RAILWAYS, CANALS AND TELEGRAPH LINES

[Stage Direction]
Fifth report of the standing committee on railways, canals and telegraph lines-Mr. Breithaupt.
(Translation):


Mr. LIGUORI LAOOMBE (Laval-Two Mountains):: Mr. Speaker, I rise to a question of privilege. Looters have invaded my constituency, at Saint-Eustaohe. I request for my constituents the protection of the Royal Canadian Mounted Police. Those bandits are breaking into houses ravaged by the floods which have caused damages amounting to more than one million dollars. The Right Hon. the Minister of Justice (Mr. Ilsley) will no doubt issue instructions accordingly.
(Text):



INDUSTRIAL RELATIONS


[Stage Direction]
Mr. DAVID CROLL (Spadina) moved that the second report of the standing committee on industrial relations, presented on Tuesday, July 8, be now concurred in.
Mr. SPEAKER:: Is it the pleasure of the house to adopt the motion? Carried.


Mr. FLEMING:: On a point of order, Mr. Speaker, does that not have to be a separate motion?


Mr. MACKENZIE:: Yes.


Mr. MacKINNON:: They are separate
motions.


James Horace King: That is the procedure which is being followed. I have presented the motion which was that the second report of the standing committee on industrial relations be now concurred in. Is it the pleasure of the house to adopt the motion? Carried.
Mr. MACKENZIE. KING: Just a minute, Mr. Speaker. What is the motion, please? Is it that the second report be now concurred in?


James Horace King: That the second report of the standing committee on industrial relations, presented on Tuesday, July 8, be now concurred in.


Mr. MACKENZIE KING:: If there is no desire for a debate on the report, Mr. Speaker, I quite agree to its being concurred in at this moment. But if it is likely to give rise to a debate at this stage of the session I should like to point out certain reasons why concurrence should not be given at this time.


Some hon. MEMBERS:: Carried.


[Stage Direction]
Motion agreed to.
Mr. CROLL moved that the third report of the standing committee on industrial relations be concurred in.
Motion agreed to.


[Stage Direction]
Mr. D. F. BROWN (Essex West) presented the fourth report of the special joint committee on Indian Affairs, as follows:
Pursuant to orders of reference dated 13th February 1947, your committee has held 67 meetings and has heard 102 witnesses, including departmental officials, church dignitaries and Indian representatives from all provinces in Canada except the maritimes which were visited last autumn by a commission under the Inquiries Act, appointed by order in council PC. 3797, dated 11th October, 1946.
Embodied in the minutes of evidence, as appendices thereto, are 153 written briefs or submissions received by your committee from Indian bands or organizations and from other Canadian individuals or groups interested in the welfare and well-being of our natives of Indian descent. The minutes of proceedings and evidence cover approximately 2,500 pages.
Your committee was instructed to "continue and complete" the examination and consideration of the Indian Act. However, the actual recasting, or revision of that Act, which is long overdue, could not possibly be attempted until a full opportunity had been afforded to all interested parties to make representations in that regard. _	#
Your committee is agreed that the joint committee on Indian Affairs which was appointed in 1946 was warranted, as it reported to parliament, in adopting a programme which envisaged the revision of the Indian Act only during the 1948 session of parliament.
The 1946 joint committee on Indian Affairs, on August 15th last, also reported:
... The hearing of departmental officials has disclosed the necessity for certain administrative improvements which can be effected without the revi, lion of my existing legislation and which, when put into effect, will remove some of the causes out of which have arisen grievances and complaints of many Indians. ..
5344	COMMONS
Indian Affairs-Report of Committee
Your present committee notes with extreme regret that recommendation No. 8 of the said report of August 15th, 1946, which was concurred in by both houses of parliament, has not yet been implemented.
That recommendation was:
...8. That more direct methods be employed for the return of rentals collected on the behalf of Indian lessors.
Your committee, therefore, recommends:
1.	That immediate steps be taken by all responsible officials to remove without further delay this long standing grievance with regard to rentals due to Indians,
and your committee further finds and recommends :
2.	That a commission, in the nature of a claims commission, be set up with the least possible delay to inquire into the terms of all Indian treaties, in order to discover and determine such rights and obligations as may therein be involved, or any subsequent substitution therefor, and to appraise and settle in a just and equitable manner any claims or grievances arising thereunder:
3.	That the questions involving band membership be left for definition and determination during the 1948 session when the Indian Aot is next examined and considered;
4.	That immediately parliament next reassembles a special joint committee be constituted with powers similar to those granted your committee on 13th February last;
5.	That the matter of enfranchisement of Indians be left for further consideration when the Indian Act is under revision;
6.	Certain Indian bands resident on "lands reserved for Indians", particularly in the province of Quebec, are compelled to pay taxes other than those imposed by dominion legislation. It is therefore recommended that a reference be made to the proper court to determine the legality of any taxation imposed on Indians;
7.	That encroachments of persons other than Indian upon lands reserved for Indians are not reviewed with favour by either the members of the Indian band concerned nor by the Indian Affairs branch. It is recommended that the Indian Affairs branch take immediate steps, consistent with the wishes of the Indian bands concerned, to remove from Indian reserves all persons other than Indians who reside in, or carry on business on an Indian reserve;
8.	That the whole matter of education of Indians be left over for further consideration. In the meantime, however, it is recommended that all educational matters, including the selection and appointment of teachers in Indian schools be placed under the direct and sole responsibility of the Indian Affairs branch;
9.	That the administration of all aspects of Indian Affairs should be under one ministerial head.
10.	The director of the Indian Affairs branch should be given the status, if not the rank, of deputy minister to permit him to have direct approach to his and other departmental heads; or, he should be named a commissioner who shall rank as a deputy minister and who shall have at least two assistant commissioners of whom one should be a Canadian of Indian descent;
11.	That Indians who are qualified for any position in the administration of Indian [Mr. Brown.j
Affairs, at any level, be given a preference for appointment to such positions within that administration for which they qualify or are suited;
12.	That when the Director of Indian Affairs becomes aware that an Indian agent will shortly be leaving the service, he should, in ample time before the said agent retires, request that the Civil Service Commission select and appoint a successor to the said agent, so that there shall be no interruption in the carrying out of the duties of that most important office in Indian administration. that of Indian agent;
13.	That the retiring leave of any agent or officer in Indian administration be granted to him simultaneously with the payment to him in a lump sum of his leave payments instead of retaining him on the payroll pending actual retirement. This in order *that the position may be filled without delay by the person selected and appointed to succeed the retiring agent or officer;
14.	That whenever possible a vacant position of Indian agent be filled by the promotion of an assistant agent who will have had the opportunity of receiving training in all the duties of an Indian agent;
15.	That in view of the fact that Indian reserves are widely scattered across Canada, and in view of the diversity of the problems confronting those charged with the administration of Indian Affairs, the Indian Affairs branch should be decentralized and the regional directors he appointed to look after and to determine such matters as appropriately fall within this particular regional jurisdiction;
16.	That the establishment for the Indian Affairs branch be increased to provide for the appointment of a sufficient number of Indian agents and Indian agents-at-large, to provide for the adequate and proper administration of Indian reserves.
17.	That when a promotion from the staff of an agency is not possible, a promotion should, when practicable, be made from junior officers in the district who may desire promotion and who are suited and qualified for a senior post;
18.	That when promotion within the staff of an agency is not feasible, the field of competition for applications from the general public should be made wide enough to ensure the selection and appointment of a fully qualified person;
19.	That examinations, whenever possible, should be conducted by the district offices of the Civil Service Commission rather than at headquarters of the Civil Service Commission at Ottawa;
20.	That Indian agents who have undergone a period of probation satisfactory to the Director of Indian Affairs should be made permanent civil servants at the end of such probationary period;
21.	That, by order in council, appointments to the Indian affairs administration should no longer be subject to the "permanent quota" now in force, as imposed by treasury board regulations;
22.	That the preference accorded to any veteran be consistently accorded with regard to all appointments to positions in the administration of Indian Affairs;
23.	That future appointments of officials concerned with the administration of Indian Affairs should, where practicable, be re-

Indian Affairs-Report of Committee
striated to applicants who have had previous experience in the field. Field officers in the said administration should, from time to time, be posted to the divisional or headquarters office of such administration;
24.	That in the best interest of the administration of^ Indian Affairs, if there be officials therein who are incompetent, or incapacitated, or for any reason unable to fulfil their duties, such officials should be superannuated or retired from the service, without undue delay;
25.	That the project of building a central governmental hospital in northern Indian agencies, with nursing stations in far outlying districts be proceeded with at once; and
26.	That some statutory provision be made for the adequate oare of aged, infirm or blind Indians; and that in the meantime rations given to properly care for Indians should be sufficient in quantity and quality. Whilst your committee would like to express
due appreciation to all those individuals and organizations who have rendered valuable assistance to the deliberations of your committee, we feel that occasion must be taken to single out for special mention the very -ibiable contribution made by Mr. William 7immenrian. ^ J,r., Assistant Commissioner of Indian Affairs, Department of the Interior, U.S.A.. who came to Ottawa to inform your committee with regard to the administration c Indian Affairs in the said United States of America.
A copy of the minutes of proceedings and evidence is tabled herewith.
Mr. BROWN moved that the report be concurred in.
Mr. T. L. CHURCH (Broadview):: Mr. Speaker, so far as the deputations which have appeared before this committee during the past two years are concerned, the committee was a great disappointment; it did not take the action which was requested. There is only one point they had to decide, namely, are the Indians citizens or not. They were here 186 3'ears ahead of the British and French. Surely they are citizens; and if they are citizens they are entitled to all hospitalization and other services. It is really too bad that, after two years of talk and Cook's tours of the committee, nothing is done about it but talk.


Mr. J. H. BLACKMORE (Lethbridge):: Mr. Speaker, it seems to me that something ought to be said on this report before it is concurred in. I am not at all satisfied with the progress which is being made in dealing with our Indian problems in Canada. It seems to me that now is the time to register a protest. It looks to me as though all we as a parliament are endeavouring to do is to pass the buck, to use a common expression, in matters pertaining to the Indians. Last year we had a report from the committee on the Indian Act. It certainly was strong enough and certainly should have resulted in action this year, but no action has been forthcoming in any way commensurate with the recommendations of
the committee. Now we have another report, and though I hesitate to say it, it looked to me as though the government had not even the interest in it to hear the report-


James Angus MacKinnon: Oh, no.


John Horne Blackmore: -because it was suggested that the reading of the report be dispensed with. Had that report been read, every member of the house would have been able to hear what the report was.


James Angus MacKinnon: That suggestion was not from the government side.


John Horne Blackmore: If this is an indication of the general attitude of the government to the Indian question, I think it is high time that the members of the house had a good deal to say about the matter.


James Angus MacKinnon: That did not come from the government side.


John Horne Blackmore: The hearings of the Indian Act committee, I believe, have filled all members of the committee with grave concern with regard to affairs pertaining to the Indians in Canada. There is a serious shortage of educational facilities for the Indians. The Indian's means of earning a livelihood are far too inadequate. Much needs to be done in regard to that. The housing situation for the Indians is almost intolerable and their health conditions are simply deplorable. There is widespread unhappiness among the Indians because of the fact that many of the treaty obligations into which this government entered with them have not been observed; in fact, they have been broken.
I am speaking only in a broad and general way in order to avoid taking up an undue amount of our time, but I think what I have said is serious enough. I would urge the government that before this parliament meets again they have a programme which will really come to grips with the problem of the Indians and deal with it. As I recall it, our committee last year recommended that the old age pension be given to the Indians. Yet notwithstanding that, the old age pension was not given to the Indians this year, although an amendment to the Old Age Pensions Act was brought in. That would seem to indicate that the government is prepared to flout the recommendations of the committee. All this indicates a serious situation, Mr. Speaker. I am not at all satisfied, and the Indians throughout this country are not satisfied.


James Horace King: Is it the pleasure of the house to adopt the motion?


John Horne Blackmore: On division.


[Stage Direction]
Motion agreed to.
Royal Style and Titles Act

[Stage Direction]
OMISSION OF WORDS "iNDIAE IMPERATOR" AND "EMPEROR OF INDIA"
Right Hon. W. L. MACKENZIE KING (Prime Minister) moved for leave to introduce Bill No. 449, to provide for the alteration of His Majesty's royal style and titles.
Mr. MacINNIS:: Mr. Speaker, I wish to rise to a point of order in connection with this bill. It appears in the Votes and Proceedings today and it also appears on the order paper. If the Prime Minister wants the unanimous consent of the house, we are quite happy to give it; but unless that is done this procedure is irregular.


Thomas Langton Church: I am opposed to this change in the King's title, for the reasons I gave last Friday, Hansard, pages 5093-94. It will lead to civil war.


William Lyon Mackenzie King: May I say I was surprised myself when I saw this bill on the order paper this morning. I had given the notice of the bill to be placed on the Votes and Proceedings yesterday afternoon. If the house will give its unanimous consent to introduce the bill now, I would be pleased, and I think there is everything to be gained and nothing to lose by having the measure introduced at once. May I take it that I have the leave of the house to introduce the bill?
Some lion. MEMBERS: Agreed.


William Lyon Mackenzie King: Hon. members will recall that in enumerating the measures which would be considered before the end of the session I was careful to say that some measures might come up of which I had no knowledge at the time I was referring to the remaining list of bills that would be brought in. This is a case in point. The request for the measure which I am now introducing came from the British government at the beginning of this week; I had no knowledge of any probability of this measure being introduced this session until I received the communication from his majesty's government in England with respect to what they hoped might take place before this session of parliament prorogued. For that reason I shall give the house immediately a more lengthy explanation in introducing the bill than otherwise might be necessary. The purpose of the bill is simply to delete the words "Indiae Imperator" and "Emperor of India" from the style and title of his majesty, but so that hon. members may see the significance of this proposal and also the necessity for it I will give the house some details as to the circumstances which have rendered it advisable to enact this pro' posal at this time.
t'Mr. Blackmore.l
Last week the United Kingdom government introduced in the House of Commons at Westminster the India independence bill. This bill provides for the setting up in India of two independent members of the commonwealth, India and Pakistan. It will take effect on August 15. Full legislative power is conferred by this bill on the legislature of each of these countries and provisions comparable to those of the Statute of Westminster are applied to them.
When this bill becomes effective the relation of His Majesty to India and Pakistan will be the same as his relation to the other fully self-governing nations of the commonwealth. It follows from this .that the title "Emperor of India" which was added to the royal style and titles in 1877 will not be appropriate.	_	_
There has been included in the India independence bill a clause declaring that the parliament of the United Kingdom assents to the omission from the royal style and titles of the words "Indiae Imperator" and "Emperor of India."
In accordance with the recitals set out in the preamble of the Statute of Westminster the consent of each parliament in the commonwealth is necessary for an alteration in the royal style and titles. The purpose of the legislation which I am introducing is to give the assent of the Canadian parliament to the deletion of the words in question.
The matter of the general revision of the royal style and titles, raised earlier in this house, is not raised either by this bill or by the bill introduced in the house at Westminster. It is to be expected that this matter will be discussed at the next meeting of commonwealth prime ministers.
Motion agreed to and bill read the first time.


James Horace King: When shall said bill be read the second time?


Some hon. MEMBERS:: Now.


William Lyon Mackenzie King: No; next sitting. The purpose in giving an explanation of such length this morning was to give hon. members an opportunity to see for themselves exactly what the measure amounts to before second reading.


Mr. POULIOT:: If I am permitted, may I ask the Prime Minister what is the meaning of "royal style"? Is it the royal status, or what?


William Lyon Mackenzie King: It is a description, which speaks for itself; it is a style of address.



PRIVATE BILLS


[Stage Direction]
Bill No. 444, for the relief of Joseph Edmond Gerard Santoire.-Mr. Maybank.
Bill	No.	445,	for	the	relief	of	Alderic
Gemme.-Mr. Maybank.
Bill	No.	446,	for	the	relief	of	Pierre
Behoearay.'-Mr. Maybank.
Bill	No.	447,	for	the	relief	of	Joseph
Rosealphee Oderic Dussault.-Mr. Maybank.
Bill No. 448, for the relief of Dan Alonzo Dwight Wright.-Mr. Maybank.
Some hon. MEMBERS:: On division.



QUESTIONS

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

Mr. GREEN:: 1.	What costs, additional to contract price, were incurred through the allocations of material to the contractor, in the wartime housing project in the city of North Vancouver, under which approximately 695 houses were constructed?
2.	Were roads, sewers, water mains and septic tanks put in by contract on such project?
3.	If so, who were the contractors and what amounts were paid to each of them?
4.	What was the cost of the re-survey of the area?
5.	Who carried out such re-survey?


Mr. McILRAITH:: 1.	No additional costs were incurred thrpugh the allocation of material to the contractor in the wartime housing project in the city of North Vancouver in which approximately 750 houses were constructed.
2.	Yes.
3.	Smith Brothers & Wilson were the general contractors and were paid an amount of $447,746.03 for this work.
4.	No resurvey of the area was made. Survey costs $589.34.
5.	The survey was carried out by J. Rodger Burnes, dominion and British Columbia land surveyor, Vancouver, B.C.


WARTIME PRICES AND TRADE BOARD-J. E. SHIELDS
Mr. STOKES:: 1.	Has J. E. Shields, a solicitor of Kerrobert, Saskatchewan, during the years 1943 to date been retained by the wartime prices and trade board as prosecuting counsel?
2.	If so, on how many cases?
:3. What is the total amount of fees he has received in each of said years?
Questions
4.	What was the amount of the accounts rendered by him during the said period and what was the total amount taxed off, if any, before payment?
5.	Are there any outstanding bills of costs which have been rendered by him? If so, what amount?


Mr. MAYHEW:: 1.	Yes.
2.	Thirteen.
3.	Fiscal Years-
1943-44	 $ 60.00
194445	 166.36
1945-	46	
206.101946-	47	
523.804.	Total amounts of accounts rendered during the said period-$1,282.26.
Total amount taxed off before payment, $326.00.
5.	Yes-$76.18.


PUBLIC WORKS-ACTING CHIEF ARCHITECT EXPENSES
Mr. DIEFENBAKER:: What is the total amount paid for expenses incurred by C. G. Brault, acting chief architect, in the year ending March 31, 1947?


Mr. FOURNIER (Hull):: $283.52 (travelling expenses).


QUESTION PASSED AS ORDER FOR RETURN
Mr. TIMMINS:: 1.	How many income tax centres are there in Canada and where are they situated?
2.	What officer is in charge of each income tax centre; what is the name of the officer second in charge: what are their respective salaries, and how long has each been in the public service?
3.	For the years 1943, 1944, 1945 and 1946, what are the arrears of income taxes in each of the income tax centres?
4.	How many income tax cases were tried in the exchequer court or any other court, for income tax arrears in each of the years, 1943, 1944, 1945 and 1946?
5.	How many prosecutions were instituted in each of the years 1943 to 1946, inclusive, for non-payment of income taxes?
6.	How many persons in Canada are making payments in respect to income tax arrears after having been prosecuted or sued for such tax arrears?
7.	What is the aggregate amount of said arrears?
8.	How many of these cases are subject to payment by instalments, pursuant to settlement arrived at with the Minister of National Revenue or the deputy minister of national revenue
Inquiries of the Ministry

or other departmental official, and what is the aggregate amount involved in such settlements?
9.	How much money has been collected for succession duties, during each year since the Dominion Succession Duty Act came into force?


Mr. McCANN:: Return tabled.



CANADIAN BROADCASTING ACT


[Stage Direction]
Hon. J. J. McCANN (Minister of National Revenue) moved that the house go 'into committee at the next sitting to consider the following resolution:
That it is expedient to present a measure to amend the Canadian Broadcasting Act, 1936, to provide that the Minister of Finance shall deposit to the credit of the Canadian Broadcasting Corporation the gross amount of the moneys received in each year from licence fees in respect of private receiving licences and private station broadcasting licences without deducting therefrom any costs of collection or administration; with a consequent charge to the government for such costs of collection and administration.
He said: His Excellency the Governor General, having been informed of the subject matter of this resolution, recommends it to the consideration of the house.
Motion agreed to.
Mr. REID:: On division.


Thomas Langton Church: It is one of the most mischievous corporations in Canada.



JAPANESE PEACE SETTLEMENT


[Stage Direction]
On the orders of the day:
William Lyon Mackenzie King: Mr. Speaker, I wish to make a brief announcement with respect to the conference of commonwealth nations to be held at Canberra on August 26 next.
At the invitation of the Australian government a meeting of representatives of the governments of the British commonwealth is being held in Canberra commencing on August 26 to exchange views in an exploratory and noncommittal way on the forthcoming Japanese peace settlement. The Canadian government will be represented by Hon. Brooke Claxton, Minister of National Defence, assisted 'by Mr. K. A. Greene, high commissioner for Canada in Australia, Mr. E.	H. Norman, head of the Canadian liaison mission in Japan, Mr. R. E. Collins, alternate Canadian member on the Far Eastern commission, Washington. The governments of

Australia, United Kingdom, New Zealand and South Africa will, I understand, also be represented by cabinet ministers.
No decisions will be taken at this Canberra meeting which will affect the freedom of action of the Canadian government at the Japanese peace conference which is to be held, but it is thought that this preliminary exchange of views will be helpful to all the governments concerned.



INQUIRY AS TO SUBSIDIES TO DOMINION COAL COMPANY

[Stage Direction]
On the orders of the day:
Mr. A. J. BROOKS (Royal):: I should like to direct a question to the Minister of Reconstruction and Supply, based upon a statement made by President Arthur Cross of the Dominion Coal Company to a meeting of the shareholders of that company in Montreal. He is reported as having said:
Federal subsidies now being negotiated will be based on a fixed amount per ton, which will be gradually reduced as production per man increases.
Is the government negotiating the payment of subsidies to the Dominion Coal Company? If so, will other producers of coal in the maritime provinces receive the same consideration?


Right Hon. C. D. HOWE (Minister of Reconstruction and Supply):: Hon. members will recall that the royal commission on coal recommended' an interim subsidy for the mines of Cape Breton island to permit remodelling of the operation in that area so it may become self-sustaining. The government at present is studying the operation of the mines on Cape Breton island, and is considering subsidy provisions which will extend not beyond the end of the calendar year and will be very modest in amount, ibut which it is hoped will bridge over the transition period.
The report of the royal commission made no reference to the mines in other areas in Canada. Therefore no consideration is being given to subsidies to other mines.



INQUIRY FOR RETURN


Angus MacInnis: Mr. Speaker, may I direct a question to the Minister of Mines and Resources or the Secretary of State? On June 16 two orders for return standing in my name were approved by the house. The return to one was tabled today. When may I expect a return to the second?

Senate and Howe oj Commons Act


Clarence Decatur Howe: I shall 'be glad to look into it immediately and endeavour to bring it down this week.



SENATE AND HOUSE OF COMMONS


[Stage Direction]
Right Hon. W. L. MACKENZIE KING (Prime Minister) moved the second reading of Bill No. 443, to amend the Senate and House of Commons Act.
He said: The purpose of this bill is to provide an allowance of §7,000 to the leader of the government in the Senate, and an allowance of §4,000 to the leader of the opposition in the Senate, in addition to the regular allowance made as sessional indemnity. May I say at once, as was mentioned yesterday by t'he hon. member for Winnipeg North Centre (Mr. Knowles), that this measure should be considered apart altogether from the personalities involved at the moment as leaders of the government and of the opposition in the Senate respectively. All hon. members will appreciate what was said yesterday by the hon. member for Winnipeg North Centre to the effect that both leaders in the Senate are held in the highest regard and esteem by members not only of their own house but of this house as well.	,
The question to be considered at the moment is the particular question of whether a certain allowance should be made for the leader of the government in the other house and also for the leader of the opposition in the other house. So far as the principle of the measure is concerned, it has already met with acceptance in this house. I refer to the principle of giving to the leader of the opposition an additional allowance by statute for his service as leader of the opposition. The leader of the government, of course, receives a larger remuneration than ministers of the crown generally. That may be taken in part as a recognition of the duties which he has to perform as leader of the house as well as Prime Minister.
May I say a word first of the duties of the leader of the government in the other house. In most of the parliaments of the British commonwealth, the leader of the second chamber or upper chamber, whatever it may be called, is usually a member of the government who receives the salary of a minister of the crown. For example, in the United Kingdom, Lord Addison is a member of the House of Lords. He is also the Secretary of State for Commonwealth Relations, and he receives the salary which goes with that important government position. In Australia, New Zealand and in South Africa I think the arrangement is often similar, that the leader of the upper house is a minister holding a portfolio in the government and receiving the larger salary which goes with the portfolio he holds. So far as the leaders of the opposition are concerned in other parliaments of the commonwealth, I think Australia is the only country which has made provision for the leader of the opposition in the upper house. I understand that a bill has just gone through making provision for the leader of the opposition in the upper house.
May I point out that both the positions are of great responsibility. They are on the side of the house to which they relate, the most responsible positions in the two houses, because the leaders have to do with carrying on the business of the house and their office efficiently and effectively. The purpose of this measure is solely that of enabling them to perform this public function and duty more effectively and efficiently than might otherwise be possible.
The present leader of the government in the Senate is a member of the government without portfolio. He has to give to his duties an amount of his time much greater than that of any other senator.
Ian Alistair Mackenzie: Hear, hear.


William Lyon Mackenzie King: My hon. friend says "hear, hear." I think everyone will agree with that. He has to give a greater amount of time to the business of the country than any other member of the Senate would be expected to give. In order to perform that duty efficiently the leader of the government in the Senate has to be familiar with the government's policy and programme in all particulars. To be familiar with the government's policy and programme he has to attend meetings of cabinet very regularly. He has to attend those meetings not only during the time when the Senate is in session but between sessions as well. If hon. members opposite ever come to have the experience of preparing a parliamentary programme they will realize that it involves a good deal of time and thought on the part of ministers, whether with or without portfolio, for some little time before parliament meets. That is but one of the official duties. I need not say to hon. members today how much more complicated the business of legislation is at this time than it has ever been heretofore. The best evidence of that is the length of the parliamentary sessions themselves. If parliaments held sessions of two, three, or
6350	COMMONS
Senate and House oj Commons Act
four months it might be expected that leaders might be found to take on these extra obligations without expecting to be in any way recompensed financially for that obligation; however when a parliamentary sessions lasts, as ours apparently are going to continue to last, and as they have been in the last few years, for half a year or more, it is imposing a very heavy obligation on any individual, both financially and otherwise, to expect him to be able to familiarize himself with the legislation that comes before the two houses in the course of a particular session, and to explain policy as well as particulars of legislation. The character of the legislation, as I have indicated, is much more intricate and comprehensive in every way than has been the case with legislation in the past.
This house is familiar with the amount of time that has been given this session to international questions. The Senate is perhaps in many ways in a better position to devote a great deal of its time to international problems than is this house. Every encouragement should be given to the members of the upper house to give a. great deal of time and attention to all-important world problems. The leader of the government and the leader of the opposition in the Senate have to familiarize themselves with these problems. If they are to do that they will have to give a great deal of extra time to that particular work. There are also the individual measures that come from this house. The leader of the government has to make arrangements with members of his following, no matter in which house it is, to take charge of particular measures as they come up. To do that he himself has to be more or less familiar with the measures that are being brought forward. As I say, all of these things make the office of leader of .the government in the other house a much more responsible one today than it has been at any previous time.
Here I think I might as well answer the hon. member for Winnipeg North Centre at once about the strengthening of the Senate. He said yesterday he was surprised that a Liberal government, which has aimed at reforming the Senate, should bring in a measure of this kind. May I say I think what we are seeking to accomplish is a Very necessary reform. We have been hearing a great deal-


Some hon. MEMBERS:: No.


Some hon. MEMBERS:: Oh, oh.


William Lyon Mackenzie King: My hon. friends of the C.C.F. group laugh; but may I tell them if that is their attitude it will be a very long time before they will have anything, to do either with the government in the House of

Commons or with the business in the Senate. If they took the business of the government as a whole more seriously they would begin to realize the force of what I am saying at the moment.


Angus MacInnis: The argument is getting pretty weak.


Mr. KNOWLES:: And the Prime Minister knows it.


William Lyon Mackenzie King: The responsibility of the leader in the Senate is very great. As I was about to say when I was interrupted, hon. members are talking about not enough business being done in the Senate, about not enough bills coming from the Senate to this house. I say that that is largely the result of the fact that no leader, under the financial obligations which he must incur at this time, can, unless he is going to be compensated in some way for the extra time he will have to give to these questions, manage effectively the business of the Senate so as to ensure measures being introduced there in the first place, debated there and brought over to this house. The provision this bill seeks to make will help both the leader of the government and the leader of the opposition to give more of their time to the introduction of legislation in the other house and to careful discussion of it before it comes over to this house.
My hon. friend said that he was surprised that a Liberal government should introduce this measure, because we stood for democracy as well as for reform of the Senate. He argued that this was not a democratic measure. May I draw the attention of hon. members to the fact that we have pretty well reached the point so far as the Senate is concerned, and indeed so far as this house is concerned as well, where, unless the leaders are wealthy men, they are not going to be able to carry on the business of leadership. A measure of this kind will make it possible for any man, whether he be a man of means or one who is not too well off, if he is a leader to devote his time to the extent that it should be devoted to public business in the other house.
I attach a great deal of importance to that because I think one of the great reforms that has been made through the years has been that of recognizing that even members of parliament, who may not have any special obligations, have a right to expect a certain indemnity. But you cannot expect a person receiving only the ordinary indemnity, especially with taxation as it has come to be, to give as much time as he would like to be able to give, if he wishes to do his work effectively, in the position of leadership, with all that that involves ai this time. So I

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say to my hon. friend that this is a reform in that it will enable the Senate to function more effectively than it has up to the present, if on that score there is any exception to be taken. It will enable the leaders to organize the business of the upper house in a more effective way, and to that extent it will be assisting public business generally.
My hon. friend went on to say that the Senate was a useless institution. I think that was the phrase he used, or something to that effect. May I say that we are not debating the question at the moment whether the second house should be abolished, but I should be very surprised indeed if the people of Canada generally would not perhaps feel a greater need than ever for a second house if the C.C.F. - ever got into power. I can assure them that they need have no anxiety over the attitude of the public toward this measure. If my hon. friends were in power the public would need no end of safeguards-


Angus MacInnis: Big business.


William Lyon Mackenzie King: -in the conducting of public business. It is not big business. May I say to my hon. friend who interrupts and to his acting leader: Do they think that they are the only righteous men in this country?


Angus MacInnis: To hear the Prime Minister speak one would think that he thinks he is the only one.


William Lyon Mackenzie King: I am getting tired of having hon. members of their group talk as though they were the only honest men in this country, as though they were the only men with ideas in this country, as though hon. members in other parts of the house had not as high ideals and purposes as any other group. The hon. member for Winnipeg North Centre (Mr. Knowles) said, I think, that we were strengthening vested interests in helping to strengthen the position of the Senate. I would remind the hon. member that most of the members of the Senate came from the House of Commons. How did these hon. gentlemen get into the House of Commons other than by the support of the majority of the electors in their constituencies and with the confidence of the people of the constituency which they representedi, and who knew them best.


Stanley Howard Knowles: Many of them were beaten, and that is why they were sent over there.


Ian Alistair Mackenzie: Not as many as the C.C.F.; there were 200 defeated in the last election.


William Lyon Mackenzie King: The point I wish to make is this: so far as the other house
is concerned, if one takes its complexion it is impossible to say that it is representative of the vested interests or the big interests, or is made up of wealthy men. When one has regard for the positions which those hon. members held in public life, whether they were appointed by this government or by previous governments, he will realize that in most cases the appointments to the Senate were made from members of this House of Commons, from those who had had great experience or extra experience as ministers of the crown, or long experience in conducting the affairs of government. They were appointed' because the government of the day knew that they represented, the will and the wishes of the people or they would never have got into this House of Commons. I say to my hon friend that he had better not seek to reflect either upon the characteristics or the callings of hon. members of the other house of this parliament.
I have spoken of the necessity of giving the leader of the government in the other house a salary. I have said very little about the position of the leader of the opposition. I would draw the attention of the house to the fact that at one time no salary was paid to the leader of the opposition in this house. Twenty years and more ago special provision was made for the position of the leader of the opposition in this house. Why was that done? It was done as a means of furthering the public interest by assigning to one leader the special obligation of watching the progress of legislation as it went through this house and continually guarding the public interest from the point of view of the opposition as well as of the government.
So far as the positions of leader of the opposition in the Senate and in this House of Commons are concerned, the difference is in degree not in kind. The leader of the opposition in the Senate has to give a great deal of extra time to studying the measures that come before that house, in making arrangements with the leader of the government in regard to the conduct of business from day .to day, in associating himself with the work of committees, in meeting delegations and deputations. He has to meet the extra expense to which all leaders in public life are put. Unless we are going to have only wealthy men filling positions of high responsibility some additional remuneration will have to be given to the gentlemen who are in these responsible positions or else they will not be able to give as much of their time to them as otherwise would be the case.
I submit to the house that the time has come when, in the public interest and for the

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more effective discharge of public business, some additional allowance should be made to both the leader of the government and the leader of the opposition in the other house. I repeat, the reasons are much the same as have governed in this house. The change in the times necessitates this as their duties grow greater and greater from day to day and from year to year. Some special provision, I submit, is imperative if we are to have public business done as the country expects it to be done in both houses of parliament.


Mr. JOHN BRACKEN (Leader of the Opposition):: Mr. Speaker, the bill before us, Bill No. 443, is a bill to amend the Senate and House of Commons Act. As the Prime Minister (Mr. Mackenzie King) has said, in this bill the government proposes giving an additional allowance to the leader of the government and to the leader of the opposition in another place. In this discussion I am wandering whether one has to use that outmoded term or not.


William Lyon Mackenzie King: No.


John Bracken: I think it is time we got back to straight, talk and spoke of this institution respectfully as what it is, the Senate of Canada.
The bringing forward of this bill indicates that the government feels that the position of both leaders in the Senate carries with it greater responsibilities, and on this ground they base the present proposal of giving them an additional allowance. As to greater responsibilities, I am sure there can be no question about that. The question that does arise is one of curiosity: Why, if greater responsibilities justify an increase to the men who now hold these positions, has an additional allowance not been given prior to this time? This government has been in office for twenty years or so, but has never before made any move in this direction. We have had confederation for eighty years, and no move has been made in this direction. The Prime Minister has indicated that at the moment greater responsibilities devolve upon us all. That is true. Yet the fact remains that in all these past years the men who occupy these positions in the Senate did carry greater responsibilities than their associates who were private members in that house.
In view of the statement which the Prime Minister has made and the statement made by the hon. member for Winnipeg North Centre (Mr. Knowles) the other day I think perhaps I should take a moment to explain oui position with reference to this measure. It can be briefly stated.

If the leaders in the other house have added responsibilities I think there is every justification for giving consideration to a larger allowance for them. How much that should be may be a matter of judgment. The government in its wisdom has indicated that the leader of the government in the Senate should get an additional allowance of $7,000 and the leader of the opposition an additional allowance of $4,000, making a total allowance to the leader of the government there of $13,000 and a total for the leader of the opposition of $10,000. I think on the basis of added responsibilities there is something to be said for making these greater allowances. If the Senate is an essential part of our government institutions we cannot just pass off a measure like this without giving it some reasonable consideration. On the other hand if that institution does require some reform and has not had it, and there is no proposal here that measures shall be taken to bring about reforms in the Senate that would be in the public welfare, there is some excuse for saying, as a measure of protest, that we do not want to take a position of supporting this institution in its present form by this action. I say there may be some justification for that.
As to greater responsibilities there can be no question. As to the essential place which this institution occupies in our government there can be no question. The only question is whether steps should not be taken for its reform.
Our position is briefly this: We believe in a second chamber. We do not believe in the abolition of the Senate. We do believe in its reform. We believe in maintaining that institution for several reasons, as a check against hasty and ill-considered legislation, as a protection for minorities, as a protection for the provinces in a federal system, and there may be other reasons. As I said, we are opposed to the abolition of the Senate. But we do think it should be reformed. I make no comment now on the various suggestions which have been made as to how it should be reformed. Some have said that its members should be elected by the people and not be appointed by a party government.


Mr. IIARTT:: Then I would have a better chance.


John Bracken: The hon. member's chance will be good if he gets defeated in the next election.


Ian Alistair Mackenzie: There is no chance of that.


John Bracken: One suggestion that has been made is that the members of the Senate

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should be elected by the people rather than appointed by a party government. Another suggestion is that their term of office should be fixed, some have said at ten years, others for different terms, rather than that it should be a life appointment. Some have said that the provincial governments should be allowed in some way or other to choose some of the members of the Senate, and some have suggested that they should choose half of its membership. Some have said that the present incumbents in the Senate should not be disturbed. I am in some sympathy with each one of these proposals, but I make no comment on them now.
My suggestion is this, that there should be called together a joint committee, a representative body composed of representatives of this house and from the other place and representatives from the provinces, to consider the situation as it now exists in our parliamentary system and see what can be done to strengthen the Senate, having in mind nothing else but the welfare of the Canadian people. That is my proposal. That is our position, andi in that position I have the support of some outstanding men in Canada. I want to read what one of them had to say at a time when he was a crusader for Senate reform and other kinds of reform. I am glad to know that at one time he supported the policy we now stand for. I am quoting from a paper which at that time was a strong supporter of the present government, known then as the Globe. This is from its issue of Monday, September 7, 1925. when the party opposite had a crusading spirit and progressive policies and when some of its members supported what I now advocate, and I hope when I sit down they will all support my proposal. This is what that great Liberal newspaper had to say, referring to the present Prime Minister (Mr. Mackenzie King):
No declaration by the Prime Minister throughout the whole of his address was more enthusiastically received by the North York electors than that in which he declared for Senate reform. Loud "hear, hear" and applause which lasted nearly two minutes greeted his declaration:	"We believe one of the great necessities
of the time is Senate reform."
We have had this morning one evidence of his notion of senate reform. I do not know what others there have been in the intervening 21 or 22 years, but we have had one evidence this morning. The report goes on:
But the difficulty in consummating Senate reform, Premier King proceeded, lay in the fact that the Senate itself had to approve of any parliamentary measure to reform it, and its members could not be removed by any action of the people or the commons.
"Who appoints them?" demanded a member of the audience. "I am coming to that", replied the premier.
"Throw them put", demanded several other's in chorus.
Then the report continues:
Proposed interprovincial conferences to discuss Senate reform, went on Mr. King, constitute at best an attempt to reform the Senate from without, whereas reform from within was the only effective way in which it could be brought about. He proposed reforming it from within by appointing hereafter only men pledged to oarry out the policies of the Liberal government.
Now in so far as that particular reform is concerned, the Prime Minister has carried it out.


Some hon. MEMBERS:: Hear, hear.


John Bracken: When he started there
was a majority against him, I believe he said, of 23 or 24 or 25. Now he has 66 on his side and there are only 22 on the other side, so that he has been faithful in carrying out his policy in that respect. This report goes on to quote the Prime Minister. These words are a quotation and evidently they are his:
"We believe the effective way to reform the Senate is to take advantage of the opportunities as they arise," declared Mr. King,-


William Lyon Mackenzie King: Just what we have done.


John Bracken: "and to see that no one is appointed to the Senate who will not undertake to support the policy of the Liberal administration-"


Some hon. MEMBERS:: Hear, hear.


John Bracken: You applauded a little
too soon that time. You did not give me a chance to finish the sentence:
"and to see that no one is appointed to the Senate who will not undertake to support the policy of the Liberal administration with respect to reform of the Senate."


Some hon. MEMBERS:: Hear, hear.


John Bracken: This is a very enlightening document and one that supports the position I am taking. That is why I am reading it. To continue:
Responsible government had been threatened, he agreed, by the action of the senators in throwing out government legislation, and he was the last man who needed to be prodded into activity in the defence of responsible government.


Some hon. MEMBERS:: Hear, hear.


John Bracken: Supposing last year he had dissolved parliament upon the Senate issue, he was not so sure, he said, that that issue would have been accepted throughout Canada as a major one. To-day the issue was more apparent.

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Then the report goes on:	'
"In addition to that," he said, "the government of to-day-
Speaking of his own.

is in the position to come before the people and give a guarantee of how it will he able to effect that Senate reform. _ When we came into office there were twenty-six of a majority in the Senate.
That is, I presume, twenty-six against him.
It was twenty-three, I think, the day before yesterday. Today the number has been reduced by ten, or will be within the next few days. The government has waited for the filling of the different vacancies until it could take the right moment to act. We have appointed to the Senate gentlemen to fill vacancies in eight out of ten vacancies-the other two will be appointed shortly, and every one of these men gets his appointment on the understanding that he stands for the policy of the Liberal government with respect to Senate reform,-
Some hoD. MEMBERS: Hear, hear.


Stanley Howard Knowles: That is democracy.


John Bracken: -and will fight for that policy in the Senate itself".


Some hon. MEMBERS:: Hear, hear.
An lion. MEMBER: Tres bien.


John Bracken: I presume all the senators who have been appointed since that time have signed on the dotted line this requirement by the Prime Minister so that he can now have any kind of Senate reform that is desirable. I think that is a good position to have them in, but I would like to be assured by the Prime Minister that he has that assurance from them all, and I would like to have that verified by them all.
Now what is the situation, Mr. Speaker? Here is a body which is necessary to our form of government. It is filled by appointments from the parties that are in power. One party is in power a long time and gets many of its supporters there. At the present time there are 66 supporting the government and 22 against them, appointed on the regional basis. I believe there are 24 from the maritimes, 24 from each of the central provinces and 24 from the west. But it has resulted in a onesided representation over there; it has resulted in failure to get anything like occupational representation.
I am the last to suggest that that should be the basis of representation in any parliamentary body, but at least there should be some approach to better occupational representation than there is today, because in that body, out of 96 members there are only

13-who can be classed as farmers and only one who can be called a labour man.
Our position, briefly, is this. Some justification can. be made for paying men for additional work they do. We can approach this thing from the point of view of prejudice and say, "Well, there is popular prejudice against this institution and we will not do anything to help it". I do not think that is a constructive approach. We can approach it from another point of view also, and say, "We have done little for old age, the aged people in this country, giving them an increase of only SCO a year, and here we are going to give seven thousand to one man and so much to another.
I suggest that is not the statesmanlike approach to the matter. We are prepared to support the government in this measure provided they will give us some assurance that some steps along these lines will be taken to try to lay the foundation for reforming this institution so as to make it more useful for the people of Canada. If the government can give us that assurance we will support them in this measure eveu though at the moment it may not be the popular thing to do. If they cannot give us that assurance they must proceed with their measure without our support.


Stanley Howard Knowles: Mr. Speaker, in just a sentence I should like to repeat the remark I made yesterday, that we approach this matter on its merits with regard to the principle at stake and not with reference to any personalities at all. I am grateful 'to the Prime Minister for echoing the sentiments I expressed yesterday with regard to the two men who would be immediately affected. I would like to go one step further and say that not only have I a high regard for the two men immediately affected, but I have had the privilege of meeting and getting to know a number of other senators, and I regard them as men who have rendered a distinguished public service, men to be held in high esteem. We are all agreed on that phase of the matter and on the fact that we are discussing this as a matter of principle.
I also wish to point out that the amount of money involved in this bill is, in terms of federal budgets, infinitesimal. The total amount of money to be added to the cost of government by this bill is only SI 1,000 a year. When one takes time to debate such a measure it is because a principle is at stake. I want to say that I agree with *those who have said that work should be paid for. But I am not yet convinced that Their Honours in the other place are underpaid for the amount of

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work which is given them to do. As for the suggestion of the Prime Minister that they should be given more work and that we start paying their leaders first in order to encourage them to take on more work, I submit that is contrary to the democratic approach and contrary to the whole aim at Senate reform which was in the crusading heart of the Prime Minister over twenty years ago. I. know that during recent years from some quarters of this house there have been requests for more work to originate in the Senate, but they have not come from this group. We fee'l, as the Prime Minister felt twenty years ago, that the elected representatives of the people should have supremacy in matters of legislation. The Prime Minister's whole case for paying this extra money rests upon the assumption that the place of the Senate in our parliament set-up is a justifiable one.
I am not going into the arguments for abolition of the Senate at this time, because we who favour that course are in a minority in this house. But I feel, as the leader of the opposition didi, that we have a right and duty to appeal to hon. members opposite- to measure up, as the Prime Minister put it, to their own high ideals and purposes. I do not deny for one minute that hon. members opposite are just as high in their ideals and purposes as we in this group claim to be; and I am tired of these references to righteousness on the part of members in any quarter in this house. As a matter of fact, Mr. Speaker, as one reads the pages of Hansard in years gone by, and as one reads party platforms, he finds in Liberal literature the highest of idealism and purposes down across the years. But what bothers us is that they can hold those ideals for years and years and never do anything about them.
I observe, Mr. Speaker, that you have picked up the bill, no doubt as a suggestion that I should speak about it; and that is, in fact, what I propose to do. The bill before us is No. 443, an act to amend the Senate and House of Commons Act, to provide what the Prime Minister implies today is reform of the Senate. The Prime Minister used that very expression; he said he thought this was a reform which was long overdue. I cannot see that it is in any sense an expression of the kind of reform of the Senate for which the Liberal party has stood down across the years. I want to say something about the position of the Liberal party, as did the leader of the opposition. But before I do so, there are two other remarks of the Prime Minister to which I wish to make a brief answer.
First of all, I wish to point out to the Prime Minister that in my remarks yesterday I did not refer to individuals in the Senate as representing vested interests. What I said was that we were creating a vested interest in the Senate itself, by strengthening it in this way. The other point I wish to make in reply to what the Prime Minister said is to the effect that I think he let the cat out of the bag when he said that when the C.C.F. comes to power it might, in his opinion, be good for Canada still to have the Senate there. The implication there was that, after the people of Canada have decided in a democratic way that they want the C.C.F. in power, a Senate appointed by the Liberals, appointed largely by the Prime Minister himself, should, he thinks, still be there to block legislation which the people of this country had declared they wanted by putting this party in power. That is a far cry from the position the Prime Minister took in this House of Commons on July 19, 1924, which was a position similar to the one he took on a number of occasions during those early twenties when the majority in the Senate was against him. In that period of time, with his crusading spirit, he rose in this house time and time again and declared that this House of Commons should be supreme, that this House of Commons should have the right to enact the legislation which it was elected by the people of Canada to put on the statute books.
On July 19, 1924, the Senate had, by a certain device, rejected proposed amendments made by the House of Commons to the Pension Act, the act having to do with military pensions. The House of Commons was put in a jam; they had to accept the deletions made in the other place in order not to lose some of the benefits that were in the amendments to the Pension Act which had been passed by this house. After the house had faced the fact that it was in a jam and had to agree to it, the Prime Minister had this to say. as reported in Hansard of July 19, 1924, at page 4S72:
Right Hon. W. L. Mackenzie King (Prime Minister):	Mr. Speaker, having in mind the
action of the second chamber with respect to the measure which has just been amended and also the fate of a number of bills adopted by the Commons and defeated in the Senate. I think hon. members will agree with me that the time has come when the Commons in Canada should seek to gain rights and privileges with respect to legislation originating in this chamber similar to those which have obtained by the House of Commons in the parliament at Westminster. I may say that the government had under consideration, prior to the opening of this session, legislation with this end in view, but we were anxious the public should feel fully convinced of the necessity before pressing it on the attention of parliament.

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Later in, that same statement-and remember that this is back in 1924, twenty-three years ago-he said:
I desire to assure the house that when parliament reassembles steps will be taken by the government to obtain, if possible, means whereby bills may be enacted by and with the advice and consent of the House of Commons under conditions similar in principle to those which have been sanctioned for the parliament of the United Kingdom.
I submit, Mr. Speaker, that if the principle that the Commons should be supreme was sound back in 1924, the Prime Minister should not alter that principle when he envisages the possibility of the C.C.F. being .in power.


William Lyon Mackenzie King: I never envisaged it. I was careful to say "if", not "when", they came in.


Stanley Howard Knowles: Even on the Prime Minister's terms, he said that if that should happen it might be good for Canada to have the Senate there which he had appointed, to block-


Angus MacInnis: The will of the people.


Stanley Howard Knowles: -the will of the people as expressed through a C.C.F. government.


William Lyon Mackenzie King: My hon.
friend is going too far when he says that I should like to see a Senate which will block what hon. gentlemen opposite might do should they ever come into power. I have never given an intimation of anything of the kind. I would hope that whatever party is in power in this house would get good support from the Senate so long as their measures did not involve going to such lengths in some as might seem to unsettle the Senate altogether.


Stanley Howard Knowles: Mr. Speaker, I will let the record speak for itself. I am not surprised the Prime Minister wanting to put what he said aright a bit, because it was pretty clear to us that he had let the cat out of the bag in the statement he made when he spoke a little earlier.
The Prime Minister objected to my remark of yesterday that this would have the effect of strengthening the Senate. I want to point out that this is exactly what it does; it crystallizes the Senate in its present form. I found it a bit difficult to follow the position taken by the leader of the opposition (Mr. Bracken), but I think I got it before he finished. I take it that he is not prepared to agree to this measure unless he gets an assurance from the Prime Minister that the Senate will be reformed somewhat along the lines he suggested. In view of the fact that these promises to reform the Senate have been

made by the Prime Minister for twenty-three years, I would advise the leader of the opposition to demand that some of these reforms be made before he agrees to these increases. The assurance that it will be done puts it on a pretty long-range basis, from our experience with the Prime Minister. I think it is going about it the wrong way to say yes, we will agree to this now, but we do so on the understanding that next year or the year after you will bring in some Senate reforms. I think the leader of the opposition would be better advised to say to the Prime Minister-and I am talking on their terms, not ours-"We will oppose this measure until you bring it in as part of an over-all reform of the Senate."


John Bracken: O ye of little faith!


Stanley Howard Knowles: The leader of the opposition had faith in the Prime Minister for a good many years, until finally he decided he had better break his connections and get into another party. The hon. gentleman referred to pledges extracted by the Prime Minister from gentlemen he appointed to the Senate back in the twenties, to support Senate reform. I should like to add to the quotations given by the leader of the opposition. He quoted from a daily newspaper; I wish to quote from Hansard for July 12, 1926, at page 105. At that time Mr. C. W. Bell, then member for West Hamilton, quoted, without its being challenged, a statement made by the Prime Minister in London, Ontario, on October 16, 1925, while speaking in the rink in that city. This is the quotation:
Only a few days ago a number of senators were appointed. Every one has given me his pledged word he will be prepared, once a measure passes the Commons, to give it his support. Subsequent senators will be appointed with that understanding, and as Providence takes away a few of the older senators you will have a Senate pledged to bring about the reforms for which the administration stands.
Well, Providence has done its part; many of the older members have been taken away during the years that have intervened, and I wonder now if this is the kind of reform those members were pledged to support. Then on February 26, 1927, as recorded in volume 1 of Hansard for that year at page 355, the matter was made still more one of record by questions which were placed upon the order paper and answered by the Prime Minister. Let me read the questions:
Mr. Evans:
1. What is the form or wording of the pledge, if any, taken from _ those who have been appointed senators during the last two years with a view to Senate reform?

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2. How many hiave been thus pledged?
Right Hon. Mr. Mackenzie King-
There can be no doubt about the authenticity of this. It is not a quotation from a newspaper; it is the Prime Minister's answer to questions placed upon Hansard-.
Right Hon. Mr. Mackenzie King:
1.	An assurance of support of such measure of Senate reform, in conformity with the requirements of the constitution, as may be introduced by the Liberal administration.
2.	This assurance has been given by ^11 who have accepted appointment to the Senate within the time mentioned.
I will not bother to reedio the comments which appear in Hansard of those days about the dictatorial methods involved, for as a matter of fact, holding the view I do of the Senate, I think in his crusading spirit the Prime Minister was doing a good job in those days to get these pledges and to tell the country that on the basis of those pledges the Senate would be reformed from within. But we have waited a long time; and, as the leader of the opposition says, he cannot recall any other reforms in recent years until now we get this one. to increase the salaries paid two members of the Senate.
Another interesting quotation, which is particularly appropriate in the dying days of a session, appears in Hansard for June 4, 1926, volume 4 of that year, at page 4030:
Senate Reform On the orders of the day:
Right Hon. Arthur Meighen (Leader of the Opposition): May I ask the Prime Minister if there is to be any action taken this session with respect to Senate reform? If not, when is the next move to be made in this direction and of what character?
This question reminds me very much of the suggestion made by the leader of the opposition today.
Mr. Jacobs: At the next sitting of the house.
Right Hon. W. L. Mackenzie King (Prime Minister): I might say to my right hon. friend that the government would not like to prolong the session unduly by introducing the subject of Senate reform at this stage. My right hon. friend may be sure it will come up in due course.
Well, Mr. Speaker, if I may use the word, that is a honey. In 1926 it was thought by the Prime Minister unwise to prolong the session in its dying days by introducing a measure of Senate reform. In those days his idea of Senate reform was to clip the wings of the Senate. But now in 1947, when we are at the close of the session, it is perfectly all right to prolong the session :by introducing this sort of measure of Senate reform, which instead of clipping their wings gives them a few more feathers. The leader of the opposition and I
have been quoting an outstanding authority in the person of the Prime Minister.


Some hon. MEMBERS:: Hear, hear.


Stanley Howard Knowles: I am glad to note the retroactive support of hon. members opposite for the views the Prime Minister held over twenty years ago, and my appeal to them is to stand by those convictions even though the Prime Minister seems to have moved away from them. But we should not take all our cues from the Prime Minister in this matter; for there might be some other authorities. I am going to refer to one other. This quotation is from volume 1 of Hansard for 1935, at page 102. The speaker was Mr. Humphrey Mitchell, who was then a private member sitting over on this side. He said:
I believe it was the leader of the opposition who raised the discussion concerning the Senate. I am making reference to all these points because I believe one would do better to put his finger on the spot where the sand may be put into the machinery.


Some hon. MEMBERS:: Oh, oh.


Stanley Howard Knowles: I take it that hon. gentlemen have no doubt this is a quotation from the present Minister of Labour (Mr. Mitchell).
The right hon. gentleman has said that we have a Tory Senate. If I gather anything from the temper of the Canadian people, and if it is the policy of the Senate to put sand into the machinery, then we will have to reform the Senate.
Then come these words, with particular meaning in view of the portfolio the minister now holds, and one of the branches of his department:
The time lias long since passed when the Senate should be used as unemployment insurance for many of those in political life.


Some hon. MEMBERS:: Oh, oh.


Stanley Howard Knowles: Therefore, Mr. Speaker, because of this long build-up with regard to the attitude of the Liberal party toward the Senate I quite sincerely suggest to the Prime Minister that he consider withdrawing this measure or at least letting it die on the order paper. We are near the end of the session; it is quite easy to do that. All he has to do is to have some hon. member move the adjournment of the debate and let it die when the session ends. I am sure if he does that he will have the support of many hon. members on his own side.
I do not profess to know too much about the attitude of supporters of the Liberal party in eastern Canada, but I know that Liberals in western Canada do not take kindly toward the unrepresentative, undemocratic character of the Senate, and they will find it very hard
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to understand their Liberal representatives in parliament supporting a measure of this kind. If the Prime Minister will not withdraw it I suggest that he do the democratic thing and permit the house to take a free vote on this measure.
Some bon. MEMBERS: Hear, hear.


Stanley Howard Knowles: I hope it will be noted that the "hear, hears" come from the other side, which indicates that Liberal members would) like to have that opportunity. I suggest to the Liberal members on this one occasion that to think they are willing to be misled by any suggestion that a defeat of this measure would 'bring on an election would be a ridiculous rumour to spread. The Prime Minister would never go to the country because of the defeat of this measure.


William Lyon Mackenzie King: Don't be too sure.


Stanley Howard Knowles: Well, if there were a chance of going to the country on the defeat of this measure, coming on top of such an unproductive session as we have had this year, we of this group would welcome it wholeheartedly.
I ask the private members of the Liberal party opposite to consider the difficulties they will have when they go back to their constituencies and try to explain this measure.


Some hon. MEMBERS:: No.


Stanley Howard Knowles: Nothing has been done about health; nothing has been done about housing.


Mr. MUTCH:: Don't worry about us.


Mr. SINCLAIR (Vancouver North):: Wait until Monday evening in Halifax.


Mr. DEPUTY SPEAKER:: I must ask the hon. member to confine his remarks to the principle of the bill.


Stanley Howard Knowles: Mr. Speaker, the motion before the house is that the house give second reading to Bill No. 443. It seems to me that gives me the right to discuss the circumstances in which that bill is introduced. I submit that coming at the end of a session which has failed the people, and which has failed to get many other things, but has provided a special pension for diplomats of S3,000 a year at the age of sixty-five to bring this thing in is adding insult to injury so far as hon. members opposite are concerned.


An hon. MEMBER:: Sipeak for yourself.


Mr. PROBE:: And reclassification of the civil service.


Stanley Howard Knowles: When the government of this country finds it possible to raise the old age pension by only $5, as the leader of the opposition said, and increase one man's salary from $6,000 to $13,000, I suggest with all respect to the leader of the opposition that it is not showing any feeling of prejudice to oppose that kind of thing. Hon. members come down here to fight for the interests of the people. That applies to hon. members opposite as it does to us. I know that, and I could name a number of them. All of us, government supporters and opposition supporters, find it difficult to go home and explain to our people that all kinds of things which are just and right for the ordinary people of this country cannot be done, because


Mr. MARTIN:: Why does the hon. member not tell the truth?


Stanley Howard Knowles: -there is no time. When diplomats come into the service at sixty and need a pension at sixty-five, a special act can be brought in. When leaders of the Senate, in the opinion of the Prime Minister, are overworked, despite his arguments for reform across the years, a special act can be brought in. I submit that it is getting a long way from the concept of democracy that our people have. Our people feel that parliament represents the people and is here to do the things that are in their best interests. We hear a great deal of talk these days about threats to democracy. The threats to democracy are not so much the threats from without as the threats from within, such as the scale of values that the government brings before this parliament with respect to the kind of legislation that we have had this year. Therefore Mr. Speaker, throughout what I have had to say I have tried to argue on the basis of the position of the Liberal party. I go farther than they do and I admit quite openly that I feel the Senate should be abolished, but the Liberal party does not stand for that; it stands for reform and: I am asking Liberal members to stand by their own principles.
By the way, the Prime Minister made some reference to the fact that there are extra payments for leaders in the upper houses in some other parts of the commonwealth. May I point out that in Australia the upper house is elected, which puts it on- quite a different basis. If my information is correct, there are no salaries as such attached to membership in the House of Lords in the United Kingdom.


Paul Joseph James Martin: 
Stanley Howard Knowles: I stand corrected on that, but so far as the lords generally are concerned there is no salary associated with their job.


Donald Methuen Fleming: The Lord Chancellor does much more than lead the government in the House of Lords.


Stanley Howard Knowles: As a matter of fact members of the cabinet in this parliament and in the legislature of the various provinces get these extra salaries not for their position as cabinet ministers, but because they head and administer a department. I submit that it is discrimination against cabinet ministers over there, who get extra salaries for the job they do the year around administering their departments, to give a similar extra amount to gentlemen who do not head departments.


James Sinclair: What about the leader of the opposition?


Stanley Howard Knowles: The leader of the opposition here is a member of an elected institution. That is the underlying principle about this whole matter, which the Prime Minister has overlooked. He has made his argument about the Senate on the assumption that it plays a proper place in our parliamentary set-up. That is not the view he took back in the twenties.
Perhaps I had better bring my remarks to a close and say to hon. members opposite that I do not doubt they find this situation a difficult one. They know where their party has stood down across the years. On the other hand there is a sort of tradition that anything that comes from our side of the house must be opposed by them; but they know that the Prime Minister, despite what he said a few minutes ago, would not go to the country on this issue. I suggest that at least the vote on this matter might be delayed until the Liberal members have conferred with their leader to see if they could not find some way out. I appeal also to the leader of the opposition to realize that if he wants to get the side of the bargain he is interested in he had better hold off his support of this measure.
To sum up, and feeling that this measure should definitely be blocked so far as this session is concerned, I have pleasure in moving, seconded by the hon. member for Prince Albert (Mr. Bowerman):
That the word "now" be left out, and the words "this day six months hence" be added at the end of the question.


William Ross Macdonald: Is the house ready for the question?


William Lyon Mackenzie King: I want to say just a word on the amendment. My hon. friend who has
just moved this amendment has taken exception to the measure coming at this stage of the session. May I draw his attention to the fact that t'he notice of this bill has been on the order paper for a very considerable time. It was placed there so that hon. members would know the intention of the government with respect to the legislation of the session. It was left until this moment because there were more important measures which the government thought should have precedence.


Stanley Howard Knowles: And there still are.


William Lyon Mackenzie King: If my hon. friend will allow me, I should like to make my statement. The measures in which the government thought the house as a whole were most interested received precedence. I also tried to arrange matters in such a way as to leave to near the end any measure that was likely to prove controversial. I knew hon. gentlemen opposite were going to take the attitude they have, and I therefore gave precedence as far as I could to -other measures in order that we might be sure of their getting through in plenty of time.
It is now about a quarter to one o'clock;
I do not want to delay the vote, but I should like to answer one or two points that have been raised by hon. gentlemen apposite.
The leader of the opposition asked why this reform, as it has been called, has been delayed so long. May I say to him that the same argument could be applied to the question why no allowance was given to the leader of the opposition in this house for so long a time. My hon. friend went back to the days of confederation. As I remember, a Conservative government was in power most of the time from the days of confederation up to 1896, and during all that time they made no provision for any salary for the leader of the opposition. It was the leader of the Liberal administration who introduced that reform. I find that Sir Wilfrid Laurier introduced a bill to amend the act respecting the Senate and House of Commons on April 20, 1905, and section 2 of that bill reads:
To the member occupying the recognized position of leader of the opposition in the House of Commons there shall be payable an additional sessional allowance of seven thousand dollars.
That amount has since been increased.
I said a moment ago that I thought that had happened some twenty years or more ago. I do not think one should trust one's memory too much as one becomes older, because I find now that it was in 1905, forty-two years ago, that that measure was introduced by the Liberal administration of the day. As I say, the business of the country
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has increased vastly with the years, and the obligations of the leaders have grown in the other house as well as in this. That is why we are asking for this increase in allowances.
Many quotations have been made from previous speeches of mine in regard to reforming the Senate. I must say that I feel highly complimented by the extent to which hon. gentlemen opposite are beginning to take so many of my teachings to heart. It is like the Senate itself; it has taken a long time to reform it, but there has been a tremendous reformation.
My hon. friends have read quotations of mine about democratic legislation having been thrown out whenever it went over to the other house. That was the condition when we came into office. There was very little chance in those days of getting through both houses measures of the type of social legislation we have since put through because it would be turned down in the other house. But what a change has taken place since that time. I promised that we would see that the Senate was reformed so that liberal measures that were being enacted would be put through. May I say that we have carried out that reform much more thoroughly and effectively than I ever believed would be possible at the time I made that statement. If we stay here much longer you may be sure that that reform will go on, and we will make doubly sure that democratic measures and social legislation passed by this house will get through the upper house.
I should like to correct one impression some hon. members appear to have. Apparently it is thought that the leader of the government in the Senate, as a cabinet minister without portfolio, receives a salary. May I say that he gets nothing at all as a. minister without portfolio either in the way of salary or allowance. Being a member of the government and having to have a knowledge of government business, its programme, policy and the like, the leader of the government in the Senate is obliged to have a residence in this city practically the whole year round, and he is put to that additional expense.
These are things which I think it is only right should be known to hon. members. The provision being made by this bill is something that will govern through the years to come. Before I conclude, may I say this to my friends of the C.C.F. who suggest that Liberals in the Senate might be inclined to throw out some of their legislation should they come to power. If I am correctly informed, the president of the C.C.F. party in British Columbia made this statement:
The first duty of this party when it comes to power is the bold and ruthless removal from private hands of the means of production.

If there is anything like that, I can tell my hon. friends that it certainly will be thrown out by the Senate. If their idea is that they are going to bring .measures before the house which will mean that no business can be carried on under private enterprise, I shall be very much mistaken if they might get it through either this or the other house at any time.
Mr. SOLON E. LOW (Peace River): Mr. Speaker, I shall detain the house for only a moment, to make clear the position of' this group with respect to Bill No. 443. We have tried to consider it apart from the persons who occupy the two positions mentioned in the bill. I have a high regard for both those gentlemen, whom I know; and I have tried to keep, personalities completely out of my consideration of the matter.
We look upon the bill as one more evidence of the tendency of the government which has been demonstrated so many times during this session, that is, to raise the incomes and grant security to certain, selected classes of people while neglecting to consider measures to increase adequately the incomes of substantial groups who aTe much more in need. When the government presents tangible evidence of a determination to make possible for the messes of the Canadian people a fair level of income and social security, then I will not hesitate to support the Prime Minister in his proposal to provide allowances for the leaders in the senate.
I suggest that when the government have given, tangible evidence of a determination to make it possible for the masses of Canadians to have a fair level of income and social security, then the bill to provide allowances for the leaders of the senate ought to be brought in along with a general reform measure for the Senate. I believe that this house would have received this bill with much more grace and would, have given it more favourable consideration had it been attached to a general reform measure. Under the circumstances our group will not support the Prime Minister's bill.


Angus MacInnis: Mr. Speaker, I think the few remarks I have to make can be completed before one o'clock. I would not have risen except for the statement of the Prime Minister (Mr. Mackenzie King) that the members of this group were not taking their duties in the house seriously. What is hurting the right hon. gentleman is not that we are not taking our duties seriously but that we are taking them too seriously. He knows that very well.
I have been here quite a long time now, and I have noticed that the Prime Minister is

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becoming more and more impatient with opposition to his proposals. That is usually the result of a long period in power. So far as this group is concerned his impatience is not going to do him any good, because we are going to deal with questions as they arise regardless of what anyone may think.
What the Prime Minister thinks of the Senate should not be measured by what he said today, but by his action in 1945 when he brought in the first resolution to increase the indemnities of members of parliament. The members of the Senate were not included; consequently the Prime Minister must have felt that the senators if not overpaid, were at least paid enough without any increased indemnity. But finally they got that increase, and now, a very short time afterwards, a bill is brought down by the government to increase the allowances to the leaders of the two parties in the other place.
I wish to associate myself with other members who have said that in this matter personalities do not count at all. I know the leader of the official opposition in the Senate fairly well. He is a gentleman for whom I have a high regard. I know the government leader in the Senate not so well, but I think he is a great improvement over the senators who were in the Senate in 1926 when they were considering the first old age pension bill in the other place. My position, therefore, has nothing whatever to do with the personalities of the two gentlemen concerned.
I would draw attention again to a quotation made by the hon. member for Winnipeg North Centre (Mr. Knowles), from page 105 of volume I of Hansard, January 12, 1926. Mr. C. W. Bell, the then member for Hamilton West, was speaking, and he said that the present Prime Minister, speaking in London on October 16, 1925, made this statement:
Only a few days ago a number of senators were appointed. Every one has given me his pledged word he will be prepared, once a measure passes the Commons

I want hon. members to note this:
-once a measure passes the Commons, to give it his support. Subsequent senators will be appointed with that understanding, and as Providence takes away a few of the older members, you will have a Senate pledged to bring about the reforms for which the administration stands.
If that means anything, it means that if every one of these appointed to the Senate gave such a pledge, he gave a pledge that he would act as a rubber stamp for the Prime Minister in the Senate.


Ian Alistair Mackenzie: No, for the people of the country.


Angus MacInnis: My understanding of the duty of a public representative is that he will wait before making a decision until he has satisfied himself as to the facts in the case and then make his decision on the facts. A public representative who acts in any other way is merely a rubber stamp for somebody.


Ian Alistair Mackenzie: The will of the people.


Angus MacInnis: The will of the Prime Minister, not the will of the people. If there were no other argument against this measure and against perpetuating a condition of that kind, this argument in itself is so overwhelming that there is not a member of this house who has any regard for democratic institutions who should not oppose this bill.


Mr. E. G. HANSELL (Macleod):: Mr. Speaker, I would ask you to call it one o'clock.


Some hon. MEMBERS:: No.


James Sinclair: If you want to waste time you might as well waste it now.


Ernest George Hansell: It is two minutes to one o'clock and I wish to speak longer than two minutes.


Some hon. MEMBERS:: No.


Ernest George Hansell: Then I will go on until one o'clock and perhaps can deliver my introduction in the two minutes remaining.
I have listened with tremendous interest to this debate today because it has been extremely interesting. I was almost spellbound as I listened to the Prime Minister (Mr. Mackenzie King) give our friends immediately to my right the sort of tongue lashing that it seemed to be at the time. I have rather regarded those two parties as carrying on a bit of a courtship over the last few years, and as the Prime Minister was speaking I thought perhaps the courtship was coming to an end. I have been somewhat accustomed to family squabbles, not in my own home, but by reason of my profession I have sometimes been called in to help out in such situations. I remember 'being called in once to a home where they had had a squabble; I tried diplomatically to lead things up to where I might be of some help, and the lady of the house said, "Mr. Hansell, you know we do have our spats and sometimes they are pretty bad, but it's great to kiss and make up again." I suggest that when a subsequent measure comes before the house, such as the radio bill, we may find those two parties kissing and making up again.
At one o'clock the house took recess.

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After Recess
The house resumed at two o'clock.


Ernest George Hansell: Mr. Speaker, when the house rose at one o'clock we were discussing Bill 443, an act to amend the Senate and House of Commons Act, and I had only nicely started my introduction. The bill proposes to increase the present allowances to the leader of the government and the leader of the opposition in the Senate. My first reaction is something like this. Of course, I am a social crediter, and my social credit conscience seems never to permit me to vote against giving something to somebody, especially when that person or those people contribute something to the country's welfare.
Even though I have sometimes perhaps_ expressed myself on increases in judges' salaries and increases in the salaries of those engaged in the diplomatic service, I always feel a little guilty if I oppose them, because it is only increasing the benefits to the individual, and why should I not want to increase the benefits accruing to people? But of course a principle is involved. While I am a social crediter I am not living in a social credit country. I am living in a country controlled by a party that believes in a policy which will not permit of my social credit instincts functioning. Therefore it boils down to this, that living as I am in this country, apparently to vote to give someone an additional financial benefit means in the net result voting to take something away from somebody else. That is the position in which I find myself.
I can quite understand, perhaps, my friends to my immediate right being so enthusiastic about their position in respect to this bill, because, as I understand that socialist philosophy, it is that in order that benefits may accrue to the substratum of society it is necessary to reduce the benefits from those who have more than others. I do not believe that has to be done; it would not if the country were handled properly. In other words, I do not believe that you have to tear the fop fellow down in order to build up the fellow who is underneath. That is a wrong philosophy, it is a wrong mental attitude to take, and anyone who looks at a bill like this and says, "Well now, here these people in the other place, who are getting the same as we are getting, $6,000 a year, are to have another addition, which wall mean that one will get $13,000 a year and the other less, and perhaps some other additions-well, I cannot stand for that; he is getting too much"; to such a person, I say, that mental attitude is wrong.
[Mr. Hansell.)
To my mind nobody gets too much provided he is not taking it from somebody else. There is my position. I am dealing now with a mental attitude, and I would like the house to think that through some time, particularly when members are suffering from insomnia and want something to think about.
As to what has been said about abolishing the Senate, I must confess that with my present knowledge of the entire parliamentary set-up, plus the history of parliamentary institutions, I personally would not be so bold as to say at the present time that I want the Senate abolished, that they are no good- what is the use of them. You hear that sort of talk, and I am inclined to think that underlying that attitude is another principle, and that is the desire that I must not be checked in what I am going to do. That too is a mental attitude. I do not know whether it would be the best thing for a government to be elected and have an absolutely free hand, without any check whatsoever, to do whatever they thought best on the spur of the moment. I can visualize a danger there. Governments are not always right, and if the Senate of Canada were what I think it should be, they would have an excellent opportunity of checking something that governments might do which in the end would be wrong.
I do not want to bring in my friends to my immediate right, but they were wrong in their attitude towards the war when the war broke out. There is no question that time proved they were wrong, just as wrong as anyone could ever be. Of course that was on a negative proposition; they did not want something done that was about to be done. But suppose they were in office and desired a positive thing that was just as wrong; I do not know why a properly functioning body in the other place would not be a good thing.
I am perhaps thinking out loud now when I mention those particular things. I can visualize, under this party system, a government being elected on a tremendous emotional appeal at a time when people's hearts and minds were tremendously confused and the country was being saddled with an irresponsible government. I am not now referring to my hon. friends opposite. They may or may not be. I do not care about that. I am visualizing a situation which might easily arise, where the country is confused and dissatisfied and a great emotional appeal is made to the people. They are fed up with what they have and they are taking a chance on something new, something of which perhaps they have little knowledge, and an irresponsible government is elected with no check whatever on what they do and the methods they take.

Senate and House of Commons Act
They may be well-meaning; they may have good intentions. They desire to reach a certain objective, but in trying to do so they pass legislation and devise methods of reaching their objective which might very well wreck this whole country. I say it might be as well if we had some little check through the medium of the Senate.
There is another point I should like to make here. There does seem to me to be some justification for increasing the salaries of the leader of the government and the leader of the opposition in the Senate. What I mean is this. I understand that they now receive the same remuneration as all other senators. It seems to me that their responsibilities are heavier and that they should receive something more than the other senators receive. I am not opposed to an increase. Whether the increase should be the amount provided, I am not prepared to say. When the Prime Minister (Mr. Mackenzie King) spoke he pointed out that the leaders in the other house are under additional expense. Perhaps the government leader in the Senate has to maintain a residence in Ottawa. Those arguments are all right, and I am not opposing them; but the Prime Minister did not refer to another phase which I think is worthy of consideration, namely that under the present system all senators are appointed for life. One cannot compare them with the leader of the opposition in this house, for instance, or the Prime Minister, or any other minister, because their tenure of office may not be long. They do not know how long it will last, while the senators have economic security for the rest of their lives. That should be taken into consideration, I think, when an amount is determined.
There was another thing which struck me, and it was this. All that the Prime Minister said, even though we grant it to be true, has been true for the last thirty, forty or fifty years. I cannot quite understand why at this session the government has suddenly decided to increase the salaries of those two leaders. If they need that increase today, they needed it last year and they needed it twenty years ago. That is a point which I think is worthy of noting.
With respect to that part of the debate which has emphasized Senate reform, I have just a word or two to say. I certainly believe that we need Senate reform. I would go farther; I would say we certainly need parliamentary reform, and the Senate is part of parliament. I once said that I thought senators should be elected. I still think so, because upon their election they would be sent to the Senate to represent the will of the people.
83166-342J
At the present time, when they are appointed by the government in office, they naturally feel that they must be loyal to those who appointed them. But they might be loyal to those who appointed them and not loyal to the people. If they are not elected I think that at least the provinces should have something to do with the appointments. Is it not passing strange, for instance, that although there is in Alberta a government which has been known as a Social Credit government, holding a different concept from that which the present Liberal administration holds, a Social Credit government which swept out all its opponents twelve years ago and has been in office ever since, yet the Liberal government here in Ottawa has been appointing Liberal senators from that province from that day twelve years ago up to the present.


Stanley Howard Knowles: There has not been a Liberal government there for twenty-five years.	.


Ernest George Hansell: The hon. member for Winnipeg North Centre reminds me that there has not been a Liberal government in Alberta for twenty-five years.


Ian Alistair Mackenzie: There will be next time.


An hon. MEMBER:: What a hope!


Ernest George Hansell: It is nice to dream about these things we should like to see happen. But let the Minister of Veterans Affairs (Mr. Mackenzie) come out there and do all he is able to do; I am afraid he will not have much effect. I have great regard for the Minister of Agriculture (Mr. Gardiner). Speaking of eloquence, he can really move the people. But a few days before the last election he was in my home town. After he had spoken-and the theatre in which he spoke was crowded to the doors-I went, around the next day feeling I was surely defeated. But when the people went to the polls I received more votes from that section than from any other. So if the government wants to send the ministers out there again, it is all right with me.
I believe that Senate reform is essential. There is one thing I think we look to the Senate to do, and that is to protect the rights of the provinces. Yet it is possible for a province to have a government which is unalterably opposed to this government and still have no senators representing the views of that provincial government. I do not think that is right. I believe some body should be set up-first I thought of a joint parliamentary committee of both houses, and then in terms of a royal commission, but somehow or other

Senate and House of Commons Act
I do not rush too quickly into suggesting it should be a royal commission-for the purpose of going into parliamentary reform, with the .[DOT]specific view of bringing about such reforms as will ensure that at all times the will of the people is reflected. That is not what happens today; positively it is not. The other day we had a bill dealing with old age pensions. Would anyone say that the means test reflects the will of the people of Canada? It does not. So I say there is need for Senate reform.
In conclusion let me say that I do not like to oppose a reasonable bill. I am not saying I oppose an increase for these two public servants who sit in the Senate. However, I think my position will have to be that of the leader of this group; that what we want is a bill embracing the over-all picture of parliamentary reform. If that is done, and something of this sort is brought in, it will meet with more favour as far as I am concerned. I shall have to take the position my leader has well taken, and oppose the bill. I do so on these grounds, not necessarily because I do not believe in some further consideration being given these public servants.


Mr. DANIEL McIVOR (Fort William):: I have just one brief observation to make. It is well known that there are many members of this house who will never go to the Senate. We are all interested in social security; but I know of many hon. members who have passed through this house who have not even the hope of the old age pension. If we are to have social security then I believe that at another session some consideration should be given hon. members who serve in this house for a number of years just as faithfully as those who are appointed to the Senate.


Mr. WILLIAM IRVINE (Cariboo):: 
Jean-François Pouliot: Mr. Speaker, I have just a word to say in reply to my hon. friend (Mr. Irvine) who has made as usual a delightful speech. He says that the Senate does not always reflect public opinion. It is a respectable view, but I think that my hon. friend is wrong, because in the Senate there are twelve or fifteen owners of newspapers. They establish public opinion, and therefore the views of the public must be in conformity with their own.
At first I was opposed to the Senate. I said to myself, so long as Senator Dandurand and Senator Aylesworth, dear Sir Allen, are there, I will not go further with the suggestion of abolishing the Senate. But if the government has not done much that has been seen in the reform of the Senate, the senators
have taken it up themselves and they have reformed themselves to a great degree. We see that they are very active now and they show some independence. In the Senate we see some dignified old Conservatives and some Liberals who are really democrats. They unite together to make some profitable suggestions to the government,
I must say, sir, that I am honoured in counting amongst my friends some old gentlemen who sit in the Senate and who are just as worthy of sitting there as any hon. member is to sit here. The Senate has done no harm in the past, and now it is starting to do some good. The only thing is to warn the government to be very cautious about the appointment of a future leader in the Senate. The present one stated one day that the Prime Minister would lead the small nations at the peace conference, which was just flattery. It was not interesting, it was not worth listening to, and he got his place. But there are others who practise flattery in order to replace the present incumbent. I will name no one, but it is clear and evident that the practice is followed. The Prime Minister has too much experience of men not to read between the lines when something of that sort is said to him.
Even when I was opposed to the Senate because at the time they had not started their own reform I never complained bitterly about them as some of my hon. friends did today. The senators are able men who represent a good1 slice of mankind. They do not pretend that they are any better than the commoners but they live a life that is more boring when they wait for legislation that takes so much time to come from the House of Commons. They deserve our sympathy; they deserve our assistance; they deserve our help, and it is to be hoped that in the future the Senate will not be castigated by the House of Commons any more than the Senate does this house, but that there will be a spirit of cooperation between both houses. That spirit is highly desirable. It is unfortunate that at times there are closed walls between both houses. There should be more frequent communication and exchange of views between the senators and the members of the House of Commons. When that is done there will be no more complaint about- the Senate.
This bill is a trivial matter; it is just to increase by a few thousand dollars the amount that is paid to the leaders of both parties. I am not very well acquainted with the leader of the government in the Senate. I believe that he is doing a good' job in his

Senate and House oj Commons Act
position; but I am well acquainted with the leader of the opposition in the Senate, who has been here for a very long time. He is a dignified old gentleman and works very hard. I remember that Senator Dandurand, although he was very old, used to wake up at four or five in the morning to start his day. As the Prime Minister said, 'he had no extra pay to lead the government in the Senate; it was quite meritorious of him to be up so early in the morning to start his day. I know some other senators who are public spirited just as much as any other member of any group in the house. They express independent views -perhaps because 'they are in the other house, I do not know; but they express independent views for the welfare of the community and on this account deserve highly from the country.


Mr. GREEN:: This morning the leader of the opposition asked the Prime Minister if any plans were being made for the reform of the Senate. Is the Prime Minister not making any reply in closing the debate?


William Lyon Mackenzie King: There is an amendment before the house, and I have already spoken to it. I presume that I am precluded from speaking again on the amendment. If it is a question that is being asked, I would say to my hon. friend that I have had several conversations with the leader of the government in the Senate and with some of the senators as to the possibility of some immediate reforms -being made which would enable the Senate to play a more important and effective part in the business of parliament. As a result of these conversations I understand that there has been consideration by hon. members of the Senate of some of the matters raised and that at the present time they are receiving favourable consideration by members of the Senate.
I might mention one question. I had suggested that I thought it would facilitate further cooperation between the two houses if ministers of the crown were granted permission to appear on the floor of the Senate chamber when important government measures were being presented and that they should have the right to participate in the debate and to answer any questions which might be asked. I believe that that reform would be most helpful and I have reason to believe that it is one which will be favourably entertained by the Senate.


Stanley Howard Knowles: Would the ministers, like it?


William Lyon Mackenzie King: It is not a question of who likes this or who likes that; it is

a question of what will most effectively further public business. That is the purpose of the particular bill before the house. Many references have been made to the necessity of Senate reform beginning in the Senate itself. As hon. members know', all public bills have to pass both houses. It seems to me appropriate that the Senate should as far as possible initiate measures for the reform of the Senate.
Reference has been made to pledges exacted from members going to the Senate. The only reference in that connection that I can recall is the matter of senators being prepared to favour a shortening of the years during which service would be given in the Senate. Many Liberal members who went to the Senate after this government came into office gave their word that they would favour a shortening of the term, that is, instead of having a life term that some age limit would be fixed. That was not in the nature of making a rubber stamp -out of the Senate; it was if anything to ensure that Liberal members who went to the Senate would be helpful in bringing about that reform. That was a mere understanding, a gentleman's agreement with some of those who went to the Senate at the beginning of my term of office as Prime Minister. Of late years I have not felt it was necessary to suggest this reform to any senator; I believe many already favour it.
I have always looked upon every member ' of parliament, whether he was in the Senate or in this house, as being independent in the matter of expressing his views, and I hope this measure will help to further that same independence.


Mr. STIRLING:: I understood the leader of the opposition to indicate this morning that he would like the Prime Minister to state his views with regard to the suggestion made that a joint committee composed of members of the Commons and members of the Senate and representatives of the provinces be set up to consider the reform of the Senate.
I further understood my leader to indicate that unless there wras a probability that such a committee would be set up to examine the question of the reform of the Senate, this party would reconsider the decision which he expressed in favour of the bill.


William Lyon Mackenzie King: I did not understand that the leader of the opposition was asking me to commit myself to the extent of agreeing to set up a committee of both houses to take up the question of Senate reform. If he had asked that question specifically I would have said, I have ro hesitation in say-

Senate and House oj Commons Act
ing that I am wholly	in favour of a committee
to consider matters	affecting Senate reform.
My hon. friend brought in a reference to the	
provinces. I would	wish to have the joint
committee of the two houses consider for	
themselves whether	the provinces should be
brought in before that step was taken.	
The house divided	on the amendment (Mr. Knowles), which was ing division:	negatived on the follow-
YEAS	
Messrs:	
Adamson	Lockhart
Archibald	Low
Barrett	McCuaig
Bentley	McCullough (Assini-
Blackmore	boia)
Blair	Macdonnell (Muskolca-
Boucher	Ontario)
Bowerman	Maclnnis
Bracken	McKay
Bradshaw	McM aster
Brooks	MaoNicol
Bryce	Massey
Burton	Matthews (Kootenay
Campbell	East)
Charlton	Merritt
Coyle	Murphy
Daniel	Probe
Drope	Quelch
Fair	Robinson (Bruce)
Fleming	Ross (St. Paul's)
Fraser	Rowe
Gagnon	'Shaw
Green	Stewart (Winnipeg
Hackett	North)
Hansell	Stirling
Harris (Danforth)	'Stokes
Hatfield	Strum, Mrs.
Hazen	Thatcher
Herridge	Timmins
Hodgson	Townley-Smith
Irvine	Tustin
J ackman	Webb
J aenicke	White (Middlesex
Kidd	East)
Knowles	Wright
Kuhl	Wylie
Lennard	Zaplitny-69.
NAYS	
Messrs:	
Abbott	Claxton
Arsenault	Cloutier
Beaudoin	Cote (St. Johns-Iber-
Beaudry	ville-Napierville)
Belzile	Cote (Verdun)
Benidickson	Cournoyer
Bertrand (Laurier)	Dion (Lake St. John-
Bertrand (Prescott)	Rioberval)
Bertrand (Terrebonne) Emmerson	
Black (Yukon)	Eudes
Blanchette	Farquhar
Boivin	Ferguson
Bonnier	Fontaine
Bourget	Fournier (Hull)
Bradette	Fournier (Maison-
Breithaupt	neuve-Rosemont)
Brown	Gariepy
Clievrier	Gauthier (Nipissing)
Church	Gauthier (Portneufj
Gibson (Comox-	MacLean
Alberni)	MacNaught
Gibson (Hamilton	Maloney
West)	Marier
Gladstone	Marquis
Golding	Matthews (Brandon)
Gour (Russell)	Maybank
Gourd (Chapleau)	Mayhew
Grant	Menary
Halle	Michaud
Harris (Grey-Bruce)	Mitchell
Hartt	Mullins
Healy	Mutch
Henderson	Nixon
Heon	Picard
Howe	Pinard
Ilsley	Pouliot
Jutras	Raymond (Wright)
King, Mackenzie	Richard (Gloucester)
Kirk	Richard (Ottawa East)
LaCroix	Rinfret
Lafontaine	Robinson (Simcoe East)
Langlois	Ross (Hamilton East)
Lapalme	St. Laurent
Lapointe	Sinclair (Vancouver
Laurendeau	North)
Leger	Smith (York North)
McCann	Stuart (Charlotte)
MeCubbin	Viau
McCulloch (Pictou)	W arren
McGarry	
McGregor Mellraith	White (Hastings-
Mclvor	Peterborough)
Mackenzie	Whitman
MacKinnon	Winters

102.


Paul Joseph James Martin: I was paired with the hon. member for Cape Breton South (Mr. Gillis). Had I voted I would have voted against the amendment.


William Ross Macdonald: I was paired with the hon. member for London (Mr. Manross). Had I voted I would have voted against the amendment.


Mr. JEAN:: I was paired with the hon. member for Waterloo South (Mr. Homuth). Had I voted I would have voted against the amendment.


Mr. JOHNSTON:: I was paired with the hon. member for Halton (Mr. Cleaver). Had I voted I would have voted for the amendment.


Mr. ASHBY:: I was paired with the hon. member for York-Sunbury (Mr. Bridges). Had I voted I would have voted for the amendment.


Mr. HLYNKA:: I was paired with the hon. member for Rosthern (Mr. Tucker). Had I voted I would have voted for the amendment.


Mr. MARSHALL:: I was paired with the hon. member for Shelburne-Yarmouth-Clare (Mr. Baker). Had I voted I would have
voted for the amendment.

Senate and House of Commons Act


Mr. McLURE:: I wag paired with the hon. member for Beauce (Mr. Dionne).


James Horace King: The question is on the motion that the said bill be now read the second time. Shall the motion, carry?


Stanley Howard Knowles: On division.


[Stage Direction]
Motion agreed to, bill read the second time, and the house went into committee thereon, Mr. Macdonald (Brantford City) in the chair.
On section 1-Additional allowance to the leader of the government and the leader of the opposition in the Senate.
Stanley Howard Knowles: Mr. Chairman, we accept the decision of the house in the matter and therefore will not take further time. We want to record our opposition to the measure at every stage.


Thomas Langton Church: I have just a few words to say on this bill. This is not the time to make any change in the constitution in the present state of the world. That is one of the reasons I have for supporting the bill. Second, the gentlemen in respect of whom this bill is being passed are both good men who are doing splendid work. I have a third reason, and it is this. I remember the time in this house, five or six years ago, when a measure was put through this house which would have had the effect of duplicating the tariff in Canada by means of indirect taxation, given to the provinces, because it gave the provinces the same powers that the dominion had to tax directly every article used by the consumer. That measure had the support of hon. gentlemen to my left and the result would have been to put an>
indirect provincial tax on every implement the farmer uses. It virtually gave the provinces the powers enjoyed by the dominion. The Senate threw it out, and that is one more reason why I am supporting this bill. There are other reasons, one of which is that I would like real Senate reform, but in my opinion this is not the time to make a change in the constitution.


[Stage Direction]
Section agreed to.
William Ross Macdonald: Shall I report the bill?


Stanley Howard Knowles: On division.
Bill reported.


James Horace King: When shall the said bill be read a third time?


Stanley Howard Knowles: Next sittting of the house.


Ian Alistair Mackenzie: Now.


James Horace King: Unless there is unanimous consent the bill cannot be read the third time now.


Ian Alistair Mackenzie: Third reading. There is no amendment.


Stanley Howard Knowles: Next sitting of the house.


Mr. ABBOTT:: Cooperative as can be.


Stanley Howard Knowles: Do you believe in the rules of the house?


Ian Alistair Mackenzie: Standing order 77.


Douglas Charles Abbott: We believe in a little cooperation.



TAX AGREEMENTS


[Stage Direction]
The house resumed from Wednesday, July 9, consideration of the motion of Air. Abbott for the second reading of Bill No. 411, to authorize the government to enter into agreements with the governments of the provinces pursuant to which, in return for compensation, the provinces agree to refrain from levying certain taxes for a limited period.
John Bracken: Mr. Speaker, when this question was before the house last evening the Minister of Finance was good enough to allow the adjournment of the debate in order that I and others might have an opportunity of examining certain documents he asked to be placed on Hansard and which had not been seen. I am sure that all hon. members of the house have since seen those documents. The minister was good enough to let me have them last night.. I have looked them over. They have to do only with the formulae for arriving at the amounts of money to be paid to the various provinces under varying conditions. I think they contain nothing more fundamental than that. As far as that point goes, the documents which the minister tabled I think added nothing new, except in detail, to the facts he presented last night and to other facts he had presented at other times. Since last night I have also had the opportunity of looking over the minister's remarks, and I think I can conclude my observations with respect to them in a very short time.
What the minister had to say only confirms our worst doubts and fears. He simply repaints the dismal picture of this government's calculated objective to get from the provinces certain taxation rights by any means and at any cost. The minister also made it plain that

Tax Agreements with Provinces
the government is going to back away from its 1945 proposals because they are more burdensome than it can afford. In that respect the Minister of National Health and Welfare (Mr. Martin) a few days ago also gave us notice that he expects the provinces to assume a greater share of the cost of old age pensions. With respect to public investment, public works, unemployment and so on, those plans which were aimed not only at a greater measure of social security but also at lessening the prospect of a recession, there is nothing proposed. The minister makes it clear with respect to the minor taxes that while the government will bargain with respect to them, the dominion will abandon nothing. If all these things had been considered in a conference and an agreement had been achieved, the story would have been different and the effect would have been different. But this method of playing one province off against another, and playing some provinces off against others, is to be deplored. For that kind of procedure the government is deserving of the severest censure.
The question now is, what are we going to do about the bill? What is this bill? This bill is simply enabling legislation. Apparently seven provinces have assured the government that they are prepared to accept the government's plan. As I understand it, no agreements are signed. This is therefore an enabling bill to give the government power to enter arrangements with the provinces by which the provinces will give up the right to collect certain taxes and in return the government will make certain payments to the provinces. In that respect we do not intend to take the position that this agreement made between the government and several other governments cannot be signed. We therefore shall not vote against this bill. But we want it made clear that certain of the results of the method which the government has followed are objectionable, not only to us but, we think, objectionable to most Canadians.
Last night I stated my objections to the government's whole programme. It is now clear that the government has abandoned its social security, health and unemployment proposals as announced two years ago. Its policy does not embody in any real sense the principle of fiscal need. If the principle of fiscal need is in it, it is only incidental in this arrangement by which the government is proposing to extract from the taxpayers of this country a great deal of money and hand it over to the provinces to spend. It is virtually buying the provinces out of their taxation
rights, and doing it with the money that the government is going to subtract from its own plans for social security, health and so-called public investment, as proposed two years ago. That is made clear by the minister's own statements here and elsewhere, which I shall put on the record in a moment. I am sure he will not object, because he repeated last night statements which he had made previously. He stated that to the extent these offers to the provinces are generous, to that extent will the provinces have to assume greater responsibility and to that extent will the dominion government do less in the way of carrying out its proposals of two years ago.
By way of summary, let me say this with respect to the criticisms I offered last night. I said the government's proposal goes a long way to promoting disunity. That must be apparent to anyone who reads the minister's address of yesterday. On page 7 of the typewritten address he let me have-and it is at page 5310 of Hansard-he put on the record the minimum amounts which would go to the different provinces in Canada if this scheme goes through, and the maximum amounts that might go to them on the basis of the year 1947. In the one case the amount is $206,000,000 odd; and in the other case it is $228,000,000 odd. When one looks at those figures he sees that the minimum amount that is going to the provinces, if the w'hole nine of them went into it, would be $206,000,000, and the amount going to the seven provinces which have indicated their willingness to sign is $83,000,000. I suppose two-thirds of that will be collected from the taxpayers of Ontario and Quebec, which provinces have not signed and are therefore left out of this arrangement. The province of Quebec was to receive $56,000,000 odd and the province of Ontario $67,000,000 odd, in minimum amounts, a total of about $123,000,000. So as a result of the government's policies we have seven provinces getting $83,000,000, two-thirds of which is collected from outside their boundaries, and the two provinces in which that two-thirds is collected getting nothing; In that there is not only cause for disunity, but we must also keep in mind that if this government does not pay the money to Ontario and Quebec, or if those provinces do not accept it, the taxpayers of Canada will have that much less to pay, and the budgetary problems of this government will be made that much easier.
I want to examine now the other table of payments that are based on the 1947 figures. This shows the total cost to be $228,000,000, with seven provinces getting $91,000,000 odd,

Tax Agreements with Provinces

of which, as I say, two-thirds or more would be collected outside those provinces. The remaining two provinces would receive $137,000,000, in the case of Quebec $63,000,000 and in the case of Ontario $74,000,000, with the taxpayers of those two provinces being taxed to pay two-thirds of the money going to the other seven provinces while themselves getting nothing. My point there is that this method, whatever merit it may have, at least leads to disunity.
My second point is that in a federal state a procedure of this kind goes a long way toward centralizing the taxing power in one government. To the extent we go in that direction, to that extent we are leading to a unitary state; and to the extent that we become a unitary state we are simply saying good-bye to confederation as we have known it in this country.
My third point is that in a federal state the plan now before us fails to give the province any clear fieild of taxation. In that connection I want to read a brief statement from page 85 of book 2 of the report of the Rowe'll-Sirois commission, a report which I regard very highly and to which the minister paid a high compliment last evening. Dealing with the proposals brought forward which aimed to leave with the provinces certain of the minor fields of taxation, the report says:
It is implicit in the plan, but should be clearly stated, that the dominion will respect the tax fields left to the provinces. Adjustments in the joint dominion-provineial-municipal tax structure will undoubtedly be necessary and desirable from time to time. But the dominion can no longer consider itself a free and independent agent to take unilateral action to this end when it pleases. The essence of the plan is to leave provinces and municipalities with adequate, stable revenues, and this would clearly be defeated if the dominion should extend its taxation into fields already occupied by the provinces or on objects jointly taxed without making satisfactory compensatory adjustments. Such action would violate the whole spirit of the arrangement.
That was their statement with respect to minor taxes under their proposed settlement.
The fourth criticism I offered of this plan was that it has failed to achieve a continuance of plans for dominion-provincial discussions, which in my view is a serious matter in a federal state. Here it is important that we go to great lengths to try and get the maximum of cooperation between the central government and the other governments across the dominion. In my judgment the course the government is following will lead to the liquidation of the dominion-provincial conference system which has 'been inherent in our set-up since the first years of confederation.

My fifth criticism was that this procedure delays the bringing into effect of the social security, health, unemployment and other plans envisaged in what was spoken of two years ago as a great national plan. In that connection I want to read a statement made by the Minister of Finance (Mr. Abbott) himself, and then to refer to his own words in dosing his address last evening. Addressing the Toronto board of trade on January 27 of this year the Minister of Finance had this to say:
As a result of increased rental payments from the dominion-
That was after the dominion had proposed to increase its rental payments above the figures proposed in some earlier discussions.
-the provinces will be able to assume, and must expect to assume, a somewhat greater financial responsibility.
I commend the minister for his frankness. The dominion offered to give the provinces more, but to the extent that it gave them more it would do less itself. That should be clear to anyone examining the matter, but when we have the statement so frankly from the lips of the minister there can be no doubt as to the position. Then he went on:
The dominion government will be able, correspondingly, to reduce some of the burden it was prepared to assume for a public investment and social security programme.
Then last evening in this house, at page 5319 of Hansard, the minister had this to say:
The details of our original proposals may of course change as a result of further study or of developing public opinion or of discussion with provincial governments at a general conference which will be necessary' before they can be implemented. The proposed contributions which the dominion may be able to make in the field of public investment and social security may, as I have said publicly and as I advised the provinces which were negotiating with us last winter, have to be revised-
In that case the word "revised" means "reduced".
-to take into account the substantial increase in the financial payments which the dominion has now undertaken to make as rental for the tax fields in question.
My point in reading these quotations is this. The government made certain proposals to the provinces that it would undertake a great national programme. In its negotiations with the provinces it had to increase the size of its offers. This it did, as the minister frankly said, on two or three occasions. He said that having increased the government's contribution to the provinces, the provinces can now expect less from the government in the future.

Tax Agreements with Provinces
My sixth criticism last night was that this plan brought forward by the government abandons the principle of fiscal need. I think the minister's statement last night on fiscal need was a specious argument. There is one way to give fiscal need, and no other, namely to recognize the periodic, or in some cases, I am afraid:, the permanent, inability of some provinces to provide adequate standards of social services. That is one of two reasons given in justification of the kind of measure by which the dominion collects taxes from the people and gives some of it to provincial governments to spend. I support the government to a degree in that policy. But I agree with the Prime Minister's statement of past years that to go beyond that is a vicious principle.
There is one other thing I might have said, which I shall say now, it is this: This proposal or these related proposals are not charity, not merely taking; from a wealthy section of Canada and having the money distributed: in needy sections. It is not that only. In this federal state of ours, with nine provinces, the people in all these provinces contribute to the wealth made by large institutions, which by circumstances find themselves located in the larger centres of population in. the central parts of the country. The net result of that is that the taxing capacity of the outlying sections is reduced, and the taxing capacity of the central sections is increased. To the extent that that is so, any state is warranted in taking taxes where they can be obtained and allowing a part of them to be spent where they are needed, I did not mention this aspect last night; I am sure it was not necessary. I mention it now only because one might take from the discussion that this was wholly a charitable arrangement-one 'by which money was collected in the wealthy sections of our economy and spent, in other sections. It. is not wholly that. Some of the wealthiest sections of our economy have- been made such by wealth made in business done in other sections of the nation. It is entirely defensible to use some of that- to help correct- in a small way the inequities that result.
Let me conclude by this one statement. In my judgment the course the government is following means the liquidation of the dominion-provincial conference system which has been inherent in our confederation system since its inception. Certain provinces need help. That is granted. And help to a degree can be justified . But the procedure the government. has followed has brought about serious criticism. It is resulting in disunity and all the other objections I have raised. Certain provinces having undertaken to come into this 83166-3434
arrangement, we ought not to deny them that right. We can defend it to a point. Beyond that it is unsound policy.


Angus MacInnis: Mr. Speaker, this party does not intend to make any long debate on this measure. In our opinion it is not a measure that one can get particularly hot about either way. We regret exceedingly that the dominion-provincial conference which was called in August, 1945, broke down and that now the arrangements between the dominion and the provinces are on a province-to-province basis. I can agree with the leader of the opposition (Mr. Bracken) that that is a bad aspect of our dominion-provincial relations.
I should like to draw attention to the fact that the dominion-provincial conference was called by the dominion government. The impression is abroad that the conference broke up because certain premiers were, to use the language of the street, playing politics. But even if that were so I do not think the dominion government is in a strong position when it refuses to call the conference together again. Because of the position of the dominion government, where it has an over-all view of the needs of Canada, knows what the needs are in every .part of the dominion, in fact knows that the provinces as a whole constitute the dominion and that there is no dominion of Canada outside the provinces, it should pocket its pride and, regardless of what the attitude of any provincial premier had been or might be in another provincial conference, call a new conference.
In my opinion the dominion government has all the trumps in this game, and it would be the easiest thing in the world to expose any provincial premier who tries to disrupt the over-all programme that the dominion government is attempting to put into effect. Therefore I do not believe the dominion government can be excused for the failure to call a dominion-provincial conference after the last one broke up in April or May of 1946.
Let me read two short paragraphs from the statement made by the Prime Minister on the first day of the conference, August 6, 1945. On page 6 of the proceedings of the plenary session of that date, the Prime Minister said:
Above all, we aim at the maintenance of a high level of employment and income. In no field are the interests of dominion and provinces more thoroughly one than in the maintenance at all times of a high level of employment. The fear of war is undoubtedly the worst of all fears in the minds of men today. But next to the fear of war, the greatest fear for most men is the fear of unemployment. There are men and women who almost dreaded the
Tax Agreements with Provinces

coming of victory because they feared that depression and unemployment might come in victory's train. That fear we must all seek, in close cooperation, to remove.
I agree with every word the Prime Minister said. The fear of unemployment cannot be removed by the arrangements that are now being made between government and government. That fear is just as prominent in the minds of the Canadian people in 1947 as it was in 1945. The Prime Minister went on to say:
Finally, our proposals are designed to make possible a comprehensive system of social insurance, partially federal and partially provincial, through which the community will share with the individual in meeting the variations of income and expense to which the rise and fall of business activity, natural disasters, accident, ill health and old age render all of us liable. Improved standards of nutrition, housing, health and social amenities, for both urban and rural populations, are also objectives of our reconstruction policy. Of these housing is a most urgent need in the period of reconstruction.
I would like to ask the Minister of Finance or any member of the government: Have any of the problems mentioned by the Prime Minister in that paragraph been solved by any agreement that has been made up to date or that can be made under the present policy? Obviously the answer is no.
There is a little background to this whole question of which we should not lose sight. I am old enough to remember what happened at the end of world war I as well as at the end of world war II. At the end of both wars people had come to the conclusion, because of what we were able to do during those wars in the matter of production, that never again would we go back to the haphazard, unplanned way of providing for our needs. They felt that there had to be more planning and, as the Prime Minister so well said, a sharing by individuals who were in good circumstances with other individuals who were not. What we need is an over-all policy where the rich provinces will share with the poor provinces because all together are Canada.
I found some difficulty in following the reasoning of the leader of the opposition (Mr. Bracken), but that may be my fault and not his. I had the same difficulty last night and my difficulty was not decreased today. At page 5321 of yesterday's Hansard the leader of the opposition referred to the way in which the amounts needed by the provinces had been increased step by step. He said it was S40 million under the Rowell-Sirois commission; it was $117 million under the 1942 tax arrangements; it was $138 million under the 1945 proposal, $198 million under the 1946 proposal, and it is $228 million at the present time.


Douglas Charles Abbott: A minimum of $206 million.


Angus MacInnis: Last night he said $228 million.


John Bracken: $206 million was the minimum.


Angus MacInnis: Then he referred to the statement made a few evenings ago by the Minister of National Health and Welfare (Mr. Martin), that the proposals outlined in the 1945 proposals would cost at the present time from $500 million to $600 million a year. He then went on to say:
I have not seen certain of the calculations and figures which the minister put on the record tonight, but I am going to refer to them m ** moment. But in so far as this measure provides fiscal need for the provinces of Canada, it will receive our support. In so far as it fails to provide fiscal need, the bill is weak and should be remedied. In so far as it provides more than fiscal need, it is not a sound method of financing in Canada. Does this proposal meet fiscal needs?
Then he continued:
If in the 1945 proposals the government was planning to meet the fiscal needs of the provinces by providing $138 million, certainly it ij paying enough to meet the fiscal needs of the provinces now by providing $228 million which is $92 million more. On that basis I do not think there can be any question but that this plan does meet the fiscal needs of the weaker provinces.
If I understood him aright today, he said that these plans did not provide for the fiscal needs of the poorer provinces. I am simply stating how it appeared to me after listening to the hon. member.


John Bracken: I did not mean to say that today.


Angus MacInnis: I think that is what my hon. friend said. However, I am not going to refer to it any more. I am in a quandary, now and I was in a quandary last night as to whether he was supporting or opposing this measure. I am wondering now just where he stands. I hope when I finish I shall not be in the same boat.
I should like to know what is meant by fiscal need. Does fiscal need mean the programme of social services and public investment which was mentioned in the 1945 proposals? In my opinion fiscal need means just that. Let us see what was in that programme. I shall refer only to the headings. There was a national health programme for all the provinces. There was provision for old age pensions to those seventy years of age and over, for which the dominion government would assume full responsibility without a means test. That would mean that everyone over seventy would automatically get a pen-

Tax Agreements with Provinces
sion. If he had income over and above the maximum amount of the income tax exemption, then the tax would take it away. For those old age pensioners between the ages of sixty-five and sixty-nine years the government would go fifty-fifty with the provinces on a means test basis.
Then there was provision for unemployment assistance benefits. I have not looked this up recently, but my memory is that those benefits were to cover persons not covered by unemployment insurance or who had exhausted their unemployment insurance benefits. TheD there was a policy of public investment. After a social security programme I think that a policy of public investment which would provide employment, which would increase the wealth of the country, is of equal importance to a social security programme under which benefits would be paid. In the one case benefits are paid, and in the other case we enable people to provide incomes for themselves. Of course the kind of social security programme that we would be able ultimately to provide for ourselves would depend upon the amount of wealth produced and the national income created by that wealth.
My criticism of the government's policy is that it does, as the leader of the opposition says, throw overboard the whole social security and public investment programme. I am inclined to believe that the government was pleased rather than otherwise that the conference broke down, because the psychology in favour of cooperation and state assistance in 1946 was not as strong as it was in 1945 and in the last years of the war. In 1946 the psychology of private enterprise was on the make-take what you can and the devil take the hindmost. I believe that the government had come to doubt its own programme and was glad when the premiers of two of the central provinces broke up the conference in 1946.	*
The leader of the opposition several times referred to the fact that the federal government in its taxing arrangements was encroaching upon provincial tax fields to such an extent that no field of taxation was now clear for the provinces. Let us take a look at that picture.
The Canadian constitution provides for a distribution of powers and responsibilities as between the dominion and the provinces. We found that during the depression years, with all the taxing powers that they had ever had, most of the provinces found themselves in a position where they could not discharge the responsibilities given to them under the British North America Act, and the federal government had to come to their assistance. That being so, I think it is far more important to the provinces that they should have sufficient income to enable them to discharge the responsibilities that they now have, regardless of where the money is to come from, than that they should have taxation fields which will not provide them with sufficient revenue to discharge those responsibilities. I do not believe that any province should be greatly disturbed if the dominion is collecting all the taxes, because the people who are paying the taxes are all Canadian citizens and they are the same people whether it is the dominion or the province that collects the tax. If there are two sets of tax collectors there will be two expense accounts to pay.
What is required is that the dominion and the provinces should come to an arrangement whereby each province would be provided with sufficient revenue to discharge the responsibilities that it assumed under whatever arrangement it entered into with the federal government. The present arrangements do not do that; they do not provide for social security services, and while we may get along without those services at the present time, perhaps in a few more years, maybe sooner, we shall be in the position in which we found ourselves between 1930 and 1939, when seven of the provinces of this dominion were not able to discharge the responsibilities assigned to them under the constitution.
In conclusion I would urge the government at the earliest possible moment to call the dominion-provincial conference. If pride deters them, let them throw it overboard. Big people' are not deterred by a little pride. When the conference is called together, if any premier of any province begins to use that conference as a political platform I am satisfied that the dominion government, if it wishes to go ahead with the programme outlined in the green book, has sufficient material to expose that individual and bring him to time. The people of his province will repudiate him if he puts them in such a position that they are not able to take advantage of benefits which they could enjoy if he accepted a reasonable arrangement with the dominion.
Mr. SOLON E. LOW (Peace River): Mr. Speaker, I think I should eay just a word to place on record the position of my group with respect to these agreements. I certainly shall not take long because I would not want to thresh old straw or to cover any territory that has been so well covered thus far this afternoon.
I must agree with a good deal that has been said by the leader of the opposition (Mr. Bracken) and follow much the same line that

Tax Agreements with Provinces
he did. There were some things in the speech of the hon. member who just preceded me (Mr. Maclnnis) with which I can also agree.
As is well known, Mr. Speaker, our group has always taken a strong position against centralization. We do so now. We feel that this is a move for centralizing control in the federal government. We do not think that that is in the interests of Canada and its strength, and in due course I am satisfied that whatever government may be in power at the time, it will come to recognize that centralization is not the answer and will take steps to see that Canada is strengthened by a decentralizing move. However, that is not what I wanted to develop at any length, except to place our position on record as strongly against centralization.
The agreements seem to be based on quite reasonable terms, at least in relation to conditions at the present time. I have no particular objection to the terms. But it must not be overlooked that the money which is being paid back in these increased grants to the provincial governments is collected out of taxes which come from the very people to whom the grants are being paid.
It is not a question of the provinces getting a better deal than they have ever had. It is simply a question of the provinces receiving from a central collection agency taxes which they could very well collect for themselves if they wished to tax their people that heavily. I am wondering, Mr. Speaker, what the dominion government would do should another disastrous unemployment situation arise. I went through that sort of thing in Alberta in the thirties and I know what it means to a province with limited revenues. It was not during that time a question whether we could collect taxes to take care of unemployment and the needs of hungry people. It was not that at all. The money just was not there. There were plenty of goods and services that could have been made available, but the money was not there. There was only one authority in this dominion of Canada that could have made that money available, but they did not do it.
Now I am wondering if, under the terms of this agreement, the federal government might not back out of the picture in case of the development of a serious unemployment situation and say to the provinces: We have provided for all that in this agreement, and it is your responsibility from now on; take it.
I protest against that most vehemently. I think the provinces will have to guard themselves against such a possibility and I hope they will. I can do no better, Mr. Speaker,

than to put on the record a statement made by the Hon. Mr. Manning, premier of Alberta, in his budget speech delivered on March 7, 1947, in the Alberta legislature. This sums up his attitude towards the whole agreement. It is the stand that we in this group will take in this house, because it is the stand that we have consistently followed. Mr. Manning said:
The government of Alberta is convinced that the accumulating force of circumstances will continue to add still further emphasis to the impossibility of a satisfactory permanent solution to the problem of dominion-provincial relations until three basic factors are recognized and acted upon. First, there must be a redefining and, if necessary, a reallocation of^ the rights and responsibilities of the respective governments in the light of conditions as they exist today.
Not as they existed, Mr. Speaker, back in 1867, but as they exist today'.
Second, each government must be assured adequate revenue under its own unfettered jurisdiction to enable it to discharge fully its constitutional responsibilities and provide adequately for the just requirements of its people. Third, to make this possible the Canadian monetary system must be reformed in the manner necessary to permit the monetization of the entire national production and the use of the financial credit thereby created to supplement and progressively to replace excessive taxation as a means of providing public revenue. The Alberta government will continue to do everything in its power to secure recognition of these basic factors to the end that this important problem, ultimately, will be solved in a manner satisfactory to the dominion and all the provinces, and on a basis that will assure the Canadian people the national and provincial economic stability which they desire and to which they are justly entitled.
That is the attitude of the government of my province with respect to these agreements. They do not look upon the arrangement as in any sense a permanent one. I think they are quite well satisfied at present with the terms of the agreements, but,I think too that I should emphasize that they signed the agreement with the reservation that it would be for a preliminary five-year period, and also on the understanding-I believe an undertaking was given by this government that would lend credence to their understanding-that one year prior to the termination of these contracts another conference would be held at which further efforts would be made to reach a permanent solution that would be satisfactory in the interests of all concerned.
In conclusion let me say this. I quite recognize the importance of social security measures and of public investment possibilities. I do not think, however, that it would be possible to conceive a better programme of social security and public investment than that which is embodied with in the terms of the

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statement which Mr. Manning made, particularly in the third provision, which I quote once more:
To make this possible, the Canadian monetary system must be reformed in the manner necessary to permit the monetization of the entire national production and the use of the financial credit thereby created to supplement and progressively to replace excessive taxation as a means of providing public revenue.
There you have the answer to our calls and demands for public investment and for social security agreements. The provinces, if given their rights under a proper monetary system, can provide their own social security, and they will not have to come here on their stomachs with hat in hand asking the federal govern-met to help them. They can provide their own public investment programme and take care of their own people if this government will sit down with them and work out a definition and perhaps an allocation of powers that will enable the provinces to discharge fully the responsibilities that are placed upon them under the terms of our constitution. I wanted to emphasize that as our position.


Jean-François Pouliot: Mr. Speaker, this is a matter which has been discussed at other times and which is of the utmost importance to the country. I appreciate the fact that everyone has spoken in a friendly disposition and with a view to trying to help the community by making suggestions.
When we discuss any matter we must have the same basis for discussion. The leader of the opposition said yesterday that the dominion government and the provincial governments have certain responsibilities and certain taxing powers. He should have said that they have the right to impose taxation within their respective jurisdictions. The hon. member used the word "jurisdiction" later on in this speech, and he knows very well that the meaning and scope of the word "jurisdiction" is entirely different from that of responsibility. He added at page 5319:
In other words, the dominion government in this bill asks the provinces to refrain from taxing in certain fields, and for that concession the dominion government undertakes to pay money to the provinces.
This is the main issue. Speaking of the Rowell-Sirois commission, he described it as the fullest and most valuable statement on dominion-provincial affairs made since confederation. It was certainly the fullest, considering the size of the books that were published; but when he concludes that it was the most valuable report, distinctions should be made. It was an orgy of words. It was the fiesta of the intelligentsia, and all the clever
brains from all over the country were invited to do something to make that report thicker. I remember hearing one of these superjbrains in a broadcast in 1940 or 1941-1941 I believe- say that the time had come when Canada should no longer be an amalgamation of several small countries but should become one great country, meaning that the provincial legislatures should disappear in order to make room for a larger dominion parliament. He seemed to be embarrassed when he said that over the radio, but he went on and finally finished the sentence. I was down home and I heard him over CBL, Toronto.


William Irvine: Who said that?


Jean-François Pouliot: He was a professor at Queens, and with regard to the book he had published for the commission he was praised by the editor of Saturday Night who sat in the press gallery- for some time and was a civil servant on many occasions but described himself as a reporter even when he was in government pay.
The issue is that of giving uncontrolled power to the intelligentsia. I have seen it from that angle from the start. Ten years ago I wrote articles in a Montreal paper to the same effect. It is my deep conviction.
In this matter of dominion-provincial relations I 'have formed my own views, and to me it is a matter of paramount importance to all Canadians. Because one expresses a certain view, he should not be described as a supporter of Mr. So-and-So here in Ottawa, or Mr. So-and-So in Quebec city, or Mr. So-and-So in Toronto. In a discussion I seldom consider a subjective reason. To do this is referred to as the use of the argument ad hominem-recalling the past sayings of a man to show his contradiction in certain statements. I am reluctant to do that, but I shall be bound to do it in a minute. I say to you, Mr. Speaker, that we all should consider any matter objectively. Because Mr. So-and-So has said a certain thing, we Should not be bound to fall in line with him, and we should not be considered as bad Canadians whether we do or do not think as he does.
In the first place, I must say that I have deep sympathy for the Minister of Finance (Mr. Abbott) because he has inherited a heavy legacy from the war. I cannot understand the controversy between the various parties and groups with regard to dominion-provincial relations, for this reason: if we have to bear such a heavy burden of taxation now, it is precisely on account of war finance, on account of the loans and gifts which were made to other countries, and on account of the expenditures which were not. scrutinized
Tax Agreements with Provinces

by any party during the war. I remember that Mr. Hanson, the predecessor of the present leader of the opposition, used to say, "Well, I close my eyes during the war; but after the war is over, we shall see to it."


Mr. MacNICOL:: That was too late.


Jean-François Pouliot: We see that very well. But I am in sympathy with the present minister because he has shown determination not to fall into the trap as often as his predecessor did every time some country asked something of him.


An hon. MEMBER:: Give him time.


Jean-François Pouliot: He deserves a great deal of praise for that. During the war, when a handful of members of parliament were pointing out the results of that nonsensical crazy extravagance, everybody was saying, "It is all right." In spite of what was said, the money was voted blindly just the same as if we were never to face a situation as the one which now confronts us.
The leader of the opposition has been frank in his utterances, and that is possibly the best explanation for his contradiction. I give him credit for his sincerity. Everyone knows that he was one of the instigators of the Rowell commission. It was initiated by the Sanhedrin of Winnipeg, as is well known, and one of the members for a time was the late Judge Hudson, who was a personal friend of mine but with whom I never had any business dealings. There were some other members; some of them are still alive. It is known as the Sanhedrin, and when I mention it to the leader of the opposition he will know whom I mean in Winnipeg. The Sanhedrin controls the spirit of the Winnipeg Free Press, and the Winnipeg Free Press in flesh and bone was John W. Dafoe. Mr. Dafoe was self-educated, but perhaps not absolutely enough. He could not give to his own brain the last finishing touch. But he was there and he probably wanted to organize something for the benefit of the prairie provinces. If ever anyone had the personal ways and, to use a royal expression, the personal style, to canvass the readers of his newspaper, he had. There was Mr. Rowell, and there was also Senator Crerar, a delightful man, who was then the Manitoba minister in the dominion government. My hon friend the leader of the opposition was then premier of the province which was so ably represented in the dominion cabinet by Mr. Crerar. So we have Mr. Crerar, Mr. Dafoe and Mr. Bracken. Naturally they wanted to have the whole scheme promoted by a premier of one of the nine provinces,

and they could not find any better man than the premier of their own province, who is now leader of the opposition.


Stanley Howard Knowles: Is that the whole of the Sanhedrin?


Jean-François Pouliot: Oh, no.


Stanley Howard Knowles: There have to be seventy members.


Jean-François Pouliot: Oh, no; there are the big grain merchants, too.


Stanley Howard Knowles: The Sanhedrin has to have seventy men in it.


Jean-François Pouliot: I cannot count them, but my hon. friend knows I am on my way to truth.


Mr. BENTLEY:: We can count them for you.


Jean-François Pouliot: Before that the dominion was most generous with the western provinces. They used to come here with a top hat asking for just a guarantee. Then they came with a homburg for a loan. Finally they came bareheaded, like the burghers of Calais, for a gift. The guarantee became a loan; the loan became a gift, and then everybody had to pay for it. I asked some questions of Mr. Dunning at the time; but the western provinces have always been the spoiled children of the government, just as in a large family the children who are of a weak disposition are more loved than the others.


Some hon. MEMBERS:: Oh, oh.


Jean-François Pouliot: If my hon. friend does not belong to that category it is because he was born in Halifax.


Mr. LOW:: These tough guys from the central provinces!


Jean-François Pouliot: But it is the true story. Then the Sanhedrin wanted a judge to preside over the commission, a man who would be entirely disinterested; and according to the official figures I obtained he was well looked after. At the time he was not a judge; he was not a cabinet minister; he was not a member of parliament; he was not a civil servant, but in the ten years from 1927 to 1937 he received from the dominion government $168,332.51. In addition, from November 20, 1926, to June 14, 1928, he received an amount of $48,641.63 for services, travelling expenses, expenses, allocations and so on, not taking into account what was paid by other departments than justice and national revenue. So he received $216,000 in that period of ten years. He was full of disinterest. He was there as chairman of the commission; he had

Tax Agreements with Provinces
Mr. Dafoe sitting with him and another French-Canadian judge who was there for a time but who became sick-probably he became sick of it, though he was not in such bad health as the second chairman, who died not long after he was appointed. It was impossible to live in that atmosphere. It was babel at its worst. It was indeed a fiesta of the intelligentsia. They came from all over the world, a caravan of learned fellows with thick glasses, bringing statistics in brief cases which were well loaded with important documents. It was not paper they wanted; it was straw to make nests and feather to make pillows. They wanted to make themselves comfortable in the fine atmosphere of Ottawa.


William Irvine: There was no gurgling sound from the brief cases?


Jean-François Pouliot: No; it was all generosity, abnegation and the spirit of sacrifice, and they forgot themselves completely. They were coming here to serve the country, this gentleman who had been paid $216,000 in ten years and all the rest. It was self-sacrificing abnegation. Then they organized that scheme, and we saw a mountain of reports. It was the Rowell commission. Strangely enough they recommended exactly what the Minister of Finance, Mr. Dunning, had suggested after the election in 1935-to take over succession duties and that sort of thing, Which I opposed many years ago when the matter was brought before the house.
The leader of the opposition has admirably summarized the recommendations contained in the report of the Rowell-Sirois commission: that the central government should collect taxes wherever they can be obtained, and that the provinces suffering from a poor economy should be benefited on the basis of fiscal need, that is, to the extent of the amount necessary to enable those provinces to have the same levels of public services as the other provinces without having to apply a higher level of taxation. His suggestion was that some provinces which he considered richer because they were not his own would have to be called upon to pay for the other provinces that were supposed to be not so fortunate; but the hon. gentleman also said the basic recommendation of that commission was that the provinces of Canada should be aided by the central government on the basis of fiscal need. It is very difficult to establish that; and the hon. member for Vancouver East (Mr. Maclnnis) asked for some information from the leader of the opposition, who also said, "In fact there are vast differences, so that we find in this nation six different major types of economy". I wonder if he perhaps missed a page in which
those six different major types of economy were described. I am very anxious to know what they are, and I hope that when the bill is in committee the hon. gentleman will be kind enough to tell us.
In the past, Mr. Speaker, it was stated that some of these provinces have not been able to secure as high a standard of living or of public services as the others. Those mentioned have been the prairie provinces and the mari-times. When it comes to helping any Canadian, whether he is from the east or from the west, there should be no objection. But there should be order in government, and the only way to have order in government is to have the same treatment for all. If some provinces both east and west have difficulty in making ends meet it is precisely because they do not have the powers of taxation that have been given them by the constitution. That constitution has been in force for eighty years, and until ten years ago there was no difficulty. At that time the difficulty came about not in the east but in the prairie provinces, and due to drought and other reasons, some of which may perhaps have been good reasons. They were given a palliative, just as though the government were ashamed to act properly toward the western provinces. Instead of saying, "You need something, and we will fix you up", it was always given by the back door. After a certain time the prairie provinces were most generously treated, especially after the Bennett regime went out. They were better treated than the eastern provinces; but the government seemed to be ashamed to do anything in the open. There was always a screen and a reason to hide what had been done. I had to ask special questions to get full information from the then Minister of Finance, Mr. Dunning, who seemed reluctant to give a true picture of what had been done for the western provinces.
What has been said1 about the inferiority of the maritime and the prairie provinces is an insult to the population of these provinces. The propaganda is to the effect that the older provinces, Ontario especially and Quebec, will have to pay the system of social security for the whole country. It seems that if the taxes had been adjusted; properly there would be no difficulty about social security in any part of the country.
When the motion to appoint the Rowell commission was brought before the house I remember that I uttered thunderous "hear, hears", and it was struck out from Hansard. The purpose of the motion was to bring some order in the relations between the dominion and the provinces. The purpose was

Tax Agreements with Provinces
excellent. If it was falsified by those who wanted to serve certain areas at the expense of the rest of the country. Mr. Speaker, you would be astonished to see the fabulous sums that have been paid for the Rowell-Sirois report, about half a million dollars at the time. But that is nothing compared with what we have to pay now.
In the summary of the report it is said that Ottawa wall be able to collect more taxes than the provinces ever could. That is one of the arguments that have been brought out by the commission. But, sir, the reason that I am opposed to it is that I consider that the collection of taxes is something most unpleasant and it should be left to those who spend the money. I do not see why Ottawa should have the opprobrium of collecting taxes and pass the amount over to the provinces. That is one reason. Besides that it is an occasion for red tape to show up. There are many reasons why I cannot understand that policy, and I wonder whether all the difficulties which have been raised in regard to dominion-provincial relations have not been caused by the bureaucrats who have taken advantage of the Rowell-Sirois report to fatten themselves at the expense of the public treasury. You know very well, sir, that it is most difficult to make some people who have been appointed on a temporary basis understand that as soon as their time is ended they will have to go. When someone is employed as a temporary in Ottawa it is for the duration of his life. What we see now is the old struggle. It is not a fight between the provinces and Ottawa; it is the old struggle between the taxpayer and the bureaucrat, and the bureaucrats are much more numerous here than they are in the provinces.
Why not consider the question objectively? Those who made the report wanted to make it big and thick to impress those who would never read it. It is a well known fact that not one out of ten thousand people has read the full report of the Rowell-Sirois commission. But when the report is so big it creates a deep impression on the people, even on those who do not know how to read and write. It would have been much better for this country if some of the university professors and journalists who worked on the report had never been taught how to read and write. Therefore, sir, I have always agreed with the present Prime Minister (Mr. Mackenzie King) in his statements of 1929 and 1930 when he said, as was quoted by the Leader of the Opposition (Mr. Bracken):
That it was a thoroughly vicious system to have one body raise taxes and another body expend the money thus secured.
[Mr. Pouliot.l
On February 5 of this year, I offered my services as an intermediary between the dominion and the provinces to try to get them to come to an understanding so that we would have order in. this country and so that grants which are made to the provinces should no longer be considered as bribes but given as due. If we look at the British North America Act we shall see the equal treatment which was given the first four provinces at confederation. Naturally each province did not have as much, but the proportion was the same for all, and so long as the same proportion of money is paid to all provinces it is difficult to have an objection to it, although it is much better and economically sounder to give the provinces the opportunity to collect their own taxes and to do what they think they have to do with their own money. It is a question of decentralization. Decentralization is a Liberal principle. It is the principle of giving the same opportunity to all in every part of the country. That is the way in which the country was governed at the time of Alexander Mackenzie, at the time of Sir Wilfrid Laurier and at the time of Mackenzie King before Bennett came to power. I remember those happy days when the country was fortunate and when everybody seemed to be prosperous even in spite of the crash of 1929.
If I took the trouble to speak about this today it was not with the expectation to convert anybody right now, but it was to afford all hon. members the opportunity to think over what has been said. I may be right; I may be wrong. I am not prejudiced, but I hope that in the near future the quarrels between some provinces and Ottawa will stop. I find it a disgrace. The provinces are considered wrong because they do not accept the views of this government, because they are not ready to accept what has been cooked up in the Rowell-Sirois report.
It is not a question of so many more millions .to be given by Ottawa, because I submit that the provinces have a right to expect that the same proportion will be paid to all. When it is done to all the provinces there can be no question of bribing. I can remember that not later than last year the question came up of giving other countries some large gifts which would have to be paid out of taxes. Members of parliament were told, "If you do not vote for this, you will not have family allowances any longer." If that is not blackmail, I do not know what blackmail is. That was not said by the present minister; it was said by. someone else who was putting undue pressure.
That is not the way to act with the provinces. The provinces have a right to be

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proud and dignified because they have exclusive rights within their jurisdiction under the British North America Act. I need not refer hon. members to the various provisions of that imperial statute because they know that the provinces on the one hand, and the dominion on the other have exclusive jurisdiction respectively. That means that the provinces are the equal of the dominion in their respective fields. The dominion is asking the provinces to make a concession in connection with taxing powers and in return -the provinces will be given the returns from the collection of those taxes. It cannot go on like that. Let the provinces be independent; let Ottawa be independent, but let us all be friendly. I hope that in the near future, with the fine disposition of the Minister of Finance who is open-minded and broadminded, and with the equally fine disposition of the premiers who have not accepted the proposals, there will be a complete revision of what has been done with seven provinces. This should be done at the earliest possible opportunity in order that all the provinces can be treated fairly and squarely.
If the leader of the opposition has reached this conclusion, I congratulate him. I do not know how he will vote. His speech was based on the false principle of gifts. I am against gifts to provinces as I am against gifts to other countries. The provinces should be given the right to maintain themselves through their own taxation.
Mr. JOHN T. HACKETT (Stanstead): Mr. Speaker, the title of the bill is rather long but it is fully descriptive. It is styled:
An act to authorize the government of Canada to enter into agreements with the governments of the provinces pursuant to which, in return for compensation, the provinces agree to refrain from levying certain taxes for a limited period.
As its title indicates, this bill entails the surrender by the provinces to the dominion, for a period at least, of certain constitutional rights. It suggests that among some of the provinces there are necessities which should be met. As a preface to what I have to say, I should like to make two definite statements. The first is that I believe that, as a civilized community, it behooves Canada so to administer its affairs, in conjunction with the provinces, that need may be relieved where it exists. I do not wish anything I say to be interpreted as hostile to a revision of taxing rights and to a reallocation between the dominion and the provinces of the revenue of those taxes. The next statement is that these questions are not free from' controversy. It is possible for men to hold divergent views, to hold them in good faith and with some degree of enlightenment. For
that reason I was sorry to hear the acting leader of the C.C.F. group state this afternoon that two premiers-there were three a short time ago-


Mr. MICHAUD:: There will not be any before long.


Mr. HACKETT:: My hon. friend would be prophetic; if he were better acquainted with the attachment to principle of the people of the province in which is located the county I represent, he would not be quite as certain of the accuracy of the allegation he has made. Be that as it may, I am sorry that the hon. gentleman who leads the C.C.F. group found it necessary to characterize the attitude of two or three premiers as political. If my ears did not mislead me, he said that they had been playing politics. I would be loath to make that suggestion in view of the sound arguments which were advanced by each of those gentlemen at the conference and, forsooth, because of many convictions which I hold myself. One of the characteristics of this chamber and of our political institutions is that a man may state views which may not be universally accepted, without his motives being challenged.
This bill, if enacted, will enable the federal government to pay to the provinces the sums of money stated in the bill, the consideration being that the provinces yield for a period of time their right to levy certain taxes. The policy of taxing by one authority and spending by another is false in principle and wasteful in practice. It has been condemned by all authorities, including Sir Wilfrid Laurier, and by none more roundly, more completely, more forcefully and more eloquently, than by the right hon. gentleman who leads this house.
We are told that agreements have been entered into separately with seven of the nine provinces. In several instances these agreements have been renegotiated because a province, finding that some other province had subsequently to its arrangement with the dominion, received better terms, came back and insisted that it be given terms as satisfactory as those conceded to the last province- with which the dominion had dealt.
I should like to .make it quite clear that my objection to this method of dealing with the provinces rests on what I believe to be a principle. This country's genesis, this country's beginning, this country's origin as a confederation rests on conference, on agreements arrived at in the open, and if we are to put an end to the era of conference and agreement which makes it obligatory that all the provinces should be treated in a way which is satisfactory to all, then I fear that we have come upon very sad days for this dominion.

Tax Agreements with Provinces
How are we to deal with each of these provinces separately? What are we contending for; what is the group which sits to my immediate left contending for as well as other groups in the house in the field of labour? It is that everybody should have complete freedom of bargaining. Is one to believe that a province whose necessities are extremely urgent has the same freedom of bargaining the same power and capacity to bargain with respect to its own interests as a province which has a relatively larger revenue?
To take a case, let us take that of Nova Scotia; let us remember that only a short time ago an announcement was made in the house that the province of Nova Scotia had finally accepted the offer which had been made to it by the dominion. Here are the words of the premier of Nova Scotia only a little over a year ago. At page 419 of the Dominion and Provincial Submissions and Plenary Conference Discussions he said this:
In return we are asked to surrender our rights to collect income and corporation taxes, two fields which, as I said, yielded last year something in excess of one and a half billion dollars. We have then to surrender the rights to collect income and corporation tax, two fields which I said last year yielded something over one billion and a half dollars. That is the position which the provinces are asked to take. Let me ask you, Mr. Chairman, and the delegates here, whether they represent the dominion government or the provinces, let me ask anyone who is within sound of my voice, let me ask that greater body to which we as public servants are all accountable, the citizens of our provinces or of Canada, let me ask any of those people whether they think that is a fair or honourable or dignified position in which to place the provinces in this dominion. Provincial autonomy will be gone. Provincial independence will vanish. Provincial dignity will disappear. Provincial governments will become mere annuitants of Ottawa. Provincial public life-and I do not think these words are too strong-will be debased and degraded. I cannot think that such a state of affairs is desired by the representatives of the government of Canada here today, my one-time colleagues. I am sure that they have no wish or desire to see such a state of affairs come to pass in this country, nor can I believe that such a state of affairs is desired by the people of this country.
Yet the same hon. gentleman, if we are to believe what has been stated in the house, has signed an agreement with the dominion. He has had to yield up the dignity of provincial life. He has had to foreswear the autonomy in which he believed. Why? Because he and his people have been starved into that acquiescence. I say, Mr. Speaker, that agreements which rest upon a basis of that kind are insecure; they are not durable, and they will not bring about a happy, contented or prosperous Canada.
[Mr. Hackett.l
The taxing powers under the constitution have been divided between the federal and the provincial authorities. It is now sought so to divide them that the federal government may collect the taxes and pay over large sums to the provinces. That system is subversive of the whole idea of confederation and it will make, as has been said by the premier of Nova Scotia, vassals of the provinces. I submit that it is far better that a dominion-provincial conference be called together and that an arrangement be arrived at with all the provinces whereby each province, retain* ing its right to tax within the terms of the constitution, shall provide by direct taxation for its own needs.
How did this difficulty come about? We have heard this afternoon something said about the Rowell-Sirois report. At the time that study was undertaken the provinces were in the greatest distress. That situation has been modified. The party that now needs money most urgently is the dominion. The dominion, having acquired taxing rights from the provinces for a period of time, having enjoyed them for the duration and for the purpose only of winning the war, directed them to another purpose. It. used them to win an election. It used the proceeds of the taxing rights conceded to it by the provinces for the purpose of winning the war for the purpose of providing family allowances. Family allowances are an excellent thing. Dishonesty is not a virtue. When a government is in possession of certain borrowed taxing rights and revenues for a specific purpose and it diverts them to another purpose, it seems to me it is nothing short of dishonest, Filial piety is a fine thing itself, but were a young man to break into the home of a neighbour and take away a large sum of money and, with a portion of it, buy an armchair or an automobile for his parents, his conduct would hardly be lauded.
That is exactly what has happened here. But that is not all. At the end of the period, when the time came to return to the provinces their taxing rights, the dominion said: We cannot do that because, if we do, we shall not be able to continue these social services, social services which were excellent in themselves but which, in reality were within the jurisdiction of the provinces, which, upon a proper reallocation of the taxing privileges, were better equipped and better able to provide those services than was the dominion itself.
We have found that the dominion received something over $2 billion from the exercise of these taxation rights. It paid out to the provinces, as the leader of my party said last

Tax Agreements with Provinces_____
night, about SI 17 million per annum during the war, keeping the balance for it-s own purpose. The amount has increased rapidly since that time. It was SI 17 million during the war, $138 million in 1945, $198 million in 1946, and according to the table which the Minister of Finance put on Hansard last night, it will be $228 million for 1947. There is evidence of the unsatisfactory result following the method which the government has pursued. It has made a secret arrangement with one province and another secret arrangement with another province, and when the first province has found out what has happened it has required a larger amount of money.


An hon. MEMBER:: How were they secret?


Douglas Charles Abbott: ' There were no secret arrangements made with anyone.


Ian Alistair Mackenzie: We are not a Tory party.


John Thomas Hackett: As to the secrecy, they were not made openly in public conference; they were not made with the knowledge of all the provinces; and the point I am endeavouring to make, Mr. Speaker, is that any arrangement with a province which is made outside, the knowledge of all the provinces, any arrangement which is made in the absence of any member of the family, is a secret arrangement and one which tends to undermine the very basis of confederation, one which makes for rivalries and jealousies and for misunderstanding throughout the country.
We have just about emerged from a period of sordid division which has prevailed throughout the land since the first great war. It is not my intention to go into all the details of that sad story which grew out of the question of where Canada's duty lay. with regard to defence. You know, Mr. Speaker, that the situation was such that a large element, a very respectable and intelligent element in one section of the country was told and told frequently that it had no duty to serve anywhere unless this country were attacked. We are through with that. The fallacy of those statements has been brought home to those wiho made them. It was only the other day that we enacted in this house legislation to provide for tribunals before which members of visiting forces who had misconducted themselves might be haled, meaning, if it meant [DOT] anything, that visiting forces would come to Canada for the purpose of coordinating their military endeavour with our own, so that our country might be, if not immune from attack, made strong in resisting it.
Now we are at last free from the divisions which arose out of enforced military service,
are we to be injected into a new era of division in the economic area by permitting the government again to rule by means of dividing? Are we to permit the government to make arrangements with individual provinces? Is each province to be put on the block and to be bid in according to its necessity or the whim of him who has the moneybag?
This whole idea of centralizing taxation is bringing to Canada a theory and practice which are entirely contrary to the scheme of government which was developed and enacted eighty years ago; and if we are to continue, as my leader said, to permit the centralizing of the taxing power and of the spending agencies in Ottawa we are imperilling confederation. The interests of this country are too diverse. Our origins, our outlook, our hopes are so far apart that they cannot find expression in a unitary form of government. We can only hope to exist if complete and continuing provincial autonomy be preserved in this country.
We have been led astray to some extent,
I think, by the use of words. I noticed that the minister last night referred to the "rental of fields of taxation". That is not exactly a new phrase. It is rather a glittering one, and it is certainly a loose one. It is not unlike that other term used by a master of words, "lend-lease", which was really an aphorism to describe acts of war, while the semblance of peace was maintained. I say again that the words "rental of fields of taxation" are misleading. We are witnessing the transfer of provincial rights to the dominion. It is all very well to talk of it in terms of rental; but, once an act of this description is perpetrated, it is difficult to undo it. In my hand I have the report of the royal commission on dominion-provincial relations, and the last words found in the first volume-which is really the last volume, because it is the report-indicate the aim of the transfer and make clear how final is the step that will be taken if this bill be passed. Here are the words found at page 259:
Where legislative power over a particular subject matter is divided, it is ordinarily desirable that these powers should be pooled under the control of a single government in order to secure unified effort in administration.
And on the same page in a preceding paragraph we find these words:
Thus the dominion must always hesitate long before withdrawing a grant. The provinces know this and they are not seriously impressed by threats of such action. The power to withdraw the grant is not an effective sanction except against the most flagrant of abuses.
Tax Agreements with Provinces

So that we can draw but small consolation from the fact that this is only a five-year agreement. When these moneys have been paid and this method of dealing with the provinces has been established we shall, I fear, have gone just one step farther toward complete centralization of administration and centralizing of taxation in this dominion. The result will mean rivalry, dissatisfaction and waste; it will mean that the provinces will be weakened and will be forced, as Nova Scotia was forced, to accept the terms of the dictator, the centralizer, the powerful totalitarian who holds the purse strings.


Some hon. MEMBERS:: Oh, oh.


Douglas Charles Abbott: What nonsense!


John Thomas Hackett: I hear hon. gentlemen opposite dissenting. I naturally do not wish and cannot hope to force my views on anyone. I merely wish to express them. But when that dissent comes from hon. gentlemen from my own province, I marvel at their temerity; because if there is an element in this country which is interested in the maintenance of the integrity of the constitution, if there is an element in this country which needs the British North America Act and needs the power given to it by the constitution to develop its own institutions, to advance its own culture, to interpret its own soul, it is the element represented by the hon. gentlemen who sit opposite. I for one would feel remiss in the duty which is vested in me by my electors did I not say these few words against the terms of the bill and against the philosophy which underlies it.
I say again that our constitution found its genesis in understanding and in conference. Everyone who knows the story of Canada will recall that in 1866 only the two Canadas and Nova Scotia seemed willing to come into confederation. New Brunswick was not interested then. It was not until after what were called the Fenian raids, after the fear of invasion had arisen, that the latter province Changed its mind and decided that it would participate in the strength and power which come from brotherhood, understanding and complete disclosure. Could confederation ever have been .achieved if the fathers had gone about knocking at one door of each province? This dominion could never have been born had it not been for the endless conferences and a fathomless spirit of trust and faith which the various provinces placed in each other.
I want to say just one word before I take my seat. No one has greater awareness than I of the transcendant abilities of the right hon. gentleman who leads this parliament. But when his story is told, free from all propa-
ganda and all prejudice, I think it will be said that his genius-his sorry genius at times -has found expression in the creation of situations which the Canadian people were frequently unable to resist, although these situations were neither helpful to nor healthy for them. I reiterate what I said a moment ago about family allowances. The' people wanted family allowances; to get them they had to sacrifice provincial autonomy and accept centralized authority in this government.


Mr. BERTRAND (Laurier) :: Why did the hon. member vote for them? .


John Thomas Hackett: That is a pertinent question. I am not going to vote for the bill which is now before the house, if it comes to a vote. I did not vote for family allowances, and I would not have voted for them had I been here because I believe it was a mistake in principle to introduce them as they were introduced, a mistake that will cost all the provinces of this country dearly, and none more than the province of Quebec. Only a short time ago this house was asked to pass a resolution, which resulted in an amendment to the constitution. Thus was another situation created! The. good province of Quebec was to have eight more seats in this house than it had before; and for that mess of pottage the members opposite consented, by a mere expression of party whim, by a mere parliamentary majority, that that sacred thing, the constitution, might be torn up.
I will point out one other instance in which a situation was created that men just could not resist. Possibly some hon. members will remember the plebiscite., What was that plebiscite? The people of Quebec-not the people of Canada-had been promised there would be no war.


Some hon. MEMBERS:: Oh, oh.


John Thomas Hackett: The people of Quebec were promised there would be no participation in war. The people of Quebec were promised there would be no overseas service.


Ernest Bertrand: Never.


John Thomas Hackett: When the war came, what happened? Quebec was not asked to relieve the government from its promise; the whole dominion was asked, to which no promise had ever been made. Quebec refused to relieve the government from the promise which had been made to it; the plebiscite sought relief from the whole dominion.


An hon. MEMBER:: What has that to do with the bill?

Tax Agreements with Provinces


John Thomas Hackett: It has this to do with it, that one situation after another has been created which, I suggest with all respect, are as cynical as they seem to be irresistible. They have been hostile to the interests of the people; yet, as in this instance, there are provinces in need, and their need is so great that they are being forced, as it were, into surrendering their autonomy, which is the genesis and the basis of confederation. Once provincial autonomy disappears, of necessity the dominion will dissolve, because there is not sufficient identity between the different elements of the country for them to submit to an all-pervading and unitary government.


Ian Alistair Mackenzie: I am not intervening in the debate at all, but I should like to ascertain the wish of the house in regard to this evening's procedure. It was our intention to ask that private bills be called at seven o'clock, but notice was not given. Therefore, if the house would prefer to have them deferred until tomorrow evening at seven o'clock that will be quite satisfactory. I should not like to call them at seven o'clock this evening without unanimous consent. There are several on the order paper.


John Bracken: We will be disposed to accept the judgment of the acting leader of the government in the matter.


Ian Alistair Mackenzie: Then we will call them at seven o'clock this evening, with the consent of the house.


Thomas John Bentley: From seven to eight?


Ian Alistair Mackenzie: Not later than eight o'clock.
(Translation):
Mr. GEORGES H. HEON (Argenteuil): Mr. Speaker, it is unfortunate that the government should have waited until the last days of an already quite long session to introduce this bill. As a matter of fact, I feel that none of the measures which have been put forward during the session now nearing its end, was more important than the one which is before us today. This bill, if it is favourably considered by the house, will enable the central government to enter into agreements with the provincial governments, pursuant .to which the provinces, for a consideration, will sell their already limited direct taxation powers, with a redemption right apparently exercisable after five years. The language of the bill is by no means clear, because of the ambiguity of the definition of the "value of gross national product"-which will apparently be the value as estimated by the dominion statistician by "methods generally recognized as the accepted
statistical techniques"-and because of the highly intricate calculations by means of which the compensation to be paid will be determined. I doubt whether the Canadian ratepayers who, after all, will once again have to pay for the proposed compensations, as they always have, will, unless they are well up in mathematics be able to make or understand the complicated calculations whereby they will take with one hand what they afterwards will give away with the other.
However, if the proposed measure is difficult to understand as regards definitions and figures, it suddenly becomes quite clear when enumerating the constitutional rights which the provinces will have to relinquish if they want to obtain further subsidies. To put it briefly, the measure requires the provinces to renounce their definite constitutional right to levy personal income taxes, corporation income taxes, and, in the language of the bill itself "corporation taxes as defined in the agreement", as well as their right to levy succession duties, if they want to obtain further subsidies. Moreover, while that is not stated in the bill, we may easily conclude or at least surmise, that the provinces unwilling to accept the proposed bargain can expect the central government to keep on levying the taxes which the provinces are required to give up, but without any compensation for the latter. Anyone familiar with the more or less satisfactory financial position of some provinces whose taxation revenue is far from large, can understand that the temptation to barter their constitutional prerogatives for gold is too great to be long resisted. To those who believe in a greater fiscal and economic centralization, in cyclic finance, in ever-increasing subsidies, the proposed measure appears most advisable. I do not question in the least the good faith or the sincerity of those who hold such views; however, I do not agree with that doctrine as I have frequently indicated by my speeches and my votes in this house, because I believe, in the first place, that centralization, even if based on the best grounds cannot, if continually extended, but lead to socialism, which, as we know, does not favour overmuch private initiative and free enterprise. We can easily imagine where such a centralizing policy would lead, should our socialist friends assume power, as they so often think they will some day..
Mr. Speaker, because I believe in dencen-tralization, both legislative and administrative, owing to our immense territory, the multiplicity and diversity of our natural resources, the particular needs of our ethnical group, settled mainly in the province of Quebec, with its praiseworthy and distinctive culture and traditions; because I also especially believe

Tax Agreements with Provinces
that provincial rights, already restricted by our constitution and encroached upon to a considerable extent during two wars, must be protected instead of being auctioned off to the highest bidder. I see in this piece of legislation, another serious menace: the present policy is the clever but far-reaching continuation of a policy initiated during the first world war, by which the dominion government, at a slow though deliberate pace infringes more and more upon provincial sources of revenue. Should this policy be pursued any longer-and it will seemingly be perpetuated in spite of everything-the provinces, some having almost reached that point already, would be completely at the mercy of the dominion government in the matter of fiscal needs.
To my mind, such is not the spirit and even less the basis of the federal pact. Our authorities in constitutional law, in the Quebec universities, at any rate, have always taught, and our courts have often emphasized that our constitution rests on the autonomy of the provinces in their own spheres. Some people, knowing that the fiscal rights of the provinces are limited to direct taxation and that incomes and profits are the main sources of this method of taxation, realize that the surrender of these sources to the dominion government, even at a huge price, can neither be approved nor promoted by supporters of autonomy and decentralization. I do not hesitate to state that I have always belonged to that school of thought, even before I entered parliament and before the Hon. Mr. Duplessis became premier of my province.
For Quebec particularly, each constitutional right surrendered represents a real danger, perhaps not so much for the time being as for the future. In fact, considering the new ideas afloat, which lead almost inevitably to absolute socialism and the omnipotent state taking over all economic and financial activities, considering also the veiled hostility forever smouldering in certain quarters against Quebec and French Canadians, do we know what the future has in store for us, and more especially, what will be the complexion of future dominion governments?
I have already said and take pleasure in repeating that personally, at any rate, I prefer the guarantees and rights granted by our constitution to the good will and possible sympathy of future dominion governments. Mr. Speaker, six provinces, after months of bargaining and overbidding, felt that they ought to sign an agreement based on the surrender of their rights: no doubt they acted after serious consideration, free from all compulsion,

I hope, and convinced that they had taken the right course. Although I am indeed most happy that, by holding back, they finally secured tidy sums of money, I cannot approve of the methods, tactics and procedures followed with respect to the presentation and signing of the agreements.
However, one should not conclude from what I have said that I am opposed to the payment of new and more substantial subsidies to needy provinces. I have a great deal of admiration and respect for Canadians of all racial origins who have settled in the west, and also for the courageous maritimers who have played a most glorious part in the history of our country. I readily agree that they were treated unfairly in the past and despite the fact that their population is smaller and their sources of taxation less numerous, they are nevertheless entitled to the same social security, the same full employment, and the same general services as the provinces whose population and revenues are larger. I would approve with much pleasure and satisfaction an agreement under which the dominion government and the more favoured provinces would agree to pay to provinces actually in need subsidies which they could justify, after collecting all the taxes they reasonably can. Every Canadian will approve the payment of additional subsidies to those provinces which can show their real need for them; however, I cannot agree that those same provinces should be placed in a situation where they have to sell, surrender, loan or rent acquired and fundamental rights in order to obtain that to which they are inalienably entitled.
Mr. Speaker, La Cliambre de Commerce de Montreal, which no one can, in good faith, charge with electoral propaganda or partiality, submitted through sheer patriotism and a sincere desire to help the government, a brief on the ticklish matter of dominion-provincial fiscal relations. The report had been previously unanimously adopted by the executive council of the chamber on April 2, 1947. I wish to stress the fact that I agree with the recommendations set forth in the report, and that my views on the legislation under consideration are practically the same as those of the Chambre de Commerce. For instance, on pages 3 and 4 of section No. 1 of the brief, the Chambre de Commerce states the following:
La Chambre de Commerce is of the opinion that the present dominion proposals would entail too large an economic and fiscal centralization. However, it considers that it would be urgent to put forth clear proposals satisfactory to all concerned, governments and taxpayers.

Tax Agreements with Provinces
And further:
The present legislative procedure constitutes, by its definition, at least partial centralization, not only with respect to collection of taxes, but also to legislative initiative in the field of taxation, which hinders the free use of the rights guaranteed the provinces by the constitution. One must not forget that the constitution limits the powers of the provinces to direct taxation and that a direct taxation policy rests upon the right to tax income and profits. For the above reasons, the Chambre de Commerce is opposed to such centralization.
And I conclude with another quotation from the same brief:
Unfortunately, it is impossible to ensure sufficiently uniform conditions as between one province and another without a certain contribution of subsidies, but the Chambre de Commerce is of the opinion that it should be restricted as much as possible.
Any province which has not yet decided to relinquish all taxation powers in the fields covered by the agreements should not authorize the carrying out of a federal permanent plan on economic control and social security, if, in order to maintain its constitutional rights it must, five years later, withdraw from and thereby disorganize such a plan.
On page 5 of the same section, the brief suggests the following basis of negotiations:
Both federal and provincial governments should come to an agreement which would clearly define their respective fields of direct taxation, according to their respective rights and needs, on the basis of the following fundamental principles-
(a)	Each government to keep the power of initiating legislation in the taxation fields granted to it by the constitution, which is the only system consistent with the exercise of the rights pertaining to their respective jurisdictions;
(b)	Provincial governments, being confined to the field of direct taxation, should be given the assurance that they may cultivate it according to their needs.
(c)	The various governments should devise means to simplify tax collection and to exchange information on ways and means of simplifying or standardizing legislation.
In conclusion, Mr. Speaker, may I ask my hon. friends to the left as well as to the right not to interpret my attitude as being prompted by picayune electioneering motives. I am not voting against this measure because it is brought down by a Liberal federal administration, nor, despite what some hon. members may think, because the Quebec provincial administration, under the leadership of Premier Duplessis, takes a definite stand on provincial autonomy, but for the simple and only reason that I have always looked upon legislative and fiscal decentralization as the policy best suited to serve and to protect the interests of the people in the future. I would oppose this bill, were it presented by a Conservative or other federal administration. I
would be on the side of any Liberal provincial administration which would advocate the policy of decentralization and autonomy in which I believe. After these remarks, no one doubts, I hope, that I shall vote against the bill,
(Translation):


Mr. J. I. HAMEL (St, Maurice-Lafleche):: Tax Agreements with Provinces
Third, the centralization entailed by the bill, will only multiply the iniquities already suffered by my compatriots, by further extending, at their prejudice, the federal government's sphere of influence.
Fourth, the refusal by the two central provinces to surrender rights guaranteed by the constitution, unfairly penalizes them to the extent of $100,000,000 a year. I see no alternative for those two provinces-which, according to the 1941 census, hold 64 per cent of the population of this country-but jointly to consider the possibilities and desirability of secession. Unless the central government agrees to reconsider the matter, I wonder what other choice is left open to those two provinces.
Fifth and last, because of the many uncertainties I mentioned in the debate on the budget, which are far from being cleared up by the bill, I shall cast my vote against its ' second reading.
(Text):


Mr. GEORGE BLACK (Yukon):: Mr. Speaker, on the second reading of this bill I wish to call the attention of the house and the minister to the fact that, although it provides for compensation for the nine provinces of Canada in consideration of their refraining from levying income and other taxes, there is no mention of remuneration or compensation for Yukon. Yukon levied personal and corporation income taxes, but under agreement with the federal government it refrained and still refrains from levying income taxes. For a few years, Yukon received a grant of money in compensation for that, but that was discontinued and has not been resumed. The reason given by the federal government for not resuming compensation to Yukon is that the territory makes a profit on the sale of liquor. It is true that Yukon makes a few thousand dollars on the sale of liquor in which the federal government generously shares, but where Yukon makes thousands, the provinces make millions and they still get their compensation. I wonder if the minister could tell me why Yukon has been overlooked in this legislation and whether he has any plan in mind for compensating Yukon in some other way for not levying income tax.


Douglas Charles Abbott: Perhaps I could answer the horn, member at the committee stage if that would be convenient.
On motion of Mr. Bentley the debate was adjourned.



SUPPLEMENTARY ESTIMATES, 1947-48

[Stage Direction]
A message from His Excellency the Governor General transmitting supplementary estimates for the financial year ending March
31,.	1948, was presented by Hon. Douglas Abbott (Minister of Finance), read by Mr. Speaker to the house, and referred to the committee of supply.
At six o'clock the house took recess.
After Recess
The house resumed at seven o'clock.


[Stage Direction]
Bill No. 450, for the relief of Elrick Montgomery Barton-Mr. Maybank.

[Stage Direction]
Bill No. 432 for the relief of Pierre-Ben-Danais Warren.-Mr. Maybank.
Bill No. 433, for the relief of Ethel Florence Rhodes Pompetti, otherwise known as Ethel Florence Crowdy Pompetti.-Mr. Maybank.
Bill No. 434, for the relief of Elisa Jamoul Hull.-Mr. Maybank.
Bill No. 435, for the relief of Ernest Stanley Rundell.-Mr. Maybank.
Bill No. 436, for the relief of Thelma Lillian Dalton Hilger, otherwise known as Thelma Lillian Dalton Goerner.-Mr. Maybank.
Bill No. 437, for the relief of Mary Alice Berrigan Hamelin.-Mr. Maybank.
Bill No. 438, for the relief of Dorothy Mary Boyce Jackson.-Mr. Maybank.
Bill No. 439, for the relief of Edith Oberfeld Mintz.-Mr. Maybank.
Bill No. 440, for the relief of Roger Lebeau. -Mr. Maybank.
Bill 441, for the relief of Shelia Marcus Issenman.-Mr. Maybank.
Bill No. 442, for the relief of Zenobia Perrow Broadbent Emond.-Mr. Maybank.
Bill No. 273, for the relief of Eileen Maude Gardner Richards.-Mr. Maybank.
Bill No. 274, for the relief of Frances Audrey Gray Lacaille.-Mr. Maybank.
Bill No. 275, for the relief of Aline Theoret Larose.-Mr. Maybank.
Bill No. 276, for the relief of Margaret Betty Rollings Burman.-Mr. Maybank.
Bill No. 277, for the relief of Beatrice Dorothy Pountney Alker.-Mr. Maybank.
Bill No. 278, for the relief of Margaret Jean Duff Dorval.-Mr. Maybank.
Bill No. 279, for the relief of George Somerville Blackie Begg.-Mr. Maybank.

Private Bills-Divorce
Bill No. 280, for the relief of Lillian Guerasio Galardo.-Mr. Maybank.
Bill No. 281, for the relief of Stewart Davidson Myles.-Mr. Maybank.
Bill No. 282, for the relief of Dorothy Bradford Hurley.-Mr. Maybank.
Bill No. 283, for the relief of Elsie McCormick Albers.-Mr. Maybank.
Bill No. 284, for the relief of George Wilson Dyce.-Mr. Maybank.
Bill No. 285, for the relief of Rita Johnson Cherrier.-Mr. Maybank.
Bill No. 286, for the relief of Esther Cole Zeesman.-Mr. Maybank.
Bill No. 287, for the relief of Celia Yaffe Dubinsky.-Mr. Maybank.
Bill No. 288, for the relief of Elsie Marlyn Garayt Johnson.-Mr. Maybank.
Bill No. 289, for the relief of Leone Rhea Leduc Metcalf.-Mr. Maybank.
Bill No. 290, for the relief of James Arthur Ablett.-Mr. Maybank.
Bill No. 291, for the relief of Goldie Slo-vinsky Tkatch.-Mr. Maybank.
Bill No. 292, for the relief of Harold Fassett Staniforth.-Mr. Maybank.
Bill No. 293, for the relief of Claire Morgan Lockner Middleton-Hope.-Mr. Maybank.
Bill No. 295, for the relief of Rose Nemer-ofsky Silverstein.-Mr. Maybank.
Bill No. 296, for the relief of James Albert Carruthers, otherwise known as James Albert Fell.-Mr. Maybank.
Bill No. 297, for the relief of Ronald Edwin George.-Mr. Maybank.
Bill No. 298, for the relief of Margaret Lena Bertha Dasen Scheffer.-Mr. Maybank.
Bill No. 299, for the relief of Ethel Mary McKenzie Cramp.-Mr. Maybank.
Bill No. 300, for the relief of Evelyn Alice Howard Smart.-Mr. Maybank.
Bill No. 301, for the relief of Mary Margaret Tibbins Gogo.-Mr. Maybank.
Bill No. 302, for the relief of Alfred Nelson Nickle.-Mr. Maybank.
Bill No. 303, for the relief of Arthur Haigh MacGill.-Mr. Maybank.
Bill No. 304, for the relief of Clinton Leslie Dobson.-Mr. Maybank.
Bill No. 305, for the relief of Bernard Stanley Bailey.-Mr. Maybank.
Bill No. 306, for the relief of Archie William Young.-Mr. Maybank.
Bill No. 307, for the relief of Olive Lever Sanborn Lead.-Mr. Maybank.
Bill No. 308, for the relief of John Mackie.- Mr. Maybank.
Bill No. 309, for the relief of Isabel Mercer Leboeuf.-Mr. Maybank.
Bill No. 310, for the relief of Hilda Irene Gordon Lazarus.-Mr. Maybank.
Bill No. 311, for the relief of Mary Margaret Bernice Walker Kennedy.-Mr. Maybank.
Bill No. 312, for the relief of Gertie Rabin Bard.-Mr. Maybank.
Bill No. 313, for the relief of Ruth Morrison Henderson Sidders.-Mr. Maybank.
Bill No. 314, for the relief of Philip Berger.- Mr. Maybank.
Bill No. 315, for the relief of Harold Swann.
[Stage Direction]
Mr. Maybank.
Bill No. 316, for the relief of Margaret Isabelle Curry.-Mr. Maybank.
Bill No. 317, for the relief of Rosamond Edith Bean Crease.-Mr. Maybank.
Bill No. 318, for the relief of Alma Mary Hanway Eccles.-Mr. Maybank.
Bill	No.	319,	for	the	relief	of	Alberta
Dorothy Olson Colby-Mr. Maybank.
Bill No. 320, for the relief of Clair Reginald McLaughlin.-Mr. Maybank.
Bill	No.	321,	for	the	relief	of	Eugene
Klein.-Mr. Maybank.
Bill	No.	322,	for	the	relief	of	Daniel
Hudson.-Mr. Maybank.
Bill No. 323, for the relief of Eileen Edna Paget Bray Dundas.-Mr. Maybank.
Bill No. 324, for the relief of Jessie Goodis Markis.-Mr. Maybank.
Bill No. 325, for the relief of Julia Luella Audrey Cleroux Babbage.-Mr. Maybank.
Bill No. 326, for the relief of Mile Kristo Yoja, otherwise known as Stanley Vadic.- Mr. Maybank.
Bill No. 327, for t'he relief of Anthony Wavroch.-Mr. Maybank.
Bill No. 328, for the relief of Mary Magee Glasheen.-Mr. Maybank.
Bill No. 329, for the relief of Mary Ann Clorenda Archer Richardson.-Mr. Maybank.
Bill No. 330, for the relief of Gladys May Kay Oliver.-Mr. Maybank.
Bill No. 331, for the relief of Henry Thomas Matthews.-Mr. Maybank.
Bill No. 332, for the relief of Ivy Stapleton Brown.-Mr. Maybank.
Bill No. 333, for the relief of John William Sydney Jordan.-Mr. Maybank.
Bill No. 334, for the relief of Pamela Mary Gottschalk Muckell.-Mr. Maybank.
Bill No. 335, for the relief of Winnifred Doris Cleaver Wooley.-Mr. Maybank.
Bill No. 341, for the relief of Eileen Francis Murphy Kerson.-Mr. Maybank.
Bill No. 342, for the relief of Joyce Kathleen Reynolds Swards.-Mr. Maybank.
Bill No. 343, for the relief of Anne Fishman Minsk.-Mr. Maybank.
Bill No. 344, for the relief of Muriel Alice Goddard Perkins.-Mr. Maybank.
Private Bills-Divorce
[Stage Direction]
Bill No. 345, for the relief of Irene Elizabeth Burke Robinson.-Mr. Maybank.
Bill No. 346, for the relief of Gardner Hink-ley Prescott.-Mr. Maybank.
Bill No. 347, for the relief of Joseph Amedee Alexis Cousineau.-Mr. Maybank.
Bill No. 348, for the relief of Mildred Verna Ruth Schnaufer Case.-Mr. Maybank.
Bill No. 349, for the relief of Robert Ralph Tripp.-Mr. Maybank.
Bill No. 350, for the relief of Charles James Langevin.-Mr. Maybank.
Bill No. 351, for the relief of Edward Frank Fulton.-Mr. Maybank.
Bill No. 352, for the relief of Pauline Bertha Marwick Dallison.-Mr. Maybank.
Bill No. 353, for the relief of Evelyn May McNaught Grandison.-Mr. Maybank.
Bill No. 354, for the relief of Margaret Turner Shaw Ward.-Mr. Maybank.
Bill No. 355, for the relief of Olivier Pierre Bernard Laguex.-Mr. Maybank.
Bill No. 356, for the relief of Hazel Mair Grant Rubin.-Mr. Maybank.
Bill No. 357, for the relief of Doris Louise Dickson McMurray.-Mr. Maybank.
Bill No. 358, for the relief of Ethel Florence Barr Shiells.-Mr. Maybank.
Bill No. 359, for the relief of Gabrielle Augustine Gilberte Desmarais Creelman.- Mr. Maybank.
Bill No. 360, for the relief of Christos C. Koukouvelis.-Mr. Maybank.
Bill No. 361, for the relief of Aime Bibeau. Mr. Maybank.
Bill No. 367, for the relief of Henry Eaton. -Mr. Maybank.
Bill No. 368, for the relief of Lodie Kadei Nakel.-Mr. Maybank.
Bill No. 369, for the relief of Margaret Sophie Bolenski Dubeau.-Mr. Maybank.
Bill No. 370, for the relief of Marion Mapes Harvey Allinson.-Mr. Maybank.
Bill No. 371, for the relief of Frances Alice Egg Johnston, otherwise known as Frances Alice Egg Willey Johnston.-Mr. Maybank.
Bill No. 372, for the relief of Selden Grant Stoddard.-Mr. Maybank.
Bill No. 373, for the relief of Elmon Parker Law.-Mr. Maybank.
Bill No. 374, for the relief of James Dewey, junior.-Mr. Maybank.
Bill No. 375, for the relief of Peggy Alicia Stilwell Kneeland.-Mr. Maybank.
Bill No. 376, for the relief of Alexander Monteith.-Mr. Croll.
Bill No. 379, for the relief of Evelyn Clara Woods Cross.-Mr. Maybank.
Bill No. 380, for the relief of Minnie Braimaster Kazarensky.-Mr. Maybank.

Bill No. 381, for the relief of Peter Moroz, otherwise known as Peter Morris.-Mr. May-bank.
Bill No. 382, for the relief of Lome Earl Barth.-Mr. Casselman.
Bill No. 383, for the relief of Thomas Wynn Hayes, junior.-Mr. Maybank.
Bill No. 384, for the relief of Claire Black Wolfe.-Mr. Maybank.
Bill No. 385, for the relief of Anna Lovannah Theoret Wilson.-Mr. Maybank.
Bill No. 386, for the relief of Norma Lorraine Desrosiers.-Mr. Maybank.
Bill No. 387, for the relief of Rose Jacobson Greenberg.-Mr. Maybank.
Bil No. 388, for the relief of Guido Corbo. -Mr. Maybank.
Bill No. 389, for the relief of Harold Ashton Hugh Roberts.-Mr. Maybank.
Bill No. 390, for the relief of Mary Kalich-man Pulver.-Mr. Maybank.
Bill No. 391, for the relief of Gaston Dorval Lachance.-Mr. Maybank.
Bill No. 392, for the relief of Donat St. Jean.-Mr. Maybank.
Bill No. 393, for the relief of Sheila Sydney Doner Gordon.-Mr. Maybank.
Bill No. 394, for the relief of Thomas Walter John Moon.-Mr. Maybank.
Bill No. 397, for the relief of Edward Charles Barron.-Mr. Maybank.
Bill No. 398, for the relief of Violet Eileen Lepine Tickner.-Mr. Maybank.
Bill No. 399, for the relief of Jean Lawrence Ritchie.-Mr. Maybank.
Bill No. 400, for the relief of Livio Quin-tino Fantacci.-Mr. Maybank.
Bill No. 401, for the relief of Bertha Ber-covici Hamer.

Mr. Maybank.
Bill No. 402, for the relief of Ann Bogdanof Millichamp.-Mr. Maybank.
Bill No. 403, for the relief of Beatrice Elman Perlman.-Mr. Maybank.
Bill No. 404, for the relief of Grace Emily Dawes Matheson.-Mr. Maybank.
Bill No. 405, for the relief of Gabriel Burs-zan.-Mr. Maybank.
Bill No. 406, for the relief of Doris Phoebe Potter Potts.-Mr. Maybank.
Bill No. 407, for the relief of Richard Andrew Frame.-Mr. Maybank.
Bill No. 408, for the relief of William Page. -Mr. Maybank.
Bill No. 409, for the relief of Louis Gerst-man.-Mr. Maybank.

[Stage Direction]
Bill No. 395, to incorporate the Canada Permanent Trust Company.-Mr. Cleaver.

Tax Agreements with Provinces


[Stage Direction]
The house resumed consideration of the motion of Mr. Abbott for the second reading of Bill No. 411, to authorize the government to enter into agreements with the governments of the provinces pursuant to which, in return for compensation, the provinces agree to refrain from levying certain taxes for a limited period.
James Horace King: Is it the pleasure of the house to adopt the motion?
Some hon. MEMBERS1: Carried.


[Stage Direction]
Motion agreed to, bill read the second time, and the house went into committee thereon, Mr. Golding in the chair.
On section 1-Short title.
Thomas Langton Church: I wish to speak for just five or ten minutes on this section. I intended to say something on the second reading, but perhaps I can express my views on this clause. First of all, I should like to point out two or three facts in connection with this subject. The bill before the committee is one of considerable importance to me, representing as I do a city which is a large tax-paying corporation in Canada. This bill empowers the government to enter into agreements with the governments of the provinces, pursuant to which agreements, in return for compensation, the provinces agree to refrain from levying certain taxes for a limited period.
This whole problem of taxation was covered bj- the British North America Act. At that time there were no motor cars and no telephones; there was no radio; there was nothing of that kind, and the British North America Act was looked upon then as something after the fashion of the law of the Medes and Persians. It could not be changed. At confederation certain powers were vested in the provinces, and the municipal systems that came into being then were, one might say, almost an afterthought of the intentions of the founders of confederation. As a result of the system adopted then, we have overgovernment and overtaxation in the country now. We have a duplicate system, provincial and municipal, foisted1 on the country, with taxing powers. As a matter of fact, we have a triplicate system, federal, provincial and municipal. The bill we have before us tonight indicates the necessity for constitutional reform. This was admitted in all the discussions that led to the appointment of the Rowell-Sirois commission. I may say that I introduced a motion dealing with parliamentary, cabinet and constitutional reform, and1 the minister of justice of that day arose and said that he would appoint a royal commission. Such a commission was appointed with Chief Justice Rowell as its first chairman; later on he was succeeded by Mr. Sirois, and that commission, which has come to be known as the Rowell-Sirois commission, functioned for two or three years.
If this bill is to be the law for a short period; if this legislation is temporary, in my opinion it sounds the death-knell of the provincial system. We are virtually empowering the provinces to impose taxation, but we are also taking away from them certain powers they have. It gives Ontario only $67 million.
From confederation down to the year 1917, income tax was the exclusive prerogative of the municipalities, and many federal burdens, following confederation, were placed upon the municipalities which the fathers of confederation had not intended. The result was that the municipalities had that form of taxation down to 1917, when Sir Thomas White was Minister of Finance, and they objected to the dominion invading their field at the time. But they were told it was just to be for a year or two during the war and when the war was over it was intended to be the end of it. But they still hung on to it.
We now come to the province. There was no income tax in the province before. It was the exclusive field of the municipality. But after the action taken by the dominion government with regard to income tax in 1917, the province came along and imposed a tax of a mill on the dollar of assessment on the municipalities and raised a large sum of money in our city at the time. It was a burden on real estate from 1917 to 1921. I want to point out in connection with this item that we must be careful that we do not adopt the principle which caused the separation of the American colonies from the mother country, namely, taxation without representation. That is a principle which is largely wrapped up in this bill. What I wish to see is the policy of confederation with regard to taxation. I believe, for confederation, in the old Cornish battle-cry, "Each for all and all for each." I believe that in this bill there has been the greatest invasion of the rights of the municipalities and the provinces. Ontario seems to be the forgotten province.
In connection with the merits of this bill, the allotment of the province is $67,000,000. When you look at the return of the Minister of National Revenue in the blue book, at pages 24 andi 25, and see the returns from the income and excise taxes, it is a large sum of money running into $423 million. In connection with income tax the tables are set out at pages 897,

Tax Agreements with Provinces
898 and 899 of the last issue of the Canada Year Book. I will not read the figures. The province of Ontario has been discriminated against. The taxation clauses of the Sirois report are unfair to our province and to Quebec. According to a return I saw, those two provinces pay about seventy per cent, of the total taxes of the whole dominion. There are certain provinces which one might call "have" provinces and there are two of them. Then there are certain provinces one might call 'have not" provinces. The "have not" provinces have been given a large share of the funds of this bill. I wish to say that Ontario is the forgotten province.
In conclusion, may I say in connection with these agreements that I hope they will be only temporary. They are interfering with all the municipalities. The municipalities are starving. They cannot have any money left under the system of taxation we have, which is a system which I described as that of robbing Peter to pay Paul, and under which the finances of the "have not" provinces are loaded on to the "have" provinces. How the municipalities are to live, I do not know. They are all having a hard fight, There are high taxes on real estate and on personal property. When you see that form of taxation which the municipalities have relied upon in order to get public buildings roads and public utilities, libraries, more schools and many social services, being assessed for social services by the dominion and province, it is a heavy burden. If it is only temporary, it is another matter. But on behalf of a large tax-paying city I protest against this way of handing out moneys and dealing wdth agreements. There are two forms of agreement in the bill. One is a statutory agreement under the British North America Act, with statutory subsidies paid. Then you add on to that what you might call politics. Politics is the science of government. A large number of others have been added on by statute from time to time regarding Prince Edward Island, Manitoba, provincial subsidies, Alberta natural resources, Railway Act, Manitoba resources, Saskatchewan and the maritimes. Our province seems to be the forgotten one when it comes to this.
I believe that charity should begin at home and that the two industrial provinces should have enough to live on. At the present time they have not; nor have the municipalities. The result is that taxes are a burden on industry, labour and capital. There should be some way of lessening that. We should be able to adopt a better system than the one we have, which is a haphazard system of handing out in some form varying amounts of money, with no standard agreement and no equality of treatment.

(Translation):


Liguori Lacombe: Mr. Chairman, I shall take but a few minutes. The bill now under consideration is of such importance that I would be remiss in my duties were I to refrain from taking part in the debate.
How often have I objected to such intrusion of the federal government in exclusively provincial matters. Why have the government declined to call another conference with the provinces?
Because they knew full well that they were at fault. There are lawyers of great renown in the cabinet. They also know that the provinces enjoy rights guaranteed by the constitution. Why not respect the provincial jurisdiction and privileges recognized by constitutional law?
The federal government is ready to pay the price for ensuring the betrayal of the provinces. Only Judas is capable of such a foul deed. I fearlessly say that the hon. Maurice Duplessis had ample reason to state that he would not permit his province to be crucified, were it on a golden cross.
On July 21 next, the Huntingdon constituency will vindicate the hon. prime minister of the province of Quebec for his devotedness, his loyalty, his straightforward, energetic and splendid attitude toward his province. I have spoken.
(Text):


[Stage Direction]
Section agreed to.
Sections 2 to 6 inclusive agreed to.
On section 7-Payments respecting income tax on specified corporations.
Douglas Charles Abbott: I am sorry, Mr. Chairman, but this has been going a little bit more rapidly than I had dared to hope. I have an amendment to section 7 which I shall have to introduce or ask one of my colleagues to move. I think it will be here in a moment, but in the meantime I might avail myself of this opportunity to answer one or two points which were made in the course of the debate this afternoon. Perhaps we might do that under clause 6, which is the clause now under consideration.


The DEPUTY CHAIRMAN:: We are on
section 7.


Douglas Charles Abbott: Then, under section 7,
although what I have to say has no relevance to section 7. That clause is something which is apart from the agreement. However, perhaps the committee will allow me to make these general remarks under section 7.

Tax Agreements with Provinces
In the course of the debate a number of points were raised by some of the members who spoke, in particular the leader of the opposition and the hon. member for Stanstead who is not in his seat at the moment, with which I should perhaps deal briefly. I should like to deal, first, with a point which was raised by the hon. member for Stanstead when he said that the negotiations which had led up to these agreements were secret negotiations and that the attitude of the dominion govern-men in presenting these proposals-and I am paraphrasing his words-was characterized by cynicism. I take strong exception to that description. There has been no secrecy about the negotiations with the seven provinces which have so far evinced their intention of signing agreements with the dominion. In my explanatory statement last evening on the second reading of the bill I outlined in considerable detail and in chronological order the various steps which led up to the conclusion of these agreements. Any discussions with any particular province have been promptly made known to the other provinces with which the dominion was negotiating, and, moreover, have been made known promptly to all provinces, even those which up to the present time have evinced no particular desire to enter into agreements with the dominion. I could refer particularly, of course, to the negotiations which took place last December with the premier of British Columbia, in which he placed before the dominion government the views of his province with respect to these agreements and following which, speaking broadly, it was decided that we would extend to that province the benefit of the escalator clause which had been made available to the other provinces. That understanding or agreement was conditional upon the provinces which had already evidenced t-heir desire to enter into agreements. on the basis of the original budget proposals being prepared to agree; and that offer was promptly made known to those other provinces. As I stated last night, they put forward the view that under those circumstances they felt their position should be reconsidered. It was reconsidered and in January'-I have not the exact date before me-the new formula or new formulae which we worked out were made known to all the provinces.
I cannot emphasize too strongly that there have beep no secret, hole-in-the-corner negotiations with anyone. The circumstances which made it necessary for the dominion to make an offer to the provinces in the budget speech of last year on an individual basis have been fully outlined, and there is no reason for me
to review them now. But there has been no concealment, no secrecy, and no attitude of cynicism on the part of the dominion government in presenting these proposals to the provinces.	[DOT]
As I listened to the hon. member for Stanstead, knowing the interest he has in history I thought to myself there is nothing new under the sun. I remembered a letter which had been written by Sir John A. Macdonald to Hon. Joseph Howe in 1869, at the time confederation was being worked out and when agreements were being made between the various provinces. I sent out a note to the librarian, asking him to send me the letters of Sir John as collected by Joseph Pope; and I think it might be of passing interest if I were to quote from a letter written oh January 12, 1869. I need not read the whole letter; some of it relates to other matters, but it does have to do with the negotiations which were going on at that time concerning financial arrangements between the provinces of the new confederation of Canada. This is the third paragraph of the letter. The letter itself is a very interesting document, and I commend it to all hon. members. It is to be found at page 83 of the "Correspondence of Sir John Macdonald, 1840-1891", as collected by Sir Joseph Pope. He is referring to Sir John Rose, who was then Minister of Finance.
Rose, who will give you this, will meet you with a strong and sincere desire to come to some satisfactory arrangement. I need not, however, caution an experienced statesman like yourself, not to ask for too much. We shall have our own difficulties with the general parliament in carrying any concessions. Already has George Brown, through the Globe, protested against any pecuniary advantages being given to Nova Scotia, beyond those secured to them by the Union Act. This course will not at all deter us here from agreeing to what is reasonable, and staking our existence upon it in the legislature.
The province of Quebec, whose government is the reverse of economical, will, we fear, attempt to put on the screws for additional pecuniary aid if it is granted to you. So you see that we must take great care as to every step we take.
I have no doubt that you and Rose will find common standing ground, but whatever you agree upon must be kept strictly a secret. If divulged prematurely, the opposition press in Ontario will protest against any additional charges being put upon the people of that province. which, it is alleged, from its greater wealth, already hears more than its fair Bhare of the public burdens. In Quebec, the united press will demand a slice for that province, and all the anti-papers in Nova Scotia will denounce the arrangement as being altogether insufficient and unsatisfactory, and you will have the usual charge brought aganst you of "selling your heritage for a mess of pottage," etc.
It will be very difficult I know, for you, on your return, to resist the pressure of your friends to disclose the arrangement; but the answer should be satisfactory, that any arrangement with the government is of no value until
Tax Agreements with Provinces

sanctioned by parliament, and that we, having the responsibility of carrying it, should have the opportunity of submitting it to the public and parliament at our own time, and in our own way.
I quote from that letter only to show that things have not changed a great deal in the last eighty years. As the French say, "Plus cela change, plus c'est la meme ohose"; and I just suggest to the hon. member for Stan-stead that in these proposals to the provinces we have been at least as frank and open as was that great statesman and leader of the party of which the hon. gentleman is a distinguished member, Sir John Macdonald.
In the course of his speech last evening and today the leader of the opposition raised a number of points with which I should like to deal briefly. First, he made the point that he approves fiscal need grants, but that he would not be prepared to agree to anything which went beyond the requirements of fiscal need. The hon. member for Vancouver East asked what he meant by fiscal need. Of course he did not have an opportunity of replying and I do not suppose the hon. member particularly wished that he should. Well, I have no intention of defining fiscal need, either, but my understanding has always been that a grant to cover fiscal need would be a grant to enable a particular province or particular organization, whatever it might be, to balance its budget, and that no matter how extravagant the administration of the province might be.


John Bracken: I would not agree with that definition.


Douglas Charles Abbott: Well, that is one suggestion. Another might be that it would1 be a grant or an allocation to a province which would enable that province to maintain an average standard of services without imposing higher than average rates of provincial taxation. But whatever basis one may take, I suppose the broad principle is that the grant or allocation should be sufficient to enable the particular government, provincial or municipal, to discharge its legitimate responsibilities. Later in his speech the leader of the opposition questioned how long we could go on making payments to the less favoured provinces from money collected largely in the two most favoured provinces. Well, I found it hard to understand that position, because it seemed to me that the two attitudes were contradictory. How can you have fiscal need subsidies unless money which is collected in more favourable provinces is spent in less favoured areas? Then he went on to say, as I mentioned a moment ago, that he favoured payments to the extent that they 
met real fiscal need but not to the extent that they exceeded fiscal need; and he contrasted the payments of approximately
840,000,000 under the Sirois proposals with the $226,000,000, roughly, under the 1947 agreements. The first point I wish to make is that that comparison in itself-and I think my hon. friend will agree-is misleading, because the Sirois plan envisaged the assumption by the dominion of servicing provincial debts in addition to fiscal need subsidies. The total outlay for net debt service and sinking fund estimated for 1940 was $73 million. So if you add that to the $40 million contemplated1 by the Sirois report you have something like $120 million.
I think the committee would agree that since 1940 the practical value of taxation fields which are to be turned over to the dominion, or which it was suggested in the Sirois report should be turned over, have been greatly increased. The proposed 1947 agreement was made up of the statutory subsidies plus annual rentals for tax fields now occupied by the provinces.
I believe that on a moment's reflection the committee will agree that the rental for those taxation fields had to be high enough to compensate the so-called more favoured provinces for the tax sources which they were renting, and the rent, of course, is higher than the value of the tax fields in the less favoured provinces. The difference, I suggest to the committee, provides a convenient and, in fact, a largely automatic measure of the economic disadvantage and consequently the fiscal need of the less favoured provinces.
As I listened to the leader of the opposition I thought I should ask him if he considers that British Columbia, for example, is getting a higher rental than the tax fields are worth to that province. Does he believe that the payments to Manitoba and Nova Scotia are in excess of the fiscal needs of those provinces?
Then the leader of the opposition took exception, as did the hon. member for Stan-stead, to the method of making agreements with the provinces individually. Well, I spent some time yesterday evening and I have spent considerable time on other occasions in outlining in some detail the efforts which were made by the dominion government through a series of conferences to arrive at a mutually satisfactory agreement with all the provinces. I see little purpose in my reiterating tonight what I have said on that score.
But I wish to make this observation, that a desire for agreement on both sides is necessary to arrive at an agreement. I do not wish to impute motives to anyone, and indeed I am not doing so, but what has taken place does

Tax Agreements with Provinces
not convince me that there is a genuine desire on the part of all provinces to arrive at agreement. The budget speech of my predecessor in office, the present Minister of Justice, shows what the dominion was willing to offer. Seven of the provinces have now indicated that they are prepared to accept that. Since that budget only a little over a year ago, the governments of two provinces, Quebec and Ontario, have consistently failed to indicate on what terms they would be prepared to confer. It never seemed to me that there was much use in calling a conference without some kind of agenda to work on. Seven provinces have already evinced their desire to enter into an agreement, and there is little to confer on so far as taxing matters are concerned.
I want to repeat what I said before, that the dominion has repeatedly expressed its willingness to confer with all the provinces, and to confer with Ontario and Quebec if they [DOT] would indicate some specific basis for conference.
I know I am not permitted to quote from a previous debate, and I do not intend to do so, but what was said by the Prime Minister as it is reported at pages 69 and 70 as to what Canada did in 1946 and 1947 is exactly what the leader of the opposition recommended in 1941 when he was Premier of Manitoba, namely not to permit one or two provinces to obstruct essential action to give justice to less favoured provinces.
Another point which the leader of the opposition made was that the proposed agreements make for centralization of taxing power. I say the dominion is not asking for the slightest abatement of the constitutional powers of any of the provinces. Their taxing powers remain intact. We are merely seeking to rent-and I use that term, although I know the hon. member for Stanstead took exception to it-taxation fields, which the Sirois report suggested should be exclusively and permanently federal.


John Thomas Hackett: After amendment.


Douglas Charles Abbott: That is why I find it so difficult to understand the attitude of my hon. friend the leader of the opposition, who was a staunch supporter of the Sirois report. It was the Sirois report which recommended that these powers be exclusively and permanently assigned to the dominion.
I am not going to quote from the speech of the leader of the opposition which was made at the conference of 1941, but I would point out that he strongly endorsed the permanent surrender of income and corporation taxes and succession duties to the dominion.
I do not suggest for one moment that the proposals which we put forward now are the most desirable. We had hoped that, as a result of a general conference, we could arrive at a general over-all understanding. They are perhaps not the best, but certainly in my judgment they are better than nothing at all. And it was no fault of the dominion government, may I say, that we were driven to this particular method.
There are one or two further points. The leader of the opposition referred to the well known statement made by the Prime Minister in 1929 and 1930 to the effect that the raising of money by one government to make grants to be spent by another government was a vicious principle. Neither the Prime Minister nor anybody else has ever disputed the truth of that. But this statement was taken from its context. It referred to unemployment relief grants and to other grants in aid where the provinces had control of expenditures and the' dominion made grants in proportion to the expenditures, the full size of which it could not possibly control.
What is vicious, of course, about such grants is that they are open-ended commitments. The dominion has no possible means of controlling the extent of its liability. But the payments under the present agreements are not grants in aid. They are contractual payments in the form of rents for the use of taxation fields. The rent is determined by an objective and well known formula; the grant does not increase and the province can get no more if its administration is lax or if it is extravagant. I think the principle of a grant is vicious when there is an incentive to extravagance or inefficiency. But that is not true of the payments proposed under this agreement, because if the provinces inflate their budgets they still have to raise money by provincial taxation to balance them.
I believe I have covered most of the points raised. I must say I was not entirely clear, after listening to the leader of the opposition, whether he was for or against these agreements. I gathered, however, that on balance he was for them. He did make one other statement to which I would refer. He said we were backing away from the 1945 proposals. I covered that point yesterday evening in my statement upon introducing the bill. My hon. friend was good enough to quote what I said and, he having quoted it, I wondered how he could justify his stand that we are backing away.



Tax Agreements with Provinces
I am going to repeat this evening what I said as it appears at page 5319 of Hansard:
The details of our original proposals may of course change as a result of further study or of developing public opinion or of discussion with provincial governments at a general conference which will be necessary 'before they can be implemented. The proposed contributions which the dominion may be able to make in the field of public investment and social security may, as I have said publicly and as I advised the provinces which were negotiating with us last winter, have to be revised to take into account the substantial increase in the financial payments which the dominion has now undertaken to make as a rental for the tax fields in question.
Then I emphasized these words which he did not quote this afternoon:
But the main objectives expressed in those proposals remain the guiding objectives of this government.
I leave it to the sense of the committee to decide whether or not the dominion government is backing away from those proposals.


Thomas John Bentley: I do not know whether I am going to be able to make a speech at this stage. I have become a little confused within the last week or two with regard to the rules of the house and I find myself even more confused at the present time. Just before six o'clock I rose to speak and the minister requested the remaining time in order to introduce another matter which was important to the government and to the house. Therefore I adjourned' the debate. It happened that during the dinner hour I had to attend the final meeting, of the radio committee. Knowing that private bills were to come on at seven o'clock and would continue until eight o'clock if necessary, I did not think there was any great rush to get back and I was a little late in entering the chamber.


Douglas Charles Abbott: I was in the same position.


William Henry Golding: The speech which the minister made was not strictly in order, but I think the committee was anxious to hear his statement. While it may not be strictly in order to make a general speech on this clause, I think with the permission of the committee the hon. member should be permitted to say what he wants to say.


Some hon. MEMBERS:: Agreed.


Thomas John Bentley: I am not sorry that the slight irregularity occurred, even though it might have prevented my speaking, because I was interested in hearing the minister's statement. I had hoped to hear it in the proper place. I was afraid1, Mr. Chairman, that possibly you might consider he was closing the debate and therefore I was diffident about asking your permission to speak. Before I
[Mr Abbott.]
proceed I want to say that I would have supported the principle of the bill if I had been here when it carried. But that does not mean that I agree with all that has been done.
This afternoon I listened to a couple of speeches which were most interesting, one by the versatile and amiable hon. member for Temiscouata. The hon. member went through quite a lengthy series of legal or mental gymnastics to arrive at a conclusion I would have arrived at through another process, one with which I would agree no matter what process was used. He argued that it was necessary for the dominion and the provincial governments to be independent, but that they should be friendly. I do not think anyone will dispute that conclusion.
Then the hon. member for Stanstead, not quite as versatile, but quite as earnest and a little ponderous, surprised me somewhat with his argument. One of his main arguments was that, while this agreement would be only for five years, it would be difficult to change it at the end of that period and therefore he was opposed to it. He said that it was different from what had happened eighty years ago. After eighty years he now opposes any change whatsoever, and yet in the same breath he says that we would not be able to make a change at the end of five years. I was unable to follow the hon. member in that line of reasoning, but otherwise he was interesting.
One of the things he referred to was that the provinces are responsible for their own position. Speaking for Saskatchewan, I want to say that we would not hesitate to accept that responsibility if all other things were equal. I think I can say the same thing for our sister prairie provinces. In order to do that we would have to turn back the pages of history and start somewhat differently. I shall not take advantage of this opportunity to review the history of Saskatchewan and make a political speech, but I want to remind the committee that it would be possible to do so and make out a good case.
When the dominion government insists upon interfering with the work or the decisions of a provincial government in order to prevent that provincial government from doing something which the dominion feels is within its field, it seems obvious to me that the dominion government has some responsibility. I am going to refer to two things to illustrate what I mean, one having occurred in Alberta and the other in Saskatchewan. I do not sit with the hon. gentlemen of the Social Credit group, so that obviously there are points of disagreement between us, but there is one point of agreement between us. If the people of a province by a democratic election have

Tax Agreements with Provinces
elected a government on a programme which those who sought their votes claimed they could put into effect, then they should be allowed to do it. Whether social credit will work in Alberta we shall never know until it is tried and this government deliberately prevented them from making the experiment. Canada is poorer for not knowing the results of that experience. Having interfered with the democratic decision of the people of Alberta, this government owes that province the necessary fiscal aid to carry out its social services, regardless of what might have been said eighty years ago at the time of confederation.
Recently a new government was elected in Saskatchewan on a somewhat different ticket but through the same democratic process. That government was elected because a majority of the voters felt that their programme was good. One piece of legislation which they passed to carry out their election promises was the farm security act. Because one of the clauses of that act might, through some obscure method of reasoning, be considered to interfere with interest on capital, which this government claims was its exclusive field, the dominion government took steps to see that that particular legislation was disallowed.


Mr. ILSLEY:: Not at all; correct that statement.


Thomas John Bentley: The minister can correct it any time he cares to.


James Lorimer Ilsley: I will do so now. The dominion government referred the legislation to the courts. That is all they did; they did not disallow the legislation.


Thomas John Bentley: The dominion government did not need to refer it to the courts. The dominion government could have allowed the private companies concerned to refer it to the courts and not taken any hand in it whatsoever. I still say that the dominion government interfered unnecessarily in that arrangement.


James Lorimer Ilsley: Does the hon. gentleman think it is a good thing to have ultra vires legislation, on the statute books?


Thomas John Bentley: I am not asking for ultra vires legislation; I am simply saying that when the dominion government is determined to retain in its possession certain powers, then it must accept certain responsibilities, and one of those responsibilities is to see that the fiscal needs of the province are taken care of. That is the point I am making. I am not going to criticize the government in this debate for what they did-I may do it at some other time, but not today; I am simply 83166-344J
citing this as an illustration of what took place and in order to show that in my belief this government has a responsibility along with these powers.
When the Rowell-Sirois commission presented their report some years ago many of us in Saskatchewan-and this was before the C.C.F. government was elected in that province-felt that there was a great deal of good in that report. I remember going to a meeting at which the former member for my constituency, a supporter of the present administration, gave an exposition of the report to the voters of our city, and I remember being very much interested and listening carefully to his explanation. He indicated complete support for the report at that time. The premier of Saskatchewan at that time was a Liberal, and he also supported the report, as I believe the premier of Manitoba did. Some others did not. But I did not feel the disappointment over these disagreements that many seemed to feel because, When a report on so complex a subject is presented, it is only natural to expect that, until the report has been studied and discussed and mental changes have taken place in consequence, some people will not agree with the report right off the bat. The discussions went on, and finally we had the dominion government's offer to the provinces. Many of us considered that a good thing, and I commend the government for having made those proposals. I think the government deserves commendation for its offer at that time. I go farther and say that the government and the Minister of Finance deserve commendation for the adjustments they have made and for the flexibility of their arrangements in arriving at agreements with the different provinces.
The hon. member for Temiscouata this afternoon said he was sympathetic with the Minister of Finance because of the heavy load he carries. I am not a bit sympathetic with an able man who is well able to carry the load. His bearing of the load will make him an even better man than he is at present, and he is very good. So I waste no sympathy on him because he does not need it. I give him all possible commendation for having been capable of arriving at some kind of solution with seven of the provinces.
But I would point out to the government that Saskatchewan, through its previous and its present administration, indicated its willingness to enter into these taxation agreements, knowing well, from the history of Saskatchewan and considering the way in which we got stuck and our not having industrial organizations which would stand the taxation load which would be required to meet

Tax Agreements with Provinces
the fiscal needs of the province, that we would have to call on the rest of our sister provinces who are more favourably situated in that regard for their contributions. We have the same situation within the province itself because there we have some good areas, some not so good, and some very poor, and we have to ask the good areas to make a larger contribution, so that our social, educational, and welfare services will be better equalized for the men, women and children of the province. We expect the same type of cooperation from our sister provinces. Even though two provinces of this dominion have not yet decided1 to enter into this kind of agreement, we feel that, even at that, we should have had implemented in our province the full amount of the government's original proposals. ' We have not yet got the sixty per cent of the medical, health and welfare proposals of the dominion government. We have not got the full amount of old age pensions and assistance for the employable unemployed assumed by the dominion government, as well as a number of other things. We believe that we should have those things in the province of Saskatchewan.
I want now to say something that is not quite so commendatory of the government. The provinces of Quebec and Ontario through their premiers-I believe that they are called prime ministers down here-have indicated an unwillingness at the present time to enter into this kind of agreement, for reasons of their own, and they are being headlined in the press. Not for one moment am I supporting either one of these gentlemen. I deplore the attitude they are taking, but I do not think they, as only two comers of the triangle, are entirely to blame. While they are being blamed in the press and elsewhere, I feel that the government here has not done all that it might have done to resolve some of these differences and to have brought about a better understanding with these two provinces; and if our situation in Saskatchewan is to depend upon the provinces of Ontario and Quebec entering into agreements with the dominion government I think the dominion government should be infinitely more energetic in trying to bring that about. I do not agree it is the proper attitude for this government to take, to say that what is done for Saskatchewan must depend on Ontario and Quebec entering into an agreement with the dominion government. I think the dominion government should deal with Saskatchewan on the basis of its original proposals, and similarly with any other province willing to enter into an agreement. But if the dominion government will not carry out its original pro-

posals until all the provinces have entered into an agreement, the dominion government should be infinitely more vigorous in trying to bring that about and should carry its share, at least one-third of the blame for these agreements not having been arrived at up to the present time.
(Translation):
Mr. LaCROIX: I had intended to say a few words but owing to the lightning speed with which second reading was proceeded with, I have had no chance to do so.
Here is what I have to say with regard to Bill No. 411, authorizing the government of Canada to enter into agreements with the governments of the provinces, pursuant to which, in return for compensation, the provinces agree to refrain from levying certain taxes for a limited period. May I be permitted to say, at the outset, that while I do not support the stand of the government headed by Mr. Duplessis, who left the conference even before its conclusion, and who has submitted no counterproposal with a view to working out some kind of agreement, I cannot, nevertheless, understand how individual agreements could be entered into with the provinces without the cooperation and outside the presence of the province of Quebec, because in my humble opinion it is contrary to the spirit of the British North America Act that separate agreements should be entered into with the provinces in that respect without the consent of all.
You may tell -me, Mr. Chairman, that in view of the stand taken by Duplessis, no agreement can be reached with Quebec. My answer is that above Duplessis there is the province of Quebec to consider, and that, to my mind, it would have been preferable to enter into no separate agreement with the provinces as long as the possibility of negotiations existed. Indeed, I feel that the economic depression which those agreements are supposed to ward off, will not be prevented if the two richest provinces of this country have no part in them.
It is unthinkable that the province of Quebec, which pays a large part of the taxes, should not be a party to those agreements, from which the western provinces will greatly benefit.	*
I wish you would bear in mind, Mr. Chairman, that I am not discussing the merits of the proposals submitted by the dominion to the Quebec government; I am dealing exclusively with the fact that such separate agreements are likely to undermine the very foundations of confederation and to foster a principle fraught with danger, so that their implement-

Tax Agreements with Provinces
ing may contribute to lead us fM'tiher and farther from our greatest objective, Canadian unity.
I have already had an opportunity to explain in this house what I consider as the reason for the aloofness of Messrs. Duplessis and Drew, and the selfish grounds on which they have taken their stand. I still hold that view, but I deem it my duty to oppose agreements entered into separately with the provincial governments, without Quebec being a party to them.
In concluding, I wish to express the hope that Messrs. Drew and Duplessis may change their stand, because otherwise we shall have a system of double taxation detrimental to all Quebec taxpayers.
(Text):


Douglas Charles Abbott: I have an amendment to move to section 7, that subsection 2 of section 7 be amended by deleting the phrase "twenty-fourth day of June, nineteen hundred and forty", which will be found in lines 32 and 33 on page 6 of the bill, and substituting therefor the words "first day of July, nineteen hundred and forty seven", and by adding after the word municipality, in line 3 on page 7, the words "which in the opinion of the said minister are not part of a sales tax of general application". By way of explanation, I may say that this is the appropriation section which will enable the dominion to pay to the government of any province half of the receipts from income tax derived from companies selling electricity, steam, gas and the like as defined in the section. It was found that it would be more appropriate to put July 1, 1947, which was the day before this bill was introduced, than the 24th day of June, 1940, and the words which have been added to line 3 on page 7 relieve the requirement of deducting a sales tax, which is part of a general sales tax and not a concealed corporation tax.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Bill reported.


[Stage Direction]
Hon. DOUGLAS ABBOTT (Minister of Finance) moved that the house go into committee to consider the following resolution:
That it is expedient to present a bill to make provision for the refunding and adjustment of the liability of the provinces of Manitoba, Sas' katchewan, Alberta and British Columbia to the government of Canada, in respect of loans made to them by the government of Canada to
finance expenditures on direct and agricultural relief and other purposes during the nineteen-thirties; and for the final settlement in full of claims of the provinces of Alberta and Saskatchewan against the government of Canada in respect of the administration and control by the said government of natural resources in those provinces before the transfer thereof to the provinces.
Motion agreed to and the house went into committee, Mr. Golding in the chair.
John Bracken: I presume the minister will make a full statement.


Douglas Charles Abbott: I would hope that the committee might be willing to follow the procedure we have adopted in the last week of permitting the main debate on the measure to take place on the second reading of the bill. Briefly, as the committee knows, the bill which will be founded on the resolution will authorize the dominion government to complete settlements already arrived at with the western provinces and British Columbia respecting certain relief indebtedness incurred during the 1930's and also settlement of the natural resources award1 to the provinces of Saskatchewan and- Alberta.


John Bracken: We. are agreeable to this procedure on the understanding that we shall have a copy of the bill before we deal with it again.


Douglas Charles Abbott: It should be available immediately.


John Bracken: May I ask whether any financial arrangements have been [DOT] made with any of the provinces other than that outlined in the bill which the minister is about to introduce?


Douglas Charles Abbott: None whatever. As a matter of fact, the terms and conditions of the arrangements which this bill will confirm were announced by the provincial treasurer of Saskatchewan and: by my colleague, the Minister of Justice, some months ago, and this is merely asking for legislative confirmation of settlements which have already been negotiated.


John Bracken: Then there are no other major agreements on financial matters with any other provinces within the last year?


Douglas Charles Abbott: None whatever.
Resolution reported, read the second time and concurred in. Mr. Abbott thereupon moved for leave to introduce Bill No. 451, respecting the refunding and adjustment of indebtedness of the four western provinces to the government of Canada in respect of certain outstanding loans for relief and1 other
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purposes and final settlement of the claims of the provinces of Alberta and Saskatchewan in respect of natural resources.
Motion agreed to and bill read the first time.

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



DEPARTMENT OP NATIONAL DEFENCE

William Henry Golding: The committee is considering item 551, national defence.


Alfred Johnson Brooks: I was very much interested, having been connected with the reserve force for a good many years, in what the minister said with reference to reserve training of the army. There were a couple of questions I wished to ask in this connection, and I may say that I am pleased indeed to see that a much larger estimate than usual has been given for this training this year. No one knows the necessity for this better than an officer who has been with the reserve army for a number of years. The question I wish to ask the minister has reference to the training of tank regiments in rural areas, and I speak particularly of the tank regiment in my district. There are a number of squadrons. The regiment is not a city regiment but a rural regiment, and therefore these squadrons are scattered pretty well over two counties.
Some time ago I understood from the commanding officer that it was the intention of the department to send tanks for training purposes to the different squadrons. Perhaps the parliamentary assistant to the minister can tell me whether that is correct.


Mr. HUGUES LAPOINTE (Parliamentary Assistant to the Minister of National Defence):: That is correct.


Alfred Johnson Brooks: In criticism of that, it was felt that it was not feasible to send these large tanks, weighing from thirty to forty tons-I have not the exact weight, but that is about what they weigh-over country bridges, rivers and so on. That was not felt to be practicable unless the regiment is brought together in one central place. My suggestion with reference to this particular tank regiment would be that it should be brought to one centre, and if there is to be training with tanks, then it can be done in a more practical way. As a matter of fact, I do not believe tanks could be used in this area if it were attempted to carry out .training by the different squadrons. This is a matter I should like to have the department look into.

I might say also, as the parliamentary assistant knows, that there has been a training centre at the town of Sussex for a good many years. This rural regiment has its headquarters at Hampton, a few miles from Sussex. I would think that the better plan for this regiment and probably for other tank regiments across the country would be to bring them together for a number of days during the year and give them training when they could all be brought together. I should also like to ask the parliamentary assistant if it is the intention to use the camp at Sussex as a training area. Some time ago I heard that training was not to be at Sussex but at Utopia, another camp in the southern part of the province. I might say that Sussex camp has been a training area now for, I think, over fifty years. That area was greatly extended during the war. The parliamentary assistant himself spent some time in Sussex and we were pleased to have him there. I think he knows it is a good training area. I hope consideration will be given to using it as a training area.


Hugues Lapointe: I wish to thank the hon. member for Royal for his constructive remarks. As regards his first point about tank regiments, I think the point he raised has been already appreciated by the department. It is realized that it is quite impossible in some areas where a tank regiment exists, to have training going on in that area. Tanks will be issued to those units in order to permit the men to be trained in the maintenance and operation of those tanks; but I dare say that training as a tank squadron would not take place in areas where it would cause any damage.
As regards Sussex, I regret that I have not the information here. I quite appreciate my hon. friend's point of view. I know of the facilities which exist in Sussex, and were it not for the fact that I should probably be contradicted by other members, I would say that one of the best brigades that ever went overseas was trained in Sussex. However I will look into this matter and give the hon. member the information he seeks.


Mr. FRASER:: I have before me a letter from a man who says he joined up in the air force believing that he would be an instrument mechanic; he signed up with that agreement but, after he got in, he was told that there would not likely be a course in that subject and he would just have to take anything at all that was available. He wanted to have a trade of that kind, and there not being a course of that kind in there he said,

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"Well, then, can I get out?" He was told, that he could get out, but I understand that in order to do so he has to buy his way out. Is that right?


Hugues Lapointe: That is quite right.


Gordon Knapman Fraser: Will the parliamentary
assistant explain that? How does a man buy his way out?


Hugues Lapointe: I have not the regulations before me; but roughly, the principle is that a man who has enlisted for a period of three years, five years, or whatever it may be, and who wishes, for reasons of his own, to withdraw from the service before the expiration of that period, must pay a bounty of so much a month. I believe in the case of the air force, although I would not say for certain, it is S2.50 a month for each month he still has to serve. That provision has always been in the king's regulations. It was there prior to the war and is still in force.


Gordon Knapman Fraser: In this case, I would judge that the air force was at fault to some extent, owing to the fact that they took him in believing that he would be an instrument mechanic. Now they are asking him to pay SI00 in order to get out.


Hugues Lapointe: My hon. friend quite realizes that I cannot tell him whether or not the particular air force officers concerned were at fault in this particular case. If he wishes to give me the particulars of the case, I shall be glad to look into it.


Gordon Knapman Fraser: I will do that. I will write to the man and then I will speak to the parliamentary assistant.
I have another case. I wish to get a little bit of information in regard to a course. A boy in Peterborough tried to join up at Royal Roads, but his age was just three months out and they would not take him in. But a Royal Canadian Air Force officer was in Peterborough interviewing the different boys, and he said that in 1948 there would be a course there for graduates of high schools with senior matriculation standing, and that they would be graded and given short-term commissions in the Royal Canadian Air Force. Is there to be some special set-up in 1948 for the Royal Canadian Air Force?


Hugues Lapointe: The only thing that comes to my mind that would explain this would be that this particular officer would be referring to university training, the equivalent of our Canadian Officers Training Corps in the army or U.N.T.D. in the navy-I do not know exactly what the name for it in the air force is-where a student, having senior matriculation, following the university course can follow the equivalent course in the air force and, after the period of service, be qualified to enter into the air force.


Gordon Knapman Fraser: There is another thing I should like to ask in regard to a course or joining up in the Royal Canadian Navy and the Royal Canadian Air Force and the conditions of entry at Royal Roads. Some of the boys in my district or, as I said before, one especially tried to join up and he was just three months over the age. As to age limits, a candidate must have attained the age of sixteen and a half years but not the age of nineteen and a half on July 1 of the year of entry; but in the case of candidates from French classical colleges the maximum age is extended to allow entry up to twenty and a half years on July 1 of the year of entry. These boys feel that they should have the same privilege to join.


Hugues Lapointe: The explanation that I could give the hon. member for that is-


Gordon Knapman Fraser: I know that has been the rule.


Hugues Lapointe: -that the matter has been looked into, and the authorities in all services looking into the setting up of qualifications necessary to enter these various schools have come to the conclusion that students coming out of these colleges to which my hon. friend was referring would be, generally speaking, one year older than students graduating from high school with 3enior matriculation. In other words, to have two men with equal qualifications coming from two different institutions of the sort, one would, generally speaking, be a year older. In order to permit of a fair representation amongst the students, the regulations were set in that way. This was thoroughly investigated before it was finally decided by the services themselves.


Gordon Knapman Fraser: These boys felt that the authorities were haggling over just a few months with respect to their age, and they did not like it. They thought they should have the same privilege.
I have not been able to be present in committee on the defence estimates, owing to meetings of the public accounts committee. Has the minister said anything with regard to bands which are being set up across the country? There is a Major Streeter who is in charge of bands in the army. He is setting up bands, or allowing units to set up military bands and bugle bands across the country. What is the set-up there?

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Hugues Lapointe: Only bands authorized by headquarters are recognized and receive grants. I can give the hon. member the number of authorized bands and those organized up to date. The principle followed, if I may use that word, is that headquarters decides which units shall be entitled to bands. In the active force I believe two infantry units and one artillery regiment are authorized to have bands. In the reserve units the number is larger, based on the situation that existed before the war. Some units had bands before the war and still have the instruments, so it is only logical that they should be the first to be authorized to have bands now, but nothing final has been done.


Gordon Knapman Fraser: Does the department say whether they are to be bugle bands or brass oands?


Hugues Lapointe: I believe the request is made by the unit.


Gordon Knapman Fraser: Has the parliamentary
issistant any statement on the matter?


Hugues Lapointe: I am sorry, but all I have here is the number that have been authorized and those already organized.


Gordon Knapman Fraser: I do not want to take up the time of the committee. If the parliamentary assistant would just place that information on Hansard I would lie satisfied.


Hugues Lapointe: It is very short. In the case of the navy, active, four bands are authorized and three have been organized to date. In the case of the navy, reserve, nineteen are authorized and eight have been organized. In the case of the active army eight are authorized and four organized. In the reserve army 317 are authorized, but I have not the figures as to those organized to date. In the air force, active, one is authorized and three are organized; this will have to be readjusted. Each auxiliary squadron is authorized to have a band, but I do not think any have yet been organized.


Gordon Knapman Fraser: Some few years ago I asked the then Minister of Munitions and Supply about helicopters. I understand that the United States navy has set up squadrons of these machines, and I wondered if our navy had anything of that sort in mind. They have been a great help in saving lives, in rescuing people who have crashed in planes.


Hugues Lapointe: I know the air force has a few helicopters at the present time, but I do not know of any plans to develop that further.


Mr. MERRITT:: The other day I asked the minister several questions to which I hope the 
parliamentary assistant has the answers. I should like to call his attention to one in particular. I asked for a statement of the wastage in the forces, by which I mean a comparative statement of the number taken on strength and the number discharged, say in the most recent six months' period for which the parliamentary assistant may have figures. Then there are other questions I should like answered.


Hugues Lapointe: If the hon. member permits I shall deal first with one of the other questions he asked. I believe he asked if we could give the strength of various units so he might get an idea of the average strength of the reserve forces. I am sorry I did not give him the information yesterday; I had it a few minutes after he asked the question. I have here the strength of three infantry units, two artillery units and two engineer companies. The infantry units are located in Toronto', Windsor, and in British Columbia. In the case of the Toronto unit the strength is 34 officers and 270 other ranks. In British Columbia the regiment has 30 officers and 226 other ranks. The Windsor unit has 32 officers and 262 other ranks. As to artillery, the one field regiment in Ontario has 20 officers and 102 other ranks; the one in Montreal has 28 officers and 278 other ranks. In the case of the engineer companies, one in Quebec has 4 officers and 82 other ranks and one in Ottawa has 6 officers and 40 other ranks. These were given to me because they were the most readily accessible.
With regard to wastage I can give the hon. member the number of discharges over a period of a few months. In April, 1947, there were 746 enlistments and 53 discharges. In March, 1947, there were 568 enlistments and 37 discharges. In February, 1947, there were 700 enlistments and 25 discharges. During the period from October, 1946, to April, 1947, enlistments totalled 12,974 whereas the number of discharges during the same period was 135.


Charles Cecil Ingersoll Merritt: Is that the active force?


Hugues Lapointe: That is the active force.


Charles Cecil Ingersoll Merritt: Would it be possible to get any figures on the reserve forces?


Hugues Lapointe: I am afraid I have not those figures.


Charles Cecil Ingersoll Merritt: I should like to make one comment to the parliamentary assistant. The figures for the infantry battalions-and I think on the artillery regiments, though I cannot speak of that from personal knowledge as I am sure the hon. member for Calgary East will be able to do-seem to indicate that

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these battalions have not sufficient strength for adequate training. I say that from my own experience. I feel that an infantry battalion with a strength of only 250 including officers is not in a position to train to best advantage. I know the parliamentary assistant will take note of that comment, but I hope he will apply it.


John Oliver Probe: Would the parliamentary
assistant indicate whether or not there are approximate compulsory ages for retirement in all ranks of the permanent force? If there are, what are the ages when, except for special circumstances, it is considered that officers or other ranks should be retired from the permanent force?


Hugues Lapointe: I recall giving that
information last year. There are, ages for compulsory retirement of officers, depending upon rank.


John Oliver Probe: Would the parliamentary assistant put that on record?


Hugues Lapointe: I would be glad to have that information placed on record, although I have not it at hand.


John Oliver Probe: While that is being looked up, I would bring to the attention of the committee the specific case of an officer who was retired on March 8 of this year. This case was brought to the attention of the hon. member for Yorkton. It refers to an officer who had attained the rank of captain and who was thirty-three years of age at the time of his retirement. This man had made application to be retained in the Canadian forces. He had had eleven years and 233 days of service in the permanent force and the active army, having served overseas, and prior to that had four years and 149 days of service in the nonpermanent active militia, or a total service of about sixteen years.
At this early age of thirty-three years he was anxious to make the army his career. To the best of his knowledge, no adverse reports had been made about him, but he was retired by an officer selection committee under the provisions of K.R. Canada, section 267 (c). Not being compulsorily retired, he received a retiring allowance under part 5 of the Militia Pension Act, amounting to $677.91 per annum.
Mark you, this man had reached only the age of thirty-three years. The pension is to run until he is sixty-five years of age, at which time, if he is still living, he will receive a pension of $1,016.66 per annum. This man worked his way through the ranks of the permanent force and attained the rank of captain. The army has been put to a considerable expense in training him, and the country will now be 83166-345
put to a further expense in providing him with a pension for the rest of his life. In my view he has a considerable number of useful years of service left to him. The country will be placed to the further expense of training someone to take his place. It seems to me that, in respect of a man of only thirty-three years, the Department of National Defence must have strong reasons for retiring him. Otherwise the bases upon which retirements are compulsorily made are unnecessarily wasteful and poor business for Canada.
Yesterday the name of General Worthington was mentioned, a man who has served with considerable distinction in the Canadian permanent force and on the field of battle. General Worthington is not a young man. In the view of the departmental administrative officers, however, he is still able to give excellent service. I would presume that he is in his sixties or thereabouts. Surely a policy under which a man of thirty-three years with the rank of captain can be retired is not in the best interests of Canada. Would the parliamentary assistant comment on this case?


Hugues Lapointe: I believe I know the case to which the hon. member refers, because the hon. member for Yorkton brought it to my attention earlier. It is similar to those of many other service personnel who, having served in the permanent force prior to the war and having served in the active service during the war, naturally made progress. Some were commissioned and others received promotions. However, when the time came to establish a peace-time service a choice had to be made among many applicants, and it was found that some were not quite as suitable as others who were applying for appointments to the same rank.
With respect to the matter of pension, it will be recalled that last year we discussed the Militia Pension Act. Provision is made in that act whereby an officer who may have served over a period of years and who has given good service, but who, because of certain factors, suddenly is not found as useful as his subordinates, or others of equal rank, may be retired from the service, with a view to promoting efficiency and economy.
That is exactly what happened in the instance to which the hon. member refers. In view of the fact that this was a relatively young man and the fact that he had1 served eleven years, his case was looked into with even more attention than some others. In addition to the decision rendered by the selection board, assessment was made in his case by serving under officers, in a training

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centre. It was on the report made following this period of service that the decision was taken to retire him.


John Oliver Probe: In other words, there is a standardized basis for the assessment of such cases?


Hugues Lapointe: Definitely.


John Oliver Probe: It. is not a matter of personal opinion?


Hugues Lapointe: Not at all.


John Oliver Probe: And there is something
reasonable and scientific about it?


Hugues Lapointe: Definitely.


John Oliver Probe: 
Hugues Lapointe: What particular vicinity does my hon. friend refer to?


John Oliver Probe: That is the point, I do not know. You have an item here of $14,348,000 for the acquisition, construction, purchase, maintenance and so on of national defence properties. I want to be satisfied that the Department of National Defence has not acquired properties in the vicinity of areas where properties have been disposed of to War Assets Corporation. Could the parliamentary assistant give a break-down of this item, giving expenditures in excess of $5,000 or $10,000?


Hugues Lapointe: In connection with the acquisition, construction and purchase of properties, the amounts for the services are as follows:
Navy	 $1,436,940
Army	 5,034,427
Air force	 3,233,200
Most of that was for construction and additions to existing buildings. In the case of the army it would cover the construction of ranges or repairs to such things, and in the case of the navy-I know of one case-it covers the acquisition of property around a magazine in order to create a safety area. I can assure my hon. friend that no buildings are being purchased into which the services are being moved when there are already existing quarters or where facilities have been declared surplus and we now find ourselves under the obligation of purchasing others. During the war some branch of the service may have been in leased quarters, and in order to continue the operation of that station or that division we may find that we cannot lease the property and must acquire some temporary buildings in the meantime.


John Oliver Probe: Would this item cover the
1,000	dwellings which the minister mentioned yesterday were being acquired for the purposes of housing permanent force families?


Hugues Lapointe: This item covers one group of 556 family units and another one of 600 family units, which is more than the minister referred to yesterday.

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John Oliver Probe: In those particular housing areas were any military properties declared surplus?


Hugues Lapointe: Those are married quarters and none were declared surplus.


John Oliver Probe: I am thinking of buildings which might have been suitable for conversion purposes and which have been declared surplus in those areas.


Hugues Lapointe: I am informed that in those various areas the services retained all buildings which it was considered might be necessary for conversion into these temporary married quarters.


John Oliver Probe: What are the two areas to which the minister has referred?


Hugues Lapointe: When I referred to two groups I am afraid I gave the wrong impression. There are two separate construction schemes, but they cover many areas, such as Borden, Shilo, Chilliwack, Lachine, Centralia, Calgary, Greenwood, Sea Island, Vancouver, Saskatoon, Valcartier and Suffield.


John Oliver Probe: In none of those areas have buildings which might have been converted been disposed of to War Assets Corporation?


Hugues Lapointe: There might have been some, but none that were necessary for reconversion.


John Oliver Probe: Clothing and personnel equipment is part of the next item. The officer who reported to the war expenditures committee a year and a half ago indicated to us that the services had ample supplies of clothing and personnel kits to run over varying periods, as I recall it, from three to five years. Would the parliamentary assistant indicate how much it is estimated will be spent under this item this year and also justify to this committee the need for that particular item?


Hugues Lapointe: The break-down of clothing and personnel equipment is as follows:
Navy	 $ 682,666
Army	 2,065,878
Air force	 1,600,647


John Oliver Probe: Those seem to be rather large expenditures in view of the large stores which the ordnance officers of the various branches told the war expenditures committee were in reserve. Would the parliamentary assistant elaborate on the need for those expenditures?


Hugues Lapointe: In the case of the active force, army, this item is broken down as follows:
Clothing and necessaries	 $153,000
Officers' clothing	 220,000
Individual equipment	 35,000
Web equipment, trials	 5,000
83166-345J


John Oliver Probe: What is meant by that?


Hugues Lapointe: For the testing of various web equipment under certain conditions.


John Oliver Probe: Is it the opinion of the departmental officials that the equipment turned over to War Assets was not suitable for the particular use to which this equipment is being put?


Hugues Lapointe: I am informed that most of it is completely new equipment. My hon. friend understands that the ordnance service and various other branches of the army are continually making tests of personnel equipment and clothing and that changes are being made from time to time.


John Oliver Probe: There was so much equipment in store that considerable quantities were dumped into the lap of War Assets. Surely conditions have not changed to such an extent in the past year and a half that it is found necessary to buy new equipment. Even clothing, yardage goods, was turned over to War Assets by the hundreds of thousands of yards to the best of my recollection, and any that I have seen since look very similar to what was in use when I was in the service.


Hugues Lapointe: I am informed that these sums are for equipment that was not possessed and was not returned to War Assets. I know that a huge quantity of uniforms was turned over to War Assets, but these items do not cover that type of equipment.


John Oliver Probe: One more question with
regard to tractors, trains, and other engineering equipment and mechanical transport vehicles and spare parts. Huge quantities of these types were turned over to War Assets for disposal, and now apparently the Department of National Defence is in the market again for such equipment. Would the parliamentary assistant justify this item?


Hugues Lapointe: I am told that this does not cover the purchase of wholly new equipment. But a considerable amount of equipment which we had on hand and which we retained did not have the spare parts which must necessarily be carried or kept in reserve for proper operation. This item covers spare parts and components in order that the equipment might be put into operation in the field.


John Oliver Probe: Would the parliamentary assistant give us some indication of what is being done in the maintenance of the northwest highway system and say why it is now a part of the function of the Department of National Defence to look after this piece of
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road? What further highway construction is being undertaken by the department?


Hugues Lapointe: I understand that the only responsibility of the Department of National Defence for the Alaska highway is the maintenance of the highway. The operation of the highway comes under mines and resources. The army is concerned with the maintenance of the highway and keeping it in good order.


John Oliver Probe: Has the department a highway building programme?


Hugues Lapointe: Not at all; it is purely maintenance.


Mr. STOKES:: Last evening when there was considerable confusion, in the house just before we adjourned, the minister said, in reply to a question that I had asked, that if I required further information he would give it. I was speaking of the installation for the second time of an asphalt floor in the armoury at Belleville city. It was first installed in 1945 at a cost of approximately $2,800. In the early months of 1947 that floor which had become useless and had failed to fill the bill was torn up and a new floor laid at a cost of nearly $4,500. Information that has come to me is to the effect that the work in the first instance in 1945 was not passed by the inspector. It was in charge of a government official. The return I have received shows that the contractor in that case was paid. It seems to me that something must be wrong with a job which the inspector did not O.K. and which afterwards fell down as he probably thought it would.
Mr.LAPOINTE: Following my hon. friend's remarks last night, I had the file concerning the Belleville armoury brought to me and, after studying it, I find that in 1945 a contract was given to replace the then existing wooden floor by an asphalt floor. At the time the unit that was called upon to use the armoury was an infantry unit, and an asphalt floor was the common thing for infantry units in drill halls. I find from the file that the floor when finished was accepted and certified by the officer, and the contractor was paid, as my hon. friend said. Following that, a changeover was made in the unit and the armoury was put at the disposal of an artillery regiment which used self-propelled equipment, such as tanks use. The use of self-propelled equipment over asphalt flooring had the same effect as it would have on our city streets when tanks are moved around. The floor did not prove adequate for this equipment, and consequently the officer in charge recommended that the floor be taken up and a concrete floor 
be put down, which I understand has been done. The matter is not yet finally decided as far as I can find out from the headquarters file, which I studied this morning.


George Henry Stokes: The officer in charge of the regiment there told me that even when an infantry unit was using the drill hall the dust was so bad that right from the start it affected the men's throats. So it was not much of a job.
Last night I asked the minister as to the possibilities of an armoury being erected in the town of Trenton, and his answer was no. Just on Monday last I was informed by a member of the municipal council of Trenton that certain properties on which they had hoped to erect housing which the municipality is badly in need of and for which plans had been prepared have been taken over by the government, and a government official said, "We are in ahead of you on this. We are going to build an armoury there". That does not agree with the statement made by the minister.


Hugues Lapointe: The minister was quite right when he said there would be no drill hall constructed at Trenton. There have been negotiations with the municipality and a piece of ground, I understand, has been made available on to which two army huts are being moved for the use of the reserve army as temporary quarters. I doubt whether my hon. friend would be willing to accept that as a drill hall. I an) sure he will come back again next year.


Mr. HARKNESS:: Would the parliamentary assistant answer two questions I asked the minister last night, first, as to the numbers of the reserve army by commands, and, secondly, as to what form the recruiting campaign will take which is to be put on in the fall for the reserve army? When will it start and just what is proposed to be done, so that we may form some idea of whether it is adequate or not?


Hugues Lapointe: As regards the first question, I have the figures on the reserve army strength by command as of May 31:
		Other
	Officers	ranks
Central command	... 1,676	8,509Quebec command 	... 1,094	8,284Eastern command	... 581	2,625Prairie command 	... 596	4,644Western command 	... 769	4,9264,716	28,988
That gives a grand total of 33,704.
As regards the second question which bothered my hon. friend. I cannot give him a definite reply. The form which the recruiting

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campaign will take is at present being studied by a committee and the minister is awaiting its recommendations. I understand that they will get into communication with the various defence associations, but there is no definite information I can give that would satisfy the hon. gentleman.


Douglas Scott Harkness: How much is it estimated will be used for that?


Hugues Lapointe: 
Douglas Scott Harkness: The question of armouries came up last night, and I wanted to ask a question with regard to armoury accommodation at Calgary. Eight months ago there was a scheme on foot to take over what wa3 at that time a deserted air force camp on the north hill in Calgary and to use it for armoury accommodation, which was very scarce owing to the large number of units that existed there. That scheme fell through by reason of difficulties with the provincial government on account of ownership of the land. What steps have been taken since to meet this acute need for armoury accommodation at Calgary? If nothing has been done so far, what is contemplated during the coming few months?


Hugues Lapointe: I believe the minister mentioned last night that for this year there are no prospects of the construction of new armouries.


Douglas Scott Harkness: I was thinking more particularly of the utilization of the numerous huts and drill halls left over from the war.


Hugues Lapointe: That is now under consideration. Wherever buildings are available which can be made accessible to the service we are anxious to get hold of them and we do so. The difficulty is more to convince the owners of such properties to let us use them.


Douglas Scott Harkness: In that connection I should like to inform the parliamentary assistant that already in the neighbourhood of Calgary several very good drill halls which existed there and were used by the air force in their training scheme have been sold for the purposes of garages and other uses, and if the army simply continues to "consider" this matter, in a short time there will be no drill halls left because they will all have been disposed of otherwise. That was the situation, and that, I believe, is what finally happened in regard to these buildings on the north hill, which were eminently suitable. But that scheme, which would have solved the problem, was allowed to drop. What alternative, in the matter of utilizing these national defence buildings, is now contemplated in Calgary? A large number of buildings existed there, but unfortunately nothing was done. The matter was simply being considered, and in the meantime War Assets were taking over the buildings and selling them.


Hugues Lapointe: I said that this matter was being actively considered, and I might add that the minister has given instructions that a complete survey be made by all three services in order that all available accommodation may be made use of at an early day.


Douglas Scott Harkness: I trust that some definite action will be taken before it is too late because, otherwise, I am sure it will be too late shortly.


Hugues Lapointe: I appreciate that.


Alfred Johnson Brooks: I wish to ask a question in connection with drill sheds. I know there are a great many throughout the country. It was stated that some of these drill sheds would be taken and moved to different points to be used as armouries in smaller centres. Has that been tried in any centre, and what success have they had in moving these drill sheds from camps to other centres?


Hugues Lapointe: I know that some of these drill sheds have been turned over to the reserve army, and as regards moving any of them, I know one which either has been moved or is now being moved. But that is part of the survey to which I was referring a moment ago.


Alfred Johnson Brooks: I would doubt the feasibility of it.


John Ritchie MacNicol: I wish to ask the parliamentary assistant a question regarding the control of equipment in camps. At Camp Borden last summer there was a great deal of equipment, and perhaps there is still. One of the men at the camp, without the consent of the commander, took out a motor car and went to Toronto. He was not familiar with the city or the stop signs or the motor by-laws, and yet he was driving along the streets very rapidly. He came to a stop street and ran into some people with whom I am acquainted and smashed up their car, injuring the man and his wife. The department owned that car, but it claimed that this soldier or camp follower had no business taking it out of the camp. He had not consent to take it out and yet he took it out. That would strike me as careless supervision of camp equipment, when any Tom, Dick or Harry could take out motor cars from a camp and
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drive to Toronto. I brought the case to the attention of the government and they disclaimed responsibility. Surely citizens have some protection. These quiet people were motoring peaceably along the street when they were run into by this car, which should have stopped but did not. That was an infraction of the city by-laws and yet the department disclaimed responsibility. My question is, has the department responsibility for its equipment? Should not someone be responsible for taking cars or any other equipment-it might have been rifles-away from the camp?


Hugues Lapointe: I can only say that there are strict regulations governing the use of army equipment and particularly motor cars. I recall the case to which my hon. friend refers. As I remember, the culprit, if I may use that term, was himself an army driver and, as such, had a certain access to vehicles in this particular camp. Just as my hon. friend's chauffeur when sent out on duty might decade to make a trip on his own account, that is what happened here. The man was authorized to take out the car to do a certain job, and he kept the car instead of returning it, and proceeded to Toronto where he had an accident. He was not on duty. He had a car without orders, without authority. Consequently the department could not be held responsible any more than my hon. friend could be held responsible if his chauffeur had done the same thing; that is, from the purely legal angle. But I can assure my hon. friend that the greatest care is taken to look after service vehicles; and unless there has been a great relaxation, from my own experience during the time I served in the army it was practically impossible to move a vehicle out of anywhere.


John Ritchie MacNicol: Is this man still in. camp?


Hugues Lapointe: No. This particular
man was, I believe, authorized to go out of the camp on duty, but he did not return to camp. He went to Toronto. That is the case to which my hon. friend referred.


John Ritchie MacNicol: Is he still in the camp?


Hugues Lapointe: He was in the camp.


John Ritchie MacNicol: Is he now?


Hugues Lapointe: No. Following that, the man was, I believe, .authorized' to go out of friend may know, and was furthermore brought up for discipline, court martialed and found guilty. I think he was eventually discharged from the army.


John Ritchie MacNicol: Just a word further. I want to follow up for a moment the matter which was raised last evening by the hon. member for Wentworth, who made an excel-

lent job of what he said about the sea cadets. I, too, am a bit exercised over just what is to be the future of the sea cadets. Is it going to improve? Are more sea cadets to be trained? Just what is the department going to do for them? As one of the presidents of the Navy League of Canada, Ontario division, for many years, I must compliment the department upon the great assistance it has given to the sea cadet movement all during the war. As a matter of fact, the predecessor of the present minister, now the premier of Nova Scotia, was a warm supporter of the sea cadet corps. Every time he came to Toronto he was given a great reception. During the war the sea cadets did great work. In 1945 I believe there were about 15,000 young men in the ninety-one sea cadet corps in Canada, of whom some 6,000 in thirty-eight corps were in Ontario. I have long taken an active interest in sea cadet corps work because, so far as I can ascertain, not one young man trained in the sea cadet corps was ever in the juvenile court or had anything to do with juvenile delinquency. That is a remarkable tribute to the training these young men get in sea cadet work. What the department does in that regard is highly commendable.
I want to say further that those associated with the work, the men and women who give their time voluntarily, and did so during the war, had a marked influence on the prosecution of the war as far as the navy was concerned, for some 10,000 of the sea cadets during the war served in the navy. I believe about 250 in the merchant marine and perhaps fifty in the air force. I should now like to ask what programme the government has in hand to maintain and assist the development of the whole sea cadet corps programme? At the present time I believe there are some fourteen camps in Canada, more or less.


Hugues Lapointe: No.


John Ritchie MacNicol: How many are there?


Hugues Lapointe: There are eight now.


John Ritchie MacNicol: The number has been reduced. There were fourteen, though.


Hugues Lapointe: There were at one time.


John Ritchie MacNicol: They have now been reduced to eight. Summer camps were effective places for the purpose of getting these young lads off the street and training them. Are the eight camps sufficient to take care of all who are offering themselves for that splendid training?


Hugues Lapointe: 
John Ritchie MacNicol: I would like to make a suggestion looking to some recognition of the services of such men as David Gibson, who give, not only of their time, but a good deal of financial assistance. Mr. David Gibson of Toronto is dominion president of the Navy League of Canada, and Mr. Gordon C. Leitch of Toronto is president of the Ontario division of it. They and all the men who serve with them give of their time freely. I often wondered if the department had any picture, diploma or certificate which they could send to the headquarters of the navy league-they could hang it in their board rooms-to show the government's appreciation of the services rendered by these men and the officers serving under them during the war.


Hugues Lapointe: I know of no such thing, although I quite appreciate my hon. friend's point of view. I realize that, especially during the war, everybody who took an active part in the navy league which sponsored these sea cadets did an extraordinary job. But I do not think the matter to which my hon. friend refers has ever been considered. I shall be glad to bring it to the minister's attention.


Charles Cecil Ingersoll Merritt: Recently I placed on the order paper a question with regard to the pay of the reserve army officers who are instructing at Canadian Officers Training Corps. The question was passed as an order for return, but the return has not yet been brought down although I asked for it on the orders of the day. If the parliamentary assistant has the information now, I will not read the question.


Hugues Lapointe: I have part of the information. The only information which I do not have is the answer to question 3 (a), where the hon. member asked as to how many such
days or hours of duty the reserve army personnel were paid for; that is, reserve army personnel who were working with the C.O.T.C. This information has not yet arrived from the various camps and areas.


Charles Cecil Ingersoll Merritt: Of course I wanted the information for these estimates, but perhaps I can put my question shortly. Were these reserve army officers paid at the rate at which they expected to be paid when the training season began? If not, what change was made in the rates of pay?


Hugues Lapointe: These army officers were paid the reserve rate of pay, and I understand that that was what they expected to receive.


Charles Cecil Ingersoll Merritt: My information is that they expected to receive pay for the number of days they actually performed their duties, which I understand would be around thirty days, but that subsequently, by reason of a departmental regulation, they received pay for only ten days, a smaller number of days than they actually put in at this important work. If that is the case I shall have some comments to make.


Hugues Lapointe: That is the case. I understand that these reserve army officers were paid for the time they were on duty as contingent officers with the C.O.T.C. They were paid for ten days at reserve army rates.


Charles Cecil Ingersoll Merritt: And did they actually do more than ten days' work?


Hugues Lapointe: That is what one might call the bone of contention. The staff of the army advised that this would be equitable pay for these officers. I believe some of them made representations, and the matter was discussed by the staff and also with university authorities. Following those negotiations, the service set the period of ten days as what they believed to be an equitable period for the service rendered with the C.O.T.C.


Charles Cecil Ingersoll Merritt: I understood that these officers were told before they undertook their work that they would be paid for the full number of days they were actually instructing, based upon the usual manner of calculating those days. Since the parliamentary assistant has not the final information, I shall not press the particular case at the moment further than to say that I feel any reserve army officer who is called upon to perform duties of that kind, or for that matter any duties, should be paid the full amount to which he is entitled, at the ordinary rates, for the period of time he puts in. There should be set no arbitrary period of ten days. If a man did twelve days or fifteen days he should be paid for that number of days, and there should be no attempt
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to pay these men off at some set figure. I believe that is an important consideration.
According to some other information that has come to me, things like street car allowances in reserve army units have recently been cut off. I have here a letter from one officer who complains that many expenses which, arise normally in the functioning of a reserve army unit are being thrown back where they were before the war, upon the officers of the battalion. He does not give me any details, but from my own service I know the kind of expenses that used to arise and to which an officer was put. With estimates of the size they are now, I trust there will not be any of what I can only call chiseling on the individuals who are actually performing this important service for Canada. I hope the case of the
C.O.T.C. officers will be resolved equitably and generously in their favour. I would remind the parliamentary assistant that this C.O.T.C. programme, in which I believe they are carrying the greatest part of the load, is the keystone of the government's own policy for the production of officers for the active and reserve forces. If you are to use reserve army personnel to do the instructing, then they should be treated particularly generously, because they have a particularly heavy responsibility placed upon their shoulders by this government.
I leave that particular point now. I want to say a word about the estimates generally. There is only one part of the integration or consolidation of the armed forces that I do not like. I do not like to have all three sendees lumped together in the estimates of the department, because one cannot get any idea as to how this money is being spent. You see a large item of $25,000,000, and you do not know how much of that is for ships, how much for tanks, how much for aeroplanes or how much for shoelaces. It is quite impossible to get any picture from the estimates as they are now set up as to how the money is being spent. In future years I hope this particular integration will be done away with and that we shall have a picture of all three services presented in the estimates.
I want to call attention to two items, just to show what large sums of money are being spent without any particular indication of
where they are going. There is an amount of $14,348,558 for the acquisition, construction, purchase, maintenance and so on of properties. That amount alone is greater than the entire amount spent on all three services, for all purposes, in 1932. And we have no accounting for that sum, other than the total stated. An even worse case is the last item, which reads:
Sundries, including printing and stationery, telephones, teletype, telegrams, postage, office machinery, special training equipment and films, fees for special courses, maintenance grants, miscellaneous services, and other items not included in above, $10,162,195.
I do not think that is a satisfactory way of bringing the estimates before the house. I would ask the parliamentary assistant to give us some break-down of this item covering sundries. I want to say that I have no objection whatever to the expenditure of considerable sums on our defence forces. I feel that this is money very well spent, that it is good insurance against catastrophe, and I am not particularly complaining about the total amount shown in the estimates. I think, however, that with the amount of money being voted this year, we should see more than the very small number of troops on the ground, ships at sea and aircraft in the air than actually is the case. In the way the estimates are set up I do not see any explanation as to why we need $214 million or $215 million for the armed services this year when, from the figures we are given with respect to the forces being maintained, we see that they are not very much greater in size than they were in 1939. Would the parliamentary assistant make some comment on this point?


Hugues Lapointe: The hon. member asked as to what was contained, in the sundries item. In it are found amounts for printing and stationery, office equipment, business machines, communications services and the like.


Charles Cecil Ingersoll Merritt: Those are set out in the estimates. I should like to have a break-down in respect of printing, teletypes and other items for the three services.


Hugues Lapointe: The break-down is as follows:
Navy	Army	Air ForcePrinting and stationery	
Communications services, telephones, teletypes,	. $ 273,300	$ 576,505	$ 188,600postage, etc	. 310,738	1,093,000	680.000Office machinery	. 45,038	nil	nilSpecial training equipment and films	. 46,000	84,000	596,600Fees for special courses	. 1,475,000	28,400	164,750Maintenance grants	. 38.600	552,558	71,260Miscellaneous 	. 516,737	2,676,269	474,840$2,705,413	$5,010,732	$2,446,050

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Mr. LENNARD:: I should like to repeat what I said yesterday with respect to sea cadets. The restrictions in respect of training which have been imposed this year have never before been enforced. I know of one instance where a mine sweeper capable of accommodating 100 cadets and officers has been allowed to accommodate forty cadets and two officers. There were sixty-five cadets in the unit who wished to go to camp. Certainly this is a heavy restriction on training facilities. Yesterday I urged the minister to reconsider this matter and, if it is not possible to make any change this year, to arrange in another year so that more boys who have worked hard for the purpose may have the advantage of going to these training camps.
On occasions members supporting the government assert that those of us in the opposition do not offer any economic suggestions. Just about a year ago, as reported at page 5058 of Hansard for August, 19, 1946, I said
Several weeks ago the minister said that he would welcome any suggestions that would curtail spending either by the government or by the Department of Rational Defence. I therefore draw his attention to the Canadian inspection board.
On April 1 of this year the United Kingdom and Canada inspection 'board ceased to exist, and from then on it carried on as it does now under the name of the Canadian inspection board. From April 1 to July 1 that inspection board cost this country over $600,000. At that rate it will cost Canada this year over $2,500,-
000.
That establishment was not reduced until March 31 of this year. I readily understand that just because something is drawn to the attention of the government the excess service cannot be wiped out overnight. I say, however, that this represents a gross waste of the taxpayers' money. I know that many of the personnel in the export board did nothing for the six months prior to March 31, 1947. They were on extended leave. They would go to work in the morning, and would be sent home and told to report next day or next week. I know exactly what went on. If there are any other departments which have as little to do as the inspection board had last year, then the sooner they are disbanded or put on a greatly reduced basis, the better.
A return I received a few days ago shows that at present there are 348 civilian personnel on that board. How many of those have had overseas service? Are the three offices in Toronto, Montreal and Ottawa in existence, and are they operating on the same scale as they were prior to March 31 of this year? Are the same premises being used in those three cities?


Hugues Lapointe: The staff has been cut down to a point where it now numbers 329, which is a further decrease. I cannot now tell the hon. member the percentage of service personnel employed on the inspection board, but I can get that information and I shall let him have it. I know there has been a considerable cut in the office space used, but I cannot say to just what degree in each of the cities the hon. member has mentioned. However I know that the premises occupied by the inspection board in my own city have been cut down to a point where the inspection board building is now occupied by the Quebec division of the Royal Canadian Naval Reserve.


Frank Exton Lennard: Is it necessary to have even this reduced amount of office space? I know we have to have an inspection board, but on a much smaller scale than we did during the war. Is it necessary to have these different offices scattered throughout the country? Would it not be better during peace time and with the present state of affairs to have this work centralized in Ottawa in one office and then, if necessary, the inspectors could go out from here?


Hugues Lapointe: A committee was set up a short time ago to report to the minister as to the further operations of what is left of the United Kingdom and Canada inspection board.


Mr. WRIGHT:: One of the good features of the war was the fact that many young Canadians who joined the armed forces were able to visit many parts of the dominion and thus become acquainted with conditions there. I notice in the break-down on page 275 of the estimates that it is apparently the intention to permit the people in the various forces to do a lot of travelling. I notice the item for travel, transportation, freight and express is $84,102,145.


Hugues Lapointe: I am afraid that is an error; the correct amount is $14,348,558.


Percy Ellis Wright: That does not appear to be so much out of line as the other item. Could the minister give a break-down of the various items and also as between the two railroads?


Hugues Lapointe: I am afraid there is not much difference between travel and transportation; they mean the same thing. The break-down is as follows:
Travel and transportation:
Navy	 $1,519,400
Army	 4,746,428
Air	 2,239,080
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Freight, express and cartage:
Navy 			 481,750
Army 			 2,970,700
Air 			 2,391,200
Total:	
N avy 		
Army 			 7,717.-128
Air


Percy Ellis Wright: Have you the break-down as between the two railroads? Could you also give some idea as to where the different units are trained? Are they trained in provinces different from the ones in which they are raised? Are they moved as units, or is this item to cover travelling expenses of individuals only?


Hugues Lapointe: It would be mostly transportation of troops, or of groups of men being transferred from one camp to another or from a basic training centre to an advanced training centre, groups of officers being sent on courses and so on. I doubt if over the year it would cover any great movement of troops.


Percy Ellis Wright: Would it include the transportation of reserve army men to camps?


Hugues Lapointe: It does. It covers departmental administration, active force, reserve force, R.C.A.P. auxiliary service, cadet services, demobilization, Northwest Territories and Yukon radio system, inspection board, dependents allowance board inspectors, Royal Canadian Naval College; it covers practically every operation of the three services.


Percy Ellis Wright: Have you the break-down for the two railroads?


Hugues Lapointe: The only figures I have are for the army last year. They are:
CNR.	C.PR.
Passengers	
$4,070,325.83	$2,704,248.99Meals	
441/199.76	410,210.95Freight	
1,094,292.59	909,944.29Express	
73,710.90	42,141.17Total	
5,679,529.08	4,066,542.40
or 58-27 per cent or 41-73 per cent


Howard Charles Green: I think the hon. -member for Vancouver-Burrard was justified in questioning the way in which this item is brought down. The minister and his parliamentary assistant were really tempting Providence when they brought in an estimate of this bind. There is only about $200,000 shown in the ordinary estimates, and then we have an item of $239,741,165 under the demobilization and reconversion vote with no breakdown as t-o the forces. As the parliamentary assistant knows, during the war we had a break-down, even with the war appropriation votes, as between the three services. Is there any reason why this new practice of lumping the whole thing together should1 be 
adopted? It is practically impossible to criticize expenditures or to make worth-while suggestions with regard to them. Why has this practice been adopted'?


Hugues Lapointe: The explanation is that the three branches of national defence have been brought under the one minister, and it was desired to coordinate the services, wherever practicable, in order to avoid the duplication of administrative functions. I think that was the explanation given by the minister when he took over this department and the three services were brought under his jurisdiction. In carrying out the plan it was assumed that one service might possibly take over similar functions in the other services. With that in mind it was thought advisable, in view of the amalgamation, to bring in the estimates of all three services under the one item. Whether -that practice will be continued next year I could not say. I appreciate my hon. friend's views and' those expressed by the hon-. member for Vancouver-Burrard, and I -believe yesterday by the hon. member for Yale. Possibly another way will be found which will permit hon. members to have a clearer view of the expenditures which are contemplated by the department.


Howard Charles Green: The parliamentary assistant has been handling the estimates in such a pleasant way that it is difficult to go after him with a club, although that is the type of treatment he deserves with regard to this question. However we do give him fair warning that if he tries this again next year he will be in for trouble. We want a much better break-down of -this estimate than we have at the present time.
Shortly after Japan struck in December, 1941, there rose up on the Pacific coast by voluntary effort almost spontaneously a group of auxiliaries who became known as the Pacific Coast Militia Rangers. They were men engaged in the logging industry, in fishing and in farming out in the more remote portions of the coast, and in some cases in the suburbs of the cities and the larger settlements. They did a grand job and they built up a wonderful esprit de corps. The defence department supplied them with certain clothing such as slickers for the rain and hats, also rifles and certain other equipment. The force made a great reputation for itself. After the war, many of the men in the Pacific Coast Militia Rangers wanted to carry on that work and they have been carrying on, I believe, as rifle associations. The present Minister of National Defence when -he visited the coast at Easter of this year announced thalt there was to be a new ranger organiza-

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tion formed under the Department of National Defence. I have a dispatch of April 9 in a Vancouver paper, which starts by saying:
Organization of a dominion-wide "people's" defence force made up of trappers, miners, woodsmen and farmers in remote parts of Canada as an addition to the reserve militia was announced here Tuesday by Defence Minister Brooke Claxton at the conclusion of his six-day inspection of west coast defences.
Last night I was amazed to read in the Vancouver Sun, dated July 4, 1947, which came in yesterday, this statement by the chief of staff, Lieutenant-General Charles Foulkes, then visiting in Vancouver. He said:
Formation of a rangers corps to succeed the Pacific Coast Militia Rangers here is being held up only by a technicality which makes it necessary to revise the Militia Act because the force is not a regular army unit.
That report may not be fully accurate. But what is the hitch? We understood from the minister's announcement at Easter that this rangers corps was to be organized under the Department of National Defence. Now apparently for some reason that is not being done. I would point out to the parliamentary assistant that delay in carrying out plans of this type is dangerous. It makes it just that much more difficult to hold the men together, and if the delay is to continue for another year until there can be an amendment to one of the dominion statutes, that is a most discouraging development. I would ask the parliamentary assistant to make a statement tonight in regard to this situation.


Hugues Lapointe: I know of the organization the minister had in mind when he made that statement on the coast, and that is being planned. The technicality referred to is one which has never before been brought to my attention, and I cannot say whether it exists or not. I have not heard of it before. I quite agree that we should try to go ahead with this organization as quickly as possible. The work which the Pacific Coast Militia Rangers did during the war is well known, and I believe they have affiliated themselves into an association which may be perpetuated through this rangers movement becoming part of the reserve militia. I will look into the point raised by the hon. gentleman.


Howard Charles Green: May I point out to the parliamentary assistant that some of the officials in the department may not be pleased to see this rangers corps established. There is a certain type of military mind that does not like these irregulars. I hope we have none of that kind on the staff at the present time, but they have been known to be at headquarters, and the minister may find that there is somebody
delaying this organization. I would suggest that he personally go into it carefully and see that the rangers are given the proper status without any further delay.


Hugues Lapointe: Certainly.


Howard Charles Green: One final question. During the session we have had some discussion in the house concerning Canadian Arsenals Limited, a crown company which has been manufacturing certain weapons of war. It has been difficult to find out who is to be responsible for that crown company. At one time we were told that it was to be the Department of National Defence. I see the Minister of Reconstruction coming into the chamber. I am always a little suspicious that he may be mixed up with Canadian Arsenals Limited.


Clarence Decatur Howe: If there is any question about Canadian Arsenals Limited, it is an important part of the Department of Reconstruction and quite out of order on this vote.


Howard Charles Green: I see the Minister of National Defence coming in. WTe should be able to get * this settled right now. Can we find out whose baby this is? Who is responsible for Canadian Arsenals Limited, and who is to be responsible for it?


Hon. BROOKE CLAXTON (Minister of National Defence):: Canadian Arsenals Limited with its five or six plants at the present time is under the Department of Reconstruction and Supply.


Howard Charles Green: The Minister of Reconstruction and Supply thinks he is going to keep it. Is that right?


Brooke Claxton: We do not know how long he is going to keep it, but he himself has announced that there will be a change. We have been considering whether or not the change should be in favour of the Department of Trade and Commerce and the associated government agencies there, or the Department of National Defence. There is no decision yet, but the present inclination is in favour of the Department of National Defence. We are envisaging a rather high level committee of representatives of the manufacturers who made munitions during the war and representatives of Royal Canadian Ordnance Corps Association, Canadian Arsenals Limited, Canadian Commercial Corporation, the Department of Trade and Commerce and the senior supply officers of the army, which would constitute a major government committee to advise the minister and the defence committee of the cabinet on matters of industrial organization. That is our inclination. We believe that in that way we shall be able to bring together all the forces
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which worked so well during the war and which it is necessary to have working together in peace.


Howard Charles Green: On that committee will there be any representatives of industry?


Brooke Claxton: Yes; the majority would be representative of industry.


Howard Charles Green: How would they be chosen?


Brooke Claxton: Through the Royal Canadian Ordnance Corps Association council.


Howard Charles Green: That is civilians?


Brooke Claxton: Yes.


Douglas Scott Harkness: There are two points I wish to make. First, I would call the minister's attention to the peculiar situation that exists in connection with the organization grants for what are looked on as newly formed units in the reserve army. I believe the regulations lay down that this grant can be given to any unit which has been more or less just formed since the war as a result of the new reserve army set-up. However, what has happened in a large number of cases is that units which actually are new organizations have been given names belonging to some former unit which they are supposed to perpetuate. For example, in Calgary the 41st anti-tank regiment is claimed to perpetuate the 41st reserve regiment which existed there during the war and is an entirely war-time creation. Actually the only thing it inherited was the name. It did not get men, equipment or anything else. It simply got the name. Nevertheless, owing to the fact that it has the name, it is cut off from receipt of the organization grant. That has caused a certain amount of difficulty, and also misunderstanding on the part of the reserve army unit commanders. I should like to bring this to the minister's attention and ask him, if possible, to have the matter straightened out in a more equitable way than has been done so far, so that units which are in reality new will be able to draw the grant, notwithstanding the fact that they may have inherited a name and nothing else.
The second point I wish to bring up is in connection with the remarks, mentioned yesterday by the hon. member for York West, which were attributed in the Calgary Herald of Thursday, July 3, to General Foulkes when he was out there. He was speaking in connection with C.O.T.C., and he stated, according to the newspaper:
Cadets are being trained as officer instructors capable of forming a nucleus around which a swiftly trained army could be formed in the event of an emergency.

I hope that is not the view of the Department of National Defence, because I do not think the fact that officers are turned out by C.O.T.C. corps now in existence will result in an army being formed much more quickly than we were able to form one on the outbreak of the war in 1939. In other words, we shall have only a certain number more of trained officers, and I certainly hope the Department of National Defence does not think that, owing to the institution of the C.O.T.C. training plan, we shall be able to form an army in a hurry in the event of an emergency. I do not think we shall be able to form it more rapidly than in 1939.
In addition to the fallacy, as I see it, in that statement, which I hope is incorrect, or is an incorrect report, I suggest that statements of that kind react disadvantageously as far as recruitment of the reserve army is concerned. If senior officers of the army, in travelling about the country, make statements of that kind, which are highly publicized, the average young man will say, "What is the use of my joining the reserve army? It is not much needed. These C.O.T.C. boys will have all the jobs as officers to begin with, and there will be no chance of my rising in the organization, because apparently that is all they need when war breaks out. They can get an army in a hurry and there is no use in my putting in training at the present time." It is particularly from that point of view that statements of that kind are harmful, and I hope this one was incorrect. Can the minister comment on those two matters?


Brooke Claxton: I am sure the hon. member would not disagree with the view, which has been so repeatedly expressed, that it is a good thing to have a very large number, as far as we can, of well trained officers.


Douglas Scott Harkness: I am very much in favour of it.


Brooke Claxton: Everyone is agreed on that. On the other hand, in the event of war there will always be room for others; but in between we hope we shall be able to develop practices whereby promising men having qualities of leadership, education and physique will be given every possible chance of encouragement to qualify as officers. We hope our kind of force-and I mean by force the force of the three services-will be one which will give opportunity for a career for young and promising men either in the active or in the reserve forces.
With regard to the other question raised, the amount provided for grants to units is $375,308, and provision is made for the kind

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of allowance to which the hon. gentleman has referred. I think that is amply taken care of.


Douglas Scott Harkness: Do I understand the minister to say that he will look into the matter of organization grants and have that difficulty straightened out?


Brooke Claxton: Yes.


Douglas Scott Harkness: Thank you very much.
There is one other matter I should like to touch upon in these estimates, and I shall have finished. On page 1321 of Hansard, there is a return which was brought down in answer to a question by the hon. member for Wentworth, which reads:
Mr. Lennard:
1.	How many military vehicles or weapons were overhauled, repaired or reconditioned at Sorel, Quebec, during the year 1946?
2.	What firm or firms did this work?
3.	What was the cost?	_
4.	What disposition was made or is to be made of these vehicles or weapons?
Mr. Lapointe:
1.	Military vehicles-none; weapons-274 together with spares and ancillaries were modified and overhauled.
2.	Sorel Industries Limited, Sorel, Quebec.
3.	$514,719.87.
4.	These weapons are being issued to active and reserve force units of the Canadian army.
That 274 weapons should have been repaired at a cost of approximately $314,000 means that the cost of repairing was a little less than $2,000 each, and I should like to know what kind of weapons they were and to whom they have been distributed, since the cost of $2,000 apiece for repairing weapons is, on the face of it, excessive, in fact very excessive.


Brooke Claxton: The weapons in question were 25-pounder guns which had been manufactured at Sorel Industries and the modifications of which were gradually applied and are still being applied in the armament depots of Canada. These modifications cost a good deal. It would have been much easier to have made the gun with the modifications than to have made the gun, and added the modifications later. It is an expensive proposition, but the modifications were proven to be necessary in consequence of war-time experience. They were necessary in order to bring the weapons up to date. They are the most up-to-date weapons and therefore we feel the expense was justified.


Douglas Scott Harkness: The minister is aware, I believe, that I know a little about guns, and I should like him to tell us when these guns were completed, lacking in all these modifications. At the end of the war, our guns, many of which were made in 1942 and 1943, carried
if I remember correctly, about twenty-seven modifications. Most of these modifications had been put on by our own men in our own unit workshops, and those that had not, had been done in the ordinary army ordnance workshops. When were these guns completed and delivered to the army, and what are the modifications that would run to $2,000 apiece? Unless you practically rebuild the gun I cannot see why it should require that amount of money.


Brooke Claxton: I believe the hon. member knows enough about guns and the cost of them to realize that $2,000 does not represent a very large proportion of the cost of a gun. In this case, production was begun, I believe, in 1941 or 1942, and modifications came in from time to time. Then they accumulated, and my colleague the Minister of Reconstruction and Supply was face to face with the problem of production. There is always the question whether you produce with modifications or without, and whether you take the time to produce the modifications or not. I think he was faced with that problem almost from the outset of the war until the end. Almost the greatest delays in the production of war materials, after you get the initial plans, I should think he would agree, were the modifications made in them. Frequently the modifications cost a good deal more than the original weapon. In the case of the 25-pounder gun, we began production in 1941 or 1942. Modifications began at once. Some of them were made in some weapons and some were not. They have gone up, I think, to something of the magnitude of twenty-five or thirty modifications. I have seen armament depots across Canada where there are still many modifications. They are always being made.


Douglas Scott Harkness: But were those guns never delivered?


Brooke Claxton: That is right. Some of the guns were delivered and used in Europe, and brought back. Others were never delivered. We have both. As an illustration of this, I might mention the Mosquito aeroplanes. Throughout the length of the war I think there were some eighteen modifications which accumulated. To make the eighteen modifications with respect to each Mosquito would cost $15,000 today.


William Henry Golding: Shall the
item carry?


Douglas Scott Harkness: No. I am still not satisfied with regard to modifications in these guns. Instead of the government spending this
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$500,000 odd, I think the army should have put them in their own ordnance workshops and had the modifications made there, particularly if the guns had been used in Europe, as most of the modifications would have been made. When I was there we modified these guns regularly. Another modification was made practically every two or three weeks. But most of those modifications were things which could be put on by your own unit fitters or your own light aid detachment.


Mr.   OLAXTON@: No.


Douglas Scott Harkness: If they could not do it, then it could be done by the ordnance workshop. On the ones which came back from Europe, if they were in use, I would think very few modifications would have to be made. In any event, I think all the modifications should have been made by the army themselves in their ordnance workshops, as a matter of giving practice and experience to the men in them. This particular item of $500,000 odd which was spent in that way is, I think, an appropriate item to be investigated by the public accounts committee, and I hope it will foe so investigated in the coming session.


Brooke Claxton: I shall be glad to have it investigated.


William Henry Golding: Shall the item carry? Carried.


Mr. ADAMSON:: No, Mr. Chairman. I have a question concerning the permanent force units. Are the units being broken up? In other words, after the last war, the permanent force units were broken up very much to their detriment in training, morale and usefulness. The P.P.C.L.I., for instance, had one or two companies in Winnipeg and one company in Esquimalt. When the colonel wanted to travel between his headquarters in Winnipeg and his headquarters in Esquimalt, he had to pay his own way. I want to ask the minister specifically with regard to one instance, that of the Royal 22nd Regiment. Where is the headquarters of this unit? Are there two headquarters? Is the unit split up?


Brooke Claxton: With regard to the Royal 22nd, I can tell the hon. member for York West that the headquarters is in Quebec, and the regiment will be centred in Quebec; but one or -two companies will be located in St. Johns, Quebec, during the winter months. The whole regiment will be brought together in Valcartier, Quebec, during the summer months for some training.


Agar Rodney Adamson: Are -there any units split up in such a way that it makes difficult their joining together as a complete battalion?


Brooke Claxton: I do not know of any other unit which is being treated in this way.


Agar Rodney Adamson: The military -establishment of the Royal 22nd Regiment consists of one company and the officers in St. Johns, Quebec?


Brooke Claxton: It is not quite fixed whether there will be one or two companies in St. Johns and the remainder in Quebec and what- the -proportion will be between the two. But- it is decided for the -t-ime being that, in view of the la*k of accommodation, part of the unit will be in Quebec; the regimental headquarters will be in the Citadel in Quebec, and the rest of the unit will be in St. Johns during the winter. The whole unit will be brought together in Valcartier for training in the summer.


Agar Rodney Adamson: In modern training with a battalion, you need the whole unit together to do effective training. I would think -the policy of splitting up a battalion militates seriously against effective work in the efficient training of the battalion. I should hope that steps would be taken to get all battalions together as units.


Alfred Johnson Brooks: Can the minister say where companies of the Royal Canadian Regiment will be stationed,? Will any be stationed in- the maritimes?


Brooke Claxton: No, that is not contemplated.


Alfred Johnson Brooks: Where are their he&di-quarters, and where will they be stationed?


Brooke Claxton: At Brockville and Borden.


Alfred Johnson Brooks: There will be none in Halifax?


Brooke Claxton: No.


[Stage Direction]
Item agreed to.
Demobilization and reconversion-
552. Defence research and development, subject to allocation by the treasury board, and to authorize commitments against future years in the amount of $2,005,000, $13,0-31,834.
Percy Ellis Wright: This item deals with research. I think it is one of the most important items in the defence estimates, because quite often in the past we have blamed- our defence on the basis of the last- war we fought, instead, of looking ahead to the one which might occur in the future. I do not think our own military men were any worse ini this respect than- the military authorities of any

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other country. I believe, however, that we have learned a great deal from the last war with regard to the importance of research. The minister should give us some idea of how our research is being carried on. Is it being carried on in conjunction with, the universities in Canada? Are they given certain problems to solve for the department? Is it being carried on through our national research council? What coordination is there between civilian and national defence research? In all research work, when men are seeking the solution of a certain problem, they quite often stumble on other things which are of value but which may not be of any value to them. To what'extent are our research people making any information which they obtain and which may not be of interest to them, available to the industry and to the scientists of this country? The minister should give us some explanation.


Brooke Claxton: In response to the interest expressed by the hon. member for Melfort, I am indeed glad to make a brief statement on the subject of defence research. The Department of National Defence Act was amended on April 1 of this year to provide for the establishment of a defence research board as a permanent part of the department. The board consists of five ex officio and six appointed members serving under a full-time chairman, Doctor O. M. Solandt. The ex officio members are the chiefs of staff of the three armed forces, the president of the national research council and the deputy minister of national defence. The appointed members are Professor C. H. Best of the university of Toronto; Professor Paul Gagnon of Laval university; Colonel R. D. Harkness of the Northern Electric Company; Professor J. H. L. Johnstone of Dalhousie university; Professor Otto Maass of McGill university and Professor G. M. Shrum of the university of British Columbia. The country is most fortunate in obtaining the advice and guidance of such a distinguished group. Each one of them is not only an outstanding leader in his own field, but has also made an important contribution to the defence of Canada in the past war.
LTnder the guidance of this board, good progress has been made in setting up a permanent organization for defence research. This organization is already beginning to take its place as an essential part of the defence of Canada. It can be regarded as a fourth service, and there is every reason to believe that it will play an increasingly important part in military affairs in the future.
The organization under the defence research board will consist of a headquarters staff, advisory committees and a few research establishments. The ultimate aim of the whole organization will be to make available to the armed forces of Canada all the scientific resources of Canada and of other countries. The headquarters staff will be the main link with the armed forces, getting from them their research requirements and conveying to them the latest results of scientific research. The advisory committees will serve to make available to the armed forces the best scientific advice that is available in Canadian government, university and industrial research laboratories. They will also help to keep the whole scientific community of the country in touch with the problems of defence to facilitate rapid mobilization in time of need. In order to avoid any unnecessary duplication of research facilities, the research stations of the board will deal only with those problems of the armed forces which have little or no civilian interest. In other fields, such as electronics and aeronautics, it will make use of existing research laboratories, especially those of the national research council. In all its work, the board will give priority to problems in which Canada, has some special interests for which our facilities are specially suited. Experience has already shown that well-directed defence research produces many results that are of considerable direct and indirect value to the civilian economy.
In planning this organization, the government has had clearly in mind the vital need for continuity in research. This new organization is no mere temporary addition to our armed forces. It is a fully integrated part, of the defences of the country. It must be staffed and equipped, to take a long term view of the scientific requirements of defence, and it must continue in being as long as there is a need for defence forces. Further, to ensure that research receives adequate consideration of the highest level, the director general of defence research has been given the status of a chief of staff, is a member of the chiefs of staff committee and defence council and attends meetings of the defence committee of the cabinet.
Coordination with civilian research and industry is effected through a number of committees. I can assure the hon. member that the important problem to which he has directed attention is being given the utmost consideration, and that the organization is already in being to deal with it in a way which I am sure he would approve.


Percy Ellis Wright: I am certainly pleased that the minister has made this statement, and particularly pleased that there is cooperation with industry and our educational institutions in this respect.
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There is just one further question. During the war we were able to get much further in our research work through cooperation with the United States and with Great Britain. I am just wondering to what extent we are continuing that cooperation in this line today.


Brooke Claxton: I think the best thing I can tell the committee is that we are continuing to work together.


Alfred Johnson Brooks: I notice an item of
$25,263,748 for personnel supplies, food supplies, medical and dental stores, clothing and personnel equipment, barrack, camp, hospital equipment and so on. I should like to ask the minister if they are using the supplies left over from the last war. It would seem to me that, as far as clothing, dental stores and supplies for barracks, camps and so on are concerned, there should be sufficient supplies on hand to meet the needs of the armed forces. In that connection also, I should like to ask if uniforms for the soldiers are still being manufactured. I understand that is being done in certain parts of Canada, and it seems to me a ridiculous situation that, with the thousands of uniforms which must have been on hand at the end of the war, we should be still manufacturing uniforms.


Brooke Claxton: The situation is that at the end of the war we had very large supplies of various types of uniforms, but we did not have all the sizes to meet all the needs. Since then, we have just purchased what has been necessary. For example, quite a lot of cloth was to be declared surplus to War Assets Corporation by the Reconstruction and Supply pool, and we purchased from that corporation quite a considerable quantity of this cloth for the making of uniforms during the next three or four years. We have endeavoured to economize our resources in every possible way. As far as I know, we have not wasted any money. We have used what we had; but in order to supply a force as large as we now have, with some thirty-four or thirty-five thousand in the three armed services, it has been necessary to supply continuously such things as uniforms of different sizes, and that has been done only to' the extent necessary. We have used up every possible piece of equipment we had on hand, and all the clothing we had on hand, and have obtained additional supplies only where necessary.


Alfred Johnson Brooks: Do I understand that the change in size is due to the change in size of the personnel of the army after the war was over? We had sizes for all sizes and shapes of men during the war.


Brooke Claxton: The hon. member will appreciate that when one is dealing with forces of the magnitude of 700,000 he does not require such refinements of sizing as are necessary when he gets down to 34,000 or
35,000.


Mr. HERRIDGE:: Yesterday the minister agreed to inquire into a point of law which I raised. Can he give that information now?


Brooke Claxton: I am sorry I cannot give the answer yet. The question was raised for the first time. It has been referred to the judge advocate general and the law officers, and as soon as I get the answer I shall be glad to communicate with the hon. member.


[Stage Direction]
Item agreed to.
190. Grants to military associations and institutes, as detailed in the estimates, $113,350.
John Oliver Probe: I believe the parliamentary assistant has some information for which I asked earlier.


Hugues Lapointe: The hon. member asked about the age limits at which other ranks and officers must be compulsorily retired. The age group of other ranks in administrative and training staffs is forty-five, and for sergeants and above it is forty-five. In static units of headquarters establishments for the rank and file it is fifty, and for sergeants and up it is fifty-five. The discharge of certain specialists and tradesmen may be deferred for a period not exceeding five years beyond the age limit, but each of these cases has to be decided by army headquarters. All personnel is to be discharged on thirty-five years' active force service or at the age limit, whichever is the earlier. In respect of officers the age limit for brigadiers and above is fifty-five; for colonels, fifty-three; for lieutenant-colonels, fifty-one; for majors, forty-nine; for captains, forty-seven; and for lieutenants, forty-five.


[Stage Direction]
Item agreed to.
Brooke Claxton: May I make two brief announcements, one of which has to do with civil service leave, and a matter which is of great concern for the reserves. I am happy to say that order in council P.C. 1/2728 covering leave for civil servants attending camp was adopted today, and I shall place it on the table, expressing the hope that the example set by the federal government in this field will be copied by provincial governments and industries throughout the length and breadth of Canada so as to permit members of the reserve forces to attend camp without monetary loss.

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DEPARTMENT OF MINES AND RESOURCES

[Stage Direction]
130. Departmental administration, $183,173.
Mr. CROLL:: I should like to take only a few moments to bring to the attention of the committee what I consider is still an important problem, namely that of immigration. I shall not weary the committee tonight with the old arguments which have been used on many occasions before; nor am I going to reiterate the various arguments which are being used in the senate chamber, in the various forums in Canada and in the service clubs.
I am not going to discuss principles tonight, either, not because I believe the principle is not important, but I am convinced that not only are the principles of immigration understood in Canada, but they are accepted throughout the country. What I am concerned about is the matter of administration. I consider it important that the principles we accept should be translated into action. As things stand, we are not doing enough. It is true that over the period of months governments have evolved a policy which is commendable, but at the same time it is not bringing about results. Perhaps that is inevitable where we have a day-to-day policy, and particularly when we realize that the Department of Mines and Resources is a large one and has in it many important agencies.
The blue book indicates that in that department matters pertaining to the Northwest Territories are placed. Indian affairs form part of it, as does the dominion observatory. Indeed the department covers some thirty boards, branches and bureaux. I have nothing but praise for the department in the manner in which it has carried out its various diversified functions, but I think it is impossible under the present arrangement, to do justice to vital problems such as immigration. The first thing we must do is to let the immigration branch stand on its own feet. During the period of great immigration to this country, and in the days of our greatest prosperity the department of colonization and immigration dealt with some 2,835,000 people from 1901 to 1913. When the flow dwindled the department contracted, and was tucked away in the Department of Mines and Resources where it has remained ever since. It is an efficient department, but at the same time entirely circumscribed.
Today's papers indicate that the committee on Indian affairs has asked for the setting up of a separate Indian affairs department. I notice by the press that Senator Crerar, a former minister of mines and resources, is quoted to have said that Canada's natural resources have been neglected to a point
that was almost tragic. I think the time has come to put the immigration department on a full-time basis, to reconstitute a separate department. If the government does not see fit to do that, then the least it can do is to appoint a deputy minister of immigration. The Department of National Revenue has two deputies; the Department of National Health and Welfare has two deputies, and the Department of National Defence has one deputy with three associate deputies.
The Northwest Territories in themselves have unlimited horizons, and that in itself provides an inspiring job. There is an empire there which needs developing, and that will take all the energies of a full-time deputy minister. The Indian affairs committee suggested that the department should be unscrambled by having a deputy devote his entire time to Indian affairs. I know it is a bold step, in these days when we hear so much of bureaucrac}q to suggest a further enlargement. That sort of thing is looked upon with some disfavour, but I would recall to hon. members that, during the war and its aftermath, when important problems came to the front we did not hesitate to set up departments of government which were answerable to this house. For instance, there were the Department of Munitions and Supply and the Department of Reconstruction and Supply, both created to meet pressing needs. When the need had passed, one department was closed down and the minister has told us that some day the department of reconstruction and supply will go out of existence.
Immigration today and for the immediate future constitutes a problem of national significance. It offers a challenge which we must meet boldly. If we temporize; if we allow it to bog down administratively, we are likely not to reap great benefits. Another aspect of immigration is the regulations. Anyone who has made any study of the regulations will realize that to some extent they are hot logical. If a nephew is twenty-one years of age, he is admissible under the regulations; if he is over twenty-one years of age, he is not admissible. I could never understand what difference it makes. If a man is in good health, is able to work and has someone here in Canada willing to assume responsibility, what earthly difference does it make whether he is twenty-one or twenty-two years of age, so long as he fits into our economy? I can see where in years to come we shall have a lot of people making affidavits before the old age pensions board to the effect that they are really a little older than they are supposed to be.
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I do not like the category method of selection because it smacks too much of the United States system. Like the United States system, it is meant to keep people out, not to let them in. We should admit to Canada anyone who meets our requirements and can conform to our standards. We need hundreds of thousands of people. If the prospective immigrant has a relative here, no matter of what degree, so much the better. If he has not a relative but has a friend who is willing to undertake that he will not become a public charge, then that ought to be good enough.
We have been told that transportation is a difficulty, but recently the premier of Ontario showed us one way of cutting through red tape. The country was much impressed by the action he took in going over to England and arranging for plane transportation for a great number of people. Even today he has two ministers of his government in England arranging various details. I have here a clipping from the Globe and Mail of July 9, datelined London, which reads:
More than 600,000 Britons have made definite plans to migrate, according to the figures given in a man-power survey made by Political and Economic Planning, an independent research organization, and published here today.
We need that kind of people and we ought to make a serious bid for them. If the providing of passage is necessary to lure them to this country, then we ought to make sure that ships are available. I can recall when there was nothing we could do about transportation, but immediately after the premier of Ontario was able to make arrangements to fly people here, we were able to arrange for a ship. It seemed to come out of the thin air, but it will carry some 600 passengers a month. I think we now have transportation for almost 3,000 a month.
Some time ago we were happy to hear the minister announce that 5,000 persons from the displaced persons camps would be admitted to Canada at once. Newspaper reports indicate that the quota has been filled completely, although the people are not yet here. One question one must ask is: What now? From what we know as members, from the letters we get and from the people we see, we know that the surface has not even been scratched so far as people who have someone in Canada willing and able to stand good for them are concerned.
At the present time Britain is admitting 4,000 immigrants a week and has already admitted some 500,000 into that country. This is an urgent problem. We cannot afford to delay. We cannot afford to wait for the international refugee organization, because it may never

function, From all indications the British are looking after their own zone; the French are looking after their zone, and the United States are looking after theirs. We in Canada must face the facts. We have pledged ourselves to provide a home for a fair share of Europe's refugee population who have roots in this country, not only of kinship, but of general national origin. This means that sooner or later we shall take a certain number. With our population, our resources and our absorptive capacity, my suggestion is that we do not wait too long. We ought to begin now to admit those who will eventually come here in any event, because delay is causing incalculable harm at the moment. To bring them over now would be, not only in their own best interests, but in our best interests, for other countries are making very much of the opportunities and are taking off the most skilled, the farmers, and the technicians in every calling, and if we delay we shall find ourselves with only the second best. I think it is time for us to make big plans and to make them at once.
One thing we have to be sure of is that no one shall come into this country without the approval of the government. I think we are all agreed that there is no room for private enterprise in that field.
In view of the statement made recently by the deputy minister that the quota of
5.000	has been used up, it is time that a new declaration should be made. The piecemeal attempt that we are making now is not finding complete favour with the Canadian people. The time has come when we must stop nibbling at this problem and take a good bite at it. Actually we can digest more than we think we can. On this particular question I feel that the people in the country generally are ahead of the government. They are not only willing but anxious that people should be brought in, and my suggestion is that the government make a bold declaration of policy. This constant business of allowing a certain number in today and another number tomorrow leaves us in an uncertain position, and for that reason, rather than the government making declarations from time to time, I suggest that they boldly declare now that we shall allow in a certain number, be it 20,000,
30.000	or 50,000 so that not only can we in Canada plan, but the people who are charged with this responsibility can also plan in order that we may get these people over here as quickly and as surely as possible, not only, as I said, in their own best interests, but in our own best interests too.


Clarence Decatur Howe: I should like to cor-

Supply Mines and Ressources
rect one or two statements that have been made by the hon. member. The first one I think it is important to correct because it was made not only by the hon. member but on the radio tonight and it has also been made in the press. It was that the committee on Indian affairs recommended that Indian affairs be a separate department of government. As a matter of fact that was not the recommendation. The recommendation was that all Indian affairs be in one department, and as I understand it, be in the present department. My hon. friend knows there was a separation of the department a year ago, and the committee recommends that Indian affairs be now reunited in one department.
I should also like to correct the hon. member's impression as to immigration. In his remarks he gave the impression that a quota of 5,000 immigrants had been established by the government. That is not the case. There are three types of immigration: first, immigration from the United Kingdom and from the United States-British and United States immigration; that is unlimited. Any man who is able to get to Canada from Britain or the United States and who has good health and sufficient funds to establish himself here is entitled to come, without limit.
Then there is the ordinary immigration from some non-enemy countries, which again is practically unlimited-immigration such as the Dutch settlers, some of whom arrived recently.
The 5,000 figure had to do wholly with men and women in displaced persons camps. Arrangements have been made with respect to these, and authority was given to bring in
5,000.	These 5,000 have now been selected, and today the governor in council authorized a second 5,000. That is merely to coordinate the work of those engaged in selecting displaced persons and in placing them in Canada in order that one part of the organization may not get out of step with the other.


John Ritchie MacNicol: Are they all coming from continental Europe?


Clarence Decatur Howe: They are coming from displaced persons camps, which are all in Europe.


Mr. QUELCH:: There are no limitations on those who may come from the United Kingdom?


Clarence Decatur Howe: No limitations at all. There is nothing to stop any British subject resident in the United Kingdom from coming to Canada if he can get transportation and if he has good health and funds sufficient to establish himself. I simply make these few remarks now, which I shall extend at the next sitting, because I do not want the impression left
that Canada is carrying on a limited immigration policy. We have an active immigration policy. The facilities for carrying on immigration are being improved each month, and we look for very satisfactory results by the year's end.


Victor Quelch: What provision is there that a person in the United Kingdom with a certain amount of money will be able to bring his money to establish himself in Canada? Is he allowed to bring a certain number of pounds?


Clarence Decatur Howe: That is a matter wholly between the resident of the United Kingdom and his government. The United Kingdom has exchange control, as has Canada. The amount that the British treasury will permit a British immigrant to bring to Canada is a matter that depends on the circumstances and depends on the viewpoint of the treasury in the particular case.
Item stands.
Progress reported.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
Friday, July 11, 1947