committee appears in the seventeenth line. After the word "the" these words have been inserted, "persons with whom it is required to do business: provided that such language shall be the French or the English language."


Mr. REID:: This is the first time I have
seen the reprinted bill, and on a cursory examination it seems to me the question might arise whether it is the locality or the province that is intended.


Louis Édouard Fernand Rinfret: I might explain that
this bill was sent to the special committee on the civil service, where several projected amendments were discussed by the members of the committee, and a subcommittee was appointed to go over them. This amendment was finally adopted by the committee, upon the recommendation of the chairman of the civil service commission, was approved by the sub-committee and subsequently by the committee itself. I am quite satisfied that the bill in its present form will attain the end we all have in view.


Mr. HEAPS:: This is the first time I have seen the amendment, and going over it casually I do not think it will make very much difference in the conditions that prevail at the present time. It is for the civil service commission to appoint people to positions requiring to be filled in various parts of Canada, and we are really attempting to do here by legislative action what should be done by those responsible for the administration of the acts of parliament. I do not like to mix up administrative with legislative functions. If the civil service commission is not appointing fit and proper persons to occupy these positions, that is not the fault of the legislation *on the statute books, but the fault of the commission, and if representations were made to the commission that there should be appointed to these positions in the province of Quebec and other parts of Canada people speaking the language required in those districts, I think that is all that should be necessary. I think it is a mistake to have this kind of thing in the form of legislation, and personally I would have been much better satisfied if the committee inquiring into the matter had made representations to the commission to see that appointments such as have been com-
1486	COMMONS
Civil Service Act-Language Qualification
plained of in the past were not repeated, and that persons were appointed who could speak the language required.


Mr. BROOKS:: The hon. member for
Winnipeg North has expressed pretty well the exception that was taken by some members of the committee, but not very many. We all agreed on the principle of the bill, but some of us felt that this matter could be better dealt with by regulation than by an act of parliament which is restrictive in character. The main point brought out in the committee was that very often to some English-speaking districts a French-speaking representative of some department would be sent, and vice versa to the French-speaking districts an English representative of the agriculture department or some other department would be sent, who would be unable to look after the business properly because of being unable to speak the language of the district. But the representative of the civil service commission advised us that the departments and the commission always endeavoured to see that the person sent was conversant with the language of the people with whom he would come in contact. Some of us felt that this could be done much better by regulation, and that this would be much more flexible than a bill of this kind.
Another point brought up was that some of these positions required technical men who did not have to come in contact with the people, and so the language requirement was not so necessary; but under a bill of this kind you may not get .the best technical men because you are restricted in making appointments. As a member of the committee I did take exception because I felt this matter could be dealt with better by regulation than by a restrictive bill of this kind, but the committee was almost unanimously in favour of this amendment.


Ernest Lapointe: I desire to congratulate the members of the committee upon having come to at conclusion which will meet the views of both the committee and the house. Even those who have expressed some little dissent agree on the principle, and object only to the method, believing the matter could be dealt with better by regulation, and that it was not necessary to express the wish of the bouse in a bill. I am reminded of the words of a famous French diplomat of former days, Talleyrand, who, when negotiating a treaty of some importance, insisted on certain words being put in the treaty, but others said, "It is not necessary because it goes without saying." Talleyrand 
replied, "Yes, it goes without saying, but it goes still better if we say it." I think it is practically the same here; and if everybody agrees that the principle is right, why should there be any objection to our stating in a bill what we want?


Abraham Albert Heaps: I am not opposing the principle. I do not object to its being stated in the regulations; but that is different from its being included in an act of parliament, and I am afraid that in practice it may have an effect the very reverse of what has been stated by the Minister of Justice. For instance, take a district where sixty per cent of the population is English-speaking and forty per cent French-speaking; districts containing approximately that proportion of the two races can be found in various parts of the dominion. Suppose an English-speaking person is placed in a district like that and he has to meet the forty per cent of French people; the letter of the act would be carried out, but the spirit would be lacking. Personally I would rather see in such a district a person who can speak both languages than to have an appointee who is capable of speaking only one language. Although the letter of the act would in such a case have been carried out, the official would be under a handicap in meeting a large number of persons in that area.


Mr. MacINNIS:: I believe it has already been stated that this bill was referred to the special committee on the civil service, and that committee referred it to a subcommittee. The subcommittee, after considering the matter several times, drew up this amendment, which I believe was passed unanimously; and when it was placed before the special committee I believe it was assented to by all who happened to be in the room at the time. I was present and voted for the amendment, and while I am not quite sure that it is the best thing that could have been done, I shall vote for it to-night. I think we can easily understand the reasons for the introduction of such a bill as this. It is an effort to meet conditions which do not exist in my province of British Columbia. I never had the experience of trying to converse in my province with an official who could not speak my language, but possibly the hon. member who brought this measure forward found himself or some of his acquaintances in that situation. For that reason we should give careful consideration to the bill. The only thought in my mind of wherein it might be detrimental is that too much emphasis might be placed on language and not enough upon other qualifications necessary to fill a position. However, that is a matter

Civil Service Act-Language Qualification
which must be left to the good judgment of the civil service commission and the heads of the departments concerned.


Richard Bedford Bennett: There is a difficulty, and it is a very real one. The other evening I pointed out that, to my mind, the principle of this legislation was sound; but I should have preferred that it be provided that whoever was appointed to a position in which there were varying numbers of people speaking two languages should be a bilingualist. That would be the sound thing to do. But I understand that certain difficulties have arisen in getting people qualified in that way. This substitutes, for a knowledge of languages adequate to communicate with the whole community, knowledge of the language of the majority, which is not the general purpose of the legislation in the Civil Service Act. I fear it will be found after practical experience with this provision that it will have to be repealed, because it substitutes for ability to use the languages of the community, the language of the majority, and if it should happen that that majority was English and there was a minority of forty per cent who could speak only French, you would have a very difficult situation; e converso, if the population were forty per cent English-speaking and sixty per cent French-speaking, the situation would be extremely difficult. It will be observed that the last section is the one which contemplates examinations being given in one language or the other, so that what would be required is proficiency not in both languages but only in the language of the majority with which the official is to do business. I gathered when the hon. member introduced his measure-and I * certainly feel that he presented it with great moderation-that what he had in mind was that whoever was appointed should be able to speak the language of the community but that he should be by choice one whose natural language, if I may use that word, is the language of the majority. The proposal which has been approved by the special committee will not, I am afraid, meet the difficulty he had in mind but will rather accentuate it.
I may be wrong. I know that this is not what the hon. gentleman had in mind when he introduced his measure. His purpose was an absolutely sound one. If an appointment is to be made to the position of supervising inspector of agriculture in a community along the river St. Lawrence where seventy-five per cent of the population is French and twenty-five per cent English, the man who goes there should be able to speak to all those people, French and English, so as to make himself
understood for the purpose of giving adequate directions. Under this legislation you will appoint one who is qualified by examination in the French language only, and twenty-five per cent will not be able to communicate with him.


Mr. ILSLEY:: Not necessarily.


Richard Bedford Bennett: Not necessarily, but that is what the bill contemplates.


James Lorimer Ilsley: I do not agree.


Richard Bedford Bennett: All the minister has to do is to look at the last section. Candidates have the choice of which language they pass in, French or English.


Louis Édouard Fernand Rinfret: I appreciate the spirit in which my right hon. friend approaches this bill, but he seems to be under the impression that from now on this is going to constitute the only qualification.


Richard Bedford Bennett: Oh, no.


Louis Édouard Fernand Rinfret: It is added to other qualifications. What I like most about this bill is that it should create a new spirit ii>
relation to these matters. I understand tha! when a position is open and comes unde! the provisions of this law, this requirement will not detract from the other qualifications demanded of candidates. If, for instance, an official is to operate in a French centre where there is an important English-speaking minority, I would say that it would be the duty of the commission to see that the candidate speaks both French and English and has other qualifications as well. This bill does not subtract anything from the present act or from the present qualifications required of candidates, but merely adds this additional requisite, that a candidate to be appointed must be able to speak the language of the people with whom he comes in contact. But he must have other qualifications as well.


Richard Bedford Bennett: Oh, of course. But lest for one moment it should be thought that I was labouring under any such misapprehension, I desire at once to disabuse my hon. friend's mind of that impression. This does not in any sense deal with a question of qualifications as determined by the examinations. The technical qualifications remain as they were; but it is provided that instead of writing his examination in or having a knowledge of both English and French, he may select at his option in which language he will write, and if he writes it in French he will not by any chance be a bilinguist; if he writes it in English he will not by any chance be a bilinguist. The minister sees the point? The candidate has to qualify by examination.
Criminal Code-Trade Unions

If the Minister of National Revenue will look at the clause he will see that unless and until the candidate to be employed is qualified by examination in the knowledge and use of the language-


Mr. MACKENZIE (Vancouver):: It is quite opposite to being belingual.


Richard Bedford Bennett: That is exactly what I wanted to say. I shall not labour the point. I am afraid it does not meet the purpose that the mover of the bill had in mind. I think he was trying to say that appointments should be made under which a person otherwise qualified would be able to communicate with the residents of all the community with whom he came in contact. As the bill reads now, it substitutes for that a majority, which I do not think is the purpose intended.


[Stage Direction]
Section agreed to.
Section 2 agreed to.
Bill reported, read the third time and passed.


[Stage Direction]
The house resumed, from Friday, February 25, consideration of the motion of Mr. Woods-worth for the second reading of Bill No. 4, to amend the criminal code.
Angus MacInnis: In rising to say a few words in support of this bill I hope that what I may have to say will help the Minister of Justice (Mr. Lapointe) to change his attitude towards the bill. I have no doubt at all that in the narrow legal sense the minister's position is quite correct, but I believe that the principle underlying the bill is sound. I maintain that although legally the workers have the right to organize to-day into trade unions and trade associations, in many instances actually they have not that right, because it does not make very much difference what the legal right is if the individuals concerned are unable, owing to certain economic factors, to exercise that right. And that is true to-day in many instances, as I shall prove before I sit down.
I have some little knowledge of the struggles made by the workers to secure the right to organize and to bargain collectively. As every hon. member who knows anything of the history of the working class is aware, that right has been strenuously opposed. Society, however, has been compelled to recognize the need for collective bargaining; that is, the need for negotiation between employers and

employees on a basis of equality. It is, I think, becoming clear to thoughtful people even outside the labour movement that trade unions are a powerful factor for social betterment, and even for social stability; conse-luently I am not taking the minister's statement as the last word on this question. I have heard it said on many occasions in this house that certain things could not be done and I have seen those things done later on with all the sanctions of law behind them. The most striking fact in history is that the impossibilities of to-day become the actualities of to-morrow.
When the Minister of Justice spoke on this measure a few weeks ago, he read from a circular sent to all the provincial legislatures last year by the executive of the Trades and Labour Congress of Canada. The circular urged the provinces to pass legislation similar to that asked for in this bill. It seemed to me that the minister in referring to the circular wanted to convey the impression that the Trades and Labour Congress considered that no action outside the provinces was possible in this matter. That, however, is not so. I shall quote very briefly from the circular referred to. It is a part of the submission made to the Prime Minister (Mr. Mackenzie King) and the members of the dominion cabinet this year by the executive of the Trades and Labour Congress of Canada.


Ernest Lapointe: That is not the circular.


Angus MacInnis: I quote:
We realize that jurisdiction in these matters rests with the provinces at present, rather than with parliament, and in the past year we have approached the several legislatures seeking protective legislation, with success in some eases. We firmly believe, however, that the dominion parliament also should recognize the rights of the workers to freedom of association and collective bargaining in as far as its jurisdiction extends, by providing suitable penalties for proven cases of interference with those rights.
That is exactly what this bill asks the government to do.


Ernest Lapointe: That is not the circular from which I quoted. I quoted from the circular which was sent to the legislatures of the provinces.


Angus MacInnis: That is quite correct, and I am quoting from this submission to show that the executive of the trades and labour congress did not consider that action by the provinces was the last word in the matter. Let me give a line or two more from the same submission:
It is a fact that the workers are not interfered with by the law in their desire to

Criminal Code-Trade Unions
organize, but experience has shown that that is not enough.
We say that, because experience has shown that there is interference with the workers in their endeavours to organize, and because the provinces so far have not passed legislation to prevent such interference, this bill has become necessary. That is why it has been introduced.
With further reference to legal rights, I believe it was Anatole France who said that the majestic equality of the law recognized that it was illegal for the rich as well as for the poor to sleep under bridges, but he also noted that the rich were not very often prosecuted for sleeping under bridges. The majestic equality of the law in this instance allows the workers to organize; but if the employer says they must not, they are in a very difficult position, and we say that the law should be amended so as to guarantee that right to them. The law says that the employees as well as the employer have the right to organize; but if the employer objects it becomes very difficult for the worker to exercise his legal right. It becomes almost impossible, without great sacrifice on the part of someone. Someone must sacrifice his job; on many occasions someone must sacrifice his hope of improving his future position, must sacrifice the future of his family.
I should like to draw to the attention of the house a case which I think I drew to the attention of the Minister of Labour (Mr. Rogers) last year, a case in which the Department of Labour tried to get a settlement. Burns & Company, Limited, in Vancouver had a dispute with its employees. Late in 1936 the workers of this comp:.~y formed a trade union. This was discovered by the company, and nineteen employees were dismissed, including the ten who were the executive of the union. After many attempts had been made by the provincial Department of Labour and the federal Department of Labour to effect a settlement, the provincial department appointed Mr. Justice J. C. McIntosh of Victoria as commissioner to investigate. The commissioner held sittings extending, I think, over ten or fifteen days, at which numerous witnesses were heard. I Should like to read briefly from his report, which states the conditions he found and the recommendations he made. This report is to be found in the June, 1937, issue of the Labour Gazette. He said:
The situation disclosed is unusual in labour disputes in Canada. No question of wage scale, hours of work or working conditions has arisen or is involved, as all such conditions were and are satisfactory to those affected, but consisted wholly of the activities of the newly formed labour union to which the majority of the employees belonged and the retaliatory reaction of the employing company's manager in relation thereto.
This union was formed with the sole purpose of advancing and protecting the interests of the company's employees and to improve the conditions of the workers, and with no ulterior motive.
No complaint was made by the manager of the services rendered by the employees, and an increase in pay was promised and later put into effect. He also informed the employees that they should seek to deal with the company in matters of mutual concern only through the medium of a plant or company union with no outside affiliations, this being the method adopted by most packing plants of consequence in Canada and the United States, of bargaining between the employees and employer, functioning in many cases side by side with a local union in such plants.
When the nineteen employees referred to were dismissed, a strike was called, and in referring to those dismissals the commissioner made this statement:
The intermingling of those nine employees against whom cause could be assigned, and those ten against whom no cause could be assigned except their activities as executives of their union, left only one implication. The manager must have known and anticipated that his action would culminate in a walkout of the employees, being members of the union.
As the commissioner could not get the parties concerned to agree, he proposed a plan of settlement himself. The report continues:
It is submitted as a reasonable plan for the reinstating in employment of the 131 employees affected-
Fot after the employees went on strike all of them were dismissed.
-apart from the nine mentioned, that the company shall reemploy fifty of those former employees in April, 1937, forty-one in May, 1937, and the remainder, being forty, in June, 1937, accelerating the numbers if the opportunity offers, at the scale of wages and working conditions now existing with the following provisoes:
Then he offers some suggestions for more harmonious working relations in future:
(a)	The selection of such employees shall be by some arrangement agreeable to the parties, married men in any event to be first selected when possible.
(b)	Upon this settlement being made effective the union shall immediately return the products of the company to the fair list.
(c)	There shall be no discrimination on the part of the company towards returning employees because of their former union activities.
(d)	The employees shall have the right to belong to any organization or association of their own choosing, and the company shall
Criminal Code-Trade Unions

recognize a committee elected by all of its employees to represent them in their dealings with the company's management.
(e)	The nine employees objected to by the company for cause shall have the privilege of appearing before the management of the company and being heard.
What I wish to bring particularly to the attention of the house is that despite the recommendations of the commissioner, very few of these employees have yet been taken back.
There is another point in this report which I think is very important. The commissioner stated that most, if not all, of the trouble developed because, first, the management did not understand trade union organization, and, second, the men themselves were not accustomed to trade union organization and their business agent did not approach his duties in the way that a more experienced trade union official would have done. And he made this recommendation or suggestion.
It is not submitted but suggested for obvious reasons, having regard to the future harmony of all concerned, that both the business agent of the union and the manager of the company be transplanted by their respective employers to other fields of endeavour


Mr. ROGERS:: Will the hon. member permit a question? I have not that report before me at the moment, but was it alleged by the company at that time that some of these employees were discharged for reasons other than their connection with a trade union?


Angus MacInnis: From the report I would take it that nine employees were discharged for cause.


Norman McLeod Rogers: And the others because of their connection with the union?


Angus MacInnis: The others because of their connection with the union. That is what I would take from reading the report. What I want to point out again is that despite the fact that these employees had the right to organize under the laws of Canada; despite the fact that a commissioner had found that they had that right and that there was no case against them; despite the fact that he recommended that they be put back in their positions. up to the present time only a very few of them have been permitted to go back to work.
I am sure the Minister of Labour will pardon me for quoting from a New Year's message he delivered at the end of 1936, published in the Labour Gazette of January, 1937. The minister expressed the right of association much better than I could when he said:
In connection with recent strikes in Canada there have been frequent complaints that certain employers have denied to their employees the

right of association and have summarily discharged men and women who have been active in the organization of labour unions. It is necessary to state in the clearest terms that the right of association is a civil right, long established by law and usage.
That established law did not help the employees of the Burns company who lost their jobs and are still out of employment. I continue:
It was affirmed with special reference to Canada by an order in council of July 11, 1918 (P.C. 1743). It was proclaimed explicitly in the treaty of Versailles at the close of the world war. To deny the right of workmen to combine in any lawful organization they desire for the promotion of their common welfare is an open invitation to extremists to preach the futility of collective bargaining as an alternative to direct action.
In other words, to deny the right of organization tends toward a breaking of the law in other directions. If that is true-and I maintain it is

then it is incumbent upon this house to see that what the law allows, the law shall guarantee. I quote:
The right of association for legitimate purposes should be respected in the national interest and labour should not be denied the means of organizing for collective bargaining. The right of employers to organize for all lawful purposes is not questioned in any quarter. Employers are not entitled in the same breath to protest against governmental regulation of industry and to deny to labour its right to resort to legitimate measures of self-help to voluntary association.
I submit that the Minister of Labour has stated our position very clearly in that paragraph. These days we hear a great deal about democracy. Very few liberal speakers-I do not use the word "liberal" in a party sense- speak on this subject without referring to the necessity of maintaining democracy. May I say that I am in full accord with that. I believe that people have come to recognize the value of democracy as they have never done before, even if it is not as complete as we would like it to be. But democracy is impossible without freedom of organization. We measure our political democracy by the extent to which various classes in society are represented in government, and to make our political democracy worth while we must have economic democracy. Our economic democracy will be measured by the extent to which the various factors in our economic life share in its direction. The workers cannot share in the direction of industry until such time as they are organized. The industrial union by means of which the worker has some share in arranging the terms upon which he gives his labour, either of hand or brain, is the first step to that fuller democracy to which I hope we are travelling.

Criminal Code-Trade Unions
Whenever I think of democracy my mind goes back to a visit to the Scandinavian countries about a year and a half ago. I was impressed with the reality of democracy in those countries, and I am convinced that their democracy and to a large extent the stability of their social structure are dependent upon the organization of the various economic groups within the countries. In Sweden the employers are organized; labour is organized; the farmers have their organization and, what may be equally important, the consumers are organized. I believe we would solve many of the problems created in this country by monopolistic industry if in some way or another we could organize the consumers. As one writer has put it, "The Swedish road to democracy is through organization. The fundamental units of this organization are economic ; their political parties reflect these alignments." Sweden with a population of a little over 6,000,000 people has 650.000 trade unionists. Canada with a population of something over 11,000,000, with about 2,000,000 workers who could organize, has not more than 250,000 trade unionists.


Thomas Reid: Is the number of trade unionists in Sweden greater than the number in the old country?


Angus MacInnis: My information is that a greater proportion of the workers in Sweden are organized in trade unions than in any other country. I am not stating that definitely; it is simply the information I have at the moment. Mr. Justice McIntosh, the commissioner in the Burns dispute, stated that a possible cause of the dispute was the inexperience of the management in dealing with trade unions. May I say that the use of the instruments of democratic procedure does not differ from the use of any other instruments. We must learn to use them before we can use them efficiently. The old saying that practice makes perfect is just as true of trade union organization and negotiation as it is of anything else. When a union is well organized; when a union has had considerable experience in negotiating with employers, it is very seldom that there is a strike; it does happen the odd time, but not very often.
I should like to quote briefly from an article which appeared in Harper's Monthly Magazine, of November, 1936, by Mr. Hubert Herring. This deals w'ith trade union organization in Sweden. It seems so good to me that I think it worth while to read it to the house:
The Swedish labour union serves to make some six hundred and fifty thousand individuals, representing perhaps one-third of the population of Sweden, partners in democratic control. These members study, they debate, and they participate. Knowing that the local union is a unit in the national union movement which dominates the social democratic party and that the social democratic party is the dominant party in the national parliament makes for responsibility and realism. The fantastic loses its charm. The Doctor Townsends and the Huey Longs and the Father Coughlins have the ground cut out from under them. The Swedish worker has no prejudice against the promised land of plenty, but he knows that the way is beset with practical problems.
When you find a trade union organized and dealing with practical problems, and when the employees meet their employers and know the practical problems with which the employer has to deal, then you find people who are open to reason and, as I said before, it is not very often one finds strikes and disorders developing under those conditions.
I notice that in his message in 1937 the Minister of Labour expressed the same sentiments as he had expressed in 1936, pointing out that many of the strikes during the year which had just closed were caused by workers wishing to bargain collectively, and employers refusing to meet them. May I quote these few words from that message:
Once these relations-
That is collective bargaining.
-are established between employers and employees, they supply the best possible guarantee of industrial peace. They facilitate the discussion of particular disputes in a spirit of tolerance and forbearance. They also encourage a sense of obligation on the part of both to the community at large.
I agree with that, too. In effect he is saying that collective bargaining makes for good citizenship, and that it makes both employer and employee more socially minded. They recognize that a social interest is involved and that industry is not something which concerns only those actually engaged in it, but that it also concerns the community at large.
In the light of what I have said I would ask the government to give the most careful consideration to the bill before it decides that nothing can be done. If the bill is not acceptable because of its construction, we shall be only too happy to support any measure which would accomplish the end in view, namely to give the workers the right to associate in organizations of their own choice, in fact, as well as in law.


Alan Webster Neill: Mr. Speaker, while I have no reason to doubt the accuracy of the law cited by the Minister of Justice (Mr. Lapointe), or the soundness of his statement when he says that this bill is ultra vires because it intrudes on

Criminal Code-Trade Unions
provincial jurisdiction, yet I intend to vote for the bill, if it is only as a friendly gesture towards trying to do away with the principle of what is known as the black list on the Pacific coast.
It is true that last fall there was a bill passed in the provincial house, known as the Industrial Conciliation and Arbitration Act, which was supposed to be a universal cure-all, but it appears to be more spectacular than useful from the working man's point of view. That the black list still exists is indicated by statements I have under my hand. Some trouble arose in a lumber camp, and submissions were made to the government. One comment is as follows:
One affidavit stated, among other things, the boss told me that as far as my work was concerned there was none better, but that it was impossible for him to rehire me. In giving his reason for not hiring me, he said, "there is no use of telling you there is no black list, because you know better."
A second affidavit states: "Upon asking if my work was satisfactory he said it was very satisfactory, and that he had nothing against my work whatsoever. He informed me that I would not be hired on account of my union activities in the camp in the previous year."
I also find that the employment office which sends lumber workers to the camps makes those workers sign a slip, one clause of which reads as follows:
It is understood I will not invite or allow any person in the camp or on the premises without the owner's consent.
The paper from which I quote, the B.C. Lumber Worker, goes on to say that that is rank intimidation. I do not know whether it is that or not, but certainly it is an interference with the liberty of the people. It would be just the same for a man to rent a house, and tell his tenant that he, the owner, would prescribe as to who would or would not be entertained in that house.
There is no doubt that, despite the provincial bill, the black list is still in existence. It is a very fruitful source of profound dissatisfaction on the part of many loggers. Therefore, if it is only a gesture along this line, I shall support the bill if it ever comes to a vote.
Hon. NORMAN McL. ROGERS (Minister of Labour): Mr. Speaker, I cannot do more than give a brief introduction of what I had hoped to say on this bill to-night. As it has been presented to the house, the bill has taken the form of an amendment to the criminal code. As such it was dealt with by my colleague, the Minister of Justice (Mr. Lapointe) when it was before the house some
TMr. Neill.]
little time ago. It was stated then by the Minister of Justice-and I repeat it now- that the right of workers to form or to join trade unions has the full support of this government.
Freedom of association has been proclaimed on several occasions by the dominion government.
It may be within the memory of some hon. members in the house to-night that during the great war, in order to meet rather grave conditions of industrial unrest, an order in council was passed which very clearly affirmed the right to organize. It took the form of an assertion of the existence of the right to organize, and there was no suggestion at the time that the dominion parliament had power to deal with the question in any way other than by declaration.
Mr. Speaker, it is nine o'clock.



FARMERS' CREDITORS ARRANGEMENT ACT


[Stage Direction]
The house resumed consideration in committee of Bill No. 25, to amend the Farmers' Creditors Arrangement Act, 1934-Mr. Dunning -Mr. Johnston (Lake Centre) in the chair.
On section 5-No new proposal after a certain date.
Charles Avery Dunning: I believe we are on section 5 of the bill, the last section. The leader of the opposition called my attention to the fact that my previous suggestion, namely that on the title we might discuss general matters connected with the bill, would be of little avail, because there is no title. I therefore suggest it would be appropriate for hon. members, such as the hon. member for Marquette and other hon. members who wish to make observations on the general workings of the act, observations which would not come directly under any of the sections of the bill, to make those observations on section 5, which deals with the method of terminating the act in the various provinces.


Richard Bedford Bennett: A very appropriate place.


James Allison Glen: Mr. Chairman, what I say will probably be misinterpreted, no matter how carefully I may choose my language; nevertheless, I shall take the risk, if risk there be. I therefore state I am not attacking or impugning the principle of the act. I realize there is no intention in the amendment before the committee to impugn the principle of the

Farmers' Creditors Act
act; it is simply to place the responsibility perhaps where it should belong, namely on the provinces, by proclamation.
What I wish to discuss is the question of deliberate default on the part of a debtor, and to suggest what I am sure every member of this house will agree on, that some remedy should be applied to deprive any person of the benefits of the act who is entitled to and does receive them and who thereafter wilfully evades the corresponding obligations and undertakings and defeats the very purpose of the act itself. What I say cannot be applied to an honest debtor, but certainly it may be applied to a dishonest debtor. In order that I may draw my conclusion I shall have to inform the house of a case which, I think, can hardly be duplicated in the dominion, and one which, I believe, justifies the remedy that I shall propose at the end of my remarks. Therefore I shall have to ask the house to bear with me if I am a little lengthy.
The case concerns a property in Manitoba which was sold under an agreement of sale in 1930. The price was 810.000, interest 6 per cent, and the payments were spread over a period of years. There was no cash payment. The purchaser entered into possession of the land but did not make any payments for some considerable time, and ultimately the estate, which was in the hands of executors, decided that they must take steps to protect their interests. In Manitoba the first thing to be done is to obtain a certificate from the provincial debt adjustment board. After sixteen months I was able, on behalf of the estate, to obtain that certificate. As soon as I obtained it, an appeal was taken by the purchaser of the farm to the county court judge. The appeal was heard and dismissed, and proceedings were therefore taken by way of foreclosure in the court of king's bench, Manitoba. When the action was before the court a dispute note was filed. It was purely a bogus dispute note. The whole intent of the agreement of sale, as they said, was that the proceeds of the farm would pay for the purchase price. When the matter was brought before Mr. Justice Adamson no representations were made by the defendant except for the purpose of obtaining time in which to redeem. I pointed out to the judge at the time that to give time for redemption would mean that this man would just wait until the period had almost elapsed, and then would apply under the Farmers' Creditors Arrangement Act. Six months was given to redeem. This expired on March 16, 1935, and on that date the purchaser filed a proposal with the official receiver. The matter was
heard before the official receiver and no agreement was arrived at. An appeal was then taken to the board of review, and after a hearing the board of review formulated a proposal. That proposal was objected to strenuously on the part of the estate because it was felt it amounted to a confiscation of the estate under the sanction of law. We had a strong case; but apparently it was not strong enough, for the board of review still maintained their proposal, and ultimately it was filed in accordance with the act.
In order that the house may fully understand the position, the only payments which this man made under this S10.000 agreement amounted to 8616.42 over a period of seven years, or an average of S88 a year, and the estate, in order to protect the farm, had to pay taxes to keep it out of tax sale, and had to pay insurance to the amount of $370.98, and on October 31. 1937, there were taxes due amounting to $387.53. In other words, the money paid by this farmer from 1930 to 1937 was less than the amount paid by the estate, including taxes for which the estate is liable. He had had the farm about seven years, and all that the estate has received is the amount stated.
When the matter was before the board of review the position was that this man actually owed, including the purchase price of the land, $19,000, and against that he had assets of S540 for stock, and the most meagre line of equipment to carry on operations. I do not suppose the assets, including stock and equipment, would realize more than $1,500. Yet the board of review made the order, and in that order they stated that the purchase price shall be reduced.. First, they take upon themselves to reduce the purchase price. There was a total indebtedness of about $15,000 at the time of the foreclosure action. The board of review reduced that to $7,500, almost fifty per cent of a cut. At that time it was shown that the defendant had $19,000 of debts. All the unsecured creditors except those with lien notes were absolutely wiped out, and after that the farmer continued with his operations under the board of review order. That board of review order is a precious thing in its way. It provides for the payment of this $7,500, which was the amount arrived at by one of the officers of the soldier settlement board. The board in Manitoba take this position, that they would arrive at the value of the land themselves and give no indication to the parties interested of how that amount was arrived at, and in consequence there is nothing you can say about the matter.
Farmers' Creditors Act

The farmer continued with his operations. During 1935, 1936 and 1937 he was bound under the order to deliver one-third share of the crop, and under the orders of the board that one-third share of the crop was to take care of all the obligations which he had to pay for the purchase price of the land. In 1935 that one-third share of the crop amounted to $49.80; in 1936 it amounted to $247.48, and in 1937, last year, it amounted to $16.47.
Provision is made by the board's order that the money received from the crop shall first be applied to municipal taxes; at all events the Manitoba act provides that one-third share of the crop shall be applied first to taxes; the purchaser has the right to pay the taxes and to hand over the receipt to the vendors, and that fulfils his obligation. As a matter of fact, all the money which the estate has received in three years has been paid out on account of taxes, and yet at the present moment there is $387.53 still owing in taxes.
AVhen the year 1937 came we were astounded to learn that this gentleman had leased the farm to another man altogether. He had left the farm and gone to the town of Virden in Manitoba, and is now, I am told, selling stock for an oil company from Brandon. I verified the facts and found that there was a lease of the farm given for three years. You talk of privity of contract, but there certainly is no privity of contract between the vendors and the present lessee. He is on the farm. In the meantime the old lady to whom the estate belongs, a very dear and beautiful English lady of seventy-five, is living in a small cottage on an adjoining quarter section belonging to her son, and looking over the fence at her beautiful home occupied by a stranger who has no interest in it.
Naturally one felt annoyed at circumstances such as these, and I was endeavouring to do all I could; so I communicated then with the board of review, pointed out the circumstances, told them of the hardship, and they realized it, but they said they could do nothing. And why? Because they had already given their proposal; it was filed in the court, and therefore they were functus officio and could deal no further with the matter. I communicated with officials in Ottawa and got the same answer from them. In fact, the letter I received indicates two widely different points of view with regard to certain matters of which I shall speak shortly. At all events, after all the efforts in order to get some place where the estate could regain the farm, we came to the question whether what we should do would -be done

under the rules and regulations of the act. In these rules and regulations there are two clauses, 48 and 49, which I am going to read.
48.	The official receiver or any creditor may, after giving such notice to the debtor as the court may in the circumstances require, apply to the court for an order setting aside a proposal because the debtor has-
There are four reasons.
(a)	made a fraudulent or preferential conveyance, gift, delivery or transfer of any of his property;
(b)	with intent to defeat or delay his creditors, departed or remained out of Canada;
(c)	assigned, removed, secreted or disposed of any of his property with intent to defraud, defeat or delay his creditors;
(d)	conducted himself to the satisfaction of the official receiver in such manner as indicates bad faith towards his creditors.
49.	In the case of any application made under the next preceding paragraph, the court may order that the proposal be annulled, and such an order shall be deemed to be a final disposition of the proceedings.
Would it not be imagined, reading that, that these words mean exactly what they say, and that the official receiver or a creditor may, after giving such notice to the debtor, apply to the court for an order setting aside the proposal? But when I make the request of the official receiver of the district in which this land is situate, and ask him to make the application to the court, which in this case would be the county court, he, with instructions from the board of review in Winnipeg and also perhaps from the officers in Ottawa, takes the position that that refers only to a proposal which is either before the official receiver or the board of review. I cannot understand the reasoning of it and I cannot convince the other side that my reasoning is correct.
For instance, an application is made to the official receiver. The hearing is set; the witnesses appear, and then if necessary it goes on to the board of review. What in the world is the use of making an application to the court to prevent the issuance of an order when it is at that moment before the official receiver and before the board of review? If there are evidences that any of the four subsections which I have read have been contravened by the applicant, the farmer who is applying, all that need be done is to bring that matter before either the official receiver or the board of review and he will not get the order or the composition that he is seeking. That would seem self-evident, and I am informed it is the fact that there have been applications to the court in that particular district on that very ground. But why the necessity for it I do not know, because surely if a litigant comes before the

Farmers' Creditors Act
court with impure and unclean hands, those who are in the position of authority and to whom he must appeal would certainly not formulate any proposal but would simply refuse to do anything with it. If it only means that, that remedy is in the hands of the official receiver or the board of review; why should this be placed in the act at all? They say, of course, that lawyers always disagree, when they are paid for it. I submit that there are many differences of opinion in the courts with regard to the matter. It arose in one case in Manitoba, the Manitoba farm loan case, where one of the judges, Judge Richards came out and stated categorically that rules 48 and 49 did not apply to a proposal that had already been formulated by the board and had reference only to the proposal when it was before either the official receiver or the board of review. As against that, in the same judgment, Judge Prender-gast fakes the position that rules 48 and 49 are applicable. Judge Dennistoun made only a casual remark, and the other two judges made none. But it has happened that in other cases, in Alberta and also in Saskatchewan, there is a direct conflict of opinion among the judges as to whether rules 48 and 49 apply, and the consequence is that to-day the law is so muddled that no one knows where he is at. It happened in the course of my negotiations that it was suggested to me by a very high authority in Winnipeg-I do not mind saying that it was Mr. Justice Montague, judge of the board of review-when dealing with this matter, that he thought, his board of review being functus officio, their jurisdiction ended as soon as the proposal had been formulated, but we might invoke bankruptcy proceedings and thereby attain the object for which we were applying. The leader of the opposition referred to a case which I have read, the case of the Commercial Life Assurance company v. Strynadka, 1 Western Weekly Reports (1938), page 479. That decision states that where a debtor has defaulted in complying with the terms of the proposal confirmed by the board of review under the Farmers' Creditors Arrangement Act, 1934, chapter 53 (dominion), section 19	(2) of the Bankruptcy Act, 1927, chapter 11, cannot be invoked to support an application to the court to have the proposal annulled and the debtor adjudged a bankrupt. The advice I received from the head of the board of review in Winnipeg has been nullified-naturally must be-by the judgment of the appellate court in Alberta; and to-day we are in this state, that there are no judgments before the court as to how a creditor can arrive at a place where he can annul a proposal.
It may be suggested that I might take another action of foreclosure after default had taken place; but the unfortunate thing about that is this, that default has not taken place under the terms of the order of the board of review. The man has delivered the one-third share of the crop each year; in consequence he has lived up to that order and therefore we cannot invoke that procedure. We are apparently debarred from invoking rules 48 and 49 by reason of the dictum of the judge of the board of review in Winnipeg and also of the officers of the crown here. Where are we to go? I submit to the Minister of Finance that such a situation cannot be allowed to continue. The procedure in order to file a proposal and to have it formulated by the board of review is an informal proceeding, the cost of which is so little that there can be no objection to it. But I submit that no creditor should be obliged to make the law in courts when we here are dealing with the act, and we can remedy the act and make it so clear and unmistakable that there can be no doubt in the minds either of creditors or of the courts as to what exactly is intended. I submit that a creditor who is being defrauded by a debtor should surely have the same rights-inexpensive, informal, if you like-as are accorded to the defrauding debtor when he makes his proposal.


Charles Avery Dunning: My hon. friend is not alleging fraud in this case.


James Allison Glen: I am alleging that the man is defaulting.


Charles Avery Dunning: You say he delivered one-third of the crop as the order called for?


James Allison Glen: Yes; but he has left the farm and gone off and is not a farmer now. The whole spirit of the act is defeated by the fact that the man is off the farm. He has left it to the lessee, and if that is not conducting himself in such a manner as to indicate bad faith towards his creditor I do not know what it is. I therefore suggest that rules 48 and 49 be amended and that it should be clearly stated that " the official receiver or any creditor may, after giving such notice to the debtor' as the court may in the circumstances require, apply to the court for an order setting aside a proposal," either before or after a proposal has been formulated by the board of review.
I make that suggestion to the Minister of Finance, and I ask him to take the matter up with the law officers of the crown and clarify the act so that the man who is endeavouring to defeat the principle of it shall be subject to the same remedies as he has invoked under the act, and that the act itself
Farmers' Creditors Act

shall supply that simple and inexpensive remedy to the honest creditor endeavouring to retain his property as against a debtor defaulting by his own act.


Charles Avery Dunning: I shall be glad to have the suggestion examined. As I understand it, it would involve an amendment not to the act but to the rules. I shall have it looked into.


Frederick Cronyn Betts: I wish to say a few words applicable particularly to section 5 of the bill, which is the section that enables the governor in council by proclamation to provide that no proposal shall be filed in any province after a date fixed in such proclamation. I should like to add my remarks to those that have already been made urging the minister to cause the operation of this act to cease in the province of Ontario at as early a date as possible. I am unable to state, except from what I read in the newspapers and hear in this chamber, anything about the operation of the act in any of the other provinces; but I can state, from observation and first-hand knowledge of a good many of these cases, that whatever may have been the usefulness of the act when it was first passed, whatever necessity may have existed for its passage, it has entirely outlived its usefulness in this province.
The hon. member for Marquette gave a striking case in which a creditor in the west has been subjected to considerable hardship as a result of the operation of the act. I should like to put on record a somewhat similar case in which a creditor in Ontario has been defrauded-I do not think the term is too strong-and I do not adduce the details because they are of any particular interest in themselves; I cite them simply because the case is entirely typical of many such cases that have been dealt with by the board of review particularly in the course of the past three years or so. This is a case arising in the county of Essex in which the mortgage under consideration was made in April, 1923. It was a mortgage for 82,000, for ten years, at what was then the prevailing rate of interest, seven per cent, and the security was fifty acres of land, all of which was tillable. The repayments of principal were at the rate of 8100 a year. At the time the mortgage was made the mortgagor was a young farmer, twenty-four years of age, apparently quite capable of carrying on and making a go of his undertaking. He borrowed the 82,000 to retire a former mortgage, and the mortgage of which I am now speaking then became the first and only mortgage. The amount invested in the mortgage represented the savings of an elderly woman, savings that had been

accumulated as a result of very many years of hard work at low wages. From the date on which the mortgage was made in 1923 until 1926 the principal was reduced from 82,000 to $1,600, and the interest was paid promptly. After 1926 there were no further reductions in principal, but the interest was paid in full until the first of April, 1935. At that date the mortgagor owed nothing for taxes and he had some other debts, comparatively small. Having paid his interest up to the first of April, 1935, from which it might fairly be said that he had continued his interest payments throughout the worst of the depression, in the spring of 1935 he evidently learned of the act with which we are dealing, because from that date onward he ceased paying his interest and his other debts, and in the latter part of 1937 he applied under the act, his application coming on for hearing in January, 1938.
This is what was done. The two years of interest which he owed were wiped out; the mortgage was ordered renewed at the sum of $1,600 for a term of ten years from January 18, 1938 and the interest rate was reduced to three per cent. No repayments on account of principal were ordered until 1944, that is, five years in advance, and from 1944 on it was ordered that 875 on the principal should be paid annually. His unsecured debts were reduced by seventy-five per cent; it was ordered that the creditors must accept twenty-five per cent of their claims in full. As a result of that order great hardship was worked on this elderly lady who held the mortgage. Orders of that sort are becoming increasingly common.
My submission is that through the operation and administration of this act in recent years, *most of those whom it was designed to benefit; most of those who are worth keeping on the land and who are making an honest attempt to make a go of their farming operations, have been dealt with. They are either carrying on or else they have got off. And the present result of the continuance of the act is that many creditors Whose sole investment takes the form of farm mortgages have become impoverished; and on the other side of the picture, many men who should not be on the land at all, who are not making an honest endeavour to meet their obligations, are occupying farms which would be taken up by young, energetic and qualified farmers who cannot find a place. As a result of this situation the supply of mortgage money in Ontario has almost dried up, land values have been greatly reduced; young men who would otherwise go on the farm cannot get accommodation to buy stock, to make an

Farmers' Creditors Act
initial payment on a farm, to buy a few implements; and exactly the reverse situation to that which was intended to be created by the act has developed. I know of many such cases in London, because in that city, which is the centre of a very rich mixed farming and dairying community, there are many retired farmers who have come into the city with just enough money to see them through their declining years and who, as is common I think with most farmers in Ontario, have chosen mortgages for their investments. Many of them are in great destitution, some actually on relief, while a few miles out of London, occupying the premises on which they hold mortgages, are shiftless and, in many instances, dishonest farmers who have only sufficient energy and ability to convince the board of review that they have a right to stay on and a right to have their debts periodically pared down.
Therefore, in the interests of the very class for which this act was designed-the farmers -and in furtherance of the very object for which it was passed, namely, to keep as many farmers as possible on the farm, operating it and making a go of farming, I submit that in Ontario the act should be repealed at the earliest possible date.


Thomas Clement (Tommy) Douglas: I have listened all afternoon to some hon. members complaining about the number of creditors who have been adversely affected by this act. When one remembers that more than 26,000 cases have been handled, it would imply more than human wisdom if there were not some cases in which there may have been unfair treatment. I personally could cite cases of people who invested their money, and now find that there has been a reduction which seems to them too drastic. But I would ask hon. members to remember first that this act deals with insolvency, with cases of bankruptcy in which the security against which the debts were placed has, in many instances, practically disappeared. When any concern goes into bankruptcy everyone connected with it has to take a loss. I am not suggesting that the creditors should take all the loss, nor yet should the debtor take all the loss. If the security has been reduced in value, the loss must be shared by both sides. And the figures speak for themselves. In the 26,365 cases that were dealt with under this act the average debt per farmer was $9,281.79. The total indebtedness-I shall just use round figures-was $158,000,000 registered against farms the value of which was only $112,000,000. In other words, the indebtedness was more than $46,000,000 in excess of the value of the farms.


Richard Bedford Bennett: That is present values.


Thomas Clement (Tommy) Douglas: Yes, present values; of course that is all you can go on. And even where the debt has been reduced 44-38 per cent-and that is a drastic reduction-the debt is still ninety-three per cent of the total value of the property, still leaving the debtor with a tremendous burden. I cannot speak for Ontario; but even in the figures for Ontario which were placed on Hansard the other day by the Minister of Finance, the indebtedness was $34,000,000 and the value of the farms affected $30,000,000. So evidently someone had to take a loss. While I am not denying that there may have been cases of hardship. I hope the minister will not allow himself to be too greatly influenced by the recital of individual cases in which someone thinks the amount he had invested has been cut too drastically. The fact is that this act was designed to meet a critical situation of bankruptcy in agriculture, and that losses have been sustained by the farmers, and consequently losses have to be sustained by the creditors as well. Therefore I say to the minister just this, although I think it is not necessary, because I think I know how the minister feels about this act: I agree with this new section 20 in principle, although I am a little worried about the method by which the end is to be accomplished. I agree that if in any province the government decide after careful consideration that it is no longer in the best interest of all concerned that the act should continue to operate, it ought to be discontinued; but I hope that very careful investigation will be made and that the investigation will not consist entirely of hearing creditors and creditor corporations, with the debtor class, who are not so vociferous, being overlooked.


Charles Avery Dunning: Oh, pardon me; they
are vociferous.


Thomas Clement (Tommy) Douglas: Well, they have not been as vociferous this afternoon and evening.


Charles Avery Dunning: They are merely taking second wind.


Thomas Clement (Tommy) Douglas: As this new section stands, I do not object to it, except that there is no safeguard at all beyond the good judgment of the governor in council. But the governor in council, if they wish, may in essence repeal this act. Although it may still be on the statute books, they could by making it inoperative in each province cause it to cease to function.


Richard Bedford Bennett: They would probably
refer it to parliament!

Farmers' Creditors Act


Thomas Clement (Tommy) Douglas: That is a tremendous power to give to the governor in council, in essence the power to repeal a statute passed by this parliament. I hope that if there be any way by which the minister could provide some safeguard to protect the provinces which still desire the operation of this act, it will be put in, and if it is not, that at least the minister will give the committee assurance that every precaution will be taken to consult all parties concerned before the working of this act, which in my opinion has been invaluable, is discontinued in any province.
Mr. McDonald (Souris): In criticizing this act a few weeks ago I am afraid I left a rather unfortunate impression, that is that it was not working well in Manitoba. The impression I meant to leave was that in the early stages great hardship was done, and I am sure that is quite true even yet. But I believe the commissioners in Manitoba are doing their best now and are making the act work as well as one can expect a bad act to work. I wonder if the government will ever know how much damage has been done to credit in Manitoba and the other provinces. I believe that the act will be more workable when it is amended so that when adjustments are made, the debtor will be made to live up to them.
I would suggest this plan to the government, although I do not know whether it will work. As hon. members know, the agreement of sale in Manitoba is on a crop basis. A man holding a mortgage to-day feels rather insecure. All these people are asking is that they get their share in those years when there are good crops. They suggest that when crops are poor the interest be cancelled for that year. Surely this is worthy of consideration. The crops are the security behind the agreement, and I think it would be only fair if the debts were adjusted along these lines. I would be glad if the Minister of Finance would put this plan before the board of review.


Charles Avery Dunning: It is under consideration now.


Mr. CLARK (York-Sunbury):: I quite agree with the hon. members from Ontario who have referred to the damage that has been done to credit in that province as applying also to New Brunswick. Under the present working of the act, the board of review sits upon a case and gives judgment, and in many instances that is the end of the matter. The people do not have to pay anything to come to the board of review; they figure they will not have to pay anything thereafter and many of them do not pay anything. I know of one case that came before the board recently

where a farmer owed only $232 in addition to a mortgage. His proposal was to pay S150 on the mortgage. The matter came before the board of review and the judgment was that he would pay only $125. The judgment was worded so that he would not have to pay anything for three years. Upon protest being made to the board, the judgment was changed so that he would have to pay interest every six months, but even this has not been carried out. Then there are those cases where farmers apply who are not bankrupt or insolvent and cannot be said to be.


Richard Bedford Bennett: Then the board has no jurisdiction.


William George Clark: Such a
farmer comes to the board and makes a proposal that if the government will lend him money on his farm, he will compromise with his creditors. Surely it is not a good plan when that can be done. Then the man who was loaned money on mortgage, especially the one who received it for the purpose of making a compromise under the Farmers' Creditors Arrangement Act, is looked upon with disfavour because his getting the money was an incident in his practically cheating his neighbours, in that they were forced to accept a compromise on the debts the man owed. That sort of thing leads to communism. The mortgagor getting money in that way, from his experience with the Farmers' Creditors Arrangement Act looks upon this as a debt that he will never have to pay because it is from the government, so that the spirit of several people has possibly been changed by the one loan from a desire to work out their own problems to one of enmity for or a feeling of dependence upon the state.	In connection with one
case, the man's neighbour writes about him as follows:
He owes me too $98. I know lie is able to pay for all his debts if he wants to. He is my first neighbour. He is about the biggest farmer of the place but he drinks and sports too much. He told me himself he had done $1,800 the first fall he had the hay press. But it's a scheme for not paying liis debts.
Then in another letter the neighbour states:
He bought a car about a month and a half ago again and runs that car every day up and down.
This man went before the board of review and got the board to require his creditors- there were only a few

to accept a compromise. I understand that he got money from the farm loan board, but that is what his next door neighbour says about him.

Farmers' Creditors Act
I have had a good deal to do with cases and I know that most of the money goes for administration. This act is not in the interests of the people of the province generally and it ought to be discontinued. Surely there is no demand for the continued operation of the act. It would be better for the people if the announcement was made that after a certain date no more cases would be considered in the province. That would be better for New Brunswick and it would restore credit generally to where it has been in the past. As things are now, the people who have money will not lend it on farm mortgages because they fear that they will not get it back in full.


Donald Alexander McNiven: The Farmers' Creditors Arrangement Act has been assailed vigorously in many parts of Canada, but I want to assure the committee that so far as Saskatchewan is concerned the act has been beneficial. In fact, I think it is regarded as one of the most beneficial pieces of legislation we have on our statute books to-day. The reason for its introduction in 1934, and its nation-wide application, is just as apparent in Saskatchewan to-day-even more so 

than it was then. That condition need not be repeated, as it is well understood by members of the committee.
Parliament has recognized its responsibility in the matter of debt towards the people of Canada, and has taken certain steps to maintain a national equilibrium, and to enable business to continue. In the last revision of the Bank Act, for example, the rate was definitely fixed at seven per cent, with penalties attached for any infringements. That was made necessary because of the tendency- in fact, the practice-of the banks to>
charge whatever the traffic would bear-seven per cent, seven and a half per cent, eight per cent, eight and a half per cent and nine per cent. Western Canada, in particular Saskatchewan, was the victim of that practice.
Then, too, parliament has recognized its obligation towards debtors by its adjustment from time to time of arrangements with the soldier settler. Practically ever since the original arrangements were made, adjustments of one kind or another have been brought about. There has been a reduction in interest. Adjustments have been made in principal. Now we have before us a plan granting a dollar for dollar bonus to soldier settlers, which is to be offered them until 1941. With that plan I have no quarrel; I approve and endorse it.
Then, we have the Bankruptcy Act and its adjunct, the Companies' Creditors Arrangement Act. The Companies' Creditors Arrange-51952-95J
ment Act, which was discussed here the other evening, provides a ready method for companies to adjust their indebtedness with their creditors, without the necessity of going through bankruptcy, retaining their good will, preserving something of their assets, and keeping the company away from the most destructive agency which we have, namely bankruptcy proceedings. I do not wish to enlarge upon the benefits of that act, but I say now that it has performed a very real service, and that it is a distinct advance in the administration of affairs between debtor and creditor.
Then, too, we have the Farmers' Creditors Arrangement Act. The preamble to that measure asserts as its purpose enabling farmers to continue on the land and to support agriculture as the basic industry of the country. I am quite prepared to admit that it is predicated upon the bankruptcy of the individual farmer. So far as we are concerned, may I repeat that that act has been of beneficial effect, and has performed a very useful service. A good many have indicated to the committee the desirability of repealing the act, and have indicated some of the features in which it has worked a hardship. It has been stated that it is no longer serving a useful purpose. But the committee will observe from the recitation which I have just made, that no provision is made in any law to relieve the urban residents. There is nothing for the artisan. Is there any group of men who in the last six or seven years have suffered more than the artisans, the people identified with the building trade?
In Saskatchewan the situation is such that we have had only two loans under the Dominion Housing Act, notwithstanding the fact that last spring, during the months of Janu-* ary, February and March, certain loan companies advertised their willingness to take loans on that plan. But when applications were received, so many difficulties were placed in the way that it was not possible to effect a loan.
It may be said that legislation of this kind has been responsible for that situation. I am rather inclined to think, however, that it is the desire of those engaged in the money lending business to preserve western Canada, and Saskatchewan in particular, as a seven per cent, or better, loaning area, and not to permit any invasion by five per cent money.
Because of conditions, we were not able to take advantage of the home improvement plan. Under that excellent plan a smaller amount of money was loaned in Saskatchewan than in any other province of Canada, with the exception of Prince Edward Island. There-
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fore it will be observed that there has been practically nothing in the province by way of work or wages for the benefit of the artisan.
Then, we must consider the clerk in the store, the office man and the commercial traveller. The commercial traveller has seen his living whittled away by degrees, has seen his commissions cut and his routes shortened, and has had to contend against competition of one kind or another-all of which meant a reduced income to the traveller.
Then we have the railway employees, thousands of whom have had to accept unemployment, or shorter hours and comparatively few working days per month. Those railway employees incurred obligations by building homes back in the days when agriculture was a thriving industry in western Canada, back in the days of 1927, 1928 and 1929. We must remember 1928, the year in which Saskatchewan alone produced 330,000,000 bushels of wheat, and when railway trains in the fall of the year were passing through Regina at the rate of one every twenty minutes, carrying complete train loads of grain to Fort William. It was during that period that these men incurred obligations by building their homes. Since that time they have passed through a period of intermittent employment, and find that the result of their efforts of bygone days is being gradually whittled away.
Then, too, we must remember the small business man in our towns, villages and cities, the man who finds that his business is being whittled away by the chain store, the great corporation, and that he is being gradually engulfed by their competition.
In addition to these, we have the civil servant who, like the railroad man, incurred similar obligations. In Saskatchewan the civil service has taken its share of the depression. Were the civil service of Saskatchewan put upon the same schedule of pay as the dominion service, it would cost that province nearly $2,500,000 more than it does at the present time. The civil service is a group of men and women who have borne their share of the depression.
Then we have the professional men, the lawyer, the doctor, the dentist, the veterinary surgeon, the surveyor, many of whom have been legislated out of business and who find their practices gone. That, Mr. Chairman, means that this very large group of responsible, honest and well-meaning citizens, desirous of fulfilling their obligations but finding themselves unable so to do, has been left to voluntary or provincial plans for debt adjustment. The provincial debt adjustment plan does what it can; but it is negative

rather than affirmative; all that can be accomplished there is to bring the parties together, and if no agreement is reached which the board considers fair, just and reasonable, the board may refuse the creditor the right to take foreclosure proceedings in the courts.
Our provincial government in conjunction with the dominion government made with the mortgage companies an arrangement applicable to the drought areas which provided for the wiping off of certain liens for seed grain, certain dominion liens, and also certain taxes, and the mortgage companies agreed to write off all the interest in arrears prior to January 1, 1935. They also agreed that there should be a six per cent rate of interest for ensuing years. But nothing was done with regard to the urban resident. I thought at the time it was intended that the six per cent rate of interest should apply to all mortgages, but such is not the fact. Mortgage companies are to-day in our larger centres collecting interest at the original rates under agreements which were made back in 1925, 1926, 1927, 192S and 1929 or thereabouts. That leaves that great group of men and women the one alternative of bankruptcy. And, Mr. Chairman, you will recall the scathing indictment of bankruptcy that was delivered the other evening by the hon. member for St. Lawrence-St. George (Mr. Cahan). It is little wonder that the fear of the farming population with regard to bankruptcy proceedings is shared by the urban resident, and that they are resorted to only as a last resort. If anything were needed to complete the indictment of bankruptcy and bankruptcy proceedings in addition to what was said by the hon. member for St. Lawrence-St. George the other evening, it was supplied by the right hon. leader of the opposition (Mr. Bennett) when, speaking on the second reading of this legislation on June 11, 1934, he said:
One of the difficulties that gave me the gravest concern about the legislation is the very circumstance to which attention has now been directed. There has grown up such resentment against some of the corporate trustees, on the part of those who have had to deal with them, that I say to the committee frankly I was amazed at the vigour of the protest that came to me from time to time, and during the last few months, in connection with matters of this kind. One of them has been discussed in a legislature, and one of them was discussed the other day in one of the courts of the country, and in the most vigorous terms the judge said that he intended to report the matter to the superintendent in bankruptcy. My experience has been, in connection with the farming population-that is in respect of voluntary assignment; and it does not apply to the province of Quebec at all-that they have complained, first, of expense, and secondly, that corporate trustees are without a soul, without any sympathetic attitude towards them at all.

Farmers' Creditors Act
Such is the indictment of bankruptcy proceedings from two very prominent men, and there are many others who could add their testimony to that which has been already cited. May I say that it is to the tender mercies of the Bankruptcy Act, which has been described in such eloquent terms, that we are leaving this very large group of urban residents.
It is true that some results are achieved from time to time by voluntary adjustment. It is also true in Saskatchewan, under our voluntary debt adjustment board, that some seven hundred foreclosures of urban property have been permitted. I should in fairness to the board say that in many of these cases, possibly all of them, there was an accumulation of principal, interest and taxes far beyond the present-day value of the property and that it was not possible to work out an adjustment.
Just a year ago there was presented to the Saskatchewan legislature a petition bearing some thirteen thousand names, and that petition is abundant evidence of the fact that there was in the urban centres of that province a real need for the application of the provisions of this act. There is need for the creation of tribunals where those who had in the good days incurred obligations might go and have them adjusted on a basis on which they could pay and which would give them a new hope for the future. On the basis of that petition the matter was debated in the Saskatchewan legislature and a resolution was passed containing a number of clauses, of which I should like to refer to numbers three and five. Clause three reads:
That the scope of the said act be widened to permit of home owners in cities, towns, villages and hamlets making proposals under the act to obtain adjustment of mortgages, agreements for sale, liens and other encumbrances on their homes.
And five:
That the provisions of the act be extended to make it applicable to retail merchants and traders so as to enable them to claim the benefit of the act.
You will notice, Mr. Chairman, that the resolution asks for the application of the provisions of this act to urban home owners and also to retail dealers, and in making that recommendation the legislature had in mind just the very fear which has agitated the mind of the urban resident with regard to bankruptcy proceedings and what he has come through during the last seven years.


Thomas Clement (Tommy) Douglas: I am very much in agreement with the two proposals which the hon. gentleman has just read. As a lawyer -would he tell us how one should go
about amending the act to effect these two purposes?


Donald Alexander McNiven: Which act?


Thomas Clement (Tommy) Douglas: The Farmers' Creditors Arrangement Act.


Donald Alexander McNiven: That is the problem for us at this time.


Thomas Clement (Tommy) Douglas: I wonder if the hon. member has any suggestion as to how one would go about amending the act. I am very much interested.


Donald Alexander McNiven: I shall come to that in just a moment, if I may.
It may be asked why we should protect these people and to what extent the protection should apply. I hope that hon. members will not think I am narrow or parochial in my discussion of this matter; but as it is one of the principles of this bill that its jurisdiction be limited to provinces. I am dealing with my own province only. In that province there are seven cities, eighty towns and three hundred and eighty-five villages, with a population something over three hundred thousand. The function that those cities, towns and villages serve is a service to agriculture. It is true that their prosperity depends upon a prosperous agriculture, but likewise a prosperous agriculture depends upon the service which those towns, cities and villages give. They are complementary; they are interlocking; and just as any country depends for its future upon a prosperous agriculture, an agriculture that is carried on by farmers who own and have a substantial interest in the farms which they are cultivating, so, too, a prosperous town, city or village can only be and remain such where a substantial number of its residents own and occupy their own homes.
The results of the situation which I have outlined are these, that those people have experienced a period of drought and all the climatic disasters which have visited our province; they have also been victims of the depression; they have to maintain themselves to-day on a basis where the rentals are 25 -7 per cent higher than they were in 1913, where the cost of everything that enters into their households is lli per cent higher than it was in 1913; and these very people cannot collect the accounts that are owing to them by the agricultural population, by reason of conditions, by reason of legislation. Under this act and by voluntary adjustments they find that their own accounts have been substantially reduced. They find their ratio of profit in the carrying on of their business is greatly reduced or has gone altogether. They find that on
Farmers' Creditors Act

mortgages and on agreements for sale of which they are covenantors the interest has piled up; and may I say this to eastern Canada, that it is not at the rates of interest which are enjoyed and regarded as commonplace here.
A few minutes ago the hon. member for London said that there was no money available for loans on farms in Ontario. Within the last few days I have had several conversations with a gentleman in Ottawa who informed me that there is active competition to-day in this city for loans on city properties. He also volunteered the information that they had not known in the last fifteen years a loan exceeding 6 per cent interest, and that most of the loans during that period had been on a basis of 5 and 5J per cent. I have seen mortgages on western homes varying all the way from 7 per cent to as high as 22 per cent. It is no wonder that on such a basis interest has piled up. Likewise taxes have increased. Urban centres have a relief problem. Our own city pays 20 per cent of the entire cost of relief, pays all of the administrative expense, carries the medical bills for relief recipients, as well as dental bills, opticians' bills, hospital bills, and a hundred matters of that kind. In the last five years we have seen our assessment grow from forty mills to fifty-one mills; and I sometimes wonder when I hear our Toronto friends complain about an assessment of around thirty-two or thirty-three mills and complain very bitterly because there is a possibility of that assessment increasing during the next year on account of relief.
There is also a tendency, in fact a very marked effort on the part of mortgage companies to recoup as far as possible some percentage of their losses in agricultural loans by continuing the prevailing rates of interest and insisting upon the letter of the bargain from their urban mortgagors. Then, too, farmers have moved into the city, and I could give the committee a number of distressing cases of that type, where farmers have sold their land, taken the cash payment, bought a home in the city and assumed a mortgage on that home. They now find themselves without any revenue from their farms, and are unable to get any adjustment with or any protection from the mortgagees who have the mortgages on their homes. They are without revenue and are about to lose what interest they have in their own homes.
There is another reason for the situation that has arisen. Times without number during the years 1920 to 1930 mortgagees refused to accept prepayment of their mortgages. They

have also refused to accept payment of instalments in arrears unless accompanied by a bonus of three months' interest. If mortgagees had been willing during those years to accept prepayment of their mortgages there would not be nearly so much difficulty or trouble to-day, but they refused so to do, and are now lamenting the results of that refusal.
In addition to this increased overhead, these accumulations of interest and taxes, every one of these men and women in employment in our urban centres, irrespective of their location, has had to accept a substantially reduced income. It is not possible for these men and women on the basis of their present-day income to meet obligations that were incurred in 1928 and 1929. It therefore seems to me to be part of our obligation that we should seriously consider a workable plan for the relief of these people who have accomplished so much, put up with so much, and faced a difficult period so valiantly.
I know that one of the difficulties is to work out a plan whereby the provisions of this act would be applicable to urban centres. In that regard I am going to refer to the original debate on June IS, 1934, in which the leader of the opposition, discussing this bill, and in reply to a question by Mr. Han-bury, made the following statement:
Offhand one would say, considering the kind of cases that will have to be dealt with, that here the whole arrangement is predicated on the ability of the man to pay. There need be no plan at all. If the board concludes that the man will never pay they should not make an arrangement. This is predicated on the assumption that the man has indicated, by his past history or by his present surroundings and conditions, his ability to pay something. He makes a compromise accordingly. . . .
The right hon. gentleman said that there need not be any plan at all, and perusal of many of the adjustments that have already been made under this act will show that quite evidently there was no plan at all. Because of past experience with the productivity of the soil, the board arrives at a basis on which it thought the man could pay. As I say, the leader of the opposition said that there need not be any plan at all, and then we find a number of others for whom a plan has been formulated. Prior to that there was a crop failure for some four or five years. It seems to me, therefore, that we can very well adapt the principle of this act to the urban residents, and that can be done by drafting a new part in language similar to that contained in the original act, making it applicable to urban centres. The principle of the bill would be the same; the purpose would be

Farmers' Creditors Act
complementary to the original purpose of the act. I say, Mr. Chairman, that the responsibility stands out as a challenge to us as members of the House of Commons to take some action with regard to the situation in which 300.000 people find themselves, and which w7as emphasized in the petition executed by 13,000 of them. They are the victims of depression, the victims of drought. They find an accumulated liability which it is impossible to meet, and any attempt to meet that liability in full will result only in an impairment of their future, so that they will approach the next economic cycle with assets diminished to such an extent that for them life in the future will amount to nothing more than one continuous chain of depressions. I ask that the committee and the minister in particular give serious and careful consideration to the formulation of a plan which will give some relief to urban residents.


William Rae Tomlinson: I would feel remiss in my duty if I did not place on Hansard my objections in general to this bill. I listened to the very capable speech of the hon. member for Regina City (Mr. McNiven), and I noticed his reference to adjustments made by the soldier settlement board in connection with reductions in interest and so on. That is all right; but I would ask, Who reimbursed the government for any reduction in interest or in principal? Naturally, the government. I never could quite understand, when this act was first passed, why they singled out the farmer and said to him, "With your particular creditor we are going to allow you to make application to have your debt adjusted, your interest and principal if necessary, and the creditor alone must stand the loss." I realize that in 1934 the farmers were in a very serious condition. The prices of their crops and of their live stock were very low; they were compelled to accumulate debts, and probably at that time something had to be done to assist them. But it is my contention that if we desired to save the credit of the farmer, it should, as a government, have agreed to pay the loss that any single creditor would have to sustain on the principal sum. That has always been my contention. I might say further that if that had been the case, boards of review, especially in Ontario, would have made much more careful decisions and reports. They would not have been so free to say to the debtor, "We shall cut your principal in half regardless of the creditor's situation."
I cannot help it, but it is impossible for me to illustrate my contention without citing a certain case. On one application in Bruce county the debtor did appear before the
official receiver first and then before the board of review. The board of review decided first to cut the unsecured creditors fifty cents on the dollar and do away with all interest, and they also decided that the principal of the mortgage should be reduced. But what did the debtor do after receiving his order? His first desire was to retain his credit in the town in which he dealt. The next day after the order was issued he came into town and paid in full his debts in that one particular place. He had only one idea-he wished to retain his credit. And this is what this act is doing to-day in Ontario; it is destroying the credit of our farmers.
Another case I have in mind was one in the county of York where the board of review had decided that payment of principal and interest should be made on the thirty-first of December in each year. The first payment was due on December 31, 1937. This farmer decided that he would realize all he possibly could before December 31. So he had a sale of his farm stock and implements on December 30, and the creditors had no right of action until January 1. Of course in that case the creditors lost all.
That is	one reason	why I	say	that theproclamation of this act should be dealt with in the very near future. I quite realize that to do away with it immediately might cause confusion.	I can also	realize	the	plight ofthe people of Saskatchewan, and why they desire this	act; it is	because	of	the highrates of interest and the drought, and probably people in the cities as well as on the farms desire it. But in regard to the extension of this act to town and village residents. I would say that the statement made	by	the hon.
member for Regina is quite correct, that in our towns and cities in Ontario we can borrow money. Transactions and transfers are taking place. But if the act be extended, we shall certainly have greater confusion, loss of credit and loss of value in our homes and real estate.
I believe the minister has on file a resolution from the county council of the county of Bruce; I think I forwarded it to him last year. That county council consists of a reeve from each township and each municipality in the county. Those reeves in turn represent the residents of their townships. Having spoken of this last year, and placed on Hansard the cost of this act, the way it was administered and the doubt it has caused in the minds of men who might desire to lend money on farm properties, I believe that it would be in the best interests of the farmers to have this act declared in the near future not in force in Ontario. I believe this would
Farmers' Creditors Act

increase the values of our farms and would give our young men and women an opportunity to borrow money when they desire to start out in life. To-day they have not that opportunity, unless they go to the Canadian farm loan board, and the restrictions in the act under which that board operates are very harsh. I hope the minister will give this matter his serious consideration in the near future.


Mr. WEIR:: Apparently the popularity of this act depends upon where you live. As far as western Canada is concerned, I think sufficient evidence has been presented this afternoon definitely to impress on the committee that this legislation was necessary, at least at the time it was enacted. I think all the western provinces already had debt adjustment legislation, which, however, could not adjust anything; it really only stayed proceedings, and adjustments were made in which voluntary concessions were given on both sides. Then this legislation came along and provided the necessary machinery to complete settlements. It has served a useful purpose. As far as the act generally is concerned, I would not hazard a guess as to what percentage of cases have been actually dealt with by the board of review itself, but I think it furnished an incentive for a great many voluntary adjustments made by individuals without going to either the official receiver or the board of review. That is all to the good. In the part of the country from which I come a great many of the adjustments, as far as the farmer and his creditors were concerned, were made voluntarily through the official receiver. That is the cooperative concession which has been made on all sides.
A great deal has been said about the effect the act had on the farmer's credit. I honestly believe that the credit of the farmer is better to-day after he has gone through the board of review than it was before, for the simple reason that he did not have any credit or he would not have gone through the board. Therefore, I think it is correct to say that his credit has not been affected. It is true the act has created some hardships and dissatisfaction, and there have been some abuses. Some of our merchants have suffered unduly; some of them have been treated unfairly, or at least it would appear that way. At the same time I think it is only fair to ask what they would have got anyway had the farmer not gone through the board of review. In most cases there would have been nothing.
I understand that ordinary bunkruptcy, legislation, if it could have been made applicable

to farmers, would have achieved practically the same result as this legislation has. But when it was not applicable to the farmer, then something else was necessary, some cheap form of procedure for adjustment of these debts. Had the farmer been able to avail himself of ordinary bankruptcy legislation, these creditors who are making such a cry to-day about the manner in which they have been used would have been in exactly the same position as they are under this board of review. So in that respect I do not think they have suffered. I just wish to emphasize again that the legislation has assisted in bringing about many voluntary settlements which otherwise might not have taken place. And strange as it may seem, instead of requests coming from western Canada to have the operation of the act discontinued, we are actually receiving requests to have it extended to other classes of people, particularly those in towns and villages, and merchants to some extent.


Richard Bedford Bennett: Mr. Chairman, it hardly seems nearly four years since I stood in my place across the chamber and introduced this bill in the house. It was predicated upon two considerations. The first was that it was desirable to keep the farmers on the land. That was part of the preamble of the act, that they should be retained in possession of their farms. The second was that inasmuch as under section 7 of the Bankruptcy Act a farmer could not take advantage of the provisions of that statute, we should without making him bankrupt give him all the benefits which would accrue if he were able to take advantage of that statute.
The delay in introducing that measure, from 1930, was owing to the fact that there was grave doubt on the part of lawyers as to our right to introduce it at all. It was felt by many that it was within the sole jurisdiction of provincial legislatures and not of this parliament. However, in the session of 193233 we introduced the Companies' Creditors Arrangement Act, and on reference to the court it was held to be intra vires. There was pending in the courts a case known as Larue and the Royal Bank of Canada which went to the privy council, and it was held that legislation of a certain kind was intra vires. Therefore, we concluded that we had the jurisdiction to introduce this statute as a bill, which we did.
I have been very much impressed with the criticisms which have been urged against this measure. They have been urged by the hon. member for Bruce (Mr. Tomlinson) to-night. But I submit that there has been a complete misunderstanding of the basis of

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this legislation. Once it is understood, I cannot think for a single minute that there would be any objection to it so far as principle is concerned. The hon. member for Macdonald has referred to that principle. It is hardly necessary at this time to refer to the fact that legislation dealing with bankruptcy is very old in the British Empire. The theory of bankruptcy goes back almost to prehistoric days, to the dawn of civilization. When men began to make arrangements and to have institutions, they began to realize that an honest man should have another chance and that if his assets were divided ratably among his creditors, he should be discharged from further liability and given another opportunity to start in life. That is the theory of bankruptcy legislation.
Bankruptcy measures have been on the statute books of Great Britain for many years. We had a Bankruptcy Act in this country in the early days, but it was not found to be satisfactory and was repealed. In 1919 we placed upon the statute books what is now known as the Bankruptcy Act. The theory of bankruptcy is that all the assets of the individual shall be liquidated and his creditors shall receive ratably among themselves the proceeds of the sale of the assets. Obviously we could not keep the farmer on the land and follow that principle, so we provided that instead of his being sold out when he could not pay his debts, instead of his assets being realized upon and divided ratably among his creditors, he should be permitted to work out his own salvation on some scheme or plan which would be effective, having regard to all the circumstances of each case.
The hon. member for Macdonald pointed out quite properly a moment ago that voluntary arrangements have been made in a great many eases. Just as soon as it was apparent that this legislation was on the statute books, these voluntary arrangements became the order of the day. As soon as it was apparent that by voluntary effort and cooperation these arrangements could be carried out, when the extent to which the statute went was not generally known, these settlements were made; but when it became apparent that the statute was of much wider consequence, then appeals to the boards of review became more numerous. It is for this very reason that the board of review is presided over by a judge. This is in order that judicial procedure shall mark the operation and conduct of the proceedings under the act. In other words, the true bankruptcy significance of the act should be apparent in the acts of the judge who presides over the board of review.
In many cases it was quite clear-this was particularly so in one province-that the official receivers went around soliciting business. That was done when they were paid on the basis of so much for each case. I looked at a return supplied by the Minister of Finance for all provinces, and I saw one community with less than 90,000 people where the activities of the official receivers were marked indeed. I am sure that if hon. members have looked at this return they will be struck with, shall I say the versatility of the official receivers and their great ability in getting business.
But what happened in other cases? First of all, we have the official receivers; then we have our board of review consisting of a judge and representatives of the creditors and the debtor. I wish I had the time to refer to the circumstances under which those provisions became part of the law of the country. However, I will say to the hon. member for Bruce that representatives of the loan and lending companies of this dominion came together here at Ottawa. I met them personally and spent the major part of half a day with them in the first instance, and later on a lesser time. They realized the situation was such that while it was not desirable that the farmer should come under the provisions of the Bankruptcy Act, some proceeding in the nature of bankruptcy should be resorted to if we were to keep the farmer on the land and give him an opportunity to work out his own salvation.
Now, having gone that far, having had the official receiver and having had the board of review, we found that this question at once arose:	Can you deal with the secured
creditors? Here is a situation where you have a mortgage, where you have a bank with security, sometimes in the form of a chattel mortgage-could we deal with the secured creditor? Under a voluntary arrangement, except by consent, the secured creditors were not made subject to the provisions of the act; but just as soon as they went to the board of review where steps w'ere taken by the board to formulate a scheme, jurisdiction was conferred to deal with secured creditors. The result was and is that in many instances the secured creditors have had their security cut in half. There have been instances in which it has gone that far. Why? Because the value of the assets on which the mortgage was given was less than half the amount of the mortgage. In other words, the present value and the possible improvements that might take place determine the action of the board of review. In other
Farmers' Creditors Act

words, the board's action was based upon the present value plus probable improvement in value.


Charles Avery Dunning: That is where the matter of opinion enters which gives so much difficulty.


Richard Bedford Bennett: With respect to the
first factor, there has always been a little difficulty; with respect to the second factor, there has always been much difficulty, for the simple and obvious reason that it was always most difficult for men to arrive at unanimity as to what the probable future would be. For instance, I have known cases in which opinions were expressed that the future would be rosy and bright, but unfortunately there was no rain the next year and the future became darker than the past. That position has arisen frequently in western Canada.
I put this question to the hon. member for Bruce:	Why should a farmer be denied
the benefits of the principle of the bankruptcy law? Bankruptcy law is one of the oldest marks of civilization. I said a moment ago that it is predicated upon the thought that an honest man who was willing to hand over all his assets to be divided among his creditors should be entitled to be discharged to start again free from judgment or action against him. Owing to economic conditions, the assets of the farmer had changed in value so that it was quite impossible to realize upon them anything like the amount of his indebtedness. He is now receiving the same measure of justice as though he were a trader; but instead of selling out his assets, he is retained in possession of them and he works out over a period of years his economic salvation. That is the purpose of the act. Why should we say that he is not entitled to it as much as the trader? Why should we say that we have a bankruptcy law passed in this country in 1919 for the benefit of all those who seek to avail themselves of it, and not make it available to the farmer?
But the farmer of course, did not wish to go through bankruptcy in the way in which that term is technically and legally used. So we provided that instead of his making an assignment under those circumstances, instead of his having an assignee in bankruptcy, or a trustee in bankruptcy, we provided this simple machinery at the cost of the state to enable the farmer who creates new wealth-the greatest creator of new wealth outside of those who discover gold and petroleum, the greatest continuous producer of new wealth-to have his assets-including mortgages, and including his secured creditors-ratably divided among them, not on the realization of his
[Mr. Bennett.1
assets, but on the estimate of their present value, together with an opinion-which is an estimate-of what the future would bring to that man. That was the theory.


Charles Avery Dunning: As a going concern.


Richard Bedford Bennett: Yes, his living on the
property. Obviously this involved a tremendous amount of worry and anxiety as to how it would be possible to effect that purpose. The drafting of this measure was not a simple thing; it involved a tremendous amount of work. I think I can say in no spirit of egotism that I drew some of those sections myself, with great deliberation, toil and care. Well, we put the act in force, and appointed trustees. Then difficulties arose; in 1935 before we went out of office, we made amendments to meet that situation, and the act has operated, I think, fairly successfully.
When I heard the hon. member for Wey-burn to-night talking about 8158,000,000, I thought one must realize how vast a sum that is. It is a sum equal to half or practically half the national debt of Canada before the war. If I remember correctly, the reduction was something over forty-four per cent. Have I misstated the figure?


Charles Avery Dunning: That is approximately
correct.


Richard Bedford Bennett: That was not an arbitrary act of arbitrary individuals. That was an act taken after due consideration either by agreement on one hand, or by the action of a board headed by a judge, on the other.


Charles Avery Dunning: In each individual case?


Richard Bedford Bennett: Yes, not in the mass, but in each individual case. Someone has said that it injured the credit of the farmer. Why should it injure the credit of the farmer? Does it injure the credit of traders in this country that they one day may be subject to bankruptcy? That was the argument which was made when we placed upon the statute books of this country a bankruptcy act. That is still the reason why many people are opposed to bankruptcy legislation.


Charles Avery Dunning: Would my right hon. friend permit me to correct a figure? It is thirty-one per cent in the whole of Canada.


Richard Bedford Bennett: Yes. I took the word of the hon. member for Weyburn but did not look up the figures.


Charles Avery Dunning: It is forty-four per cent in Saskatchewan.

Farmers' Creditors Act


Richard Bedford Bennett: Yes, forty-four per cent in Saskatchewan and thirty-one per cent in the whole of Canada. What is the sum total for the whole of Canada?


Charles Avery Dunning: The amount of reduction is 850,189,000.


Richard Bedford Bennett: Yes, over $50,000,000.
Now, this was not an arbitrary act. I have said that it is done by this board, in the ultimate analysis, and each case is dealt with on its merits. Would it be possible to have 26,000 cases dealt with, Mr. Chairman, by any group of men, without cases arising where there would be bitter criticism as to something with which they had dealt? I admit this, that when men deal with these things continuously they develop a bent to their minds either favourably disposed or otherwise to the creditor or debtor class. In this instance throughout Canada I think it is fair to say that the sympathy of the board is given to the farmer.


Charles Avery Dunning: There is no doubt about that.


Richard Bedford Bennett: I think there is no doubt about it. And in the light of that sympathy, it may have created in the minds of some of us the idea that the law has not been strictly enforced; for the basis of the legislation, as I said in the house four years ago, and again to-night, was insolvency. Let there be no misunderstanding about that, because we could not be here at all if it were not for the fact that the basis of it is insolvency.
Look at the statute. The statute itself makes it perfectly clear in section 6, that it must be that. It states:
(1)	A farmer who is unable to meet his liabilities as they become due may make a proposal for a composition, extension of time or scheme of arrangement either before or after an assignment has been made.
(2)	Such proposal shall be filed with the official receiver who shall forthwith convene a meeting of the creditors and perform the duties and functions required by the bankruptcy act to be performed by a trustee in the case of a proposal for a composition, extension of time or scheme of arrangement.
And the chief justice of Canada, when this statute was before the court, summarized it as follows:
The provisions of the statute are made a part of the general system for the administration of the assets of bankrupts and insolvents established by the Bankruptcy Act, and they come into operation only where a farmer who is unable to meet his liabilities as they become due makes a proposal for a composition, extension of time or scheme of arrangement.
That is the language of the Supreme Court of Canada. Bearing in mind that that is the
basis of all these proposals, the basis of this legislation, can one for a single moment say that, as was said by the hon. member for York-Sunbury, these men were not insolvent? If they were not insolvent the board had no jurisdiction, and the courts of the country could issue a prohibition against them proceeding. But when you hear an hon. member of this house or elsewhere say that men were not insolvent, I say: Who has failed in the discharge of his duty? The board had no right to hear such cases. If they did so, that is not because the law is bad, but because it is administered badly. It is because those who had no right to hear have heard. But I am bound to say my examination led me to the conclusion that I have not yet been able to find a single case where an allegation was made that the man was not insolvent that the evidence did not disclose that he was hopelessly insolvent. How could he be otherwise? He files there a statement of his debts, and you see at once what they are.


Charles Avery Dunning: There are occasionally different cases.


Richard Bedford Bennett: Yes, but those usually depend upon the question of arriving at values.


Charles Avery Dunning: No, in some cases in the absence of mortgage indebtedness.


Richard Bedford Bennett: You can put it in that way if you wish. I agree that if there are no secured creditors the difficulty is greater than in dealing with cases where there are secured creditors, by way of mortgage or otherwise. There is no question about that, because you have the valuation placed upon the property at the time the mortgage was made that usually represents about sixty per cent of such appraised value-very often about fifty per cent.
There are some further . matters I desire to deal with, I am sorry to say, but-


Charles Avery Dunning: We will permit the section to stand, if my right hon. friend wishes to speak.


Richard Bedford Bennett: There are two or three things I should like to suggest should be done with this statute. I have in mind the case which arose in Alberta. I think it should be made abundantly clear that the statute is within itself a charter which controls and governs the whole administration, and that it should not be a question of any application being made under a bankruptcy act, which, of course, if applied, does not apply in the case that arose in Alberta, for the reasons given by the chief justice. I think we should deal with that.
C.N.R.-Shop Employees

Then, we should deal more broadly than has been done, with the question of who is a farmer, because we followed largely the definition in the Bankruptcy Act when we were dealing with that. We should deal with the case in which farmers are incorporated. For instance, many families have incorporated themselves as limited companies, those families living on the land. We should not deny them the benefit of this because they have studied the problem and have taken this form of conducting their business.
There are two or three other cases to which I should like to make reference, but it is now eleven o'clock.


Charles Avery Dunning: Before the committee
rises and reports progress I might say that following the discussions of this afternoon and this evening on various sections I want to have an opportunity of again consulting the law officers with regard to some suggestions which have been made. I do not intend to bring the bill into committee of the whole again without having a thorough examination made of all the suggestions which have been put forward this afternoon, including those summarized by the right hon. leader of the opposition in his closing remarks. When I come back I hope to be able to indicate finally the length to which the government is prepared to go in regard to all matters discussed to-day.
Section stands.
Progress reported.
On motion of Mr. Dunning the house adjourned at 11.05 p.m.
Monday, March 21, 1938