Mr. JAMES SINCLAIR (Vancouver North):: Mr. Speaker, I rise to a question of privilege affecting the hon. member for Comox-Alberni (Mr. Gibson), myself, and every member in the house who comes from a distance to attend parliament. At the beginning of the last session we went to the accountant of the House of Commons and submitted our travelling expenses, along with receipts, in accordance with the Senate and House of Commons Act, section 43(1) of which states:
For each session of parliament, there shall also be allowed to each member of the Senate and of the House of Commons his actual moving or transportation expenses, and reasonable living expenses while on the journey between his place of residence and Ottawa, going and coming, once each way.
When we applied to the House of Commons accountant for payment of those expense accounts we were informed that Your Honour had ruled our accounts out of order. No reason was given, but the inference was that because we travelled by air our accounts were not in order.
I submit that the House of Commons Act makes no limitations as to the type of transportation to be used. When the first British Columbia members came here they came by sailing ship to San Francisco, across the continent by rail and then north by stage, for a matter of twenty-six days. Since that time we have had rail transportation; and since the advent of the Trans-Canada air lines, cabinet ministers, businessmen and civil servants have travelled back and forth by air. But we have been limited to travel by rail. If Your Honour will examine the public accounts for 1944 you will find that one Vancouver member travelled by air and at Easter adjournment in 1946 and 1947 members travelled by air. The hon. member for Yukon (Mr. Black) informs me that he regularly travels by air and his accounts are approved. For the pre-Christmas session, the British Columbia members who travelled by rail had to spend eight days
travelling to attend a session lasting eleven days. Moreover, those who went home by rail arrived only the day before Christmas.
We suffer enough by being absent from our homes for six months without having to drag ourselves across the continent by rail, and as a member of parliament I request that Your Honour give the reason which you gave to the accountant of the House of Commons as to why the expense accounts for the hon. member for Comox-Alberni and myself were refused.


Mr. SPEAKER:: The hon. member may be assured that due consideration will be given to the matter.


James Sinclair: With all due respect, you have already made your decision. I am only asking that as a member of parliament I be afforded the same courtesy as is given the accountant of the House of Commons.


James Horace King: I call the attention of the hon. member to a very well known rule, that the Speaker should not be questioned from the floor of the house. I have noted the remarks made by the hon. member, and he may be assured that due consideration will be given them.



VETERANS AFFAIRS


Right Hon. W. L. MACKENZIE KING (Prime Minister):: Mr. Speaker, I wish to make a statement to the house with respect to pensions and) student veterans' training allowances.
On the 19th December, 1947, I made a statement in this house respecting veterans pensions in the course of which I said that "in the case of disabled veterans and pensioned widows, the government will introduce legislation during the present session of parliament to amend the Pension Act, in order to provide for an increase in rates of compensation", and that such "increases will be made effective as of October 1, 1947".
During the recess of parliament the government continued to give careful consideration to the adequacy of the pensions in respect of disability and death, and particularly to the provision for dependents. Representations
Veterans Affairs

were received1 from the national organizations of ex-service men and women, and the entire situation was reviewed by the Department and by the government.
I am pleased to announce that a bill to amend the Pension Act is now virtually ready for introduction. I am prepared at once to give in outline what the government intends to propose:
(a)	The basic scale of pensions for total disability and death will be increased and, for all ranks up to and including that of captain, the compensation will be at a rate in excess of that at present being paid on behalf of captains.
(b)	The additional pension which is being paid on behalf of the wives and children of disability pensioners, and' the children of pensioned widows, will be substantially increased, as will the awards to orphan children.
(c)	The maximum award to the eligible parent or parents of a member of the forces who has died will be correspondingly increased.
With the consent of the house I shall now table a schedule reflecting the upward1 adjustments I have outlined. It is estimated that these adjustments over present rates will involve a total increase in cost of approximately $12,000,000.
These increased rates will, to a greater or lesser degree, affect over 400,000 persons and in accordance with my original announcement, will be effective from October 1. 1947. The government is anxious to have these retroactive payments made as early as possible. Although everything possible will be done to enable this to be accomplished, it will necessarily be a matter of some weeks, after authority is received, before the adjustment cheques can be ready.
The government has also been giving close and sympathetic consideration to the position of veterans in training, both vocational and university. It has been decided to change the schedule of training rates to provide increases to married veterans, and to those with dependents, in conformity with the rates in this schedule which I now table.
The effect of these increases will be as follows:	A married veteran while taking
training will receive $90 per month instead of $80. In addition, there will be payable on behalf of the first child $18 instead of $12, and for the second child $14, with proportionate increases for succeeding children, so that a married veteran with three children will receive $134 per month instead of $114. In addition to these rates, tuition fees will continue to be paid.

The increased rates are effective as from January 1, 1948. It is hoped that the increases will overcome many of the difficulties being experienced by married veteran students.


Mr. PEARKES:: Is provision being made for increases under the War Veterans Allowance Act?
Hon. MILTON F. GREGG (Minister of Veterans Affairs): The amendments to the War Veterans Allowance Act are still under study, and the proposals will be completed before the end of the present week.

On the orders of the day:


Mr. GORDON GRAYDON (Peel):: I wish to ask the Prime Minister a question based upon his announcement that legislation is proposed with respect to an increase in veterans' pensions and allowances. I understand that the increases cannot be made effective until the legislation has passed through parliament. If that is so, may I suggest to the Prime Minister that when the legislation is brought in we give it priority. We give priority to veterans generally, and I think we should give priority to this legislation.


Mr. GREEN:: A further question along the same line:	Is it the intention to send that
amendment to the Pension Act to the special committee?


William Lyon Mackenzie King: To send which amendment?


Howard Charles Green: Is it the intention to send to the special committee being set up to consider veterans affairs the bill amending the Pension Act?


William Lyon Mackenzie King: I cannot give an answer at the moment, but I will have a reply later.


Mrs. STRUM:: The Prime Minister mentioned married student veterans. Does that mean there will be no increase in the allowances to the unmarried man or girl veteran?


William Lyon Mackenzie King: I can speak for the unmarried man; there will be none for him. My hon. friend, the Minister of Veterans Affairs, may speak for the ladies.
Some lion. MEMBERS: Oh, oh.


Gladys Grace Mae Strum: Student veterans.


Mr. GREGG:: It , is correct; there is no increase indicated for the unmarried veteran.


Gladys Grace Mae Strum: Or the girls.


Milton Fowler Gregg: Veterans, men or women.

Diplomatic Service


Mr. GIBSON (Comox-Alberni):: The Prime Minister indicated1 in his announcement that the increase in the veterans pension payments would total 812.000,000. Does that include the 87,500,000 he announced on December 19, or is it in addition to that?


William Lyon Mackenzie King: I say to my hon. friend it does include it.



LABOUR CONDITIONS


Hon. HUMPHREY MITCHELL (Minister of Labour):: In conformity with the provisions of article XIN of the constitution of the international labour organization I desire to table the authentic text of the conventions and recommendations adopted at the thirtieth session of the International Labour Conference at Geneva in June and July last; also copy of P.C. 287 setting out the legislative jurisdiction involved therein.



DIPLOMATIC SERVICE


[Stage Direction]
Right, Hon. L. S. ST. LAURENT (Secretary of State for External Affairs): Mr. Speaker, on February 12, I indicated to the house that I would examine the press articles referred to by the hon. member for St. Maurice-Lafleche (Mr. Hamel) in his question of that day in connection with the new letters patent governing the office of Governor General of Canada. I have now had an opportunity of doing so and also of reading a subsequent article published in Le Devoir on February 13. This last article bears the title: "Mr. St. Laurent quite annoyed at the leakage of the state secret."
I hope I did not display any annoyance- which I certainly did not feel-though I was concerned to find that there had been any leakage about confidential correspondence between the Prime Minister of Canada and the secretary of His Majesty the King in his capacity as King of Canada. My concern was not over the contents of the correspondence but over the impropriety of publicity about something which, not only by tradition and by courtesy but also by proper constitutional practice, and even by the implication of the ministerial oaths of office, has always been and should be treated as highly confidential.
Of course it could be no secret that there must have been correspondence in connection 5849-79
with the new letters patent since it was apparent they were signed by His Majesty himself in London and authenticated under the Great Seal of Canada and countersigned by the Prime Minister of Canada in Ottawa. But the form and tenor of that correspondence was just as confidential as would have been their conversation if the Prime Minister of Canada had approached His Majesty in person at Buckingham Palace or elsewhere and the completion of the letters patent been arranged orally.
Nor -was it any secret that though the terms of these letters patent made it legally possible .for the governor general, on the advice of Canadian ministers, to exercise any of the powers and authorities of the crown iD respect of Canada, without the necessity of submission being made to His Majesty, including among others, royal full powers for the issuance of letters of credence for Canadian ambassadors and foreign ministers, there was no legal necessity to alter existing practices and that it would be the responsibility of the government of Canada, in any prerogative matter affecting Canada, to determine whether the submission should go to His Majesty or to the governor general.
What I have just stated was made perfectly clear to the press by the Prime Minister on October 1, 1947. What gave me some concern is the publication of garbled and speculative accounts of when this correspondence is supposed to have been exchanged and what it is supposed to contain.
Though the publication of the correspondence would at once dispel all this, the government is not disposed to take that easy way of dispelling it, because at best it would be discourteous to His Majesty and because of its possible effect as a precedent on confidential exchanges of views between the sovereign and his responsible advisers in relation to public affairs prior to decisions or actions for which his advisers themselves and they only have full constitutional responsibility.
Le Devoir in its article of February 13 narrows its alleged disclosures to one assertion. After discussing the Prime Minister's communication to the press it says in so many words:
The only newr fact asserted by Le Devoir is the existence of a personal communication of the king expressing the desire that our ambassadors' letters of credence continue to be submitted to him for signature. It is precisely this royal communication which constitutes the state secret w'hich it was desired to keep inviolate.
Diplomatic Service
[Stage Direction]
After making that assertion, the paper states:
The Canadian people have the right to know if King George VI did express, in a communication to the Canadian government, a personal desire which would amount to_ an intrusion of the government of Great Britain in our foreign politics. The Canadian people also have the right to know if the king expressed this desire before the issuance of the new letters patent or only during the last weeks.
I feel I can say this much: There has been no communication whatsoever from His Majesty referring to the manner in which it would be agreeable to him to have letters of credence to Canadian ambassadors and ministers dealt with since May, 1947 and there has been no communication at any time which would amount to an intrusion by the government of Great Britain in our foreign politics.
Any suggestion that His Majesty may have been acting on advice of the United Kingdom ministers in the course of the correspondence with the Prime Minister of Canada about these letters patent 'is fantastic. I will merely recall, because it is too clear to require any comment, that the right to advise His Majesty in prerogative matters affecting Canada resides exclusively in the government of Canada.
The conference on the operation of dominion legislation held in London in 1929 to provide for the implementation of the declaration of the imperial conference of 1926, made the following declaration:
It is the right of the government of each dominion to advise the Crown in relation to all matters relating to its own affairs.
The report of this conference was approved by the imperial conference of 1930.
This was followed by the statute of Westminster, 1931, which refers to the declarations and resolutions set forth in the reports of these conferences and makes the legislative provisions required to ratify, confirm and establish such of these declarations and resolutions as it was necessary to deal with by legislation.
The new letters patent in increasing the powers of the governor general represent a very significant constitutional advance in line with the declarations of the conferences and the statute of Westminster. To suggest that there has been anything whatsoever which could be regarded as retrogressive in connection therewith or in connection with the practices thereunder is absolutely unwarranted.
What I have already said disposes also of the assertion in the article of the Chicago Tribune referred to by the hon. member. With regard to the references in that article to the appointment of Mr. Edmond Turcotte, I

need only say this: The correspondence relating to the new letters patent and to what was intended to be the practice thereunder took place several months before Mr. Tureotte's appointment. Moreover, Mr. Turcotte was not appointed ambassador or minister. He was appointed consul general, an appointment of a different character, which was made by order of His Excellency the Governor General in council on the 27th of October last.

William Lyon Mackenzie King: Mr. Speaker, I have been pleased to observe that the leader of the C.C.F. party (Mr. Coldwell) is in. his seat today. I think I may venture to say, on behalf of all parties in the house, that we much regretted the indisposition which caused his absence from the house during the past ten days, and we. are pleased indeed to see him again in his seat.


Mr. JOHN BRACKEN (Leader of the Opposition):: Mr. Speaker, I am glad to say that in this matter the Prime Minister speaks I think for all members of the house. I am glad to see the leader of the C.C.F. party back in his seat.


Mr. R. M. WARREN (Renfrew North):: Mr. Speaker, I should like to draw attention to the fact that a friend of ours, the hon. member for Selkirk (Mr. Bryce), who has been, absent from the house for some time on account of illness, is with us again today. On behalf of the back benchers I wish to welcome him back to his place in this house.



FUR SEALS


[Stage Direction]
Hon. J. A. MacKINNON (Minister of Fisheries) moved the first reading of Bill No. 35 (from the senate) respecting the provisional fur seal agreement between Canada and the United States.
Motion agreed to and bill read the first time.


[Stage Direction]
Hon. MILTON F. GREGG (Minister of Veterans Affairs) moved the first reading of Bill No. 47 (from the senate) to amend the War Service Grants Act, 1944.
Motion agreed to and bill read the first time.

Inquiries of the Ministry


[Stage Direction]
Bill No. 36 for the relief of Adelaide Margaret Munn Bain.-Mr. Maybank.
Bill No. 37 for the relief of Gwendolyn Beulah Russell Denefeld.-Mr. Maybank.
Bill No. 38 for the relief of Miriam Salomon Starr.-Mr. Maybank.
Bill No. 39 for the relief of Laura Krause Suffrin.-Mr. Maybank.
Bill No. 40 for the relief of Jean Fullarton Craig Walker.-Mr. Maybank.
Bill No. 41 for the relief of William Hesketh. -Mr. Maybank.
Bill No. 42 for the relief of Janet Alice Smith Bennett.-Mr. Maybank.
Bill No. 43 for the relief of Gwendoline Elizabeth Hunt Edmund.-Mr. Maybank.
Bill No. 44 for the relief of Reta Mabel Welch Gilbert.-Mr. Maybank.
Bill No. 45 for the relief of Leah Shrimer Schanker.-Mr. Maybank.
Bill No. 46 for the relief of Doris Mary Stratton Stuart.-Mr. Maybank.
Bill No. 48 to incorporate National General Insurance Company.-Mr. Benidickson.
Bill No. 49 respecting The Eastern Trust Company.-Mr. Isnor.
Bill No. 50 respecting The Ruthenian Catholic Mission of the Order of Saint Basil the Great in Canada.-Mr. Hlynka.


[Stage Direction]
Right Hon. C. D. HOWE (Minister of Trade and Commerce) moved that the house go into committee at the next sitting to consider the following resolution:
That it is expedient to present a bill to amend the Canadian Wheat Board Act, to authorize the board to provide pensions for members, officers and employees and to make provision for the increase of the fixed minimum price on wheat deliveries; to extend the control of interprovincial movements of wheat products and to empower the governor in council to extend the present system to oats or barley.
He said:	His Excellency the Governor
General, having been made acquainted with the subject matter of this resolution, recommends it to the consideration of the house.
Motion agreed to.


[Stage Direction]
On the orders of the day:
Mr. DONALD M. FLEMING (Eglinton): May I ask the Minister of Finance whether 5849-791
there is any truth in the statement in the press that the government is contemplating an increase in the present ceiling on housing accommodation ?
Hon. DOUGLAS ABBOTT (Minister of Finance):: Obviously the question is one of government policy, which will be announced in due course.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Mr. CLARENCE GILLIS (Cape Breton South):: Mr. Speaker, may I direct a question to the Minister of Labour of which I have given him notice? The radio this morning announced that there were 7,500 unemployed in the city of Halifax, with a possible layoff of 2,000 more within the month. Has the minister been advised of this? Is his department taking any steps with regard to employment or relief measures in that city, and has he checked with the senior member for Halifax (Mr. Isnor), who might have a solution?


Humphrey Mitchell: Mr. Speaker, the employment situation in certain sections of the maritimes, including Cape Breton, New Glasgow and Halifax, has been receiving special attention for several weeks past. The situation at Halifax has considerably worsened in the last few days on account of the sudden drop in shipping.
The rather unfavourable situation in the maritimes is explained by a number of circumstances. The freight traffic through the maritime ports has reached an all-time low since before the war.


Mr. FRASER:: That is government policy for you.


Humphrey Mitchell: I shall not say what I might have said. The cut of 'logs for lumber has been lighter this year and lumbermen have not been in as great demand as heretofore. Shortages of material, especially steel, have affected work in the shipyards and layoffs have occurred. Other industries have also had to curtail on account of the shortage of material. On Saturday the Halifax shipyards laid off 300 men. For the first time since the war the textile plants report sufficient staff and there are no vacancies other than for skilled workers.
With regard to the immediate situation in Halifax city and county I was advised at noon today that there were registered in our Halifax office a total of 4,187 men and
Inquiries of the Ministry

women seeking employment. That is a drop of 3,000 from my hon. friend's figure.


Clarence Gillis: My figure came over the radio this morning.


Humphrey Mitchell: You cannot believe
everything you hear, even over the radio. Unemployment insurance benefits were being paid to 2,728 of the persons registered for employment. This, of course, does not mean that some of the others who are not being paid are not eligible for benefits. They may have been laid off in the last few days. It simply means that in many cases they have not been out of work long enough to claim the benefits. In addition, there are 1,800 stevedores on the stevedores' register, and there were fewer than 400 working today. The department has been giving close attention to the situation particularly that which has existed in Cape Breton and New Glasgow. Men out of work, and some women too, have been offered free transportation to other parts of Canada. This offer has, in fact, been standing for several months. Up to date 2,632 persons have been moved by the department.


Mr. SMITH (Calgary West) :: Never send another notice or you will get more of this.


Humphrey Mitchell: I shall tell the whole story, and leave nothing to the imagination.
While I am on the subject I should like to state that a good deal of construction is being planned in the maritimes. Halifax city has under consideration a housing project, of 300 units. A new pier and emigration shed at east Saint John is at the planning stage. East Saint John has a plan underway for a housing project.
Contracts have been let to the Saint John Dry dock company for a wharf construction job to cost $2,500,000. The provincial governments are planning for a heavy program of highway and bridge construction for the coming season. Two of the brickyards have closed down and are remodelling so that they can increase their production. The Nova Scotia power commission has announced a $5,000,000 program of hydro development. All of these things lead one to believe that the present situation is largely seasonal in character.
There are some very encouraging things that should be reported; for example, close to one million crates of New Brunswick seed potatoes have been shipped from the port of Saint John to Argentina and other South American countries during the past three months, the arrangements for which shipments were due to the activities of the Department of Trade and Commerce.

There has been a very brisk movement of maritime woodsmen to the United States for lumber work, and many Canadian workers have taken advantage of the offer of employment in the United States and will be returning with a considerable number of United States dollars.


An hon. MEMBER:: That will help.


Humphrey Mitchell: Let us have some
pleasure, gentlemen. We do not want all misery. I know my hon. friends opposite want misery;
I like something constructive.


Mr. KNOWLES:: We are getting it now.


Gordon Graydon: You are trying to get sunshine out of cucumbers.


Humphrey Mitchell: We are not getting any sunshine out of the hon. member for Peel.


Gordon Graydon: I think you are, but perhaps you are not.


Humphrey Mitchell: Sardine fishermen landed record catches in 1947 and enjoyed a very successful year, due in part to the high December auction prices which brought double the usual prices.
Generally, labour management relations have been good. There has been no interruption of work in the coal or steel industry and, while several negotiations are under way at the present time I hope they will result in satisfactory agreements.


Gordon Graydon: What are hon. members applauding about?


Mr. HOMUTH:: That settles the unemployment problem in Nova Scotia.


John Bracken: I should like to direct a question to the Minister of Labour, arising out of the statement he has just made. As I listened to it I gathered that some 2,600 unemployed workers have left Nova Scotia to accept work elsewhere in Canada under the government's plan of assisting them to find work elsewhere. Will the minister state what period of time that movement of 2,600 workers covers?


Humphrey Mitchell: I would say about the last six months. I am speaking now from memory. I may say this to my hon. friend

and I think the hon. member for Cape Breton South (Mr. Gillis) will agree with me-that by the very nature of things during the war there was a heavy concentration of labour in Halifax. Inevitably when you change from a wartime to a peacetime economy there must be a shift of labour forces in that part of the country. I think that should also be taken into consideration.

Inquiries oj the Ministry


John Bracken: Will the minister indicate later how many persons left Nova Scotia under that plan prior to the time the 2,600 left?


Humphrey Mitchell: I shall be glad to give my hon. friend the numbers, and where they went, perhaps tomorrow.


Gordon Graydon: May I ask the Minister of Labour a supplementary question with respect to the movement of labour from Nova Scotia? Does he not think that this would be a good time, when there is need of work in that part of the country, to begin construction of the Canso bridge?



HUMAN RIGHTS


[Stage Direction]
On the orders of the day:
Mr. J. G. DIEFENBAKER (Lake Centre):: I should like to direct a question to the Minister of Justice. In regard to the replies which have been received since November 1 to the letters sent out by the committee on human rights and fundamental freedoms to the attorneys general of the various provinces or to deans of law schools, will he table these replies?


Right Hon. J. L. ILSLEY (Minister of Justice):: Yes, some additional replies have come in, one as recently as three or four days ago. Tomorrow I shall table all the replies that have been received.



VETERANS AFFAIRS


[Stage Direction]
On the orders of the day:
George Randolph Pearkes: Will the Minister of Veterans Affairs give an answer to the question I asked on January 27 regarding the appointment of a special committee to inquire into the Braefoot project?
Hon. MILTON F. GREGG (Minister of Veterans Affairs): Mr. Speaker, the persons who are carrying out the investigation are meeting in Victoria today. I shall give the hon. member a further reply tomorrow.



BARBARA ANN SCOTT


[Stage Direction]
On the orders of the day:
Mr. J. T. RICHARD (Ottawa East):: Mr. Speaker, I think it is only fair that before I put my question to the Prime Minister I
should pay particular tribute to a lovely lady from Ottawa who has become the queen of the skating world, Barbara Ann Scott. As the member for an Ottawa seat, the one in which the Minto skating club is located; and also as the owner of the first pair of fancy skates worn by Barbara Ann Scott. I am proud indeed to pay tribute to the fairest lady of, this country. My question to the Prime Minister is whether any suggestions have been made to him with regard to the tribute to be paid to Barbara Ann.


William Lyon Mackenzie King: Mr. Speaker, when Miss Barbara Ann Scott won the European championship and the Olympic championship I sent her a telegram on behalf of the government and people. Yesterday' I sent another one to her, this time on the winning of the world championship. Hon. members would, I am sure, wish it to appear on Hansard. It is as follows:
Dear Barbara Ann: All Canada is prouder of you than ever. Once more warmest congratulations upon winning for the second time the world championship in figure-skating contests. Your triumph is shared by all your fellow-Cana-dians who now await your return to accord you a truly national welcome. I extend these congratulations on behalf of the government as well as on behalf of the people of Canada. In the world arena of sports you have indeed brought high honour to our country and to yourself.
W. L. Mackenzie King
I may say to my hon. friend that I have had some suggestions as to the recognition that might be given to Miss Scott when she returns; among others the communication from himself, received only' a few minutes ago, and no doubt there will be other suggestions made. By the time Miss Scott returns I hope it may be possible to have general agreement on the form of recognition by the capital of Canada, representing the people of Canada, which it would be advisable she should receive.


Mr. McIVOR:: I should like to ask
another question. Would it be possible for her to appear before the House of Commons or the Senate?


William Lyon Mackenzie King: Mr. Speaker, I think I might promise to take my hon. friend and introduce him privately to her any time he wishes.



BUSINESS OF THE HOUSE

[Stage Direction]
On the orders of the day:
Mr. RODNEY ADAMSON (York West):: On Friday night there was some debate as to whether Bill No. 3 or Bill No. 7 would come
Foreign Exchange Conservation

on this afternoon. Will the Minister offs Finance give even a tentative date when Billijg No. 7 will be called1? Will Bill No. 3 have.fj to be concluded before Bill No. 7 is pro- i ceeded with?	i


Douglas Charles Abbott: I have not taken any definite decision, but I had assumed that we would try to conclude Bill 3 before passing on to Bill 7 or the other measures in connection with the dollar conservation program.



FOREIGN EXCHANGE CONSERVATION


[Stage Direction]
The house resumed from Thursday, February 12, consideration in committee of Bill No.
3, respecting emergency measures for the conservation of Canadian foreign exchange resources-Mr. Abbott-Mr. Macdonald (Brantford1 City) in the chair.
On section 3-Goods not permitted import.
The CHAIRMAN:: When the committee rose on Thursday night it was considering an amendment moved by Mr. Jaenicke, seconded by Mr. Knowles:
That subsection 1 of section 3 of Bill No. 3 be amended by inserting after the word "Canada" in line nine on page one of the said bill, the following words:
"from any country requiring gold or currency of the United States of America in payment or settlement of their purchase price."


Mr. MacINNIS:: 
Douglas Charles Abbott: I do not know whether any other hon. member wishes to speak on the amendment; if not, I have one or two facts which I should like to place before the committee.


William Ross Macdonald: The hon. member for Peace River.


Mr. LOW:: I do not want to delay the committee for more than a minute or two, Mr. Chairman, but I thought. I should say a word before the minister speaks. I have been giving some consideration to the amendment now before the committee. After weighing both sides of the question.-and I admit that there are definitely two sides to it- I must say that I find myself more in favour of the amendment than I was when it wras proposed the other night. As I say, I realize that there are two sides to the question and I have given consideration to the side which the minister has indicated in a number of his speeches with regard to the things that might make him fearful about having such an amendment passed. I think the minister indicated last week that action of the house in passing an amendment of this kind would possibly be looked upon by the United States as a breach of faith on Canada's part. They may do so, Mr. Chairman, but certainly not reasonably. The Geneva pact recognizes that where a nation finds itself with an adverse balance of trade, such as Canada now does, that nation may have to use the escape clause that is .provided .in the pact and restrict imports from all their creditor nations. Surely no fair-minded person or nation would regard as a breach of faith the action we are now proposing to take. If the authorities in the United States hold to the principle of nondiscrimination and are favourable to the insertion of an escape clause for nations that have an unfavourable balance of trade, surely they expect us to use it if we get into that position. Likewise, I think the United States would not consider the amendment that is before the committee as a breach of faith, if we should carry it, particularly in the light of the fact that that great nation has never yet been seized with a sense of her own responsibility to balance her trade in the interests of world peace. I cannot believe that the United States would resort to retaliation, as has been suggested, if we took action to protect our dollar reserves and our trading position while at the same time we take *perfectly legal action such as is envisioned in this amendment to protect our own people, and do it under the terms of the Geneva pact. No one can argue that it is not protection of our own people to swing some of the trade that is being lost, through restricting United States imports, to sterling countries from which we can get a certain quantity of the things which cannot come into Canada now under these restrictions.
At one stage in this debate the minister stated that the amount of business we could swing to sterling countries as a result of th<
Foreign Exchange Conservation

restriction on United States imports would be comparatively small. If that is so-and the minister nods his head-then it is one more good reason why it would not be looked upon as a breach of faith if we were to accept this amendment. In the light of the suggestion that the amount of business might be comparatively small, I do not see why the United States would be expected to retaliate against Canada by restricting exports from that country to Canada, including essentials, such as oil, steel, cotton and other products.
I am sure if the minister would assure the United States that the restrictions against her goods would be removed as quickly as Canada can get herself in a safe position, so far as trade is concerned, into a position where our dollar reserves were not in jeopardy, and would come clean with them, the United States would understand and certainly would not consider that, in passing this amendment, we are committing a breach of faith.
One further point before taking my seat, and it is this; we are going to have negotiations in future with the United States government. I believe it was a good thing to have the amendment offered in committee last week if for no other reason than to bring home to the people of the United States the fact that we take a serious view of this w'hole business. I should like to have it impressed upon those good folk down there, for whom I have the greatest respect, the obligation they take upon themselves when they assume leadership in the world trade. Something has to be done to bring home to the American people that they have an obligation to do things to balance their own trade, and thus to help lesser nations industrially, to balance theirs, so as to take care of their own people.
Whether or not the amendment is accepted, I contend that the salutary effect will be good, and particularly if a substantial portion of this House of Commons votes for it-as I propose to do. I believe such action would strengthen the hands of the minister in his future negotiations with that great nation to the south of us; and for that reason, along with many others, I propose to support the amendment.


Mr. CHURCH:: Coming from Ontario I should like to call attention to the importance of Bill No. 3, to which an amendment has been offered by the hon. member for Kinders-ley. He has moved-
That subsection 1 of section 3 of Bill No. 3 be amended by inserting after the word "Canada" in line nine on page one of the said bill the following words:
"from any country requiring gold or currency of the United States of America in payment or settlement of their purchase price."

The subsection would then read:
No person shall import or attempt to import into Canada from any country requiring gold or currency of the United States of America in payment or settlement of their purchase price any goods listed or of the classes described in schedules I, II or III.
If the section in the bill is followed it is good-bye to any trade with soft currency countries, including Great Britain, France.
Italy, Holland, Belgium, Luxembourg and the rest of them.
I should like to make one or two comments about this bill, because thus far I have not taken part in the debate. I did not read the bill until a few days ago. In my view this bill takes us back to where we were years ago. When I asked about the Geneva charter on February 7, I was told nothing whatever about it. This whole thing came in November last like a bolt from the blue. Those people who sat at Geneva were free traders-and they assembled in a good place. What they have done in these pacts has caused disaster to both small and large business in Canada.
We are back to where we were in the days of Gladstone, when Great Britain was a free trading country, and when Liberals in this house were free traders. We find that the first schedule of the bill is the prohibitory schedule, while schedule II gives the quotas and schedule III the permits. Anyone who will look at Bill No 3 will see that it is based on the Geneva charter; and if we look into the definition of "charter" we find that the bill includes something which was never intended by the writers of the Oxford dictionary. According to the Oxford dictionary a charter was a grant from the sovereign or from a legislature. That definition was stretched at the time of the Atlantic charter to embrace the visionary hopes of the late President Roosevelt on behalf of the United States.
If we look at this bill, what do we find? I asked about it last February. A meeting was held at Geneva while parliament was in session here at Ottawa, but on February 7, the government said it did not know anything about it. The government has not yet been able to sell this program to the country, because both large and small businesses are affected. Some of them have been practically ruined by it. They want to import commodities such as fresh vegetables from the West Indies, but they are not permitted to do so. They say America would claim this is discriminatory. Mr. Churchill spoke about the matter yesterday, and his statement is reported by the press in this way:
Turning to home affairs, Churchill attacked socialist planners who he said "keep the British

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bulldog running around after his own tail till he is dizzy and then wonder that he cannot seep the wolf from the door."
That is what we are trying to do in Canada. We are trying to keep the wolf from the doors of large and small manufacturers. But we are lucky in this country to be permitted to breathe the fresh air without first having to get a permit under this bill.
I believe this has been overdone; the government of the day and the Liberal party for two generations on trade policies has done everything by fits and starts and nothing long. In the matter of trade, I can remember when the Canadian council of agriculture came here to Ottawa, in 1923, the first year the Drury government took office, and they said protection was an unmitigated evil and they would get a spade and dig up the last remnant of it in Canada. They claimed that the grain growing industry was not an east and west industry, but a north and south industry, to serve the United States rather than England, France, Italy, and the allied countries who were with us in the first war.
I can tell you this, that the government of the day has no mandate for this bill. Where do they get their mandate for everything that has been done to upset the whole fiscal and economic system of this country set up in Canada since confederation? Sir Wilfrid Laurier and Mr. Fielding were two of the founders of the preferential system, and it is top bad that that was dropped by the United States-Canada treaty in 1938. I was one who along with the Social Crediters opposed the Bretton Woods agreement and showed the folly of the American loan, because I saw then the disaster coming from Geneva last summer. I saw it coming back in 1945. I knew what was going to happen. In my address with respect to the Bretton Woods agreement I predicted that we would have the very state of affairs that has developed, and we could go back to the days of unrestricted reciprocity with the United States covering every article of trade and commerce and upsetting our whole fiscal system. Considering the natural resources and the raw materials of Britain it is strange to me that the mother country and the dominions did not stay together, in peace as in war. Unless they hang together in trade and commerce and defence and migration they are going to hang seperately, because no dominion can go it alone. We will find this out during the coming summer and fall if this bill passes.
This Bill No. 3 is no protection by any means whatever. What has happened since we came into this house? Before and during the last war there were nin* or ten different 5849-80
forms of protection applied to the farming industry of this country. I admit that some were necessary. There were those in this house who said that protection was an unmitigated evil, yet during the war we gave the. farmers seven or eight kinds of protection. In fact for years Canada paid them a bonus not to grow crops at all.
When I saw the war coming I spoke in the house and suggested to the Minister of Agriculture and the government and asked that storage reservoirs be built in the old country in which to store our grain. In January 1938 the British Medical Association said that hard grains and wheat could be stored scientifically below ground and kept for ten years. But they would not do that at all. They paid people not to grow crops; they had acreage bonuses and all that kind of thing, all by protectionist measures.
I take exception to this third section of the bill because it is not protection in any sense of the word. It ruins any chance of protection for the small storekeeper, the small importer of goods, the industrial worker and the farmer. It contains many discriminatory clauses. This Bill No. 3, section 3 and the three schedules, ruin any hope of the people in the soft currency countries of doing any export business with this country.
These are all discriminatory agreements. They go beyond our national policy. What is our national policy? Sir John A. Macdonald in 1878 laid it down and Sir Wilfrid Laurier and Mr. Fielding adopted it. They were the authors of preferential trade which was abrogated to the United States in 1938. Because of that we had soup kitchens all over the country. Our policy was to have our own markets for our own products and our own work for our own workmen. The United States pulled themselves up from the dark days when the commercial travellers from Great Britain went through their land selling goods. They are today the greatest industrial country in the world and they achieved that greatness by having the highest protection of any country. Now they want to .extend the Hyde Park agreement which is not an agreement at all, which is simply a verbal agreement. I am opposed to the trade pacts made in Geneva. I am against the whole idea of multilateral trade agreements and the manner of putting through this bill.
No conference was held last January before the February Geneva meeting. New Zealand asked for a conference and so did the mother country and Australia, but what did Canada tell them? We had the reply, when I raised it in the house, that the government did not
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intend to hold such a meeting. They sent Mr. Wilgress over there and he is down in Havana now at a trade conference of twenty-one countries. According to a dispatch published in the press last week he said in Havana that 800 amendments have been proposed to the Geneva charter, not one of which can be accepted because it is all signed, sealed and delivered by twenty-one countries; not a line of it can be changed.
By this Bill 3, clause 3, the various subsections of clause 3 and three schedules we are only holding a post mortem. We are just caretakers and undertakers. That is what we should turn ourselves into, because that is all the .power we have over this particular bill. It has been signed, sealed and delivered by the twenty-one governments and by the permanent officials. The government of the day will have to take the responsibility.
As I say, there was no conference before Geneva. New Zealand, Australia and Great Britain wanted a conference. The United States should have been told that preferential trade was a family matter and would not be open for discussion at Geneva. If that had been done w-e would not have had the situation we have today.
By the Geneva pact the Liberal party has gone back on everything Sir Wilfrid Laurier did. What did he say in 1897 when he was first in the diamond jubilee procession over there? He said, "If you want our aid, invite us to your councils." We were invited in February, 1947, to the councils of Great Britain, Australia and New Zealand, as to Geneva, but we would not even attend them before Geneva. We are simply hanging all hope of preferential trade in the future on the sour apple tree with John Brown's body. The action of the Liberal party puts me in mind of the old song, "Rocked in the cradle of the deep, I lay me down in peace to sleep." That is what happened at Bretton Woods and Geneva; they were rocked in the cradle of the deep and they laid themselves down in peace to sleep. They did the same thing at Geneva.
I am not here to criticize the United States; it is a great land and what they did in the war was wonderful; but I think they would appreciate us more if we told them the truth, the whole truth and nothing but the truth about where these bargains are going to land this country.
Canadianism defeated eontinentalism at the polls in 1911. Canada's victory on the reciprocity issue should have cleared the way for the working out of a protectionist system that would protect the consumer against unjust

prices just as truly as that system would protect the manufacturer against unjust competition. Canadianism has been perverted more and more into a system of taking care of the producer and leaving the consumer to take care of himself. The desire of the milling companies and the middlemen to inflate the price of their securities on the market is much more conspicuous than the desire of these milling companies to pay the farmer a fair price for wheat or to charge the consumer a fair price for flour. Greed on the part of manufacturers and Ottarva's failure to restrain their greed has weakened the whole principle of Canadianism in this country's trade and industry.
Someone mentioned the flag the other night in connection with this party. In 1922 I said that it would be better for the Conservative party to remain out of power under the union jack of Canadianism than to be returned to power under the white flag of unrestricted reciprocity or the yellow flag of free trade.
This Bill No. 3 is going back to the days of Gladstone and the old free trade way of doing business when we started up as a country. It is brought in under the guise of an emergency but it is going to be here for a long time. We are giving up all hope of ever restoring the preferential system of trade with the British empire. I am opposed to this internationalism and multilateral trade. I have opposed it before because it has brought this country only a minimum of trade as compared with preferences. True, we had a policy once of favoured-nation trade with twenty-eight countries, and that was a good system, although it encouraged trade with some countries only, not with the vast majority. National combinations can be more easily controlled from Ottawa than international combinations or cartels can be restrained or suppressed from Washington.
Away back in 1923, I brought up the question of a Canadian national coal policy which would have saved us millions of United States dollars. I brought it up almost every session. I also brought up the question of developing oil from the tar sands, and the question of asbestos. All our coal should be mined under the British flag, from Wales, the maritimes and Alberta. In 1913, 1914 and 1915 we had ships coming into Toronto harbour loaded with coal from Swansea, Wales. They had come all the way across the ocean and up the St. Lawrence and docked in Ashbridge's bay, owned by Baldwin's, with which the late Stanley Baldwin was connected. That just shows what can be done. Ten years later

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millions of tons of coal were brought in under that policy from the same three places, and we could have ten times as much if only we solved the transportation problem by water and rail and all rail.
I came across an article today proposing to stop the flow of our minerals in their raw state to the United States, to be manufactured there into finished products. The Hon. T. A. Crerar in an address to the Canadian Club at Hamilton said that Canada was overindustrialized. I pointed out that Canada's yearly imports of products from the United States which under a proper policy could be bought in Canada amounted to $400 million, and showed that $9,000,000 w'orth of raw asbestos exported from the province of Quebec is shaped and fashioned by United States hands into a finished product worth $60,000,000. Think what it would mean if that work were done in our own country. I also pointed out that in processing this asbestos, 15.000 United States citizens were employed, receiving wages of $25,000,000 per annum and supporting a population across the line of 75,000. My address was commented upon in an editorial written by John R. Robinson, a great editor, in the Toronto Evening Telegram of May 14, 1924. I also pointed out that the number of workers in the United States employed in the manufacture of exports of raw materials from Canada was 120,000, and that the United States population supported by the sale of these exports was at least 700.000. Think of what such a policy would mean today when we are short of United States dollars. I believe the time has come when we should raise this issue. We are going to have trouble in respect to trade with the Argentine. Agreements have been made for the purchase by Britain of Argentine cattle and food and grains. We should have stayed with preferences to the mother country and the sterling area and then we should not have had all this trouble. Although things may look dark in Great Britain, she is not going to be crippled for ever, and we should do everything we can to build up our trade with her.
I am going to vote against the Geneva agreements. I do not believe in them. They upset the whole economic policy of this country since confederation and will cause wide unemployment. They are not in the interests of Canada, not in the interests of our farmers, or industrial workers, not in the interests of the mother country, and not in the interests of the empire. We should stick to the British preferential system which did so much for us after the dark days after the first world war. This Geneva business means the ruination of this country and will lead to 5849-80^
widespread unemployment here. The government of the day should have an election on this issue. They have no mandate from the people of this country to overthrow our whole traditional policy. This country is heading for disaster the moment we throw overboard the trade policy we have followed since confederation.


Mr. STUART (Charlotte):: Mr. Chairman, I assure you my remarks will be brief; but after listening to the debate I did1 feel that I should express the views of one from the maritime provinces. During the debate we have heard a great deal about trade between the United States and Canada. I am sure that if some hon. members who have tala n part fn the debate had lived and were livit g in the maritime provinces they would take a different attitude.
It is all right to talk about trade in the sterling areas when you have articles that can be traded' in those areas; but when you have a perishable article it is difficult to trade in other countries. Figures were put on the record today by the Minister of Labour showing that last year in Charlotte county the sardine catch amounted to almost two million cases. These were caught in the southern part of Charlotte county.. Nearly a million and1 a half cases were sold in the United States. Those that were canned in Canada were to a great extent exported; but I want to point out to the committee that down where I come from the people will resent any measure or regulation- that interferes with trade between the United States and Canada.
During the discussion I have also heard remarks such as the one we heard away back in 1911, "no truck or trade with the Yankees". When you give expression to those views in the maritime provinces you find a people there who take a very different view, and I believe the same applies all over Canada. Another thing that strikes me is that on many occasions in this country we forget too quickly. In listening to the discussion I often wondered if we ever thought back to the last war. I am thinking particularly of the canning industry. I realize that I talk mostly about fish, but I am once more thinking of the canning industry. During the war, from 1940 to 1945, if it had not been for the help of our southern neighbours, the canning industry in Charlotte county, and in fact in the whole of the maritime provinces, would have been closed. We depended one hundred per cent on our United States friends for tin plate. I am sure hon. members realize that during the war tin plate was in very short supply. We had none at all in Canada. In the canning industry
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we did! mot lose a single day on account of a shortage of 'tin plate, thanks to our United States friends to the south.
Edible oils are used extensively in the sardine industry; in fact it is utterly impossible to carry on the industry without them. There again we depended one hundred per cent on our United States friends. Prior to the war we imported! cotton seed oil from Great Britain. During the war the only thing available in the way of edible oil for canning purposes was soy beam oil from tihe United States. Not one single day was lost in Charlotte county on account of a shortage of edible oil.
When we are speaking of our neighbours to the south there is one other thing we should keep in mind. During the period of the war they were supplying us with gasoline. The rations that the people of this country were given, compared favourably with and in some cases were better than those given to their own citizens in the United States.
When mention is made of interference or a suggestion of interference with the trade over that border I say that it would not meet with the approval of the people of the maritime provinces. I for one am firmly convinced that the freer goods move over that border both ways the greater the prosperity in the maritime provinces, and I shall oppose any measure, any regulation which in any -way interferes with the traffic we have enjoyed' for years and years.
In closing I would ask horn, members to give this matter very serious thought. As I have explained to hon. gentlemen, down where I live we have a perishable article to dispose of. It must go to the United States market. The United States fishermen in Maine have for years and years tried' to convince the powers that be in Washington that Canadian fish and fish products should not go into the United States in competition with their own. Regardless of the arguments put-forward1 by these fishermen we still enjoy that market, and without it today the fishing industry, not only in my own county of Charlotte but in the maritime provinces as a whole, would be practically worthless.
Our lobster industry last year was fairly prosperous. I should like once more to put the figures on record. One company alone in a little town where I live exported $4,000,000 worth of lobsters to the United States market in 1945. Bess than four per cent of that amount were sold in Canada. That will give the committee some idea of what the United States markets mean to ihe fishermen in the maritime provinces. I would therefore ask

hon. members to think carefully before supporting this measure, because the people down in my part of the country will very much resent any regulation which will in any way interfere with that international trade.


Mr. PROBE:: I listened with interest to the hon. member for Charlotte, but when lie concluded' I was not sure whether his argument was meant to oppose the amendment proposed by the hon. member for Kindersley or to oppose the main motion.


Andrew Wesley Stuart: I think I made myself quite clear.


Mr. BENTLEY:: The hon. member said "this measure".


John Oliver Probe: The hon. member is opposing the amendment.


Andrew Wesley Stuart: Absolutely.


John Oliver Probe: I think possibly he is a bit. inconsistent in this regard. We are all sold on the need for having trade on a two-wray street. That is perhaps the one reason why the federal government has got itself into the currency jam which requires the introduction of a bill such as Bill No. 3.


Andrew Wesley Stuart: May I ask a question?


John Oliver Probe: Yes, if it is relevant.


Andrew Wesley Stuart: Does the hon. member believe that the shipment from Canada to Britain of goods which could have been sold to the United States for cash has had anything to do with the dollar situation in Canada today?


John Oliver Probe: The best way to answer the question is this: We cannot get the currency of the United States through the form which our trade has taken in past years. IVith the exception of a few years during the war the United States have sold on this market more goods than we have been able to supply them in return; and it is to correct that deficiency, I presume, that the Minister of Finance has introduced1 this measure and the others which are to follow.
The hon. member for Charlotte of course is quite correct in his argument, and I agree with him, except that he does not carry it to its logical conclusion. Undoubtedly we want to sell to the United States as much as they sell to us. Apparently that is the only way in which international trade can be carried on at the present time, because the British link on which we relied before the war is broken for the time being. That, of

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course, is the crux of the whole situation, and I think the government would be first to admit that it is true.
In this bill the Minister of Finance has presented three schedules. Schedule I includes lists of goods which are under complete import Dan; schedule II includes goods which are permitted to be imported on a quota basis related1 to the pre-war imports from the countries of origin; schedule III allows all imports by permit only.
The argument of the Minister of Finance in turning down this amendment-because I presume that is what the government proposes to do, or it would have accepted the amendment long ago-is that the goods involved in the three schedules, goods which are under import restriction from the United States and from the soft currency countries, will give us imported articles from the soft currency countries in excess of what we would get from the United States.
The minister gave us certain figures when he introduced the bill, but the unfortunate thing is that these figures are not complete. I would ask the minister, before he turns down this amendment, to give us an assurance that before the bill is finally concluded, before we have considered the individual items in the three schedules, he will prepare a concrete table enumerating the items in the three schedules and indicating wtiat will be the dollar effect of his ban in the form it is taking in relation to United States imports and from the point of view of future imports from other countries. He has indicated that the various items, for example, in schedule II which are subject to quota based on the 1939 import experience will be less unfavourable to the soft currency countries than would appear on the surface. I think it is only fair that the minister should give us a detailed table before the bill is concluded. That is what I would ask at the present time.


Douglas Charles Abbott: When we come to the consideration of the schedules I shall furnish such data as can be made available showing the extent to which the prohibitions, quotas and permits would affect imports from the hard and soft currency countries.


Thomas John Bentley: When the minister is preparing that table will it be possible, in the matter of schedule I and the quotas of schedule II, to set opposite those items which ones can be imported from the soft currency countries, which we could have if they were not banned or under quota?


Douglas Charles Abbott: I will see what accurate data I can give on that. In my speech introducing the bill, particularly at pages 333 and 334 of
Hansard, there is a good deal of information on that subject, and I will see what additional information I can give.
A good many hon. gentlemen have expressed concern that the exchange conservation measures which the government has introduced, and in particular this bill, will have an adverse effect on British exports to Canada, and on several occasions I have expressed the belief that the reverse will be the case.
In the first place, I direct the attention of the committee to the statistics which have now become available for December, 1947, that is, the first full month during which the program was in effect. In December, 1947, the total Canadian imports from the United Kingdom were valued at $20,254,000, as compared with $11,664,000 the preceding December. The increase was about 73 per cent. I might add that the December, 1947, figure is higher than that for any previous month in the year and, I am informed, in no other postwar month have commercial imports, exclusive of Canadian war materials returned from the United Kingdom, been so large.
I do not believe the fears that this conservation program will injure our trade with Britain are well founded. It is evident. I think, that they are not based on experience to date, and I am confident that future figures will emphatically dispel that fear.


Howard Charles Green: Is it not an obvious fact that if these restrictions and quotas were not in effect, imports from Great Britain and the other non-dollar countries would have been even larger than the figures the minister has given?


Douglas Charles Abbott: No. They would have been smaller, because prohibitions and quotas against the dollar areas are so strong that they enabled British goods to come in during that month and will continue to allow British goods to come in, which otherwise would have competition from United States products, textiles in particular. The competition would have been such that it would have excluded British products.


Howard Charles Green: I said that if the prohibition against goods from Britain had not been in effect there would 'have been more imports from Britain.


Douglas Charles Abbott: I cannot agree with my hon. friend for the reason I have given, that the effect of the quota system was such as to enable Britain to export to us in the month of December, and she is continuing to export to us, goods she would not have been able to send on a competitive basis with the United States; and the comparatively minor prohibitions
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have been very much more than offset by these added imports. That is assertion, I know, but it is based on information. Let me finish this statement and I will answer any further questions later.


Howard Charles Green: The minister missed the point entirely. The point was that if the prohibitions had been in effect against the United States and other dollar countries but not against Britain and other soft currency countries, then the imports from those countries would have been greater, of necessity, than the figures the minister gave.


Douglas Charles Abbott: That is true, no doubt, if the quotas had been on a different basis. But one must take the program as a whole. You cannot take schedule I and ignore schedules II and III. The point is that the net effect of schedules I and II is to stimulate trade from the United Kingdom and the soft currency country areas as against the dollar area. Nearly all consumer products which Britain is in a position to send in volume are listed in schedule II and accordingly, as I said before, British exporters are afforded an opportunity and a strong incentive to step in and fill the gap which results from quota restrictions on competitive imports from dollar countries. The quotas under schedule II are non-discriminatory in form. But of course they take prewar imports as the base, and by assisting Britain to regain her pre-war share of the import market they are in fact of tremendous benefit to her. The complete prohibitions of schedule I did affect British trade but only to a slight extent. As I said on January 30, the prohibited list then covered only about two and a quarter millions of United Kingdom imports, and even this figure has since been reduced to some extent by the amendments which I have subsequently announced. The amount is less than 1J per cent of the total imports from that country to Canada.
Hon. members will note that in respect of textile products, which is the most important quota category, imports from schedule countries, namely, the hard currency countries, are being cut down, from $130,000,000 to $40,000,000. On the other hand, the nonschedule countries, primarily the United Kingdom, are given an incentive to increase their exports to this country from $52,000,000 to $120,000,000. Similar opportunities on a smaller scale are afforded other British goods by quotas applicable to such things as prepared food, leather products and miscellaneous products including glassware, cutlery, sporting goods and toys. I can only repeat that I am convinced that the effect of this

bill will be to help Britain to trade with Canada instead of injuring her under existing circumstances.
Amendment negatived: yeas, 42; nays, 49.


Mr. WHITE (Middlesex East):: On section 3 of this bill I want to follow up something I took up early in the session in connection with the importation of fruits and vegetables. While the hon. member for Charlotte was speaking I was thinking that, while he talked about the freer trade with the United States as the Liberal policy, never in the history of this country have tariffs been so high as they are at the present moment, and more are proposed. It is a case of talking in one way and acting in another. The Minister of Agriculture has now admitted that the agricultural policy during the war years and since, when our farmers were denied the United States market for their products, was not a marketing policy on the part of the government but a price control policy, and the farmers were the victims of it. In some of these schedules that are being introduced the farmers are again becoming the victims of that policy. It is not a policy of developing the natural resources of this country. We have thousands and thousands of idle acres that could be growing the food which we import from the United States, but who dares to go into that business, because nobody knows when this particular dollar conservation program may end and unrestricted importation of food from the United States will ruin those men who have gone into that business.
We have an immigration policy, if it can be called one, under which we are bringing in people from Europe, many of whom are skilled in the production of fruits and vegetables. I am thinking particularly of those who come from Holland. They could very well turn their skill to the production of many of the things we have been importing from the United States. We could establish them on land. But what is the use? In a matter of months, the minister said, the policy will be over. We should arrive at something definite. We cannot be going in two directions at once. We should have a policy under which our farmers can go ahead, plan their future, and know whether they can expand their operations or not.
While this committee in investigating prices I suppose mention of that matter should not be made, but I just wish to refer back to the thirties. A great deal has been heard here about cheap food. Back in the thirties we had cheap food; eggs were eight cents a dozen; wheat was thirty-five to sixty cents a bushel;

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milk for cheese purposes ran from fifty-six to sixty cents. What happened? Thousands of people were walking the streets looking for jobs. Why? Because farmers could not purchase the things which are manufactured in our cities. So let us not enter into some plan that will bring about cheap food. The day we have cheap food we shall have idle men.
I would say that this policy is a two-faced one. It is designed to discourage United States trade, so the minister says; and then he says it is designed for freer trade. I wonder what will happen. One minister says it is a long-term program and the next minister says it is a short-term plan. What are we to believe? The minister has said that he will not protect Canadian producers. He also said that the 25 per cent excise tax is designed to protect United States manufacturers who were exporting to this country. I wonder just whom the cabinet represents. Does it represent United States producers of the goods which we have been importing, or does it represent United States farmers who have been sending in thousands of carloads of farm produce to an agricultural country. If I had known different, I would have thought I was listening to Clinton Anderson, the Secretary of Agriculture in the United States or Averell Harriman, Secretary of Commerce in the United States, instead of our own cabinet minister.


Gordon Knapman Fraser: You likely were.


Harry Oliver White: Canadian growers are not asking for something impossible. They are just asking'for an opportunity to grow and to market the things they can produce in this country. Let me give an illustration of what is going on. Here in my hand I have two letters sent out by organizations which are dealing with fruits and vegetables. One is issued by the Ontario food council and is signed by M. M. Robinson as manager. This is special newsletter 5B, dated May 23, 1947, and is dealing with the importation of lettuce. It was designed to advise growers and importers with regard to the situation as far as that one particular product was concerned. It says:
Lettuce available June 2.
We are now informed, after a careful cheek, that head lettuce will be ready for harvest in the Leamington area June 2 with some supplies available the end of next week.
Favourable growing conditions during the last few days have brought some early vegetables on with a rush. Conditions during the past week for growth could not have been better -and the original expectation that lettuce would not be available until June 9 has had to be revised.
There is a lot of head lettuce in the Leamington area and generally it is of excellent quality so far. Actually, the weather could not be better for lettuce and cabbage.
Please co-operate by calling off imported lettuce deal as quickly as possible.
Actually what happened after this information. had gone out was that importers brought in as large a quantity as it was possible to buy of head lettuce and stored it, and practically ruined the Canadian growers who had passed out this information that it would be available so that they could have protection for the time it was necessary to have it. That is one of the results of "kindly cooperate". The government did not. The grower did.
I have here also a letter from the Canadian horticultural council, which quotes the Washington food report issued by the American institute of food distribution in New York city. This is a quotation from what was stated by the American institute of food distribution, in New York city. It is headed "Tariff Gossip", and states:
Exports of dried fruits, fresh and canned fruits and vegetables, packaged cereals and many grocery specialties will be increased by tariff concessions secured from 17 nations with whom we are now bargaining.
Canada will permit us to make larger shipments of fresh fruits and vegetables at lower duties, except during approximately two months of Canadian harvesting. Canada will also open the way to receive larger quantities of canned fruits and vegetables from us which it does not pack itself. It will probably concede lower duties on dried fruits which were kept fairly high under the 1939 agreement because of the empire preference.
Now, with the Geneva agreement, those preferences will be done away with, and we find ourselves in a difficult position. Would labour or industry permit such tactics to be employed to undersell Canadian manufacturers and the products of Canadian labour? They would not submit for one moment to the importation from the United States of large quantities of goods produced here in Canada by Canadian industry. Yet, that is done, so far as the farmer is concerned, and they get away with it.
Bill No. 3 has been referred to as a program, but it is not a program at all. It is an expedient. It is a hoax without faith, and without vision. I say to the committee that you cannot be a great nation on a carload of lettuce. We hear a howl from the cities for these greens. This country was built up on pork and beans, and I am not a poet either. We have the climate and the people to produce these things.
I have mentioned immigration. We could put these immigrants to work. But we must
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have some assurance that once they make some investment, and make plans, they will be able to reap some profit from those plans.
The minister says that this program is non-discriminatory, so far as other nations are concerned1; but it is certainly discriminatory so far as Canadians are concerned. In history we make reference to B.C. and A.D. I expect very shortly we shall be referring to AA.-After Abbott.
If the minister were a fruit and vegetable grower in this country, what would he do right now?


Douglas Charles Abbott: Shovel snow.


Harry Oliver White: I should like to say a word or two about the Geneva treaties as they apply to vegetable and fruit growers. They are the victims of a squeeze play. Certain fruits and vegetables are allowed in for a certain time; but under the Geneva treaties the length of time United States produce is kept out, because of our production in harvest time, has been narrowed. One vegetable which was prohibited previously for fifty-two weeks is prohibited now for only ten weeks. In other words, the Canadian grower is penalized for forty-two weeks.
In this connection let me refer specifically to a few items. First, cranberries, which were protected fifty-two weeks under the old plan, and with a tariff of not less than li cents are now protected for only twelve weeks with a tariff of three-quarters of a cent. Many other tariffs have been reduced. Green peas which formerly were protected for fourteen weeks with a duty of five cents are protected now for only eight weeks, with the duty reduced to 34 cents. In respect of onions Canadian producers have lost protection for twelve weeks. Rhubarb was formerly protected for fifty-two weeks with a tariff of 1-J cents, whereas now the time has been reduced to ten weeks, and the tariff to one-half cent. Tomatoes were protected for fifty-two weeks; that is now reduced to thirty-two weeks.
Therefore our farmers are the victims of a squeeze play, particularly in southwestern Ontario. We have two huge United States markets in Buffalo and Detroit. When the United States growers see that a surplus is piling up in cities other than the two I have mentioned they will consign the surplus to Detroit and Buffalo. Canadian truckers go over there, buy that distress produce, bring it into the Canadian market and lick the Canadian farmer. That has been going on for years.
The government should take this matter seriously. They are in power because of the

confidence of the people, and I say they are losing the confidence of the Canadian farmer. Farmers have been given no guidance as to what they should do, either in the next year or in the next five years. The month of March is just around the corner, and many of the growers about whom I have been speaking must make their plans in March and early April. I am asking that guidance be given to those producers as soon as possible, so that they may have products to sell-produced by Canadians and for Canadians and to save United1 States dollars.


Mr. SKEY:: I rise to express what perhaps might be described as a word of admonition. In a recent exchange the minister asked me to make some recommendations. I made two, one that we should have a 90-cent dollar, and, second, that the minister should consult those skilled in finance. Both of those suggestions were rejected. Finally, in a gentle fashion, the minister admitted that he would keep an open mind, and that he was not prepared to say that his was the only way of solving this problem.
The minister was in Toronto last Friday and spoke to the Rotary club, at which time he is reported as having stated that the depreciation of the Canadian dollar would have an immediate and widespread effect on the basic cost of living in Canada.


Douglas Charles Abbott: I do not like to interrupt my hon. friend, but I must rise to a point of order, due to the fact that I did it in respect of someone else in this debate. I suggest that it is not in order to discuss devaluation when section 3 is before the committee.


Lawrence Wilton Skey: I have very little to say today. Pechaps if I looked through the section I could find something to which my observations would apply. However, if the minister will be patient for a moment I will complete what I have to say.


William Ross Macdonald: Perhaps the minister will permit the hon. member to proceed at this time, but I hope that other members will not take advantage of his generosity. I trust that other hon. members will stay strictly within the rules.


Lawrence Wilton Skey: I would not continue this discussion except that we have been on this subject for so long. I think it is unfair for the minister to state just one side of the question. There are at least five other factors which have increased the cost of living far more than the depreciation of the Canadian dollar by ten per cent would have done. There is the present inflation which has caused price rises; there are the reckless loans which have

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been referred to already in the United States house of representatives; there is the unchecked government spending; there is the 25 per cent tax, and there are the restrictions which invariably cause rises in prices. To tell the Canadian businessman that a ten per cent devaluation would cause these price rises is most unfair. The government are getting into trouble. They are making political issue out of this thing and some day they will regret it.


Mr. MACDONNELL (Muskoka-Ontario):: I should like to deal with something which I am sure the minister will agree is within the terms of the subsection. Although we made a beginning with this the other night, we did not get very far. I want to talk about permits because, after all, they constitute the very root of this bill. The minister's colleague spoke of this the other night. What I complain about is that the minister of reconstruction seems to consider this from the point of view that it is entirely natural and, no doubt in his mind, a desirable thing that the ordinary life of the community should be invaded. Let me reassure the minister that I am not going to repeat my speech on arbitrary power. Nevertheless I want to reiterate that the business life of the country is being invaded to an extent which six months, or let us say nine months before the minister began to consider this, he probably would have thought was just as intolerable as I hope he does still.
The minister of reconstruction talks about this as if it were the most natural thing in the world. It seems to me that this question of permits must be considered rather particularly. This is a thing which we all deplore. I say "all" because I am sure that all of us do deplore this action w'hich the government has considered necessary and which, under the circumstances, I suppose the rest of us have to admit is necessary to some minor extent. However, I believe that this committee and the people of this country are entitled to know just to what extent it is necessary. What I complain about is the way in which the minister of reconstruction talks blithely about permits and then very optimistically goes on to talk about the huge exports to the United States which he is arranging. The minister referred the other night to aluminum exports, and then the hon. member for Winnipeg North Centre, as reported on page 1162 of Hansard, said:
When shall we get that kind of discussion?
To which the minister replied:
I do not think you will ever get it on this bill.
I think the minister had better leave hon. members to make up their own minds as to
what they are going to decide on this bill. I wish he would come here to listen to these things. Not that I think they would make any impression on him, but I should like to know that he had at least heard me say them. We got to the point where the hon. member for Winnipeg North Centre said:
When shall we get that kind of discussion?
To which the minister replied:
I do not think you will ever get it on this bill.


Gordon Graydon: You must have a permit to have a discussion.


James MacKerras Macdonnell: Yes. I have no desire to press this point, but in passing may I say it is just an illustration of the kind of thing to which I am objecting. Here we have a man who has become so used to the exercise of power in wartime that he thinks he is going to do exactly the same thing in peacetime.


An hon. MEMBER:: He is doing it.


James MacKerras Macdonnell: He is doing it; that is right. I think we need to have a real discussion' on this permit business. I know the Minister of Finance would like to get this through and I do not regard myself as an obstructor, but I want to tell him that we are going to stay here until a different attitude is adopted by the minister of reconstruction from that which he adopted the other night. The other night his attitude was: treat them rough and tell them nothing. He is not going to get away with that. He should be ready to come here and treat us as serious people who are entitled to get what information is properly available. That is all we are asking for. Unless that is done, we shall be here for a long time on section 3.
I am not the only one on this side who feels like that. Incidentally, the information which the minister of reconstruction has given us can be divided into two categories. First, there is that which he will not give and, second, there is that which he gives but which appears to 'be nearly all wrong. He gave me some information on Thursday evening about the motorcar industry. Since then I have been trying to check it and1, as far as I have been able to1 get along with it I find1 that it is all wrong.


Douglas Charles Abbott: My colleague the Minister of Trade and Commerce is not here because I think he anticipated that the main discussion on this section of the bill would come on schedule III. I am sure that when that schedule is called he will be here ready to give such information as he has and to answer
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any charges whiich any hon. member may level against him. It is very difficult for both the Minister of Trade and1 Commerce and myself, or for all ministers to be in the house at the same time. Hon. gentlemen opposite know that there are many duties devolving on a minister. I 'think, in fairness to my colleague, it should be said that he did not expect that schedule 3 would be discussed this afternoon, and it is that schedule which deals with permits. There will be a full opportunity on schedule 3 to deal with permits.


James MacKerras Macdonnell: My point is that if we deal with this permit matter and it is behind us, then when that time comes we shall find that we might just as well have saved a lot of breath on schedule 3. It will be just good, clean fun. I hope the minister of reconstruction will be here shortly because I think there are some others who want to ask questions.
The minister also said that he was not getting very far with his regulations, but apparently he had some with regard to the automobile industry. He said that he would be glad1 to get them and place them on Hansard. He said he had sent for them. In deference to the minister who is here, it seems to me that the fact that we were in the midst of this discussion-we were diverted by the amendment-should make it necessary for the minister of reconstruction to have been here. That is what I want to say at the moment. It is only an intermission as far as I am concerned because, when the minister is here, I want to question him about the information he gave us and which, as far as I can make out, is all wrong.


Arthur Leroy Smith: I am in exactly the same position. I intend to withhold what I have to say, but in order that he may be appraised of what I want to ask him may I say now that it can be found on pages 1164 and 1165 of Hansard. I am hoping the Minister of Trade and Commerce and the minister in charge of the bill can both be here, because I am inclined to think they will need a little collaboration in order to answer some of the questions I intend to ask.
May I say I appreciate the difficulties in the way of a minister being here. I was greatly amused the other day, although it was only for about a minute and a half, when I noticed that the only person on the front benches was the hon. member for Cartier. I did not know 'he had been designated1 to lead the government.


William Ross Macdonald: It occurs to me that the committee might desire to allow several sections to stand until the Minister of Trade and Commerce is here.


Douglas Charles Abbott: I do not know that the formal clauses of the bill concern the Minister of Trade and Commerce so much as the details of schedule III. I shall, try to be in position to answer all questions with respect to articles prohibited under schedule I and the articles under quota under schedule II. Those are administered by my department. However, permits which are issued for so-called capital goods are issued under schedule III, and that is the section of the bill for which my colleague, the Minister of Trade and Commerce, is responsible. I shall try to answer such questions as may be asked about administrative details, but there may be some questions which might be asked under this section1 which would have to be held over until he is here.


Mr. FULTON:: I do not see how we can confine ourselves to schedule II, because section 5 deals with goods in schedules II and III.


Douglas Charles Abbott: Possibly when we arrive at section 5 we can have paragraph (c) stand.


Howard Charles Green: Section 3 refers to all three schedules, and therefore to the portion of the bill which is under the Minister of Trade and Commerce. He should be here. It is his business to be here. We cannot go on now because the Minister of Trade and Commerce is not here.


Douglas Charles Abbott: I am asking for the cooperation of the committee. My colleague has pretty heavy responsibilities along with some of the rest of us; and the detailed information, if the committee wishes to co-operate, can quite properly be given under schedule III. The essence of this section is that no goods shall be admitted into Canada which are listed in schedules I, II or III, except under permit. The permit under schedule II is with respect to the quota. In the case of prohibited goods the only exception is the particular hardship section, and under schedule III comes the individual or group permit. I am simply suggesting that if the committee wants to discuss details and to know how many motorcars or printing presses or other items of capital expenditure are to be allowed entry into the country we can properly deal with that under schedule III. But to use the standard phrase, I am in the hands of the committee.


Howard Charles Green: The minister is completely wrong in that statement, because when we get

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to the schedules we can deal only with the particular items in the schedule before us and we cannot have a general discussion. The Minister of Finance himself should be able to answer questions with regard to automobiles, because they come in under quotas under schedule II and formerly were under schedule I.


Douglas Charles Abbott: No, they are under schedule III.


Howard Charles Green: Formerly they were under schedule I, which is the total prohibition schedule. The minister should be able to answer these questions himself. It is not the responsibility of the opposition, of course, to have the Minister of Trade and Commerce here. Nevertheless he should be here to explain the sections of the bill.


Douglas Charles Abbott: My hon. friend is very ready to make statements that so-and-so and such-and-such is the case, but if he will look at page 27 of the bill he will find that, under schedule III, item 438a covers automobiles and motor vehicles of all kinds, electric trackless trolley buses and chassis for all these.


James MacKerras Macdonnell: We are not discussing this or that detail but the basis on which the permits are to be issued. The minister has told us that regulations were to be made, but he has not completed them yet, with the exception of the motorcar industry. I am not going to make a speech on arbitrary power but, with all due deference, I think the Minister of Finance in his conciliatory manner is trying to lull us into a situation where we shall be talking about these permits as if they were ordinary things, whereas they are, we hope, extraordinary and temporary things, and we are entitled to have a good look at them. However, just to show that we are ready to co-operate, there is a further point in paragraph (a) which I think the minister might be prepared to discuss in the absence of the other minister. I would also draw attention to the last line but one of section 3 (1), which says that this omnipotent minister may, among other things, "issue, vary or revoke permits". I raise this question only on the understanding that we can come back to this question of permits and discuss it in its broad implications. I am not saying whether or not this power of revocation is necessary. Maybe it is, but there should not be a wide-open power to revoke just according to how the minister happens to feel. There should be some qualification on this power.


Douglas Charles Abbott: My hon. friend is quite right when he says that the committee are entitled
to ask questions on these sections and to know the conditions under which permits are to be issued, whether under schedule I, II or III, but I do not anticipate that we shall pass this section immediately and the questions might stand until this evening when no doubt it will be possible for my colleague the Minister of Trade and Commerce to be here. As to the use of the words "vary, or revoke," that language is taken from the Export-Import Act, which is now in force. It is more or less standard legal language.


James MacKerras Macdonnell: Two wrongs do not make a right.


Douglas Charles Abbott: It is pointed out to me that permits under schedule II take the form of quotas, and it is essential under that schedule to have this power.


James MacKerras Macdonnell: I would have thought that the circumstances there were quite different. I could see more justification for revocation there 'than here.


Edmund Davie Fulton: This discussion seems to me to bring clearly to the fore the fact that we are apt to get more and more into this kind of situation if more and more portfolios are to be added to one minister. I am glad to see that the Minister of Trade and Commerce has just come in. Before we deal with the general question of permits and their administration, I notice that in section 3 the word "minister" is used for the first time, and it is not laid down in the bill what "minister" means, or at least I have not been able to find it.


Howard Charles Green: That is provided in section 6.


Douglas Charles Abbott: Section 6(2).


Edmund Davie Fulton: We shall have to look to orders in council to find out what minister is in charge of what.
There is another point I wanted cleared up. I take it that the whole of this program is being administered under P.C. 4678. Has the Minister of Trade and Commerce issued any permits yet? Or have all permits been issued by the Minister of Finance, who is the minister responsible for foreign exchange control. How is that being worked out?


Douglas Charles Abbott: Permits under schedule II are issued under the direction of myself. Permits, if any, under schedule III, or an order in council equivalent, would be issued by the Minister of Trade and Commerce, who will be able to answer how many permits have been issued. I must correct myself. The present
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[Stage Direction]
situation is that permits are issued under the Foreign Exchange Control Aot and, since the responsibility for that aot is by its terms vested in myself, permits under schedule II are issued by the foreign exchange control board on my authorization after consultation with the Minister of Trade and Commerce, to maintain the proper legal form. But, in practice, responsibility for the administration of that rests with the Minister of Trade and Commerce, who will have the sole responsibility when this bill becomes law.
Edmund Davie Fulton: There must be consultation under the present P.C. 4678.


Douglas Charles Abbott: Yes.


Edmund Davie Fulton: Then the Minister of Trade and Commerce should be in a position to tell us what regulations he has laid down, if only for his own guidance, which will apply in the administration of the aot in the future. He has appeared to be reluctant to tell us what the. regulations are.


Mr. HOWE:: Just a minute; prove your statement.


Edmund Davie Fulton: Well, I refer to the discussion which took place last Thursday night.


James MacKerras Macdonnell: Surely he would mot deny that.
Mr. FULTOiN:	The horn, member for
Muskoka-Ontario has already referred to it and the minister will find it on Hansard tomorrow. He told the hon. member for Winnipeg North Centre, "We wdll not have any discussion of that type on this bill."


Clarence Decatur Howe: No.


Stanley Howard Knowles: May I interrupt for just a moment? That is the wording that appears in the daily edition of Hansard-never any discussion of it on this bill. The newspaper reports say the minister said that we would never get any discussion on this matter.


Howard Charles Green: That is what he did say.


Mr. JACKMAN:: Hansard is changed too much.


Edmund Davie Fulton: What we want at the moment is to find out what regulations the minister follows in the issuing of these permits; what regulations he has laid down as to the conditions under which permits will be issued.


Clarence Decatur Howe: Actually, permits for the importation of capital goods are not required at the present time; they will be required after March 1 on certain commodities. Pro-

gressively thereafter, permits for use in clearing through customs will be required to an increasing extent. We are now issuing project approvals. The plan there is to screen the project for unnecessary United States dollar expenditures, then to determine the value to the Canadian economy as far as dollar exchange is concerned, and either to grant or to refuse the project approval, depending on whether or not the project is helpful to the exchange situation. A good many projects have been disapproved!; others have been approved, and others are approved, subject to screening.
Hon. members will appreciate that, once a project is approved, the permits required for the project to the extent authorized will issue automatically. Certain permits have been approved to be used at such time as they are required; for example, for off-the-road motor vehicles, motor vehicles used in logging, in mining, and certain other permits of that type are being issued. At the moment there is no requirement under the Capital Goods Act, because the first order in council making effective part III of this act becomes effective only on March 1.


Howard Charles Green: What does the minister mean by the "Capital Goods Act"?


Clarence Decatur Howe: Capital goods schedule, schedule III of this bill.


Gordon Graydon: May I ask the minister what he means by "screening"?


Edmund Davie Fulton: The only criterion there is at the moment with regard to the granting of permits under schedule III is the minister's own personal decision as to whether or not the project is one which he should approve. I am correct in this assertion, am I not? There will be no general regulation describing the type of project for which a permit may be sought, or is the decision to be reserved personally to the minister without prior indication as to the type of project which might be approved?


Clarence Decatur Howe: The type of project has been generally indicated by statements that have been issued from time to time. The act does provide discretion to the minister as to the type of project that can be approved. There is really no other way to determine which projects are desirable or otherwise. If a law could be passed that would fit every situation that would be very wel indeed. Before the automobile schedules were issued, it was necessary to discuss the situation with every group of manufacturer and manufacturers of parts,

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to make up a formula to fit their particular industry, and to make sure that we were not putting Canadians out of work.


Edmund Davie Fulton: Perhaps I can point out that I did not mean that we should have a law saying-I think this bill1 is bad anyway, but that is so much water under the bridge- this and that type of project; but the bill itself provides that the governor in council may make regulations with respect to permits. That is what I was thinking of. Is there to be any general indication to industry as to the type of project, circumstances and method by which they can apply for and receive their permits, or is the w'hole thing to be in the personal discretion of the minister?


Clarence Decatur Howe: There will be regulations
applying to specific industries. Regulations that apply to the automobile industry probably would not suit the electrical industry. Each industry is being studied and regulations are being issued as applying to that industry. So far as projects go, the general principles have been laid down as to the type of project that can proceed under present-day conditions, and the type of project that cannot proceed.
My hon. friend asked what we meant by "screening". A construction project is examined to see whether United States content is being used unnecessarily. For instance, if the specifications calls for Indiana limestone where the material might just as well be Queenston limestone the substitution is required to be made. If it is a steel structure where the project could just as well be reinforced concrete, that change is being required before approval can be given. But there must be a measure of flexibility. Regulations can only issue as all sections of the Canadian economy have been examined and those engaged in the industries consulted. All I can say is that there are certain regulations now and there will be more as the capital goods sections are put into effect.


Howard Charles Green: The minister has referred to projects approval.


Clarence Decatur Howe: Y'es.


Howard Charles Green: Am I to understand from that, that approval is given, for example, to the construction of a dam or a building or some other construction project? Can the minister tell us under what authority he can now issue what are called approval projects? I cannot find any authority for approvals of that kind in order in council P.C. 4678. It may be that there is some other authority;
but, as I read this order in council, it gives power to issue a permit only for the importation of goods. Apparently the minister has some other sort of document he issues called a project approval. I should like to know under what authority he is now issuing those project approvals.


Clarence Decatur Howe: I assume that the minister has authority to write a letter to someone. A project approval is, in effect, simply a letter from the minister saying that if a project is going ahead and involves so many dollars of United States exchange, based on plans which he has examined, he will be prepared, when the time comes, to issue permits for the required United States imports to be brought in for that project.
A project approval is not a document which can be used for any other purpose; it is simply an undertaking that the person can proceed with the projects with the assurance that the department will issue the permits necessary to allow him to carry out that project.


Howard Charles Green: I thought that was the picture. There we have the whole complaint of the official opposition on the manner in which the Minister of Trade and Commerce and Reconstruction and so on is carrying on. That just makes a farce of our whole statute law and even of the powers to legislate by order in council. It also makes a. farce of parliament. We are in this position. The minister has not any authority whatever to issue these documents known as project approvals. He has just admitted that they are merely letters from himself. What is the sense of a scheme like that? If the minister required these powers the government should have come to parliament and asked for them; or, if it could be done under order in council, that is another way in which they could have moved. But here we have a minister of the crown arbitrarily deciding whether or not projects from one end of this country to the other can go ahead. Instead, he writes a letter without any authority whatsoever behind him.
That, Mr. Chairman, is an impossible situation and I am amazed that the government of Canada or of any other democratic country would allow business to be done in that way. We might just as well find out now where we are going, and wThether this is the way in which the country is to be run. The man who wants to start a project is entitled to know the authority under which he can be stopped or the authority under which his actions can be controlled, and there is not a vestige of any such authority at the present time.
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Douglas Charles Abbott: Look at 43 (d) of the order.


Howard Charles Green: Of what?


Douglas Charles Abbott: Of the present order, the regulations with respect to foreign exchange control. It is number 4678.


Howard Charles Green: I have it here 43 (d) of 4678 provides that, until otherwise directed by the Minister of Finance, acting on the advice of the Minister of Reconstruction and Supply, permits may be granted for the import of goods and equipment of the classes described in appendix nine. That is the only authority this government has at the moment to prohibit these goods, the capita) goods. The procedure outlined there is for the Minister of Finance to issue a permit, and all he ha*, to do is to get the advice of the Minister of Reconstruction and Supply. Instead of that course being followed, the Minister of Reconstruction and Supply is arbitrarily taking all the power and writing letters called project approvals, and not giving permits at all for importation. As the hon. member for Rose-dale says, where are we? It just means that the Minister of Reconstruction and Supply, plus a lot of other things, is doing whatever he wishes, without any curb on him by legislation or by the government, and the people across the country are having to do as he tells them. That I must protest against. It is an intolerable situation and should be remedied without further delay.


Clarence Decatur Howe: I have never heard a more ridiculous statement than the one just made in this house.


Howard Charles Green: You always say that when anyone criticizes you.


Clarence Decatur Howe: The hon. member must know that a minister of the crown writes letters on a great many subjects in the course of his duties, and the government is bound by the letters the minister may write. A man is entitled to know whether the project he wishes to start on now is one that he can complete in the course of the dollar program. He writes to the department to find out. He is called in; his project is examined so that a letter may be written giving the information he wants. After the project 'has been examined, the letter is written, saying it is or it is not a project that can be proceeded with under the present regulations. It is perfectly absurd to say that special powers are required for that. Nothing of the kind.


Howard Charles Green: On that point-


Clarence Decatur Howe: Don't be silly.


Howard Charles Green: I do not mind the minister's remarks of that type. It shows what little concern he has for parliamentary procedure or laws or anything else. That is just the difficulty, and that is exactly why we are in the position in which we now find ourselves. The minister has complete disregard for any sort of legislation or regulation. All he wants is the power to go ahead and do what he thinks should be done, and he attaches absolutely no importance to the formalities that must be gone through. That show's a complete disregard of our whole parliamentary system.


Clarence Decatur Howe: Explain to me the formalities that should be gone through.


Howard Charles Green: Well, you should have some law authorizing you to do these drastic things. You have no power at all to do them. You are just doing them on your own, w'ithout authority at all.


Clarence Decatur Howe: But I have the power to stop them.


Ralph Melville Warren: Perhaps the hon. member for Vancouver South would like to take on the job.


Howard Charles Green: I will tell the hon. member for Renfrew North that I do not believe there is another minister in the cabinet who would act as the Minister of Trade and Commerce has been doing. I do not believe there is a private member in this house in any party who would undertake to carry on in the way the Minister of Trade and Commerce is doing, with absolutely no authority.


Ralph Melville Warren: Will the hon. member
agree that he did a fine job for Canada?


Gordon Graydon: What is under debate anyway?


Stanley Howard Knowles: I think the committee should pause a moment to consider the effect of the treatise on parliamentary methods which the Minister of Trade and Commerce has just enunciated.


Gordon Graydon: Parliamentary?


Stanley Howard Knowles: In fact, it is as unparliamentary as it can be. It is a negation of the whole principle of responsible government. The minister stands in this house and says that ministers write letters every day and the government is bound by those letters. I know that my files are full of letters, and I am sure every member has such letters, from ministers telling us time and again they were sorry they could not do so-and-so because

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they had no authority under the act that parliament had passed. Many times we felt that it was an excuse, that they were not availing themselves of sections in the act or of ministerial prerogatives, but we have had to accept it.


Douglas Charles Abbott: That does not apply here.


Stanley Howard Knowles: Ministers are bound by the statutory provisions enacted in parliament, but now the minister says that ministers write letters every day and the government is bound by those letters. It is not good enough for the minister to say that the hon. member for Vancouver South is silly.


John Oliver Probe: United States or other foreign exporters to this country are as much interested in the basis on which the permits are being issued as are Canadian importers, and it seems to me that this would be an appropriate time for the Minister of Trade and Commerce to loosen up a little with information and take us into his confidence. He should tell us the over-riding policy under which he would or would not do certain things. I should like to know, with respect to the issuance of permits, particularly in connection with the third schedule to the bill, whether the minister intends to adopt a policy of making certain that every possible portion of the imported commodity has incorporated within it as large a percentage as possible of Canadian material to complete the assembled product; whether or not he is to make it obligatory or conditional with respect to permits in certain lines-and I am thinking of automobiles-that there be an expansion of United States branch plants in Canada; whether or not he is taking any steps to see that the proceeds of the Canadian sale be not immediately transferred to the funds of the foreign country; whether or not a portion of those proceeds should remain on deposit in Canada.
I think these are conditions which the minister might elaborate on. He might tell us whether he is insisting, in order that the imported product be readily accessible on the Canadian market, that for the future the exporters, or our foreign friends, shall take definite steps to import comparable quantities of Canadian products, either for disposal in toto or for processing for inclusion in such articles. Take the automobile industry for example. If it were made obligatory that United States exporters of automobiles to Canada should take the full amount, or a very large amount, of the dollar value of the imported automobile in terms of those parts
of that automobile which we are already making in Canada, or which our people could readily make more or less to balance the exchange position, that would be a valid stand for the minister to take. Will he tell us whether or not there are any linkages with other trade plans such as the Marshall plan, or whether or not conditions will be made to permit United States exports to this country; that is, to have a quid pro quo whereby the Americans accept Canadian substitutes in some of their other foreign markets? It seems to me that those are things on which the minister could readily elaborate when he is asking for our approval.
There is perhaps one other thing which the Minister of Finance might indicate. To what extent do we make certain, through the foreign exchange control board or the export board of Canada, that the proceeds of all our Canadian exports to hard currency markets, the hard dollar returns, are, in fact, always brought back to Canada? Those are things that are not clear in my mind. Would the Minister of Trade and Commerce reply as far as he can with respect to the policy questions I have posed?


Mr. LOCKHART:: I wish to speak just briefly now. I had intended to make some extended references-


John Oliver Probe: May I not have an answer from the minister?


Clarence Decatur Howe: Perhaps I might reply to the hon. member for Regina City. The purpose of the policy is to use the minimum amount of United States dollars for imports and to earn the maximum amount of United States dollars through export. All the regulations are framed with that in mind. The regulations governing the automobile industry have been published. If my hon. friend will study those I think he will have the general pattern that is being applied to Canadian branch plants manufacturing a wide variety of articles.


John Oliver Probe: Does the minister imply that there are other than press reports covering that? That is all I have seen in connection with the automobile industry.


Clarence Decatur Howe: I shall be glad to table tomorrow a copy of the letter of instructions that has gone out to the industry.


Douglas Charles Abbott: To answer the second part of my hon. friend's question as to what steps have been taken to ensure that proceeds of exports in United States dollars are returned to Canada, it is and has been for some time
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the regulation of the foreign exchange control board that goods can be exported to the United States only for a purchase price in United States dollars, and that those dollars must be brought back to Canada and sold to the board. So far as I know, that regulation has worked effectively.


Norman James Macdonald Lockhart: Just about one minute is all I desire at the present time. I had intended to make some extended references along somewhat the same line as those made by the hon. member for Middlesex East; but, after his clear elucidation of the matter of the importation of certain fruits and vegetables, I shall content myself by asking a question. I do not know which minister to appeal to, but I should like one of them to tell me what steps will be taken to clear up the situation which has occurred almost every year. When this proclamation was issued by the government we started off by having no cabbage one day and having them the next.


Ralph Melville Warren: Who wants cabbage?


Norman James Macdonald Lockhart: A little sauerkraut might do for the hon. member. What I should like to know, and I think probably that either minister could answer, is this. Reference has been made to the issuing of permits to allow the importation of many things which have already been referred to and I shall not enumerate them again. With regard to those permits that may be issued, will steps be taken to see that we do not have a repetition of the perennial flooding of our Canadian markets just prior to the time that our own produce comes on the market? If we could just have that flooding eliminated, it would be a tremendous help to the growers.


Douglas Charles Abbott: The situation at the moment is, of course, that virtually all or at least a great majority of fresh fruits and vegetables are completely prohibited. There is no seasonal aspect to it at all.


Norman James Macdonald Lockhart: There are some quotas.


Douglas Charles Abbott: Yes. The announcement stated that potatoes, onions, cabbages and carrots are to be allowed in under quota or permit. I announced as long ago as early in November that, when it was necessary to do so to insure adequate supplies of those four staple vegetables, permits would be issued. So far, special action has been taken only with respect to cabbage. It will no doubt be necessary to take action in the not distant future with respect to carrots.


Norman James Macdonald Lockhart: Can the situation not be controlled in some way, so that just prior to the time that our own products come on the

market, we shall not have fifty cars of some product flooding the Toronto, Montreal or Winnipeg markets? The products just come in; their arrival seems to be so timed. Surely that can be controlled.


Douglas Charles Abbott: That may have been the case in the days before these prohibitions were on, but that can be controlled now.


Gordon Knapman Fraser: It will happen in the future, because that is what has happened in other years.


Douglas Charles Abbott: There was no prohibition of imports then. There is now. It has been indicated that there will be only a limited exercise of the import of fresh vegetables into Canada, namely, on the four staples I have mentioned

onions, carrots, potatoes and cabbages-if necessary. Virtually all. other fresh vegetables are prohibited. I can assure my hon. friend that there is no immediate intention of changing that prohibition. I think it can be taken for granted that permits for the importation of cabbages, potatoes, carrots and onions will not be issued in such a way as to hurt domestic producers of those vegetables.


Gordon Knapman Fraser: I have had complaints.


Norman James Macdonald Lockhart: There will be no flooding of the markets?


Douglas Charles Abbott: No.


Gordon Knapman Fraser: I have had some complaints from my own district. The vegetable men there are wondering if the Minister of Agriculture could not let them know what the situation is to be, so that they could order their seeds for planting in the spring.


Gordon Graydon: You will have to get a project approval from the Minister of Trade and Commerce.


Gordon Knapman Fraser: Yes, I know.


Stanley Howard Knowles: Get them to write you a letter.


Gordon Knapman Fraser: The farmers here in Canada produced enough vegetables-carrots, cabbage, celery and other things-to hold over until about April of the following spring, until this government came along, gradually kept flooding the market and squeezing the truck grower out of business. They do not want that to happen again.
At six o'clock the committee took recess.
After Recess
The committee resumed at eight o'clock.


Arthur Leroy Smith: Mr. Chairman, I wish to ask only a question or two for the clarification of certain things in my

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mind. In order that the minister may understand the position-I hope better than I do- I shall read briefly from the bottom of page 1164 of Hansard, where it says this:
Mr. Howe:	Mr. Chairman, all I can say is
that it may surprise my hon. friend to know that the Canadian automobile industry is not a drain on balance-that is the industry manufacturing in Canada is not. It does not constitute a drain on American funds. Value of exports are in excess of value of imports. The net balance does not represent a drain.
Mr. Macdonnell (Muskoka-Ontario):	Does
the minister mean a net balance in American funds?
Mr. Howe:	The net balance of exports.
Mr. Macdonnell (Muskoka-Ontario):	That
has not anything to do with this.
Mr. Howe:	I say that it is much the same
thing. However, it would take all evening to explain that to my hon. friend.
Perhaps I might pause there to say that that was the treatment accorded the hon. member for Muskoka-Ontario. Then, on the same page of Hansard, speaking to the hon. member for York West, the minister concluded:
That is probably too deep for the hon. member.
Then, speaking today to the hon. member for Vancouver South, the minister told that hon. member that what he was saying was ridiculous, and then added the gentle remark, "Don't be silly."
It seems to me, judging from the last three occasions upon which the minister spoke- and I have placed what he said on record- it is about time, he learned there are some people here with at least a trifling bit of ability-that is, of course, aside from himself. We assume that he treats members of the government with the same contempt as he treats us; and that, of course, is just a little bit more power gone to his head.
Then, to quote again from page 1165 of Hansard, the minister said:
As a matter of fact, dollar exports to the United Kingdom at the present time are just as good as exports to the United States, in obtaining American funds, because the balance in. excess of the loan is paid for in gold-that is American funds.
If the minister intended to convey that, taking the statemeht as it stands, dollar exports to the United Kingdom were just as good as exports to the United States, then he certainly misled me, unitl I had an opportunity of looking into the matter. If we take the words at their face value, he has misled the House of Commons and the country, and for this reason. On the following page the Minister of Finance did explain the matter, because at the top of page 1166 he said this:
If the British take automobiles, they will bake them instead of aluminum; that is the answer to that.
I think the statement made by the Minister of Finance is the correct one, although I am sorry he selected aluminum.


Douglas Charles Abbott: That was just by way of illustration.


Arthur Leroy Smith: I think, as
a matter of fact, that Great Britain gets her bauxite from British Guiana.


Douglas Charles Abbott: She gets her aluminum ingots from here, though.


Arthur Leroy Smith: I think the minister was quite correct in saying that if we got that gold for motorcars, then we simply did not get it for something else. Therefore no one can argue that this whole policy is not a restrictive one. It seems to me that we should be bending our efforts to help rather than to hinder countries like the United Kingdom, which are in difficulties similar to our own. As yet I have heard no reason advanced -certainly no satisfactory reason-as to why we have shut off these exports from elsewhere, because it is now admitted that we have the power to do this. But, lest the Minister of Finance should regard himself as not a sufficiently great authority in the matter-and I think he is-let me quote some observations by the Prime Minister in the house on December 18, as reported at page 423 of Hansard:
In the arrangement for the provision of supplies, however, Canada has not been asked and will not be asked to go further than her financial situation permits. Likewise the United Kingdom will itself decide how to dispose of its present limited financial resources in the way most effective for its recovery.
So that there may be no doubt about the position at, all, having the statement made by the Minister of Trade and Commerce leaving the general impression that exports made to the United Kingdom are as good above $45,000,000 in United States dollar value as exports made to the United States, we must all remember that when the British pay for motorcars in gold, as they may in one month or in a series of months, it means that they do not export other articles to us. In other words, this has been a restriction. And one might be quite safe, I think, in using the expression that to a considerable extent it has been a bar to importations from Great Britain to this country.
In view of the fact that, in reply to the hon. member for Muskoka-Ontario, the minister and the hon-. member became involved in the matter of balances, as well as that of currency, I consider it worth while to look into the situation with respect to our foreign
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trade. I have in my hand three documents to which I shall refer by their numbers. These documents are numbered1 10-4110, 1(44120 and 104130. I am not going to read any portions of them to the committee, but I shall summarize as best I can what they mean. They mean this, that to the end of last year our balance of trade from all1 countries, excluding gold, was $237'8 million. The gold was practically $100 million-I believe the exact figure is between $90 million and $100 million. This means that we had close to $350 million, or perhaps nearer to $340 million.
As shown in the documents to which I have referred, for the ten months ending January 1, 1948, our net credits extended abroad were $376 million. On that basis, if you take the twelve months it would be approximately $450 million. Therefore, our credits that we extend exceed the over-all balance which we have. I think what I have said gives us a really /true picture of what our trading position is.
We have been carrying on this program, austerity or otherwise, and it seems to me that what the government have done is to waken from a sound sleep where they have not been watching with their usual caTe the mounting trade balance against us, the dollar position which was constantly getting worse. For three months they have operated under this program. To speak broadly, fthe bill which we have before us does not purport to do more than they are doing at the present time under the authority which is theirs or which they have assumed to be theirs under the order in council passed under the Foreign Exchange Control Act. That act does not expire until sixty days after the meeting of parliament in 1949.
When we remember the draining from the reservoir of goods which took place during the war; when we remember that inventories have been increased exceedingly quickly since the war and certainly very much so within the past eighteen months; when we remember that there has been a heavy stocking up of inventories in view of rumours of the possibility that the action which was taken would never be taken, it brings to my mind the thought that perhaps it would have been better for the government to carry on for another twelve months or for a period prior to the expiry of the act on which they base their present authority, and then the house might not have been bothered' at all with this bill.

The circumstances which I have mentioned, namely, the stocking up by merchants-by merchants, I mean all people selling goods- was such that I believe that within twelve months the situation would have rectified itself to a very large extent or, in any event, would have reduced itself to a trend that was fairly flat. We would have had a much more accurate idea of what our position was in that respect.
It seems to me that what has been done is reminiscent of what was done by Mr. Schaoht, who was in charge of things financial in Germany prior to the war. He had to do two things. He had to develop the economy to run the ordinary needs of the country, and he also had to prepare a great armament program. What he did was this. He simply said, "We will estimate 'the things we need to live and the things we need for the armament program. Therefore we will take control of all foreign exchange arising from German exports and these will be allocated strictly along the lines I have indicated."
Is that not exactly what we are doing here? We are taking charge of all foreign exchange and allocating it through the judgment of the Minister of Trade and Commerce to specific purpose within our own country.
I am not smart enough, I am not sufficiently experienced, nor do I have the knowledge to say that ultimately in Germany, had there not been a war, that action would have failed probably just as quickly as it did because there was a war. What I am trying to say is that the government has been tried and not only has it. been found wanting, but it has led us to disaster and chaos. Do not let any one say that I am predicting that for this country of ours. What I am saying is that it is basically wrong.
It is true that we are told these are only temporary measures. If they be but temporary measures, it seems to me that it should say so somewhere in the bill. The bill is entirely silent with respect to that.
I hope that no one in this country will accept the view which, by inference, may plainly be taken from the words of the Minister of Trade and Commerce, namely, that exports to Britain in United States dollars are just as good as exports to the United States. I am not saying that it was done deliberately, but that is a complete distortion of fact. The minute they use their limited supply of gold to take care of motorcars, then they have to give up something else. What we would have accomplished is this. It is true that they may

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do the allocating of their limited supplies of gold, but it is equally true that we choke off these people and rid them of all chances to re-establish themselves by trading with us, [DOT]their sister commonwealth.


James MacKerras Macdonnell: I want to say something more about this question of permits, and I should like to return to what the minister said on Thursday night last. I should like to read just a sentence or two of what he said. We are talking about the automobile industry, to which the hon. member for Calgary West has referred, and the minister said, as reported on page 1165 of Hansard:
However the point I make is that it seems to us that the industry is capable of contributing much more in American funds than it has been doing, and the regulations are framed with that in mind. I shall be very glad to get the regulations and either put them on Hansard or send them to my hon. friend. I have sent up for them.
I want the minister to tell us about these regulations, and then I want him to give more detailed figures of purchases, imports and exports by the automobile industry. I am not able to find figures which bear out what he said. Even giving the words he used the most favourable interpretation, while I agree fully with the hon. member for Calgary West, it is entirely improper to allocate gold against the motorcar industry and say that is as good as United States dollars and therefore we have a surplus. What I want to know is whether, even on that basis, we have a surplus. The figures I have show the contrary. I should like to hear the minister's figures.


Clarence Decatur Howe: Since this is not my bill I have not all the figures before me. I sent for them on the day in question and I had them here, but by then nobody seemed- interested, so I put them back in the file. I shall have them here after three o'clock tomorrow afternoon. The figures for the motorcar industry are closely in my mind. I happen to have been examining the position of imports and exports in dollars, and I must say that I was surprised myself to find that, on balance, the exports produced more than was represented than by the drain on dollars through imports.


Arthur Leroy Smith: Does that include tractors?


Clarence Decatur Howe: No; motor vehicles. Tractors are made in Canada only to a very limited extent.


James MacKerras Macdonnell: Was the minister talking about automobiles, trucks and parts?


Clarence Decatur Howe: That is right, of a class or kind made in Canada.


James MacKerras Macdonnell: Then I am going to suffer a great disappointment tomorrow, because I cannot be here to hear the minister's figures, and I know they are wrong.


Mr. FLEMING:: Section 3 (2)i(a) refers to goods that have not been delivered- but were in the possession of a common carrier before November 18, 1947, and were in the course of continuous and uninterrupted transportation to Canada on the day preceding that day. That provision is a counterpart of the provision in P.C. 4678. I suggest that that provision ought to be liberalized, if one may use that expression with a small "1" without any political connotations. Many cases of genuine hardship must have been brought to the minister's attention, arising out of the strict enforcement of that provision, and I submit that the provision itself is not a suitable one.
It is axiomatic, as I believe the Minister of Finance will agree, that new legislation ought to avoid any interference with existing contractual obligations unless there is some over-riding principle involved. In the transactions of the kind I shall refer to there is no question of exchange involved. They are cases in which purchases had been made of United States goods before November 17; the money -had been paid, and there was no question of exchange involved. In some of the cases of which I have personal knowledge, the goods had been warehoused or had made perhaps the first leg of a journey, but were not in continuous and uninterrupted transit on the day t-he government chose to put the new program into effect. Those cases were automatically excluded by the act, even though no question of exchange was involved.
Here is Mr. Jones who has the good fortune to have his goods in movement towards Canada, whereas Mr. Smith alongside him had also completed his purchases of United States goods but was waiting perhaps for the proper season or because he did not have storage room or for some other perfectly good business reason, and so his goods were not in continuous and uninterrupted transit at the moment when the new regulations came into effect. I hope that the minister will treat these as cases of hardship.
I do not believe that it will open the door to fraud if you enlarge the exception to include cases of goods purchased and paid for which were not actually in uninterrupted transit on November 18. Surely to goodness,

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ample proof can be 'had that a transaction had been completed, ownership had passed and the purchase price was, paid. I cannot see that there would be any difficulty in policing transactions to that extent.
There is another feature to this provision. Take the case of the Canadian importer who perhaps has stretched his means to the limit to complete a purchase in the United States. He has been wanting to bring the goods in here and has stretched his financial resources to the limit. He has completed his purchase. He is prevented from moving the goods to Canada. He has, therefore, to sell his goods at the best price he can obtain for them over there, to sacrifice them, being at a disadvantage, or in the other case he is up against an equally serious disadvantage in performing his contractual obligations. I wish the minister would give the committee a clear assurance that, in cases where purchases had been completed and there can be no question whatever of any other requirement of United States dollars being involved, the mere fact that the goods were not in continuous and uninterrupted transit at one minute after midnight on November 18, will not prevent importers from bringing in goods which are theirs in fact, and where there is no question of United States dollars being involved.


Douglas Charles Abbott: That question was given most careful consideration before the provision was put ini the order and a test of continuous and uninterrupted- transit was accepted1 as the one which should be followed. The particular hardship clause is there to be availed of in cases where the importer would suffer exceptional hardship by reason of the fact that he could not bring the goods into Canada because they were not in transit at the time the order came into effect. In the case of the importer who had paid for the goods in the United States, he, of course, became the -owner and he could warehouse them there if he wanted to, or he could sell them and bring the proceeds back into Canada and that would represent a conservation of United States dollars. Th-e provision was 'based' on the experience of other countries in imposing similar restrictions. Sweden had to take similar action last March, and where they attempted to recognize existing contracts the restrictions did not become effective until six months after being put into force. There has to be a line drawn- somewhere, and there is the hardship clause to take care of exceptional cases. As I said to -the hon. member for Muskoka-Ontario, a considerable number of permits have been issued under the -hardship clause, some 5,000 odd, representing goods of a value in the order of $7,000,000.


Donald Methuen Fleming: In section 3(1) the minister is given power to "issue, vary or revoke permits for the import of such goods '. I have looked carefully through the act many times to find1 a provision- which clearly defines the conditions under which the minister may revoke a permit, once granted. It seems to me, with respect, that once a permit has been granted, it should no-t be revoked except under clear circumstances, for instance, where there has been fraudulent misrepresentation to the minister in support of the application. There ought to be clear provisions in the bill some place, not necessarily here, dealing with the matter, and it should not be left simply to regulations to define the circumstances under which the minister may revoke a permit which he has issued.


Douglas Charles Abbott: That was discussed to some extent this afternoon, and I pointed out that it is the language which is used in the Export-Import Act. The question of revocation of permits relates more particularly to the quotas which are, as the committee appreciates, a form of permit. For instance, if a quota holder should go bankrupt, his permit, consisting of a quota, should be revoked. If he fails to distribute the goods equitably in the district in which he is doing business; for instance, if he has a quota of import oranges and does not distribute them equitably we should have 'the -power to revoke his permit. Suppose an importer in- Halifax, for example, has a large quota of import oranges, and distributes them all in the Halifax area, and does not send any over into Sydney-I am just using that as an- illustration-it is desired to have the power to revoke his permit if he does not distribute his quota fairly. I think under a permit system, unfortunate as it may be, it is necessary to have the power to revoke accompany the power to issue. I agree with my hon. friend that it would probably be as well, in drafting regulations, to try to indicate as explicitly as possible the conditions under which permits would 'be issued, varied or revoked; but in the very nature of things it would probably be impracticable to foresee all the circumstances under which it might be necessary to exercise that power.


Donald Methuen Fleming: 
Douglas Charles Abbott: This subject of revocation is an -important one. I agree with my hon. friend that it would be desirable to try to spell out just as completely as possible in the regulations what these conditions are, but hon. members will recall that during the war it was necessary to have control measures of this kind. Unfortunate as it may be under ordinary circumstances, it is necessary to their effective administration in the interests of the public that there should be a considerable measure of legislation by regulation.


John George Diefenbaker: Bureaucratic control.


Douglas Charles Abbott: One may describe it as he likes. I am afraid it is inevitable, and one cannot make these control measures work without them. I do not like them any better than anyone else. I had hoped we would be out of these things long before this; nevertheless sometimes it is necessary to do unpleasant things. This legislation is an unpleasant necessity, and if it is to work, and work smoothly and properly, there must be the flexibility that is necessary to enable it to be done. One of the methods is by the enactment of regulations which are made public, which have to be published in the Canada Gazette, and which the public know. But to attempt to spell it all out in a statute, to foresee all the various circumstances which will arise in a statute, I suggest is completely unrealistic. It would defeat the very purpose which we are trying to accomplish.


John George Diefenbaker: I have not taken any part in this discussion and I do not intend to take much no-w. I had occasion this afternoon to hear the Minister of Trade and Commerce dealing in his usual cavalier way with questions asked by the opposition. I can
quite understand the attitude of the minister, because he had been flitting from power to power, until today he believes that, as far as parliament is concerned, it is just an institution before which he appears from time to time. But when asked questions he uses the usual method he has of referring to the statements made by those in the opposition-


Clarence Decatur Howe: Thank you very much.


John George Diefenbaker: Well, I am glad to receive at least thanks from the right hon. gentleman. That is quite different from the usual-


Clarence Decatur Howe: Was it something you wanted to know after all that?


John George Diefenbaker: All I -have to say, sir, is this. My right hon. friend invariably resorts to abuse when asked questions that are reasonable and fair. I can quite understand his attitude. He has passed through one dictatorship to the other. He took over radio; he controlled air, and now he controls wheat marketing in- this country; and finally he is going to control the entire economic development of our country. I point out this in connection with what the hon. member for Eglin-t-on said, when we place in the hands of a minister the absolute power that has been placed in the hands of the Minister of Trade and Commerce, surely parliament has a right to ask that these powers shall be exercised in- accordance with law and statute passed by parliament or regulation which parliament knows of. I ask the minister this question: is that an unrealistic suggestion?


Clarence Decatur Howe: I am afraid my hon. friend gets himself mixed up with parliament as a whole.


John George Diefenbaker: As a matter of fact, sir, when I see the powers that are conferred here I look back and I read what the Prime Minister said in 1933, and I ask myself, has democracy so changed in this country? In the session of 1932-33 the question of the allocation of power to the executive was under discussion, and the Prime Minister said, as reported at page 3187 of Hansard'.
If this parliament parts with the power of parliamentary control over legislation generally and- places that power in the hands of the executive, I say, we shall find very soon the contention being made in different parts of the country that if one individual or executive can exercise all -the powers of government then a class can just as well do the same.
Sir, I suggest this to you, never in the history of this country, and even today in Britain under socialism, has any minister been as
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powerful as the Minister of Trade and Commerce in this government today. It is not very long ago in the city of Toronto that he made a great speech after coming back from Britain. He pointed out the great danger of placing almost absolute power in the hands of one man. He spoke of its danger and how such a condition of affairs would not be permitted to exist in this country.


Clarence Decatur Howe: When was this?


John George Diefenbaker: That was in a speech made in Toronto in October last.


Clarence Decatur Howe: To whom?


John George Diefenbaker: To the board of trade of the city of Toronto, after the minister's return from abroad.


Clarence Decatur Howe: I never addressed the board of trade in the city of Toronto in my life.


John George Diefenbaker: It just indicates how the minister forgets some of the statements he makes.


Clarence Decatur Howe: I never addressed the board of trade in the city of Toronto in my life.


William Ross Macdonald: May I suggest to the committee that they discuss the powers under this act and not go so far afield. At present the hon. member is discussing a speech that was made by the Minister of Trade and Commerce before he was Minister of Trade and Commerce and before this act came into effect. I suggest to the committee that if we are to make the progress which the committee desires we should stay within the rules of the house and discuss the clauses which are before the committee.


John George Diefenbaker: That is what I am
trying to do, and I wish to thank you, sir, for having pointed out that there is reason for the minister's change of attitude, because I was referring to statements made before he became Minister of Trade and Commerce. Does Your Honour say to me that, in connection with the question of powers, I may not refer to some of the lessons of democracy given this house on occasion?


William Ross Macdonald: I think it would be more strictly in accordance with the rules, now that we are in committee, that members should discuss only the clauses before us, and not discuss other questions which, though relevant to this question, are not strictly before the committee at the present time.


John George Diefenbaker: As long as you keep me directed so that I shall stay within the rules, I will try to do so.


Clarence Decatur Howe: When do we come to fundamental rights and freedoms?


An hon. MEMBER:: Every time we deal with you we come to them.


John George Diefenbaker: Fundamental rights and freedoms. That expression coming from my right hon. friend is just a series of words, not practised by him at any time.
Now, for the purpose of building up what I have to say, may I finish the quotation? Incidentally, may I say to my right hon. friend that I said that it was the board of trade, and that this was the only institution he spoke to in Toronto after he came back from abroad. I believe it was the businessmen of Toronto.


An hon. MEMBER:: The Liberal businessmen.


William Ross Macdonald: Again, I cannot see what that has to do with the clause under consideration. I believe the committee does want to proceed with its work and I again ask the hon. member to discuss clause 3.


John George Diefenbaker: I have sat here and listened to the debates that have gone on and have not had anything to say, and I heard a discussion this afternoon, and even this evening, which I considered relevant to the section in question, as were the remarks that I was making. However, Your Honour rules this committee and I bow to your ruling.
I was dealing generally with the question of controls, and I am sure Your Honour will not consider me astray if I refer to a statement made by the Minister of Finance a few moments ago in regard to bureaucratic controls.


Douglas Charles Abbott: That was my hon. friend's phrase, not mine.


John George Diefenbaker: Yes, but accepted with approval by my hon. friend.


Douglas Charles Abbott: Not necessarily with
approval.


John George Diefenbaker: He certainly does not disagree. You know, sir, we have come to this point in this country. All along, those on this side have spoken about bureaucratic controls and how the people have been strangled and stifled by them, and now the minister admits the necessity of bureaucratic controls this evening.


Douglas Charles Abbott: Controls, anyway.


John George Diefenbaker: He admitted the necessity of bureaucratic controls. As a matter

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of fact, that is a long cry from the Prime Minister's statements of a few years ago. I am sure he will admit what the advisory council of the national Liberal federation enunciated at the recent convention. Here for the first time is an admission by those who direct that party that bureaucratic controls are, in fact, necessary in Canada. I read from the section dealing with fiscal policy:
The advisory council of the national Liberal federation reaffirm its faith in the system of free enterprise, accepting the proposition that government of bureaucratic control or regulation may become necessary in an economy based upon a system of free enterprise.
It gives various reasons why bureaucratic control is necessary, and finally declares:
... to overcome a crisis developed by a temporary emergency.
That, sir, is the greatest admission we have ever been able to secure that there is, in fact, in this country, and has been, bureaucratic control, and it is part and parcel of the policy of this government.
May I ask this question-? When did the Minister of Finance first seek an opinion regarding the use of the Foreign Exchange Control Act for a purpose which parliament never intended?


Douglas Charles Abbott: My recollection is, early in August.


John George Diefenbaker: Early in August. At that time the amount of our foreign exchange was gradually going down. It had diminished to a great extent at that time. The situation was dangerous. I will not give quotations on this occasion; but not only did the hon. member for York West warn the government in June last, but throughout the summer newspapers in the country were warning them. Yet, did the government act? In August, the minister admits, he realized the situation, because if he had not realized it he would not 'have gone to the law officers of the crown to find out if there was not some way whereby he could get around that situation. I say, with all the respect I have for the Minister of Finance, that no more serious insult to parliament has been committed by any minister than by the Minister of Finance when he admits that parliament was led by the government to believe that this act would be used for one purpose only, and the government, in the face of the promise to parliament, endeavoured to ascertain whether they could circumvent an act passed by parliament for one purpose in order to achieve another purpose.
That indicates how far this government was prepared to go in order to circumvent parliament. If the situation was serious in August, why then did the government wait until November 17? Why was parliament called? Why was parliament not called during that period? Why was it necessary to do something that has never been done before in history, to impose taxation by order in council? Why, if this government intended to respect parliament, was not something done between August and November 17 to convene parliament? That is the question to which I think the minister will have to give a better answer than the rather offhand, haphazard answer that he has given up to the present time.
I am now going to ask the minister certain questions, and they can be answered either at once or later as the case may be. How much United States currency is it estimated that during the period of a year will be saved on prohibition; that is, on commodities directly prohibited? And on commodities subject to quota-on automobiles, and on tourist expenditures in the United States?


Douglas Charles Abbott: I have given some of that.


John George Diefenbaker: You have not given all of it.


Douglas Charles Abbott: I think I can give some of them. As I have said before, we estimated tourist expenditures at $30,000,000 to $40,000,000; but that can only be an estimate. I think I can probably give the prohibitions and quotas right now if my hon. friend will wait for just a moment.


John George Diefenbaker: Very well.


Douglas Charles Abbott: It is estimated, between prohibitions and quotas, at approximately $300 million. I do not know that I have a breakdown of the articles on the prohibited list and those on the quota list. That is based on last year's importation of those articles.


John George Diefenbaker: That is a full year?


Douglas Charles Abbott: That would be operating for a full twelve months' period; that is correct. I can perhaps give that in a little more detail tomorrow or a little later on.


John George Diefenbaker: I should like to ask the Minister of Trade and Commerce what the anticipated savings of United States exchange will be on capital goods that ordinarily would have come into the country but for the refusal on his part to grant permits in individual cases. What is the estimate in that connection?


Clarence Decatur Howe: It is impossible to make an estimate. We can make estimates in various
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John George Diefenbaker: 
Douglas Charles Abbott: I think I recall that at the time, following the discussions which we had with our officials, it was felt that any estimate as to capital goods would be perhaps not a guess but pretty nearly a guess, because it is so difficult to know at what rate people would want to go ahead with capital expansion, what portion would be absolutely essential to be allowed to go on, and so on. So we never felt at any stage that any accurate estimate could be formed as to what would be the savings on the capital goods side of the program.


John George Diefenbaker: Was there not an estimate given?


Douglas Charles Abbott: I remember that at the press conference we were careful to state that the estimates in that particular field, and in the others too, were only estimates and should be taken as such.


John George Diefenbaker: 
Clarence Decatur Howe: On capital goods?


John George Diefenbaker: Yes.


Clarence Decatur Howe: What are the other items? The hon. member has the statement there.


John George Diefenbaker: 
Clarence Decatur Howe: No.


Douglas Charles Abbott: I do not think so.


John George Diefenbaker: I obtained my
information from the London Free Press of November 19, and the estimate on new gold given on that day, as reported, was $50,000,000. I should also like to ask the Minister of

Trade and Commerce what have been the savings to date in those various items. I do not know which minister to ask. Possibly I will ask the Minister of Finance. What have been the total savings to date under those various items?


Douglas Charles Abbott: It is impossible to say, because we have had only' a couple of months of operation. Any estimate of the savings must be made on the assumption that the volume of imports, on both prohibited goods and imported goods, would continue at the same rate as they had during the preceding twelve months. The best criterion or a partial one is the position of our exhange account which I gave the other day. At the end of January it was approximately $514 million, up from a low of $461 million, I think, on December 17. But it is hard to pinpoint the savings in this group or that group. We shall have monthly figures under tariff item classifications for the prohibited items and for the quota items.


John George Diefenbaker: The minister has none of those yet?


Douglas Charles Abbott: We may possibly have the December figures. I shall have to check on that. We would not have anything later than the December figures, but we may possibly have a breakdown on those. I would have to check on that and see.


John George Diefenbaker: If the minister has those, he will let us have them?


Douglas Charles Abbott: Yes.


John George Diefenbaker: On the occasion of this conference the Minister of Trade and Commerce allegedly stated that certain industries in this country were to be given priority because they are capable of expanding exports to the United States; in other words, in the granting of permits for the importation of capital goods, certain particular industries were to be given priority. Has any determination been made as to which these industries are? Are there any regulations which indicate that a definite policy in that regard is being followed?


Clarence Decatur Howe: I have stated several times that in the issuing of project approvals, approvals are given for industries which are improving the United States exchange situation. A good many have been granted. I suppose my hon. friend will ask to whom they have been granted. I cannot give him that information just now, but it is a routine procedure. A considerable staff is engaged in exactly that work of determining whether the project is one that will improve Canada's

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United States exchange position. If so, the approval is granted. If, on the other hand, it is a project that will be a drain on the United States exchange position, the project approval is not granted.


John George Diefenbaker: But are there no regulations?


Clarence Decatur Howe: Definitely.


John George Diefenbaker: Are no definite principles enunciated?


Clarence Decatur Howe: Definitely.


John George Diefenbaker: That is what I am trying to get at.


Clarence Decatur Howe: Yes.


John George Diefenbaker: Will the minister lay on the table of the house a copy and let us see the general principles on which he acts? I am sure he will agree that that should be the case. If that is not so, the situation lends itself to discrimination on the part of the minister. In other words, it places the minister in a position where he can say to one manufacturer in a certain industry that he will give him no permit and to another manufacturer of a like product that a permit will be granted. Unless there is something of a definite rule, the minister might very well find, however he might back up and be adverse to this being considered, that political fitness would become the qualification for the issuing of permits. It is in that respect that I ask the question.


Clarence Decatur Howe: My hon. friend is taking that from the sewer of his own mind.


John George Diefenbaker: What is that?


Harry Rutherford Jackman: You are doing that from the sewer of your own mind.


John George Diefenbaker: Mr. Chairman, that is a typically polite remark on the part of the minister, and I ask for an immediate withdrawal of that statement.


Clarence Decatur Howe: In the last eight years I have had probably more opportunity than any other man in public life to favour my political friends and punish my political enemies, but never on any occasion have I had an insinuation that it is a thing that I am likely to do; and I will not take it from my hon. friend or anybody else.


John George Diefenbaker: I am accepting the minister as being the custodian of all perfection. Nevertheless, I want that statement withdrawn.


Clarence Decatur Howe: I will not withdraw it.


Ralph Melville Warren: I suggest that the hon. member for Lake Centre withdraw his insinuation.


William Ross Macdonald: Probably the language on both sides has been quite strong. The Minister of Trade and Commerce used the word "sewer" which, I think, is probably too strong. Perhaps he would like to change that word.


Clarence Decatur Howe: There is no reason in the world why I should. This is not my bill. There is no reason why a member of the opposition should get up and make insinuations of that kind, which are wholly uncalled for. Why should I apologize?


Some hon. MEMBERS:: Withdraw.


Howard Charles Green: On a point of order, the minister has said that the thoughts of the hon. member for Lake Centre as expressed, were from the sewer of his own mind. No one in this house can get away with a remark of that kind. It should be withdrawn, without qualification.


Ralph Melville Warren: I suggest that the insinuation that the minister was ever guilty of the suggestion made ought to be withdrawn.


Angus MacInnis: Strictly as a neutral, and possibly to throw some oil on the troubled waters, may I say that I was listening carefully to what was said by the hon. member for Lake Centre. While the minister might have felt that the language used by the hon. member was provocative, I do not believe that it was, actually, in the context in which it was used. As I heard him, he was not referring to what the Minister of Trade and Commerce might do. What he was saying was what this legislation would give the minister power to do-and that is an altogether different thing. Perhaps it is unfortunate that the minister has to take some of this, but I think the minister's statement was uncalled for, in the way it was put.


Clarence Decatur Howe: Mr. Chairman, I was sitting in the committee like any other member, and the hon. member rose in his seat and proceeded to read me a lecture. But if what the hon. member for Lake Centre said is what the hon. member for Vancouver East has just said, there was no call for my remark.


John George Diefenbaker: Is it withdrawn?


William Ross Macdonald: The minister was under the impression that the hon. member for Lake Centre-


Some hon. MEMBERS:: No, no.
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William Ross Macdonald: Order. The Minister of Trade and Commerce was under the impression that the hon. member for Lake Centre was suggesting that he was using his power improperly. I think it is clear now that the hon. member for Lake Centre had no such intention. In view of that, I would suggest that the Minister of Trade and Commerce should withdraw his remark.


Clarence Decatur Howe: I bow to your ruling, Mr. Chairman.


John George Diefenbaker: I appreciate that.


Clarence Decatur Howe: Just address yourself to the Chair, not to me; I am tired of it.


John George Diefenbaker: I am not talking to you.


William Ross Macdonald: I would ask hon. members to address the Chair.


John George Diefenbaker: I appreciate that-


An hon. MEMBER:: Withdraw.


William Ross Macdonald: The remark has been withdrawn.


John George Diefenbaker: I am pointing out, as the hon. member for Vancouver East stated, that without regulation executive tyranny is possible in a case such as this. The minister has now stated 'that under no circumstances should such a thing be said. Then I ask him what possible objection he could 'have to accepting a regulation so that each industry would know whether it qualifies to receive a permit for the importation of capital goods from the United States. In that way every suggestion that unfairness is possible, that caprice has been exercised, that injustice has been done by way of discrimination will be removed entirely; for each and every one who applies will realize that in certain industries permits will be granted, if extensions will meet the exchange situation, whereas in other industries permits will not be granted, regardless of circumstances.
After all, the identity of the individual minister of the crown is not at issue here. The matter at issue is that parliament is asked under this legislation voluntarily to give up and to surrender its rights and to place them in the hands of one or two ministers to determine for an indefinite period.
It started off with the minister's statement that in a few months everything would be well. But since this debate has started, that "few months" has become an indefinite date in the future. We ini this parliament are asked to give power which might not be of an emergency nature, and which may be permanent; for all the record of the last few
[The Chairman.]
years has shown that when parliament has surrendered! a power temporarily, in the ordinary course of events that power has tended to become permanent, and a complete loss on the part of parliament, and its right.
Will the minister not reconsider the situation?-I make an appeal-and if I cannot make it to the Minister of Trade and Commerce, then I make it to the Minister of Finance-to reconsider this, and to tell the committee in some businesslike detail, so that he who runs may read and understand, what general principles are to be adopted. So far as permits are concerned, in respect of capital goods, those industries which will not receive permits should be designated, and those which will receive them should also be placed on the list, showing that applications from them would in ordinary circumstances be affirmatively accepted.
On the occasion of the press conference- and I have various press reports here-the Minister of Trade and Commerce stated, as it is reported in the Ottawa Journal of November 18, that the government would encourage and increase the production of coal. And he indicated that, in order to increase the production of coal in Canada, the government might be more generous in the matter of subsidies. Then he went on to say that it would even consider assistance in the export of Canadian coal, if paid in United States dollars. I would ask the Minister of Trade and Commerce what, if anything, has been done to carry out the suggestion or plan enunciated on that occasion.


Clarence Decatur Howe: I did not hear the reference. The hon. member referred to the Ottawa Journal.


John George Diefenbaker: It was a statement made at a press conference.


Clarence Decatur Howe: Every pound of coal that has been produced in Canada has been marketed, and every encouragement that I know of, has been given. If a subsidy was required to move boats, or to move coal1 by ship, such subventions have been provided. If boats have been required, assistance has been given to obtain boats.


John George Diefenbaker: Have there been any subventions since November 18?


Clarence Decatur Howe: Yes.


John George Diefenbaker: Extra ones?


Clarence Decatur Howe: Nothing outside the scope of the subventions, but there have been new applications.

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John George Diefenbaker: Probably the minister could tell us which companies received extra subventions since November 18?


Clarence Decatur Howe: Dosco.


John George Diefenbaker: And who else?


Clarence Decatur Howe: That is all.


John George Diefenbaker: That is all?


Clarence Decatur Howe: Those were the only subventions required.


John George Diefenbaker: Were there any other applications?


Clarence Decatur Howe: No.


John George Diefenbaker: No other applications?


Clarence Decatur Howe: What clause is my hon. friend speaking to now, Mr. Chairman?


Ralph Melville Warren: That is what I want to know.


John George Diefenbaker: I am speaking to the question of a permit. After all, we are granting certain powers to the Minister of Trade and Commerce, but we in parliament do not seem to be able to get a complete answer to these questions.


William Ross Macdonald: I do not believe the question of subventions is involved in this, although the question of permits is.


Gordon Graydon: Surely that is part and parcel of the general situation we are discussing.


Clarence Decatur Howe: Coal1 subventions, do you
mean?


Gordon Graydon: Yes.


Clarence Decatur Howe: What section in the bill?


Douglas Charles Abbott: It could apply to the constructive part of the program, but it has nothing to do with the restrictive side of it.


William Ross Macdonald: Shall section 3 carry?


Edmund Davie Fulton: The minister has just taken exception to a remark made. I wonder if he could explain the necessity for what seems to me otherwise a quite unnecessary and indefinite state of suspension in connection with Canadian industries. He spoke earlier this evening of a list of what he called project approvals. As I understand the proposition, the Minister of Finance is in a position to give a permit to anyone who applies for imports. Why should the minister of reconstruction take it to himself; why should he have the power, or why should he follow the course of writing a letter saying, "Your pro-5849- 814
ject is one in connection with which I might give a permit," or "I will give a permit when the permits come into force." Why could the Minister of Finance not simply get the approval or advice of the minister of reconstruction and give the permit now? Why put the thing on the. precarious basis of a letter which says, "At some time in the future I may give a permit"?


Clarence Decatur Howe: A project might require a vast variety of permits. It might require a permit for the importation of structural steel, a permit for specific items of machinery and so on. It is all very well to give permits, but the applicant is not ready to specify his requirements, and there is no purpose in asking him to file under every tariff item that may be involved since the assurance can be given that if and when he needs permits he will obtain them.


Mr. CRUICKSHANK:: I rise to a question of privilege. This morning no less a person than the Prime Minister extended greetings to the leader of the C.C.F. party. The hon. member for Renfrew North extended greetings to the hon. member for Selkirk. I want to extend greetings to the hon. member for Greenwood who has returned for his annual visit. I hope he is fully recovered in health.


Gordon Graydon: That was totally uncalled for, if I may say so.


Edmund Davie Fulton: Do I understand the minister to say that he then gives tentative approval for applications which may be received in the future? Is that the effect of the letter of approval?


Clarence Decatur Howe: A manufacturer may want to erect an industrial plant, and he desires to know that if he undertakes a project of that kind he will be able to procure the United States contents required by the project. He asks that simple question and he obtains from the Department of Trade and Commerce either a yes or no answer to his question. If the answer is yes, he is able to proceed with the project knowing that he will obtain his United States contents. If the answer is no, he does not start his project and get himself involved because he has received pretty fair assurance that he will not be able to build it.


Edmund Davie Fulton: Is this letter a tentative application?


Clarence Decatur Howe: Call it that if you will.


Edmund Davie Fulton: I am. just trying to find out what reliance the manufacturer or the person who is considering a project can place on that letter if he has not made application.

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I am trying to find out upon what basis the minister says that he will or will not give permits when application is made.


Clarence Decatur Howe: The application is made on a form and the facts are examined by the appropriate officers. If the project is of any considerable size the applicant appears before t'he officers of the department and gives them any explanations they require. Then the facts are presented to me with a recommendation and a letter is issued accordingly, or approval is issued accordingly in the form of a letter. My hon. friend wants to know if it is binding. The man does not have to go through with his project because he gets approval and therefore it would not be binding on him-. If a minister of the crown writes a letter, it is binding on the minister.


James MacKerras Macdonnell: I understood the minister to say earlier in answer to the hon. member for Lake Centre that at least one reason for his being hesitant about making regulations along the line which were suggested by the hon. member for Lake Centre and which seem to me to be absolutely sound was that it was still too soon to determine just how much currency could be allowed to this or that industry. If the minister is not sure, when project A comes in, that he will allocate so much to the steel industry or so much to the motorcar industry or so much to some other industry, how is he able to decide on the project? How is the man who is undertaking the project to know whether this is decided on some general principle, or whether it is just the absolutely uncontrolled decision of the minister, based upon no reason that anyone can hold the minister to?


Clarence Decatur Howe: Perhaps he will not be able to decide that, but at least he will know whether he can go ahead.


James MacKerras Macdonnell: I imagine it is really a waste of time.


Clarence Decatur Howe: I think so.


James MacKerras Macdonnell: But maybe it is 'time we have to waste. The minister is supremely uninterested, absolutely uninterested in the idea of people having rights. The minister laughs. I think the idea of rights is something that he considers rather ridiculous. Apparently his colleagues have given him this power. We have objected in this house to order in council government, but we have got away beyond that. We shall soon be looking back to the days of order in council government and thinking that that was a

good time, that we had the judgment of at least a dozen men, some of them good men; but now we have only the judgment of one minister, even though he has a lot of portfolios.
We have not yet been able to interest the minister in our idea. I know very well the minister regards this house as being a tiresome place. He is bored when he has to come here >to talk to us. He regards it as a waste of time and he shows that by his demeanour, I will not say never, but he seldom tries really to answer our questions in a way w7hich will satisfy us, as some of his colleagues do. His whole attitude is that it is rather impertinent to ask questions. That is the impression I get. But I am going to ask this question and I am going to keep on asking it until the minister answers it.


Clarence Decatur Howe: I understand that my hon. friend thinks it is the inherent right of any man to build anything he likes, provided that he has the money to pay for it.


James MacKerras Macdonnell: That is just a rhetorical answer.


Clarence Decatur Howe: You asked me a rhetorical question.


James MacKerras Macdonnell: No, I did not. I recognize that we have got into strange times, partly due to the action of the government, if you like, but I will not emphasize that; I recognize that we have reached a point where we have to use some unusual expedients. All we are asking is that we have some remnant of the liberties under which we used to live. I think there are some ministers here who would like to leave us with some residue of those liberties, but, so far as the minister of reconstruction et cetera is concerned, I do not think he is interested in the idea.
I think we should stay here until we either get him interested or get somebody else interested. The hon. member for Lake Centre asked a reasonable and sensible question. He asked if there were any regulations, if there was anything anyone could appeal to. I put *that up to the minister. He asked me if I thought any man in Canada could build anything he liked just of his own sweet will. That is not a serious contribution to the situation. All I am asking is whether there is something short of the minister's uncontrolled jurisdiction, whether there are some means whereby a man will have some rights other than those granted by the minister's sweet will.


Clarence Decatur Howe: Now we are getting on common ground. I more than any man in this house believe that people should have the

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widest possible freedom to spend their money [DOT] as they like, and I have explained to the committee the difficulty of administering building control on that very ground. The present regulation has reference to only one view point. Is the project helpful either in earning more United States dollars or in saving United States dollars? That is the test. If it is a factory, what does the factory make? Is it something that can be exported? Is it likely to save dollars by avoiding an import? Is it likely to be convertible into an export? If it cannot meet two of these tests there is every reason why the project should not proceed. If it simply adds to the amenities of living the permit is not issued. If it simply adds somewhat to the comfort of the situation it is not likely to be issued. We have a larger capital expenditure program planned than this country can afford. It must be cut back. Its cut back is dependent on the value of the project in the present economic situation.


James MacKerras Macdonnell: I think that is a sensible explanation and we are getting on common ground at last. But I cannot believe that is the exclusive test, because the minister himself the other day said a thing that, I imagine, is correct. He said that, so far as individual items are concerned, if it is a replacement of a worn-out part, the permit would issue automatically. That is in contravention of what the minister has just said, because it would apply to any company whether producing United States dollars or not. There must be other regulations as well. That does not come within the four corners of what the minister said a moment ago.
Coming back to what the member for Lake Centre asked, we have asked repeatedly that the regulation shall be published so that people will have some knowledge of what their rights are. I do not think that is an unreasonable request. The minister is going to bring down tomorrow the regulations for the motorcar industry. That may give us a pattern which can be applied elsewhere.


Clarence Decatur Howe: I think I explained earlier that we are drawing up regulations for industries as rapidly as we can; but, naturally, before publishing the regulations, we have to test them carefully. It might be all very well for some of our officers to sit in an ivory tower and plan regulations for a great industry having ramifications all across the country. Those regulations might look good here in Ottawa; but, until they are tested against the industry as a whole and the repercussions of
their application are estimated, it would be dangerous to file them. It might do a great deal of unnecessary harm.


Mr. MERRITT:: The minister said that the project will be approved according to whether it earns or saves United States dollars. For what period of time does the minister suggest that this test should be applied? Must it earn or save United States dollars within a matter of six months or a year, or is it five or ten years ahead, or something of that kind? Can the minister say what is in his mind now as to the period of time that will govern his judgment in making a decision?


Clarence Decatur Howe: It must be obvious to my hon. friend that the time must be flexible. The last project I saw that came up for approval was a pulp mill on Vancouver island. It will not earn United States dollars for eighteen months, and yet it will contribute to the permanent solution of the problem we are tackling. I hope my hon. friend will not quote me now as saying that it must be eighteen months. If it is six weeks, so much the better.


Charles Cecil Ingersoll Merritt: We had made a little progress. We find that a project which might earn United States dollars in eighteen months will get a permit. Is the minister thinking further ahead, of long-term additions to capital expenditures on development of the country, whether or not they would save United States dollars? During this period of restrictions, will capital development be permitted only if it saves United States dollars, or might there not be circumstances under which an industry suitable to Canada, but which does not replace United States products, would be permitted to be constructed?


Clarence Decatur Howe: If my hon. friend will mention one industry I shall try to give him an answer.


Mr. HATFIELD:: Has this program not resulted in a shortage of United States refrigerators and boxcars coming into Canada which might have been used for the shipment of Canadian goods back to the United States, thereby securing United States dollars?


Clarence Decatur Howe: Does my hon. friend want cars to ship potatoes?


Heber Harold Hatfield: There used to be 1,000 cars a day come in from the United States loaded with fresh fruits and vegetables and other produce. Immediately this order went, into effect, these cars stopped coming into Canada, which cut off our supply of cars for the shipment of Canadian goods back to the United States, thereby preventing the ship-
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ment of Canadian goods across the line which would have brought in United States dollars.


Clarence Decatur Howe: I would be very sorry to know there were shipments of Canadian goods which were not crossing the border because we had not the cars. I thought we had an ample number of cars for our shipments to the United States.


Heber Harold Hatfield: I may inform the minister that there is a great shortage of cars, especially refrigerator cars which come up from the United States loaded with fresh fruits and vegetables. We used to ship back in those cars potatoes from Prince Edward Island, Nova Scotia, New Brunswick and probably Ontario, which brought in United States dollars. The same is true of boxcars. As soon as this order went into effect, the Canadian railways refused to allow their cars to go across to the United States, because they did not want them to come back empty. Only coal cars are coming in now from the United States, and they are not suitable for shipping Canadian goods such as newsprint, potatoes, pulpwood and many other goods which would have brought in United States dollars. As soon as this order went into effect, it created a great shortage of cars.


Charles Cecil Ingersoll Merritt: To refer to my earlier question, what about machinery for a sawmill or logging machinery imported from the United States for use in the lumber industry? These would not necessarily come in under permit for definite projects. It cannot be decided that the importation, of any one of these articles is certain to produce more United States dollars. There must be a closer definition than the one he gave to the hon. member for Muskoka-Ontario; there must be a closer definition than the simple criteria. How is he to know whether the approval he gives earns more United States dollars than the money spent for the equipment?


Clarence Decatur Howe: To my simple mind, if a lumber dealer wishes to bring in more machinery I would assume that that machinery would have the effect of increasing the exports of lumber from Canada, and thus be an earner of dollars; therefore I would give the permit. My hon. friend might have doubts, but I think that would be a reasonably clear case.


Charles Cecil Ingersoll Merritt: But surely a great deal of the lumber cut by such machinery would be consumed in Canada; a great deal more would go to the United Kingdom, and a great deal more to Australia, and the amount of lumber which that mill might send over to the United States might be negligible as compared with 
its total cut. Is that not a correct statement? The minister will know that as well as I.


Clarence Decatur Howe: It might be reasonable to my hon. friend, but, as I say, the simple souls who administer this would say that lumber was for export, and therefore the importer of lumber machinery would come within the class of goods for which permits are issued.


Charles Cecil Ingersoll Merritt: Do I understand from that, for instance, that an unlimited number of lumber carriers would be allowed in? If the mill showed the minister that it needed these carriers in the ordinary course of its business, would permits issue automatically for these things, or is there some other restriction the minister has in mind that he might apply in the event that too many people applied for the importation of such goods?


Clarence Decatur Howe: If the machinery was required it would be demonstrated that logging machinery was required, and if it was not available from a Canadian source the permit would issue. I will go that far dogmatically. I hope the hon. member will not cross-examine me too much on it.


Donald Methuen Fleming: After an experience of sitting in this House of Commons one does not expect to find consistency in the government; one does not expect to find consistency in their statements. For instance, in almost every debate in recent times in this house in which the government has taken a position of some kind or other, it has been possible to turn up speeches made by the present Prime Minister when he was leader of the opposition, in which precisely the opposite position was taken by him. In what we have heard tonight from the Minister of Trade and Commerce and others, we have just about a complete contradiction of the things that the same right hon. gentleman has previously said.
You recall, Mr. Chairman, April 1, 1946, in this house. You recall that the same right hon. gentleman made a statement of some importance at that time concerning building control in Canada. I am going to read you the statement in a moment, but, before I do so let me remind you what the minister has just said by way of justifying the pyramiding of a system of control throughout the length and breadth of Canada over these capital projects, pyramiding to an apex on top of which the Minister of Trade and Commerce is himself squarely perched.
This is one paragraph from the; speech made by the right hon. gentleman on April 1, 1946. It will be. found at page 411 of Hansard of 1946. He, said:
During the war years, the Department of Munitions and Supply maintained a rigid con-

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trol of construction for the purpose of providing material for the war. During that period our citizens accepted this control as necessary for the successful prosecution of the war and its regulations were observed. However, after the end of the war, construction control regulations were no longer observed to the same degree.
Mark these words if you will, Mr. Chairman:
It was recognized by the department that it was impossible to judge from Ottawa the essentiality of different projects and the local conditions which necessarily must govern each decision.
Just let me remind you of these words, Mr. Chairman:
It was recognized by the department that it was impossible to judge from Ottawa the essentiality of different projects . . .
The whole basis of the case put forward by the Minister of Trade and Commerce in asking parliament to vest him with these powers that might have made Mussolini swoon with envy is that he may be completely trusted to exercise these powers not only without favouritism but also with complete perspicacity, complete ability to judge what is essential and what is non-essential. One need do nothing more than to offer to the right hon. gentleman his own words that it is impossible to judge from Ottawa the essentiality of different projects.


Douglas Charles Abbott: There was no simple test then as there is today, though.


Donald Methuen Fleming: No simple test then as there is today?


Douglas Charles Abbott: That is right. The simple test today is whether it will get us United States dollars.


Donald Methuen Fleming: The Minister of Finance has not been following what I am saying. The minister's statement was not made during the war. This is the statement made by the Minister of Trade and Commerce, then the minister only of reconstruction and supply, on April 1, 1946, with reference to the situation which followed the war.


Douglas Charles Abbott: I know.


Donald Methuen Fleming: In the first sentence he talked about the war. Then he goes on to say, now with the war over, it is impossible to judge from Ottawa the essentiality of building projects, and for that reason he abandons the construction controls which were the means he had in his power at that time for channeling into the construction of houses available supplies of building materials. He turned his back on that responsibility and said, the whole reason is this, we cannot tell from Ottawa what is essential and what is not; therefore we will withdraw from the field.


Douglas Charles Abbott: We can tell from Ottawa whether a project will save United States dollars or not.


Charles Cecil Ingersoll Merritt: I bet you cannot.


Donald Methuen Fleming: What is the difference in essence between a national emergency arising out of a shortage of houses and a national emergency arising out of a shortage of United States dollars? The principle at stake here is precisely the same. If it was impossible in April, 1946, for the minister to judge the essentiality of building projects at Ottawa, just how much easier is it for him in February, 1948, to judge the essentiality of capital projects in the matter now before us.
All this talk we have had tonight about trustfully leaving to the minister and his judgment to decide what is good for the country and what is not simply does not hold water. The fact of the matter is that we are back to the same old situation from which we thought that democratic peoples had emerged1 several centuries ago, where justice was measured by the length of the chancellor's foot. In this case, apparently, the essentiality of measures of this kind, capital projects, is simply to be measured by the particular notion that the Minister of Trade and Commerce entertains at the time the particular application comes before him.
In what I am about to say I am not necessarily being unkind to the Minister of Trade and Commerce. Human nature being what it is, there is not a man, I do not care who he is, the. minister of reconstruction or anybody else, who is so constituted, that, given powers of the scope and breadth of these powers which he is seeking in this bill, can dismiss from his mind all vestige of whim, caprice and favouritism when applications come before him. What is bad in this measure can be cured only if the minister is stripped of those dictatorial powers, and if what is necessary to meet an emergent situation is dealt with in terms of statutory provisions that cannot be applied otherwise than equally to all people, regardless of who they are.


William Ross Macdonald: Does the clause carry?


Howard Charles Green: May I ask the Minister of Trade and Commerce whether he is to have any control over projects which do not require United States material?


Clarence Decatur Howe: No.


Howard Charles Green: It is clear that there is control only over projects which will require at least some United1 States material.
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Clarence Decatur Howe: How would the other projects come to me? Why would they come to me?


Howard Charles Green: Well, things, both good and bad, seem to have a way of coming to the minister. I was just wondering. I should like to ask the Minister of Finance a question. Last week there was some discussion with regard to the possibility of the government taking some steps to promote the purchase of goods in Canada, or from soft currency countries, to replace purchases from the United States. At that time the minister was not clear as to what steps the government was taking. Can he explain to the committee tonight what is being done along that line?


Douglas Charles Abbott: The principal encouragement is, of course, the way in which 'the quota system is working. There is a decided incentive to Canadian importers to search for commodities and merchandise in soft currency markets, because the size of the quota is such that they can bring these in readily. There is no effective limitation of certain lines for the time being. Textiles is perhaps the outstanding example in that field, fresh fruits being another; and, as far os automobiles are concerned, I believe there is a fairly generous quota. I am told there have been continuous discussions with representatives of the United1 Kingdom, Australia and other soft currency areas to see what additional imports can be made available to Canada, and the trend is upwards, as the figures I gave this afternoon indicate. I am confident that this will be tremendously accelerated over the next two or three months, and we are particularly anxious that it should take place in textiles, which used to be a traditional export from the United Kingdom to Canada. For the past two or three years we have had to replace them with expensive textile imports from the United States. There is an indication that what I have indicated will be achieved.


Howard Charles Green: AVhat about an effort being made to have Canadian goods purchased to take the place of goods prohibited from the United States? I have two of the minister's advertisements, and in neither is there any forthright suggestion that Canadians should endeavour to purchase Canadian goods. No emphasis is put on that.


Douglas Charles Abbott: We have been urging that. Perhaps it would be desirable to advertise along those lines. The purpose of the advertisements to which my hon. friend refers was that they should be more in the nature of directives, that they should be informative.

I approved the copy myself. I wanted it to be non-controversial and not to be considered as propaganda for the particular policy, but wre found from the letters that there was a considerable amount of misunderstanding as to where people should go for information, and just what the program covered. Therefore those two advertisements were put in the papers across the country, the intention being to clear up some of these misunderstandings. I have not decided whether to spend more money on that sort of thing. That decision has not been taken.


Howard Charles Green: The minister will agree that there is little indication of a change in the future whereby Great Britain will be able to supply us with United States dollars as she did before the war.


Douglas Charles Abbott: But she can supply us with goods, which is just as effective.


Howard Charles Green: There is not much indication that in the near future there will be a drastic change in the present general position; and if we maintain these prohibitions against goods for a certain period and then lift the prohibitions, we shall be right back in the spot in which we now find ourselves. I suggest that some steps should be taken to reach a permanent solution of the problem, and one way would be to persuade the Canadian people to buy their own Canadian goods or goods from soft currency countries.


Douglas Charles Abbott: We hope they will do that.


Howard Charles Green: There is one other question I should like to ask the two ministers. In one of these advertisements there is a picture of an oil drum, a coal scuttle, a bale of cotton and a steel rail, and it says: "To keep our industries humming, our living standard high, we need petroleum, coal, cotton, steel and similar essential things." I take it that these are the four products which are primarily responsible for our shortage of United States dollars.


Douglas Charles Abbott: Those are the four products which we import in substantial quantities. Steel products of all kinds ran to something like $500 million last year. I am speaking from memory. Cotton runs to a large figure, and petroleum is something like $250 million or $260 million. These are tremendous items; they are all essential, and they have to be paid for in cash.


Howard Charles Green: Those are the four commodities which we purchase in the largest quantities from the United States?


Douglas Charles Abbott: I think that is correct, yes.

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Howard Charles Green: What plan has the government in mind to produce petroleum, coal and steel in Canada? I realize that we cannot produce cotton, but what plan has the government in mind to produce the other three items? I know, and I presume every other member in the house knows, that we have the potentialities for producing large quantities of each of these commodities, and this is the time there should be an all-out drive to produce them. I should like to know, therefore, what the government has in mind in regard to some such plan.


Douglas Charles Abbott: No doubt the Minister of Trade and Commerce could answer that better than I can. So far as petroleum is concerned, that depends on discovery. There were fortunately some important discoveries of petroleum in the Leduc field south of Edmonton about a year ago. Active exploration is being carried on by a great many who are interested, large companies and others, to see where further supplies of petroleum are located in Canada. Steel production is being expanded. As my hon. friend knows, the steel company at Hamilton is expanding its strip mill and Algoma is expanding. That takes some time.


Howard Charles Green: What about iron production?


Douglas Charles Abbott: I am afraid I have not much personal knowledge of that. We have all read, of course, of the explorations going on near the Labrador border, but some little time will elapse before the material will be available for active use in the steel industry. It would appear, however, to be quite an important discovery. All these things are going on. They will not solve the short-term problem, however, though they are of importance, as the hon. member has pointed out, in the permanent fundamental solution of the question.


Howard Charles Green: What about coal?


William Ross Macdonald: We are getting beyond the scope of the bill, which deals with restrictive measures and not constructive measures. I do not think the discussion we are having at the present time is relevant to clause 3.


Howard Charles Green: I am reading from the government's own advertisement with regard to the austerity program; we have to get at production of those commodities before we can get out of our present difficulty. I submit that both the minister and I are in order in discussing these commodities.


William Ross Macdonald: In my opinion, both hon. gentlemen are out of order at the 5849-82
moment. The hon. member for Vancouver South is dealing with another program, a constructive program, and the minister has replied. I think the committee must deal with the bill which is before us at the present time, the Emergency Exchange Conservation Act, which deals with restrictive measures entirely.


Mr. MacNICOL:: Would not the question raised by the hon. member for Vancouver South relate to exchange; for instance, coal of which we import a large tonnage? We have to pay for that in United States currency. Does that not come under the problem of exchange?


William Ross Macdonald: The hon. member could deal with permits respecting the importation of United States coal.


John Ritchie MacNicol: At the moment in Toronto, on Yonge street, in the store of A. Welch and Son there is a demonstration being shown to the public in the burning of Alberta coal.


William Ross Macdonald: I do not .think that is in order at the moment. The hon. member will have plenty of opportunity to discuss that question.


Harry Rutherford Jackman: I wish to make one or two observations and to ask some questions. When we impose controls we seldom know where -there will be repercussions, and I think it should be brought forcibly to the attention, not only of the committee but.of -the people generally, that we find as a result of these controls, as my colleague, the hon. member for Victoria-Carleton pointed out a shortage of freight cars coming into the maritime provinces from the United States to take back certain vegetables grown there. The Canadian railways do not want to send their cars loaded with Canadian produce to the United States, because they do not know what, if -anything, will come back in that type of car; and the Americans are just not sending up as much by way of railway freight as formerly. So there is a shortage of cars, something -that -the government could hardly have been expected to think of.
The hon. member for Vancouver South asked the minister of reconstruction if permits were required only for imported materials which would be used in construction. That is clearly the case. May I just ask for some opinion from either one of -the ministers on the effect on the price of certain construction projects in this country. If I may call them that, when you have certain domestic supply, let us say of steel for construction or of machinery, and the excess requirements which we do not pro-

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duce in our own country we import from the United States. In order to save the trouble of going to the minister and getting a permit, you naturally try to get your requirements in the domestic market, and surely the temptation is to bid up for quick delivery and avoid the uncertainty, and difficulty of going to the minister. Therefore I should think another reaction we shall have from these controls, particularly in the capital goods industry and under schedule III of this bill, is that we shall find an increase in price, because it is more convenient, if you have the money, to pay rpore and avoid going to the ministers for a permit.
I have a question of a more general nature which I should like to direct to the Minister of Trade and Commerce. Will he expand on those general principles which guide him in giving an O.K. or refusal to applications? He said as he has said before in this house, that the principle was whether or not an application would save United States exchange or produce United States exchange. I tried to call to mind the things which would be the subject matter of applications and, in view of the fact that our economy is so closely integrated with the United States economy, I wondered just what we would import or what would be the subject for the application for exchange that would not either create United States exchange because we would export something made by the machinery we got in, or would not save us United States exchange? What is there in our own economy here that we cannot, by way of substitution, get from the United States, or what do we make in our own country that we cannot send to the United States? I wonder just how this rule is to be applied as a sound rule, and it is the substance of this whole measure. It seems to me to be broad in its application. I confess that I have had of course, no experience with applications. The minister may have had sufficient, though, to give the committee a little more information.
I think the general opinion throughout the committee is that we are putting a tremendous amount of power in the hands of one or two men, a power which we do not like to see in their hands, particularly in peacetime when we should be able to get along and still preserve all our fundamental rights. So I would ask him to elaborate on that matter.
I should also like to ask how much exchange we are expecting to save altogether. As I recall it, it was $300 million under consumers goods and $200 million under producers goods, or abou t $500 million in all. That figure was certainly given press publicity; whether or not it had

any authenticated source, I do not know. We know that we are running behind on United States exchange by about $1,000 million a year.


Douglas Charles Abbott: We were.


Harry Rutherford Jackman: We were. It may be that they are stopping the flood which was due to the fact that we over-indulged ourselves during the summer months and in the fall; however, time alone will tell. But $500 million is not as much as we should like to -save if we are to balance the account and perhaps restore the surplus of $1,500 million 'that we had a year ago of United States exchange in gold. So, in the absence of rules under this bill, and no business knowing whether or not it is to be put out of commission in order to save more exchange, I feel that the government should give all the information possible and try to give some indication of whether or not we are to be faced with further austerity. The Minister of Finance may well say that it depends on just how the exchange balance is during the next few months. I think it would be interesting for the businessmen to know whether or not they are in a business-and I am thinking particularly of the importing business-which might be blitzed, because further austerity measures are necessary in order to bring about some financial balance.
Just to close my remarks, I should like to make a suggestion to one minister, and perhaps to both of them, particularly with regard to schedule III: It is that whenever a decision is made, it should be published; that a body of laws or a body of rules-call them administrative rules if you like-should be published, so that the Canadian businessmen who have to make these applications will know how other cases have been dealt with, will know if their case is on all fours or on three legs only with a case which has been decided, and will be able to tell approximately what to expect. It will also be a useful guide, if I may say so, to the minister himself, because he will have his previous decisions before him; he will have the reasons for having decided thus and so; it should simplify his judgments for him, just as for a court of law which relies on precedents in order to make its judgments. If this power is taken by the government-an unprecedented power of great magnitude,, and one which we all are sorry to see them take, even if it is necessary-I hope that they will publish their decisions and give a brief statement of the facts. As the Minister of Finance will recall, at the head of the report of a legal case there is a brief review of the facts, a few paragraphs, and then the decision.

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I suggest that the same procedure be followed here so that there will be some guide, some check and some precedent for the public to follow, by which their actions may be guided.


Mr. McLURE:: On this matter of permits and controls I should like to ask one question which has been put up to me by several manufacturers in this country. It is this. Will Canadian-owned goods now being processed in the United States require a permit to bring them back to manufacturers in Canada?


Douglas Charles Abbott: I am told that some manufacturers can get an export permit to export steel, have it processed in the United States and bring it back into Canada again through the customs. Although it may be on the prohibited list, they will get an export permit to have it sent to the United States to be processed, and brought back in here in a finished state.


Winfield Chester Scott McLure: I might cite just one item that is owned by the government, namely, 11,000 or 12,000 fur seal skins. They are now being processed in the United States. I cannot find in any of the schedules where a permit has to be issued to bring those back to be manufactured in Canada. The Canadian manufacturers are anxious to find out whether they can bring those back in.


Douglas Charles Abbott: I shall take note of my hon. friend's remarks. I believe it is under consideration at the present time.


John Ritchie MacNicol: I should like to ask a question with reference to the bringing in of machinery. I have had information from certain firms respecting job sawmill machinery required for the keeping of sawmill saws in order. Up to the present time they have been unable to get permits, owing to their not being ready. Is there some reason why the permits are not ready? If so, when will they be ready for the admission of such machinery? It is quite an inconvenience to these people.


Clarence Decatur Howe: When do they want to bring in saws? They can bring in all the saws they like at the present time.


John Ritchie MacNicol: Not saws; machinery for the sharpening of saws.


Clarence Decatur Howe: They can bring that in too at the present time.


Heber Harold Hatfield: Are permits being issued for the importation of green vegetables from the United States?


Douglas Charles Abbott: Cabbage only.


Heber Harold Hatfield: None for lettuce?


Douglas Charles Abbott: No.


Ralph Melville Warren: Cabbage is good enough.
5849-82J


Mr. CASE:: By the terms of the bill before us I am convinced-and I believe this must be in the minds of hon. members generally- that this is a great step toward departing from democratic government. I have listened to the questions asked and the answers given, and I am just about as confused now as are those who have been giving the answers. No one knows exactly what we are heading for, although it has been suggested that we are heading for a dictatorship. We have the whole framework right here, sufficient completely to wreck our own democratic system.
This just did not happen overnight. We have had, during the course of this debate, sufficient evidence to prove where the government made its fatal error. On July 5, 1946, the then minister of finance placed an artificial value on the Canadian dollar. That was the date when the natural flow of goods between nations was prevented.


William Ross Macdonald: Order.


Wilfrid Garfield Case: What I am saying has a direct bearing on the bill.


William Ross Macdonald: As the hon. member says, it has a direct bearing on the bill, but not on the principle of the bill.


Wilfrid Garfield Case: We are discussing import
controls.


William Ross Macdonald: Order. The principle of the bill has already been accepted. We are now dealing with section 3, and the discussion must be related directly to that section. I would ask the hon. member not to proceed with a discussion of the principle of the bill.


Wilfrid Garfield Case: If we are to confine ourselves to section 3, then I still say that we are delegating to the minister extraordinary powers which he will have great difficulty in administering fairly. I think that can be said, in fairness to the minister himself.
How are people to plan any project, when they have to come to Ottawa to find out what the score is. There exists a terrific state of confusion, which all results from the fact that the government is interfering with the natural process of regulating trade and commerce. One simple method of avoiding all this was already in existence.
What yardstick is the minister to use when he must determine whether or not a permit is to be granted, when he must determine that a permit is to be revoked, or that a person who is in possession of a permit cannot dispose of his business and his permit as well? He has no equity in the permit, according to the terms of the bill. So what method can any businessman employ to determine how best he can carry on and make a contribution oi
Foreign Exchange Conservation

United States dollars-and that would appear to be the purpose of the bill? That man has no security in the bill, except at the pleasure of the minister-one man. What method does the minister propose to employ to determine what course shall be pursued?


Clarence Decatur Howe: It is so easy for a businessman to put his problem before the department and to obtain a ruling, that I suggest it would be much easier to do that than for me to answer a theoretical or hypothetical question on the floor of the house. I do not know just how to answer the hon. member's question.


Mr. STEPHENSON:: I should like to ask a question arising out of a statement made by the Minister of Trade and Commerce. He said that so far as building or construction projects were concerned, those responsible for building the projects would be told to use Queenston limestone instead of Indiana limestone. If the minister is going to say to construction companies that they must use Queenston limestone instead of that from Indiana, the Queenston quarries might not be in a position to supply the required amount of limestone. It might take years to reach a position where it could be supplied in quantity.
I asked the Minister of Finance a question a few days ago, but 'he did not answer it. I ask it again. Are these suppliers to be given no security? If they expand so as to build up a big business in an effort to supply limestone for these projects, they might find that these restrictions would be taken off overnight, and a company which has spent huge sums of money to expand might be swamped. Can not the government say to the producers and to the manufacturers of Canada how long these restrictions may last. It is important that this question should be answered. It is a question 1 am sure private members who are supporting the government as well as the members of the opposition would like to have answered if they have factories and producers of goods in their own constituencies.
I am wondering if the government are not finding themselves in this position, that the government having agreed to the terms of the Geneva trade agreement for freer trade, this bill setting out restrictions is just the opposite; the two courses of action are counter to each other? In the terms of the Geneva conference we have agreed to freer trade; yet the government is now in a position where it is putting on restrictions. For that reason the government will not say to the people of Canada, "This will be in force for six months" -or two years or ten years, as the case may be. I think it is important to every member

of parliament and to the people of Canada as a whole to know how long this program will be in effect, in order that they may make provision to take care of short supply. If they do build up a business they should1 know that they will not be wiped- out again by the lifting of restrictions. Surely the question I have asked is a reasonable one.


Clarence Decatur Howe: It illustrates the difficulty of answering a hypothetical question. I used Queenston limestone as compared with Indiana limestone as an example. The saving of United- States dollars would not be great, because neither Indiana nor Queenston limestone is used in such large quantities. So, for that reason, the hon. member has -me in a somewhat awkward situation.
However, I would say this, that I think any business which expands to take care of the immediate situation, thinking that it will last more than a year or two, is making an unwise investment. I hope it will not do that. Unless an industry is expanding on a basis that will survive under normal conditions, it would be unwise to expand.


Charles Elwood Stephenson: The Minister of Finance says that this is not a protectionist policy, that it is an emergency policy. I agree in principle that the government is adopting a program which should have been adopted in this country twenty years ago. I know the government will not adopt a conservation policy because the Conservatives have advocated such a policy. I believe that if a policy of this kind had been inaugurated twenty years ago we would have built up industries in this country, thereby creating employment and preventing the exodus of our people to the United States. If we had in Canada a conservation program we could process our own natural resources, instead of just ti-ying to preserve United States currency spent for imports, and we would be doing something constructive for Canada.


Gordon Graydon: Hon. members have been waiting patiently for some announcement from the government, because in previous times when the people in other parts of the country have spoken the government has made announcements with respect to by-elections. I wonder if the spokesman for the government would give us the results in Huron?


Mr. MARTIN:: They cut down the majority greatly.


Heber Harold Hatfield: How many extra customs officers will have to be appointed under this bill?

Foreign Exchange Conservation


Douglas Charles Abbott: I have not the figures at the moment. Perhaps the Minister of National Revenue could give that information later on.


Lawrence Wilton Skey: Getting back to the point raised by the hon. member for Durham with regard to industry, I should like to ask the Minister of Trade and Commerce a particular question having to do with importers. I have had an inquiry from a company which is in position to build up a business in Canada in mirrors. They have spent some money on capital goods, and then to their surprise they find that their place in the schedule has been changed and that mirrors are being imported from the United States. They are afraid that their capital expenditures will be a loss. The first definite guidance we have had was when the minister spoke a moment ago and said that he hoped new industries would not be built up as a result of these restrictions and embargoes. Could the minister elaborate on that statement and let the committee know whether it applies to all categories of industry and whether it is his policy not to build up Canadian industry behind tariff barriers?


Clarence Decatur Howe: I have read in the papers about doing it with mirrors, but I do not understand what my hon. friend is doing with mirrors. The principle is simply this. If an industry wishes to establish itself in Canada; if it is one which in normal times would be able to operate profitably; if it is an industry which will assist in building up exports or in conserving United States dollars, it will be welcomed. But if it is an industry being built up simply to take advantage of the temporary prohibitions, it will not be welcomed. For instance, if someone wants to come in here and build refrigerators in Canada for no other reason than that the importation of refrigerators is temporarily banned, that industry will not be welcomed. If we recognize it for what it is, it will not be permitted.


Lawrence Wilton Skey: The minister says "come in." This is the case of a Canadian company wanting to expand into new lines. They admit frankly that they cannot compete with large producers in the United States who can export to Canada over the tariff barriers.


Norman James Macdonald Lockhart: I just want to follow up the argument advanced by the minister in connection with the development of industry. He is warning against it. A great deal of coping, window frames, door frames and that sort of thing has been imported from Ohio and Indiana. Many buildings are finished with that type of finish. The Queenston limestone plant has been in existence for a long time.


Clarence Decatur Howe: I am sorry I mentioned it.


Norman James Macdonald Lockhart: You have mentioned austerity and there are a lot of things you are going to be sorry over before we are through. Queenston limestone is a marvellous stone, but it is about four times as difficult to mill as other limestone because it is so much harder.


Clarence Decatur Howe: I advise you not to buy it.


Norman James Macdonald Lockhart: You have to have coping and trim of all kinds, even in new structures. I wanted *to take up this matter privately with the minister. Some new construction was being considered and the first thing asked about was the use of Indiana limestone. I told them that it looked as though they would have to use Queenston stone, which would cost them more money. What is the position of the Queenston quarries so far as going ahead and stimulating production' is concerned? In the face of what the minister said tonight, they will be right back in a short time to where they were before. The inconsistency of his statement is apparent on its face. I cannot see where the minister's argument holds at all.


Clarence Decatur Howe: It is nice of you to do the worrying for the Queenston quarry.


Norman James Macdonald Lockhart: It is not just the Queenston quarry I am worrying about; it is that the principle behind this thing is all wrong and I just want to point that out to the minister.


Donald Methuen Fleming: There is one matter that has been discussed recently in this house with some fervor on the other side, namely, beneficial results of publicity being shed on transactions of a certain kind. I wish we could discern in the remarks of the ministers the same zeal for publicity with respect to government business and policy under this act as they have shown in connection with publicity in the affairs of others.
What assurance have we under this bill that favouritism will not be exercised in its administration? The Minister of Trade and Commerce says that we can trust him, but that is not a good enough answer. There is nothing in this bill that says there shall be a statement given to the public as to what permits are granted, what permits aTe denied and what things are permitted to be brought in by way of permit.


Mr. BERTRAND (Laurier):: I should
think, Mr. Chairman, thait the question is out of order because it does not pertain to section 3.
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Donald Methuen Fleming: We are dealing with permits under section 3, and there is the clearest provision there that:
No person shall import or attempt to import into Canada any goods listed or of -the classes described in schedules I, II or III except in accordance with a permit issued by the minister.
I do not like the system set up by the -bill, and section 3 is the core of the bill. I would think the minister should be very glad to improve his measure somewhat by at least giving us assurance in statutory form that star chamber methods will not be practised in the administration of this -measure. What is there in the bill that gives any assurance to the public that everybody is to be treaited alike, that all -persons who come or send to Ottawa for permits will receive equal treatment of their application- on their merits? There is nothing in the bill -which says the minister shall give any publicity to whatever he does under it. When it comes to reports to parliament-and this is what the Postmaster General had in mind-section 9 provides:
The minister shall lay before parliament, within- fifteen days after the commencement of each session thereof, a report on -the administration of this act during the preceding fiscal year.
That means that the minister can go ahead for the whole of 1948 without having to make a report to anybody-not until fifteen days after the commencement of the 1949 session. In the meantime, permits could have been granted to one -and denied to another in equal circumstances and the public would know nothing about it. That situation is not one that can be tolerated by any democratic parliament in the twentieth century. Methods of that kind we thought were discarded three hundred years ago. Where do we get any -assurance in this bill that it is not just a case of star chamber methods that are to be practised with respect to applications under the bill? It is time we had some assurance from the government, not that the affairs of individuals shall be disclosed to the public, but that there will be published regularly, at short intervals, statements with respect to the commodities imported under permit, so that the public can have some idea of what is going on under the bill when it is passed, and have the assurance that the full benefit of publicity is being cast upon the administration of the measure with respect to the issuing of permits and that it is not being used to cover up favouritism.


Douglas Charles Abbott: I have already answered that question several times. After most careful consideration, it was felt that in the case of capital goods the only system which could

be made to work was a permit system, and that involves the exercise of discretion. Under the quota system, that is done automatically. The government may determine from time to time what the base period may be and the percentage of imports during the base period, but that applies right across the board. As to capital goods under schedule III, reflection will show that by its very nature, this does not lend itself to any general rule which would be applicable in all cases. It has been indicated' that in certain categories there will be regulations-the automobile industry is one

and so far as possible that will be done. But there are bound to be a great many cases in which there will have to be an exercise of discretion. Suppose some newspaper decides that it must have a large new printing press. You cannot lay down a general rule for that. Permission will be given or refused upon the merits. If some other way could be found no one would be more relieved than- the members of the government, but our dollar situation is such that we cannot continue to allow the uncontrolled import of capital goods into this country from the United States.


Donald Methuen Fleming: If there is any justification for the permit system, then surely, there must be the need for publicity and no reason why full publicity should not be given to the granting of permits.


Douglas Charles Abbott: I cannot see any objection to publicity. I do not know just what my hon. friend has in mind-monthly reports or something of that kind. I think it might be possible.


Clarence Decatur Howe: We were looking into the question of permits and under one item alone, 427-a, the basket machinery item, we estimated that some 15,000 permits would be issued. If my hon. friend wants all those published I will arrange for it if he will pay for the cost of publication.


Donald Methuen Fleming: The minister is treating the committee with his customary levity and derision. I do not suggest that every permit should be published, or that the private affairs of individuals should be disclosed, but there should be disclosure of the capital goods that -are permitted to enter. It should not require too much ingenuity or labour on the part of government officials to make reports on what capital goods are being admitted. That would give people who are interested in that type of goods an opportunity to know whether they were being treated the same as the next man. I was very glad to hear the Minister of Finance say that he would take the suggestion of publicity into consideration, because I think it

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is highly desirable that the public and the house should be reassured by some measure of that kind such as regular reports.


Douglas Charles Abbott: I do not think any reports that could be published would demonstrate that everyone was receiving exactly the same treatment. You could give figures as to the categories of goods brought in and the permits issued, but the man who was refused a permit might still wonder why he was not getting the same treatment as the other fellow.


Donald Methuen Fleming: Should he not have something by way of information to go on? For instance, if he sees that other people are getting permits for importations under the basket machinery item while he is refused a permit, he will ask why permits are being granted to others and not to him.


Clarence Decatur Howe: It all depends on what they are using the machinery for.


Lawrence Wilton Skey: The minister mentioned 15,000 permits under the basket machinery item. Can he give the committee any idea as to how many permits will be issued altogether for all the items?


Clarence Decatur Howe: I gave one estimate because I happened to know that item.


Lawrence Wilton Skey: If it is 15,000 for one item, it is probably half a million for the lot.


Clarence Decatur Howe: Not that many.
Mr. SKEY-: How many would the minister say?


Clarence Decatur Howe: It might be 25,000.


Lawrence Wilton Skey: And 15,000 under one item alone?


Clarence Decatur Howe: I do not know and neither does my hon. friend, 'so why pursue this further? I was just giving a general idea.


Lawrence Wilton Skey: It is strange that the minister could make an estimate in regard to one item but has no idea how many permits will be requird in another item. I think the committee is entitled to a little more information. If he has to hire a staff of two or three thousand people to pass on these items it may require months to get an item through. If that happens, the whole business will be held up while his small staff struggle to cope with the flood of requests for permits. I think the minister should give the committee some idea.


Clarence Decatur Howe: Twenty-five thousand permits a month would be a fair idea.


Harry Rutherford Jackman: This matter of reports of what the minister does is of the utmost
importance to the country. As I have said before, the minister is arrogating to himself tremendous power, the power of life and death over a great deal of Canadian industry. It is an important matter, and if it costs a bit ol money to publish the information about the decisions I do not think the committee will have any objection to it. Surely the Minister of Finance, who is familiar with reports, understands what it is that I am after and what a good many other hon. members have in mind. All legal cases are not reported. The 15,000 county court cases or the 25,000 division court cases are not reported. Nobody is interested in them because the principles are well laid down. But on cases which make law, important cases, someone makes a digest of them consisting of three or four paragraphs; it may be a couple of pages if it is very difficult, and that information is given to the public. If a summary were made of the decisions it would give the people who are applying for these import licences some idea of just what the government has in mind when it is applying this one simple principle, does it earn or does it save United States exchange? The principle is so simple that the minister said, in reply to my colleague, the hon. member for Eglinton, it could readily be administered from Ottawa; whereas the deciding of whether or not a particular piece of building construction in some other part of Canada could not be decided from Ottawa.
This is a relatively simple matter. The object is very simple. There will be a few hard oases, undoubtedly, until we get a body of principles. If it is to be such an important matter to Canadian business, we must know what the law on this principle is. It will not go to rest in the mind of the minister and have my support in this house, and I do not think it will have the support of many others on this side of the house, if the minister is to have the matter in his own control and discretion and we are not even permitted to know after the event, much less before.


Charles Cecil Ingersoll Merritt: I do not think we have got very far this evening in finding out how this principle is to be administered. Even at the cost of repetition, we might well pursue it farther. As I understand the situation, at the present time we have a very simple principle, whether it earns or saves United States dollars. If one may judge from some of the answers the minister has given, the principle is so simple it is like a sieve; anything will go through it and it is not a safe principle to work on at all. The minister himself will not be able to pass judgment in his own mind just on that one principle; otherwise it would be
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impossible for him to do more than guess whether a thing would earn or save United States dollars. In practice, he will have to formulate a series of sub-principles or subclassifications under which goods will be allowed in.
I want to ask him this question. Is it to be: first come, first served? Suppose, for instance, the minister were to make up his mind that the over-all quota for capital goods was $750 million in a year. The first lot of applications comes along, and he approves up to $750 .million on the basis that these goods are going to earn or save United States dollars. Then someone else comes along with another project which, in the minister's opinion, will earn or save more United States dollars than one of the schemes he has already approved. Will he then cancel one of the earlier ones to which he has given approval and thereby enable this greater saving to be made, or will he stick to what he has already done and force Canada to do without the project which would have saved more dollars than what he has already approved? Can the minister comment on that?


Clarence Decatur Howe: My hon. friend asked a long question based on a hypothetical theory, the theory being that we are going to say we shall spend $600 million and no more. We are not going to do that; therefore the whole question falls to the ground.


Charles Cecil Ingersoll Merritt: I am, of course, not satisfied with that answer at all, and I shall wait here until I get an answer to the question. I shall ask my question in two parts, so that the minister can understand1 it. The minister was not listening before-


Clarence Decatur Howe: I listened' to it.


Charles Cecil Ingersoll Merritt: The first question I shall ask is this. Is it a question of first come, first served, and those who come after the over-all quota has been used up are out of luck, regardless of how useful their scheme is?


Clarence Decatur Howe: That question falls to the ground because, as I have explained before, there is no over-all quota. If we can get a great many products that will produce substantial quotas of United States exchange we shall be glad to take them.


James MacKerras Macdonnell: Then the whole thing is a grand guess.


Charles Cecil Ingersoll Merritt: In that case why have the schedule at all?


Clarence Decatur Howe: Why have this debate at all? I cannot imagine why my hon. friend rose in his place.


Charles Cecil Ingersoll Merritt: We are in this position now. The minister has said that any capital goods project will be permitted. That is the sum and substance of what he said, because the test he applied in an earlier question I asked! was ridiculous. In the case of many capital goods, he cannot tell whether they will be used to manufacture goods which will go into the United States or will take the place of goods we would otherwise import. They may all go to soft currency countries. There is no way in which he can tell that; therefore if his answer is that he has no overall limit, and, so far as I can see, the whole thing falls to the ground completely. Is the minister not really in this position, that any capital goods which will increase the production of goods in Canada he will approve. Is that nob the case?


Clarence Decatur Howe: No.


Charles Cecil Ingersoll Merritt: Will the minister give an example? He has been asking us for examples. He must have some knowledge of these things. Will he give us an example of the capital goods which he will not approve?


Clarence Decatur Howe: If a man wanted to build a factory to make billiard tables, for instance, I would say no, we do not want that business.


Charles Cecil Ingersoll Merritt: Then the minister is putting it on the basis of luxury goods, apparently.


Clarence Decatur Howe: You asked' me to name one and I named one.


Charles Cecil Ingersoll Merritt: I am speaking of a classification. The minister will not allow a Canadian to manufacture luxury goods-


Clarence Decatur Howe: Why not class billiard tables as sporting goods ah well as luxury goods? My hon. friend is really putting on a very silly performance. I enjoy it, but it has taken a good deal of time.


Charles Cecil Ingersoll Merritt: I shall have to take my chance on whether it is a silly performance or not. We may get somewhere this way. Has the minister made any attempt or have his officials made any attempt to classify these capital goods as a guide to the exercise of his discretion?


Clarence Decatur Howe: No.


Charles Cecil Ingersoll Merritt: He has made no attempt, then. I think that answer is a pretty good exhibition of what we are getting in this bill. The Minister of Finance said earlier it would be very difficult and almost impossible to make this classification.

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Douglas Charles Abbott: It is a matter of appreciation of the facts in individual cases. Surely that is self-evident.


Charles Cecil Ingersoll Merritt: It is quite apparent from what the Minister of Trade and Commerce has just said that the government has made no attempt to bring out a list of regulations which would be a guide to themselves and to Canadian businessmen as to what goods should or should not be imported. It is one thing to say that it is impossible; it is another thing to say they have not made an attempt to do so. I submit that before this committee approves a section of this kind, giving these arbitrary powers whiijh we have talked of so much, at least the government, if they still pretend to have any respect for parliamentary institutions, should attempt to produce a statute which is in line with previous parliamentary practice. If they had come in and said that they had tried and failed and that this was a great emergency condition, we might be more disposed towards this scheme. But when they come and say they have not even tried, then I think an attempt should be made before we approve the section. I wonder if the minister will answer this question. Has he made any attempt, since he cannot codify those things he will let in, to codify those things he will not let in?


Clarence Decatur Howe: That is the opposite of the other.


Charles Cecil Ingersoll Merritt: Would it not be a shorter list, the ones he will not let in?


Clarence Decatur Howe: I do not know.


Charles Cecil Ingersoll Merritt: You do not know. The great mind has not been exercised. The Minister of Trade and Commerce is a man who has been resourceful in everything for the past seven or eight years. I should think that if he would exert himself and set the great mind in motion he might produce something which would satisfy the members of the committee. I do not like this situation where no attempt is made to bring into the house a bill which would accord with proper parliamentary practice.


James MacKerras Macdonnell: I think this is an unedifying and, in a way, a rather humiliating proceeding. I do not think we are an unreasonable lot of people over here. We have been asking for information and, as far as the minister of reconstruction is concerned, with the exception of one brief interlude when he has tried to help us, he has been in the highest degree unco-operative.
I think section 3 should stand over because, in any event, the minister of reconstruction
has to bring in information which he should have had here tonight. He says he will bring it in tomorrow. Second, I hope the Minister of Finance will consider the point brought up with regard to the word "revoke". If he will not consider the point, we shall have something more to say about it.
In the third1 place, I want to add to the point made by the hon. member for Vancou-ve.rJBurrard. We are not suggesting that there must not be discretion. We recognize that there must be. But what is being done is, in effect, appointing a committee with no terms of reference. We are asked to vote for this absolutely blindly, without any restriction, although I would point out that the bill itself does not contemplate that. In section 5 it is provided that the governor in council may make regulations governing the issue of permits for the import of goods listed in schedule III. I presume the order in council will not be merely a statement that the minister of reconstruction shall issue what permits he likes. I should hope it would not be that, and it is highly reasonable that we should ask now, before voting for this section, remembering always that this is an extraordinary invasion of our rights, that some attempt should be made, as apparently it has not yet been made, to lay down at least certain principles. As a matter of fact, some of the things the minister says tonight make one feel that there has been no attempt at all. I do not think that is quite true, because on the other hand he has told us that there have been regulations, though we do not know what they are like, in the automobile industry. If there have been, I see no reason why there cannot be framed certain general' regulations, the principle of which would be effective in other cases.
I am suggesting, therefore, that this section be stood over. If the minister will not accept my suggestion I shall regret it. If he says it cannot be done tomorrow, I see no reason why the bill should not stand over another day. We are well within our rights in asking that an attempt be made to have at least the terms of reference or something equivalent to that. I therefore suggest that section 3 be stood over for the reasons I have given.


Douglas Charles Abbott: There is no desire to rush the section through if anyone wants to discuss it, but I may as well say now that I do not think it will be possible to give to the committee the full regulations which will have to be prepared and drawn up under the enabling powers contained in section 5.
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James MacKerras Macdonnell: I do not want the minister to make me look unreasonable and1 dogmatic. The minister speaks of the full regulations which will be needed in order to make it operative. I do not think I said that. I said, some general principle. I used the words, "terms of reference", something in the nature of a guide of some kind', which up to the present time we have not had. At present we are asked to sign a blank cheque.


Douglas Charles Abbott: There is a fairly good guide in schedules I and II. Schedule I is a straight prohibition and schedule II is the quota. It is true that the regulations will establish the base period'. It is now done under the existing order in council, and it will establish the percentage of imports during that base period. That is automatic. That is the principle, so that the discussion this evening is related almost entirely to the individual permits, if I may so describe them, under schedule III.


James MacKerras Macdonnell: I agree.


Douglas Charles Abbott: Literally they will be
legion. You may have groups like the automobile industry, where regulations can be drawn up, laying down a principle. But so far as the rest of the schedule is concerned, it must be essentially a matter of the exercise of discretion by the minister. I am fully aware of the objectionable features of that, and the discretion must be exercised in this way, that it involves the appreciation of facts in- a great many individual cases. I think the Minister of Trade and Commerce will agree with me that in categories where one can lay down general principles, such as the automobile industry, which is a good example, regulations can be adopted and made public so that everyone can know them. But I am certain that, after all that is done, when one has examined a number of industries where that can be done, there will be a large residuum of cases where you simply cannot lay down a general principle, and there will have to be an exercise of discretion. I am almost sure that will be the case.
We gave a tremendous amount of thought to this matter when the legislation was contemplated and, as I believe I said before, we reluctantly came to the conclusion that the only way in which schedule II could be made to work would1 be under the permit system. That, I know is a general explanation.


James MacKerras Macdonnell: The minister has conceded, I think, a good deal of what I said. I do not disagree with his

statement that there will be many that cannot be brought within a definite rule. On the other hand, he has agreed that there may be a great many that can. What I complain about is that, so far as I can see, except in the case of the automobile industry, no attempt at all has been made to do it. I see no reason why we should be asked to vote on this section until that attempt has been made. If it was even the case that the minister was coming in and saying, "Look, we tried to draft these things and found we could not do it", that would be something. But we are not even in that position. We are told that in the automobile industry that has been done. We are to see that. A moment ago the minister suggested, if I understood him correctly, that in other large and important areas it might be done. We are asking to have that done; that is to say, we are asking to have whatever can be given in the way of a general yardstick or of general rules. We do not intend to be unreasonable and say that you have to dot your i's and cross your t's; but, as I said a moment ago, at the present time we are being asked to sign a blank cheque. There has been no attempt to do what we are asking. I must say frankly that what has been done so far has not been wholly reassuring because, according to the figures I have, the minister's statement with regard to the automobile industry is wrong. Tomorrow it may turn out that my figures are wrong, but I do not think so. Therefore it is not reassuring to go ahead and sign this blank cheque at the moment.


Douglas Charles Abbott: On this particular section, I do not know that one can give much more information than has already been given. It enunciates the general principle that imports require a permit when they come from certain areas. There is no trouble with regard to schedules I and II.


James MacKerras Macdonnell: I do not think there is any trouble there.


Douglas Charles Abbott: As I said before, one must freely admit that under schedule III there must be a wide measure of discretion. The situation at the present time is that no permits in fact are being required for the capital goods group, and they will not be required until March 1. That delay is in order to work out a good deal of this detail which I think my hon. friend is perhaps referring to-to look into such cases as that of the automobile industry and some of these others and see what the regulations will have to be for the exercise of the discretion which must be exercised in

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connection with these schedule III cases. But at the moment individual permits are not required.


James MacKerras Macdonnell: I am coming back to my point. The minister has not yet said anything which makes me feel that even he thinks my request is unreasonable. My request is for what general rules there are that can be laid down. There are some. Perhaps when we get the regulations in the motorcar industry the thing may look a little bit clearer.
I wish to ask one other question here. The minister says that no permits are required until March 1. Is it not correct that, while that is no doubt strictly true, in fact have not people been warned that they must watch their step with regard to any undertaking they are contemplating now just as if the regulations were in effect? In other words, are the regulations not, to all intents and purposes, in effect in respect of any work which people are taking up now which requires imports from the United States? Will the minister say if that is correct?


Clarence Decatur Howe: It has been announced publicly, over the radio and in varieus statements in this house, that if anyone is contemplating a project which requires imports over a considerable period of time, particularly after March 1 next, he would be wise to have his project approved and to make sure in advance that he will be permitted to import from across the line the materials which he requires.


Mr. MANROSS:: Which minister has charge of issuing the permits under schedule I? Is it the Minister of Trade and Commerce or the Minister of Finance?


Douglas Charles Abbott: I have.


George Randolph Pearkes: The agility of my younger friends enables them to rise to their feet more rapidly 'than I am able to do, but I had intended to ask a simple question. What happens when goods arrive here which are in schedule I and are not permitted to enter? I have a simple example. It is in connection with a small shipment of goods ordered from Scotland last summer. Two days after the issue of these orders or prohibitions, they sailed from Scotland, passed through the Panama canal and have now arrived at Victoria. They are being held at the customs at Victoria. They are urgently required by the firm which ordered them. They are of no use to anybody else, because the firm's name is stamped on the packages. Are they to be thrown into the sea?


Douglas Charles Abbott: No. On the facts as my hon. friend has presented them, a permit would be given under section 4 of this measure and the corresponding section of the order in council. It is a case which would be treated as one of hardship. The goods would be useless in the other country and they would be allowed to come in.


George Randolph Pearkes: How would the firm go about getting them in?


Douglas Charles Abbott: Write a letter to the emergency import control division, Sussex street.


William Ross Macdonald: Shall the section carry?


Some hon. MEMBERS:: Carried.


James MacKerras Macdonnell: No, it is not carried. I said to the minister that I thought this section should stand, because we still have to get certain information in regard to the regulations with respect to the automobile industry. I am confident that the Minister of Finance will take some action along the line I suggested with regard to regulations.


Douglas Charles Abbott: I do not know what action can be taken. Of course the section will have to stand. It can be talked on until eleven o'clock. I was hoping that we might make some progress. There are other sections of the bill under which I think any information could be given which could conceivably be wanted. But I am in the hands of the committee. I thought that in six hours we might get one section through.
Section 3 stands.
Progress reported.



BUSINESS OF THE HOUSE

Agar Rodney Adamson: What is the business for tomorrow?


Douglas Charles Abbott: The same thing as today.


Stanley Howard Knowles: The same thing all over again?


Douglas Charles Abbott: Tomorrow we shall continue the discussion on this measure.


Clarence Decatur Howe: Hon. gentlemen opposite will ask the same questions again.


Howard Charles Green: Maybe the ministers will have the answers.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Tuesday, February 17, 1948