Right Hon. W. L. MACKENZIE KING (Prime Minister):: Mr. Speaker, I rise on a question of privilege concerning a matter which is in the nature of a reflection upon myself as an hon. member of this house and as Prime Minister and which I think might well be resented as an indignity against the house itself. I refer to a report of a speech that was made by the hon. member for Nanaimo (Mr. Pearkes) which appears in the Vancouver Daily Province of Wednesday, March 31, 1948. The heading is, "Pearkes claims Mackenzie ousted over pensions". The article is by Gordon McCallum and it reads:
A Canadian war hero member of parliament charged Tuesday night that Right Honourable Ian Mackenzie was ousted from the cabinet because he rowed with Prime Minister King over the size of veterans pensions.
Major-General G. R. Pearkes, V.C., Conservative member of parliament for Nanaimo, told a Vancouver Centre Conservative nomination meeting: "Your member fought to get a better increase in pensions than the Prime Minister would authorize. His reward was, Thank you. Now get out. You will go to the senate. I will get my former private secretary in your place.' I will defy anyone to contradict that this is what happened."
I say to the hon. member for Nanaimo that I contradict his statement wholly and completely; there is not one word of truth in it from beginning to end. The circumstances under which Mr. Mackenzie tendered his resignation and which led to my recommending His Excellency to appoint him to the senate appear in an exchange of correspondence that took place between us and which is published in Hansard of Monday, January 26, 1948.
At no time have I had a word of difference with the former minister of veterans affairs over any questions relating to pensions for returned soldiers. Indeed I think the former minister will say that he had not a stronger supporter than myself in all the legislation which he brought forward during the time he was in office to improve the condition of the war veterans.
As for the selection of the Liberal candidate in the constituency, I let it be known publicly that I wished to have nothing whatever to do directly or indirectly with directing the choice by the Liberal convention of the candidate who was to contest that riding. I did not seek to influence, nor did I influence either directly or indirectly, the choice of the convention when it selected Mr. Campney as the candidate.



PRIVATE BILLS


Mr. MAURICE HARTT (Cartier) moved:: That the petition for divorce of Lillian Helena Gross Page, presented on April 5, 1948, together with the report made thereon by the clerk of petitions, be referred to the standing committee on standing orders for such recommendations as may be deemed advisable.


Mr. HOMUTH:: It is too late; it is out of order.


[Stage Direction]
Motion agreed to.

[Stage Direction]
Bill No. 185, for the relief of Francis Clyde Peachey.-Mr. Boucher.
Bill No. 186, for the relief of Harriet Dodd McLachlan Cummings.-Mr. Maybank.
Bill No. 187, for the relief of Phyllis Smith Curtis.-Mr. Maybank.
Bill No. 188, for the relief of Jacqueline Louise Waddington Skinner.-Mr. Maybank.
Bill No. 189, for the relief of George Malouf.-Mr. Maybank.
Bill No. 190, for the relief of Sonja Anna Margaret van der Walde Brown.-Mr. May-bank.
Bill No. 191, for the relief of Richard Edward Welsh.-Mr. Maybank.
Bill No. 192 for the relief of Violet Maude Mitchell.-Mr. Maybank.
Bill No. 193, for the relief of Elsie Williams Lodge.-Mr. Maybank.
Bill No. 194, for the relief of Joseph Albert Aldee Leveillee.-Mr. Maybank.
Inquiries of the Ministry

[Stage Direction]
On the orders of the day:
Mr. GORDON GRAYDON (Peel):: Mr. Speaker, I note that the Prime Minister is back after what seemed to be not just an ordinary holiday but very much like a busman's holiday, judging from what we read in the press. I do not see how he could have had much leisure on such a trip. In view of the fact that he had discussions with the President of the United States and perhaps with officials at Washington, I would ask the Prime Minister if he is now ready to fix a definite day next week for the discussion of external affairs in the House of Commons.


William Lyon Mackenzie King: Mr. Speaker, my hon. friend will remember that I did say that we would take up external affairs as the first department to be considered under estimates, and that the estimates would be taken up next week. I hope that one or two departments might be brought in by an item being called this week, so that we may proceed either on Monday or Tuesday of next week with the discussion of external affairs.


[Stage Direction]
On the orders of the day:
Gordon Graydon: Mr. Speaker, the Prime Minister a few moments ago brought up the question of the Vancouver South by-election.


Mr. CRUICKSHANK:: Has the hon. member for Vancouver South resigned?


Gordon Graydon: May I ask the Prime Minister why the by-elections in Vancouver Centre and Ontario were not announced at the same time as the Yale by-election?


William Lyon Mackenzie King: It was thought more advisable to announce Yale first.


Gordon Graydon: May I suggest to the Prime Minister that from the information I have the situation is getting worse for the government every day these by-elections are postponed.


George Alexander Cruickshank: May I direct a supplementary question to the Prime Minister? Has the hon. member for Vancouver South been kicked out or has he resigned?


[Stage Direction]
On the orders of the day:
Mr. T. J. BENTLEY (Swift Current):: Mr. Speaker, may I ask the Minister of Trade and Commerce if Bill No. 135, dealing with amendments to the wheat board act, has been proclaimed in wdiole? If not, why not, and when can the house expect the proclamation?


Right Hon. C. D. HOWE (Minister of Trade and Commerce):: Mr. Speaker, as I understand it, no proclamation is required.


Thomas John Bentley: May I ask a supplementary question of the Minister of Trade and Commerce or the Minister of Agriculture? In view of the statement that Bill No. 135 has not been proclaimed, has the government taken any steps to bring oats and barley under the operation of the wheat board?


Clarence Decatur Howe: The bill provides that the government may by order in council bring marketing of barley and oats under the wheat board in any year beginning August 1. There seems to be ample time between now and then to take whatever steps may be considered appropriate.



NATIONAL FILM BOARD


[Stage Direction]
On the orders of the day:
Mr. M. J. COLDWELL (Rosetown-Biggar):: May I ask the Prime Minister if the government will give consideration to setting up a special committee of inquiry into the operations of the national film board?


William Lyon Mackenzie King: The government will be pleased to give consideration to the matter and I will give my hon. friend the result of that consideration in a day or two._



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Mr. ANGUS MacINNIS (Vancouver East):: Mr. Speaker, I should like to ask a question of the Minister of Labour. He said in reply to a question I asked him on March 24, regarding the union proposals for arbitration

Inquiries of the Ministry
in the seamen's strike, that he was awaiting a reply from the shipowners. Can the minister now tell the house what is the attitude of the shipowners to the arbitration proposal?


Hon. HUMPHREY MITCHELL (Minister of Labour):: My hon. friend is in error in referring to it as the seamen's strike. It is a strike of the deck, engineer and wireless officers. I have a statement on the position at the moment which I shall now give to the house.
In reply to the question of the hon. member for Vancouver East, members will recall that all issues in dispute between the two federations representing deepsea shipowners on the east and west coasts and the three unions representing the licensed deck, engineer and wireless officers of their Canadian-registered ships were fully considered by Mr. Justice D. A. McNiven, of Regina, acting as an industrial disputes inquiry commissioner.
In spite of his patient and painstaking efforts, the commissioner was unable to secure a settlement of the dispute and submitted his report to the Minister of Labour on January 22.
The recommendations made by the commissioner were used as the basis of further direct negotiations, which took place between the parties at Vancouver during February. These direct negotiations broke down early in March, at which time the shipowners announced that they were putting into immediate effect all of the recommendations of Mr. Justice McNiven except two, which involved the payment of an overtime allowance to radio officers and the deck and engineer officers' security watch abroad. The officers' unions held out for the adoption of all of the commissioners' recommendations, together with overtime pay on an hourly rather than a lump sum basis, "pro rata" leave in connection with annual vacations with pay, and other concessions.
A strike was called on March 3 upon all ocean-going dry cargo vessels touching Canadian ports, and up to date about thirty-two vessels have been immobilized.
Subsequently, both sides to the dispute sought the assistance of the Department of Labour and everything possible has been done to bring the parties into agreement. Various arbitration proposals were put forward from union sources, and on March 25 the Minister of Labour formally suggested to the shipping operators that they authorize him to approach the unions with an offer of an immediate return to work by the officers conditional upon acceptance of the employers' Vancouver offer of March 1, together with arbitration of the questions of hourly overtime pay and pro rata
leave. This was done in the belief that the suggestion was capable of bringing about an early settlement, and that it was not unreasonable since it was felt that the two points on which arbitration was proposed were rather minor ones.
On March 31 the two federations of shipowners informed the Minister of Labour that they were now prepared to accept the recommendations of Mr. Justice McNiven in their entirety providing the ships' officers now on strike did likewise and returned to work forthwith, and provided that the provisions of the commissioners' recommendations should remain in effect until January 31, 1949. The owners were not prepared to arbitrate any issues not recommended for adoption by the commissioner.
With regard to a suggestion by the unions that all officers should be reinstated without discrimination and that those on articles should not be penalized under the provisions of the Canada Shipping Act, the operators maintained that they should not be asked to condone what they described as the illegal actions of officers who had broken their articles of agreement.
I should add here that one of the twenty-six companies involved in the dispute, the Federal Commerce and Navigation Company Limited, with the assistance of the department reached an agreement with its employees which has been endorsed by the unions concerned, and I had word from the company this morning that its "ships sailed over the week-end".
This single settlement provides that all of Mr. Justice McNiven's recommendations will be implemented; that final and binding arbitration will take place on the questions of hourly overtime pay and pro rata leave; and that so far as the Federal Commerce and Navigation Company can influence the matter, there shall be no penalization of officers under the Canada Shipping Act, and the company will not discriminate against its employees for having engaged in strike action.
Assurances have been received from two of the officers' unions, namely, the Canadian Merchant Service Guild and the National Association of Marine Engineers, that if the east and west coast shipowners will agree to the same terms as the Federal Commerce and Navigation Company, the strike will be terminated immediately.
The latest word from the shipowners' federations, received on Saturday, is that they are not prepared to go beyond their offer of March 31, and that they consider their "final position ' to be in the long-term public
Inquiries oj the Ministry

interest. They also submitted that their willingness now to accept in full the recommendations of the commissioner absolved them from any suggestion of being unreasonable or arbitrary in refusing to accept arbitration of other issues which were fully considered by Mr. Justice McNiven and which, if conceded, might endanger the competitive position of Canada's merchant marine.
The principal recommendations contained in the commissioner's report were that:-
1.	The basic wages of officers holding certificates should be increased by from $20 to $25 per month-and, in the case of deck and engineer officers who have completed certain periods of continuous and satisfactory service with the same company, increases up to $35 per month should be granted.
2.	Stipulated lump-sum amounts of overtime pay should be paid to deck, engineer and radio officers as compensation for all work performed in addition to watch-keeping duties.
3.	Longer vacations with pay should be granted.
4.	Compensation should be made for loss of personal effects in the event of marine disaster.
5.	Allowances should be made for deck and engineer officers' security watches abroad.
6.	Concessions as to wages and annual leave should be made retroactive to October 15, 1947.
7.	No concessions should be granted in respect of union security beyond the existing recognition of the unions concerned as sole bargaining agents for licensed officers, coupled with the preferential hiring of union members.



INQUIRY AS TO LABOUR CODE

Karl Kenneth Homuth: I should like to ask the Minister of Labour this question. How soon can we get the labour code before our committee? It is most important, particularly in view of the fact that some of the provinces-


Mr. SPEAKER:: Order.


Some hon. MEMBERS:: Order.


Karl Kenneth Homuth: -some of the provinces-


Some hon. MEMBERS:: Order.


Karl Kenneth Homuth: Oh, nuts to you.


Humphrey Mitchell: May I say this to my honourable and genial friend: if the opposition had' made shorter speeches and less repetition it would have been before the committee long before this.



PARLIAMENT HILL


[Stage Direction]
On the orders of the day:
Karl Kenneth Homuth: I want to make a suggestion to the Minister of Public Works (Mr. Fournier). I suggest that something ibe done with regard to the speed of the cars that are operating around the parliament buildings. Many of the vehicles are departmental trucks. We are very fortunate that we have not had some disaster because of the speed1 at which they operate. The Minister of Public Works ought to take this suggestion into consideration and slow them down.


Some hon, MEMBERS:: Question.


Karl Kenneth Homuth: Well, now, don't get impatient. I have had a lot of patience with some of you people.



SALES IN DRUG STORES AND JEWELRY STORES

[Stage Direction]
On the orders of the day:
Mr. CLARENCE GILLIS (Cape Breton South):: I should like to direct a question to the Minister of Finance arising out of press dispatches to the effect that drug stores and jewelry stores in the city of Montreal were offering a pound of butter as a premium on any purchase of luxury goods over $7. Has this matter been drawn to the minister's attention? If so, has an investigation been made, and is the minister in a position to inform the house as to whether there is any truth in these dispatches?


Hon. DOUGLAS ABBOTT (Minister of Finance):: The matter was brought to my attention. The wartime prices and trade board are making an investigation, and' I am also told that the matter has been considered by the prices committee. On March 31, I think, the chairman of the prices board issued1 a statement to the effect that this practice was viewed with disfavour; that if it became widespread1 some positive action would have to be taken by the board to prevent it. My present information is that it has occurred in only two instances, a drug store and a jewelry store, and that a limited quantity of butter was involved. The investigation is proceeding, and if it is found that there is any infraction of ceiling prices, appropriate action will be taken.


Gordon Graydon: Where in the world do the stores get the butter?


Douglas Charles Abbott: They buy it from the wholesaler.

Inquiries of the Ministry



IMMIGRATION


[Stage Direction]
On the orders of the day:
Mr. L. W. SKEY (Trinity):: Mr. Speaker, my question has to do with immigration. I suppose it should be addressed to the Minister of Trade and Commerce in the absence of the Minister of Mines and Resources.


William Lyon Mackenzie King: To the Minister
of Fisheries.


Lawrence Wilton Skey: It has to do with the application for admission to Canada of relatives of Canadian citizens and residents. My question is this: will the minister investigate and advise the house regarding the present situation, which seems to be that a number of papers and approval forms are missing from the records of the Oanadian-European immigration teams?


Hon. J. A. MacKINNON (Acting Minister of Mines and Resources):: If the hon. member will give me more definite and particular information it would assist in the inquiries that I should be glad to make.



REQUEST FOR AUGMENTATION OF STAFF OF INSPECTORS

[Stage Direction]
On the orders of the day:
Mr. DONALD M. FLEMING (Eglinton): May I direct a question to the Acting Minister of Mines and Resources concerning an immigration matter? Will the minister give immediate consideration to the augmentation of the staff of immigration inspectors at places on the frontier where trains are entering Canada with immigrants from abroad, so that the delays which are now occurring at the borders, as the present inspectors complete their work on the trains, may be obviated? On Sunday morning I was on a train that was held up for two hours at the border while the existing staff was trying to carry on work that should have been done by a staff three times its size.
George Alexander Cruickshank: You are making a speech. You should have given a talk on freight rates yesterday.


James Angus MacKinnon: The matter has been discussed with the officials of the department and the discussions are continuing.



POTATOES


[Stage Direction]
On the orders of the day:
Mr. WILLIAM BRYCE (Selkirk):: I wish to direct a question to the Minister of Trade 5849-170
and Commerce or to the Minister of Agriculture. What steps, if any, are being taken to find a market for the 300 carloads of surplus potatoes produced in the greater Winnipeg district?


Right Hon. J. G. GARDINER (Minister of Agriculture):: I have no information on the matter. I will get whatever information there is and answer the question later.



INQUIRY AS TO PROBABLE DAY OF PRESENTATION

[Stage Direction]
On the orders of the day:
Mr. J. M. MACDONNELL (Muskoka-Ontario):: I should like to ask the Minister of Finance two questions. First is it possible for him yet to give any indication as to when the budget will be brought down?


Douglas Charles Abbott: I am not yet in a position to make any definite statement as to when the budget will be brought down.



INCOME TAX


[Stage Direction]
On the orders of the day:
James MacKerras Macdonnell: Has the Minister of Finance made up his mind yet whether the new income tax bill can be referred to the committee as promptly as possible-if necessary, even before the budget comes down?


Douglas Charles Abbott: I am not in a position to say whether the new income tax bill will be referred to a standing committee or whether it can be considered in committee of the whole. I may add that we have received, as I said before, a great many representations and written submissions in connection with the income tax bill from representative groups such as chartered accountants, members of the Canadian Manufacturers Association and others, and it may well be that the field has been so fully covered it will not be necessary to submit it to a special committee.


James MacKerras Macdonnell: I am sure the minister will remember that it is almost two years since his predecessor assured the house that this new income tax bill would be dealt with within a year.


Douglas Charles Abbott: It will be dealt with this year.
Inquiries oj the Ministry



HARBOURS


[Stage Direction]
On the orders of the day:
Mr. L. E. CARDIFF (Huron North):: I should like to direct a question to the Minister of Public Works. Due to the fact that much damage has been done to the harbour at Goderich by flood waters, has the minister or his department given consideration to granting immediate relief for the damage done?


Hon. ALPHONSE FOURNIER (Minister of Public Works):: Immediately the damages occurred at Goderich officials of the department were sent out' to make inquiries, and I am informed that they will start repairs to the piers as soon as the level of the water has gone down. I received no notice of this question, but I shall give further information to the hon. member later.



OSHAWA, ONT.-QUESTION AS TO DREDGING

Mr. A. L. SMITH (Calgary West):: May I ask the Minister of Public Works a question? Has he yet learned from the Minister of Trade and Commerce (Mr. Howe) of an undertaking given by him in Oshawa a few days ago to dredge the harbour there? It is in the county of Ontario.


Alphonse Fournier: There are so many requests for dredging of harbours throughout the country that the minister may have told me of this instance. He has asked for many similar works and I cannot recall them all.


Mr. KNOWLES:: After all, he is the minister in charge of by-elections.



MARSHALL PLAN


[Stage Direction]
On the orders of the day:
Gordon Graydon: On two different occasions earlier in the session the leader of the opposition directed a question to the Secretary of State for External Affairs asking that some statement be made with respect to Canada's participation in the Marshall European recovery plan. Because of the developments in the United States I should be very glad if the Secretary of State for External Affairs-or the Minister of Trade and Commerce, who, according to the press, appears to have something to do with the matter now-would give the house some statement in respect to the possibility of our participating therein.

Right Hon. L. S. ST. LAURENT (Secretary of State for External Affairs): I am not sure that I understand exactly the purport of the hon. member's question. There can be no further aid extended to foreign countries without legislation in parliament, and no such legislation has yet been prepared. If any is to be brought before parliament of course it will be announced in due course.
If the hon. member's question has to do with what prospects there may be of purchases in Canada out of the amount that is reserved or earmarked for so-called offshore purchases, that is something about which I would not be in a position to make an estimate.


Gordon Graydon: I understood from the press that a move has been made either by the United States government or by this government to have a conference between the officials or the ministries of the two countries with regard to the Marshall plan, and that is what I had in mind at the moment.



GOLD MINING


[Stage Direction]
The house resumed from Friday, December 19, 1947, consideration of the motion of Mr. Abbott for the second reading of Bill No. 7, respecting emergency payments to assist in meeting increased cost of production of gold.
Mr. ALAN COCKERAM (York South):: Mr. Speaker, in the radio broadcast made by the Minister of Finance (Mr. Abbott) on November 17 he announced a policy of bonus-ing the gold mines in order to assist them in the difficult days through which they were passing, and in that broadcast the amount of $7 was the figure which it was proposed at that time to give by way of bonus to the mines. Owing to objections of officials at Washington, however, this was changed and a new scheme of bonusing was brought down, as contained in this bill.
The gold mining industry as a whole is opposed to being bonused, for the simple reason that it makes them the creature of the government and possibly allows the government in days to come to interfere with the management and with the manner in which the business is to be carried on.
The bonus that is now being considered in this bill is in my opinion of some help to the industry but it is not of any great assistance. Most of the mining companies have already passed this bonus on to their labour, for from January 1 the increase in wages in Ontario and

Gold Mining
Quebec has more than absorbed the total amount of the bonus payable under this bill.
Many discussions have taken place regarding the state of the gold mining industry and it was only during the last session when this matter was before the house that I brought certain aspects of the situation to the attention of the Minister of Finance, and I remember that on one occasion he stated that I was talking for Bay Street. However, I was glad that in November the government had come to realize that the industry was in a very unsatisfactory condition and that it was necessary for the government to give it some assistance.
Some of the gold mining companies have suggested various plans, one of which was of course the free marketing of gold. I am not going to talk about that today. My only point is that there may be some place in the world where some or all of our gold can be sold at a price higher than $35 and the proceeds from these sales converted into United States dollars, and the excess paid to the producer.
The troubles of the industry started in 1946 on the day when parity was brought about by the government in arbitrarily placing the Canadian dollar on a parity with that of the United States. I have said before that the industry did not want this bonus. It was not their idea but the idea of the government, and the industry feels that this bonus is being given at this time to make up in some small degree for the placing of our money on a parity with that of the United States.
I think at this time I should say something about the industry itself. Many people, and especially members to my left, seem to think that only a few wealthy shareholders of producing gold mines are the ones who will benefit by any bill such as that which is before us at this time. In this connection it might be pointed out that there are from 250,000 to 300,000 registered shareholders of Canadian mines, and one has only to look at the shareholders list to see the size of the blocks of shares. One company of which I have some knowledge has approximately 8,000 shareholders of whom there are only a few hundred having more than 500 shares of stock, the majority of the shareholders holding less than 100 or 200 shares.
I bring this question up now because I am of -the opinion that this bill is quite necessary at this time so that the industry may at least get some help from the government to carry them on the road to recovery. Probably few members, and few people in this country, have a knowledge of the broad effect of our gold 5849-170J
mines on the Canadian economy. It is too early to give many figures for the year 1947, but I have one or two figures here with regard to purchases and expenditures of some of the Canadian mines. I would take as an example the Sigma mines operating in the Bourlamaque area of the province of Quebec. Last year they made purchases from 353 individual suppliers in 96 different municipalities. The Noranda mines during the year 1947 paid for operating supplies $12,420,000, for freight and transportation $1,150,000 and for hydro power $1,012,000. Approximately 96 per cent of the total expenditures of Noranda and its subsidiaries was spent in Canada, and these orders were distributed to 1,200 firms, providing employment for men and women living in 140 Canadian towns and cities.
Two of the corporation's comparatively small subsidiaries accounted for approximately $600,000 worth of supplies, which included such items as metal products, equipment, explosives, lumber and timber, reagents and chemicals, electrical equipment and supplies, air operated equipment and parts, pipe and fittings, fuel, petroleum products, rubber products, paints, and a great variety of other items.
It may interest hon. members of the house to know some of the communities which benefited from these purchases. The principal communities in Ontario, for instance, were Amherstburg, Baden, Belleville, Blind River, Bowmanville, Brampton, Brockville, Cobalt! Cooksville, Dundas, Eganville, Fort Erie, Galt, Gananoque, Niagara Falls, Peterborough, and many others. In Quebec the purchases were made at such places as Beloeil, Joliette, Sorel, Lachine, La Tuque, Montreal, Rock Island, and Shawinigan Falls.
I have given these figures to show what this industry means not only to the people who work in the mines but to those who work in the factories that supply the necessary tools and equipment to keep the mines going. Then on top of that, with the millions of dollars paid out in wages, there is the great purchasing power built up by the workers for such things as clothes, furniture and other household effects that have to be purchased by the people living in the mining districts. On top of that the government received a great deal of the money from the dividends paid, and the government receives large sums in taxes on the profits of the operating companies. I have given these figures to show that this industry must get some support from the government.

Gold Mining
There are only two or three ways in which they can help. We realize that. A great deal has been said about it in this house. The mines' trouble started from the day our money was put at parity. I am one of those who believe that if the industry is to get back on its feet one of these days some consideration must be given to allowing our money to get to the place where it properly belongs, namely, the price that people are willing to pay for it. We can also receive help by an increase in the depletion allowance and by decreasing costs. I think the majority of us who are in the business today are hopeful that costs will come down, but they will not do so in the immediate future. If the mining industry is to survive, costs must be brought down or we must get an increase in the price we receive for our gold production. We know' that the Canadian government alone cannot bring about an increase in the price of gold. We saw what happened even at a time when they wished to pay $7 an ounce; there was interference by Washington.
The minister has had many interviews with people interested in the industry, and he has some idea of what is at the back of their minds in respect to this bill. There are one or two sections in it to which they have asked that some further consideration be given. One of them is in respect to the commencement date, which is to be from December 1. The industry thinks that date should start from January 1, because of the fact that for the majority of the mines their fiscal year closes on December 31.
With regard to another section of the bill, I should like to read a resolution that was passed at a meeting of gold producers, at which were represented the companies which produce 86 per cent of the gold in Canada. The resolution, which dealt with section 3, subsection (b), read as follows:
Therefore be it resolved that immediate representation be made to the dominion government that clause 3 (b) of the said Bill 7, together with any other clauses having similar application, be amended to provide for the application of subclause (a)


James Horace King: Order. May I suggest to the hon. member that if he wishes to deal with the sections of the bill, he can do so when we are in committee.


Alan Cockeram: I will do as you request, Mr. Speaker. The minister has some knowledge of the section to which I refer. In view of the fact that the mining companies as a whole have always passed on to the men working for them the bonus that is now before the house, it seems to me that the help which this bill was intended to give, in order to

produce a greater amount of gold, has been pretty well shot. When we are dealing with the sections of the bill I will have something further to say on the matter.
One question which is causing a great deal of concern is the matter of the regulations under this bill. As is well known to the minister and the officials of the Department of Mines and Resources, during the war and subsequent thereto the mines have had to forgo the extensive development which ordinarily they would have carried on. Before the United States came into the war the mines produced double their normal production of gold for the benefit of the country, and their development suffered because they were unable to carry it on. Since the end of the war the mines had hoped that they would be able to catch up on development, but it will be a long time before the mines catch up with the development that was allowed to stand during the war.
In connection with the regulations, I suggest to the minister that he consider discussing this matter with some of the operating mines to make sure that the regulations which are brought into effect will not be too arduous. We are glad to see that the government has at last come around to the point of realizing that the industry must be supported, because for every one man operating in the mine, as has been said before in this house, ten people outside are dependent on him.
I do not propose to say anything else at this time, Mr. Speaker, but when the bill reaches the committee stage I shall have something further to say.


Major James William Coldwell: This is a most interesting proposal, Mr. Speaker, made by the government with respect to an industry in Canada. The hon. member who has just taken his seat (Mr. Cockeram) seemed to say at the outset of his remarks that while this bill might help the gold mining industry, it was really not as useful as he expected it might be. Yesterday we had a very interesting discussion on freight rates and how they affect the economy of our country. Today we are discussing the subsidizing of an industry which, were it not for the strange circumstances in which the world finds itself, could not be justified by any stretch of the imagination. However, I suppose the need for foreign exchange and the value of new gold in obtaining that foreign exchange is the plea advanced for the development and expansion of this industry. It is a strange reflection on human society, I think, that we should have a large number of efficient and valuable men engaged in extracting from mother earth a mineral which, as soon as it is taken from one hole, is

Gold Mining
placed in another, apparently to remain there. I saw in a newspaper a day or so ago a statement that the accumulation of gold in the United States, I suppose mainly at Fort Knox, now amounts to something like $22,000 million.


Douglas Charles Abbott: It is $22-7 billion.


Major James William Coldwell: Apparently the United States is anxious to get gold, and as long as it is prepared to pay $35 an ounce it provides us with some needed foreign exchange. Having said that, however, I think this can be justified only if we accept certain considerations which should be fundamental to the granting of any subsidy of this kind, namely that the subsidy should not be used for the profit of the owners of the mines but should be granted only if we have not merely an understanding but a definite undertaking that the men engaged in the mining industry are paid decent and sufficient wages and work and live under decent and proper conditions. Those, I think, should be fundamental considerations in anything we do, because after all, in spite of what my hon. friend says, we are doing something very material for this industry.
May I say to the minister I have been told that when the representatives of the unions discussed this matter on one occasion with one of the ministers, I believe the Minister of Trade and Commerce (Mr. Howe), he was willing to accept the suggestion that some sixty per cent of the grants made by the government under a measure such as this should be used for the improvement of conditions of labour and of health, and the rates of pay of the men engaged in the industry. I say I have been told that; perhaps when the minister speaks a little later he will say whether or not that information is correct. In any case if this house is going to bonus this industry we should see to it that those who actually produce the wealth-the men who go into the bowels of the earth and risk their health, and indeed in some instances their lives, in the mining of gold-are adequately protected and adequately remunerated. I know conditions are very much better now than they were a few years ago, at least in the Ontario mines. I am not sure about the mines in some of the other provinces, for example the province of Quebec, where recently we have read of the reappearance of the scourge of silicosis. In any event, whatever we do in matters of this kind should be done with the distinct understanding, and, as I said, on the distinct undertaking, that a proper proportion of whatever aid is given shall be used for the improvement of conditions among those who risk life and limb and health in the mining of gold.


Arthur Leroy Smith: How would you work that out? I am interested.


Major James William Coldwell: Some of my friends on the Progressive Conservative side laugh when that question is asked.


Arthur Leroy Smith: I did not laugh. I asked the question in all seriousness.


Major James William Coldwell: No, you did not laugh, but I saw the hon. member for Rosedale (Mr. Jackman) laugh.


Mr. JACKMAN:: On a question of privilege, Mr. Speaker, I resent these imputations.


Major James William Coldwell: Then don't laugh.


Harry Rutherford Jackman: I will laugh if I want to. I am not laughing at you, particularly. I understand the hon. member for Rosetown-Biggar (Mr. Coldwell) very well, and I have no objection to engaging in parliamentary debate with him at any time at all. But for the hon. member to make such insinuating assertions is entirely out of order, and as a member of this house, Mr. Speaker, I ask you to protect me from any such imputations. I, together with my colleague, am interested in learning exactly how my hon. friend would work out this particular proposal, and I am listening intently to what he is saying.


Major James William Coldwell: I do not profess to have expert knowledge of everything involved in matters that come before this house. I do believe, however, as I think every intelligent individual should believe, that to every problem there is a solution. At the moment I would not be prepared to place an ill-considered proposal before this house in connection with a matter of this kind. I have considered this question, however, and I believe that in drawing up the legislation or the regulations under the legislation it should be possible to achieve the objective I have in mind. I have sufficient confidence in the members of the legal staff of the House of Commons and the advisers to the government to say that in my opinion the problem is not insuperable, but that it can be solved if the minds of these gentlemen are directed to its solution. So I repeat, Mr. Speaker, that this should be a fundamental consideration in the giving of any aid to the mining industry.
Now I want to look for a moment at the statement made by the minister on December 19 last. I know I must not quote from a previous debate, as the minister reminded me yesterday. '


Douglas Charles Abbott: That was during the resolution stage of the same debate.


Major James William Coldwell: I was going to say that the statement I wish to quote was made by
Gold Mining

the minister during the resolution stage of this debate, so I do not think I shall violate the rules in referring to it. We are told that the first step in the calculation is to take half the amount by which a mine's cost of producing an ounce of gold in the year of payment exceeds $18 per ounce. I take it that if the cost of producing an ounce of gold is $28 the increase would be $10, and it would be half of that, under the conditions which follow, that would be the amount involved, in other words $5.


Douglas Charles Abbott: That is so.


Mr. COLD  WELL@: Then the minister went on, at .page 532 of Hansard-.
Having obtained this basic rate of assistance in the ease of the particular mine, it is applied to the amount by which production in the current year exceeds two-thirds of production in the base year, which is the twelve months' period ending June 30, 1947.
That is to say, one-third of the production in the succeeding year is then the amount by which the base year is exceeded?


Douglas Charles Abbott: If the production in the succeeding year were exactly the same as in the base year.


Mr. COLD  WELL@: Then you take one-half 'of that third and reach the figure required for the calculation; is that right?


Douglas Charles Abbott: The $5 my hon. friend gave a moment ago would be one multiplier, and if production were exactly the same, one-third of that production would be the other.


Major James William Coldwell: Then the minister went on:
In the case of new mines, the payment as described above will be paid on the entire production in the first year, and in the two succeeding years on the amount by which current production exceeds two-thirds of the first year's production.
I wanted to look particularly at the very wide interpretation given the expression "cost of production". The minister had this to say:
In the new bill, "cost of production" of gold from a mine during any period is defined as "the costs incurred by the operator of the mine in, and properly attributable to, the production of gold produced from the mine during that period, and includes-
The inclusions are indeed inclusive.
mining, milling, smelting, refining, transportation and administrative costs so incurred and so attributable, and includes such amounts in respect of depreciation, amortization of production of expenses, and costs of exploration and development in the mine as may be determined in accordance with the regulations, but does not include any amount in respect of depletion or off-property exploration and development, or, subject to the regulations, any amount not allow-
IMr. Coldwell.]
able as an expense or deduction in determining income from the mine for the purposes of the Income War Tax Act.
I think hon. members will agree that in this bill the cost of production is given a very wide interpretation. I should like the minister to correct me if I am wrong, but it seems to me that one of the dangers in these calculations is that instead of achieving what the government wants to achieve, that is, an increase in the production of gold, undue attention may be given by a mining corporation to development work in anticipation of future production and future profits.


Douglas Charles Abbott: It would have to be in the mine.


Major James William Coldwell: It has to be in the mine.


Douglas Charles Abbott: No off-property exploration.


Major James William Coldwell: That is what I understood. Does the minister think that this measure safeguards the country sufficiently against underground operations which would not produce the immediate results that are desirable but which might be undertaken in anticipation of a future rise in the price of gold, and therefore the country would be paying for development and expansion work upon which a corporation at some later date might reap $40 or $50 per ounce for gold instead of the $35 per ounce we now have?


Douglas Charles Abbott: Yes. I do not think the incentive would be great enough to do that.


Major James William Coldwell: I am glad to have the minister's assurance on that, because it was a point that was bothering me to some extent.


Arthur Leroy Smith: What did the minister say?


Major James William Coldwell: He said that the work must be done in the mine, and that what I have suggested could not be done because it would not fall within the definition which I read a few moments ago.


Douglas Charles Abbott: I went further and said that I did not think the incentive would be great enough to justify doing exploration work and adding costs.


Major James William Coldwell: That is a little different. The minister says he does not think the incentive would be great enough, but I take it that the possibility is there, even if the incentive may not be there.


Arthur Leroy Smith: Do you mind if I ask a question? Surely in all mining operations you must lay out development ahead of you; you are not objecting to that?


Major James William Coldwell: No. I am not suggesting that.

Gold Mining
Mr. SMITH (Calgary West)': What you are referring to is their going off some other place and starting to exploit it?


Douglas Charles Abbott: That is prohibited.


James Horace King: May I call the attention of the house to the fact that the debate is on the motion for second reading and an hon. member is permitted to speak only once. If an hon. member wishes to discuss the details of the bill or to get information with regard to the bill I suggest that he wait until we are in committee.


Arthur Leroy Smith: I interrupted to ask a question. I was simply seeking information and I am not inclined to like being spanked. My intentions were good.


Major James William Coldwell: I will take the responsibility, because I gave the hon. gentleman permission to ask a question when I sat down. I realize that we are both violating the rules.


Douglas Charles Abbott: I was at fault too.


Major James William Coldwell: Your Honour was quite right to call it to our attention. Now we have that point cleared up. There may be pressure-and I do not mean just pressure from interests; I mean pressure because of need for foreign exchange-to do something of this sort. But to my mind it is a strange thing that governments can provide legislation, can provide bonuses, can provide subsidies for powerful mining interests, and yet cannot pay the same kind of subsidies when it comes to providing milk for the children of Canada. That is the thing that puzzles me about legislation such as this.
I think this bill should be gone into most carefully in committee. I suggest to the minister that some of the wealthy and remunerative mines which do not require this may receive benefits under the bill which are not warranted at the present time. I am certainly of the opinion that legislation such as this is less important than the social legislation which this house repealed during the last number of months in the form of subsidies, the maintenance of price ceilings, and so on.
It is a rather strange phenomenon that my hon. friends of the Progressive Conservative party who have been so insistent upon the removal of subsidies, price ceilings -and so on should in such large numbers support subsidies for one industry in the country, namely, the mining industry. I say that is paradoxical, but it indicates that where your treasure is, there will your heart be also. I do not want to say anything more, but I do think that this bill should be considered carefully in committee.
Mr. SOLON E. LOW (Peace River): Mr. Speaker, like the hon. member for Rosetown-Biggar (Mr. Coldwell) I consider this bill a rather strange phenomenon. The government maintain tariff subsidies of many kinds and yet they declare their opposition to subsidies. They maintain home market subsidies that are paid for by the farmers so that all the people of Canada may have cheaper bread, and yet they oppose subsidies on selected products as the means of bringing down the cost of living. The government refuse point blank to use subsidies in peacetime to stimulate the increase in production of such vitally essential products as milk, which was referred to by the hon. member for Rosetown-Biggar, but now they bring in a bill to authorize the payment of subsidies for the purpose of stimulating the production of gold which nobody can eat, which nobody can wear, and which nobody can burn to keep himself warm. One is led to exclaim: Consistency, thou art a jewel.
If we on this side of the house were as inconsistent as the government we would strenuously oppose the passage of this bill. But we know that we live in a world of grim realities. We are facing serious problems and we know that we must do everything we can to make ourselves strong under the present system in order to be able to solve those problems. Evidently we will not be able to change the system as long as we have people on the other side who think as they do.
As long as there are countries which will buy our gold at a good price and pay us with valuable goods and services such as coal and oil and cotton, then it seems to me that Canada should produce all that Canada can produce in exchange for these commodities, and every means of inducing greater gold production should be thoroughly investigated. I am not suggesting that every means be used, but surely every means of inducing a higher production of gold in this country should be investigated and those means used which will be effective. I am of the opinion that an upward adjustment of price would be a better way of securing higher production, but Canada might find great opposition to using this means, particularly in view of certain statements that have been made in the United States.
We favour the proposed subsidy, but, Mr. Speaker, we protest in the strongest possible way against the government's unwillingness to apply exactly the same principle to other products which are much more essential for the ordinary citizen and his comfort. Sugar, I suggest, is one of those essentials. Why the Minister of Finance will subsidize gold production so as to obtain more United States dollars, and at the same time refuse to subsidize sugar
Gold Mining

beet production so as to save $28,000,000 of United States dollars every year, or dollars that we have to obtain in some manner, is more than I can understand.


Mr. BLACKMORE:: More than he can understand, too.


Mr. LOW:: Surely United States dollars saved are just as good as United States dollars earned, and I maintain that if we save them by making ourselves self-sufficient in a product like sugar, that is even better because in doing so we are at the same time taking care of our own people in several different ways. And so with many other products. I think the minister and the government should get down off their high horse and admit that one of the best ways we know of to stimulate all-out production of many essentials of Canadian living is the wise and careful use of selective subsidies. We are in accord with the use of subsidies, and we shall vote for the second reading of this bill. We do submit, however, that in committee we should examine carefully the details of the various clauses of the bill and scrutinize every item to see whether or not it is justified.


Clarence Gillis: Mr. Speaker, I shall not detain the house very long. I think the hon. member for Rosetown-Biggar (Mr. Coldwell) has done an excellent job, but I could not let this opportunity pass without reminding the Minister of Finance that not so long ago when we were, arguing in this house for a subsidy of about $5,000,000 which would have staved off a general strike in the coal mines of Nova Scotia, the Minister of Finance and the Minister of Trade and Commerce were adamant in their stand that no more subsidies were to be granted. The Minister of Justice also declared himself in no uncertain terms as absolutely opposed to the system of subsidies for any purpose.
It is rather strange that the Minister of Finance is not arguing his case very strongly today. I have read carefully the statement he made which was referred to by the hon. member for Rosetown-Biggar, and it sounds to me like a statement which the Prime Minister (Mr. Mackenzie King) drew up, because it is so ambiguous and subject to so many interpretations.
I am not objecting to this subsidy, because, as the member for Rosetown-Biggar has pointed out, while the rules of the game remain as they are, while you still maintain this old machine of free enterprise and try to hang on to the economics of capitalism, this is the way the thing has to be done.
	I S!,'
So long as the dollar remains predominant in our social order, you have to juggle with gold, dig it out of one hole and bury it in another, in order to keep that elusive dollar and maintain this old economy as long as it is possible to maintain it under present circumstances.
In reading over the minister's speech I notice that he has covered practically every item of expense of the operators, but let me warn him that he had better be careful whom he gets to administer the regulations and make sure they know something about mining and about cost accounting and about the loopholes there are in this legislation which will allow' the mining industry to take the government for a ride on this subsidy arrangement. Let the government check back carefully on its experience with Dosco during the w7ar, when like a babe in the woods they got into a subsidy arrangement and were taken for a ride on many occasions until they smartened up.
If I were the Minister of Finance and were making this kind of arrangement I would recommend to the cabinet that we might as well take the industry over because we are going to pay the shot anyway. There are many mining terms in the minister's speech, and I notice that the base period ends on June 30, 1947. I would ask the minister when he speaks to tell us if it is his intention to make this legislation retroactive to that base period. The reason I would like that assurance is that the miners' union in the gold industry has been endeavouring unsuccessfully for nearly two years to get a trade union agreement with the operators. They did1 have one but it ran out and they have not so far been successful in renewing it, and the miners do not know where they get off in the future as to wage rates.
Secondly, while every item of expense of the operators has been carefully considered in this arrangement, including the recent 21 per cent increase in freight rates, no consideration has been given to the welfare of the miners. Yet I do not suppose in the whole of Canada there is a section of any industry where the hazards are greater than in the gold and nickel mines in northern Ontario. Go through that part of the country and you will find hundreds of men in the forty-year age group who are suffering from silicosis. Once their disease is diagnosed as silicosis they are set to work on the surface. There is no pension arrangement for a man when he is retired from the industry, and there are practically no welfare benefits that accrue to him. I remember back in 1941 reading into the records of this house the will of a man in the mining industry who was suffering from

Gold Mining
silicosis but he could never prove it to the satisfaction of the compensation board, so he willed his body to his friend to be dissected in order to prove that he had died from that particular disability and secure compensation for his widow and children. This is a sad commentary both on the mining industry and on the government of Ontario, which has jurisdiction in this matter.


Humphrey Mitchell: To be fair, I should state that the Ontario government was the first one to provide workmen's compensation against silicosis.


Clarence Gillis: They may have given them protection before, but there still is no adequate protection. It is written into the act that silicosis is a compensatory disease, yes; but there is no adequate machinery provided today by the compensation board of this province which can definitely diagnose that disability in its early stages. They can say that he has a chgst condition. Whether it is silicosis or not is decided only after a definite fight takes place to prove it. Do not forget that once a man is put on the surface because of a diagnosis showing that he has a chest condition, the final stage of silicosis is tuberculosis, and when the man finally passes away he has no compensation rights. You will find hundreds of men in the forty year age group in that northern country, victims of dust and so forth, relegated to the street without any means of protection, after the company is through with them and has taken whatever profits it can get out of their hides. If the minister had written into this particular subsidy-it should not be a one-way street; it should work both ways-protection for the miners who dig the gold, take the risks and sacrifice their health, it would partly meet our demands. If the minister had recommended that at least a portion of this subsidy should be used for the purpose of setting up adequate machinery for the diagnosis of silicosis, it would meet with our approval. That is one thing that should be done.
In the next place a pension plan of some kind on a three-way basis should be set up. It should be a contributory plan by the industry, the government and the men themselves against retirement or enforced retirement because of disability incurred underground. If the minister wrote these two things into the legislation he would at least be considering the large body of men who make it possible for us to have a mining industry in this country. The fellow who clips the coupons does not dig any gold; the fellow in the United States who makes the investment in
Canadian industry is not digging any gold.
It is the fellow who gets up at four o'clock in the morning, or the one who goes down on the graveyard shift, who digs the gold and makes it possible for us to have that metal at the present time in order to get United States dollars. I could say a whole lot about this arrangement-


Arthur Leroy Smith: Are they working three shifts?


Clarence Gillis: Yes. Let me read this to the minister. It consists of only two or three lines:
Production expenses, and cost of exploration and development in the mine as may be determined in accordance with the regulations, but does not include any amount in respect of depletion or off-property exploration-
I would judge from that that exploration underground is not included. There is no such thing as underground exploration; it is a matter of developing ahead. Your shaft is sunk; your engineering plans are laid out, as indicated by the hon. member for Calgary West. You know where you are going. You know where the vein is going; in accordance with your engineering plans you develop that mine. I would judge that development which is the ordinary everyday business of the company is to be subsidized by the government, but any exploration of new properties that are off the mining property proper are not to be taken care of at all. If I were making the regulations I wrnuld say that it should be the reverse; that if the company has a mine sunk it knows where it is going; it has set its investment up for that purpose. The development of that particular mine is their business and it is good business for them to get as high production as possible out of that particular mine. But to find new gold and develop new properties is where the subsidy should be applied.
I am not going to argue any more. Before this legislation is finalized I would suggest that the minister give consideration to two points. Number one is this: if this industry is to be subsidized in order to get increased production, they should get their men together, sit down with them and settle the wage question and sign an agreement. Point number two is that consideration should be given by the department to the matter of setting up a general welfare plan in the community for the purpose of building up the morale of the workers in their homes and raising their standards, and recognizing them as human beings. If you are going to spend the taxpayers' money to get production, the man
2680
Gold Mining

who really goes down in the mine and digs the coal is the man who should get first consideration.


Mr. W. GARFIELD CASE (Grey North):: I have listened to the leaders of the C.C.F. and the Social Credit party in their arguments that subsidies are being paid for gold but no subsidies for foodstuffs. I think we are overlooking this one fact. This industry is nationalized. I doubt whether the gold mines themselves would be interested in a subsidy for their product if they had a free market for their gold; but when you nationalize an industry and determine that there is only one source through which the product can be marketed, and the price is set by the purchaser, then I feel that the subsidy is indeed justified.
I am not greatly impressed by the criticism which is offered with respect to the position taken by the Progressive Conservative party in relation to the subsidy on gold. May I remind you, Mr. Speaker, that gold has been accepted as a standard of value since the days of the Egyptians; and all down through the ages the countries which had the gold were the leaders in commerce and in industry. It has been accepted as a precious metal, durable and convertible into the things which we need. Canada has been particularly blessed. We have vast resources of this very precious metal. Unfortunately some of our mines are what is referred to as sub-marginal. That gold in the rock is of very little value to mankind unless it can be mined or taken from the rock. It does seem unusual-yet it is true-that we should exhaust our energies and devote our time and talent and labour to the development or the mining of ore simply to store it in a vault. But that has been the accepted practice, particularly since gold has been nationalized and is used more or less as a monetary basis, irrespective of the fact that we are not on what we call a gold standard. Nevertheless it has a fixed value.
It is interesting to note that in Soviet Russia they are building up huge gold reserves; just how great, we do not know. But we do know that they have put a value upon gold possibly greater than any other commodity which they are able to use, inasmuch as they do know that the gold is exchangeable for all the other products which we desire. As a matter of fact I suppose if one were to delve into history he would find that we would never have had the so-called monetary system or the system of bank notes had it not been for gold.
Historians will tell you that in the early days when people carried their gold with them in little cubes, exchanges were made by barter and trade, and the difference was adjusted

by paring or slicing off a piece of gold from one man's gold nugget and tamping it on to the other until the better traders presently found themselves with a volume of gold which was very difficult to carry about with them. Gold is a very heavy metal. I believe a fourteen-inch cube of gold weighs in the neighbourhood of one ton. So the next thing was to find a place to store the gold, and the logical place was with the goldsmith, the man who was making gold into beautiful ornaments, gold cloth and other materials which were in demand in those early days. By and by there came a time when a man had a certain amount of gold stored and it was generally understood that he had this gold, so that instead of adjusting his balance by paring off from his gold block and handing that to the other fellow, he simply issued an order on the goldsmith. As long as that order he had issued over his signature was accepted as genuine, the scrip, so to speak, was used just as we use our dollar bills or bank notes today, and it rvas passed on from one person to another and so made the free medium of exchange. That continued so long as there was confidence that the gold was there. That w'as the beginning of our monetary system.
Whether our monetary system has been good or bad, it has served a useful purpose all through the ages, and I for one have only one criticism to offer. I will go along with the hon. member for Cape Breton South (Mr. Gillis), that there should be set up certain parts of the bonus for the benefit of the miners who dig the ore, provided the bonus is offered straight across the board.
I cannot understand why we should undertake a measure of this kind, which appears so complicated on the face of it. Someone in days gone by used the term "too little and too late". It could be said that this measure is too confusing and too difficult of administration. It will lead to another great army of employees -I was going to use the word "bureaucrats", but that is being overplayed. At any rate it will lead to the employment of officials who must go from place to place, check with the mines, determine their production for the basic period and determine the bonus to which they are entitled.
I believe the minister was on the right track in his first approach to the problem. Just what Washington had to do with it, what right they had to interfere, is difficult for me to understand. I believe it was understood that we were setting up a free market for gold, or a market for gold in which we were paying more for gold than the United States. It was not clearly understood that our bonus was for native-mined gold whereby we could

Gold Mining
stimulate the production and discovery of gold mines and the extraction of the precious metal from the rock. Had that been made clear it could have been accepted as a sound practice, inasmuch as it was an admission at the time, irrespective of the position the government took on the question of the parity of our dollar with that of the United States, that our dollar was not worth the amount of the United States dollar. It should have been understood that we were simply seeking to offset that condition and to encourage the production of a commodity with great quantities of which we have been blessed.
As a matter of fact, Canada should be in the first rank of the world's gold producers. It is true that we stand well up in comparison with other countries, but I would urge, and urge constantly, that every effort be made to give an incentive to those who are willing to go into the hinterland on prospecting tours to discover mines, and we should encourage capitalists or investors, in other words the public, to risk their capital in the development of the mines.
Our hon. friends to the left would have you believe that they can designate certain mines which indeed have made a success and are now returning substantial dividends to those who were willing to take a chance and invest their money, which was risk capital. But all you have to do is to pick up a mining handbook and read the names of hundreds upon hundreds of companies who received a degree of public support, raising millions of dollars for the development of gold mines, but were more or less a failure.
I believe it was Mark Twain who said that a mine is a hole in the ground with a large cover at the top. It would appear that in many mines an effort was made to secure risk capital and to develop these ventures, but they had little chance from the beginning. And yet that old incentive, that desire to discover some shortcut to fortune, is inherent in everyone who is at all human. We all like to feel that we have an opportunity to enrich ourselves without expending too much energy or too much labour in the accomplishment. The hon. member for Cape Breton South said that plans are made for the development of these mines and that they know where they are going. I doubt if that can be accepted as a fact, because, after all, all the veins are not visible on the surface of the rock. As the shaft is deepened and the tunnels made, crosscuts are made to discover other veins which might be below the surface. Diamond drills, of course, have made a tremendous contribu-5849-171-i
tion to the task and to the advantages which we have not heretofore enjoyed in the discovery of mines.
I say to the minister that we should not pick and choose. Whatever we are going to do for the gold mining industry should be done across the board. If we are prepared to pay $40 an ounce for native-mined gold we should not allow pressure from any source to prevent us from developing our own rich resources which we possess as a gift from God. We should encourage our people to take the chance to develop something which is accepted today as the standard of value and which will secure the very things we need most. In other words, so long as we have a good reserve of gold we need not worry a great deal about our position in relation to the United States dollar.
If we are to produce gold, and it is there to be produced, if we can store it against our foreign trade balances, and if we can seek to develop trade with those who are willing to trade with us, I am sure the situation in relation to the United States will in time adjust itself.
As a closing thought I again remind the house that we are confused in any criticism we offer with respect to the bonusing of gold if we overlook the fact that in 1932 the late President Roosevelt on becoming President of the United States nationalized gold, and since that time the gold clause has been removed from their bonds and from their currency. No longer do they promise to pay in gold. Since that time gold has had a fixed value but has had only one definite fixed market, one purchaser, and that is the national purchaser.
Because of that restriction, I say that the subsidy is justified. Otherwise, if we are not prepared to pay it and we wish to put gold in the same position as the commodities to which my hon. friends have referred, then let us remove the restrictions, let the gold miners dispose of their product as they will, and they will not seek the subsidy, because gold is in great demand today. It is one of the most durable metals in the world. We should give every incentive to those who are willing to take a chance to develop this rich natural resource, and we should either pay the subsidy straight across the board or forget all about it and let the gold miners market their product where they wish to.


Mr. E. G. HANSELL (Macleod):: I feel, Mr. Speaker, that I must say something with respect to this Bill No. 7, which is virtually to subsidize the production of gold. As the leader of this 'party has already said, conditions are as they are; and we must deal with circumstances as they are, not with circumstances as we
Gold Mining

should like them to be. The fact of the matter remains that, through government policy, we have been driven to a place where we are short of some other nation's dollars and that, in order to build up our United States credits, it is found necessary to endeavour to export gold to that country. It seems a little bit difficult to oppose a measure which would aid in exporting one ounce of gold in return for $35 or $37 worth of goods. But I am wondering if there is not a principle involved, namely, that if we resort to the export of gold in order that we may import real wealth, we may not find ourselves in a position at some future time where we shall be asked to accept imports of gold in payment for the export of our real wealth.
I cannot help feeling that there is a vital principle involved in this bill; that there is not merely the fact that the government desires to subsidize the production of gold in order to get a higher production, but that there is the principle whereby this country is forced to bow down and pay obeisance to the golden gods of mammon. That to my mind is a most important principle.
The leader of this group has protested the fact that, while it may appear to be necessary to subsidize the production of gold, evidently it has not appeared necessary for the government to subsidize the more important industries. During the Easter recess, on my visit to my constituency, many people, particularly farmers, came to me almost unanimously sounding one note, namely that through the present financial policy of the government their production, production from the land, was actually being sabotaged; that the farmers were being driven into a position where it would not pay them to produce the abundance of foodstuffs which this and other countries need. I believe the dangerous principle underlying this bill is that we are to subsidize the production of what I term a fictitious metal, while at the same time we sabotage the production of real wealth in this countiy. That, I say again, is an extremely important principle.
Let us remember that the land of a country is the life-blood of that nation. A nation cannot exist unless it eats, and the only place from which we get food is the land, through agriculture. A nation cannot live except it be clothed, and the only place from which we get our clothing is the land. The Minister of Finance (Mr. Abbott)1 may be wearing a suit that is all wool and a yard wide. If so, some poor sheep had to give its fleece before he could get that suit of clothes; and

that sheep could not exist except it grazed on the land. Yet during the war we paid farmers to stop producing! Perhaps the Minister of Finance is wearing a nice pair of shoes.


Douglas Charles Abbott: An old pair.


Ernest George Hansell: Let him remember that some poor cow had to die before he could get those shoes; and no cow ever lived without grazing on the green grass of the field. The Minister of Finance may be wearing a cotton shirt. Some cotton plant had to yield its bloom; and no cotton plant ever existed except it gained nutriment from the ground. I have mentioned food and clothing and I can also mention shelter. I do not know what kind of house the Minister of Finance lives in, but if it is a frame house the material had to come from the forest, and the trees were sustained by the ground. If the minister lives in a brick house it is just the same.


Stanley Howard Knowles: He probably lives in a
glass house.


Ernest George Hansell: Well, it would appear that he does.


An hon. MEMBER:: Even the minerals for that come from the ground.


Ernest George Hansell: Yes; as my hon. friend says, even they come from the ground.
What I am trying to say, Mr. Speaker, is that the very lifeblood of the nation comes from the industry of agriculture; yet we can subsidize a fictitious metal that nobody eats, nobody wears and nobody builds houses with, while we permit the very lifeblood of the country to be sabotaged.


Arthur Leroy Smith: It is used for paving in heaven, you know; that is what the song says.


Ernest George Hansell: Yes, but the fact of the matter is that we are not in heaven yet; we are still on the ground. Even though the Minister of Finance may have his head in the clouds, our feet are still on the ground. I claim that bowing down to a system which requires a fictitious metal to keep it going, while at the same time we penalize the production of real wealth, is a crime against civilization and a sin against the Creator who makes the earth green, who sends the rain and the sunshine in their season to produce for us that by which the people live. That is the principle; and there is no question but that today the farmer is being penalized for producing.
I do not want to get off on another subject, but I know that right now the farmers are making out their income tax forms. Our

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present policy of taxation penalizes the production of real wealth. The more a man produces, the more he should be paid, but that is not the way it operates. Our present bungling financial policy means that the more a farmer produces, the more he has taken from him. It is the same with the coal miner. He works so many days producing the coal that keeps industry going and warms our homes; but he is penalized if he puts in overtime, so he does not work even full time. That system is wrong.
Let us put first things first. If I remember correctly-and I am trusting to my recollection of Napoleonic history-I believe it was Napoleon who once said the most important thing in civilization was agriculture, and it should be put first; the second most important thing was manufacturing, while the third and least important was financial policy. I believe Napoleon was right in that diagnosis, but somehow or another present governments have reversed that order.
The first thing, which is all important, is financial policy. Next are manufacturing and the secondary industries, while the third and last of the three in importance is agriculture. That is wrong, and the present policy in Canada is wrong. I say to you, Mr. Speaker, that if we subsidize the production of a fictitious metal and at the same time penalize the production of real wealth, that is a sin; and I say to the present Minister of Finance and his colleagues, be sure your sin will find you out. It is beginning to find us out now. A few years ago we had the Bretton Woods agreement up for consideration. We in this corner argued that this agreement virtually put us back upon the gold standard. Well, what has happened? That agreement is partly responsible for the present austerity program. Be sure your sins will find you out; and whatsoever a man soweth that shall he also reap. That is a divine law which no one can repudiate or get around. If we sow the seeds of idol worship of the golden gods of mammon, then in due season we shall reap that which we deserve.
Let us make sure we give our agricultural industry all possible encouragement to produce everything it can. The hon. member for Grey North (Mr. Case) spoke of the advisability of producing this gold and putting it in a storehouse. I am not going to argue particularly against that, but let me say this. A few years ago we spoke of the production of foodstuffs in this country, and we in this corner-I would refer especially to the hon. member for Lethbridge (Mr. Blaclcmore), who made a passionate plea-asked for the production and storage of vast quantities of foodstuffs against the coming of a possible evil day. Did we do that?
We did not. We paid our farmers to stop producing. That principle is wrong.
So I say, Mr. Speaker, that we have to get right back to the real, fundamental principles. The greatest wealth of this country is in its actual production of the means of life. Instead of penalizing and discouraging that, we should encourage it all we can by the payment of subsidies, if possible, and by the removal of this terrible system of taxation. We should put first things first and see that things are kept in their proper place. That is my plea today. It may seem strange that, after a speech such as I have delivered, we should say we will support the bill. We are only doing that by reason of the fact that the government, through its bungling financial policy, has driven this country into such a position that, at least for the time being, we may be able to offset part of our foreign debts, shall I say, by this simple method. It will help for the time being. I say once again that if the government are absolutely bent on driving this country back to a fictitious monetary standard such as gold, some day we shall reap the reward of our evil ways.


Mr. DANIEL McIVOR (Fort William):: Mr. Speaker, I do not think it is possible for anyone who lives in the Thunder Bay district or in northern Ontario not to be interested in gold mining. I have the finest regard for the gold mining experts in our country. During the depression many of our young men could get only So a month in the relief camps, but a great number of young married men were employed by the gold mining industry in our district.
If this bill will do anything to steady that industry, it will be a good thing. It is not altogether true that you dig gold out of one hole and put it in another. That is a fine statement, but in order for a statement to carry weight it must be true. The other day I assisted a young man to place a ring upon the left finger of his intended when they cemented their friendship for life. I think that is a good use for gold. The jewelry business is the backbone of our gold industry. As I say, if this bill does nothing more than steady the industry that we know a little about I think we should support it absolutely.
I should like to offer a suggestion to the minister and I know he is big enough to take a suggestion from a small individual. The prospectors who do the hard work get very little for it as compared with the mining magnates. These prospectors should have some encouragement. I suggest that when they make a find and report it to the department of mines or to the Minister of Finance (Mr. Abbott) and
Gold Mining

experts are sent in, if it is found to be all right after drilling, after the mine is opened up, then the mining industry or those interested should pay back to the government what it costs. That is not a subsidy, is it? I think this bill will do a little bit. As the Scotch say to us, many a mickle makes a muckle.
Mr. HARRY R. JACKMAN (Rosedale): Mr. Speaker, several hon. members have spoken on the possibility of improving the lot of the miner. That is a suggestion which I think will find ready acceptance in all parts of this house. As we know, the miner's lot is not an easy one, but on the other hand I know that in the gold mines which I have visited it seemed to be an interesting occupation and the miners underground seemed to take just as much interest in it as the geologists and engineers above ground. May I point out that in order to provide better conditions it is necessary to make the industry healthy and this bill will provide some little help to a large part of the mining industry.
We find the highest industrial standards in the United States and Canada because those countries are the most prosperous industrially and commercially. Where you have prosperity, in due course you have a higher standard of working conditions and living. I was glad to hear not long ago hon. members of the C.C.F. party say that they knew of no country in which they would rather live than in our own Canada.
While it is true that a good many of us in this house are against subsidies in principle, nevertheless there are times when in order to keep an industry alive a subsidy or some assistance such as is given under this bill is necessary. May I point out that the gold mining industry is somewhat different from any other industry in this country in that it is to a large extent, if not 100 per cent, an export industry. For reasons which I shall give later, that is a matter of some importance.
I should like to know from the minister in charge of this bill the government's long-term policy with regard to gold mining in this country. To use the vernacular, the measure before the house is nothing more than a shot in the arm. It will perhaps keep the industry going for a while; but with rising costs occurring almost daily, whether it be in the field of materials or in the field of labour, this small measure of assistance may be quickly lost to the mines and they will be in the same position and in the same plight as they were before the government gave consideration to providing some aid. It would be interesting to know just why the government is giving this aid of which we are all so much in favour. Does the

government intend to adopt a further policy if necessary, or what is the real policy of the government in regard to the gold mining industry?
Gold production in Canada in 1939 amounted to $184,000,000, and in 1941 it had increased to $205,000,000. This was quite a substantial boost, and it was at a time when those in charge of the gold mining industry were doing everything they could to carry out the government's request and make as great a contribution as possible to the war effort by producing as much gold or as much foreign exchange as possible. They produced gold even to the extent of taking high-grade ore which would ordinarily have been used over a period of years and forgoing certain development work which they would ordinarily have undertaken and which would have used manpower which was otherwise used in direct production.
By 1946 we find that gold production had fallen from the $205,000,000 peak during the war to $104,000,000. Production was just about cut in half. When the final figures are available for 1947 I think it will be found that production has been cut in two, to say the least. This may be partly due to government action.
For the benefit of those who may be interested, may I say that during the war I was not a strenuous advocate of increased production of gold because we needed manpower in other fields so urgently. Yet our gold did provide a means of purchasing war materials, in particular from the United States. After the United States joined us, I was not one of those who encouraged production. I merely want to belie any feeling anyone might conceivably have that I am primarily interested in gold stocks per se; I am interested in the welfare of Canada as a whole.
I should like to draw the attention of the house to the statement made by the Minister of Finance (Mr. Abbott) during the debate on the excise tax bill when he was refuting any suggestion from- this side of the house that we might have been better off had the government not followed its policy of July 5, 1946, of up-valuating our dollar to a parity with that of the United States dollar. Referring to that time, I find that the minister said on January 30 of this year, as reported at page 735 of Hansard:
In my judgment, inability to export is the only real justification for currency depreciation on the part of any country.
We have in the gold mining industry one of our basic industries; or rather I should1 like to know whether the government considers it a basic industry or even an important industry.

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We have a product there, namely gold, which we cannot sell abroad because our internal costs in the industry are too high. This obviously
is an example which refutes the minister's suggestion that Canada is in a position to sell abroad so far as costs are concerned, for our internal costs in the gold mining industry in this country are so high that we cannot sell gold at the world price, which is apparently the only price that is available.
One of the difficulties in having a reasonable price for gold at the present time or of having a price which gives us a fair return on this precious metal is that rock which would normally be commercial is passed over because the price is too low to make its extraction commercially justifiable.
It is perhaps also worth mentioning that there are many people, if not the great majority, in Canada who would rather see a certain -amount of premium, let us say ten per cent, paid for gold under certain circumstances. They would be quite willing to pay that premium, apart altogether from any action which the government might -take, and thus save themselves from the extraordinary penalty which the Minister of Finance has imposed on the people by putting into force these very unpopular excise taxes of 25 per cent and more. If gold were produced we would have more exchange and we would- not have to suffer the heavy and extraordinarily inconvenient burden and the inequities which the new excise taxes impose upon us at the present time.
One sometimes wonders, Mr. Speaker, when one realizes that Bretton Woods or the international monetary fund has to be consulted at every turn we take, even to help a domestic industry, whether we listened as carefully as we might have done to some of our Social Credit friends who pointed out that we were giving up a substantial part of our sovereignty when we became a member of the international monetary fund. The government's first proposal to give some assistance to the gold mining industry had to be withdrawn, apparently because it could not pass muster with the governors of the international monetary fund, and- the present proposal might have been quite otherwise than it is, for all the house knows, and the government might have been willing to go farther, had not its proposal eventually to go again before the international monetary fund to see whether it was satisfactory to its governors.
In this connection I should like to say a word in favour of the free coinage of gold. I do not know what the opinion of the international monetary fund is in regard to that, although I suspect it is opposed, but there are many people in this country who would like
to be able to purchase gold even at a premium if necessary. This leads me to say a word or two to belie the suggestion that gold is purely a fictitious commodity with no real value. As long as people are willing to pay for gold and to give for it other goods in exchange, as are the United States and every other country in the world, gold has a very real value. There is no use in considering moral values in this particular case any more than there is in any other case. One might just as well point to articles of clothing and food and drink as having no particular value; in fact some might claim that some of these commodities were injurious. Yet we go on producing them. Gold will always have great value as long as people in the world are willing to exchange other things for it. It will have great value I think long after many of the currencies which today are considered of value have passed into the limbo of forgotten things. So I suggest to the government that if they want to do more for the gold mining industry it would be quite possible to allow the free coinage of gold and let people who wish to have it store up gold for a day which they cannot foresee but which perhaps they can envisage when they believe that gold will afford them a protection which perhaps no other commodity or form of security can give. It would also be anti-inflationary if we allowed the free coinage of gold, because gold need not then come into the monetary system as a basis for credit extension.
I do want to emphasize before this bill passes, and on this side I think we shall give support to it, that the government should tell the house exactly what its policy is in regard to the important industry of gold mining in Canada. I do not wish the Minister of Finance to quibble with me and say that the policy of the government is embodied in this little bill before us, because it is a very small measure as he well knows. It is, as I said before, a shot in the arm which perhaps will enable the industry to carry on for a little while, but as he knows there are many indications on the horizon of squalls and tempests in the way of rising costs which might easily upset the industry and set it back further than it was at the time when he first gave consideration to this bill.
My hon. friend the member for York South (Mr. Cockeram) has already pointed out the great value to Canada of the gold mining industry and its affiliated and dependent industries. It is a crucial industry in Canada and it is in a critical position at the present time. Therefore I ask the government to state what its long-term policy is with regard to this vital industry.
Gold Mining

(Translation):


Mr. DAVID GOURD (Chapleau):: Mr. Speaker, having listened to some of the opposition speeches, particularly those from C.C.F. and Social Credit ranks, I note that, according to certain members from the latter group, we have no real need for gold mining companies since there is no need for that metal. These people seem to think that all you have to do to make money is to print bank notes. On the other hand, true to the tenets of socialism, the C.C.F. seem to favour nationalization.
Mr. Speaker, I have never been in favour of subsidies but helping the gold mines is another matter. It must not be forgotten that, while everything has gone up in the last few years, the price of gold and the revenue from gold have come down, due to the rate of American exchange. Gold is now selling for only $35 an ounce, or $38.50 with the exchange. While the price of all other commodities was going up, that of gold has fallen. It only goes to prove how absolutely necessary and urgent it is for the government to help out the mining companies now.
From what experience I have been able to acquire in the constituency of Chapleau, which I have the honour of representing here, as well as in the neighbouring constituency of Pontiac, I feel that the present price of gold, $35, is certainly insufficient. It certainly does not cover more than two-thirds of the operating and administrative expenses. Were it possible to have an international market where we could sell our gold at a higher price, it would be worth while entering it; but since gold is our monetary standard and since we cannot get more than $35 an ounce, I repeat that it is absolutely indispensable that the government help out the gold mining companies, along the lines indicated in Bill 7.
With your permission, Mr. Speaker, I will even suggest to the Minister of Finance (Mr. Abbott) to raise the grant to 50 per cent instead of 334 per cent of the basic production already mentioned in the bill. In other words, the suggested grant on the two thirds surplus should be granted on the increase of half the base year.
Moreover, these companies maintain whole towns with not inconsiderable populations, such as Val d'Or, Malartic, Cadillac, Rouyn and Noranda. Needless to say that such a measure would be most helpful to my constituents, in spite of the fact that most of them are farmers. It must not be forgotten that these companies ensure the livelihood not only of those who work there, but also of all the people in the

surrounding districts, where they buy the produce of the colonists and farmers.
For the foregoing reasons, Mr. Speaker, I strongly favour this bill and I hope that the Minister of Finance will succeed, without too much trouble, in having it adopted with this increase.
(Text):


Mr. ROLAND BEAUDRY (St. James):: I should like to congratulate the Minister of Finance (Mr. Abbott) on the bill we are now discussing, even though I do it a bit halfheartedly, because I would have expected, and I think the mining population or the people living in what are known as the mining sections of this country had a right to expect perhaps a little more generosity from this government than is being evidenced by the principle contained in this bill that 334 per cent of the basic year production shall become bonus-able on the scale outlined. I hold this view for three major considerations. The first is the number of people who are directly concerned in this country by the implementation of this bill and by its reaction on their daily existence. The number of people who are directly concerned in the regions affected by this bill is as considerable as the number of people in this country who are interested in the automotive industry, and the number of people who are indirectly concerned can be estimated as an aggregate of anywhere between 200,000 and 300,000. A further consideration of the number of people who are vitally concerned in this bill would show that half a million and perhaps 700,000 Canadians have shown their faith in their country and in the mining resources of their country by investing in the various mines which are affected by this bill.
The second reason which would lead me to think the Minister of Finance could have been slightly more generous and could, for instance, have bonused 50 per cent of the basic year production instead of 334 per cent is the fact that the amount involved in either case in proportion to the number of people concerned and in proportion to the purpose of the bill, while not negligible, cannot be looked at as vast under any circumstances. I have already mentioned that perhaps 300,000 people in this country are vitally affected. A great many of them are the more affected because the localities of the regions in which they live exist almost exclusively because of mining operations. It is a fact that of the various regions in this country where mining is conducted, most of them exist also solely because of mining and have become communities, in some

Gold Mining
cases, of considerable size strictly because mining operations have been continued there for a period of time which varies from fifteen to forty or fifty years.
According to the production figures of gold for all thirty-eight mines concerned in this particular bill during the year 1946, a fairly accurate computation of the amount of bonus which this country should pay toward the upkeep of these mines during the next three years on the basis of bonusing 33i per cent of the basic year production would approximate 82.800,000 a year. If 50 per cent of the production of gold had been bonusable the amount of bonus which these thirty-eight mines scattered across the country would have received would have approximated somewhere around $4,000,000 a year. I trust my figures are nearly accurate. I repeat and insist that the Minister of Finance should have been more generous in his attitude toward the mines of this country. However, I do feel that he has taken a step to help and I hope that future legislation will help the mines of this country to survive and attain that prosperity which a great many of them have not , known in recent years.


Lawrence Wilton Skey: I support the sentiment which the previous speaker has just expressed when he said that the mines might have expected better treatment from the Minister of Finance (Mr. Abbott). I would advance as my reason for that the great war effort which our mines in this country made at a time when our government, in fact this government, needed foreign exchange in the worst way. It is well known that in many cases the mines carried out stripping operations for which they are paying a heavy penalty at the present time.
I should like to deal with three aspects of the bill. First is the profits mentioned by the C.C.F. party-the profits from this possible bonus. They have said that the whole of the profits should go to the men underground.


Mr. PROBE:: That was not said this afternoon.


Mr. McKAY:: Not the whole of the profits.


Lawrence Wilton Skey: I believe it was said that the underground miners should get the whole of the bonus. I would remind my hon. friends that there are a great many people concerned with mining operations. There are prospectors, producers, assayers, geologists, diamond drill crews, geophysicists, engineers, exploration parties, aircraft pilots and the investors themselves. Many mining men, many miners included, are investors in the gold mines, and the producer companies are in many cases the
ones who invest the most heavily by plowing back their own profits into subsidiary operations.
When the house realizes that all these mining companies carry out vast operations in the prospecting fields, and that it is only about once in ten years on the average that they find another mine, the house will realize how difficult it is to discover new mines in Canada at the present time. What money these companies spend over these ten-year periods is lost to them unless it can be made up from the production of any new mine which they may discover.
Secondly, the truth with regard to the wages paid in the mining industry is contrary to the impression given this afternoon. The wages are above the average paid by other industries in Canada. I have here an average wage chart prepared by the Canadian metal mining association, and it shows that at the end of 1946, before there were some substantial rises in wages, the average wage earned by miners was over $2,100 a year, while the average for all industries in Canada was just at the $1,700 level.


Humphrey Mitchell: Have you it on an hourly basis?


Lawrence Wilton Skey: No, I have not, I am sorry to say. It is not in this chart, but I believe they work an ordinary eight-hour day.


Humphrey Mitchell: That is right.


Lawrence Wilton Skey: And no extra time. At the same time, as the Minister of Labour who has just interrupted me knows, there are many gold mines in this country that have group accident insurance plans apart from the workmen's compensation of the various provinces, and in addition to that many of them have also sickness plans.


Humphrey Mitchell: They are good employers.


Lawrence Wilton Skey: They are very good employers, and the miners, for whom I personally have the greatest respect, are some of the finest pioneers in Canada. For the most part they like their work or they would not stick to it. They like the high wages and the opportunities their job offers.
The cost of wages in gold mining has also been furnished by the Canadian metal mining association, and it shows that the cost of wages per ounce of gold produced has risen from $11.50 in 1943 to over $16.50 at the end of 1946. That is just the cost of wages in producing an ounce of gold, so that the minister and the house will realize, when other costs are added, how difficult it is for the mines to produce at a profit at the present time.
Gold Mining

It is clearly shown, by a third chart of the Canadian metal mining association that the total dividends paid by Canadian gold mines in 1941 was close to $48,000,000 and in 1947 had sunk to $16,000,000. That should be interesting information for the C.C.F., who seem to think the mines are rolling in wealth. When you realize that their returns have been cut by 300 per cent since 1941 you will appreciate the difficulties they are encountering today.
At the same time I should point out again that nearly all the mining companies have policies whereby they plow back into the mining field a great deal of the revenue they obtain from producing properties.
It struck me that the arguments advanced by the C.C.F. this afternoon were perhaps just as fallacious as they nearly always are in this house. If I might draw a parallel it would be this. They seem to think a man who invents, let us say, a carburetor for your car is entitled to no profit from that invention, but the man who takes the product of his genius and manufactures it into a working model is the one who should get everything. That is the same argument they advance with regard to every other question and it seems to me to be so fallacious that it is about time they gave it up.
I am not going to detain the house much longer, but I wish to say one or two things further about the bill. First, to get back to costs, the cause of the decay in the gold mining industry is the artificial price at which gold is now kept. Until and unless this economically unsound price policy is altered, the gold mining industry will not prosper, and there is no other solution than to permit the industry to find a proper market for its product where the price is not fixed by some other government, or for our own government to sell the product of our mines where it can obtain more revenue in United States dollars, or whatever currency it requires, than it obtains at the present time.
The value of gold to the Canadian economy cannot be over-emphasized. It is to the mining industry and to .the north that we must look for substantial increases in population. Gold has been the incentive for our development as most base metals finds are associated with prospecting for precious metals, particularly gold. It has added tremendously to the stability of our mining operations and it gives flexibility to our operations, which are unique.
Gold is the magnet which draws development. I merely point out as an example of this that Gilbert LaBine was searching for

gold when he found pitchblende and uranium at Great Bear lake. Our agricultural population is showing the tendency of being static, or, in fact, actually declining. If we are to develop, it is to the mines and the PreCambrian shield to which we must look. To suppress artificially the value of the principal product of this rich belt is to strangle the growth of Canada.


Arthur Leroy Smith: At the moment, Mr. Speaker, I am disposed to vote for the bill and I do so on two definite assumptions. If they are wrong I hope the Minister of Finance (Mr. Abbott), when his turn comes, or when he chooses, will set me right. In the first place I learned that our production of gold has been more than halved in the last few years. I think the present figure is around $87,000,000.


Douglas Charles Abbott: 


Arthur Leroy Smith: Yes, $106,000,000, or practically half. Gold is, of course, of value in connection with our exchange position with the United States. Many of these mines cannot continue with costs as they are at the present time and the 9ale price fixed as it is at $35. That is the third thing I learned. I assume those three things to be correct and to be reason for the advancement of this legislation which is clearly bonusing legislation. While we talk about subsidies, bonuses or whatever you care to call them, from listening here as I have been doing now for several years, it seems to me that is a condition which almost inevitably arises when we go into price fixing. That is true of food products referred to by the hon. member for Macleod (Mr. Hansell). It seems to me that it is equally true with regard to this commodity called gold. While I enjoy speaking of a fictitious metal, of pulling it out of a hole in the ground in one place and putting it in a hole in the ground in another place, yet as long as there is a market for gold we can get the things we need in exchange for it, for anyone to argue that we should not continue the industry because within itself you cannot eat gold and cannot wear it, I think is begging the question; it is an argument which is of no value whatever.
I want- to go back to the suggestion made by the leader of the C.C.F. (Mr. Coldwell) and supported by the hon. member for Cape Breton South (Mr. Gillis), which was that we should write into this bill a provision-I am sorry to disagree with the hon. gentleman who has just spoken; I do not think the C.C.F. said that they wanted all of it to go in that direction-that a portion of this should go for the alleviation of conditions of those people who went underground.

Gold Mining


Major James William Coldwell: That is right.


Arthur Leroy Smith: That is the way I heard it, in any event.


Major James William Coldwell: That is right.


Arthur Leroy Smith: I have
listened here in this House of Commons to a tremendous amount of crying for those people who go underground. A great part of that is not justified at all. Nobody has forced them to go there. It is as the hon. member for Trinity (Mr. Skey) has just said. You have heard the expression, once a miner always a miner. That is largely true. In the coal mining business I know it is true that the family gets into mining and stays there. It is certainly true in England.
Then I interrupted and started something I had not intended to start when I asked the leader of the C.C.F. how he would work out this thing, and how it could be done. I asked that question in all seriousness and as yet I have had no answer. I do not think there can be one, for this solid and basic reason. If you take a certain mine which is getting the benefit of this subsidy and its costs are, of course, different from those of other mines in that neighbourhood or in other neighbourhoods, I can see no equitable method whereby you can apply a percentage to go for wages and other benefits, perhaps, without upsetting your whole wage structure and wage scale throughout that industry. That may be possible. The leader of the C.C.F. said that certainly smart people could work it out. May I simply confess that I am not one of those smart people, because I am utterly unable to see how that could be done.
Then we heard something about these wealthy owners. I hope they are wealthy. I am one of those people who are happy when other people make money, even though I cannot do so myself. I could paper the walls of a good big play-room I have in my house with mining shares which I bought and paid for; and they would not even make good wallpaper. That has been my experience in dealing in this business. The answer is, of course, that I have always been a piker; I never had enough money to be anything else. I bought nickel shares, and now they are not worth even that; they are absolutely worthless.
I wish to refer to one matter mentioned by the hon. member for Cape Breton South, namely, this business of workmen's compensation. Like all other developments in labour relations, it has come to what it is now by a process of evolution. In the coal mining business, I remember that many years ago when I was acting for some coal companies I had a fine practice in fighting what we called
workmen's compensation suits. In those days the matter came to what we called the district courts or what you in Ontario would call your county courts. We had lawsuits as to whether or not the person was entitled to compensation. Following that-and I think it is the case in all provinces-boards were set up and the matter was taken from the courts; even the matter of appeal, which I think the mining fraternity now wants returned to them so that they may appeal, was taken over by boards. Those boards then fixed the compensation. I want to disabuse your mind, Mr. Speaker, and the minds of the members of this house of this idea that the companies themselves or the operators themselves have been in any way the enemies of compensation. They simply pay an assessment into a fund, and from that fund come all sums of money

be they lump, be they weekly or be they monthly-which are paid by way of compensation. We will all agree and admit that compensation has been growing from year to year as a part of the evolution and growth of a new idea in these' relationships.
I remember this silicosis business; I remember the men fighting hard to get silicosis in as a compensable disability. I remember at that time seeing figures brought from the coal mines in England. I learned then that the lungs of a coal miner are clear black and stay that way. The medical people, however, do not seem to think that has done him much harm, and they produced figures to show that, in so far as the incidence of tuberculosis was concerned, a coal miner was less affected than a person engaged in, we will say, another occupation, probably a more sedentary one. But that fight was won. Now I believe silicosis is among the compensable disabilities in all provinces of Canada. That battle has been won. I agree with the hon. member for Cape Breton South that there are sad cases such as the one he mentioned of the man who in his will gave his body to someone so that his lungs might be examined to prove the existence of the disease, in order that his family might obtain compensation. But we find that in every walk of life; you find it in the Department of Veterans Affairs. You will always find that as long as the minds of men are finite or until medicine and medical men become perfectionists, which of course they never will since they are human beings.
The point I am making is that while there are those odd cases, certainly in the province from which I come, and I have no doubt in Nova Scotia as well, that is not the fault of the employer. He has nothing to do with it; he is completely removed from it. It is a result of the advice given to compensation
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boards by specialists. I think, too, that if the hon. member were in his place at this moment he would agree that the experience of workmen who are under compensation is that almost invariably the doubt is resolved in favour of the individual; that is, the employee. I am proud to say that I know this to be true in the province from which I come, and I think it is true in the other provinces as well.
So if when the minister speaks he will give me the assurances for which I asked in the beginning, I will support this bill. But much as I may like subsidies I make this broad statement. In a country of opportunity, equal opportunity-and I think we have approached very close to that position in Canada-subsidies take money earned by one man away from that man and give it to another. That is what they do, in the broad economic picture. Someone may say I am opposed to all subsidies. I am not. Conditions arise, as in this particular case, because of perhaps unusual and extraordinary circumstances, and in such instances I am in favour of subsidies, as I am in favour of this subsidy. Then in so many cases it is found, as I am sure it will be found in this case-and in this I agree with the hon. member for St. James (Mr. Beaudry)-that a subsidy can be regarded as something in the nature of an investment. But I want to take this position, and state it clearly. I do not think there is anything in the argument which has been used here today that because this house is asked to vote a small subsidy for the general good of Canada-because our exchange situation certainly may be to the great detriment of Canada unless we can correct it-we are in any sense taking aw'ay milk from babies or bread from poor people. To my mind that sort of argument is complete and utter nonsense. I know what I have just said will not be popular in many places, but I believe it so thoroughly I had to say it here.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.


Mr. NORMAN JAQUES (Wetaskiwin):: Mr. Speaker, I wish to take only a few minutes, but first I should like to correct one statement made this afternoon by the hon. member for Cape Breton South (Mr. Gillis). He said that gold was an essential part of private enterprise. That is not so. Private enterprise is as old as civilization, as old as history itself; the gold standard is quite a modern institution.
I do not want to discuss this bill on technical grounds, but I do want to say that on the most

fundamental grounds I am opposed to the whole idea of gold and the gold standard. If you like, I will put it on religious grounds, I mean religio, to rebind or bind back to reality, truth. Surely it cannot be denied today that millions of people in the world are literally starving to death or in danger of starving to death. Neither can it be denied that the mining of gold is a waste of time, effort and materials at a time when millions are suffering for -want of the bare necessities of life.
If we take the narrow view it may be argued that gold mining is a profitable thing for those engaged in it. If we take the short view it may be admitted that it is profitable for Canada itself. But if we take the long or wide view I think in the end it will be proved that it is not profitable either for those engaged in it or for anybody else.
To say that socialists are opposed to gold and orthodox finance is not borne out by the facts. The London school of economics which certainly would support the gold standard was founded by socialists for the purpose of spreading socialism. I saw just recently that Lord Passfield, one of the founders of the socialist movement in England, was able to accumulate a considerable fortune under the capitalist system and he left that fortune to the London school of economics. Certainly the London school of economics would support gold and the gold standard.
I should like to know how much more gold the world needs. Surely there is enough for the purposes to which it is put today. It is not being coined or used as it used to be used. I can well remember when gold was in circulation, but that is not true today. It is a criminal offence at the present time to have a gold coin in your pocket. Still we are told that we must go on everlastingly mining this stuff which nobody uses and which when it is mined simply disappears into a hole in the ground. Even if we are supporting a gold standard, is it necessary to keep on mining the gold which disappears as soon as it comes out of the ground? Surely the labour, science and materials used in producing gold could be put to better use.
To go on expending this vast effort to produce gold which nobody can use, simply to produce something which it is assumed people must have before they can exchange their wealth, reminds me of what Charles Lamb said about burning the pigsty in order to roast the pig. Surely there is a more economic and convenient way of maintaining a monetary system than continuing this waste of men and materials.

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It can be argued that the future of the men engaged in mining and of the districts in which mining is carried on is bound up in the production of gold, but surely these men could be put to a much more useful task. There are other metals and minerals to be mined, not to mention, as I said before, the production of food of which the greater part of the people of this world are in such need.
Much has been said about inflation, and perhaps when the Minister of Finance (Mr. Abbott) speaks he will be good enough to explain why gold mining is not inflationary. It seems to me that it is pure inflation.
The main objection which I have and which I think Social Crediters generally have to a gold standard is that it means the centralization of control. We are opposed to that. We know what happened in 1925 when the gold standard was reimposed. We know the dreadful conditions that were brought about. If a restoration of the gold standard is not intended, then I cannot see the purpose of continuing the mining of gold. It is not used in the arts to any extent and it is not used in our coinage. It seems to me that in the end the real purpose is a return to the old gold standard which I believe was responsible for more misery than any other single institution.
I am not criticizing the policy of bonusing this or that commodity, but if it is a good thing to bonus the production of gold I cannot see why the same principle cannot be applied to any other industry which is in need of support.


Mr. J. A. BRADETTE (Cochrane):: Mr. Speaker, I should like to preface my remarks by felicitating the Minister of Finance (Mr. Abbott) on bringing in Bill No. 7, although the credit should not go entirely to the Minister of Finance and to his department or to the government, because this measure is largely due to the concentrated efforts of every section of the House of Commons and the receptive mind that the minister shows on all occasions.


Mr. GIBSON (Comox-Alberni):: Except the C.C.F.


Joseph-Arthur Bradette: No, I would not say that. The leader of the C.C.F. party (Mr. Coldwell) was in my section of the country last fall and spoke on several occasions in the Porcupine district, more particularly in Timmins, and he made it quite clear that he was in favour of a prosperous gold mining industry in Canada. I was pleased to hear him make that statement because on previous occasions-it was before his leadership, I think-the members of
his party were not very much in favour of the gold mining industry, and in fact some of them were absolutely against it.
I was not present this afternoon, but I was told that the discussion was a fairly constructive one. I hope it will also be an open-minded one, because the more that the leaders of parties and members of parliament find it possible to go into the gold mining sections of Canada, whether in northern Saskatchewan, British Columbia, northern Ontario or northern Quebec, the better they will realize the great benefit that the gold mining industry is bringing and has brought to the national economy of this country. I can speak open-mindedly on this subject because I do not own a single share in a gold mine in my constituency. I have always been in the happy position, therefore, to be a go-between between management and labour in the gold mining industry. I must state that the management of our gold mining industry in northern Ontario and northern Quebec is a credit to the country's economic activities, and I must state further that labour employed in gold mining has always been very fair, and has constructively co-operated. They have realized the exact situation in most instances and have played fair not only with unionism but with the whole of Canada.
To come to the statement made last fall by the leader of the C.C.F. party, he went so far as to say that if necessary he would give $15 an ounce as a subsidy or bonus on gold production. I do not like those words, "subsidy or bonus"-


Angus MacInnis: Call it a hand-out.


Joseph-Arthur Bradette: No, I will not call it a hand-out, and I will come back to that in a moment. The gold mining industry was really the only industry in this country which suffered grievously when parliament on the initiative, in July, 1946, of the Minister of Finance brought the Canadian dollar to a parity with the United States dollar.
I have stated before in this forum that we in northern Ontario and northern Quebec really belong to central Canada. Geographically we are a part of central Canada, and that applies as far south as Sudbury. Our viewpoint is a national one, embracing the whole of the country. Every member from northern Ontario sympathizes with the members from the west when they speak of the problems of their part of the country, and similarly we sympathize with the members from the maritime provinces when we hear them speak of their problems. It may surprise some of the members here to know that in our part of the country we know the names of the mayors in
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John Horne Blackmore: Sugar is not gold.


Joseph-Arthur Bradette: Who said that it was? Again I hear "not gold."


Mr. FAIR:: He is not married yet; he ought to have a little gold.


Joseph-Arthur Bradette: I should like every member of parliament to visit our gold
mining centres. I am giving this invitation very sincerely. I want you to come to my section of the country. You will be my guest, and I shall take you to visit sections like Timmins, Schumacher, South Porcupine, Kirkland Lake, or Rouyn-Noranda, represented by the hon. member for Pontiac. There you will see these new centres of population which are helping our farmers and the men employed in the various industries. Would anyone say that we should deliberately destroy, with our own hands commit hara-kiri and destroy the gold mining industry of this country? It is pure nonsense to make such statements; it shows a pure lack of elementary realism and it is not Canadianism. If we had to create a false market; if we had no taker; if gold was not required by the rest of the world I would say fine; we do not need the industry. But practically every nation in the world is asking for gold. They want gold for their own economic and monetary system, and we deliberately are going to destroy that industry ourselves. Even such a thought is absolutely incomprehensible to me. I continue with the quotation.
It is really the metal backing held in trust as the nation's banking reserve. It cannot be sent abroad-
I want members of the Social Credit party to listen to this:
It cannot be sent abroad or allocated here and there in the belief that it is free gold which the government can release where "it will do the most good."
There is only about $1 billion of free gold in the treasury general fund, and there are about $5 billion in the category of excess reserves. These congress could release for expenses or debt reduction. But that the gold hoard at Fort Knox and in the New York federal reserve bank vaults is merely so much useless metal performing no service is an utterly erroneous notion. These reserves are part of our complicated money system, and stand as a barrier to printing press money and the excesses of managed currency advocates.


Mr. QUELCH:: Will the hon. member permit a question? Can he tell us if we have gold reserves in Canada against our currency?


Joseph-Arthur Bradette: Surely the hon. member does not expect me to go into these details; they have been told ad nauseam, time and time again in the House of Commons. If we repeated them a thousand times some hon. members of that party would not want to understand them the thousandth time any more than they did the first time.


Victor Quelch: Have we gold reserves in Canada at all at the present time?
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Joseph-Arthur Bradette: Definitely there is gold behind the Canadian dollar in the international monetary fund. The hon. member knows very well that our paper money is backed with Canadian gold. He knows that.
I continue with the quotation:
These reserves are part of our complicated money system, and stand as a barrier to printing press money.
I heard a minister of the crown in private conversation at one time speaking of printed money issued in an unlimited way so as to solve our economic problems. I want to repeat the statement. It was a private conversation; therefore I will not give his name. He said, "The printing press is in first-class condition. We have the best ink we desire to print all the money without limit. We have the paper to do it; we have the experts and the engravers to do it, and if I wanted to tomorrow I could order -the issue of a million dollars of good Canadian money to every man, woman and child in this country. Tomorrow morning every one of us would be millionaires." What would have that meant? It would have meant that the million dollars would have been absolutely worthless, and not worth even the cost of the printing and the' paper.


Mr. KUHL:: Whose proposal was that?


Joseph-Arthur Bradette: It was not a proposal. We were speaking of funny money as your party often propounds. I said we were discussing the subject of unlimited printing of money, because if it was so easy as all that to use the printing press or apply the Social Credit system to Canada, everybody would need to worry no -more. They would get all they want; they would get all the orchestras and all the operas and so on, all the commodities and luxuries to their hearts' desires. There is nothing free in this world. I believe in Santa Claus at Christmas time, but I know after Christmas we poor uncles or relatives have to pay all of his bills.


Stanley Howard Knowles: You would make a better husband.


Joseph-Arthur Bradette: I may have to learn yet, and I still hope to make a good husband. I continue with the quotation:
They support our credit structure, our currency, and indirectly our debt. Tampering with the collateral behind the gold certificates is a dangerous expedient.
Not a dangerous action, but a dangerous expedient. I never worshipped the golden calf or the silver calf.


Walter Frederick Kuhl: Just the gold.


Joseph-Arthur Bradette: I know the monetary system is resilient and lasting. I did not get the witty remark of the h-on. member.


An hon. MEMBER:: He is shooting the bull.


Joseph-Arthur Bradette: They did not use that sort of language in Pontiac or in any gold mining district. I challenge any of these hon. members to go to Pontiac and make the speeches they just made against gold. I know the hon. member for Pontiac cannot relish their viewpoint, but by his silence he seems to agree with them. He never uses those expressions in his own constituency, and he never will. I am positive of that, but he must carry the responsibility of the policies of his party.
We have the Bank of Canada at the present time, which is a government institution. We know that a -monetary system must be resilient; we know that back of the Canadian dollar or of any monetary system you must have the work, you must have the industry, you must have the energy of the people.
The fact that we have treated this subject with intelligence is seen in the results we attained during the war. Who would have dreamed at the beginning of the last war that Canada would be able to finance the war effort which was put forth by the Canadian people at that time? We were able to do so for one primary reason, and that is that parliament realized the elasticity, the resiliency of our monetary system. But it was more than that, for behind the Canadian dollar there were the Canadian people, who put forward the best effort any people have ever made at any time.
I wish to be reasonable on this subject. I was not here this afternoon, but I was told that the hon. member for Calgary West (Mr. Smith) made as usual a very sensible speech.


An hon. MEMBER:: He always does.


Joseph-Arthur Bradette: I know he always does, but sometimes people are easily swayed. On one occasion I was told that mine was the golden voice of the gold mining industry. Certainly I can say that the gold mines of this country have proved a fruitful source of employment for our workers, our farmers and those engaged in our forests. That is what gold mining has meant to Canada, and it is one of the finest ways of developing a newer section of the country.
It is easy for anyone to stand up here and fight for the gold mining industry in view of what the industry has accomplished for the country. I do not always agree with all the statements on gold made by the members who

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come from Toronto but I know that they are sincere. I must point out, however, that some of the statements which they made two years ago, at the time the Canadian dollar was brought to a parity with the United States dollar, have not been justified by the events. Those hon. members wanted our gold producers to have access to the world market, to sell their gold on the open market. At that time I stood up in the House of Commons and said that it was impossible for the gold mining industry of Canada to sell gold on the open market of the world.


Lawrence Wilton Skey: Why?


Joseph-Arthur Bradette: Why? The thing is as elementary as ABC. Does the hon. member think for one moment that if the Minister of Finance allowed the gold mining industry to sell its production on the open market the industry would not immediately ask the federal treasury to guarantee the collection of the proceeds from such sales? I leave that question with hon. members.


Lawrence Wilton Skey: It would be the same as the wheat industry.


Joseph-Arthur Bradette: No, for the simple reason that you are dealing with a different matter. When you are dealing with wheat you know that all the nations of the world want that commodity; but there is only one nation that is willing and ready to buy your bullion at a set cash price, and that is the United States; and are you going to engage in a black market against the United States treasury? That is what it would practically mean. I leave that thought with the hon. gentleman. It would be purely and simply a black market.
Some hon. members have said that as much as $60 an ounce could be obtained for our gold. Let me put this to them, and I am speaking quite sincerely. Suppose tomorrow the Department of Finance allowed the gold industry to sell its bullion on the world market. The next day the industry would be on the minister's doorstep asking, and quite rightly, that he guarantee the collections of the proceeds of those sales, because there would be nothing else for him to do. There is no getting away from that, because these sales would not be made to governments but to individual buyers.
I am not speaking as an expert. I am speaking as a layman, and I believe with common sense, but I have lived in that section of Canada for many years and I know something about the working of the gold mining industry. From such knowledge as I have, I wish to say this wdth reference to the bill
before us, that it is a good measure and a big step in the right direction. I do not suggest that it is perfect, but I would suggest to hon. members that the Department of Finance has always been open-minded so far as the gold mining industry is concerned. Let us be fair. We are all practical men or we should be; if there is one man here who should be practical in regard to this particular question it is myself, and I may say that I could have bitterly attacked the placing of our dollar on a parity with the United States dollar because it hurt the section of the country that I represent here. But the gold mine owners are Canadians and they are good citizens. They knew that the industry was being hurt, but they envisaged the national economy as a whole and they conceded that it was a good thing that the Canadian dollar was being placed at parity with the United States dollar. When the then Minister of Finance, the present Minister of Justice (Mr. Ilsley), in the month of July, 1946, made his statement in this house with respect to dollar parity he stated at the time that it would harm to some extent the gold industry.
In my constituency there are three large newsprint mills which at present use a little over 3,000 cords of pulpwood per day, and on the night the announcement was made by the then Minister of Finance that our Canadian dollar was at par I received some telephone messages from the management of one of those big mills. I told them not to worry, because the price of newsprint, the price of sulphite, the price of lumber and the price of pulpwood were not all rigidly controlled by the United States treasury, whereas in the case of gold the situation was entirely different. This was so true that it was only a few days later that newsprint increased by $7, $8 and in some instances by $10 a ton.
The gold industry, on the other hand, found itself in a precarious position. But these men in the gold mining industry were fair, even though they had to be critical, and naturally they had to put their case and problems before the public and the government. As I have said, however, they envisaged the national economy as a whole and they did not use the kind of language that was used by some of the so-called mining papers. They *were more reasonable than others that tried to agitate the people, and this is all to their credit. The leading men in the gold mining industry realized that the best and most logical and at the same time the most sincere sort of agitation was to state the facts clearly and forcibly, and to show that the
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gold mining industry deserved careful consideration at the hands of the government as well as at the hands of parliament. The gold mining industry has always played the game, and for that reason these men felt that it deserved every consideration possible and rectification of their position.
When, early in the last war, the federal treasury requested an intensive gold mining production, the gold mining industry of Canada answered at once, without the slightest hesitation, and in doing this it was helping the serious dollar situation in which the country found itself, before we had special agreements with the United States. In many instances they went so far as to deplete their ore reserves, so much so that some of these mines like Hollinger, McIntyre, Lake Shore, and many others for many months and in some cases for a year or two, suffered a depletion of their reserves, which is always a serious situation for a mine. But they did this from a national point of view. They wanted to do all they could to further Canada's war effort.
Two years later, on account of the labour shortage and the shortage of essential metals, they were asked to shift some of their men to employment elsewhere, to the nickel industry at Sudbury, for example, or to the steel industry, and once again the gold mining industry responded magnificently and without any hesitation whatsoever. On that score alone, therefore, I know that the sympathy of the whole of Canada has been behind the gold mining management, and I repeat without fear of contradiction that our gold management has been second to none so far as labour and the working conditions of labour are concerned. It is not perfect; nevertheless it has done some marvelous things.
Here I should like to say something that may perhaps seem to be rather of local interest, but I believe that I am justified in bringing it up because it is also of interest to the nation at large. I may say that our Barbara Ann Scott got her first effective training in the summer months in one of the finest skating rinks in the country, the rink built at Schumacher by the McIntyre mine, to which every worker in the gold mining industry of that section has full access.
In my opinion management in our section of the country has been too humble about what they have done in the matter of health and improved working conditions, et cetera. It should have let the rest of Canada know what was being done for the workers. Unfortunately at times we have had the wrong kind of agitation in our section of the country, where some people have been trying to stir up the population even against their own labour leaders.

Only a few weeks ago the hon. member for Nipissing (Mr. Gauthier) and the hon. member representing the Temiskaming district and myself pleaded with the government to stop a certain man who was trying to mislead the workers in our section of the country. I could speak of men like the Bickells, the Timmins, the Schumachers, yes, thousands of others that gave their best in its development. Is it because they have taken chances; is it because they have been energetic that they should be penalized? Some started from the ground and worked their way up. No doubt many hon. members listening to me participated last year in a banquet given by the mine managers and operators and everyone who listened to men like Mr. S. L. Longmore, for instance, and other speakers, was impressed with the sincerity of these men, their logic, their comprehension, realizing that they were humanitarians whose one desire was a solid and prosperous industry and peace between labour and management. Every one of these men at that banquet was always at the disposal of the worker to go up and discuss the affairs of the workers with the management. That is one of the best ways to obtain co-operation.
That is why I am in favour of this bill. As I say, it is not perfect, but it is capable of amendment and if necessary of some changes from time to time as new problems arise. When some periodicals say that the government has done nothing for the gold mining industry since 1946 they are not speaking the truth; they are not trying to be fair. Several things have been done and several things have been tried in connection with this important problem. I might point out that I took it upon myself to go to the United States to find out what could be done, what was the situation there. I want the house to realize that United States gold producers are in the same position as our Canadian gold producers. The cost of living has gone up there, as have the wages; also the cost of materials necessary for the exploitation of gold mining is higher in. the United States than it is here at the present time. So when we talk in terms that we should increase the price of gold by $8, $10, or $15 an ounce, we must be very careful indeed.
Some speakers in that group across the floor will say, forget about the United States. They go so far as to say, forget altogether about the gold mining industry; they even wish its destruction. I do not want to see that day come. I hope it will never come. Let us pause and see for a moment what it would mean. In the Porcupine district alone at the present time we have over 75,000 people gainfully employed in gold mining. They have built some fine permanent towns; there are

Gold Mining
some fine schools, and all the public utilities services possible; towns built on permanent lines. There are in northern Quebec, northern Ontario, northern Manitoba and British Columbia, in the gold mining sections of Canada, people from every section of Europe and of Canada working to develop that needed metal for the benefit not only of the section in which they live, but also for the benefit of the whole of Canada.
I could go on indefinitely speaking on this matter. I hope that this summer, if it is at all possible, we may again inaugurate some excursions into northern Ontario and northern Quebec for the members and senators. Two years ago the Ontario mining institute brought, I believe, twenty members of parliament and senators on an educational tour into the Porcupine, Kirkland Lake and Rouyn-Noranda section. For most of them it was their first visit, and they declared that it was a revelation to them. They saw the situation right on the ground.
I am not going to talk politics, but inasmuch as we hear of some people who seem to fear personal initiative and the making of reasonable profits, I am just going to say this. As far as development is concerned, in the initial stages of gold mining more money has been lost than has been made. When you see the work of the prospectors, the promoters, the first engineers and the first men who go into these apparent mud holes, where you have water, even in the summer, right up to your knees, taking a gamble with their own money and that of others-because there will always be a certain amount of gambling attached to it; there is no getting away from that-and working for months and years before they can get a dollar of revenue, and on many occasions meeting with complete disappointment, you must admire their courage, their determination. This is the kind of industry which has enlarged the borders of Canada as a whole, and has pushed back its frontiers. In northern Canada we have a wonderful treasure house. There . used to be a time, even in the section of the country where I live now, when we thought it was not even fit. for the Indians and Eskimos. In the riding which I have the honour to represent now, when I went there in 1909 as a settler in that famous clay belt in the centre of the gold mining section, there were about
1.000	people consisting mostly of Indian trappers, white trappers, and a few prospectors. Today I have the honour and the great responsibility to represent in this house some
140.000	people. That shows the development that we are bound to have in northern Canada, and that applies to nearly every foot of ground of that immense territory. We no
doubt have it to the same extent in the Northwest Territories. We have it to perhaps a large extent in British Columbia.
I am going to make this prophecy. In northern Ontario and in northern Quebec if we are careful with our mining, if we are careful with its development, and if the government and everyone concerned have foresightedness and realize the importance of this industry to the national economy and prosperity of this country, we shall have there the greatest development that any nation has experienced in the last forty years. I know whereof I speak. We hear about the resources of Labrador. The new member from northern Quebec (Mr. Gourd), who so well represents that section of the country, well knows the potentialities they have there in mineral resources. In northern Quebec and northern Ontario we have what we call the wonderful clay belt, one of the most fertile and arable sections of land there is in Canada at present, and that is intermixed with that fine mineral belt. There are no heavy hills. Apparently by glacier action those hills have been erased or rather greatly worn down. There are fine prosperous agricultural communities there. I am going to take the opportunity of mentioning just a few in my own constituency: Raymore, Val Gagne, Cochrane, Fauquier, Kapuskasing, Opasatika, Moonbeam, Mathe-son, Hearst, and many others, all names that hon. members have heard. They have an unlimited regional market in the mining centres. The Montreal, Toronto and other markets are quite far away for us to cover because of the long freight haul. But those regional markets are a wonderful thing in agricultural development. The same thing applies to our forest development, because a lot of timber and lumber is used in mining.
I speak feelingly on this subject, and I know that, I am receiving a fine and comprehensive hearing from every section of the house. Again I repeat what I said a few moments ago. When I was in New York last fall I was happy to read the accounts of the speeches made by the leader of the C.C.F. party when he was in my section of the country. The hon. member for Cape Breton South (Mr. Gillis) has also been there. He has done some good work. We know that he is constructive in his labour activities. He wants to do what he thinks is best for the welfare of Canada and for gold mining, because if gold mining is not prosperous or is on a submarginal basis, they cannot pay the wages necessary to be paid to the worker to live eonfortably. When hon. members are, I would not say converted, but convinced of the urgent necessity and the serious problems facing the
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gold mining industry and use their influence accordingly, it will again come into its own. It is not a bankrupt industry but it is in need of practical help. At the present time one may read certain reports, but it is far from being bankrupt. However, it has suffered to a large extent, and it has suffered on account of losing the $3.50 per ounce.
Just one word about subsidies. I know some hon. members of this house will say, Well, you are against a subsidy on milk; you are against the subsidy on this and that, but you are in favour of a subsidy for gold mining. I am not in favour of subsidies for gold mining. I want hon. members to analyse and to judge the situation of gold mining impartially. Is there any other industry in Canada that has suffered as grievously as it did when we put the dollar at parity? I think not. Steel has not suffered in the same way. Neither has nickel. No other mining industry has suffered in the same way or any of our export goods. I repeat that this industry wants to be practical and has proven to be logical. It has no politics, but it realizes the great role that it has to play in the postwar period. The people in my section of the country, the mining interests, would resent it if I had the audacity to make a political speech on this important question. That is why I so highly appreciate the fine attention I have received this evening from every section of the House of Commons. We do not come before parliament as mendicants, hat in hand, for special privileges. We want you to judge the situation impartially and practically. I know if -we unite our efforts we can succeed; that we will succeed in this case.
On the question of maritime rights my section of the country always gave its support 100 per cent. With regard to wheat, you fine farmers in the west will always get support from our section, the mining section of Canada; in all the problems you may have to face, our people, all our section of Canada, will give that support diligently and voluntarily, and we make your problems our problems and naturally we expect, the same favourable support of our difficulties. I believe that under such circumstances we have the right to expect for my section of the country that the problem which means so much not only to us but to the whole of Canada, will be given support and attention and all the study possible so that a solution will be found that will be reasonable to the industry, and will allow it to play its part in our aim for a prosperous and greater and stronger nation.


Lawrence Wilton Skey: Did I understand the hon. member to say the gold producers would

require a guarantee from the federal government before they would export their gold? Did he say they would require a guarantee of protection from the federal government before they would export gold for sale abroad?


Joseph-Arthur Bradette: I appreciate the question that has been asked, and perhaps the house will give me two minutes in which to reply. I have discussed this problem with many mine owners and producers. They *would like an open market, but at the same time they are afraid of it. Suppose, for example, they sold their gold in Egypt or India at 850 an ounce. That gold -would not be sold to the government of Egypt but to some individual. What guarantee would the producers have that they would receive Canadian dollars or the equivalent for the gold? Under such transactions, the sellers would certainly have the right to ask the government to guarantee the collection.


Arthur Leroy Smith: It would be cash on the barrel, of course.


Lawrence Wilton Skey: You give them a chance and they will try.


Joseph-Arthur Bradette: They will not take the chance.


Douglas Charles Abbott: Mr. Speaker-


James Horace King: If the minister speaks now he will close the debate.


Douglas Charles Abbott: Mr. Speaker, I do not think it will be necessary for me to make any very extended remarks in closing the debate, but perhaps there are some things I should say. At the outset, however, I believe we have had a useful and helpful debate on the second reading of this bill, in which members on all sides have, I think, made a valuable contribution to a real understanding of the purpose of this legislation.
On December 11 last I made a statement to the house outlining the program the government proposed to recommend by way of assistance to the gold mining industry. That program involved certain modifications of the original proposals I had announced in my broadcast address of November 17. Those modifications, as I stated at the time, had come about following representations which had been made by the gold mining industry, and following consultations which had been carried on with the international monetary fund to which, of course, as a member Canada had certain obligations.
As far as the industry is concerned, the representations made to us were to the effect

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that the original proposal, which was to defray for a three-year period the costs of additional gold production over and above the amounts produced in the base year, which ended December 31, 1947, to the extent of $7 per fine ounce, would not serve to prevent the continued deterioration of the industry and the closing down of additional mines. As far as the international monetary fund was concerned, the consultations were begun immediately after my original announcement, in order to make sure that the detailed working out of the plan was in accordance with our obligations as a member of that organization. In my broadcast I had stated that because of these obligations the details of the program could not be made known until we had discussed them with the fund, and that consequently details would not be made known until I announced them in parliament. But I did indicate in general terms what our proposals were, in order to prevent speculation in the meantime.
In the course of our discussions with the fund it developed that the payment of a fixed dollar amount per extra ounce of gold produced was open, from the point of view of the fund at any rate, to the objection that it might be represented as constituting an increase in the price paid for gold by the government, which, of course, would be contrary to the fund agreement. So in the light of these representations and the consultations to which I have already referred the government decided to modify its proposals, and the general nature of those modified proposals I explained in my statement on December 11. Later, on December 19, when I moved the resolution preceding the introduction of this bill, I elaborated on those proposals.
I do not think it is necessary for me to discuss them now in detail, but when we are in committee we can discuss how those proposals will work out in detail. In view of what has been said during the course of this debate, perhaps I should deal briefly with two general considerations which I consider important in connection with this measure.
In the first place I should like to say a word with respect to its relation to our international obligations. At the end of my statement after moving the resolution on December 19 I placed on Hansard two public announcements made on December 11 by the international monetary fund, following our consultations with them, as well as a statement which had been made the following day by the national advisory council of the United States government. The first statement by the fund attempted to make clear just what the obligations of the member countries are in connection with legislation to subsidize the production of gold. The fund, it was pointed out, has an obligation to see that
the gold policies of its neighbours do not undermine or threaten to undermine exchange stability; and under certain sections of the articles of agreement members of the fund are prohibited from buying gold at a price above parity plus the prescribed margin. In its statement the fund pointed out it was felt that a subsidy in the form of a uniform payment per ounce for all or part of the gold produced in any country would constitute an increase in price which would not be permissible under the fund agreement. In another section of the agreement each member of the fund-
. . . undertakes to collaborate with the fund to promote exchange stability, to maintain orderly exchange arrangements with other-members, and to avoid competitive exchange alterations.
It was felt by the fund that subsidies on gold production would offend against that provision if the subsidies were such as to cast doubt on the uniformity of the monetary value of gold in all member countries, or if they tended to contribute directly or indirectly to monetary instability in other countries. In the light of these two sections of the agreement to which I have referred, our original proposal was found to have objectionable features; and incidentally these provisions of the fund agreement are also the provisions against which allowing a free market for gold or selling gold abroad at premium prices would probably offend.
There were two statements issued the same day. In its second statement the fund made it clear that it had examined the revised Canadian proposal, which is the one incorporated in the bill now before the house, in the light of its general statement of policy to which I have just referred, and had-
. . . determined that in the present circumstances the proposed Canadian action is not inconsistent with the policy stated by the fund.
That statement, I may say, was a matter of gratification to the government in view of the objects and purposes we were seeking to achieve. Before I leave this point we should recognize, and I should like to draw to the attention of the house, the significance of the statement issued by the national advisory council of the United States government. Hon. members will recall that this council consists of the secretary of the treasury, the secretary of state, the secretary of commerce, the chairman of the board of governors of the federal reserve system and the chairman of the board of directors of the export-import bank. On behalf of the United States government the national advisory council welcomed the fund's statement of policy and its expressed intention
Gold Mining


Arthur Leroy Smith: Will the minister permit a question?


Douglas Charles Abbott: Yes.


Arthur Leroy Smith: You stated a moment ago that the United States would buy all the gold offered in the world at $35 per ounce. The minister knows the world production year after year.


Douglas Charles Abbott: We do not know the world production.


Arthur Leroy Smith: You know it fairly accurately.


Douglas Charles Abbott: We have no accurate idea of the Russian gold production.


Arthur Leroy Smith: What proportion of the gold produced in the world goes to the United States at that price? It is less than fifty per cent, is it not?


Douglas Charles Abbott: I think the United States has in this $22'7 billion something over three-fifths of the known reserves of gold in the world.


Arthur Leroy Smith: A tremendous amount of gold is not going there at all. It may be hoarded, but it is being spread around the world.


Douglas Charles Abbott: We do not know accurately about Russia, but taking gold at the rate of $2-7 billion in eleven months of 1947, the United States is taking gold at a pretty rapid rate. There is not very much going anywhere else. I cannot say offhand the total gold production of the world, but Canada as the third largest gold producer produced $106,000,000 in 1947 and the United States took $2-7 billion worth from the world. It is taking a pretty big chunk of the world production. I have not available the figures for the existing production, but I know that without the willingness of the United States under existing conditions to take gold at $35 per ounce there would not be a market for gold in which we could be paid by anything we could use.


Arthur Leroy Smith: That is only a prophecy.

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Douglas Charles Abbott: That is the statement of cold fact under today's conditions.
The warning contained in the national advisory council's statement against a country becoming too dependent upon subsidized gold production as a solution of exchange problems leads me to the second general point I wish to discuss in closing this debate, namely, the purpose of this legislation.
I do not need to assure the house that, so far as Canada is concerned, there is not very much danger in the contingency referred to by the council, namely, that we shall largely stimulate the production of gold as the result of these subsidies. It is true that the bonus payments we are providing for should lead to some increase in production-I hope they will -but we are not under any illusion that the increased production for this reason alone will be of such magnitude as to become a major factor in the solution of our immediate exchange problems. Any contribution which it makes will, of course, be most helpful, but unfortunately there are other important factors at work which, unless conditions change, will be bound to limit the size of that contribution. I refer particularly to the shortage of labour and the mounting production costs which have been referred to by a number of speakers who have taken part in this debate today.
However, I should like if I may to state the primary purpose of this legislation in somewhat broader terms. Our gold mining industry, as has been pointed out by a number of speakers and without any invidious distinction by my good friend, the hon. member for Cochrane (Mr. Bradette) in particular., occupies a strategic place in our economy, particularly in the development of the social and economic structure in our great northern areas.
As everybody knows, our gold mines are located for the most part in that great mineral bearing area, one of the greatest in the world, which stretches right across the Pre-Cambrian shield in northern Quebec and Ontario, through northern Manitoba and Saskatchewan, up into the Northwest Territories and then down through the mountain area of British Columbia. Many of the mines are small and scattered in remote areas. A good many towns and hamlets have been developed which are solely dependent on them, as are also in certain cases small agricultural communities.
It was the search for gold and other precious metals which was probably the primary factor leading to the discovery of those great mineral areas where the all-important base metals of nickel, copper, lead and zinc and, more recently, the strategic uranium, are produced, with such important results to the wealth and strength
of the country. During the depression years of the thirties gold mining was a powerful factor supporting employment, business activity and the soundness of our international position.
In these and other ways the industry has made an important contribution to our national life. It has been a great dynamic factor in our economic development. By promoting the settlement of our great northern areas it has given the country depth as well as breadth. To us it is synonymous with the north, and I think we all have tremendous faith in the role which the north has still to play in expanding our national wealth and income and promoting our defensive strength.
If that be so, and I think all hon. members will agree with me in that statement, it is important that the industry be maintained in a healthy condition. As I have indicated, during the thirties it was very active and prosperous and its output increased to a peak of approximately $206 million in 1941. That was natural and inevitable. I do not need to tell hon. members that, as long as gold remains directly or indirectly the basis of the monetary standard, it will thrive in depression and languish in periods of prosperity. Its fixed price means that, as costs fall during the downswing of depression the industry's profit margin widens, but as costs again begin their upward climb with the coming of full employment and the boom stage of the cycle the profit margin also narrows and in some cases may disappear entirely.
At the height of the war the necessity of mobilizing labour and essential materials for vital purposes added still further to the industry's difficulties. Production declined steadily after 1941 until the late summer of 1945, and for the year 1945 the output of gold in Canada had fallen to $102,000,000. With the end of the war it was hoped that the industry would before very long be able to get back to its peak production. But while production did pick up to some extent, early expectations were disappointed. The war had brought a more rapid rise in the wages paid by other competing industries and the competition of these industries for labour remained very keen. It therefore proved difficult to rebuild depleted labour ranks and, before long, costs began to rise. Then in July, 1946, came the restoration of the Canadian dollar to parity. May I interject that that action was not only not criticized by anyone to my knowledge, but it was praised and recognized by most as necessary and inevitable. It certainly was not criticized by any hon. gentleman opposite.


Alan Cockeram: Oh, yes.
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Lawrence Wilton Skey: The hon. member for York West (Mr. Adamson) immediately rose and criticized it.


Douglas Charles Abbott: My hon. friend did not rise and criticize it.


Lawrence Wilton Skey: I say that the hon. member for York West did.


Douglas Charles Abbott: I do not recall it, but if the hon. member for York West did, he was the only one. The hon. member for Trinity (Mr. Slcey) did not.
An important purpose of this action was to safeguard against a more rapid rise in Canadian costs and prices which would otherwise have been inevitable, but the fact remains that its immediate effect in the case of the gold mining industry was to reduce the price of the industry's product in Canadian dollars roughly from $38.50 to $35 per ounce. Since that date there has been a further substantial increase in wage and other costs.
As a result of all these factors, production in 1946 amounted to only $104 million and in 1947 to $106 million. Much potential production had become or was about to become unprofitable. A number of mines had closed down and a larger number were claimed to be operating at a loss. The closing down of marginal mines not only would bring hardship to many northern communities but would mean in many cases so great a cost to reopen that the mines would probably be lost forever as producing entities. Prospecting for new properties had slowed down and it was increasingly difficult to raise new funds for exploration and development. If this process were to continue unabated, serious damage would be done to the existing social and economic fabric of northern Canada, and the further development of the north would probably be slowed down materially.
This was the type of situation which the government's proposal was designed to remedy, the type of danger it was primarily designed to avoid. The bonus we propose to pay should enable most mines at least to maintain and perhaps to increase their current production to some moderate extent. It should enable many mines to avoid closing down with the hardship this would cause to many communities and the social and economic waste involved in the probable necessary transfer of population and the abandonment of homes and other forms of capital investment.
Those are the main reasons, Mr. Speaker, which prompted the government to take the action which it did. The house will notice that the assistance which it is proposed should

be given is based on half the difference between the fixed figure of $18 per ounce and the actual cost of producing an ounce of gold in the particular mine; this means that it will be particularly helpful in the case of the remote mine and the marginal or high-cost mine. The program should also help to maintain hope and interest and faith in the industiy, make it easier to raise capital, and thus assure the continuance of normal exploration and development work. In other words, it should, we believe, serve to preserve the industry and maintain it in greater health and vigour in a period when rapidly rising costs of production combined with a fixed price were threatening to stifle it. To the extent that the program results in an increased output of gold-and we believe it will to a moderate extent-it will provide a much-needed increase in our reserves of gold and United States dollars. In this connection it is important to note that this contribution will be made without any great increase in the use of our resources, as the gold mining industry is one which is running at only about half its capacity. I do not think there is anything more I need say.


Harry Rutherford Jackman: What is the long-term policy?


Douglas Charles Abbott: Of course it is not my particular function to state what the long-term policy of the government is with respect to the mining industry. That more appropriately comes within the purview' of my colleague the Minister of Mines and Resources (Mr. Glen). We have on our statute books and have had for some time, particularly in the tax legislation, special incentive legislation to encourage the gold mining industry. This policy is one which is intended to assist the industry over a temporary period when costs are abnormally high. As to the long-term policy I am not prepared to make a statement now, and I do not think it is appropriate that I should, beyond saying that the dominion government will, as in the past, always be interested in the prosperity and well-being of the gold mining industry, although we do not intend to single out the gold mining industry any more than any other industry for special treatment.
So far as the details of the bill are concerned, I think they can better be dealt with in committee when we are discussing the individual sections of the bill.


[Stage Direction]
Motion agreed to, bill read the second time, and the house went into committee, Mr. Macdonald (Brantford City) in the chair.

Gold Mining
On section. 1-Short title.
Harry Rutherford Jackman: May I just say to the Minister of Finance in reply to his statement that no member of the Progressive Conservative party had anything to say in criticism of the government's action on July 5, 1946, I think it is well remembered by many on this side of the house that the hon. member for York West and the hon. member for York South did have considerable to say. It is also very well remembered, by me at least, that four or five days prior to July 5, 1916, the question arose in one form or another in the house, and I made the statement at that time that it was extremely injurious to Canadian business to have the government make arbitrary changes in our exchange rate, and that if the government would leave the exchange rate to its own natural workings we would have a situation with which businessmen could cope and they would not be thrown out of gear so completely as they were on July 5, 1946.
If we consider for a moment just what the circumstances were surrounding July 5, 1946, it will be remembered that OPA, the price control system in the United States, had gone off on July 1 of that year and that a rise in prices was expected in that country. A repercussion of that rise was expected in Canada by a good many people. The cost of living was already higher in the United States that here. Products were cheaper in price, and it was felt that there might be considerable increase in exports from Canada which would deplete our markets and perhaps make it impossible for our government to exercise price control as it was in operation at that time. I well remember this particular matter, because the Ottawa Journal was kind enough to give me a short editorial notice on July 5 and said, if I recall correctly, as its caption, "A prophet in the House of Commons." I clearly indicated that we might expect from the government some change of an arbitrary nature in regard to our exchange rate with the United States; and again, as I pointed out at that time, it was much sounder for the government to leave the exchange rate to the free operation of economic forces rather than to the artificial method which they subsequently adopted and which they have continued to adopt to this day. Businessmen do not know where they are, and I think without question at that time, on July 5, 1946, the Canadian dollar, which had been at ninety cents in relation to the United States dollar, would have improved itself of its own accord without any help from the government. The arbitrary action of the government-


Douglas Charles Abbott: Nothing like hindsight.


Harry Rutherford Jackman: -did nothing more than to raise it in a way which business could not allow for, and many people were caught off guard in the sense that people who had small amounts of United States exchange, the tourist people, the season then being at its height on July 5, 1946, found themselves with a few hundred dollars of United States money in their pockets, and in place of getting the ten per cent premium on it, found they had to suffer the loss themselves.


The CHAIRMAN:: Order.	.


Harry Rutherford Jackman: We are on the title of the bill, Mr. Chairman.


William Ross Macdonald: We are on the title, which is section 1 of Bill No. 7. I have allowed the hon. member to make certain general remarks, but I should remind him that in committee we must discuss the section under discussion and we must discuss the section strictly.


Harry Rutherford Jackman: I have only a few more words to say, Mr. Chairman, and perhaps we might be content with that. I might also point out that it is not the function of the opposition just to oppose unless they have some special reasons for it. On July 5, 1946, the whole international position in regard to prices, with the United States going off price control, was an unknown factor. As I recall it, the governor of the Bank of Canada was away on holidays at that time and was recalled for an urgent and unexpected session of the bank. I do not think the minister is justified in criticizing the official opposition for not having raised its voice more strenuously than it did on that occasion. It gave a clear warning; it pointed out the proper system to follow, namely, the natural working of economic forces. But the minister chose to do otherwise, and now is not the time for him to fling back in our faces the fact that we did not come out and tell him what his business was when we did not have the facts at our disposal.


[Stage Direction]
Section agreed to.
On section 2-Definitions.
Douglas Charles Abbott: May I say a word, Mr. Chairman, before we carry this section? I have two or three amendments to some of the subsections. They are purely technical in character; there is nothing really of substance in them. I shall ask one of my colleagues to move these amendments at the appropriate time. Perhaps I should give the proposed amendments and then we can discuss the section as a whole. The first is an amendment to section 2, subsection 1, paragraph (b)
Gold Mining

relating to the base year. The amendment contains an added proviso, and reads as follows:
That subparagraph (i) of paragraph (b) of subsection 1 of section 2 of Bill No. 7 be amended by deleting the comma -and the word "and" at the end thereof and inserting a comma and adding the following proviso:
"Provided that where the operation of any such mine was wholly suspended throughout that period, the base year means the period of twelve months commencing with the day on which operation of the mine is resumed after thg thirtieth day of June, nineteen hundred and forty-seven, and"
It is to cover the case of a mine which, as the wording will indicate, had been wholly suspended throughout the period. It was a contingency which had been overlooked in drafting the original section.
Then section 2, subsection 1, paragraph (c), which relates to the definition of the cost of production, is amended by deleting lines 8, 9 and 10 on page 2 of the bill and substituting the following:
in respect of any matter for which a deduction is not allowed in determining income from the mine for the purposes of the Income War Tax Act;
This is just for greater tidiness in drafting.
Then there is another amendment to section 2, subsection 1, paragraph (d) as follows:
That paragraph (d) of subsection 1 of section 2 be deleted and the following substituted therefor:	.
"(d) 'designated year' means a period of twelve months commencing on the first day of January in the years, nineteen hundred and forty-eight, nineteen hundred and forty-nine or nineteen hundred and fifty;"
It was suggested this afternoon by the hon. member for York South that the first of January should be substituted for the first of December, and this amendment will give effect to that suggestion.
Section 2, paragraph (hi) of subsection 1 is amended by deleting the period at the end thereof and adding thereto the following words:
"but not in any event exceeding sixteen dollars." to the definition of the rate of assistance.
Subsection 2 of section 2 is amended by deleting the word "and" at the end of paragraph (b) thereof, by deleting the period at the end of paragraph (c) and substituting a semicolon and the word "and" and by adding thereto the following paragraph:
"(d) gold produced from a mine during a designated year shall be deemed to be sold during that designated year if it is sold as soon as is practicable after the end of that year."


Alan Cockeram: Excuse me, Mr. Chairman. That is a change from S18 to $16, is it?


Douglas Charles Abbott: Not exceeding $16. The section will now read:
"rate of assistance" for a mine for any period means the amount that is fifty per cent of the amount by which the average cost of production of gold from the mine during that period exceeds eighteen dollars but not in any event exceeding sixteen dollars.


Lawrence Wilton Skey: The total assistance, will run up to $50.


Douglas Charles Abbott: I have read the last amendment. It was felt that if the gold were produced on the 31st of December, perhaps it would not be possible to sell it on that date. That provides a little more flexibility to the section.
Perhaps my colleague, the Minister of Labour, will move these amendments. They are all amendments to subsection 1 of section 2.


Humphrey Mitchell: I so move.


[Stage Direction]
Amendments agreed to.
Mr. MacNICOL:: Before the section as amended carries, I should like to ask the minister a question. There is nothing new in the debate that has gone on today, particularly in the part that I heard. It is more or less similar to what took place in the thirties when the same problem was before us. But in those days the statesmen in Canada and in the United States approached the difficulty from another angle, which was to advance the price of gold. Has any discussion taken place with the United States or with whoever is concerned-at that time England was concerned-on advancing the price of gold? On that occasion gold was advanced from $20 odd an ounce to $35, and it had the immediate effect of breaking the depression of those days Advancing the price of gold in the early thirties broke the depression at that time. Everyone knows that the cost of producing an ounce of gold has gone up materially since then. Has there been any discussion with the financial experts at Washington or elsewhere in regard to that- problem? Has the time not come again to advance the price of gold from $35 to $50, or, as they were talking of at that time, $100 an ounce?


Douglas Charles Abbott: I can say to my hon. friend that there have been no such discussions. Even if there had been, I would not be able to tell him about it, but there have not been any such discussions. So far as I am concerned, and I have been informed by my officials, there have been no such discussions so far as Canada is concerned.


John Ritchie MacNicol: I am not going to oppose what the minister is trying to do. There is a problem to be met, and this is his proposal. But on the other occasion the very effective

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proposal was made and carried out which did solve the whole gold problem at that time. I would have thought that, before a bill like this was brought in, it would be discussed with those who are going to buy the gold.


Douglas Charles Abbott: The action that was taken in the thirties was initiated by the late President Roosevelt himself without consultation with any other government, or so far as I am aware without any discussion with any of his officials or anyone else; and, so far as I am aware, there was no discussion with officials of any other government.


John Ritchie MacNicol: It was initiated in Canada and it was argued in Canada by a very great man still living, thank God, Mr. Peter L. Robertson of Milton, Ontario, who was the father of the program to advance the price of gold.


Douglas Charles Abbott: He may have put it in Mr. Roosevelt's head.


John Ritchie MacNicol: I and others brought him to see the prime minister of that day after touring Ontario and the United States; then he was invited to Washington, and I believe the prime minister of that day went with him to Washington. It was from that commencement by Peter Robertson of Milton, Ontario, that the price of gold was advanced. Of course they had to have the consent of the United States. Later they sent a deputation to England to discuss the matter there. If nothing has been done along that line, perhaps it is too late now, but I should have thought that some program would be followed similar to that initiated in the early 1930's by Peter Robertson to advance the whole price of gold, so that all low-grade mines could be brought into production and more gold produced.


Stanley Howard Knowles: I wish to ask the minister to try once again to explain to me and to others who may be asking similar questions just how this is really to the advantage of Canada. I will ask him a question in relation to section 2 (1) (h), which is being amended by the motion now before us. That subsection sets out the rate of assistance, and I note that the minister's amendment will put a ceiling on the amount of assistance that is available.
I take it from the subsection as amended that this is the situation. If it is costing a gold mine, meeting the other conditions laid down in the act, S50 an ounce to produce gold, that gold is sold in the United States at $35 an ounce. The gold mine gets $16 assistance from the government, which leaves the net cost to the gold mine itself at $34 for the ounce. Now I can see the advantage to the gold mine 5849-172J
in being assisted to the point where production which cost it $50 is reduced to $34, which leaves the mine a profit of $1 an ounce.
My simple question is this. Is it really to the advantage of Canada as a whole to spend $16 out of the federal treasury to enable a private gold mine in Canada to bring in for itself $35 of United States exchange?


Douglas Charles Abbott: My hon. friend is, of course, talcing an extreme case, and I answer at once that I would not think it would be of advantage to Canada to carry on such a thing for any length of time. But that $50 might be the initial cost when the mine is getting going. It would be a marginal mine and it would yield only $1 an ounce on that basis. This legislation contemplates assistance for three years. As I tried to emphasize in the statements I made in closing the debate on the second reading a few moments ago, one of the main purposes of the legislation is to keep some of these mines going, to keep them open, in the hope that the communities will not be broken up in this period of abnormally high costs, and in the expectation in a good many cases that these costs will be brought down.
I would at once concede that no operation which would cost for a period of time $50 to produce something that could be sold for only $35 should be continued in existence. But my submission is that in the over-all picture, in view of the large place which the gold mining industry occupies in the Canadian economy, and in view of its tremendous importance to a great many of these scattered1 northern communities, it is desirable as a. temporary measure to give this measure of assistance, first, in order to maintain and perhaps moderately to increase our production of gold, and to improve our exchange reserves and, second, to keep the communities going. That is the purpose.


Stanley Howard Knowles: I thank the minister for the reply he has made, but there are two or three things that I must say. First of all, he points out that I took an extreme case of $50 an ounce. Yes, I did; and I did so because the minister had just proposed an amendment to set the ceiling at $50 an ounce, which seems to me to suggest that, without that ceiling, there was in the minister's mind the thought that higher amounts might be asked for by the mines.


Douglas Charles Abbott: As the legislation stood, there would have been no limit, of course, and that was not the intention.


Stanley Howard Knowles: If the minister felt it necessary to put this ceiling in, it looks as if we can anticipate that there will be cases right
Gold Mining

to that extreme point. But even if that is not so, even if the average run is in terms of $40 as the cost for the production of an ounce of gold, this means that the company pays the first $18 but gets 50 per cent of the other $22. In other words, the company gets $11-


Douglas Charles Abbott: Not on all its production, remember.


Stanley Howard Knowles: I recognize that, but with respect to the portion of production set out in the act. With respect to that portion, however, it gets $11, which reduces its costs from $40 to $29, so that it is able to make a profit of $6 an ounce. It makes that profit of $6 an ounce because of the assistance of the government; and it leaves Canada in this position again, that we are paying $11 out of the federal treasury to make possible the bringing in of $35 of United States exchange, which goes into private hands.


Douglas Charles Abbott: That is, $11 on a third of the production. The other $35 comes in, and there is another two-thirds for which we get $35 in United States currency and on which nothing is paid out of the treasury-


Stanley Howard Knowles: I appreciate that.


Douglas Charles Abbott: -and the mine might otherwise be closed up.


Stanley Howard Knowles: But a moment ago the minister's reply was to the effect that when he introduced the measure he emphasized the fact that one of its purposes was to keep these mines in operation because of their importance to a great many communities in Canada. I recognize that need; but I submit, Mr. Chairman, that that is on all fours with the kind of need which the hon. member for Cape Breton South referred to when he spoke about coal mining. It is on all fours with the discussion we had yesterday concerning freight rates, and it is on all fours with any economic problem in connection with which the need for subsidies arises. In the debate today member after member, like the hon. member for Calgary West, insisted that this was not a subsidy in the usual sense. Member after member insisted, and if my memory serves me aright the minister did also, that the fundamental reason for an emergency measure of this kind is the exchange problem. I submit that neither the minister nor hon. members can have it both ways and go from one argument to the other.


Douglas Charles Abbott: It is not going from one argument to the other.


Stanley Howard Knowles: If the basic reason for the bill is the need to save certain industries, that makes it sound like a protectionist measure

and it might be interesting to pursue that thought; but if the need is to do certain things that are required to be done for sections of the Canadian people, then I submit that the members cannot draw a line between this and the demands for subsidies on milk, bread, transportation and other things that we have argued from time to time on the floor of this house. That being the case, I submit that the minister must, if he intends to present this as an emergency measure, relate it to our exchange position and make out a much stronger case for this measure as a means of solving our exchange problem, than it seems to me he has yet done.


Douglas Charles Abbott: My hon. friend is making a second reading speech on that question. That point is one which could be properly raised on second reading.


Stanley Howard Knowles: I have said what I
intended to say, in any event. But I am not so sure that the minister is right in raising that objection. We are now discussing the whole business of the rate of assistance to these people, and I submit that the case which the minister has made for this kind of assistance on the basis of our exchange position is just not strong enough, and that it leaves us right back in the other position, namely, that the real reason for this is to help an industry and allegedly to protect the interests of certain Canadian workers and certain Canadian communities. If that argument applies in connection with gold, it applies in connection with coal, milk and a great many other things in this country.


Lawrence Wilton Skey: I should like to apologize to the minister. When I interrupted him a few minutes ago I was wrong. There was no immediate protest when the Minister of Finance on July 5 of last year moved his parity measure. The protest did come later.


[Stage Direction]
Section agreed to.
On section 3-Assistance payments.
Alan Cockeram: I wish to mention the question which I brought up this afternoon and which was also mentioned by the hon. member for St. James. I think the minister has been approached by the producing mines with regard to section 3, subsection 2 (b) being changed to one-half instead of two-thirds. Can the minister give that some consideration?


Douglas Charles Abbott: Yes. I have given it quite a good deal of consideration and felt that we could not accede to that request. I think I indicated, in the course of my remarks and in my previous statement, that the international

Gold Mining
monetary fund do not look with too great favour on subsidy arrangements as such. Where such subsidies are, as this one is, related to increases in the cost of production, well and good; they have accepted that as coming within the scope of the fund agreement. I am perhaps not giving away any secret when I say that agreement was not given too readily, and I do not think the international monetary fund would view with favour any increase in the type of assistance which is proposed under this bill. I came to the conclusion that we could not increase the assistance to make it extend to half the production over and above that in the base year, but that it would have to be restricted to the one-third.


Alan Cockeram: I have in mind that the mines have passed on all this increase they are to get under this act. In view of the fact that this bill is before us partly because of the necessity of obtaining an increased gold production to help with the exchange situation, I thought perhaps something could be done along those lines. It is a very important matter, because the bill as it is going through now does not benefit the industry. It is true that it does benefit the industry to the extent that the workmen are getting that much more money; but for extra development costs and everything of that kind it does not help a great deal. I was wondering if the minister could not reconsider that section once again.


Douglas Charles Abbott: I am afraid that this is as far as we feel we can go at this time.


Stanley Howard Knowles: The minister spoke about [DOT]this matter just now and he also spoke about it when he was closing the debate on second reading. Let me put my question to him as briefly as I can. Do I understand from what the minister says that the monetary fund agreed that assistance to one-third of the production is not a subsidy but that assistance to half the production would be a subsidy?


Douglas Charles Abbott: No; I did not put it in that way. I said that our plan as it was here, and some people have said that it is complicated, was for assistance which is based on half the additional cost of production over $18, and on the excess over a proportion only of the production in the base year. The fund held that that was not a contravention of the fund agreement. I was very glad that they did so. I do not think it was myself. But obviously if one carries the formula to the point, for instance, where you are giving something with respect to every ounce of gold produced, and not only a portion of the gold produced over that in the base period in accordance with a
pre-determined formula, but with respect to every ounce of gold produced in a given year, then you are getting something that is pretty closely related to the price of an ounce of gold. This assistance varies, as hon. members will appreciate, in accordance with the cost of getting the gold out, and it is of particular value to the high cost marginal mine that is just getting by and is of much less value to the established low-cost high-grade producer.


Stanley Howard Knowles: It looks to me as though the fund's lawyers came from Philadelphia.


Douglas Charles Abbott: They may.


Clarence Gillis: Can the minister tell us who will administer these regulations? Once this legislation is passed, will the department put accountants in the mining industry for the purpose of checking costs and so forth, or will they just accept the statement of the gold mining companies as compiled by themselves for the purpose of applying this legislation?


Douglas Charles Abbott: There is to be a dual responsibility. The technical end will be administered by the Department of Mines and Resources. The accounting end and the checking of the costs and figures will be handled by the controller of the treasury.


[Stage Direction]
Section agreed to.
Sections 4 and 5 agreed to.
On section 6-Regulations.
Douglas Charles Abbott: I have one small amendment to make to section 6 (1) (b) which I will ask one of my colleagues to move. The motion will be:
That paragraph (b) of subsection 1 of clause 6 of Bill No. 7 be amended by deleting the semicolon at the end thereof and substituting a comma and the following:
"or that shall be excluded from the cost of production of gold from a mine for any period in respect of the production of any other mineral or product from the mine;"
So that the section will read:
6. (1) The governor in council may make regulations
(b) prescribing the amount, or the method of calculating the amount, that may be included in the cost of production of gold from a mine for any period, in respect of depreciation, amortization or preproduction expenses, and costs of exploration and development in the mine, or that shall be excluded from the cost of production of gold from a mine for any period in respect of the production of any other mineral or product from the mine;


Humphrey Mitchell: I so move.


[Stage Direction]
Amendment agreed to.
Alan Cockeram: I should like to ask a question about a matter I mentioned this afternoon; that is, in regard to the details of
Gold Mining

these regulations, especially having to do with development. I pointed out this afternoon that the majority of mines are behind in their development work because of the war, lack of labour, and so on. It may be, if the mines are to catch up with that work, that their costs will be very much greater in the coming months, now that labour is once more becoming available. I believe special attention should be given that matter, and I think it should be discussed with the mining industry.


Douglas Charles Abbott: The regulations are not as yet completed, but they will be carefully worked out by the Department of Mines and Resources in consultation with the industry, and every effort will be made to see that they are proper and sound and fair.


John Ritchie MacNicol: Since this is the last clause before we come to the regulations, after which the bill will pass-and I am in favour of iL- I am going to offer a suggestion to the minister. I am sure his deputy must have a keen recollection of what took place in the early 1930's when there seemed to be a general feeling on the part of those familiar with the gold problem that the price of gold should be advanced considerably. It was advanced to $35 an ounce, but the argument at that time was that the government should have possession of all the gold; that is, that the government should buy all the gold and pay the producer $50 an ounce. The government in turn would sell it at $100 an ounce to those who had to have it. I am not very clear in my recollection of that discussion. I did not get back until six o'clock this evening, and had I known this discussion was coming up I would have refreshed my memory, but it is all in Hansard. Since this is a problem which is very important to the country, I should like the minister to read the debates of those days, because it was Washington and London and Ottawa that advanced the price of gold to $35. It could have been advanced further. Perhaps $35 is not enough. Perhaps it should not be less than $50, or perhaps it should be more than that. The gold industry has a colossal effect on a large number of businesses in Canada, altogether apart from those located in the vicinity of the mines, so that it is almost of transcendent importance. I remember very well the great quantities of machinery and steel which were shipped to northern Ontario following the price advance to $35. I do not know how many mines were opened up; perhaps the hon. member for York South would know, but I believe scores of mines in which the gold ore was low-grade were opened and developed at that time.

That, broke the back of the depression. It was gold that did that. The government gets the credit, of course, but it was the production of gold that bought about such a resurgence of business in all the towns of Ontario and Quebec in which mining machinery and supplies were produced that the depression was finally broken. This looks to me like just a stopgap measure for a while, and in the meantime I suggest that the minister or his officials make an exhaustive survey and at the same time consult with our friends in Washington as to just how much further gold can safely be advanced. It might be possible to pay the producer $50 an ounce, while the government, having possession of all the gold, would be able to sell it at a much higher rate. In those days the argument was that the national debt could be paid off with the money the government received from the sale of gold over and above what it paid the producer, and the amount suggested at that time was $50 an ounce. It is too late to do anything of that kind now, but we may have to meet this problem again, so let us meet it after a thorough discussion of what is best in the interests of the whole country.


Douglas Charles Abbott: I shall be very glad to read the debates to which my hon. friend refers. As he will recall very well, in 1932 or 1933, when gold was revalued, this continent and many parts of the world were in a period of acute deflation. Today that condition does not exist, at least as far as this continent is concerned.
While I am on my feet, I now have the figures concerning world gold production to which the hon. member for Calgary West made reference a few moments ago. In 1945 the world production of gold was about $945,000,000 and in 1946 it was about $963,000,000. The figure for 1947 is not yet known, but if one bears in mind the fact that in the first eleven months of 1947 the United States bought $2-7 billion worth of gold it will be appreciated that this was almost three times the new production of gold in each of the two preceding years.


John Ritchie MacNicol: I have just one word
further. The minister will find in the library, if he has not read it already, a book called " The Remedy," written by Peter L. Robertson and published in several languages, at a cost to himself of thousands of dollars, because he was a patriot. That book goes into the whole problem of gold in exhaustive detail; and it was that book, published in German, French, English and one other language that really brought about the revaluation of gold.

Industrial Relations


Douglas Charles Abbott: I promise my hon. friend I will read the book with interest, though I will not promise to read it in all four languages.
Section as amended' agreed to.
On section 7-Offences.


Lawrence Wilton Skey: I take it that under this section the minister would not claim1, or have his officers claim, that just because a man is a director of a company, though he may know nothing about what may have occurred, he is actually to be held guilty of an offence.


Douglas Charles Abbott: If my hon. friend will look at the section he will see that it states:
. . . any officer, director or agent thereof who directed, authorized, assented to or acquiesced or participated in the commission of the offence . . .
It is restricted to direct participation.


[Stage Direction]
Section agreed to.
Sections 8 and 9 agreed to.
On section 10-Coming into force.
Lawrence Wilton Skey: Does the minister intend to have the act proclaimed immediately?


Douglas Charles Abbott: Our intention would be to proclaim it as soon as we can have the regulations drafted and approved, as I mentioned a moment ago. I should hope that would be done very shortly. However, the committee will notice that under the act provision can be made in the regulations for advances on the payments, which might be made quarterly; and I should anticipate we would get it in operation very quickly.


[Stage Direction]
Section agreed to.
Title agreed to.
Bill reported.


[Stage Direction]
Hon. HUMPHREY MITCHELL (Minister of Labour) moved that the house go into committee to consider the following resolution:
That it is expedient to present a bill respecting industrial relations and investigation of industrial disputes and to make provision therein for the payment out of the consolidated revenue fund of the remuneration and expenses of the members of the boards and commissions and the officers, clerks and employees appointed or engaged by or under the authority of the act.
He said: Mr. Speaker, the bill in question is intended to replace the Industrial Disputes Investigation Act and follow the wartime order
in council, P.C. 1003 of February 17, 1944. The provisions of the bill are almost identical with those of Bill No. 338 which was introduced during the latter part of the session of 1947 and referred to the standing committee on industrial relations after second reading. There are a few minor changes, but nothing of a substantial nature. In order to save time, I would refer hon. members to the statement I made on Bill No. 338 on June 7, 1947, commencing at page 4231 of Hansard.
As I slated in the house at that time, and I have not changed my mind in the meantime, the legislation provides what I consider are the appropriate procedures and conciliation machinery to deal with industrial disputes affecting undertakings over which this parliament has jurisdiction. The essential purpose of the legislation is to create conditions favourable to the free exercise of collective bargaining between employers and employees. For that reason only such regulation of employer and employee activities in their industrial relationship as is considered necessary for the protection of the public interest is incorporated in the legislation. The main responsibility is left with labour and management for the settlement between them of their problems, the negotiation of collective agreements and the administration of such agreements.
The bill will seek to establish an orderly procedure to be observed in the solution and settlement of industrial disputes and it will make available conciliation services to the parties to such disputes. As I stated just now, Bill No. 338 of last session was referred to the industrial relations committee of this house after second reading. That committee held a number of sittings and heard representations from employer and labour organizations and other groups, but it was unable to complete its work on the bill before the prorogation of parliament early in July.
I would point out that the representatives of three out of four of the major labour organizations in Canada who appeared before the committee endorsed the provisions of the bill. I believe I am on sound ground when I say that the employer organizations whose representatives appeared before the committee were reasonably satisfied with the provisions of the bill, although they submitted a number of additional provisions for the consideration of the committee for incorporation in the legislation.
Employer and employee representatives have placed great emphasis on the importance of having uniform legislation in effect in labour
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[Stage Direction]
relations in industry. I think this is sound and reasonable and sensible. Where you have a uniformity of practice and approach to the solution of labour disputes the trouble is kept, in a comparative sense, at the minimum.
In preparation of Bill No. 338 and in the revisions thereof which are embodied in the legislation which I now propose to introduce, there has been consultation with the provincial authorities with a view to presenting legislation which will be adequate, not only in our own sphere of jurisdiction, but appropriate and acceptable as a basis for provincial legislation. Assuming that the legislation which I am going to introduce is enacted by parliament without any substantial changes, there is, I believe, every indication that the legislation will also be acceptable to a considerable number of the provinces.
Nova Scotia passed a new trade union act in the spring of 1947, which was almost identical in its provisions with Bill No. 338 of last session and with the legislation now being brought down. The Manitoba government has within the last few days brought down before the legislature a new labour relations act, the provisions of which are almost identical with the bill I am now introducing. The minister of labour of Ontario announced in February of this year that, following a study of the proposed dominion legislation, the Ontario government, in the interests of uniform and simplified labour laws, had decided to adopt the proposed dominion legislation. I understand that the province of New Brunswick is studying the dominion legislation before bringing down its own labour legislation. The British Columbia legislation is largely the same as ours with some slight differences. I think it can be fairly said that fundamentally the legislation in existence in Alberta at the moment follows along the same line.
I think it is clearly understood by members of the house that in drafting legislation in the various provinces and the dominion there is bound to be a difference in the language used. In Quebec they always speak of arbitration in referring to what we call conciliation. It is natural that in the provinces of Canada, and I am now speaking of the industrial provinces, there is bound to be some differences in minor matters.
Arthur Leroy Smith: Not Prince Edward Island.


Humphrey Mitchell: I said I was referring to the industrial provinces. As the hon. member for Calgary West understands, there is bound to be some difference in the language used when lawyers in different parts of Canada go

to work on the same subject, and I do not say that in any spirit of criticism.


Arthur Leroy Smith: I regard it as a compliment.


Humphrey Mitchell: It is a compliment, and I think that is just as it should be. I do not think the Creator ever intended that we should all be cast in the same mould.


An hon. MEMBER:: Amen.


John Ritchie MacNicol: Get that down, too.


Humphrey Mitchell: I am looking at my hon. friend. I am a great believer in diversification; I am not one of those who believe in centralization. We have only to cast our mind's eye over the world at the moment to see the power for destruction that exists in nations where you have a highly centralized form of government.


Some hon. MEMBERS:: Hear, hear.


Humphrey Mitchell: I am glad to-hear my Conservative friends and my good socialist friends applaud that sentiment. That is elementary and fundamental. When you look back to the Industrial Disputes Investigation Act of 1907 you will see that there has been an evolutionary approach to what I believe are sensible and stable labour relations in the dominion, labour relations of the kind and character which, to my way of thinking, compare favourably with those of any country in the world where free institutions exist.
I believe that when you swing too far to the left at one time you are bound to swing to the right the next time. I am one of those who believe that the life of a nation or of civilization moves very much like a pendulum of a clock, swinging backwards and forwards; and to maintain stable labour relations it is far better to go down the middle of the road and to be as fair as is humanly possible both to employer and employee organizations.
My hon. friend the member for Winnipeg North Centre (Mr. Knowles) is smiling, but hp knows what happened in the country to the south of us when the Wagner Act was put on their statute books. Some people thought that it swung too far to the left. They now have the Taft-Hartley law which, in the opinion of some people, is causing a great deal of industrial strife in the United States at the present time. In Australia, where they have a labour government in Queensland, legislation has been passed that swings considerably more to the right than any legislation that exists in the country to the south of us. I do not mention this by way of criticism at all of the people who are charged with responsibility for

Industrial Relations
the administration of affairs in those two parts of the world, because from the very nature of things their legislation must reflect the dominant opinion of the people who sent them to their respective legislatures. Legislators in the United States, Canada and Great Britain, and in New Zealand and Australia naturally all want to be re-elected, so they keep their ear to the ground. The Taft-Hartley law must have been put on the statute book in the United States because conditions existed in that country which the people felt it was necessary to correct, and in Australia somewhat similar conditions must have existed. We too have had our trials and tribulations. That is inevitable when you get two points of view around a council table. If it were not for these honest differences of opinion there woidd be no employer organizations and no trade unions, and that would be a paradise from the point of view of some people. This House of Commons exists as a deliberative assembly simply because there are different points of view in this country, and I hope I shall never live to see the day when some people, perhaps innocently, would like to see persecution substituted for reason in the affairs of this country. Let us be honest and frank and sensible about the matter.
I leave this thought with the house. There is developing in the world today the strike expressly for political purposes. I am not speaking altogether about the Dominion of Canada, but undoubtedly trade unions are being used as an instrument for the destruction of institutions similar to those under which we live. But if we in this dominion travel down the middle of the road, take the moderate course in the establishment and maintenance of labour relations, we shall be making a great contribution to the life of our time. I was taught that you should never pass a law if you cannot enforce it, and we have seen the truth of that in labour relations not only in this country but in other parts of the world. Fundamentally labour relations are based on character, character on the part of the employer organizations and character on the part of the employee organizations. Not all the angels are on the one side. Each has its fair share. I was in the labour movement and I know that we had our fair share of both kinds of human beings. I believe, however, that if we maintain the course on which we have set out we can continue to enjoy comparative industrial harmony in this country. Look the world over and compare conditions with what we have in Canada today. In this country we have only one strike now in progress, and that involves comparatively few people. What other country in the world can 5849-173
say that? It is in my judgment a reflection of the common sense exemplified by both parties in the industrial and trade union life of this country.
I hope that this bill will move with expedition to the industrial relations committee, as suggested by the hon. member for Waterloo South (Mr. Homuth).


Arthur Leroy Smith: Mr. Speaker, we on this side are in favour of the resolution, treating it as a matter of principle. What we shall say when we see the bill, I do not know. We are told that there are some amendments-we do not know what they are-of the bill that we had last year. But I think I might in a sentence or two affirm two or three principles on the highlights of labour relations in which I believe very firmly, and in large measure I shall speak in agreement with the Minister of Labour (Mr. Mitchell).
Across the world I think that in some places mistakes are being made by having too much legislation on labour and industry matters rather than too little. Let me put it in another way. We believe here in collective bargaining. We believe in collective bargaining between industry and strong unions. To say anything else would be a negation of the word "bargaining", because there can be no bargaining in the proper sense of that word if all the strength be on one side of the table. So again I repeat that our principle is that of collective bargaining, but with strong unions. Therefore, Mr. Speaker, I must immediately say that I deprecate-I do not know how strongly I can put it-something that has taken place in the province of Prince Edward Island recently where the most backward and reactionary legislation was passed. Talk about the Taft-Hartley act; it is not even to be compared with what they have done in that island on the east coast.
I turn from that to examine briefly one or two principles, because I am anxious to affirm where we stand. There is a word used in labour relations called the "check-off". I want to say that we are strongly in favour of the check-off, and that if it cannot be arranged by collective bargaining I go so far as to say that it should be done by legislation.
The reason the word "check-off"-and it is still criticized and opposed by some very reactionary industrialists, although not many -is disliked by some of our people is the sound of it. It is a harsh-sounding word. It sounds almost Russian. In these days things Russian are not very popular in this country; but to my mind it is just as simple
Industrial Relations

as this. We will say, Mr. Speaker, that I owed you $10 and that you owed the Minister of Labour S10. Then, sir, we will say that you assigned the $10 that I owed you to the minister. In every province of Canada the minister could sue me directly for the money. It is true that perhaps you would need a written notice to sue me, but it could be done. Therefore the employee in an industrial concern is doing nothing more than assigning a portion of his wages to a third party, that party being a union. All this fuss about the opposition to the check-off is, to me, one of the least justified arguments that I know of, because the labour man can do it, anyway, in my opinion, and he can also enforce it. Of course I am referring to the voluntary revocable check-off.
Let me go a step farther. In this case I am going to discuss two or three other things which are agitating people today. One is union security. You cannot just discuss union security; there are so many kinds of it. We have one or two words naming something, and we might be talking about different things and taking our meanings from these words. I am going to say something about strikes. I hope that this parliament will never take from labour its right to strike, but I add this, that some strikes are legal and some are illegal. Never shall we take from any labour organization which is operating under rules-and they are comparatively simple-and has put itself legally in a position of a right to strike, its right to strike; but I think we should, and I hope we shall by legislation outlaw illegal strikes, because we are a country of law-abiding people and we have lived by and have been guided by law.
I want to say another word, and that will be all on this occasion. I refer now to the sympathetic strike. I hope that this parliament and every legislature in Canada will do everything within their powers to outlaw the sympathetic strike. Why? I say that for this reason. You cannot say today that you are in favour of collective bargaining logically and at the same time say that you are in favour of a sympathetic strike. Why? In the sympathetic strike there is no problem between employer and employee. They have no quarrel with one another. Therefore the sympathetic strike becomes what? Not a strike against an employer, but of necessity a strike against the public of Canada, and I hope I will never admit the right of any union the right to do that.
One word more. May I agree with the minister that in other places-and they are not very far away-they have gone too far in trying to legislate certain things. I am not
rilr. Smith (Calgary West).]
going to discuss them in detail. Perhaps it would not even be in good taste to do so. 1 have tried to enumerate two or three principles which I trust will be carried out in this bill which we have not yet seen, and we will reserve our right to discuss the bill more in detail on second reading.


Angus MacInnis: Mr. Speaker, I thought that perhaps the resolution would pass without discussion, and I did not come prepared to discuss the measure at this stage. I should like, however, to draw the attention of the house to the fact that labour legislation is a live issue today in this country and in the neighbouring country to the south. Generally the tendency in current labour legislation is toward restrictions on organized labour. That is significant, because until recently there has been very little labour legislation in Canada. As I see it, the reason for that was that labour was weak and the employers were strong, and those who were making the laws were not legislating in the interests of labour. That is the situation, and anyone who cares may look up the facts and verify them for himself.
I have been a trade unionist now for almost thirty-eight years. During the whole of that period I have been a member of an organization which had what we called a closed shop. We did not have the check-off as I very well know. Since I was the only paid official of my trade union for some time, I had to go around and see that the members paid their dues. However, if they did not pay their dues we had recourse to the closed shop clause to see that they did. Personally I am in favour of a closed shop or a union shop, whichever term you wish to use, because I do not consider that any employee has any right to wages and conditions which he will not help to maintain. That is not only a policy or the principle that we accept in the trade union movement; it is the principle that we accept in our national and municipal affairs. One may be opposed to paying taxes, but the state says you will pay the taxes whether you are opposed to it or not. Trade union dues are merely a tax that the trade unionist or the employee pays to his trade union for the protection the trade union gives him in maintaining better wages and better working conditions. I could give a striking example of what an employer whom I know thought about the matter and what he thought of the employee who would not pay his union dues.
In regard to this proposed legislation, I am receiving, as I suppose other members of parliament are receiving from chambers of commerce

Industrial Relations
and other employer organizations, resolutions which, if heed were given them, would make of this government, as far at least as organized labour is concerned, a policeman.
One of their proposals is that strike votes must be supervised by the government. Surely trade unionists, members of organized labour, citizens of Canada, should be allowed to decide their own affairs without any supervision from the government, any more than a (private corporation should have the votes of its shareholders supervised by the government. As far as I am concerned, I shall oppose any government supervision of strike votes, or any other kind of votes, so long as the unions themselves can demonstrate that they have control of their union affairs.
There are other questions to which I would like to refer, but I do not think we should have two debates, particularly when the question is to go to the industrial relations committee, where there will be an opportunity to discuss it in detail. However, as regards employers in this country who have opposed labour's every attempt to organize, and anyone who questions that, I would ask him to read the majority report in the labour inquiry of 1943, under the chairmanship of Mr. Justice McTague, the other member of the commission being, I believe, the late Senator Bench.


Humphrey Mitchell: There was another member too.


Angus MacInnis: Let hon. members read what that commission said in regard to employers in this country and their attitude toward organized labour. Indeed, the situation until recently has been that only tough men at the head of labour organizations could get recognition at all for their organizations. If there are conditions in organized labour that we do not like, the blame rests with those who would not deal fairly with moderate people in the organized labour movement,
I would suggest to such people that if they expect co-operation they will have to treat those with whom they would co-operate in such a way as to gain their respect.
I shall reserve any further comment until the second reading of the bill, or perhaps until it comes before the industrial relations committee.


Clarence Gillis: Mr. Speaker, the Minister of Labour is merely introducing a resolution to enable him to bring down a bill which has for its purpose the establishing of a national labour code, and I am quite satisfied with that, I will not argue the merits or the demerits of 5849-173i
the bill because I have not seen it. I am a member of the industrial relations committee and I shall examine the bill when it comes before the committee in the light of the proposals that have already been made by the Canadian Congress of Labour.
In my opinion, the Canadian Congress of Labour is a responsible body and it is the legislative centre of the industrial workers of Canada. They have drafted what in their opinion is an adequate measure designed to bring about what the purpose of the present resolution has in view, a national labour code. I do not know what the minister's bill is, but I hope that he and his department have given some study to the proposals made by the Canadian Congress of Labour, because I have read them carefully and I agree with them 100 per cent.
I hope we shall not repeat the performance of last year when we considered Bill No. 338. We sat in the committee a long time and wrangled over it, and I hope the legal minds in the Department of Labour have clarified one point, namely whether we have the right as a parliament to enact a national labour code under the present British North America Act. I hope the minister will be able to tell the committee when it meets whether we can do that, because there is one thing of which I am convinced and of which I think the minister by this time should be convinced, namely, that a national labour code which would embrace the basic industries of the country is absolutely necessary. That was proved to him in the packinghouse workers strike, which occurred in an industry which is established in every province.
You find yourself with a strike on your hands, with meat tied up right across Canada, and you find the federal government powerless to intervene in that strike. You find yourself in the position where the provinces could not get together and come to any sort of uniform understanding.
If a national code is to be effective, then the packinghouse industry should be designated as a national industry and brought under the code, and so should steel. Steel is basic to the economy of the country because it ramifies into every province, and unless these national basic industries are brought under the code it leaves the federal government in the position where, if a general strike takes place in any of these industries, all that the national government can do is to sit back and watch nine little Canadas all jealous of their own prerogatives, refusing to get together, unable to do anything about the matter as a national question, the country being paralysed because there is no legisla-
Industrial Relations

tion to handle the matter. Coal was in that position until the establishment of the national coal board. I believe that under that particular board the federal government has some jurisdiction in the fuel industry.
In the final analysis, labour relations are human relations and there will be difficulties because all legislation cannot be hard and fast. There must be some administrative latitude, some give and take. I have some definite opinions on some of the matters touched upon tonight, and I would be wasting my time and the time of the house if I went into them, because the place where that can properly be done is when the bill is brought down and I have been able to examine it and to discuss it clause by clause with a view to developing the proper mechanics.	.
One thing I would ask the minister to do when the committee sits is to answer the question whether we have jurisdiction under the British North America Act to enact a national labour code, and, second, whether we are prepared to designate basic national industries running from coast to coast as national industries that can be brought under the code, so that the minister may not be faced with a crisis some time in the future where there is a general strike in one of the industries and he is powerless to do anything about it.


Ernest George Hansell: 
James Horace King: When shall said bill be read a second time?


Some hon. MEMBERS:: Now.


Some hon. MEMBERS:: Next sitting.


John Ritchie MacNicol: Was it not the intention of the minister to have the bill sent to the industrial relations committee?


Humphrey Mitchell: I am, of course, in the hands of the house. The bill cannot be given second reading tonight without unanimous consent.


Angus MacInnis: I think we should see the bill before it gets second reading.


James Horace King: Next sitting of the house.



WAR VETERANS ALLOWANCES


[Stage Direction]
Hon. MILTON F. GREGG (Minister of Veterans Affairs) moved that the house go into committee to consider the following resolution:
That it is expedient to amend the War Veterans Allowance Act to extend the provisions thereof to a neglected child or children of a deceased veteran and to a veteran with a dependent child or children in special circumstances; to allow for increased permissible incomes and
to provide supplementary allowances. Provision is also made to increase the annual salary for members of the war veterans' allowance board.
Stanley Howard Knowles: Is the minister not going to make a statement at this stage?


Mr. GREGG:: I am prepared to make a statement, but there will be plenty of opportunity on second reading, in the committee on veterans affairs and in committee of the whole. If the house sees fit to adopt this resolution tonight and move the legislation forward I can assure my hon. friend that all the material will be made available as the legislation goes through the various stages.


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


Mr. WHITE (Hastings-Peterborough):: Before the resolution carries, I would ask the minister if he would not make at least some statement now. We have seen what happened in connection with the bill to amend the Pension Act, and the government cannot bring forward any excuse for rush now. I for one would ask the minister to make a statement. If he is not prepared to do so I would ask you, Mr. Speaker, to call it eleven o'clock, because I should like to speak on the resolution.


Milton Fowler Gregg: I am prepared to make a statement, but time does not permit this evening. As the hon. member will understand, this resolution does not give hon. members the details of the bill. If the resolution passes and the bill is given first reading copies of the bill will be made available, and perhaps then it will be more appropriate to make fuller explanation.


Wilfrid Garfield Case: Mr. Speaker-


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


Wilfrid Garfield Case: Mr. Speaker-


James Horace King: I have put the motion and; declared it carried twice.


Wilfrid Garfield Case: I was on my feet when you put the motion, Mr. Speaker.


James Horace King: It is not enough for the hon. member to be on his feet; he must attract the attention of the Speaker. I put the question to the house and asked if it was the pleasure of the house to adopt the motion. No one objected, so I called it carried, and I suggest that the hon. member resume his seat.


Wilfrid Garfield Case: I rose to say-


Some hon. MEMBERS:: Carried.
Motion agreed to and the house went into committee, Mr. Macdonald (Brantford City) in the chair.
War Veterans Alloioance Act


Wilfrid Garfield Case: Having lost the opportunity to have the minister make a statement while the Speaker was in the chair I now request him to make a statement on the resolution. Before the bill is introduced I should like to know what is the objective of the government, and then we can look at the bill later on.


Milton Fowler Gregg: The resolution precedes the introduction of a bill to amend the War Veterans Allowance Act, with which I think all hon. members are quite familiar. In the main it is the purpose of the bill to improve the amounts payable to the beneficiaries under that legislation. Hon. members will realize that practically all those beneficiaries are veterans of world war I. In recent years my department and this house have quite properly given a great deal of attention by way of legislation to the new veterans of world war II. The old veteran has not been forgotten with respect to pensions and other matters, but there is a desire here to improve the condition of those vho are, in the main, unemployable.
Since this legislation was first introduced in 1930 its objective has been to give the federal .authority the right to provide assistance to those veterans who fought in the first war, and who are to some extent unemployable. In the main this bill is designed to increase the amounts payable to them, and to deal with other subsidiary matters indicated in the resolution.
Resolution reported, read the second time and concurred in.
Mr. GREGG thereupon moved for leave to introduce Bill No. 196, to amend the War Veterans Allowance Act, 1946.
Motion agreed to and bill read the first time.



BUSINESS OF THE HOUSE

[Stage Direction]
Mr. ST. LAURENT: Tomorrow we would jike to proceed with the third reading of Bill No. 7, to provide assistance to the gold mining industry, which was given second reading today; then with the second reading of the bill concerning industrial relations, which has just been read the first time; with the second reading of the bill to amend the War Veterans Allowance Act, which has just been read the first time, and then with the resolution on the order paper to establish a joint committee of both houses of parliament on human rights. In order to meet the desire expressed that the house have a day fixed for a debate on external affairs, we would like to go into committee of supply and call the Department of External Affairs and perhaps one other department. Then we would ask that the items stand, and fix an item in external affairs for consideration by the house on Monday.
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Wednesday, April 7, 1948