BANKING AND COMMERCE

[Stage Direction]
Fifth report of the standing committee on banking and commerce.-Mr. Vien (for Mr. Moore).

[Stage Direction]
REPORTED STATEMENT OF MINISTER OF AGRICULTURE RESPECTING APPROPRIATION OF §50,000,000 FOR HOUSING
On the orders of the day:
Right Hon. R. B. BENNETT (Leader of the Opposition):: I should like to ask the
government whether or not we have transferred the seat of government from this parliament house in Ottawa to the province of Saskatchewan. I mean that very seriously; for the British North America Act provides that no money votes shall be dealt with until the approval of the governor general shall have been given, by message to the House of Commons, in which they must originate. Last evening in Saskatchewan it was announced by the Minister of Agriculture (Mr. Gardiner) that 850,000,000 was to be appropriated by this parliament for housing matters, and that the appropriate legislation would be passed by parliament this session. In view of the provisions of the British North America Act, and knowing as I do the ability of this government to undertake almost anything that is unconstitutional, 1 am desirous of knowing whether or not the government had been transferred to Saskatchewan during the evening in order that the announcement might thus be made. My second question is whether or not His Excellency the Governor General has given his approval to such a statement being made on the hustings in Saskatchewan rather than in the House of Commons, as provided by the constitution.


Right Hon. ERNEST LAPOINTE (Acting Prime Minister):: The government of Cam
ada has certainly not been transferred to Saskatchewan. The only transfer that I know has been effected is the transfer there of the government of Alberta. As to campaign promises made there, I do not know of any; but if there have been any on the part of the Liberals of Saskatchewan they certainly pale into insignificance compared with the promises made by the other major party which is contesting the election there-I am not speaking of the lesser groups, of course. With regard to the assertion concerning a program of housing, while it was announced some time ago by the Minister of Labour (Mr. Rogers)-!-

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Richard Bedford Bennett: But he was very careful.


Ernest Lapointe: -the amount I think has not been stated; I should be surprised if it has been stated definitely even in Saskatchewan. It must be an approximation.


Richard Bedford Bennett: No. There is just one
observation that the Acting Prime Minister did not make that I hoped he would make. He said the government of Alberta had been transferred to Saskatchewan; there is not lacking evidence that resources have also been transferred to Saskatchewan.


Ernest Lapointe: I do
not know about that. I have no experience in that.


Richard Bedford Bennett: No!



ST. LAWRENCE WATERWAY INQUIRY AS TO LEGISLATION THIS SESSION RESPECTING TREATY WITH UNITED STATES

[Stage Direction]
On the orders of the day:
Mr. W. R. MACDONALD (Brantford City):: Would the Minister of Justice tell the house whether it is proposed during this session to introduce legislation with regard to a treaty with the United States respecting the St. Lawrence waterway?


Ernest Lapointe: I do not expect any such speedy development. Obviously this new proposal, accompanied by a draft agreement, will have to be carefully considered and submitted to the interested parties, and it will require a good deal of work before anything can be submitted to the house. It will have to be first signed and accepted, so I do not see any prospect of anything during the present session of parliament.



SEED GRAIN

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RECENT DELIVERY OF WHEAT IN SASKATCHEWAN [DOT]-POLICY AS TO REMAINDER OF WHEAT UNSOLD
On the orders of the day:
Richard Bedford Bennett: The Minister of Trade and Commerce (Mr. Euler) is not in his place, but I had intended to ask him a question, which will appear in Hansard and doubtless he will be able to answer on Monday.
I am in receipt of information that cars of wheat have been delivered recently in Saskatchewan, for instance at a station called Cole-ville, where a car is lying on the track. From the report of May 21, 1938, which is the last weekly statement furnished by the Canadian wheat board, which statements the minister has been good enough to file from time to
time in the office downstairs, the wheat board has received $9,000,000 on account of cash wheat sold to the Saskatchewan government, but apparently as of May 21 some 2,368,356'25 bushels still remained unsold. I suggest that the minister might indicate the policy of the government with respect to that, because apparently, according to the terms of the letter directed to the board, the government took over the whole of the wheat. That I think was the effect of it; they may not have intended to do so. I think it is important that we should know the situation. Apparently the amount of cash remaining in the hands of the board from the sale of the wheat that belonged to the board had risen to nearly $6,000,000, if not more.
I thought possibly the minister might make a statement indicating the exact position, from the standpoint of policy, dealing with the remainder of wheat on hand, because I think probably the seeding season is past. I fancy there will be no further distribution of grain this year for seed purposes in Saskatchewan.


Ernest Lapointe: The question of my right hon. friend will be called to the attention of the minister, and I am sure an answer will be given.



INDIAN ACT AMENDMENT


[Stage Direction]
Hon. T. A. CRERAR (Minister of Mines and Resources) moved the second reading of Bill No. 138, to amend the Indian Act.
Mr. A. W. NEILL (Comox-Albemi):: The terms of this bill seem to be reasonable and appropriate enough, though perhaps section 2 is rather difficult to understand. In the discussion of the resolution on which this bill is founded the minister made a statement in connection with band funds that I was pleased to hear, which apparently indicated the intention of the department to abandon a system about which I have often complained in the past in connection with the handling of band funds. But there is nothing about it in the act itself, and I have learned by experience that it is not what the minister says but what the act states that counts. Perhaps it would be more appropriate to take that up when the house is in committee.
There is one other point I should like to mention. I am not anxious at this time of year to see any delay in legislation, but possibly it is better to bring up this point now instead of later on, after we have taken
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more time on the matter. The resolution on which this bill is founded was considered by the committee of the whole, as all such resolutions must be considered, and was passed on Thursday, April 7. The minister moved that the house go into committee of the whole to consider the resolution, which concluded with these words:
-the outstanding advances at any time not to exceed $350,000.
Then in the discussion of the resolution itself, at page 3349, the minister said that the amount was not to exceed a total of $350,000. That phrase occurs again and again, but when the bill is brought down it indicates an expenditure of half a million dollars. I should like to ask the minister or the Minister of Finance (Mr. Dunning) whether that would not upset the legality of the bill and make it necessary to reintroduce it later on. I should think it would be better to have that changed now, because I understand it is not in order to increase by a large sum the amount authorized under the hand of his excellency when the measure is brought in.


Mr. CRERAR:: I might say in reply to my hon. friend that this is a misprint in the bill. The amount is $350,000. The error probably arose in this way: there was some discussion of the advisability of making it $500,000, but it was finally decided to make it $350,000, as a beginning at any rate. When we get into committee I propose to amend that section of the bill accordingly. I think that will be quite in order.


Alan Webster Neill: Will that make it legal? Can you amend a bill to make up for such an important discrepancy?


Thomas Alexander Crerar: I am not clear on the legality of it; I should think it is within the power of the committee to reduce, but not increase it.


Richard Bedford Bennett: I think the point made by the hon. member for Comox-Alberni (Mr. Neill) is a very serious one, unless the house unanimously grants the minister authority to reduce the figure from $500,000 to $350,000. It is quite clear that under the joint operation of sections 53 and 54 of the British North America Act this bill can be considered only after a resolution has been adopted by the house; and inasmuch as the resolution provided for $350,000 we must take it that this is another bill entirely which is being introduced by the minister, a bill that has no reference at all to the resolution that was before the house the other day.

Under the circumstances it is quite clear that the bill would be out of order, but I should think that by unanimous consent, in view of the very persuasive explanation by the minister as to how the Minister of Finance saw fit to reduce the amount from $500,000 to $350,000, feeling that the exchequer of the country could hardly go that far, the error might be rectified. I appreciate the explanation that was given, because a few moments before I observed that the minister looked at the Minister of Finance, who returned his glance with that happy smile sometimes described in loose journals as that of the cat that had swallowed the canary. It is quite clear that the fine Italian hand-with no offence to Mussolini-of the Minister of Finance is to be seen in the reduction of the amount from $500,000 to $350,000, and I fancy that the minister had good reason for making the change.
Speaking for myself only, I am sure those associated with me would be glad to accord the minister, with the unanimous consent of the house, the opportunity to treat the $500,000 as a misprint, as a misunderstanding of the will of the Minister of Finance, and to accept the statement that it should be $350,000 instead.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Sanderson in the chair.
On section 1-Leases and licences to prospect for minerals.
Thomas Alexander Crerar: When the resolution was being considered a few days ago the hon. member for St. Lawrence-St. George asked for certain information as to the position of various Indian reserves with respect to the minerals which might be found in or under them, and suggested it might be desirable to obtain a statement in the matter from the law officers of the crown.
I am not in a position to submit such a statement to-day. The matter has been before the Department of Justice for an opinion for some time, but the question is greatly involved and that opinion has not yet been received. With the permission of the committee however I believe I can outline the situation in the various provinces from a statement prepared by the officials of the department. With the permission of hon. members I shall read the statement, which is as follows:
The ownership of minerals underlying Indian reserves does not appear to have been determined with any finality, except as mentioned hereafter. Some months ago however the Department of Justice was asked for a statement

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as to just what the position of the crown in the right of the dominion is. Although this reference has been studied, when it is realized that there are 2,200 reserves scattered throughout the nine provinces, that these reserves were set aside or acquired at different times under varying conditions, and that the privy council and supreme court decisions on the subject of Indian reserve under-rights were given in connection with definite sets of circumstances that do not apply generally, and further that there seem to be some differences in the judgments, it will be appreciated that the task is by no means a simple one. Consequently it is not possible at this time to make a clear-cut statement as to the ownership of these minerals in all the provinces. In Ontario, the prairie provinces, and the railway belt and Peace river block, British Columbia, the situation is fairly clear, and it is desirable that proper mining regulations be established.
It might be well to make clear at the outset that part (1) of the bill does not involve any change in practice in the administration of Indian mineral lands. Mining regulations have been standing for years and it was only when the government revised the oil and gas regulations for Indian reserves with a view to bringing them up to date and providing for better revenue for the Indians, that the legal foundation for the regulations was questioned.
The justice department expressed doubt as to whether section 54 of the Indian Act was sufficiently wide to authorize the governor in council to pass general regulations of this kind. In other words while a particular lease or sale might be provided for by order in council, general regulations could not properly be set up under which the department might issue leases or otherwise dispose of such rights. The department has prepared new quartz mining regulations for Indian reserves but submission of these regulations to the governor general in council has been withheld pending approval being given by parliament to this bill.
Generally speaking the situation with respect to ownership of Indian reserve underrights appears to be about as follows:
Ontario
An agreement between the dominion and the province of Ontario was entered into on July 19, 1924, for the settlement of certain questions respecting Indian reserve lands. The agreement is set out in full in chapter 48 of the Dominion Statutes, 1924. It provided that Indian reserves should be administered by the dominion for the benefit of the Indians and-
"6. Except as provided in the next following paragraph, one-half of the consideration payable. whether by way of purchase money, rent, royalty or otherwise, in respect of any sale, lease or other disposition of a mining claim staked as aforesaid, and, if in any other sale, lease or other disposition hereafter made of Indian reserve lands in the province of Ontario, any minerals are included, and the consideration for such sale, lease or other disposition was to the knowledge of the Department of Indian Affairs affected by the existence or supposed existence in the said lands of such minerals, one-half of the consideration payable in respect of any such other sale, lease or other disposition, shall forthwith upon its receipt from time to time, be paid to the province of
Ontario; the other half only shall be dealt with by the Dominion of Canada as provided in the paragraph of this agreement numbered 1.
7. The last preceding paragraph shall not apply to the sale, lease or other disposition of any mining claim or minerals on or in any of the lands set apart as Indian reserves pursuant to the hereinbefore recited treaty made in 1873. and nothing in this agreement shall be deemed to detract from the rights of the Dominion of Canada touching any lands or minerals granted or conveyed by His Majesty for the use and benefit of Indians by letters patent under the great seal of the province of Upper Canada, of the province of Canada or of the province of Ontario, or in any minerals vested for such use and benefit by the operation upon any such letters patent of any statute of the province of Ontario."
In effect this means that the dominion deals with the disposal of mining rights in Indian reserves, that the province receives one-half the revenue therefrom and the Indian band concerned the other half, with the exception that in the case of certain reserves in the vicinity of the north-west angle of the Laki of the Woods covered by the Indian Treat) of 1873, the Indians receive all the revenue.
irame Provinces
When the natural resources transfer agreements were entered into with the three prairie provinces and the crown lands transferred from the dominion to the provinces, provision was made in the agreements to avoid the difficulties Which had existed in Ontario prior to the agreement of 1924. Two sections of these agreements read-
U- lands _ included in Indian reserves within the province, including those selected and surveyed but not yet confirmed, as well as those confirmed, shall continue to be vested in the crown and administered by the government of Canada for the purposes of Canada, and the province will from time to time upon the request of the Superintendent General of Indian Affairs, set aside, out of the unoccupied crown lands hereby transferred to its administration such further areas as the said Superintendent General may, in agreement with the Minister oi Mines and Natural Resources of the province, select as necessary to enable Canada to fulfil its obligations under the treaties with the Indians of the province, and such areas shall thereafter be administered bv Canada in the same way in all respects as if they had never passed to the province under the provisions hereof.
12. The provisions of paragraphs 1 to 6 inclusive and of paragraph 8 of the agreement made between the government of the Dominion ot Canada and the government of the province of Ontario on the 24th day of March, 1924, which said agreement was confirmed by Statute fol!rteei1 and fifteen George the fifth, chapter forty-eight, shall (except so far as they relate to the Bed of Navigable Waters Act) apply to the lands included in such Indian reserves as may hereafter be set aside under the last preceding clause as if the said agreement had been made between the parties hereto, and the provisions of the said paragraphs shall likewise apply to the lands included in the reserves heretofore selected and surveyed, except that neither the said lands

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nor the proceeds of the disposition thereof shall in any circumstances become administrable by or be paid to the province."
British Columbia
Section 13 of the agreement respecting the union of British Columbia with the dominion reads:
"13. The charge of the Indians, and the trusteeship and management of the lands reserved for their use and benefit, shall be assumed by the dominion government, and a policy as liberal as that hitherto pursued by the British Columbia government shall be continued by the dominion government after the union.
To carry out such policy, tracts of land of such extent as it has hitherto been the practice of the British Columbia government to appropriate for that purpose, shall from time to time be conveyed by the local government to the dominion government in trust for the use and benefit of the Indians on application of the dominion government; and in case of disagreement between the two governments respecting the quantity of such tracts of land to be so granted, the matter shall be referred for the decision of the secretary of state for the colonies."
The dominion and the province entered into an agreement on the 24th September, 1912 (McKenna-McBride), which provided for the setting up of a commission to adjust the acreage of Indian reserves in British Columbia. The agreement contemplated the conveyance by the province to the dominion of additional areas for Indian reserves with full power to deal with the lands in such manner as it deemed best suited for the purposes of the Indians, including the right to sell the lands for the benefit of the Indians. This agreement was approved by the governments of the dominion and the province. The commission's report was received on 30th June, 1916, and in 1920 a dominion act was passed (Chapter 51) enabling the governor in council to give effect to the report in whole or in part. A similar act was passed by the province in 1919 (Chapter 32). The report was approved by provincial order in council on 26th July, 1923, and by dominion order in council on 19tli July, 1924, excepting suggested "cut-offs" in railway belt.
On 22nd March, 1929, a supplementary agreement was entered into in connection with the reconveyance to the province of the railway belt anil Peace river block and with respect to the form of conveyance to be used in transferring the additional reserves to the dominion. This agreement provided in part for the exclusion from the general transfer of the railway belt and Peace river block of reserves previously set aside by the province or the dominion and for the administration of such reserves in accordance with the conditions of the McKenna-McBride agreement. The lands were excluded from the general transfer by section 13 of the natural resources transfer agreement which forms a schedule to the Railway Belt and Peace River Block Act. chapter 37, statutes of Canada 1930. Clause 3 of the agreement of 22nd March, 1929, reads:
"3. We have considered clause 4 of the document known as the McKenna-McBride agreement, which reads as follows:
'4. The lands which the commissioners shall determine are not necessary for the use of the Indians, shall be subdivided and sold by the

province at public auction/ It is considered that this provision might beneficially be varied so that it be provided that on agreement between the two governments, through their respective departments, the lands may be either subdivided for sale, or disposed of en bloc, as may appear most advantageous in the circumstances of each particular case, but that such sale and disposal shall be by public auction; and as to disposal of timber, mineral and similar rights, the same should be dealt with by agreement between the respective governments through their proper departments, and we shall recommend accordingly to our respective governments."
The forms of conveyance agreed upon in 1929 reads in part:
". . . the lands set out in schedule attached hereto be conveyed to His Majesty the King in the right of the Dominion of Canada in trust for the use and benefit of the Indians of the province of British Columbia, subject however to the right of the dominion government to deal with the said lands in such manner as they may deem best suited for the purpose of the Indians including a right to sell the said lands and fund or use the proceeds for the benefit of the Indians subject to the condition that in the event of any Indian tribe or band in British Columbia at some future time becoming extinct that any lands hereby conveyed for such tribe or band, and not sold or disposed of as heretofore provided, or any unexpended fund being the proceeds of any such sale, shall be conveyed or repaid to the grantor. ..."
For years the department has been endeavouring to secure a conveyance of title to the reserves agreed upon by the McKenna-McBride commission but without much success. The matter has been discussed more than once within recent months with Premier Pattullo and he has given his assurance that it would be adjusted without further undue delay.


Richard Bedford Bennett: Probably the congress of the United States is dealing with it.


Thomas Alexander Crerar: Possibly.
A draft form of conveyance was submitted by the province some weeks ago but it was not in accord with the form agreed upon in 1929 and is not acceptable to the department. This has necessitated further negotiations which it is hoped will shortly produce satisfactory results.
Quebec
There are no outstanding mining leases or mining permits covering Indian reserve lands in Quebec. The situation with respect to Indian reserves in that province is slightly different to that in Ontario.


Richard Bedford Bennett: None of them are in the mineralized area.


Thomas Alexander Crerar: So far. To continue:
The decision of the privy council in the St. Catharines Milling case established that in Ontario the rights of the Indians in the lands was a "personal and usufructuary right" depending entirely upon the bounty of the crown. In Quebec the Indian interest in some cases amounts to beneficial ownership and in these cases the province has no claim to any reversionary interest.



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[Stage Direction]
Indian Act
Richard Bedford Bennett: In many cases they
asserted their right to a reversionary interest, and it has been granted.


Thomas Alexander Crerar: The statement continues:
In others, the rights of the Indians in reserves are personal and usufructuary and their position may be similar to the Indians of Ontario.
It is realized that the situation is not at all satisfactory particularly in view of the fact that the development of the mining areas in Quebec is being extended rapidly and the time will soon come when we will be faced with the problem of dealing with the mineral rights. As soon as a definite opinion is received from justice department further steps can be taken as may be considered advisable.
Maritime Provinces
It has not been necessary to give a great deal of thought to the dominion crown's title to minerals underlying Indian reserves in the maritime provinces. However the situation with respect to those reserves set aside prior to confederation is probably comparable to the case of Ontario. Certain reserves were purchased outright by the dominion and the dominion's title in these cases is absolute.
This is a lengthy statement, but I think it sets out the conditions as briefly and concisely as they can be set out at the present time. It is quite evident that there are varying conditions surrounding the titles to these reserves in respect to all that they may contain in the way of mineral wealth. The conditions governing vary in British Columbia, Ontario and Quebec and between different reserves in these provinces. However, when I approach the Department of Justice to see if they could give me a statement that would meet the wishes of the hon. member for St. Lawrence-St. George, they said it was quite impossible to do so at the present time. Consequently I have fallen back on this statement that was prepared by the officers of the department and which I think outlines the situation fairly well.


Richard Bedford Bennett: The statement just read by the minister is an interdepartmental statement for use in the department?


Thomas Alexander Crerar: Quite.


Richard Bedford Bennett: I would think that in the main it is a very clear and correct statement of the situation. The St. Catharines Milling Company case is the leading case dealing with the rights of provinces to the reversionary interests in lands in which it was held the Indians had other than a beneficial interest. When their interest in the reserve terminated, the dominion thought that the interest in the land reverted to the crown in the right of the dominion, but the courts decided that it belonged to the crown in the right of the province. That is the decision so far as
Ontario is concerned, and under the circumstances of that particular case. The late government had to deal with a situation ir Quebec in which the same principle was applied, the conditions and circumstances being similar, but there are some reserves in Quebec which were created under different conditions than those applicable to the reserve in the St. Catharines case. The only practical difficulty is whether or not the mines and minerals under the soil in an Indian reserve belong to the crown in the right of the dominion or in the right of the province.


Thomas Alexander Crerar: That is, speaking of Quebec?


Richard Bedford Bennett: That is the only practical question at issue in this bill. It is the whole question, because each case will have to be decided on its merits. It may be found when the minister is dealing with an Indian reserve in one province that the conditions of the original grant creating the reserve are such as to vest a claim in the crown in the right of the province and not of the dominion.


Thomas Alexander Crerar: That would not apply to the prairie provinces.


Richard Bedford Bennett: That is a point about which I am not entirely clear. There are some appropriations of land which stand on a different basis from the original treaty arrangements; in other words, the boundaries of the reserve have been to some extent modified from time to time, and it may well be that in particular sections conditions are different from those in reserves in parts of what was the northwest territories. But broadly the right to mines and minerals in what was the northwest territories should belong to the crown in the right of the dominion.
The suggestion I make to the minister in respect of this clause, in view of what is happening in the western development of oil, is that these leases should be disposed of by public tender or public auction. I am not saying that because there happens to be in power a government which I am not supporting. Some years ago a former lieutenant governor of Manitoba while a member of this house gave considerable attention and consideration to that phase of our public administration. His attention had been directed to* certain conditions, and my attention had been directed to certain conditions. He had investigated certain matters and he discussed them with me. I am inclined to think it would be very helpful to the minister, to the department, and certainly to the Indians-inasmuch as we are only trustees, because that is all we
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are; we are administering this Indian property in trust-if the leases should be disposed of only by public tender or public auction. The granting of a lease to search for oil or precious metals is a matter of very great importance to the Indians, and the Indian has become, shall I say, somewhat suspicious in connection with the administration of his affairs. I am constantly having these matters brought to my attention; sometimes I see Indian chiefs in the summertime, and they tell me they are not satisfied about this particular thing or that. While in many instances the alleged grievance is wholly groundless, I believe it would be in the public interest if we provided that these leases should be disposed of by public tender or public auction. In the United States, they now provide that leases of this kind shall be disposed of by tender, and I am inclined to think that if the minister would so provide, he would do a real service to the Indians. At the same time lie would render his own lot somewhat easier, because no one who is familiar with the history of this country during the last forty years in respect to the alienation of our timber limits and mining reserves and matters of that kind can be ignorant of the fact that there is always a disposition on the part of those who support the government of the day, regardless of party, to obtain if possible benefits by reason of that support, claiming that it entitles them to more favourable consideration than they would otherwise receive in connection with applications for leases and many other matters. The records of this country contain striking evidence of the success of those efforts, and my profound conviction is that in dealing with the Indians for whom we hold these lands as trustees it would be very much in the interests of all concerned if we provided that their disposition should be by public tender.


Thomas Alexander Crerar: The suggestion of my right hon. friend is certainly interesting, but I am fust wondering whether or not it would retard development.


Richard Bedford Bennett: It might have once, but it would not now, clearly.


Thomas Alexander Crerar: Take a reserve, for the sake of illustration, where the geological formation might be favourable to minerals. A prospector comes along who has studied the geology of that particular reserve, and wants a permit to prospect. Now if the conditions were such that we were required to advertise before he could prospect, I doubt if you would find people interested in the matter. But suppose he carries on his orospecting and makes a discovery. It is at

that point that he has to interest someone else, and quite clearly I think the place where the principle of public tender would come in would be in the initial stage, in the right to prospect. The fear I have is that the principle which the leader of the opposition has stated, and with which in general practice I wholly agree, might not, in a particular instance such as I have outlined, work out to the advantage of the Indians but rather to their detriment by retarding or preventing development. The conditions surrounding prospecting for minerals and developing mineral property are quite different from the conditions surrounding the sale of pulpwood or timber-


Richard Bedford Bennett: Or petroleum.


Thomas Alexander Crerar: -or petroleum. In those cases I think I am safe in saying that the public auction principle should be recognized in the disposal of the surface rights. I recall very well that on the St. Peter's reserve, about thirty-five or forty miles north of Winnipeg, an old reserve, part of which was surrendered, there is still a substantial portion left which is marsh or hay land, and every year the right to cut the hay on parcels of this land is put up by public tender or auction to the neighbouring farmers. That principle I think is very generally recognized in connection with such matters, but I am afraid that in mineral development it would work to the detriment of the Indians rather than to theii advantage. In the matter of prospecting for oil, I am not so sure. We had a request within the last year, if my memory serves me rightly, in connection with the Sarcee reserve.


Richard Bedford Bennett: Many years ago a company I know of had a permit to operate on the Sarcee reserve.


Thomas Alexander Crerar: I believe my right hon. friend is correct. When the permit is given a certain charge is made, and there is a time fixed within which those taking out the permit have to do certain work, failing which there is a penalty which they have to pay, or abandon the work. If the development proceeds to the point where drilling takes place and oil is discovered, there is a provision in the regulations with respect to royalties. But I shall certainly give attention to the point raised by my right hon. friend, which might be covered in the regulations so far as it is practical to do so.


Mr. TAYLOR (Nanaimo):: I should like to stress that general recommendation. When we are dealing with sub-surface resources we are dealing with something that is definitely wasting, and any expenditure of energy and

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money on the development of these resources tends only to lessen them. So that the generations to follow will have that against us; unless we are very careful to assure something to our Indians which represents compensation for the wasting of their resources, in symbol if not in actual value, they will have something to say about it. I visualize the time when we shall do that with all the mineral resources of this country. At present we throw them open to anyone who chooses to come, but the time is definitely coming when we shall demand from those who prospect and mine for mineral resources some portion of that which they mine and which they recover.


Alan Webster Neill: I would suggest that as a
matter of accuracy it would be better were the section to read:
The governor in council may make regulations enabling the superintendent general to issue leases on Indian reserves. . . .
According to the way the subsection reads now, he might lease a piece of my home farm. The old subsection 2 read like this:
The governor in council may make regulations enabling the superintendent general without surrender to issue leases for surface rights on Indian reserve.
Apparently we have abandoned that; we have just given them power to issue leases which may be anywhere, but I think that is rather an important thing. I suggest that the minister look into that. Nowhere in this section as it now reads is there any suggestion that the leases are to be on or connected with an Indian reserve.
While I am on my feet I should like to bring up another matter. I do not know that it has strictly to do with this section, but the minister introduced it, and T suppose it is arguable that it is in order; you cannot deal with the minerals on the reserve unless you have that reserve. He alludes to the McKenna-McBride agreement. If I remember aright that was negotiated in 1912. I remember the express urgency of getting the matter adjusted at that time; the government had chartered a steamer at a cost of SSOO a day to take the commission around. That is twenty-five years ago, and they have not got it adjusted yet. There was a report made in 1916, I believe. I gathered from the minister's statement to-day that about 1919 they agreed upon a form of conveyance, and the interdepartmental report did not deal with the trouble between the two provinces. As far as my knowledge extends, because I have asked about this matter in years gone by, it arises from the fact that the province is not willing to cede the land
it agreed to cede with a clear title; it wants to reserve the minerals and water rights. It must be quite evident that, whatever the terms of the agreement were, as I understand it it was to be a completely free deed by both parties. The dominion government wished on behalf of the Indians to get more reserves, generally small ones which had been omitted in the survey many years ago-mostly fishing stations in the district I represent. On the other hand there were some bigger reserves where it was patent that the Indians did not and never would require the whole area, and it was agreed that they should give up those portions. I think in one case it was a matter of a couple of hundred acres or something of the kind. But the whole thing is held up now; the land to be given back from the reserve cannot be touched because ' it is in this condition of tentative sale; it cannot be used. That is rather a nuisance in some respects, even to the Indians themselves. On the other hand the dominion government has not the title to these other reserves which it ought to have and which it may need now in the case of negotiations for mineral rights with the white people in (he vicinity and so on. The minister says he has had conversations or negotiations with the premier of British Columbia. Did it not develop in those conversations just what the trouble was? -because it is so many years now. Either we have these rights and can make this agreement and should have the agreement, or we have not. Just what is the trouble as the minister knows it?


Mr CRERAR:: I do not know that I am
in a position to state precisely the reason for the delay.


Richard Bedford Bennett: I think the minister said he could not get any action.


Thomas Alexander Crerar: It has been difficult to get action in the department concerned. It is not my place to criticize the methods of the administration of another government. Our departmental officers are of the opinion, and I agree with them, that the matter is quite clearly set out, and it should be settled. But it takes two parties to reach a settlement. So far we have not been able to prevail upon British Columbia to carry out the agreement in the terms as we understand it, and we think our judgment is right as to what those terms mean.


Alan Webster Neill: I suggest another commission.


Thomas Alexander Crerar: I hope that we may get somewhere with it in the next few months.
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Richard Bedford Bennett: During all the years I have been in -the house the hon. member for Comox-Alberni (Mr. Neill) has always interested himself very keenly in these matters affecting the rights of the Indians in the province of British Columbia, and I am not paying him any compliment when I say I think he is more familiar with the situation than most of us. But there is this to be said, that -the province of British Columbia under the terms of the McKenna-McBride agreement were to convey to us certain definite areas, and there is no limitation imposed upon the terms of the grant, but they now insist upon restrictions which are not within the agreement. That is the story as I understand it. The minister -has very properly said that he and his department decline to give effect to the provincial view. It may have to be the subject matter of a reference to the courts or -to an action of some kind before it is finally determined. So I suggest that inasmuch, as the minister very properly said, one does not want to criticize another government, especially a friendly member of the family as referred to in 1935, it might well be that the premier of British Columbia would not be ill disposed to lobby the matter before the congress of the United States, and they -might be willing to arbitrate our differences and adjust -them, either on the terms of a new military road or some other scenic attraction: possibly something of that sort might be done.
But leaving that for the moment I think if the minister will look a-t the section he will see that-I do not want to use a harsh term- it is rather loosely drawn. I confess that I do not think the second subsection means anything. If I might have the attention of the minister just one moment with respect to it: (a) contemplates grants being made by the crown of rights to prospect for, mine, and take away minerals under the surface of an Indian reserve after it has been surrendered to the crown. That is clear; only, as the hon. member for Comox-Alberni points out, unfortunately when this bill was drawn somebody, it is quite obvious, was thinking in terms of a half million dollars, and he got that in and forgot to put in the provision that should have been included, that it applies to an Indian reserve. The section that it supplants or replaces provides, of course, that it deals with Indian reserves. There is nothing here to show that it deals with an Indian reserve. It might, for all we know, deal with one of those new sites acquired by the Minister of Transport for the broadcasting corporation, or something of that sort. The minister will note on the opposite page the old section. Of course it refers to surface rights on Indian
[Mr. Crerar.l
reserves. This section does not refer to rights anywhere. What does (b) mean? Let us read the section:
The governor in council may make regulations enabling the superintendent general to issue leases upon such terms as may be considered proper in the interests of the Indians and of any lessee or licensee,
(b) Without surrender, to any person authorized to mine any of the minerals in this section mentioned, of surface rights over such area of any land within a reserve containing any such minerals as may be necessary for the mining thereof.
Surely the matter is not connected up in such a way as to make clear what that means. Another thing I find difficult to understand is, our sudden solicitude for the lessee or licencee. Our primary duty is to the Indian and the Indian only. I always thought the lessee was able to look after himself. But now we are adding to this section the provision, "upon such terms as may be considered proper in the interest of the Indians-" and these words underlined, "and of any lessee or licencee." Why should we be considering him? Our concern is the Indian. We are the lessors. The superintendent general is really the lessor in this case. I hope the minister will not regard me as unfair, but I cannot but think it is loosely drawn.


Mr. STIRLING:: And who is the licencee?


Richard Bedford Bennett: Then the hon. member for Yale (Mr. Stirling) points out that we use the word "licencee" although there is nothing in the section to indicate who the licencee is, prior to the use of the term there.


Grote Stirling: When the matter was being discussed at the resolution stage I expressed the view that the cart was being put before the horse, in that the lease is being talked about before the prospecting. In the illustration the minister gave ten minutes ago he drew our attention to the probable chain of events. Certainly the prospector would come in before the lessee. It is improbable that an area will be leased or that an application made for the lease of mineral land which has not been prospected. The desirable way to approach this would seem to be to make arrangements for the possibility of granting a licence to prospect. Possibly this reference to a licencee means that. But it appears to me to come after the granting of a lease. From the minister's story just now it would appear that he is in agreement with me on that point. He did not refer to it when I raised the question before, but perhaps he would indicate now whether he thinks it is probable that anyone will want to lease a

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piece of an Indian reserve before there has been some demonstration by someone that there is mineral value on it.


Thomas Alexander Crerar: I would think not, but on the other hand the prospector on a reserve wants to have his interest protected for the future should he find minerals. You could not say to a prospector: We will give you a licence to prospect, but we will not give you any right to develop or explore further than merely prospecting. If the prospector found mineral the department might say:	Very
well; thank you very much; we now know we have mineral there, and we will put it up for auction.


Grote Stirling: Might not a licence be given as a kind of option to that man?


Thomas Alexander Crerar: What is proposed is to set up regulations which will permit of prospecting, and, if the prospecting is successful, lay down the conditions on which development can take place.


Richard Bedford Bennett: And the royalties, I
take it.


Thomas Alexander Crerar: Precisely. So the prospector when he goes on the reserve to prospect has before him a clear picture of what lies ahead as far as his relationship with the department is concerned, should his prospecting result in finding mineral.


Alan Webster Neill: But he cannot go on without a surrender, and getting a surrender by the band means the expenditure of a lot of time and money.


Thomas Alexander Crerar: The surrender by the band would have to be prior to his going on the reserve to prospect.


Alan Webster Neill: But what prospector would go to the considerable expense of getting a surrender without knowing whether there is any mineral there?


Thomas Alexander Crerar: If we get an application to prospect, or perhaps three or four applications, the matter will be taken up with the Indian band to ascertain if they are willing to give a surrender under the regulations.


Mr. MacNICOL:: That is a surrender to permit prospecting.


Thomas Alexander Crerar: And if the prospecting results successfully, the right to develop afterwards.


Alan Webster Neill: How is the man to know there is any mineral there? He cannot go on the reserve to find out; that would be trespassing. If he wants to go on he will
have to go through all the formality and expense of getting a surrender from the band. And it is expensive, because they are scattered all over; he has to get them together, get their consent, and that of the Indian agent. A prospector's means are limited; how will he do that? If he is allowed to prospect in a casual way and then get the surrender, that is different; but on account of the expense I would not seek a surrender until I knew there was some reasonable prospect of finding something.


Thomas Alexander Crerar: Let me give an illustration. In the Little Long Lac area, if my memory is correct, there are certain well defined geological formations. There is an Indian reserve not far from the district where several mines have been developed. It is known that the same geological formation carries through the reserve. On the strength of that a prospector might say: I should like to prospect on the reserve. The department can then secure the surrender, if the Indians are willing to give it, prior to any prospecting being done at all. The point I am making is that it is not sufficient to have the surrender in the terms of the right to prospect; the surrender must include the right to go on and develop the mineral if the prospecting proves successful.


Mr. STEVENS:: That raises the point I
mentioned the other day. The bill as drafted, following the general terms of the resolution, is extremely broad. It does say "upon such terms as may be considered proper in the interest of the Indians," but there is nothing in the bill that I see which makes it obligatory upon the Superintendent General of Indian Affairs to protect the rights of the Indians in ease of a discovery of minerals, by providing that they shall, in perpetuity I would say, share by royalty in whatever winnings may result from the discovery. Take subsection (a): the Indians must surrender their rights prior to the property being prospected, and some concern or individual having prospected the area, the superintendent general is free to make any agreement he may think fair for the recovery and taking away of the minerals, the Indians having already completely surrendered their rights. Parliament ought above all things to safeguard the inherent right of the Indians to some definite prescribed return in the form of a royalty or participation in the winnings from any discoveries made. That is a vital point.
To come to details, I could visualize this situation. Here is a reserve such as that the minister has cited, Little Long Lac, where it
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is known that the geological formation offers a probability of finding mineral. What rule can be designed, other than that which was adopted in the United States in the opening up of the Indian territories in Oklahoma, which would treat fairly different individuals who might go in there and prospect? It appears to me that what is visualized in this bill is that some individual or corporation may go to the government and ask for cooperation in getting the surrender, and then under the regulations may get a prior right to prospect, and acquire the right to mine such minerals as may be found. As I have already stated, the interests of the Indians are not safeguarded, and on the other hand it would shut out the opportunity to others to prospect and stake property. If we are going to follow the principle of surrender then it should be accompanied either by an open right, first come first served, or we should definitely state that the government or superintendent general will enter into an arrangement with the highest bidder, say. That might be one way; or with some corporation, company or individual for a specific right, an individual right, an exclusive right to prospect and recover.
The main point I have in mind, and which I think is quite inadequately dealt with, is the ultimate participation of the Indians in whatever the recovery may be. That is sufficiently defined in the act, and while it is true that for a great many years the superintendent general has satisfactorily administered Indian interests, as the minister has pointed out on several occasions usually those matters have concerned grazing leases, the cutting of hay or in some cases the cutting of timber. They have been comparatively small operations of no very great importance, most of them of very little importance. In this instance, however, it may be of vital importance and ultimately amount to very large sums as development occurs.
Personally I should be loath to see the clause pass in its present form. I think it should be reconsidered and redrafted, and I believe the statute should contain some definite limitation of the power of the superintendent general in the way of leasing, such as a stipulated minimum royalty. That is not a new thing; it is well established in many parts of the United States, particularly in connection with oil. and in Canada as well. There is a well-established principle in regard to royalty, and I see no reason why it should not be adapted to minerals as well as to oil. If such a provision is not included I for one would not be satisfied to have the bill passed in its present form.
fMr. Stevens.]


James Samuel Taylor: I am glad
to see this phase of the situation developing. The instinct of the prospector is very much like that of the homing dove; he will go after his ore wherever he thinks it can be found. Obviously the right thing is to have the Indians determine exactly what their position should be, and that can be done very easily in consultation with the Indian department before any prospecting takes place. Then if a prospector goes on a- certain piece of land or into a certain reserve he knows that if he finds anything it is subject to certain conditions in regard to royalty or percentage of the company formed or something else, and he knows that definitely has to be faced before he proceeds. Then the matters of prospecting, stripping, cross-cutting and all that sort of thing, which are definitely associated with the ultimate development of a mine, can be undertaken in perfect freedom, and the capitalization of any company for such purposes can be proceeded with in the knowledge that those conditions have to be faced.
I feel quite satisfied that this is the only way in which the thing should be done, and I agree with the hon. member for East Kootenay (Mr. Stevens) that those conditions should appear in the act for the protection of the Indians. There will be a disposition, not necessarily at this time but at some later time, to avoid the responsibility of giving the Indians some value out of their wasting resources, and I think we must face that issue.


Richard Bedford Bennett: Before the minister replies I should like to mention another question and he can deal with them both at once. I think now the reason the hon. member for St. Lawrence-St. George asked the questions he did the other day, and the reason certain questions were asked the minister to-day, has become apparent. The hon. gentleman who has just spoken, as well as the hon. member for East Kootenay, was under the impression that the mines and minerals belong to the Indians. In some parts of the country they do not at all. In northwest Canada they belong to the crown in the right of the dominion; the Indians never had any title to them. It was for this reason that the hon. member for St. Lawrence-St. George asked his question the other day. In different parts of Canada the ownership is dissimilar, as was pointed out in the departmental memorandum. We have no power at all to reserve a royalty to the Indians with respect to some parts of Canada, because the grant of the reserve did not give them any right to any of the minerals. But that is not so universally. There are some

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parts of the country in which that is not so, but it is so in western Canada between the lakes and the mountains. I cannot say as to the situation over the mountains, but when the minister mentioned the Little Long Lac reserve, as a matter of fact part of the mine that has been developed in that section of the country is believed to extend on to the Indian reserve, and as I understand it the law is perfectly clear that the mines and minerals under that reserve belong to the crown in the right of the dominion, not to the province of Manitoba or to the Indians. That is the difficulty. They never did belong to them, because when they received title to the reserve they did not get the minerals; that is provided by the statute which was subsequently confirmed by the imperial parliament.
That is the position there, but it is not universally so. I repeat, I do not think it wise or desirable to leave legislation of this kind to the governor in council. The minister was not in the house from 1930 to 1935, but with his well-known studious habits undoubtedly he read every' pearly word of wisdom that escaped the lips of his now Prime Minister; and he realizes that government by order in council certainly is calculated to destroy the very fabric of this young confederation. The very foundations of it are imperilled. And despite the obvious anxiety of the hon. member for Nanaimo (Mr. Taylor) to support Liberal principles, he will find it a little difficult to do so by becoming a confirmed believer in government by order in council. I do suggest to the minister that he is going a very long distance now in substituting the governor in council for the parliament of Canada. It is true that the council of the government now consists of a much more distinguished group of men than was the case then, in the minds of those who spoke so critically of them, but still they are not denied the power of criticism or the right to suggest that after all it was the principle and not the individual that was at stake. I leave it to the minister if he thinks it wise to entrust the governor in council with responsibility for legislation of that kind.
One point more arises out of that. I repeat: Why should we suddenly become imbued with the idea that we are no longer trustees for the Indians? You see, as it was we were always trustees for the Indians, until this bill came down. Now we have to be thinking of a man who is the lessee or licencee. What concern have we with him, and how long have we had to be considering the other man when we were dealing with the interests of the Indians for whom we were trustees? As long as our superintendent general does his job. which
is to look after the Indians as trustee, I do not think he should be worrying very much about the interests of the lessee or lessees. But that is one of the amendments proposed by this bill.	.
Then there is the next point, which is this, and I am going to take them in order. To whom does the Indian surrender-to the crown or to an individual? Heretofore surrenders to my knowledge have always been to the department-that is, to the crown through the department. The surrender is given by the Indian to the crown. What compensation is he to get? The old statute provided;
Such terms to include provision of compensating any occupant of land from any damage that may be caused thereon as determined by the superintendent general.
That had not to do with this particular phase of it at all. The Indian is asked to surrender. The minister writes a letter to the agent and says, "We have been advised that it is not improbable that a vein of gold or silver may extend under this area. There are men willing to prospect it, but before we can do anything we will have to have a surrender. I want to get a surrender of that from the Indians." He goes out and sees the Indians, saying, "I want you to surrender." He takes the form provided by the department, with which we are all familiar. Those forms are presented to the Indians, some of whom can write and some of whom cannot; others make their mark. They come together. If the prospector is very anxious to see about this surrender being given he usually provides something in the way of liquid refreshments or otherwise, wholly against the law, to lubricate the transaction of business and make it much easier to obtain the surrender. I am sorry to say that this is so.
The surrender is obtained. The crown has the title; what is the compensation to the Indian? It would seem to me that there is a case in which the crown must come in, and in which we should have legislation,-because the Indian has no interest in the minerals, by law. But he should have an interest by agreement. The crown should say, "If you do surrender we will give you in perpetuity or during your lifetime in the mine which may develop there ten per cent, fifteen per cent or twenty per cent, or whatever royalty may be taken from any earnings which may come from the development of the property That is where the crown comes in in connection with the matter. That is where the crown comes in, by reason of the fact that under the law as it now stands the Indian has no interest in the mine or mineral under
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the land. He has only surface rights, and they are held in connection with his rights on part of the reserve.
Then, let us come to the next point, which has to do with the question of prospecting. As this bill now proposes, that can come about only after surrender. What starts the ministei to ask for a surrender? Because someone says there is something there, or because a prospector says there is, there is no obligation then, as the hon. member for Kootenay East has pointed out, to give it to him. Somebody else may step in the minute it is done, and say, "I am going to prospect there." But he cannot prospect there unless he has a licence to do so. Therefore the minister gives his prospector's licence to a man and sets the wheels or machinery in motion, in order to get the surrender. That is what happens there.
How could it be done any other way, as it now stands? I suggest to the minister that he take the matter up with his officers and redraft the section so as to express more clearly what I am sure he has in the back of h;s mind, namely a provision that will not retard development but rather assist it, and one which will ensure the Indian getting something through his surrender of something which will accrue to the crown by reason of his parting with his reserve.


Grote Stirling: Is it not the idea that he should get the rent?


Richard Bedford Bennett: He might get the rent, but it would be a very insignificant sum, relatively. It may be a very valuable mine and the royalties may amount to thousands or perhaps hundreds of thousands of dollars. What strikes me more than anything else, having reference to what was said by the hon. member for Nanaimo, is that in connection with the South Africa diamond mines the crown took sixty per cent of the earnings of the Premier mine, the greatest single diamond mine in the world. Sixty per cent, by way of royalties, to the crown; and they still take fifty per cent of the difference between the old statutory price of gold and the new price established by the United States.
Under these circumstances might it not be well for the minister to consider the redrafting of this section, so as to express what he clearly had in his mind, and something which certainly this section does not express? It would take some time to do it properly, but certainly it is not expressed here. I do wish once more to point out to him that the officer who suggested that the words should be added "and of any lessee or any licencee" 'Mr. Bennett.]
should be told that after all we are the trustees for the Indians, and that we have had no difficulty heretofore in discovering lessees or licencees who are highly competent to take care of themselves, either directly or through the aid of competent and skilled professional men whose services they can always employ.
We must not get away from the one idea which was common to the whole of the legislation affecting the Indians, namely that we are their trustees. Nothing less than that will satisfy the law; and any attempt to make us trustees for somebody else is at variance with the whole theory of our law, as written. I ask the minister to let the section stand, to recast and redraw it so as to provide that at least with regard to some fundamentals we are going to have it in the statute; I entreat him not to depart from all those great traditions upon which our institutions are founded, and substitute for parliament the governor in council, even although it consists of eminent gentlemen, three of whom I see opposite.


Thomas Alexander Crerar: Well, so far as the governor in council is concerned this particular section does no more than is done in other sections of the Indian Act dealing with the disposal of surface rights.


Richard Bedford Bennett: Yes, but they are done by auction, as you know.


Thomas Alexander Crerar: Yes; usually sold by
tender or auction.


Richard Bedford Bennett: They have to be.


Thomas Alexander Crerar: 
Grote Stirling: Who is the licencee?


Thomas Alexander Crerar: The licencee may in one case mean the man who has the right to cut pulpwood on the reserve.

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Richard Bedford Bennett: Then if that is so, clearly it is not stated correctly in the bill, because it says:
To issue leases upon such terms as may be considered proper in the interest of the Indians and of any lessee or licencee.


Thomas Alexander Crerar: And of any person else who may have such right.


Richard Bedford Bennett: But the words "lessee or licencee " refer to the people mentioned in paragraphs (a) and (b) who now become lessees and licencees. This is all one section.


Grote Stirling: We do not know who the licencee is, because it is not referred to anywhere else.


Thomas Alexander Crerar: When we get upon matters of legal interpretation I am on rather difficult ground. It seems to me however that the intention is clear.


Henry Herbert Stevens: I take it the minister means the prospective lessee.


Richard Bedford Bennett: Hear, hear.


Henry Herbert Stevens: The lease to be issued, because it refers to that in the same, subparagraph. The subparagraph reads:
The governor in council may make regulations enabling the superintendent general to issue leases upon such terms as may be considered proper in the interest of the Indians and ot any lessee or licencee.
There is no intimation that it refers to any other type of lessee.


Richard Bedford Bennett: That is the only person it could refer to.


Henry Herbert Stevens: Taking the minister's
interpretation there should be a subclause to make it clear that this is protecting the interests of prior lessees, which is an entirely different thing.


Thomas Alexander Crerar: I suggest that this section be allowed to stand and I shall look into the points raised by the leader of the opposition and- the hon. member for Kootenay East.


Alan Webster Neill: Was this thing drawn up in the department of the minister?


Thomas Alexander Crerar: It was.


Alan Webster Neill: It seems to me that the law officers of the crown would have more sense than to do anything like this.


Thomas Alexander Crerar: This bill passed the law officers of the crown.


Alan Webster Neill: Was it drawn up in the minister's department?


Thomas Alexander Crerar: As is customary, the draft proposals were placed before the law officers of the crown, who were told what the department desired in respect to these amendments.


Henry Herbert Stevens: The minister may have answered this already, but I should like to know if any requests were made to the department prior to the introduction of this legislation for the privilege of prospecting or acquiring mineral rights on reserves.


Thomas Alexander Crerar: There were one or two.
There was one in connection with oil rights on the Sarcee reserve, west of Calgary.


Richard Bedford Bennett: That is an old one.
There is also one at Little Long Lac.


Thomas Alexander Crerar: There was also, as I recall, a request there. I might deal with another point that was raised by the hon. member for Kootenay East. It w'ould be rather difficult to specify in the act the exact return that the Indians should get from mining minerals on a reserve. The purpose is to draft regulations covering the mineral development .from the beginning to the end. Obviously that must be regarded as one operation. A man who goes in to prospect must also be given the right to carry through with the mineral development. Otherwise he will not go in to prospect.


Richard Bedford Bennett: He gets the one only if
there is a surrender, and the other he may get without a surrender, under the proposed legislation. He can get the right to prospect only with a surrender, and he can get the right to surface rights without a surrender.


Thomas Alexander Crerar: The regulations must cover the whole story of the development. You cannot give a prospector merely the right to prospect. If he has not the right to follow up with the development, he will not go in to prospect. You will stop your development right at the beginning. Consequently the regulations must set out the whole process of the development, they must cover the prospecting, the right to explore further, the right to put in a mill and convert the ore into a saleable commodity. The terms upon which that is to be done and the returns that will be made to the Indians must be covered by the regulations.


Henry Herbert Stevens: My point is that the
statute should provide for a minimum royalty, let us say ten per cent. This principle would be applied to all. When an individual prospector or a company contemplates the exploitation of some mineral deposit, he or
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they will know that whatever eventuates a royalty of so much will have to be paid. The royalty should be fixed in the statute so that everyone would know what he was faced with should he desire to undertake some development. I do not want to come down to this level, but things have happened before in dealing with the public domain. What I have to say does not apply to this government any more than to any other, but the government might be and probably will be subject to all sorts of pressure to secure leases under the most favourable conditions once it is known that there are good prospects in the reserves. I know, and I am sure the minister knows, that occasionally, not frequently, some of the most insignificant prospects develop into fabulously rich mines. The Sullivan mine, one of the greatest lead mines in the world, was sold for S10,000 after some development work had been carried on. One might cite other similar cases in northern Ontario. The whole business of mining is surrounded with an element of indefiniteness. No one can know until a property has been developed what results may be achieved. To pin in the statute some minimum safeguarding the rights of the Indian would not interfere with the minister or the superintendent general making detailed regulations covering terms and conditions, but the underlying principle should be laid down in the legislation. I appreciate what was said a moment ago by the right hon. leader of the opposition (Mr. Bennett) to the effect that in some sections mineral rights are not inherent to the reserve. Undoubtedly that is true.


Richard Bedford Bennett: The reservation could
be made in favour of the Indian just the same.


Henry Herbert Stevens: Quite so. There is another phase of it. With the surrender of Indian rights the British Columbia government claims that the reserve reverts to the province. That feature should also be considered. The whole business is exceedingly complicated and complex when we come to deal with mineral rights. I insist that we should protect the rights of the Indians in the matter of participation in the winnings, and I plead earnestly with the minister that when he is considering the redrafting of this measure he include in statutory form a specified minimum royalty right. I am suggesting that ten per cent should be the minimum, but that may not be satisfactory. Then the matter of tendering might be considered and this feature could be provided for in the regulations. This might be considered in connection with cases where it is 
known that the geological structure is favourable and that there are likely to be valuable minerals in the area. One tenderer might say, "Yes, I will pay more than the minimum; I am ready to pay twelve per cent." Another tenderer may say, "We are willing to pay fifteen per cent." There would be an opportunity to improve the position of the Indians. At the risk of being tedious, I repeat that there should be in the statute a minimum royalty protection for the rights of the Indians.


John Ritchie MacNicol: The minister mentioned Little Long Lac. I am sure he is familiar with the situation of the Indians in that area. He must know that the Indians are more or less excited over the possibility of their hunting grounds, not merely their reserve, being overrun by irresponsible whites who are likely to steal their traps, interfere with their hunting, and so forth. If prospectors or anybody else are to be allowed to go on the reserve and prospect for minerals, I wonder what is going to happen to the Indians. Suppose gold is found in large quantities in the area around Little Long Lac; where are the Indians to go? They have been shifted now almost off the face of the earth; the whites keep moving them farther and farther north all the time. Later when the Indian estimates are up I shall have a word or two to say about the matter. I know the minister is sincere in his efforts to help the Indians. I have been on quite a number of reserves where I have heard his good intentions commended, and I want to commend him upon what he has in mind for the Indians. I am deeply interested in the whole Indian set-up in this country, and in due course I may have something to say about it. At the moment, having travelled over quite a number of reserves myself. I am just wondering what the effect will be on the Indians if under this measure the reserves are to be invaded by prospectors.


Mr. WOOD:: I should like to make one or two observations, Mr. Chairman, in answer to the hon. member for Davenport (Mr. Mac-Nicol). I believe that the purpose of this bill .'s to safeguard the interests of the Indians. I have had some experience, as a representative of a constituency containing one of the largest reserves in Canada, in connection with the disposal of oil and gas leases, and if I understand this bill aright it is just to place within the Indian department the leasing of Indian territory because they have there men who by knowledge and ability are equipped to supervise the leasing of these areas. Am I right in that? Is not that the purpose of this bill?

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Henry Herbert Stevens: The minister nods his head, staked the street in Victoria and was only Surely he does not agree with that statement, prevented from going ahead and doing develop-The Indians a'*e not surrendering their	lands	ment work by a by-law which	required himto the department.	to	put up a large amount as	a guarantee..	.	So far as	my knowledge goes, the	ordinary


George Ernest Wood: 
Alan Webster Neill: I am sure that none of us questions the integrity and devotion of the minister and his desire to do the best he can for the Indians. It is simply a question of procedure. I agree very largely, practically wholly, with the -remarks made by the hon. member for Kootenay East (Mr. Stevens), but I wish to draw attention to another phase and to make one last attempt to explain about this surrender business.
Speaking subject to correction, and possibly the hon. member for Kootenay East will correct me if I am wrong, I am practically certain that in British Columbia a prospector can go anywhere he likes. He can go on my private garden and stake a claim if he likes. I recall that when the streets of Victoria were being dug for a drain-pipei there was something that looked like gold; a prospector
the obligation to buy out my surface rights.
I am protected there. There are some railway lands where the base metals are owned by the railway, but a prospector can prospect on those railway lands, and although the base metals belong to the railway he can prospect for gold and silver; and if he makes a discovery he has to get some form of quitclaim from the railway company of their rights in regard to the base metals. But there is no prohibition preventing him from going ahead and prospecting at all. He can prospect anywhere he likes.
The idea of this legislation is to get people to prospect on Indian lands to develop supposed wealth, but you will not get these lands prospected on these lines because the prospector is not going to stop at an imaginary line in the bush; he is going to go right into the Indian reserve and ascertain whether there are any minerals there. Theoretically he is not supposed to go on the reserve until he has complied with the law, and he has to get a surrender from the Indians when he comes to the reserve. Now there may be two or three hundred Indians scattered over the district and elsewhere, and it may take a year to get them together and get the surrender. A man on Vancouver island applied last August to buy a miserable lot, sixty by one hundred and thirty, and he has not got the Indians together yet to give a surrender. The red tape of the Indian department, and the apathy, shall I say, of the Indian agent, has resulted' in that condition. A prospector makes a discovery of certain minerals on a reserve and he tries to get a surrender from the Indians. The Indians may be fishing up on the Skeena river and will not be back for six months. The surrender must be obtained from a majority of the band, and the Indian agent says: We shall not be able to get the band together until February. The prospector gets disgusted and goes away. Vou will not get the ordinary prospector to go in and prospect if you require a surrender by the Indians. I cannot see why the Indians should be compelled to surrender it. Let the prospector go in, and if he discovers minerals, then make your conditions when he is wanting
Indian Act

to develop his mine; but you will not get very far if you compel him, before he can do the most casual prospecting on that land, to get a surrender.


Grote Stirling: Would the minister also give consideration to the question of the necessary use of the water if successful mining is undertaken? Will this clause give him all the power that he needs to grant rights to use the water for domestic, industrial and perhaps for power purposes, all of which will be needed if the mine be successful?


Thomas Alexander Crerar: So far as the water power is concerned-


Grote Stirling: Water will certainly be required.


Thomas Alexander Crerar: Quite. Of course the purpose of this section is to enable the governor in council to make all the regulations that are necessary in the premises.


Alan Webster Neill: To legislate.


Thomas Alexander Crerar: Well, to do just what the governor in council has power to do now in respect to the disposal of other rights on Indian reserves. I would suggest, as I stated a moment ago, that the section should stand.
1	wish particularly to look into the possibility of favouritism, which might be implied in this section, to a lessee or licensee. However, the point which the hon. member for Kootenay East raised, that the act should definitely contain a provision of a minimum royalty or compensation to the Indians for minerals taken off reserves is one which, I think, it might be difficult to apply. I shall be glad to act upon his suggestion and look into the matter. It might be possible to put in some limitation that the amount should not be less, for instance, than the royalties appertaining in respect of provincial lands under similar circumstances. I recognize at once that there are difficulties in the way of carrying out the suggestion of the hon. member. I suggest that clause 1 stand. We might consider clause
2	and pass it.
Section stands.
On section 2-Advances for assistance to Indians.


Mr. HOWE moved:: That in the last line of page 2 the words ''five hundred" be struck out and the words "three hundred and fifty" be substituted therefor.


The CHAIRMAN:: "Three hundred and
fifty thousand dollars."


Thomas Alexander Crerar: Yes.
FMr. Neill.]


Grote Stirling: Is the idea that the various bands of Indians may approach the minister through the agent and advocate the setting aside of a certain sum of money to enable them to do such and such?


Thomas Alexander Crerar: No. The purpose of this is to provide a fund which may be drawn upon to assist individual Indians or communal enterprises on reserves, or, as I stated the other day in the discussion on the resolution. to supply raw materials, for example, to Indian schools for the promotion of handicraft work. The intention is that it will be provided by way of advances from this fund. The individual Indian may get SI,000 to equip himself with some live stock. That would be done on the advice of the Indian agent, or, in some instances, perhaps of the farm instructor on the Indian reserve. There are other cases where the Indians as a band might be supplied with live stock out of this vote, but with the definite understanding that repayment would be made to the fund over a period of time. The purpose is to encourage in the Indians the virtues of independence and self-reliance. At the present time, if an Indian needs some machinery or a team of horses to work his individual piece of land- if he has one-on the reserve, the only way he can get it is by the money being voted by parliament and given to him, and consequently that has come to be regarded by the individuals concerned as a gift or a grant. Those are not tlie conditions under which the virtues of independence and self-reliance can be cultivated and developed.
This scheme, if such it may be called, was put into effect several years ago in the United States, and according to the information obtained by our officials in the department at Ottawa, in many instances it has worked out quite successfully. Quite obviously there are a great many reserves to which this would not apply, which could not take advantage of it. On the other hand there are many reserves-several in Ontario and in the prairie provinces, and some in the maritime provinces-where it could be applied. That is the purpose of the fund, and I think we have safeguarded it sufficiently to ensure that the money will be wisely spent.


Grote Stirling: Supposing a band or a portion of a band wanted assistance in building a community hall or a church or the setting aside of a piece of land for a cemetery-two of these instances have occurred recently in my riding-would they be permitted such assistance under this scheme?

Indian Act


Thomas Alexander Crerar: No; I do not think those cases would come within what is contemplated in this plan.


Henry Herbert Stevens: I suppose they must be "self-liquidating."


Thomas Alexander Crerar: Well, I had that precious word in my mind a little time ago, but I hesitated to use it. It is intended to apply where the loans or advances will be repaid. Assistance in the matter of getting an area suitable for an assembly or the building of a community hall would, I should say, come out of the ordinary vote; it would have to be provided for there. Conceivably you might get assistance from the fund for a community hall, but it would have to be on some plan that would permit of the repayment of the money. So far as the administration of this fund is concerned, it is the present intention that it shall be used only for such purposes. We do not wish to create the impression in the Indian's mind that this is the same as an estimate passed in the house and the money handed to him. I think the scheme is worthy of a trial, and I anticipate that some useful results will come from it.


Richard Bedford Bennett: I think the minister is quite correct in that view. I believe that useful results will follow, but I have g?eat hesitancy in supporting legislation which provides for money being given to the individual Indian by the department. Frankly, I believe you are going to create friction on the reserves where you authorize the crown or the department to lend money to the individual Indian. If it is done through the band or the chief, the situation becomes tolerable. If it is done through the representative of the government, I think the position will be intolerable. I support the experiment with that limitation. I have a fairly intimate knowledge of two bands of Indians; I am quite familiar with their experiments in agriculture; and I know of the coal mine which they operate on one of their reserves with some degree of success. I have seen the department take extreme care of the Indians as regards medical attention, and their numbers, which were formerly diminishing, are now increasing.
The band that lives nearest to Calgary is a. band of Indians in indifferent health, the Sarcees. A large area of their reserve is used for military purposes and has been taken as a training ground, and they get some revenues from that source. Then there are the Stony Indians a little further west who are naturally hunters and who complain
bitterly that they are not getting sufficient to enable them to live decently, that what they receive is inadequate for their necessities. If I thought that granting them money as individuals for the purposes mentioned in this bill would be helpful, I should like to support it, but from what I know I say to the minister that he would be well advised if his department did not deal with the individual but left it as a matter between the chief and the band. If we start in as a government to make loans to individual Indians, every Indian in the band will ask for money and if he does not get it he is going to wonder why one man is favoured as against another. If they are allowed to work it out in their own way at their own powwow, I think they would select the individuals entitled to loans without arousing the animosities and jealousies which would be inherent in any effort the crown or the Indian agent might make in that direction.


Thomas Alexander Crerar: I do not altogether agree
with my right hon. friend on that point. There is, for instance, the Caradoc reserve near London. Ontario, where there is a considerable area of excellent farming land, and we have on that reserve well educated Indians who have a piece of land of their own, but have no means to carry on farming operations. If this were limited solely to advances to the band as a whole, there would be no place in the picture for them.


Richard Bedford Bennett: The minister did not
follow me. I said the advances should be made to the band for the purpose of enabling them to determine the individuals who might be benefited, rather than that the crown itself should do that.


Thomas Alexander Crerar: I should be afraid in that
case that even the chief and his councillors might not be the wisest people to decide who should receive a loan, and the extent of the loan. I visited this particular reserve two years ago; I found there several Indians who were doing very well. They carried on excellent farming practice and were successful farmers. But under the act they were Indians. Adjacent to them were other Indians who were depending practically altogether on the government for relief. If I may use that as an illustration, one purpose of this legislation is to assist Indians who are now on relief to become self-sustaining, and if possible put some fibre and morale into them in that way. I think the scheme is well worth trying.


Mr. HAMILTON:: Is it contemplated to
include under "equipment" in section 94B, such things as fishing equipment, nets, etc.?
Indian Act


Thomas Alexander Crerar: It might include that.


Henry Sidney Hamilton: I have in mind the
Indians on lake Superior who are engaged to a certain extent in fishing, who might be assisted under the provisions of that section, and I am curious to know whether it is contemplated that such things would be included.


George Ernest Wood: Would advances for buildings and repairs come under this section?


Thomas Alexander Crerar: I should not like to answer that definitely at the moment. I think it would require a stretch of the imagination to get them in.
The equipment mentioned by the hon. member for Algoma West (Mr. Hamilton) would come I think, within the category.


Richard Bedford Bennett: I think so.


George Ernest Wood: I think there is something
in what the leader of the opposition (Mr. Bennett) said, provided the band in many of those reserves could be induced to duplicate the amount advanced by the government. On the Six Nations reserve, which is the largest in Canada, and perhaps the most progressive, there was an effort made last year by the department to rehabilitate some of the Indians who by virtue of the fact that they live under the Indian Act could not go out and borrow money to supply themselves with the necessary equipment. On that reserve of 54,000 acres there are practically
6,000	acres not being tilled, and growing up with weeds, because through the depression years they had to sell and keep on selling equipment until there was nothing left to work with. The department has gone a certain way in supplying those Indians with implements of production at cost under an agricultural instructor, and because of this service they are paying back the cost of the implements to the department. The agricultural instructor only two weeks ago called my attention to the fact that this spring alone, for ploughing gardens and corn fields with his tractor, he has received $158 in cash for the services that the department has rendered. This shows that the Indians will pay provided there is proper supervision. I would ask the minister to give some consideration to the suggestion of the leader of the opposition, provided the Indian band will duplicate the amount that the department is prepared to advance, where there is, say an agricultural instructor to supervise those advances and see that they get value for their money. This would extend the service the department is rendering, and putting the responsibility on the band would lead them to take a greater interest in their own people. I do not see any reason 
in that case why advances should not be made for buildings and equipment which are particularly necessary on the reserve I mentioned because it is a first-class farming section, and they cannot maintain the fertility of the soil unless they have stables in which to keep live stock.


Richard Bedford Bennett: I think in the last line the wording should be changed to read, "live stock, fishing and other equipment." There is some doubt whether the law officers would not say that under the present wording, you could not provide for fishing nets. To say live stock, fishing and other equipment" would meet the situation.


Thomas Alexander Crerar: I think "equipment" would cover it.


Richard Bedford Bennett: But it says, "live stock and equipment", and the ejusdem generis rule might make it different. If you said, "fishing and other equipment", there would be no question. I mention that because the question was asked of me, and I am afraid I agreed too hastily in saying I thought the language was broad enough to cover it. There might be difficulty, and I should not like to find myself in tne position of having indicated that I thought it was all right when on looking at it carefully I might be in error.


Thomas Alexander Crerar: If it would tend to clarify it I have no objection to the insertion of the word "fishing," after the words "live stock", and the insertion of the word "other" before the word "equipment".


Mr. MACKENZIE (Vancouver):: I so
move.
Amendment (Mr. Mackenzie, Vancouver) agreed to.


Alan Webster Neill: I do not think we have passed the first amendment yet of $150,000.


Frederick George Sanderson: There are two amendments; that was the first.


Alan Webster Neill: I just want to say a word or two with regard to the first amendment.
I am aware that all these bills must contain provisions granting power to make regulations, but I always protest at such extreme power being taken. It gets down to the point where the governor in council instead of this parliament is given power to legislate. On page 2 the bill states:
such advances shall be made under regulations established from time to time by the governor in council-
The other day the Minister of Finance introduced a bill in connection with loaning money to municipalities, and he safeguarded

Indian Act
himself by repeated conditions. He said the rate of interest was to be two per cent; that no single municipality could get more than so much, and so on; but all these powers in this case are to be exercised by the governor in council. Is any interest to be charged on these loans? We do not know. Surely we ought to know. If we were dealing with white people I am sure we would be demanding that information. Then again, is there to be a limit; is any one Indian or any one band to be allowed to get a large amount, or is there to be a restriction such as the Minister of Finance provided in his bill? Then again, is there to be any period to the making of these loans? Is it to extend for all time or for a limited time, or what are these conditions?
I submit that we ought to be informed on these points, and that these matters should not be left to be dealt with by regulation. I submit that the general outline of these things should be put in the bill. Surely it is not out of the way that anyone representing Indians, as we all do indirectly, should ask whether they are to pay interest and, if so, at what rate. Is there to be any amortization? If so, what is the period? I think we are entitled to know all these things. Does the minister not think so also?
Mr. CRERaR: The purpose of the provision in the section which my hon. friend has just criticized is really to limit the power of the department; in other words, the con-* ditions under which these loans may be made or advances given, and the uses to which this revolving fund may be put, will not lie wholly within the discretion of the Indian department but will have to conform to regulations adopted by the governor in council. That is the purpose of the provision.
So far as the rates of interest are com-cerned, certainly it would be the [DOT] intention to charge interest, but the rate might vary in certain cases. For instance, a certain rate of interest might be charged to an individual Indian; another rate of interest charged on a loan to an Indian school for the purchase of materials to be worked up into goods for sale. Those conditions should not be too rigid. I repeat that the purpose of this provision is to not leave the power wholly in the Indian department to say when or how or to whom these advances may be made out of this fund, but to subject that to the scrutiny and approval of the governor in council. It may be necessary to vary the conditions from time to time, and that is why provision is made to vest the governor in council with power to make these regulations.


Alan Webster Neill: I really do not accept with any intense appreciation the explanation given. The minister says the real purpose of giving the governor in council this power to legislate by regulation is to prevent too much power getting into the hands of the department; that now the matter will be controlled by regulations which must be approved by the governor in council. Of course that does not sound so bad, but while I have never been in the council I have an idea that these regulations will be prepared by his department and presented by him to council more or less as a matter of form. Then it will be held in council that as the minister whose department is concerned has gone into the matter thoroughly and prepared these regulations, they must be appropriate, and they will go through as a matter of course. What I am suggesting is that it should not be left to the governor in council to settle these things; they should be settled by this house, as was done in the case of the housing act, the farm lean act and so on. which had to do with white men. I cannot see why an Indian, or those interested in the welfare of the Indians, should be kept more in the dark, than those concerned with white people.
The minister says he does not know what rate of interest will be charged. That is an extraordinary statement. We are going to embark upon what seems to me a hazardous enterprise if we charge varying rates to different people. Why should Jones get a better rate than Smith? I cannot see why. I should suppose that the interest charged either of them would be governed to some extent at least by the interest the government has to pay in the first place, as is the case under the farm loan act. That board has to sell its debentures, and they must loan the money to the farmers at a certain interest rate not more than so much above the rate they have to pay. But now this matter is going to be dealt with by regulation, and the interest may be varied according to the circumstances. I do not know why one Indian should get a better rate than another. An Indian can easily make up a story as to why his circumstances are more necessitous than those of the other man, or why a school should be favoured more than a band of Indians, and so on.
I agree with what the right hon. leader of the opposition said as to the inadvisability of lending money to individual Indians, because if you do you will not be bothered about interest, repayments or anything like that; you will not get back more than two per

Indian Act

cent anyway. However, I do think the committee should be informed on these matters. The minister has not told us the rate of interest he is going to charge, but that will be dealt with by regulation under the act. I really do suggest that it is not desirable to give the governor in council, which largely means the department, such sweeping powers, such as are not asserted by the Minister of Finance, whose department is supposedly much more capable in these matters than the Indian department. I should like the minister to express himself as to whether he does not think it advisable that at least there should be some indication as to the interest to be charged, the period for which it is to be charged and the limitations in regard to individual loans. Can he not give us any information on those points?


Thomas Alexander Crerar: No; at the moment I am not in a position to give my hon. friend information on those points. As a matter of fact, the farm loan act, the home improvement act and the Dominion Housing Act all give power to make the necessary regulations for the carrying out of the acts. This is a new venture, wholly in the nature of an experiment-I think with a fair chance of working out-and I do not think it is asking too much to give the governor in council power to make regulations for the administration of this fund. We could have left out that provision, in which case the administration of the fund would have remained wholly in the hands of the Indian department. Obviously that might be open to criticism. I can assure my hon. friend that while I may bring or recommend to council certain regulations under this act, that does not at all mean that council will accept my proposals,


Richard Bedford Bennett: 
Thomas Alexander Crerar: Yes. That was really a mistake, though. The right hon. leader of the opposition is getting a good deal of merriment out of that typographical error, but I can assure him that his guess in that respect is just as wide of the mark as many of his guesses in connection with other matters.


Richard Bedford Bennett: If his other guesses were as accurate as this he has been correct very often.


Thomas Alexander Crerar: No; he is wide of the mark. Those are the reasons why we suggest that the governor in council should be given power to make regulations. They may limit the loans and say, " You cannot go above a certain amount in individual cases."


Alan Webster Neill: What amount?
I Mr. Neill.]


Thomas Alexander Crerar: That will be determined by the circumstances of the case.


Alan Webster Neill: That is what I am objecting to; we are giving the government power to legislate. I protest that we are passing a bill which we would not pass if it were to apply to white men. The minister says the other acts give power to make regulations. That is so, but it is subject to the other provisions of the bills which set the rates of interest. Is the rate of interest in this case to be one per cent or 6 per cent or 10 per cent, or what is it to be? Is this a proper provision for us to pass? The minister says he does not think there is going to be any harm done. If we are to surrender to the governor in council our power to legislate, let us understand it; but why does not the Minister of Finance do it? I may say any experience I have had with the Indian department in recent years would encourage me to put power into the hands of the Minister of Finance rather than into those of the Department of Indian Affairs.


Richard Bedford Bennett: But that was prior to 1935.


Alan Webster Neill: We will not go into dates. But I do submit the minister has not given us satisfactory reasons why we should pass legislation giving his department power- because it comes down to that; his recommendation is accepted by council-to fix a rate of interest which is entirely in the air. Will he say it will not exceed 6 per cent? When the bill in connection with farm loans was before the house we asked the questions: What is the farmer to pay? What rate wilt he be charged? What is the service charge to be?
Is there to be amortization in this instance, and over how many years is it to be spread? I think we are entitled to know these things before we pass legislation of this kind? The minister is content to say, " It is an experiment." Yes, but let us limit the experiment to within at least reasonable bounds.
There is one other matter I should like to discuss, although it does not apply directly to the bill. It was introduced by the minister. When he spoke on the resolution he referred to band funds, and indicated that those funds belonged to the bands and therefore could not be used for purposes suggested in the bill. His actual words were:
As a matter of fact, when these moneys go into the band funds, they cannot be taken out of the band funds by the administration without the consent of the Indians.
If he had put that into the bill I would be very happy, because I have been trying to get

Indian Act
that provision for many years. When I was Indian agent I would at times be sent to get the surrender of a piece of land from Indians to be used for necessary purposes, such as the building of a railway, or something of that kind. The first thing the Indians would say was-and I need not put it into dialect- "What are we getting out of this?" I would say, "The law says you are getting a certain sum of money, half of which will be distributed among you, and the other half put into a fund in your name." Although they did not ask it at first, later they did ask, "What is the fund going to be used for?" Later on they discovered, and I discovered, that this was used to pay relief to the Indians, and the Indians-not being absolute fools-when I came back again to get another surrender said. "What is the advantage in our surrendering this piece of land? We give up a piece of our land, and you take the equivalent, in money and put it into a fund. We understand that. You keep it in a bank. Then, when our people are poor and when we go on relief you take the money out of our fund. If we had not given the surrender of that piece of land we would still have enjoyed relief. But now you make us pay our relief out of our capital. You have persuaded us to surrender this land. We receive only half the sum in cash, and now you pay the rest into the fund and it is used to pay relief." They said-and they used a strong word- "you allow the department to rob us of that money." The same policy is still going on in a greater or lesser degree. If the bill is to provide for funds to lend the Indians money, and if the minister says that, as a matter of fact, when these Indian moneys go into the band funds they cannot be taken out without the consent of the band, then it is all right with me. But that is not by any means the policy the department has carried out.


Richard Bedford Bennett: I really think that on reflection the minister will realize that it is desirable to state, say 3 per cent interest. I concur in the views expressed by the hon. member for Comox-Albemi.
Just let us pause for a minute. If it is going to be open to differentiation between east and west, we are going to have the same difficulties that governments have experienced in times past. That is the reason why I take it that in the measure before us yesterday there was provision for a 2 per cent rate, but it applied equally to the west and to the east. It applied to every part of Canada; and I should think that if the minister provided for possibly 3 per cent, he would be fair to the Indians, having regard to the nature of the experiment, and to the countrv.
I can only say, of course, that the minister knows how fully I agree with the observations of the hon. member for Comox-Alberni as to the governor in council becoming a legislative rather than an administrative body. There are measures which are quasi-administrative and quasi-legislative in regard to which the executive must at all times have jurisdiction, and exercise it. Here you are dealing in a legislative way with matters which during the present session and in previous sessions we have thought of sufficient importance to be dealt with by parliament, and not by the delegated authority which the governor in council receives from parliament.
I think the minister would be well advised to consider, and favourably, the suggestion made by the hon. member for Comox-Alberni, and provide for a 3 per cent rate. Then there would be no difficulty between contending communities as to the rate. The minister would say, "It is fixed by statute: I cannot make it more or less. It is the same in Ontario as it is in British Columbia." I believe he would find this very satisfactory.


Thomas Alexander Crerar: There is no danger of conflict between contending communities in the administration of this provision.


Richard Bedford Bennett: There might be.


Thomas Alexander Crerar: I do not wish to place
upon it the limitation suggested by the hon. member for Comox-Alberni. It may be desirable in certain circumstances to loan money for a certain period free of interest altogether. For instance, we may wish to take up the matter of making handicraft articles for sale, and as an encouragement to an Indian school we might say, "We will advance you a few thousand dollars"-or a few hundred dollars, as the case may be- "to buy material out of which you may make these goods." There may be another instance where we would be advancing money to an Indian tribe as a whole for the purchase of live stock, a project which would be of common interest to the tribe. In that case we might wish to charge 4 per cent or 5 per cent. If we put in a definite provision setting out that a certain rate of interest will be charged, I believe we will make the administration too rigid and too difficult.
I should be very glad indeed if I might believe that the hon. member for Comox-Alberni had a little more confidence in the impartiality and fairness of the government in protecting the public interest in connection with making these regulations. I believe this might be very well assumed in the circumstances.
*>1052-221i
Indian Act


Alan Webster Neill: It is the judgment of the
Indian department I am dubious about.


Thomas Alexander Crerar: I promise the hon. member for Comox-Alberni that as always I shall scrutinize carefully any recommendation I make to council in connection with a matter of this kind. I should like to agree to the suggestion of the hon. member for Comox-Alberni, but I think it would be a handicap in administration.


Alan Webster Neill: I assume we must accept
the minister's statement and must not waste more time in the discussion, but I must point out that this is a most extraordinary situation, one which has never been seen in the house before, where large sums are being loaned without the rate of interest being indicated. However, let it go at that.


Richard Bedford Bennett: I do not think they
can collect any.


Alan Webster Neill: And it is discriminatory.
One man can get it at one rate, and another body such as a church or some body with possibly more political influence,, can get it at another. The Minister of Finance is now in his seat. May I say to him that I was paying him a compliment by stating that when he introduced legislation in connection with a large loan he insisted that the rate of interest, the amount of amortization, the period of the loan, limitations as to municipalities, and so on, be defined in the bill. I do not know whether the minister's attention has been called to it, but here is a bill under which we are told it is proposed to lend up to $350,000 at varying rates of interest.


Thomas Alexander Crerar: I stated it might be desirable to vary the minimum, or it might be useful.


Alan Webster Neill: I had in mind the bills the Minister of Finance introduced in connection with farmers' creditors and so on. In those bills the minister always defined the rates of interest, the charges and so on. However, the Minister of Mines and Resources will not accept this suggestion. I just want to make one last suggestion, that there should be a concluding section in this bill similar to that which appears in many bills, that within fifteen days after the opening of parliament a report shall be made covering the preceding calendar year. That would make the information readily available for us during the session.


Thomas Alexander Crerar: I would be quite prepared to accept that suggestion.


Alan Webster Neill: I am astonished.


Thomas Alexander Crerar: The hon. member for Comox-Alberni is making headway. If he continues he will have the whole bill redrafted according to his wishes. However, speaking seriously, I think his suggestion is a useful one. Perhaps this section could stand also, and the hon. member's suggestion will be incorporated in the bill.
Amendment (Mr. Howe) agreed to.
Section stands.
Progress reported.



TRANSPORT COMMISSION


[Stage Direction]
Hon. C. D. HOWE (Minister of Transport) moved that the house go into committee on Bill No. 31, to establish a board of transport commissioners for Canada, with authority in respect of transport by railways, ships and air craft.
Motion agreed to, and the house went into committee, Mr. Sanderson in the chair.
Section 1 agreed to.
On section 2, subsection 1, paragraph (a)- Definitions-"Agreed charges."
Mr. REID:: Could the minister explain why lumber is not included in paragraph (e) covering goods in bulk? In the committee this paragraph was amended to include pulpwood, woodpulp, including pulp-wood and woodpulp in bales, iron and steel scrap and pig iron. It seems to me that leaving lumber out of this definition is detrimental to the Pacific coast. Pulpwood and the other commodities mentioned in this paragraph have to do mostly with the eastern coast, and I should like to know why lumber has been left out.


Clarence Decatur Howe: The intention was to include in this definition those goods which ordinarily move in bulk and which are the raw materials of manufacture. There is one exception in the case of grain and grain products, including flour and mill feed in sacks. The reason for this exception is the fact that the life of a mill depends upon its being able to ship its products at a rate more or less competitive with the rate of its raw materials. With that exception, the goods enumerated are goods usually shipped in bulk. It may be considered that an exception is made in connection with pulpwood and woodpulp in bales, but we find that on the St. Lawrence it is customary to bale these commodities for shipment. Woodpulp is the raw

Treimport Commission
material for paper mills, and it usually moves as a full bulk cargo. Lumber is a manufactured product and is highly competitive as far as transportation goes. It was felt that the shipment of lumber should be regulated. I ma3' say that intercoastal shipments of lumber are regulated in the United States in connection with cargoes passing through the Panama canal.


Richard Bedford Bennett: It will be observed that paragraph (e) contains the following:
ores and minerals (crude, screened, sized, refined or concentrated, but not otherwise processed) including ore concentrates in sacks.
What the hon. member for New Westminster has said with respect to lumber being a raw material can be said also of refined concentrates. In many instances the lumber is shipped just as it comes from the saw without being planed. Frequently it comes to the prairies in that condition. Surely lumber unplaned must occupy the same position with relation to poles and logs as refined concentrates occupy with respect to "ores and minerals (crude, screened, sized, refined or concentrated, but not otherwise processed)." It could be said that some apt words might be used, such as "lumber other than planed lumber." I can understand the point made by the minister, that planed lumber is a material immediately ready for use, but I would remind him that a great deal of the lumber which comes to the prairies is not planed. It is planed in our mills after it arrives on the prairies. Then we have lumber moving down the east side of the Rockies to the mills on the prairies. That is true of Edmonton and Calgary, and to a lesser degree of Regina. They would not pay the freight on rough lumber when they could have it sent forward as planed lumber. I think that point is worthy of consideration. There should be a clear distinction as to lumber being a bulk cargo when it is not so prepared as to be ready for use.


Clarence Decatur Howe: The committee considered
this carefully and it was felt that the raw material for lumber is logs. Of course, the movement on the prairies would not be affected by this bill. Whereas logs sometimes move in bulk to the extent of a full shipload, it is seldom that lumber moves as a full shipload.


Mr BENNETT:: It does by water.


Clarence Decatur Howe: Not since the schooner days. I have not seen a full shipload of lumber for many years on a boat of a class that would come within the scope of this bill.


Richard Bedford Bennett: I have seen cargoes, but I do not know how large the boats were.


Thomas Reid: I have seen these large boats with nothing but lumber on. Wheat and lumber and bulk goods are what they ship. The bulk goods are principally from the east and are exempt under this bill, while the bulk of the lumber from the coast of British Columbia is going to be controlled under this legislation.


Richard Bedford Bennett: I suppose this has been agreed to by the committee; but I must say that I have great difficulty in inducing myself to believe that it is sound, having regard to what took place in the United States in the early days of transportation, as described by Miss Ida Tarbell, in connection with rates and agreed charges that were made by great companies with the carriers of that day, notably the Pennsylvania. It does seem to me to present an opportunity for great abuses. The minister is unable to point to any country in which it is successfully working. It is true that in the United States they have talked about it, but they have not done it. I have made inquiries since the minister spoke on the second reading of the bill, and I cannot find that they have it in force in the United States, although they have talked about it.


Clarence Decatur Howe: No; but there are over two thousand agreed charges in effect in England, where it has been operating for four years.


Richard Bedford Bennett: But the situation in
England is quite different from what we have on this continent, as anyone knows who is familiar with their network of transportation facilities and the way in which they have arranged them. There are areas wholly within the sphere of activity of one transportation system; you have another one in a given area, and then you have the London, Midland and Scottish taking control of an area. Then there is the Southern. There are four separate systems.
I do not want the minister to go over the ground again, because I know this has been threshed out in the committee and perhaps I should not be taking up time over it, but I confess I have been unable to find any good reasons for thinking that this is not going to work a hardship, and not only that, I think it will bring about those very conditions which caused so much difficulty in the United States and, by discrimination, made it possible to create a situation that brought into being the Interstate Commerce Commission, the standardizing of rates, and the prohibition against common carriers making rates for-
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one person that were not enjoyed by all. That is what it gets down to. Stripped of everything, this simply means that a rate can be made which cannot be availed of by everyone.


Clarence Decatur Howe: The bill says just the opposite.


Richard Bedford Bennett: Whatever the bill says, stripped of everything it does mean that. Those of us who recall the history of transportation in Canada will remember that before the late Hon. A. G. Blair, as Minister oi Railways, introduced and passed through this parliament legislation providing for a railway commission, he deputed Doctor McLean, the deputy chief commissioner, to study the whole matter abroad for, I think, a whole year, and his book is the one that is still circulated among those who desire to obtain a knowledge of the history of the development of transportation in this country. It is looked upon almost as a standard work in some of the universities. On the strength of that Mr. Blair, as Minister of Railways, introduced that bill, which is now the law of the country and under which he became the first chairman of the railway commission.
But with respect to freight rates it was no longer possible to do what was done in days prior to that. Some shippers, for instance, got free transportation. I can remember when I went west forty years ago that a man who had large traffic had transportation given to him by one of the systems or by both. Every effort was made to induce him to do all his business in that particular way, and the whole essence of Mr. Blairs legislation was: No discrimination between the carrier and his customers, none at all, under any circumstances, and discrimination was made a very serious offence. Perhaps the minister, with his early training in the great country to the south of us, will recall the great agitation which went on there which brought into being the Interstate Commerce Commission. In addition to that, in order that there might be no discrimination, most of the individual states have their several railway commissions to prevent, with respect to local rates, any variation. A man's business may be worth only one dollar a year to the corporation, or it may be worth a hundred thousand dollars. The rate is the same. That was the basis of the rates, as regards both state and federal authorities in the United States. Now, whatever may be said of this bill, stripped of everything it is going to get down to a form of discrimination.


Clarence Decatur Howe: It is rather difficult to discuss, the matter of discrimination when we are *considering the definition of " agreed charges." We have whole paragraphs designed to prevent

discrimination, and I would suggest that that phase of the discussion might wait until we reach them.


Richard Bedford Bennett: Perhaps that is a sound observation. The definition of what is an "agreed charge" is one thing, and the application of it is another.


[Stage Direction]
Paragraph agreed to.
Paragraphs (b) to (e) inclusive agreed to.
On paragraph (f)-"Great lakes".
Richard Bedford Bennett: I desire to direct the
minister's attention to the fact that in the letter which came from the Secretary of State for the United States, and which is to be found in the votes and proceedings of May 31, 1938, he specifically pointed out that the sovereignty of the United States with respect to lake Michigan must be admitted. The second paragraph of Article VII of the draft treaty states:
Nothing in this article or in any other article of this treaty shall be construed as infringing or impairing, in any way, the sovereignty of the United States of America over lake Michigan.
I mention that only because I have grave doubts whether or not the parliament of Canada should attempt to give a definition of the great lakes that involves the inclusion of property which the United States asserts solemnly is within their sovereignty, and they use the word "sovereignty" in the draft treaty.


Clarence Decatur Howe: I am quite prepared to delete lake Michigan. It has no purpose in the bill anyway. Lake Michigan is surrounded on all sides by United States territory, and this bill does not apply to traffic plying from a Canadian point to a United States point. I would ask my colleague the Minister of Finance to move that the word "Michigan" be deleted.


Mr. DUNNING:: I move accordingly, Mr Chairman.


[Stage Direction]
Amendment agreed to.
Richard Bedford Bennett: I do not wish to be
taken as indicating that I agree with the Secretary of State of the United States-


Clarence Decatur Howe: Quite.


Richard Bedford Bennett: -because Lake Michigan so mingles with the other great lakes that to say there is sovereignty over the whole of it, without being able to define it, is a proposition with which I am unable at the moment to express agreement.


Clarence Decatur Howe: Quite. I may say I did not suggest deleting the words because I admitted

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sovereignty. I deleted it because it had no real purpose in the bill in the connection in which it is used.


James Samuel Taylor: How, then, do the words "and its tributaries" become affected by the same description given by the leader of the opposition?


Richard Bedford Bennett: It is a tributary all right. It is a tributary of the St. Lawrence.


Clarence Decatur Howe: St. Lawrence and its tributaries. Of course there are tributaries of the St. Lawrence; for instance the Richelieu.
Paragraph as amended agreed to.
On paragraph (g)-"licencee".


Thomas Reid: I was wondering if the word "railroads" should not be in there, because I notice in paragraphs (m) (n) and (o) transport by air, water and rail specifically mentioned, although in paragraph (g) it just mentions "transport by water or by air".


Clarence Decatur Howe: No licence is required for
railroads. The railroads come into this bill under the Railway Act.


Richard Bedford Bennett: Would it not be well that the minister should add the words "within Canada" after the words "St. Lawrence river and its tributaries"? It certainly could do no harm, and would make it clear that we were not endeavouring to legislate beyond our own jurisdiction. Probably the hon. member for Selkirk (Mr. Thorson) will say it is the rule that we must be taken to be legislating within our own competence. On the other hand, would it not be wise to add the words "within Canada"?


Clarence Decatur Howe: In view of the international section of the river I would prefer not to do that. For example, a boat coming from Kingston to Montreal does pass beyond the jurisdiction of Canada.


Richard Bedford Bennett: I know that. Is that not one of our difficulties?


Clarence Decatur Howe: Of course there are restrictions to our legislative competence in an international sense; for instance, pilotage and anything of that kind affecting the two countries. But for the purpose of this bill I do not think there is any difficulty. I believe that to insert the words "within Canada" would introduce difficulties which would trip us up later on.


Richard Bedford Bennett: But have we any jurisdiction outside Canada?


Clarence Decatur Howe: We have jurisdiction over boats which travel outside Canada in moving between two Canadian ports.


Richard Bedford Bennett: In foreign waters our jurisdiction, except such as attaches to the flag, is gone.


Clarence Decatur Howe: Nevertheless we have jurisdiction over the voyage. We are talking about rates for a voyage between two Canadian ports.


Richard Bedford Bennett: But we are talking about the definition now. This is a definition clause.


Clarence Decatur Howe: I would prefer not to make the change.


Grote Stirling: Does this cover the Ottawa river?


Clarence Decatur Howe: Yes.


Grote Stirling: Is that clear from the paragraph?


Clarence Decatur Howe: Yes. It is a tributary of the St. Lawrence.


[Stage Direction]
Paragraph agreed to.
On paragraph (h)-"Maritime provinces."
Richard Bedford Bennett: Quebec would say it is a maritime province. But we need not discuss that.


[Stage Direction]
Paragraph agreed to.
Paragraph (i) agreed to.
On paragraph (j) -"Ship."
Thomas Reid: Could the minister explain why this is changed to "five hundred" tons? Previously, I think, it was one hundred and fifty tons. That does not take in such a large ship.


Clarence Decatur Howe: Representations were made that there is a class of trade plying from Montreal on the lower St. Lawrence which has never been regulated. In many instances goods are not even carried with a bill of lading. The limitation suggested was one hundred and fifty tons, and it was believed that limit would cover traffic of that class, but representations were made that some of that traffic would have been brought under regulation, and the committee decided, somewhat against my better judgment, to raise the limit to five hundred tons.


Richard Bedford Bennett: I think one hundred and fifty was too low, and I think five hundred is too high.


Clarence Decatur Howe: I did, too.


[Stage Direction]
Paragraph agreed to.	,
Paragraph (lc) and (1) agreed to.
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[Stage Direction]
On paragraph (m)-"Transport."
Richard Bedford Bennett: It is a little difficult to see that this definition means much. "Transport means transport."


Charles Avery Dunning: It is just in case it might mean something.


Richard Bedford Bennett: The paragraph says that "transported" and "transporting" shall have corresponding meanings. I take it they are going to carry on "correspondence." Otherwise they have no meaning.


Charles Avery Dunning: A lawyer must have done that.


[Stage Direction]
Paragraph agreed to.
Paragraph (n) (o) and (p) agreed to.
Subsection 1 agreed to.
On section 2, subsection 2-Application of Kailway Act.
Richard Bedford Bennett: Is it quite clear that there is no inconsistency between subsection 2 and the previous definitions? I would have thought subsection 2 might have said, "Except as herein provided." It says:
Unless it is otherwise provided or the context otherwise requires, expressions contained in this act shall have the same meaning as in the Railway Act.
Probably that is broad enough to cover the different meanings which are given to some of the terms, and which are not exactly similar to the meanings given in the Railway Act. Perhaps the thing is clear.
Subsection 2 agreed to.


[Stage Direction]
Section agreed to.
Richard Bedford Bennett: We shall go on with part I this evening?


Clarence Decatur Howe: Yes, after the private bills. Section 2 is carried, Mr. Chairman, as I understand it?


Frederick George Sanderson: Yes.


Richard Bedford Bennett: Yes, and subsection 2 of section 2.
At six o'clock the Speaker resumed the chair and the house took recess.
After Recess
The house resumed at eight o'clock. PRIVATE BILLS



SECOND READINGS

[Stage Direction]
Bill No. 130, respecting The Mail Printing Company.-Mr. Slaght.
Bill No. 131, respecting the Globe Printing Company.-Mr. Slaght.

Bill No. 132, for the relief of Kathleen Barnsley Prichard Hartney.-Mr. Jacobs.
Bill No. 133, for the relief of Thomas Russell.-Mr. Emmerson.
Bill No. 134, for the relief of Marie Marguerite Agnes Marcelle Dupont Ross.-Mr. Jacobs.
Bill	No.	135,	for	the	relief	of	Wilfred
Augustus Cottle Stead.-Mr. Lennard.
Bill No. 136, for the relief of Celia Caplan Tucker.-Mr. Heaps.
Bill No. 139, for the relief of Irene Thomas Smith.-Mr. Walsh.
Bill No. 140, for the relief of Sylvia Salzman Udashkin.-Mr. Lawson.
Bill	No.	141,	for	the	relief	of	William
Dougald Stanley Campbell.-Mr. White.
Bill	No.	142,	for	the	relief	of	Mildred
Varner MacLeod.-Mr. MacLean (Prince).


[Stage Direction]
Mr.	LIONEL CHEVRIER	(Stormont)
(for Mr. Martin) moved the second reading of Bill No. 124 to amend the Copyright Act.
Alan Webster Neill: Explain.


Mr. CHEVRIER:: The sponsor of this bill, the hon. member for Essex East (Mr. Martin) is unavoidably absent this evening, and has asked me to speak to this motion. The present Copyright Act contains provision for relief where the owner of the copyright fails to print a copyrighted work or cause the same to be printed in Canada, or fails to supply the reasonable demands of the Canadian market for such work. In such case any person may apply to the Secretary of State for a licence to print the work. The granting of the application is subject to various conditions. The compulsory licence provisions are limited to domestic works where the author is a Canadian citizen. The purpose of the present bill, as I understand, is to give to the minister greater powers in dealing with such applications and to protect the public against any abuse of the exclusive rights conferred upon copyright owners by the act. The further powers conferred by the bill correspond with the powers given by similar provisions under the Patent Act, 1935. It is the intention of the sponsor of this bill to amend it in committee so that application may in future be made not to the minister but to the registrar of patents, and also that the relief may be granted by the registrar of patents. It also provides for leave to appeal from his decision to the exchequer

Copyright Act
court of Canada within a certain period of time, so that such applications will ultimately be reviewed by the courts.
The present bill arises out of a decision of the minister holding that under the present working of the compulsory licence sections of the Copyright Act he had no jurisdiction to grant an application for a compulsory licence in connection with certain fire insurance maps which are the subject of copyright. This application had the support, among others, of thirty-three Canadian fire insurance companies, but the minister was unable under the present wording of the section to consider the application on its merits. The bill is obviously one which should be considered by a standing committee, and it strikes me that the committee on banking and commerce is the one to which it should be referred.


Hon. FERNAND RINFRET (Secretary of State):: Perhaps in the absence of the hon. member who introduced this bill I may now give a further explanation as to its motive and what it may lead to. I must congratulate my friend, the hon. member for Stormont (Mr. Chevrier) who in a few words has given the essential features of this bill. Its object is to introduce into the Copyright Act sections similar to those which already exist in the Patent Act, permitting the minister to grant redress in the case of monopolistic ownership of a copyright. This provision does not exist in the Copyright Act, and the reason is quite obvious. I majr point out that in the Patent Act there are a number of sections which are fairly sweeping, whereby in case of abuse of rights under patents the commissioner of patents may order the owner of the patent to supply the Canadian market, and a complete series of sections provide that the patent owner may appeal to the exchequer court, etcetera. These sections are Nos. 65, 66, 67, 68 and 69 and other sections of the Patent Act of 1935.
There is an essential difference between a patent and a copyright. By reference to the interpretation section of the Patent Act one finds an invention defined as "any new and useful art, process, machine, manufacture or composition of matters, or any new and useful improvement in any art, process, machine, manufacture or composition of matter.'' In other words, the Patent Act deals with an object, and gives an exclusive right to a patentee to manufacture and sell that object. A copyright is a different thing. The definition of copyright is found in section 3 of chapter 32 of the Revised Statutes of Canada, 1927:-
For the purposes of this act, "copyright" means the sole right to produce or reproduce the work or any substantial part thereof in
any material form whatsoever, to perform, or in the case of a lecture to deliver, the work or any substantial part thereof in public; if the work is unpublished, to publish the work or any substantial part thereof.
I think it is apparent, when those two definitions are compared, that a copyright is quite a different thing from a patent. In the case of a copyright, which covers mostly works of a literary or artistic nature, it has never appeared that the owner of a copyright could have the least interest in not publishing or selling reproductions of the work therefore there has been no provision made in the Copyright Act, and to my knowledge- and I have been following copyright discussions for the last twenty years-this is the first instance of a demand being made, at least in the house, for a provision similar to that in the Patent Act against the monopolistic ownership of a patent.
The situation which now faces us is different altogether. Experience has shown that not only may we have to deal with an artistic or literary work, but there might also be copyrighted works of a commercial application, of which the exclusive ownership might become of great advantage to the owner of the copyright. That is the case which has been submitted recently to the Department of the Secretary of State, in which a group of insurance men are the owners of a copyright covering insurance maps which have no literary or artistic value, but which have an exceptional commercial value. In their refusal to allow another group of insurance men to buy copies of those maps they were put in a position of imposing conditions whereby these maps might be acquired by the other group, which has led to the charge against the first group of exercising a monopoly. Therefore the case has been submitted to the Secretary of State. After very careful consideration of such case, and without pronouncing on the merits but merely considering whether there is in the Copyright Act any section that might apply, my officers and I have come to the conclusion that there is none. There are, it is true, the licence clauses of the Copyright Act of 1921, but they do not apply to a case like this. I remember distinctly when these clauses were inserted. That was done under the late Hon. Mr. Doherty, and I was a member of the committee which dealt with the act at that time. I know very well that the purpose of these clauses was altogether different from the purpose that is now invoked. It was also the legal opinion of the departmental experts that these licence clauses could not possibly apply to such a monopoly.
Copyright Act


Mr. MAYBANK:: If the minister would
permit a question at this point, was the copyright in the case presented an inherent copyright as the result of having done the work, or was it a copyright that had been applied for and obtained from the Department of the Secretary of State?


Louis Édouard Fernand Rinfret: It was acquired from
the original author by the present owners, if that is what my hon. friend wants to know.


Ralph Maybank: I did not mean that.
I had understood that in the case of these insurance books there was an inherent copyright; that it was not a copyright sought and obtained upon application to the Department of the Secretary of State.


Louis Édouard Fernand Rinfret: I do not think that would have a great bearing on the case. I may tell my hon. friend that the application I had to consider was whether the licence clauses of the present Copyright Act could apply to the ownership of the copyright in those insurance maps. I just wanted to explain that the licence clauses had no other purpose than to protect the Canadian printers. I may add that at the time the authors protested vigorously against the insertion of these clauses in the Copyright Act, as they object also to the amendment now before the house, because they claim that copyright is an exclusive right. When the case was submitted to the department my only function was to decide as to whether the licence clauses could apply to the ownership of those insurance maps, and it is quite apparent to anyone who reads these clauses carefully that they do not. In brief, the licence clauses merely state that when a book or a work of art is edited outside Canada and the Canadian market is not supplied with copies of the work, then the printer may apply to the Secretai-y of State and obtain permission to publish the same work in Canada under certain conditions. That is why this bill is introduced now, because I think both parties are quite agreed- or at least they have to abide by the decision of the Department of the Secretary of State- that there is nothing in the present Copyright Act which deals with the particular case that has been submitted to us. Therefore, under the terms of the present act we have to decide that the owners of the copyright have exclusive rights to it and cannot be forced to sell it to anybody.
The intention of the present bill is to give the minister power to decide that in certain cases the owners of a copyright carry it to abuse, and to grant such relief, in the words of the bill, as the minister may deem just

and fair in the circumstances. Without any desire to criticize, I am afraid the bill has been drafted rather hurriedly.	I am not
pronouncing as to its merits in general, but I think it is an endeavour to cover the particular case that has been submitted to the department.


Mr. LANDERYOU:: Was this matter not taken before the exchequer court last February?


Louis Édouard Fernand Rinfret: I was coming to that. This particular phase of the question was not before the court, but the ownership of the copyright itself has been disputed and the case has been heard in the exchequer court. That court has rendered a judgment, and an appeal has been taken to the Supreme Court of Canada, so that phase of the matter is now sub judine
For all these reasons I agree with the hon. member for Stormont that we should not, in the single hour that is available twice a week for the consideration of public bills, and at this late stage of the session, endeavour to consider in detail a bill of such complexity, but that it would be much better to have some committee of the house consecrate the necessary time to it. I still have my doubts as to whether or not the principle of the bill should be adopted. I am not quite convinced that the dispositions of the Patent Act could well be applied to the Copyright Act in general. I must admit, however, that this exceptional case has created a doubt in my mind which did not even exist before the point was brought to my attention. I may say also that, as in dealing with patents or trade marks, or even the shop cards bill that I introduced earlier in the session, whatever power may be placed in the hands of the minister I believe there should be an appeal to the exchequer court. This bill does not provide for such an appeal, and I believe it would be a mistake even to consider the bill unless it contained a provision of that kind.
May I add that I have received a considerable number of telegrams both for and against this question as well as quite a number of representations on both sides. I believe we should approach this bill with very great care and not be too hasty in our decision. I believe both sides should be heard. Therefore I desire to move in amendment that the bill be not now read the second time but that the subject matter be referred to the committee on banking and commerce. This is moved as an amendment to the motion for second reading.


Richard Bedford Bennett: Mr. Speaker, I congratulate

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the minister upon having made a motion that will obviate the necessity of our affirming a principle which, unfortunately, at this time of the session it would be difficult thoroughly to appreciate and understand. It is quite clear that, in any event, those provisions of the bill which contemplate retroactive action with respect to pending litigation should not be accepted by this house. It would be cruel indeed if we were to interfere with pending litigation, and I cannot think that the sponsors of the bill would so desire.
With respect to the merits I have no observations at all to make, because I would be prejudging something about which it may well be that in the light of further evidence I might be able to arrive at a conclusion other than that which I now have in mind. But I feel quite certain that the bill should be referred to a committee. My only doubt was as to whether or not that committee should be the committee on banking and commerce, or a select committee, because the banking and commerce committee has a very great deal of work to do. It is a large committee, and it has been found that in matters of this kind usually a select committee is able to devote more time and attention than the standing committee to the consideration of the subject matter of a reference. However, in view of the remarks of the minister it apparently is to go to the committee on banking and commerce, and so without prejudice to the merits or demerits of the measure, except in respect to that portion of it which would deal with pending litigation, I have much pleasure in supporting the amendment of the minister.


[Stage Direction]
Amendment agreed to.
Motion as amended agreed to.


[Stage Direction]
The house resumed consideration in committee of Bill No. 31, to establish a board of transport commissioners for Canada, with authority in respect of transport by railways, ships and air craft-Mr. Howe-Mr. Sanderson in the chair.
On section 3-Board of transport commissioners.
Richard Bedford Bennett: What is the minister's
intention with respect to the present board of railway commissioners? This contemplates the creation of a new board.


Clarence Decatur Howe: It simply changes the name of the existing board, as I understand it.


Richard Bedford Bennett: I am asking as to the personnel.


Clarence Decatur Howe: It does not affect the personnel
at all.


[Stage Direction]
Section agreed to.
Section 4 agreed to.
On section 5, subsection 1, paragraph (a) Application for licence.
Thomas Reid: Although I appeared before
the committee and made representations regarding this clause, I am afraid I must still register an objection, because I view the section with alarm, if it is passed in its present form. It is all very well for the minister to express the view that the section would not bring about discrimination; but I fear that once it comes into effect, a steamship company in British Columbia wishing to go into the business of transporting lumber or other goods may very well, according to this section, meet with grave objections from the board administering the act. I therefore raise the objection and ask that even at this late hour some further consideration be given. Perhaps the minister could meet the argument I have advanced, and if so I should like to hear what he has to say.


Richard Bedford Bennett: Before the minister
answers the hon. member, probably I might say a few words.


Clarence Decatur Howe: Very well.


Richard Bedford Bennett: We are now getting to the point where we propose to license transportation facilities. That is what this means. We have created transport companies on sea, land and in the air. Now we are carrying bureaucracy one step farther and providing for the licensing of organizations which under the act will transport goods and/or passengers.
To lay a foundation for a licence for that purpose is not an easy undertaking, but those who propound the measure must be prepared to support that thesis. While I have not followed in detail the work before the committee, the minister and those who hold similar views, namely the supporters of the administration, believe that a case for licensing has been made out. I am not unmindful of the difficulties that we have in this country with respect to our railways and their revenues, and the difficulties that are being experienced by the railways in other ways as well. But it is a long, far cry from financial
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conditions to the point where we say that we shall licence those whom we have created for the purpose of carrying on the business.
I know how strongly this has been advocated in certain quarters, and I understand their motives, motives which are sincere and earnest. They are endeavouring to increase their revenues. And they propose to increase their revenues by diminishing the traffic that is handled on the one hand by unlicensed organizations, and by increasing the traffic, they believe, of those whom they say are entitled to the licences, namely, their own organizations and others, including those operating in the air.
The section is explicit in stating that you have to determine, first, "public convenience and necessity". That is the purpose as indicated by the bill. The board of transport commissioners will have to determine whether the public convenience and necessity-it is not alternative, but is a cumulative expression-require this transport service. That issue goes before the board of transport commissioners.
If you left the issue just at that point alone, it would be rather a difficult problem. But it is rendered more difficult still; for the board is given directions as to certain factors which must be considered in determining that issue. Those factors are stated in sub-clauses to the bill, one of which refers to complaints by competitors, to put it shortly. That is number one. The board will consider the attitude of the competitors to the competing applicant organization, whether by rail, water or air, "on the routes or between the places which the applicant intends to serve on the ground that suitable facilities are or, if the licence were issued, would be in excess of requirements, or on the ground that any of the conditions of any other transport licence held by the applicant have not been complied with."
Mr. Chairman, think how splendid it. would have been if we had had a provision such as that in 'Canada, say when we built some of our present railway lines! But you see, we have these railway lines. One of the factors being considered by a senate committee to-day is that we have three transcontinental lines in certain sections of the country, merging into two as they pass through the mountains. This is locking the door after the horse has been taken from the stable. You will observe I use milder language than is usually used in connection with that proverb.
The second factor is this;
(b) whether or not the issue of such licence would tend to develop the complementary rather than the competitive functions of the different forms of transport, if any, involved in such objections.
[Mr. Brnnett.l
That is, would there be an elimination of competition? It is not for me to say at the moment whether or not that is sound, but it contemplates the granting of a licence to an applicant if his proposed methods of transport are complementary to and not competitive with existing facilities. The third one is quite comprehensive. Paragraph (c) reads:
(e) the general effect on other transport services and any public interest which may be affected by the issue of such licence.
That is involved in the broad principle which has to be determined by the board on every reference. The next paragraph deals with the quality and permanence of the service to be offered by the applicant, his financial responsibility and so on. The questions of safety in the air and matters of that kind are next dealt with. I pass these by because they are matters which we would expect anj board would have to consider. Then comes this provision:
Notwithstanding anything contained in subsection one of this section, if evidence is offered to prove,-
(a)	that during the period of twelve months next preceding the coming into force of the relative part of this act on, in or in respect of the sea or inland waters of Canada, or the route between specified points or places in Canada or between specified points or places in Canada and specified points or places outside of Canada, or the part of Canada to which the application for a licence relates, the applicant was bona fide engaged in the business of transport, and
(b)	that the applicant was during such period using ships or aircraft, as the ease may be, for the purpose of such business-
I take it that the effect of that is to have the board consider the existing facilities and conditions and the length of time during which they have been operating. Then it is provided further:
The board shall, if . satisfied with such proof, accept the same as evidence of public convenience and necessity to the extent of the user so proved and issue a licence accordingly.
This section has been changed in part since the bill went to the committee. I shall not say more than that these provisions apply largely to the inland waters, the air and the sea and do not deal with other branches of the transport service. It is a recognition of an existing right based upon and determined by the method applied in the utilization of that right by the protester during a period of twelve months prior to the date of application.
It is a little difficult to determine whether or not in a young country like this we should undertake to license these facilities. I am told by those who are deeply interested

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in the problem that we should likely agree to it; that it is sound. I know that they have been endeavouring to do it in the United States for a long time, but thus far they have failed. They are watching this experiment with great interest. I made some inquiries myself, and I had inquiries made by others. I believe Mr. Eastman is the gentleman who is undertaking to correlate the activities of the railways of the United States. Without trying in any sense to repeat his language, I was fold that at a public hearing he made the observation that they were watching with much interest what might happen in this country. If we were less poor as a country, the situation would be less difficult. I am not talking of our physical assets; I am talking of our accumulated material resources.
I cannot but think it is taking a rather long leap in the dark to apply to this extent the theory of bureaucracy to transport. I apprehend the answer that will be made. I should not anticipate the answer, but I have tried to think of it fairly. It is felt that this may do something to improve the financial position of our transport companies. The last paragraph to which I directed attention applies to the sea and to the air. I know the apprehension that exists among some of our friends on the prairies as to the possibilities of increased freight rates for the movement of grain from the great lakes. Whether or not that apprehension is based upon any real appreciation of the problem, time alone will demonstrate.
The minister is of the opinion that this can be faced with equanimity, without fear as to the possible results. I suppose the answer he will make is the answer that ministers always make:	If it does not work out
satisfactorily, it can always be repealed. But nations cannot make experiments as easily as individuals without paying a pretty long price. We are paying a heavy price for some of the experiments we made in Canada in days gone by when we believed that something would happen that did not happen. In other words, we predicated our views of the future upon an anticipated expansion which did not develop. The minister will observe that I am not speaking with, shall I say. my usual certainty. There is grave uncertainty in my mind, but I cannot think I would be doing justice to the situation if I adopted the principle without pointing out what I concede to be the difficulties, and my real fear of the consequences.
I believe that a planned economy may be very necessary under new conditions in many parts of the world. I am making that confession of faith at once. I believe that
the vast accumulation of knowledge which has come to mankind during the ages cannot be utilized unless by some planned utilization of the accumulated skill that comes to people only by reason of planning their operations, whatever they may be. But to plan in this instance, without its being part of a further plan, that is, a general plan, is to set up one branch of a bureaucracy without correlating its activities to a planned or logical scheme for the whole. Until such time as we are ready to contemplate that feature of our national life, it seems to me that making this gesture will not accomplish what the minister so earnestly desires.
I suppose there is no member of this committee who is not as anxious as the minister that our difficulties should find a favourable and successful solution. But it is a great responsibility to attempt regimentation with respect to our transportation services without correlating it to a planned and considered scheme that contemplates the application of the accumulated scientific and other knowledge of our world to the economic affairs of the country. I have expressed very vaguely what is in the back of my mind, but I felt that I should make these observations before I became a party to the adoption of a principle which is far more than the application of it. In the application we find that we are touching every phase of our national life. Transportation is very important from every angle, whether it be the transportation of passengers through the air, on the sea or across the land, or the movement of our freight in any way that the act contemplates and has provided for.
I can readily understand how one who represents a constituency in British Columbia looks with the greatest apprehension on a measure of this kind because British Columbia is peculiarly situated. There is transport by water, which passes through a foreign country to reach the Atlantic coast by traversing a part of the Pacific, and the utilization of a canal that has been provided at an enormous expense. So this becomes a matter of vital importance to the people of the seaport areas of British Columbia. Their ship-borne traffic passing through the canal goes not only to the markets of Europe but also to our own eastern Canada, which makes it very important from that angle also, so that if we are to license these enterprises in this way I think we might perhaps have taken a little longer time to determine whether or not in practice it would effect the benefits which the minister desires without inconveniences and disadvantages that may amount almost to a calamity in connection with the nation as a whole.
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Clarence Decatur Howe: Mr. Chairman, it seems to me that the discussion of this bill brings out enormous inconsistencies. I have followed this legislation now for the second year in this chamber and in another chamber, and the inconsistency of the discussion is perhaps the chief feature of it. We have to-day the right hon. leader of the opposition (Mr. Bennett) before dinner expressing the greatest concern lest there should be any relaxation whatsoever of regulation as applied to the railways. The regulation of the railways was applied at a time when the railways had a virtual monopoly of transportation in this country. To-day they are far from occupying that position. The purpose of this bill is to meet the changed situation by making a move in the direction of equality of opportunity for competition. Having relaxed the regulations applied to the railways, we desire to extend these relaxed regulations to those competing forms of transport over which the federal government has jurisdiction. Strangely enough, those who are most opposed to any relaxation of the regulation of the railways seem to be the ones most fearful of evil results following from the application of such relaxed regulation of ether forms of transport.
May I point out another inconsistency? Something has been said about the senate investigation. On the walls of the committee room where that discussion is taking place is a map of Canada. On that map about five thousand miles of railway are covered with a black tape, being lines that it is proposed to abandon. I think that is a fair indication in railway circles, at least, that we have too much railway transportation. On the great lakes during the last year, when traffic was light, we have had some forty lake boats scrapped simply because there were no cargoes for them. There is actually to-day an impending shortage of tonnage on the great lakes, and the fact that freight rates on grain from the head of the lakes to Montreal have advanced from four cents to 5J cents a bushel during this season is an indication of changed conditions that exist there.


Richard Bedford Bennett: What was the average rate about three years ago?
Mr. HOWEi The rate has gone as low as a trifle under three cents.


Richard Bedford Bennett: That is my memory.


Clarence Decatur Howe: And it has gone up to 5J cents, and it touched six cents once or twice.


Richard Bedford Bennett: Very seldom.


Clarence Decatur Howe: It has never stayed at six cents for any long period. However, I think we all will agree that a surplus of transport
[Mr. Bennett.J
is uneconomical for any country, and that the shippers of the country would be better and more cheaply served if it were not necessary for the transportation industry to have a surplus of transport facilities. The public pays for those facilities in the end, and while in times of depression there may be abnormally cheap transportation, in times of large production the price is apt to go to a point which will bring a fair average return on the surplus facilities.
We believe-and other countries have shared that view, because the principle of convenience and necessity is of widespread application as applied to transportation facilities- that it is desirable to give the regulating board the privilege of deciding whether an increase in our transportation facilities is required by public convenience and necessity. This bill proposes that we attempt to make some progress in the direction of relaxation of the regulation of the railways, on the one hand, and that we extend regulation to unregulated carriers, on the other. I think everything in the bill indicates that we are instructing the board of transport commissioners to apply the new regulations cautiously. The board has behind it fifty years of experience in regulating transportation as a background for extending its operations, and I believe that no harm can be done by the application of this bill to transportation in Canada. I believe, on the contrary, that considerable good can be accomplished by a wise application of the provisions of this bill.
I find it difficult to understand why many people are very timid about placing this bill on the statute books. People talk very freely about drastic solutions of the railway problem. But think of the havoc that would follow the tearing up of any five thousand miles of railway in this country, and compare that with any disabilities to the Canadian people that could arise from this bill, and in comparison the latter must appear very trivial indeed. I believe this is a constructive step to place the transportation industry on a sound basis, and I sincerely trust that hon. members will take a kindly view of the bill.


Thomas Reid: Mr. Chairman, I am not presuming to speak for British Columbia, but we have good cause from our experience with past legislation to view with alarm anything that imposes statutory restrictions with respect to transportation. British Columbia is in a unique position. If we had not the railways, we could still transport our products by water. By this bill you are going to place transportation by water in the hands of one company, and give them a virtual monopoly of

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transportation. I can visualize a new company going before the board and asking for a licence to transport lumber by ships. It could easily be pointed out by the company at present operating and by the railroad companies as well that there were ample transportation facilities already provided to take care of all shipments of lumber or any other goods from the Pacific coast to the Atlantic on the Canadian side. I am pointing out to the minister and warning him that in my opinion-and I have not heard any argument or evidence to the contrary-you are going to place transportation by boats in the hands of one man or company who will have a monopoly of it, and so the right to others in the future to obtain a licence and transport by water will be denied.


Richard Bedford Bennett: I am sure the minister
will acquit me of any desire to take up too much time. This matter has been thoroughly discussed in the committee and I have no desire to trespass upon their good will. But I think I should point out to him that he is in error when he speaks of inconsistency; he has failed to grasp the essential underlying foundation of the argument addressed to the committee. It will be remembered that after a long struggle the masses of the people secured equality under the law with respect to freight rates. That was a very long struggle. All one has to do in order to get a clear appreciation of the nature of that struggle is to read casually the history of transportation in the United States. And in our own country we followed that old statement of Commodore Vanderbilt that freight rates were based upon all the traffic could stand, and that the large shipper who had a tremendous volume of trade for the railways could get a rate denied to the small man who was endeavouring to start a very indifferent business. That principle was swept away. That fact is at the basis of our whole railway law on the traffic side of it, and the change in the United States was secured after infinite struggle. Perhaps no one knows more about that than the minister, because he was in an institution which had a great deal to do with teaching regarding this very matter. I refer to what is known as the school of technology, I think it is the Massachusetts school of technology, one of the foremost institutions in the world; they had to do with the mechanical side of business; but across the way, in the great university, the question of transportation was enagaging the attention of very brilliant minds, and at last the Interstate Commerce Commission came into being. Here Mr. Blair, having deputed Mr. McLean to
make an investigation, put upon our statute books the law which established the railway commission.
There is no inconsistency in our position. I want to make clear to my hon. friend the minister our contention that at this stage of our national life we cannot go back and start again. Disraeli once said that democracy could never retrace its steps. I have a favourite saying that not even heaven itself can change the past; what has been, has been. These words I regard as of tremendous import in the life of nations. Here is this country with all these railways-rightly or wrongly. My hon. friends opposite are responsible for our having three systems. The great Canadian who sat in that chair opposite me told the people of this country that $13,000,000 would pay for the National Transcontinental; and his colleague the Minister of Finance, Mr. Fielding, made the same observation, and they believed it. I am not for a moment saying that they were endeavouring to impress these views upon the Canadian people without believing in them, for they did believe them. We looked into the future; we had great dreams, and we are unable to see them realized.
What we are doing now is endeavouring to start again at scratch. If the minister had said, when we were duplicating existing facilities, "I am going to insist upon a licence being granted before that facility is duplicated," we would have had a different situation. If the minister will take the trouble to read the debates on the Grand Trunk Pacific and the amendment of the late Sir Robert Borden with respect to the construction of the line from the head of the lakes eastward, he will see that had that amendment been adopted we should not have had what we have now; we should not be faced with our present difficulties in connection with these various systems. I mention that not by way of argument but to indicate some of the difficulties there are ;n retracing our steps. The minister knows, when he speaks about that map on the wall with black tape on five thousand miles, that we cannot retrace our steps and cancel five thousand miles of track. Everybody knows that. A method by which it may not be served as it has been in days past is another thing altogether, whether it should be treated as a secondary or tertiary line or in some other manner. Some lines can be taken up, but to talk about blacking out five thousand miles is another matter altogether. I do not believe it is possible for us at this time to retrace our steps in the matter of transportation. I do not think the minister has recognized the
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consistency which runs through our position, or perhaps I should say my own position, because I do not say that it represents anyone but myself, and I speak for myself only. The position is this:	Once having established uniformity under the law for the rich and the poor shipper, it is a retrograde movement to undertake to retrace your steps and say that the man with a lot of business is going to have an advantage over the man with a little business.


Clarence Decatur Howe: That is just the opposite to
what this bill says.


Richard Bedford Bennett: I have heard my friend
say that so often that sometimes I think he almost believes it.


Clarence Decatur Howe: I do believe it.


Richard Bedford Bennett: Well, I had far more
confidence in my hon. friend's intelligence before he made that observation. But just let us look a step further and see what we get in this bill. I am not going to weary the committee, but I want just one thing to be considered. You come to this section, the governing section which deals with the principle, and then you get down to clause 11:
No goods or passengers shall be transported by water, from one port or place in Canada to another port or place in Canada, either directly or by way of a foreign port or for any part of the transport, by means of any ship other than a ship licensed under this part.
Well, Great Britain's greatness grew up largely as a mercantile and commercial country because of what she did in connection with shipping. We might as well be perfectly fair about it.


Clarence Decatur Howe: And there is no shipping to-day so regulated as the British shipping.


Richard Bedford Bennett: Does my hon. friend the minister suggest that any part of it is licensed except those vessels licensed under the board of trade for crossing the Atlantic ocean and carrying passengers?


Clarence Decatur Howe: Every one is in a passenger or tramp conference of some kind, and the rates are regulated by board more or less sponsored by the government.


Richard Bedford Bennett: Not sponsored by the government.


Clarence Decatur Howe: Oh, absolutely.
. Mr. BENNETT: The North Atlantic conference, of which-


Clarence Decatur Howe: That is a passenger matter. I was talking more about the tramp shipping.


Richard Bedford Bennett: I am talking about the freight conferences. There are two conferences,

the passenger on the one hand and the tramp on the other. All passenger ships which go into a British port are licensed, under that board of trade regulations; having the Plim-soll mark and the prescribed load line and everything of that sort. And the accommodation of these ships that fly the British flag and are licensed to carry passengers is controlled. Any passenger who crosses the Atlantic can see the certificate fixing the number of passengers that may be carried, the number of lifeboats, and so on. The tramp ships may have a cartel or arrangement amongst themselves; but they are subject to the competition of the foreigner, the Scandinavian ships, and latterly the 20 knot freight ships of Japan.


Clarence Decatur Howe: But they are in the same conference. Every boat which has come into the St. Lawrence this year has been a member.


Richard Bedford Bennett: The Japanese have not been members of that conference in what you call competitive territory. The minister of course has made this his business, and I have only met it incidentally as a subject for investigation. I discovered magnificent Japanese freight ships of 20 knots. Those ships were getting the traffic. Belonging to this conference or that conference is not a matter of importance; because of their speed they get the traffic in the area they serve. And the result has been that the Yesteys have five magnificent ships running between Great Britain and Australia and South Africa. They do not carry passengers to the extent of requiring a medical man on board, but they have accommodation with baths for about twelve passengers. A great many of our fast freight boats now have that accommodation. But they are not licensed as this section provides. And if they are, this is not going to take anything away from them on the one hand or give them any advantage on the other. All we say in this bill is that no goods shall be transported by water from one port in this country to another unless these ships have a licence from this bureau, never mind their standard of equipment. The ship may be class A1 at Lloyds for one hundred years, the highest classification there is; but under this bill we authorize our customs officers to hold that ship up because we have not given her a licence to carry a passenger from Vancouver to Halifax. Why should we add that? Every provision for safety has been made; every accommodation has been provided. But now we are going to say: One more river to cross; one more bureau to meet; one more licence to get. I do not think that is going to help the business of this country, nor do

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I see where it is going to be of value to the Canadian people; for we once had a mercantile marine; we no longer have.


Clarence Decatur Howe: We did not have licences in those days; you cannot blame that on us.


Richard Bedford Bennett: I am not blaming the minister for something that has not yet been in operation.


Clarence Decatur Howe: I was afraid the right hon. gentleman was.


Richard Bedford Bennett: No, no; I have no desire to be unfair to the minister. But this is the position; to-day we are without a mercantile marine. I remember as a boy that Canada's mercantile marine was rather extensive. But it disappeared; steel ships and tramps and that sort of thing wiped it out. The ships that have to get a licence now are not going to be Canadian ships, if this legislation is literally enforced. The ship that sails from Vancouver to Montreal with any cargo must have this licence. What is the purpose of it? It is to do one or both of two things. Licences should be granted in the public interest for the safety and convenience of the individuals who may be passengers on the ship, or for the rapid conveyance of the goods the ship carries; or second, the purpose may be to destroy competition. That was the point which the hon. member for New Westminster (Mr. Reid) made. The minister, I am sure, has studied and realizes that open competition on the high seas has been the regulating factor in connection with ocean freights, notwithstanding cartels or tramp arrangements and everything of that sort; the sudden introduction into a harbour of a tramp flying a Scandinavian flag, or the flag of Germany or of some other mercantile power, has had the effect of adjusting freights at once. We know that in Montreal; we know it in Vancouver, and we know it in other parts of the world. That is the view to which I find it difficult to accommodate myself.
One more statement and I have concluded. I have trespassed too much on the patience of this committee. The consistency of my position lies in the fact that I maintain there should be equality under the law for all persons who have voyages to make or freight to ship; that is, that the tolls which are fixed by law should be of universal application, fixed by a body which is free from political control, as the board of railway commissioners set up by Hon. Mr. Blair was, he himself being the first chairman; and that that board's rates should be of universal application.
I wonder whether the minister remembers the case that was tested as to whether or not a freight rate was in the nature of a toll or tariff; having once been approved by the body which had to give its approval, no lower rate could be taken nor could a greater sum be exacted; and if a mistake were made the money could be recovered, because there is no power to alter a toll for freight which stood in the same position as a tariff. I once defended an action-unsuccessfully-from that angle. I point out that the really fundamental principle which has governed us for over thirty years has been equality under the law with respect to tolls and charges for the transport of goods in this country, and that no discrimination was possible and no differentiation by reason of the volume of traffic that the shipper had to offer to the carrier.
I ask that that principle be retained, and I submit that to exact a licence with the conditions to be imposed regarding an agreed charge is an inroad on that principle. When the minister suggests that I am favourable or anyone else is favourable to the relaxation of the rule, he has failed to understand the position we take. I am in favour of the maintenance of the principle I have enunciated, and I am opposed to any statutory provision which encroaches upon the application of that principle. The minister says that this does not interfere with it; but I say that any agreed charge, the benefit of which is not open to any man to receive, whether the traffic he has to offer be large or small, is not sound in principle. And the agreed charge contemplates that a man is going to tie himself up to a given condition for a given time in order that he may be able to secure a given rate. That, I submit, is contrary to the principle which I think should continue in effect in this country.
Without going into details, because the matter has been threshed out by so many members of the committee, although of course the jurisdiction of this general committee is still complete and we have the. right to discuss it in any detail we please, I do not propose to enter into any further discussion with respect to general principles. I content myself merely by saying that I think it is a retrograde movement. If we were going to start de novo, I am not sure that I would not be in favour of the general application of a principle that utilizes the accumulated knowledge, scientific and otherwise, and the skill of mankind for the benefit of the citizens of this country as a whole. To think by legislation to turn back the hands of the clock and put ourselves in the position we

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were in when we started in this transportation business is, of course, not for a moment to be considered. Under these circumstances it is the inconsistency of our position that I present for the consideration of the minister, and I do submit that to license vessels which carry people from one part of Canada to another, not for purposes of safety, not for purposes of their well-being, not for purposes of expedition in the handling of freight but for another reason altogether, is contrary to the general principle upon which nations have built up their positions as commercial communities, and I believe will be detrimental to the best interests of the country as a whole.


Clarence Decatur Howe: I have followed my right
hon. friend's lecture on consistency very carefully; but as yet I do not understand why it is a good thing for a boat to be able to contract for freight over any period it wishes, and not a good thing for a railroad; why it is desirable that a boat should have the privilege of quoting a low rate to a large shipper and a higher rate to a small shipper, and why there should be grave danger that a bill designed to afford protection against that practice on all forms of transportation may permit such practice on the railroads. I was not able to follow the lecture on consistency quite that far, but I think perhaps we have dealt with that subject sufficiently.


[Stage Direction]
Paragraph agreed to.
Paragraphs (b) and (c) agreed to.
On paragraph (d).
James Samuel Taylor: Will the effect of this bill, Mr. Chairman, be to close out inventive progress? Are you permitting the general development of invention and progress, or are you going to cause everything to stagnate for the purpose of permitting the railroads and transportation companies generally to meet their expenses and pay dividends? If the latter, then I submit that we have not reached a solution of the problem. No stream dammed is stopped. The flow continues and the flood will carry away the dam sooner or later. I am quite certain that until you have tackled and definitely settled the immense problem of adjusting the capitalization and capital indebtedness of these transportation companies to their effective earning capacity, which can be done but which as yet has not been done, the problem of transportation in Canada or anywhere else will not be solved. Supposing in the next few months somebody comes along with a transportation method which will eliminate all these methods now before us. You may say, of course, that this

is a highly hypothetical case. I grant that; but that principle being considered, does this bill prevent inventive progress?


Clarence Decatur Howe: I think I can assure my hon. friend that it does not.


[Stage Direction]
Paragraph agreed to.
Subsection 1 agreed to.
Subsection 2 agreed to.
Section agreed to.
On section 6, subsection 1-Term of licence fees.
Richard Bedford Bennett: Is it contemplated that the fee will pe based on tonnage, or is it intended to be only a nominal fee?


Clarence Decatur Howe: It is purely a nominal fee. The purpose of the licence is only to afford a direct contact between the unit of transportation and the board of transport commissioners. Otherwise the licence has no significance. But naturally if we have a unit of transportation that is not complying with the regulations of the board, it is liable to have its licence revoked. That is the only purpose of it.


Richard Bedford Bennett: I see the fees are to be fixed by the governor in council, and I wondered what was the general principle.


Clarence Decatur Howe: Purely a nominal fee.


[Stage Direction]
Subsection agreed to.
Subsection 2 agreed to.
Section agreed to.
On section 7-Fines payable to receiver general.
Richard Bedford Bennett: I think the word " over * is a bit of bad drafting. The section states:
Every fine imposed under this act or under any regulation shall be paid over to the receiver general of Canada-
I think that word " over " might be taken out.
Mr.'HOWE: I should think so.


Richard Bedford Bennett: But possibly it is put in to make certain in the event of any question about a magistrate receiving a fine in the first instance and paying it over. I do not like the word, but I assume it was put there deliberately.


[Stage Direction]
Section agreed to.
Section 8 agreed to.
On section 9-Limitation of proceedings for violations.
Richard Bedford Bennett: In connection with matters of this kind, where you have such a shifting

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population, should not six months be a sufficiently long period? I do not want to press the matter, but it is so difficult to deal with matters of this kind after a given time. Papers are lost; people move about, and when I read it over it did strike me that six months should be long enough.


Clarence Decatur Howe: I am not sure what purpose is behind the twelve month period, but is it really serious?


Richard Bedford Bennett: No; I do not think so. I just put it to the minister.


Clarence Decatur Howe: Perhaps I should prefer to leave it at twelve months.


[Stage Direction]
Section agreed to.
On section 10, subsection 1-Board licence to ships.
Grote Stirling: Would a transport company owning ships, a railway and perhaps aeroplanes have three licences or only one?


Clarence Decatur Howe: Of course the railway does not require a licence. The shipping and air craft would be licensed.


Grote Stirling: Two separate licences?


Clarence Decatur Howe: Yes.


Henry Herbert Stevens: Mr. Chairman, I do not intend to labour the discussion on part II of the bill. I intend later on to speak more fully to another part; but I should like to say in regard to part II, which deals with transport by water, that I think it is an unwise policy to adopt to bring this shipping under the board, and to restrict, control and regulate in the manner proposed in the bill. I shall state in a few sentences why I take that position.
One of our major items of export, as well as one of our chief sources of new wealth, is found of course in the great wheat plains of the west. The handicap to which the Canadian wheat producer is subject is that his product is produced at a point a couple of thousand miles away from the seaboard. We are in competition chiefly with the Argentine, as well as with other countries, of course. But the Argentine wheat is the closest competitor to Canadian wheat. The Argentine grower virtually has water transportation at his door. Therefore anything that affects or is likely to affect the cost of the movement of grain from the western plains to the seaboard is a matter which should be very carefully considered by parliament.
This is not a new proposal by any means. It was introduced to the house very frequently in years gone by. Almost every year it was placed before the house by the hon. member
51952-225$
who at that time represented Lambton. On every occasion I opposed it, and the bill which was introduced year after year did not become law, not because I alone opposed' it but because parliament in its wisdom decided it was not advisable to impose restrictions upon shipping on the great lakes, because of the danger of affecting the cost of transportation on those lakes.
There is no need of subterfuge or evading the issue, and parliament ought to face the facts that the only possible effect of part II of the bill would be to raise the cost of transportation on the great lakes. That is its object; there is not any question about it.


Clarence Decatur Howe: Mr. Chairman, on a question of privilege-


Henry Herbert Stevens: A question of privilege?' Let us hear the question of privilege.


Clarence Decatur Howe: Why impute motives to myself on this bill?


Henry Herbert Stevens: Mr. Chairman, surely the language I am using cannot be any-


Clarence Decatur Howe: That is all right, to make a speech to the country.


Henry Herbert Stevens: -stretch of the imagination be considered as imputing motives. I am: discussing a question of public importance, in connection with which I take a view directly opposed to that set forth in the bill. And to consider an expression of opinion of that kind* as directed to any one individual is, to put it mildly, arrogating to that individual a position of importance that he is not entitled to	have. I	have	not	mentioned	theminister, nor have I directed a single personal reference to him or to anybody else, except to mention the late member for Lamb-ton, who introduced bills containing this proposal. I	assume	there	is no question	of
privilege; certainly I cannot see one myself.
I was	proceeding to	say	that anythingwhich interfered	with	the	movement	of
freight over the great lakes is likely to result, in an increase in the cost of movement of those goods, and I added-and I repeat it now without hesitancy-that we must recognize in the language, structure and intent of the bill that its effect is to raise the cost, of the transport of goods. There can be m>
other excuse for its introduction. The very' essence of this part of the bill is to regulate' and to license, and as the terms of the bill' would show, so to regulate and restrict the freedom of movement of goods by vessel over the great lakes that vessels prepared to take them at a low price would be handicapped because of the licensing feature of this bill.
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In the interpretation clause of the bill we have outlined a distinct and absolute limitation as to the goods which may be carried by bulk carriers which are not necessarily licensed under the bill. The rights are definitely limited, because we have forbidden them from carrying any goods other than those mentioned in paragraph (e) which reads:
"Goods in bulk" means the following goods laden or freighted in ships, and except as herein otherwise provided, not bundled or enclosed in bags, bales, boxes, cases, sacks, crates or any other container;
grain and grain products, including flour and mill feeds in sacks,
ores and minerals (crude, screened, sized, refined or concentrated, but not otherwise processed), including ore concentrates in sacks,
coal and coke,
liquids.
The bulk carrier in the past has moved *grain to ports such as Montreal and Quebec, and has been at liberty to pick up any kind of cargo in any quantity he wished, on a return trip. It is well known that the vessel hauling grain down there desires as quickly as possible to return to the head of the lakes in order to secure another load of grain eastward. The consequence of that method of movement was that they did pick up cargoes, sometimes only small portions and sometimes cargoes of a substantial size, on return trips. The more cargo they secured going west, the lower would be the rate on grain coming east. We are definitely restricting that. What I said a moment ago, to which the minister took exception, was that the committee ought to be fully seized of the effect of this part of the bill before it is finally passed.
I took this stand in the committee. It is true the bill passed the committee, but I now submit to the committee of the whole house that merely because a standing committee passed the bill is no reason why it should be passed here without discussion. The bill should be fully discussed; the committee should be seized of the import of it, and the possible effect it may have. In part II we propose to license ships on the great lakes and certain other ships running from the Pacific coast to the great lakes. These ships are to be licensed; they are to be restricted, and such ships as are not licensed are forbidden to carry certain cargoes westward on the great lakes, which at present they are privileged to carry.
Let me give one illustration of the far-reaching effect of this bill. One of the main items of cargo moving westward is sugar. Sugar is something that affects the livelihood of every person in western Canada. A certain part of western Canada is supplied with its

sugar requirements from the Pacific coast. I believe the Pacific coast refineries reach eastward as far as Regina.


Richard Bedford Bennett: At one time they sold as far east as Brandon.


Henry Herbert Stevens: A year ago they came as far as Winnipeg, but the dividing line has gradually moved westward and to-day Regina is approximately the point of division. That portion of the population of western Canada living between Port Arthur and Regina secures its sugar supplies via the great lakes. We are now prohibiting the bulk carrier moving grain eastward from taking cargoes of sugar west-ivard, unless he complies with the regulated rates. As a regulated carrier he would have to file a tariff and comply with the rates under the direction of the board. Sugar is only one of many items.
My purpose in raising this point was to call the attention of the committee to this part of the bill and to register my objection to the regulation of traffic on the great lakes. The inevitable result will be to raise the rates, generally speaking, for the movement of goods eastward as well as westward on the great lakes. I think that is something of very grave importance to this country.


Clarence Decatur Howe: I take exception with my hon. friend when he says that the effect of this bill will be to raise rates. In my opinion the effect of the bill will be to create a more efficient transportation system in Canada. As I said previously this evening, an efficient transportation system is less costly to operate. The people who pay the cost of operating our transportation systems are not the owners, they are the usere of transportation. If we can reduce transportation costs by a more effective coordination of the various forms of transportation, we shall be benefiting the users of transportation. I do not think anyone will contend that regulation has increased the cost of railway transportation. I think it is quite obvious that by bringing order out of chaos in the way of rates, the cost of railway transportation has been somewhat reduced. My hon. friend seems to be the defender of everybody from the needleworker to the Montreal brokers. I suppose he is now the defender of the people against a government that are trying to increase transportation costs. There is nothing in this bill that justifies the position he is taking in that regard.


Henry Herbert Stevens: I have no apologies to make to anyone for being the defender of the needle-workers, as the minister has so facetiously remarked.


Clarence Decatur Howe: The Montreal brokers.

Transport Commission


Henry Herbert Stevens: Let me say to the minister that there happens to be about 40,000 of these needleworkers, and if there was any group of workers in this country that needed a defender, it was the needleworkers. I consider it as about the highest compliment that has been paid to me since I have been in the House of Commons to be called the defender of the needleworkers of Canada.
The minister attempts to brush the whole question aside by drawing a parallel between railway and water transportation. No student of transportation would for a moment accept such an analogy. There is no parallel at all between the two. The essence of sound policy in connection with water transportation from its earliest days down to the present has been freedom from control and direction and restriction. Freedom of the seas! The movement of freight on our inland lakes is virtually the same as the movement of freight across the seas. There is no difference between the two except that geographically the lakes happen to be within the territory of the United States and Canada, while the seas are open to all. In so far as the movement of goods by water is concerned, our inland lakes do not differ from the seas in any particular. As I said a moment ago,, the essence of the policy down through the ages has been to keep water-borne transportation as free as possible from restriction and regulation. There is no parallel between the two.
My hon. friend said a moment ago that no one would suggest that the regulation of rail tx-affic has resulted in increased freight l-ates. If one examines the schedule of rates, his answer certainly will be disconcerting to the minister, because, generally speaking, freight rates are higher to-day than they were before the introduction of regulation. But that argument is not applicable to the case at all. I am not suggesting that the regulation of railway rates was improvident or unwise. The chaos that existed then is the very chaos which will exist if part V of this bill is put into force. What were the chaotic conditions that existed prior to the regulation by the board of railway commissioners in 1905? Then the railways were competing with one another. They were making secret rebates and giving special rates, to favoured shippers and all that sort of thing. They were failing to supply the public with the proper facilities for loading and unloading goods at different points along their systems. But all of that was changed. All of that chaos was wiped out by the regulation of the railways. There is no parallel between that and waterborne transportation.
We might as well be frank about this. As far as the ship owners are concerned, this is
being done for the Canada Steamship company alone. The minister knows perfectly well that pi-actically all the other shipping concerns on the great lakes opposed this part of the bill. The Canada Steamship company will be benefited because it happens to carx-y the major portion of the package freight on the great lakes. I have nothing against that company. I should like to see it prosper, but I think it is unwise for parliament to pass legislation that will benefit this one company alone and be detrimental to other shipping concerns. In my opinion this legislation will tend to increase rates generally on the movement of grain eastward to seaboard points.


Richard Bedford Bennett: I probably fell into the
same error with regard to wheat as has been suggested here. Wheat is not covered by this bill. It is definitely stated in section 12 that the provisions of this pai't shall not apply to the transport of goods in bulk. I was greatly concerned about that provision being inserted. The minister must realize that we did endeavour to regulate these matters at one time. The government of the day, led by the present Prime Minister, had almost to entreat the owners of ships to break the law because parliament was not in session. That was in connection with the movement of grain on the great lakes. I suppose it is within the memory of some members here that we undertook to l-egulate rates on the great lakes in connection with United States ships, and they said: All right. But in the fall of the year we had to take active steps to induce them to break the law.


Clarence Decatur Howe: Just exactly what year was that?


Henry Herbert Stevens: It was when Mr. Low was Minister of Trade and Commerce.


Richard Bedford Bennett: Yes. I was not in the house, but I well remember the circumstances. Does the hon. gentleman remember what year it was?


Henry Herbert Stevens: About 1924 or 1925.


Clarence Decatur Howe: There was no regulation of rates but rather a restriction on United States shipping.


Richard Bedford Bennett: But the effect on the rates was quite apparent.


Clarence Decatur Howe: There is nothing parallel in this bill.


Richard Bedford Bennett: That bill applied to all commodities. I can send and get it.


Clarence Decatur Howe: I remember it very well. I lived on the great lakes for twenty-five years.
Transport Commission


Richard Bedford Bennett: Yes. The hon. gentleman will remember the circumstances. That bill we had to get out of the way. Any effort we have ever made to control rates on the great lakes has been difficult, and we have not succeeded. There is one thing I would ask the minister: Do we contemplate being able to control by this means the movement of commodities-I will use the broad word, "commodities"-from a Canadian port to a United States port, and subsequently transshipped from a United States port to a Canadian port?


Clarence Decatur Howe: Yes; we control that movement under this bill.


Richard Bedford Bennett: Is there not an international question there of the first order? Can we control a United States ship that loads at Fort William and goes down to Buffalo, unloads her cargo there, which is then loaded into another United States ship that sails from Buffalo to Montreal?


Clarence Decatur Howe: It is illegal in the first place between two Canadian ports.


Richard Bedford Bennett: But it is not between two Canadian ports. In the case I put, the transit ends at Buffalo.


Clarence Decatur Howe: You cannot load into another 'United States ship at Buffalo, except by a violation of Canada's coasting regulations.


Richard Bedford Bennett: The United States ship 'dears the next day from Buffalo for Montreal. A United States ship is allowed to go from Buffalo to Montreal.


Clarence Decatur Howe: It is not allowed to bring .goods from a Canadian port.


Richard Bedford Bennett: Quite. But the end of
the transit was at Buffalo, and the goods were :in bond.


Clarence Decatur Howe: We stopped that several years ago.


Richard Bedford Bennett: I have seen it stopped in my life time, but I have also seen it [DOT]unstopped. The United States authorities .asserted their position.


Clarence Decatur Howe: Unless the goods are duty paid in Buffalo they certainly could not make that voyage. They would be "through Billed" from the head of the lakes to Montreal.


Richard Bedford Bennett: I have reference to a *case where there is no through bill, where the goods lie in bond, and then are shipped from Buffalo to a Canadian port in a United States bottom, which is within the law. It will be recalled by the minister that at the time Mr. 
Low's bill became effective, the Americans lodged violent protests, and then we found ourselves in the position of asking them to do something for us, namely, to come and break the law. But that had to do with another phase. If the minister tells me he is satisfied he can control it, then I understand why the provision is there. But this whole part that we are now discussing is not intended to be put into force until it is proclaimed, and if the minister understands there are difficulties m the way, the proclamation will not be made until such time as he is able to iron them out?


Clarence Decatur Howe: Quite so. The situation will be very thoroughly studied.
Subsection 1 agreed to.
Section 10, subsections 2 to 4 inclusive agreed to.
On section 10, subsection 5-Board shall issue licence if satisfied service is required.


Richard Bedford Bennett: What about a ship "about to be built"? There was strong objection here yesterday evening to making provision for something about to be done; the Minister of National Revenue (Mr. Ilsley) will remember it. Here is a licence to be issued in respect of a ship "about to be built."


Clarence Decatur Howe: It would be difficult to build a package freighter unless the builder were sure the licence would issue. He must show convenience and necessity.


Richard Bedford Bennett: The word "building" I thought covered that; but this is "about to be built," which might enable a considerable racket to be maintained.


Clarence Decatur Howe: Would it not cover the case of a man considering building a ship, who represents to the board: "I want to build a ship, but first I want to know whether or not I can get a licence." He must show convenience and necessity.


Richard Bedford Bennett: The best evidence I think would be for him to say: "I have a contract here for the building of a ship." In my opinion it is a bad provision.


[Stage Direction]
Subsection agreed to.
Section 10, subsection 6, agreed to.
Section agreed to.
On section 11, subsection 1-No goods or passengers transported except in licensed ships.
Richard Bedford Bennett: Is it quite clear that this does not contravene any provisions of the shipping act, which by agreement at the imperial conference is common to all parts of the British Empire?

Transport Commission


Clarence Decatur Howe: This licence has to do purely with rates; the shipping act has to do with safety. This has been carefully checked.


[Stage Direction]
Subsection agreed to.
Section 11, subsection 2, agreed to.
On section 11, subsection 3-Power of detention.
Richard Bedford Bennett: It says that the collector of customs may, if he believes that any ship "has transported" passengers or goods. That puts him in the position of being a judge with respect to an alleged past offence. A collector of customs could always hold a ship that does not comply with the law immediately; but to say that he shall become a judge and deal with a case when he believes that any ship "after the coming into force of this part has transported passengers and/or goods without licence, in contravention of this part," is clothing him with judicial powers, which I really think should not be done. The rest of it I am in accord with, but that part puts him in the position of exercising judicial powers at once.


Clarence Decatur Howe: I hardly think that the actual working out of the legislation will follow the implication of this part. A customs officer would hardly detain a ship of his own volition. He would detain it on instructions from the transport board.


Richard Bedford Bennett: No; that is the odd part. If the minister will look at the rest of the section, he will see what I mean. It says that he "may detain the ship pending the disposition of any complaint or charge and the payment of any fine imposed in respect of any such offence." If there is any complaint or charge, he holds the ship until such time as he gets further information. That was my difficulty about it.


[Stage Direction]
Subsection agreed to.
On section 11, subsection 4-Suspension or cancellation of licence.
Richard Bedford Bennett: Mr. Chairman, I think
there is a contravention of an elementary rule there. It says:
If the board is satisfied that a ship is operated otherwise than in accordance with the terms of a licence applicable thereto, the board may suspend or cancel the licence of such lieeneee in respect of one or all of the ships licensed.
I think it is elementary that the lieeneee must first have an opportunity to be heard.


Clarence Decatur Howe: Oh, yes.


Richard Bedford Bennett: I mention that to the minister only because it is perhaps within the memory of some of the members of the legal profession that a judge was dismissed in one of the West Indies for very good cause; but the privy council found that, as he had had no chance to defend himself, his dismissal was wholly illegal. Here we have the loss of a licence without any provision that the lieeneee shall have an opportunity to be heard.


Clarence Decatur Howe: Would it suit the purpose if we inserted the words: the board, " after hearing "? The board would not be satisfied without hearing both sides of the case, I suggest.


Richard Bedford Bennett: It is just for that reason that I suggest you add the words, " after hearing the lieeneee," or similar language. The minister will recall the Pilot case that I once spoke to him about. It was alleged that there was no opportunity for the party to be heard before certain action was taken. How would it be to say, "The board may, after hearing the lieeneee, suspend..."


Ian Alistair Mackenzie: I move that subsection 4 of section 11 be amended by adding, in line 17, after the word " may," the words, " after hearing the lieeneee."


[Stage Direction]
Amendment agreed to.
Subsection as amended agreed to.
Section agreed to.
Section 12, subsections 1, 2 and 3 agreed to.
On section 12, subsection 4-Nor between certain ports.
Alan Webster Neill: I move to strike out paragraph (a) of subsection 4.


Frederick George Sanderson: The paragraph reads:
Between ports or places in British Columbia.
Amendment negatived.


[Stage Direction]
Subsection agreed to.
On section 12, subsection 5-Provisions not to apply.
Thomas Reid: Even at the risk of being accused by the minister of delaying the bill, I am going to protest strongly in this chamber once again against the principle in this bill of giving special privileges to the east. Away back in 1897 there was passed through parliament the Crowsnest pass rates, giving the eastern central provinces special consideration. Later, in 1925, the act was amended, but still the eastern provinces retained their special position. The Maritimes Freight Rates Act
Transport Commission

was another measure enacted by this house which gave the maritimes special consideration, and now we have a provision in this bill exempting the maritime provinces on their shipments. Even at the risk of delaying the bill, I feel that, as a member from British Columbia, and knowing the fight I have put up for the past number of years in an endeavour to get a change in the act with respect to freight rates, I could not remain in my place without rising and strongly protesting. So strongly do I feel on this matter that I am going to move this amendment:
That after the word "lakes" in the forty-first line the words be added, "or between ports or places in British Columbia and the maritime provinces and ports or places on the St. Lawrence river."
There is less reason for including in the act the province of British Columbia than there is for including the maritime provinces.


Mr. HARTIGAN:: "Less reason"? Does the hon. member say "less reason"?


Thomas Reid: Less reason for including the province of British Columbia than for including the maritime provinces. There is less competition between the ships and the railroads in traffic emanating in the province of British Columbia than there is in the maritimes.


David James Hartigan: I think the hon. member has a wrong conception of that. This exclusion pertains only as far as Montreal, and on the maritime coast the coastal trade is presumed to come up the river to the port of Montreal. That is the -legitimate territory through which maritime traffic moves, through which maritime trade always had its being up to tidewater.


Thomas Reid: Yes. I can see the members from the maritime provinces are wonderful advocates in regard to having this change made; nevertheless I am sticking to my point in spite of the hon. member's argument.


David James Hartigan: As far as the-


Thomas Reid: Never mind; I want a chance to finish my remarks as far as this is concerned. Speaking to the amendment, I feel that British Columbia should not be left out of the special provision of this legislation. I maintain that once more the maritime provinces and eastern points are receiving special consideration, even from the maritimes to the head of the lakes, by being exempted as they are under this section. The traffic obtained by any steamship line or steamers from British Columbia to Quebec, Montreal

or the maritime provinces is not lost traffic to the railroads. It is competitive business, and lumber being sent there would not be sent were it not for the fact that at times there are ships operating which will carry that lumber at a somewhat lower rate. But if those ships were not taking that lumber, the railroad companies would not get that order. The fact of the matter is that, as they would be in competition with United States and other lumber interests, the orders to British Columbia would be lost. Why British Columbia should be included in this act when they are not in direct competition, in so far as shipping is concerned, with the railroads, I am at a loss to understand.
Knowing the difficulty of getting any change made when something is once put into a measure, I feel that this is the proper time to protest. I took occasion to make the same protest before the railway committee, so I cannot be accused of waiting until the bill came back here. I would ask all hon. members from British Columbia to take note of what is being done now, that we are being brought under the legislation, and the maritime provinces excluded. I am going to protest even if no one else in the committee does.


David James Hartigan: Regarding the hon. member's complaint, shipping from the Pacific coast ports to the maritime provinces or from the maritimes through the canal to the British Columbia coast will be in identically the same position. The east is not exempt so far as ocean shipping is concerned. Am I not right?


Richard Bedford Bennett: Yes, of course.


Thomas Reid: But if I may be allowed to answer that point, subsection 4 of section 12 reads:
The provisions of this part shall not apply in the case of ships engaged in the transport of goods or passengers
(a) between ports or places in British Columbia.
That is, ships operating on the Pacific coast from one point in British Columbia to another. But when it comes to the maritime provinces it does not say from Nova Scotia to another port in Nova Scotia; it is from a point in any of the maritime provinces to some point in any other of them. So there again they are favoured.


David James Hartigan: There is only one province facing on the Pacific ocean, but in the east the maritime provinces, although separate, are taken as an entity. The mere fact of their

Transport Commission
being divided into three provinces makes no difference in the coast-line. It is the same thing as shipping between different ports in British Columbia.
The hon. member seems to be very much concerned about maritime freight rates.


Thomas Reid: I certainly am.


David James Hartigan: The preference given under that act is practically wiped out to-day owing to the lowering of competitive rates on other sections of the railways. It is practically nullified. In the case of maritime shipping to a British Columbia port we are placed in identically the same position as a ship coming from British Columbia to a maritime port.


Thomas Reid: I do not understand the statement that the maritime freight rates preference has been wiped out. If so, why is this parliament paying so many hundred thousand dollars a year under the Maritime Freight Rates Act? That question requires some answering.


Richard Bedford Bennett: Because the rates were increased beyond the arrangement made when they came into confederation.


Thomas Reid: But the hon. member says the whole thing is nullified. I cannot agree with that. But speaking to the point under discussion and the amendment before the committee, the maritime provinces receive great benefit by shipping up the St. Lawrence because this country has paid out millions of dollars to improve navigation there, whereas our waterway from British Columbia is the Panama canal, to which this country contributed not one dollar. Any ship going through there is charged $1 per gross ton, and for some ships the charge may amount to $9,000 or $10,000 for passing through that canal. So it still helps out my argument that we in British Columbia are being discriminated against by being brought under the measure, while the maritime provinces are excluded.


Richard Bedford Bennett: Under subsection 4 of
section 12, ports in British Columbia are excluded from the provisions of the legislation. And the same applies between ports in the maritime provinces. As far as this is concerned, ocean-borne traffic pays the same licence fee if it originates in Nova Scotia or New Brunswick and goes to British Columbia as if it originates in British Columbia and goes to the maritime provinces. The only thing is that the provisions do not apply to ships engaged in the transport of goods and passengers between ports or places in
the maritimes and ports or places on the great lakes, with the proviso that if they undertake to handle either goods or passengers on the great lakes they must pay. There is no exemption except for what is called in the maritime provinces coastal services, where the distance is not as great as it is up the coast of British Columbia. From the maritimes up the St. Lawrence is not as far as the distance up the coast of British Columbia, which is about-


Henry Herbert Stevens: Five hundred miles.


Richard Bedford Bennett: I think it is more than
that.


Henry Herbert Stevens: It is five hundred miles to Prince Rupert.


Richard Bedford Bennett: This is merely an assurance that the maritimes are to enjoy the benefits of coastal trade. My friend was not in this country at the time, and I was not born; but I was brought up on the talk of our coming into confederation, and the whole basis of this provision is maintaining good faith, the terms under which we entered confederation. For the same reason we are maintaining a railway to British Columbia; whatever happens, this nation has bound itself to see that that is done-contract in the west; contract in the east. One was crystallized into legislation in the British North America Act, the other in a later statute. This is merely to give effect to that understanding.


Henry Herbert Stevens: I think the hon. member for New Westminster (Mr. Reid) has perhaps not made the point quite clear. Speaking for myself, I do not object to the exemption of the maritime provinces from this measure; in fact I supported it very strongly in the committee. The point is this: In recent years, say the last twelve years or thereabouts, we have developed an inter-coastal trade between Pacific coast ports and eastern Canadian ports, Montreal and places on the great lakes. The history of that is very interesting and important. Prior to the introduction of that service, which was inaugurated originally by the Canadian National Steamships, supplies for British Columbia came very largely from the eastern United States and Europe. By the introduction of this intercoastal service a great deal of that business, that is, manufactured goods, was diverted to eastern Canada, Ontario and Quebec. Then, because of high rail freight rates, we were not able to ship lumber into eastern Canada to compete with southern pine from the United States. After the introduction of that service, however, we moved lumber from the Pacific coast to the east, and we took back
Transport Commission

manufactured goods; steel, sugar, etc. I saw a manifest the other day with, I think, forty different items on it from eastern Canada to the west. That is distinctly in the interest of building up trade within Canada.
The service was inugurated by the Canadian National Steamships and subsequently was taken over by Mr. MacMillan's company, which has maintained it ever since without any subsidy or assistance of any kind. Under this bill that service is brought into regulation. The reason that exemption was not included in the bill is that those who operate the service made no objection to being regulated, and I did not press the point. But they do object-and I am going to refer to it later-to the agreed charges part. There is a vital point there affecting their interests. But as far as this particular part is concerned, my view is that they would be better if they were not regulated; for it is obvious that a service running eight or ten thousand miles from British Columbia ports around through the Panama canal and up the St. Lawrence to the great lakes is not a local service, because the major part of it is a sea voyage; but my position in the committee was that, inasmuch as the operators of the service did not press to be exempted, I did not myself insist on the point. I would, however, submit to my hon. friend that the maritime provinces case should not be brought into comparison, because that stands on its own footing, and I think they had a perfect right to claim the exemption which they received.
Amendment (Mr. Reid) negatived on division.


[Stage Direction]
Section agreed to.
Progress reported.
[Stage Direction]
The house in committee of supply, Mr. Sanderson in the chair.
department of national defence
Militia services-Engineer services and works -further amount required, $316,385.
Grote Stirling: Would the minister give us some information with regard to this additional amount required for engineer services and works, particularly with regard to whj' these sums are required now when the main estimates are only a few months old?


Ian Alistair Mackenzie: Yes. In regard to the
amount of $204,385, this includes revotes to 
cover the undernoted construction items which were not completed ut the close of the fiscal year 1937-38:
Port Elgin, Ont.-Provision of gun shed, $3,360.
Barriefield, Ont.-Central heating plant,

Saint Johns, P.Q.-Conversion of old married quarters to barracks, $5,200.
Montreal, P.Q.-Purchase of site for rifle range, $55,000.
Winnipeg, Man.-Extension to M.T. garage, Fort Osborne barracks, $6,130.
Kenora, Ont.-Extension to drill hall, $5,430.
Esquimalt, B.C.-Coast defences, west coast, $30,903.
Esquimalt, B.C.-Ordnance workshop, $77,835.
Kamloops, B.C.-Purchase of fencing materials for magazine area, $14,305.
The supplementaries consist of two items, one of $100,000 for interim plan, Pacific coast defences, and the other of $12,000 for the construction of a drainage culvert at Charlottetown, Prince Ediward Island, to connect with a culvert at Green Bridge. That is in connection with the rifle range at Charlottetown.


Grote Stirling: Could the minister give the committee any information with regard to the magazine at Kamloops, as to its distance from the river and the height of its floor above the river?


Ian Alistair Mackenzie: I have not that information before me at the present time, though I had it when the main estimates were up. I should be glad to get it for my hon. friend.


Grote Stirling: Has the attention of the minister been called to the fact that it is stated that the floor is below the level of flood water? I cannot vouch for the accuracy of this statement, but I am informed that there is not a sufficient margin of safety between the high water level and the floor of the magazine.


Ian Alistair Mackenzie: I can
only say that I have not heard the suggestion until this moment. The engineers of the department made a very careful examination to ascertain the best available site in that vicinity, an examination which occupied them for some time, and of course this is in accordance with their recommendation. I shall be glad to look thoroughly into the matter.


Grote Stirling: Does the minister remember, from his own knowledge, how far the site is from the river? I do not know exactly where the site is.


Ian Alistair Mackenzie: I have not been there since construction was commenced.

Supply-Defence-Engineers


Richard Bedford Bennett: What other items of the department are standing?
Mr. MACKENZIE . (Vancouver): There is item No. 180 of the main estimates.


Richard Bedford Bennett: Will that be coming up to-night?


Ian Alistair Mackenzie: Yes, after we deal with the supplementaries.


Mr. MacNEIL:: The supplementary estimates follow a rather different plan from the main estimates, but in the public works vote I notice a number of items for the construction of armouries. What is the total amount of the estimates for the construction of armouries and barracks in addition to those included in the main and supplementary estimates of the National Defence department?
Mr. MACKENZIE (Vancouver)':	I think
these are mostly by way of revotes of amounts voted last year. For the armoury in Hull, Quebec, the amount is $260,000. Then there is the Craig street drill hall, Montreal, $75,000 which is not a revote; Cornwall, Ontario, partly a re vote, $246,000; Broadview, Saskatchewan, for the purchase and alteration of a building for armoury purposes, $4,200; Moose Jaw, Saskatchewan, armoury reconstruction, $18,000; Esquimalt, British Columbia, dockyard office building, $16,000, including a revote of $8,000; and Salmon Arm, British Columbia, towards the purchase of a building for national defence, $1,650, or a total of $620,850.


Charles Grant MacNeil: I do not wish to open up a discussion of policy on this item; but may I ask just why at this time, when according [DOT]to the statement of the minister we so urgently require coastal defence, steps now should be taken to construct armouries at small points such as Cornwall and Hull?
Mr. MACKENZIE (Vancouver) * I want to say immediately to my hon. friend that from the point of view of the Minister of National Defence we have not nearly enough armouries at the present time in Canada, especially following the reorganization of the militia that was effected a year or a year and a half ago, and the adaptation of mechanization processes to militia training. We find many new units of a technical nature, either artillery or engineering, with no proper armoury in which to drill or train. As a matter of fact, to be very frank, I should have preferred to see greater provision made for very necessary armouries. The only purpose of the armouries, apart from the community purposes for which they are
frequently used, is to provide for the training of the militia forces of Canada for the defence of Canada.


Charles Grant MacNeil: Does not the construction of armouries at a number of points make it more difficult to distribute to the units the equipment required for modern technical training? Would it not be preferable to have fewer training centres more completely equipped?


Ian Alistair Mackenzie: My hon. friend will realize, of .course, that sometimes we have a small section of a technical nature in a local centre, and naturally they want to have their training done at that point. I think one of the duties of any department of defence is to provide these facilities as far as that can be done.


Grote Stirling: The minister read his
list rather rapidly, and I am not sure that I followed him. Was he taking out the national defence items from public works, and referring to them?


Ian Alistair Mackenzie: Yes.


Grote Stirling: Then in this item No.
547 there is $136,000 over and above the revote-


Frederick George Sanderson: We are still on item
546.


Grote Stirling: I beg your pardon.


[Stage Direction]
Item agreed to.
General stores-further amount inquired, $530,000.
Grote Stirling: Would the minister give the details, please?


Ian Alistair Mackenzie: There
is a revote of $394,300, making a total vote of $530,000. The revotes were partly for clothing ordered but not delivered within the fiscal year 1937-38; there is an amount for miscellaneous stores ordered but not delivered within the fiscal year 1937-38; an additional amount for new uniforms, clothing for the non-permanent militia, amounting to $50,000. That is not a revote; it is in the supplementary estimates. There is a revote of $59,000 for armament stores ordered but not delivered in the fiscal year 1937-38. For technical equipment required for repairs to mountings and for miscellaneous accessories for armament generally, west coast and east coast, there is an additional amount required for 1938-39, $20,000. There are a few small amounts in connection with search-light equipment, to provide for possible arrangements for purchase. Then, partly to com-
Supply-Defence-Stores

plete the purchase of trucks, G.S. 15 hundredweight, an amount is required to meet increased cost of fifty-one vehicles included in last year's appropriations. For these purposes there is an amount of $50,000. There is also a small amount for coastal defence ammunition, and there is a revote of $30,300 for telephone, signal and wireless equipment.
If I may recapitulate, the table would be as follows:
Recapitulation of Stores and Equipment
Revote Additional 1937-38	1938-39
Clothing and miscellaneous
. stores	$ 75,000	$ 50,000Armament stores	
59,000	70,500
Ammunition procurement,
progress	 200
telephone, signal and wireless equipment	 30,300	_____
$164,300	$120,700


Grote Stirling: Is the contract for the Bren gun complete?


Ian Alistair Mackenzie: That was dealt with in the main estimates.


Grote Stirling: Yes, and the minister announced that 7,000 of them would be for Canadian use.


Ian Alistair Mackenzie: Correct.


Grote Stirling: Has construction actually started on them?


Ian Alistair Mackenzie: The
assembling of the plant and the preliminary processes necessary in the obtaining of equipment I suppose the technical terms are jigs and dies-was commenced about two or three weeks ago. They are assembling some of the plant that we had in Quebec. It is being assembled at the plant in Toronto.


Grote Stirling: That is one of the pieces of work undertaken for purposes of defence as a result, I take it, of the work of the committee of inquiry into industrial possibilities?


Ian Alistair Mackenzie: Yes.


Grote Stirling: Are any further purchases actually in hand or contemplated for other things? In one of his speeches the minister referred to search-lights, and I believe there was some reference to gas masks. There may be other requirements for defence, generally speaking. Can he give any information with regard to the developments we may expect shortly as a result of the committee's work in investigating industrial possibilities?


Ian Alistair Mackenzie: In regard to search-lights we have called for tenders and hope to have them produced in Canada. In

regard to gas masks, may I say that we have been making the main portion of them in Canada. The experiments, which were of a difficult nature have been successful. We trust to have a production of so many a month, from this day forward.


David James Hartigan: Probably the observations I am about to make may refer more particularly to public works. But I must point out that Sydney is the centre of an important mining area, and from it a large number of recruits went to the last war and fought for their country. Apparently, from the standpoint of the defence department Nova Scotia begins and ends at Halifax. I think it is high time this aspect of the question was gone into by the authorities in the department, and that Sydney was given at least an armoury in which to train the units that exist down there.
Both Sydney and Glace Bay have first-class units. The men have given of their time gratuitously, and are doing good work. Stili there is an armoury, so-called, in Victoria park which the minister knows full well is a disgrace to any military district of Canada. We cannot expect those people to do the work, such as we see done around Ottawa, and expected of them by the department, if we do not provide facilities for them.
So far as the militarization of Canada is concerned, whether it be for internal or externa] defence matters not to me, if the shows put on around Ottawa, which we witness every other day in close proximity to this building, give an indication of how the money is spent, then I say that that is not a fair expenditure of the taxpayers money. If we want the whole-hearted effort of all Canada, the east as well as the west, moneys for militarization purposes should be distributed across Canada and not centered wholly in one place with the idea of putting on a show on certain state occasions. While they are all very well in their place, still I say that is not giving other sections of Canada a square deal. I do not believe Cape Breton has received a square deal from the defence department this year, because it has not been given proper facilities to train the units.


Charles Grant MacNeil: I notice in the press mention is made of several public statements by the minister with regard to the survey of plants in Canada in connection with the manufacture of munitions. Did he in that survey include workshops and machine shops of the Canadian National Railways and those under the jurisdiction of the various federal departments?


Ian Alistair Mackenzie: I believe directions were given to the committee to survey those facilities.


Richard Bedford Bennett: Who had the contract for the Bren gun?


Ian Alistair Mackenzie: John
Inglis and Company in Toronto. They have two contracts, one from the Department oi National Defence at Ottawa for 7,000 guns, and a similar contract from the British War Office for 5,000 guns.


Richard Bedford Bennett: That was secured through the good offices of the Department of National Defence, was it not?


Ian Alistair Mackenzie: No; as a matter of fact I think negotiations were carried on entirely by the company's representative in England for the last two years, since 1936.


Richard Bedford Bennett: Have they facilities,
either in the factory or otherwise?


Ian Alistair Mackenzie: They
have an excellent plant there.


Richard Bedford Bennett: What kind of plant?


Ian Alistair Mackenzie: I cannot give the exact acreage.


Richard Bedford Bennett: What facilities for the manufacturing of guns?


Ian Alistair Mackenzie: After the equipment is assembled, I believe they will have all the necessary facilities for the purpose. Of course, I do not pretend to be an expert on plants, in any way.


Grote Stirling: The minister informed
the committee on the last occasion that a considerable quantity of machinery we have had stored at Valcartier all these years is to be adapted to this purpose.


Ian Alistair Mackenzie: Yes; I understand a valuation of about a quarter of a million dollars is placed upon that machinery. That much will be saved, as against the necessity for new purchases.


Richard Bedford Bennett: Did the minister sell it?


Ian Alistair Mackenzie: No; in one or two instances the principle has been followed of the government sharing with industry, the government purchasing equipment and retaining ownership. In this instance I understand the British War Office pays one-third of the price, and Canada pays two-thirds, with the entire ownership being vested in Canada.
Supply-Defence-Naval Services


Charles Grant MacNeil: Has any consideration been given to the protection of the civilian population in points adjacent to those places which might be the targets of enemy forces?


Ian Alistair Mackenzie: There is a committee to consider that question.


Charles Grant MacNeil: Has provision been made for the purchase of equipment for the protection of the civilian population?


Ian Alistair Mackenzie: I have
not yet received a definite report, so I am not in a position to give the hon. member the information required.


[Stage Direction]
Item agreed to.
Naval services - Royal Canadian Navy - further amount required, $122,875.
Grote Stirling: Would the minister give the information with respect to this item?


Ian Alistair Mackenzie: Of the $84,875, $73,875 is a revote of unexpended portions of the contracts for four mine sweepers. There is $5,875 held up in regard to the construction of the Venture. Then, there are stores and equipment, $38,000, required to complete the purchase of special stores and technical equipment for the new mine sweepers.


Grote Stirling: We were told by the
minister that the Venture was in Halifax where she was receiving certain alterations in the dry dock. Is that $5,000 for that work?


Ian Alistair Mackenzie: I believe the work at Halifax cost $970, roughly speaking.


Grote Stirling: Can the minister give us any further information with regard to additional acquisitions for the Royal Canadian Navy. I believe the flotilla leader, which is in the A class, was obtainable, but I do not know whether Canada made any attempt to purchase it.


Ian Alistair Mackenzie: As far
as my knowledge goes, no definite steps have been taken by the dominion government with reference to the flotilla leader. I know that to have the complement complete we should have a flotilla leader and possibly more mine sweepers, but there have been no negotiations entered into so far by the government.


Grote Stirling: When are the new ships expected to reach Canada?


Ian Alistair Mackenzie: About the end of July.
Supply-Defence-Air Force


Charles Grant MacNeil: In a sessional paper tabled last session, it was stated that Canada had entered into contractual obligations to maintain naval bases at Esquimalt and Halifax. To what extent are we under obligation to defend those bases in the event of war?


Ian Alistair Mackenzie: I am
afraid that is a legal and constitutional question which I would rather refrain from answering with any definiteness.


[Stage Direction]
Item agreed to.
Royal Canadian Naval Reserves-further amount required, $30,000.
Ian Alistair Mackenzie: This is
for the naval reserves.


Grote Stirling: The new reserves?


Ian Alistair Mackenzie: Yes.


[Stage Direction]
Item agreed to.
Air services-Royal Canadian Air Force- permanent air force-further amount required, $884,900.
Grote Stirling: Would this item apply
to contracts which were let, and in connection with which delivery has not been obtained?


Ian Alistair Mackenzie: Exactly.


Grote Stirling: What are the details?


Ian Alistair Mackenzie: They
are practically all revotes. The details are:
Bombs and ammunition	$ 50,000
Miscellaneous stores	 66,000
Airframes and new engines	 390,000
Wireless telegraph equipment.. ..	25,000


Grote Stirling: What are the details
in connection with the $884,900?


Ian Alistair Mackenzie: The
details are:
Construction of buildings and works:
Dartmouth	$ 50,000
Trenton	 114,948
Vancouver	 63,451
Kamloops-magazine	 5,500
Patricia Bay	 25,000
There is a supplementary amount of $50,000 for Patricia Bay, and the extension of further facilities on the Pacific coast, $30,000.


Grote Stirling: Is the amount for Trenton to cover a new building?


Ian Alistair Mackenzie: The
details are, in round figures:
Construction, stores building, $25,000.
Doors for hangars, $603.
Construction of barracks block No. 2, $19,000.
Supplying and installation of mechanical equipment for central heating plant, $15,000.

Construction of central heating plant, $4,500.
Underground telephone system, $7,300.
Construction of N.C.O's and airmen's mess building, $42,700.


Grote Stirling: Has the minister anything further to say with regard to the developments at Jericho?


Ian Alistair Mackenzie: The
contract for the two hangars has been let. Negotiations are proceeding, but we are waiting for the exchequer court in regard to the property I have mentioned.


David James Hartigan: Does the department
intend to proceed with the airport at Sydney?


Ian Alistair Mackenzie: I understand the report that has been received is not final or definite enough to come to a decision immediately. It is being considered at the present time.


Charles Grant MacNeil: What are the qualifications required for recruits to the permanent air force?


Ian Alistair Mackenzie: I had
all that information in the other reference books in connection with the main estimates.


[Stage Direction]
Item agreed to.
Non-permanent air force-further amount required, $48,000.
Grote Stirling: Does this indicate an extension of the non-permanent air force?


Ian Alistair Mackenzie: The
amount for revote is to replace partly funds which will be returned to treasury at the close of the fiscal year 1937-38 and which cannot be replaced from funds included in the main estimates without detriment to the program contained therein. The details are:
Aircraft and engine spares	$ 2,000
Miscellaneous stores	 6,000
Airframes and engines	 32,000
Wireless telegraph equipment.. ..	8,000
All revotes	$48,000


Grote Stirling: Are the non-permanent air squadrons fully equipped with the necessary aircraft?


Ian Alistair Mackenzie: They
have what may be termed preliminary training equipment. Advanced trainers are not yet available, but we are taking steps to obtain them as quickly as possible.


[Stage Direction]
Item agreed to.
Departmental administration, $425,720.
Richard Bedford Bennett: I had intended to make some rather extended observations with re-

Supply-National Defence-Administration
spect to the administration of the Department of National Defence, but at this hour of the evening I shall not endeavour to do so. However, I shall deal with this matter when the supply bill is under consideration and an opportunity is afforded for discussion. But there is one matter that I must bring to the attention of the committee to-night. This concerns the right of a deputy minister, because he occupies a position of importance, to libel a citizen of this country.
The department called for tenders for coal at Kingston. Tenders were submitted by Drury's, Crawford's, Norman's, the Morris coal company, and also by the firm of James Sowards company. Their tender was the lowest, whereupon the deputy minister advised the minister that the acceptance of the lowest tender, that of James Sowards company, was not recommended because of reports received concerning this firm. The minister passed on that information in his order in council and it became part of the permanent records of this country. I should like to know just what those reports are. Mr. Sowards is a large taxpayer and a reputable citizen. He does not support the government of the country; at the present moment he is a supporter of the opposition, and has been for some time. He made his tender, which was the lowest tender by thousands of dollars, and the deputy minister advised his minister not to accept that tender because, to quote his words, "of reports received concerning this firm." I have here the return in my hand. I have shown the return to Mr. Sowards. As a citizen of equal reputation with the deputy minister at least, he demands the right to know what those reports were that prevented the taxpayers of Canada from being relieved of a burden of many thousands of dollars. What right had the deputy minister to take this action? What right had any man in that position to do it? And that is only one of about twenty similar proceedings which I desire to discuss. The minister, of course, must assume responsibility for these things, as he does, because he passes them along; but when it is recorded that the deputy minister recommends such and such a thing, I rather doubt the right of any deputy minister to be the controlling factor in the language here used:
The minister, on the advice of the deputy minister of National Defence, recommends that the tender of Messrs. Morris Coal Company, be accepted as follows:
1,000	tons bituminous run of mine coal, "Yatesboro" at $6.60 ton.
100 tons coke, nut size, "Hamilton or LaSalle" at $12 ton.
Acceptance of the lowest tender, that of Messrs. James Sowards Coal Company is not recommended because of reports received concerning this firm.
That is part of the public records, and Mr. Sowards wants to know what those reports are. That is one of many matters in which the deputy minister, either of his own volition or under pressure, has become the instrument of political oppression. It applies to individuals; it applies to firms; it applies to contracts. Whether or not he did this of his own volition, it is for the minister to say, and whether or not he reflected the mind of the minister and the administration when he made this statement. But it is my duty to ask why a citizen should be pilloried in this way by any person who finds himself in a position of brief authority.


Ian Alistair Mackenzie: I have not the documents before me at the moment with reference to the particular tender mentioned by the right hon. gentleman, but I definitely recall that complaints were made in regard to the carrying out of a previous contract by this same gentleman, with reference to a definite breach of the labour conditions in the contract. I shall ascertain the exact terms of the complaint and shall be glad to supply it to my right hon. friend or to any member of the committee.
In view of my right hon. friend's references to the deputy minister, I wish to say immediately that the minister of the department assumes full and complete responsibility for every action by the department, and I wish also to say immediately that in my whole experience there is not to be found in the public service of Canada a gentleman more devoted to his duty and more self-sacrificing in the execution of his duty than the deputy minister of National Defence. I know personally that he toils far into the night, probably at a great sacrifice of his own health, and I submit to the right hon. gentleman, with the utmost deference, that he has been misinformed with reference to this matter.


Richard Bedford Bennett: I am reading from a public document.


Ian Alistair Mackenzie: I submit to my right hon. friend that what he has read from that record will be substantiated, and that it does not refer in the slightest degree to the deputy minister of National Defence. I do not recall the exact circumstances, but very likely instructions came from the minister to the deputy. I shall be glad to look up the exact details and back up what I say
3558	COMMONS
Supply-National Defence-Administration
because this is probably the only case in which the lowest tender has been refused in the department for the last two and a half years. I wish to state that there has never been an inquiry from the deputy minister to me of the slightest political significance, and that I have never seen a deputy minister more courteous to the members of this house of all shades of political opinion. The members of the opposition receive the same courteous treatment from him as do the supporters of this administration, and I regret very much that the right hon. gentleman saw fit to make the remarks that he did. I can assure him in reference to the contract he has mentioned that the information will be supplied to justify the statement made in that memorandum.


Richard Bedford Bennett: The minister has entirely failed to appreciate the point that I made. He has seen fit to make a recommendation to council based upon a recommendation made to him by the deputy minister, which provided for the acceptance of a tender that was not the lowest, which lowest tender was declined because, it was stated, "of reports received concerning this firm." Did the minister take any steps to ascertain whether they were correct or not? Did he give the man an opportunity to make an answer? Did he communicate with him at all?


Ian Alistair Mackenzie: No.


Richard Bedford Bennett: No, and that is British justice. Right there in black and white is a document impugning the reputation of a firm that enjoys at least as good a reputation as the deputy minister, and he attacks it and gives no reason for it, and does not communicate with the man. Why? This gentleman could not get a set of the tender forms, not being on the list of the Minister of Labour (Mr. Rogers) and not being able to get the forms, he puts in his tender and says: " I will fill out any form you require." The director of contracts felt that he could not deal with the situation, and so the minister says: "Do not accept the lowest tender; he happens to be a Conservative."


Ian Alistair Mackenzie: That is not. correct. It had nothing to do with it.


Ernest Lapointe: Where is that stated, that he is a Conservative.


Richard Bedford Bennett: I will tell you where it is stated. It is stated right in the document where his tender was refused-not in terms, but that was the reason. I will show you his
 '
letter. He did not have a set of the forms sent to him. Oh, no, that was not done. But he wrote to the department:
Sewards Coal,
Kingston, Ontario,
June 26, 1937.
We the undersigned are prepared to supply the department at Kingston and Barriefield with coal and coke at the following prices:
Then follow the prices, and the letter concludes:
We w'ill fill in regular form if supplied with same.
Yours truly,
James Sowards Coal Company, per J. F. Sowards.
There was no objection made to the fact that the tender was not on the regular form. No forms were sent to him to fill in. But the deputy minister, according to this document- the minister says he has no recollection of the circumstances at the moment-advised the minister that the tender of Messrs. Morris Coal Company be accepted, and that:
Acceptance of the lowest tender, that of Messrs. James Sowards Coal Company, is not recommended because of reports received concerning this firm.
The taxpayers of this country have had to pay thousands of dollars more for their coal, and no opportunity was afforded to Mr. Sowards to meet the anonymous assassin who stabs him in the back without giving him a chance to defend himself. And this is typical of the administration. The Minister of Labour is not in his place, but if the Minister of National Defence will apply to him he will get. some information about the matter.


Ian Alistair Mackenzie: I shall
be very glad to do so.


Richard Bedford Bennett: I have been reading from sessional .paper No. 170A as brought down, and when the minister has ascertained the facts we shall be able to deal with this and other matters of a similar kind that have also to be dealt with.


Charles Grant MacNeil: Does the item stand, Mr. Chairman?


Ian Alistair Mackenzie: If my
hen. friend is anxious to have it stand, I have no particular objection.


Charles Grant MacNeil: If you would, please.
Item stands.
Progress reported.
On motion of Mr. Lapointe (Quebec East) the house adjourned at 10.55 p.m.

The Late A. M. Edwards
Monday, June 6, 1938