[Stage Direction]
Interim report of the special committee appointed to consider the procedure of the House of Commons.-Mr. Speaker.
Second annual report of the atomic energy control board for Canada. 1947-48; annual report of Eldorado Mining and Refining Limited for the year ending March 31, 1948; and statement of operations of Northern Transportation Company Limited for the year ending December 31, 1947.-Mr. Howe.
Two copies in the French language of the annual report of the fisheries prices support board for the fiscal year ending March 31, 1948. -Mr. MacNaught.

[Stage Direction]
Mr. S. M. CLARK (Essex South) presented the third report of the sessional committee on railways and shipping owned, operated and controlled by the government.
Mr. CRUICKSHANK:: Does that include railways in Saskatchewan?



VETERANS AFFAIRS


Mr. L. A. MUTCH (Parliamentary Assistant to the Minister of Veterans Affairs):: Mr. Speaker, I wish to answer orally questions directed yesterday on the orders of the day by the hon. member for Lethbridge (Mr. Black-more). The first question was:
Where is veteran T. Harvey, regimental No. D76502 and pension No. 550593, known to have been discharged from Ste. Anne's hospital, Ste. Anne de Bellevue, P.Q., on June 14, 1948; known to have been in Ottawa June 17, 1948; known to have been at 597 Place d'Armes, Montreal, some time since June 17?
The answer is:	Mr. Harvey visited the
district office of the Department of Veterans Affairs in Montreal yesterday, June 24. He was seen by a medical officer who advised him to enter hospital for his pensionable condition of tuberculosis. Mr. Harvey said that he had some personal business to attend to and that he would present himself for hospitalization when his business was completed. He left no address.
The second question was:
Has the said veteran Harvey been forcibly detained some time since June 18, 1948?
The answer is: Not by this department.
The third question was:
Is the said veteran Harvey now being denied freedom to communicate with certain of his friends outside his present place of abode?
The answer is: Not by this department.
I might add that Mr. Harvey left the hospital after signing a refusal to take further treatment. He left of his own accord, returned yesterday of his own accord seeking to find out whether or not he would be admitted, was told that he would be, and is free to return at his own request.


Mr. BLACKMORE:: Will the parliamentary assistant tell us what hospital Mr. Harvey so left after refusing to receive treatment as indicated; to what hospital did he return recently, as indicated by the parliamentary assistant; and is it so that prior to his discharge from Ste. Anne's on June 14, 1948, veteran Harvey was forcibly detained in Ste. Anne's hospital for several weeks?


Mr. SPEAKER:: Order.



QUESTIONS

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

Mr. ROSS (St, Paul's):: 1.	Have any permits been issued for the importation into Canada from Great Britain of any pictorial postcards, greeting cards, or similar artistic cards or folders, finished or unfinished, or any Christmas seals, stickers, tags and enclosure cards, printed, embossed or otherwise decorated, which articles come under the prohibited list schedule I of Bill No. 3?
2.	If so, to what company, partnership, person or persons have these permits been issued?
3.	What was the reason for their issuance?
4.	What condition of exceptional hardship would result if the permits had not been issued?
5.	What is the nature of the permits?
6.	For what types and quantites of the above articles have permits been granted?
7.	What is the approximate value of the articles under the permits so granted?


Mr. BELZILE:: 1.	Yes.
2.	Bets Book Shop, 2224 Oak Bay Ave., Victoria, B.C.; Furness Withy & Co. Ltd., St. Sacrement St., Montreal, P.Q.; Grenfell
5830
Questions

Labrador Medical Mission, 48 Sparks Street, Ottawa, Ont.; Guild Book Shop, 15 Metcalfe St., Ottawa, Ont.; J. Kemp, 2079 Crescent Rd., Victoria, B.C.; H. O. Loescher Canada Ltd., Niagara Falls; Mahons Stationery, 90 Spring Garden, Halifax, N.S.; Menzies & Co. Ltd., 266 King St. W., Toronto, Ont.; R.A.E.J. Agencies Ltd., 1 Buckingham St., Halifax, N.S.; Stafford Roberts, 14 Lonsdale Rd., Toronto, Ont.; G. Morris Taylor, Jasper, Alta.; Valentine Edy Co. Ltd., Printers & Publishers, Canada Bldg., Winnipeg Man.
3.	Permits have been issued for the following reasons and to take account of conditions of exceptional hardship as indicated below:
(a)	Greeting cards individually marked "sample-not for resale" are permitted import in reasonable quantities on application by greeting card manufacturers. Most greeting card manufacturers in Canada adopt their designs from abroad and sample cards are normally imported to permit canvass of the Canadian market before production in Canada. It would seriously disrupt established trade practice and create considerable hardship if manufacturers were not permitted to import these samples.
(b)	Some small shipments to the value of less than $20.00 came forward shortly after import was prohibited. It was deemed unreasonable and excessive hardship, in relation to the quantities and value of the goods, to insist that they be returned overseas or destroyed. Accordingly, import permits were given and the importers warned that no further exceptions could be made.
(c)	In some cases the goods were printed with Canadian names, trade marks or designs that rendered them valueless outside Canada. In others, the processing of materials to such specifically Canadian designs was well under way as of November 17, 1947. It was considered an exceptional hardship to prohibit import in such cases; therefore, permits were given for goods wholly or substantially made to distinctively Canadian specifications at that date.
(d)	One shipment, approximately $200 in value, was shipped from England on November 19, 1947. It was considered a permit should be approved in this instance.
(e)	One shipment of goods designed for free distribution in Newfoundland by a noncommercial organization was admitted.
(f)	One shipment of postcards was admitted on the following basis: while technically an import into Canada, the goods were consigned by an English steamship company to its Canadian agents to be supplied ultimately to the consignor's own ships when in Canadian ports, for distribution to the passengers.
4.	See answers to No. 3.

5.	Permits are issued on Emergency Import Control Division Form EC-6, "Special Permit to Import Controlled Goods." Permits authorize the collector of customs at a designated port of entry to permit import of a stated quantity of specifically described goods up to a stated maximum value in Canadian dollars when consigned to the person or persons named therein (normally, the applicant or his agent), in one or more consignments as specified therein, on or before a stated expiry date.
6.
Type 1	Quantity	Value
Religious type greeting		
cards 		324	$ 6.00
Chromos (i.e. semi-manu-		
factured greeting cards)	235,500	3,069.36
Postcards (cards) 		501,816	
(packets) 		1,000	
(lbs.) 		62	4,836.85
Greeting cards - com-		
mercial type 		120	20.00
Greeting card samples ..	5,704	
No commercial value-		
nominal value esti-		
mated to be 		....	40.00
		$7,972.21
7. See answers to No.	6.	
DUFFERIN COUNTY, ONT., COUNTY		JUDGE


Mr. ROSS (Hamilton East):: 1.	Who is the county judge of Dufferin county, Ontario ?
2.	When was he appointed?
3.	What is his salary?
4.	How many times a month does he hold court?
5.	Does he hold a position with the Liquor Licence Board of Ontario?
6.	If so, what position?


Mr. ILSLEY:: 1.	Walter T. Robb.
2.	December 22, 1931.
3.	$6,666.66.
4.	No information.
5.	His Honour Judge Robb is chairman of the liquor authority control board, Ontario.
6.	Answered1 by question 5.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. STEWART (Winnipeg North):: 1.	Were volunteers to fight in Finland during 1939-1940 permitted to organize in Canada?
2.	If so, were these volunteers supplied with army equipment at any time and, if so, of what types?
3.	Were these volunteers paid? If so, by whom?

Inquiries o] the Ministry


PAYMENTS TO LOWER ST. LAWRENCE NAVIGATION COMPANY, ETC.
Mr. COTE (Matapedia-Matane):: 1.	Were any amounts paid by the various federal departments as grants, expenses or otherwise from March 31, 1939, to March 31, 1946, to (a) the Lower St. Lawrence Navigation Company (Compagnie de Navigation du Bas St-Laurent); (b) the National Telephone Company (Compagnie de Telephone Nationale); (c) the Rimouski CJBR radio station; (di) the Lower St. Lawrence Power Company (Compagnie de Pouvoir du Bas St-Laurent); (e) the Jules Brillant School of Rimouski; (f) the Marine School of Rimouski; (g) the Industrial School of Rimouski; (h) the Arts and Crafts School in Rimouski?
2.	If so, what amounts were paid in each case?
3.	Were any amounts paid by the various federal departments to J. A. or Jules Brillant, of Rimouski, as emoluments, fees, salary, remuneration, expenses, or otherwise, from March 31, 1939 to March 31, 1946?
4.	If so, what amounts?



PIE IX BOULEVARD BRIDGE, ST. VINCENT DE PAUL, QUEBEC

[Stage Direction]
Mr. DENIS;
1.	Did the federal government make any contribution in the expenditure incurred for the construction of Pie IX boulevard bridge at St. Vincent de Paul, Quebec, including expropriation and viaduct?
2.	If so, what was its authorized and paid contribution?
3.	What percentage does this amount represent if compared with the Quebec provincial government's contribution for same?


[Stage Direction]
On the orders of the day:
Right Hon. W. L. MACKENZIE KING (Prime Minister):: I wish to make a statement. on relief and rehabilitation in the Fraser valley as approved by the Premier of British Columbia on behalf of the government of British Columbia and myself on behalf of the government of Canada.
After consultation with the Fraser Valley relief and rehabilitation commission established by the governments of Canada and British Columbia, the two governments have agreed that the assistance to be given by the government of Canada to British Columbia in helping to meet the requirements for emergency relief and for the rehabilitation of the flooded areas in the Fraser valley arising out of the national disaster created by the floods shall take the form of a lump sum grant by the federal to the provincial government of $5,000,000.
It has been agreed by the two governments that this grant will be understood to cover 5849-3701
the share of the government of Canada in temporary emergency relief as well as the share of financial liability for measures of rehabilitation which the government of Canada agreed to accept in accordance with the announcement made in the House of Commons on June 9.
In addition to the lump sum grant of $5,000,000 for relief and rehabilitation, the government of Canada will provide seventy-five per cent of the cost of repairing, strengthening and reconstructing the dikes in the Fraser valley and removing water and debris from the flooded land, and the provincial government will provide the remaining twenty-five per cent of these costs. The two governments have agreed to establish a Fraser Valley diking board that will carry on this work as quickly as the board can be organized and take over the actual responsibility for this work from the various local, provincial and military authorities now dealing with it.
In view of the lump sum grant by the federal to the provincial government, the government of British Columbia, together with the flood relief committee, the Red Cross and the local authorities, will assume responsibility for whatever relief and rehabilitation measures they deem necessary in the flooded areas, not only in the Fraser valley but elsewhere throughout the province, except as regards the repair and reconstruction of the dikes and the removal of water and debris in the Fraser valley. It has also been agreed by the two governments that the armed forces will remain to assist the province until the emergency is ended, and it has been tentatively agreed that the end of the emergency will be regarded as occurring when the water level at Mission falls to eighteen feet.
It was recognized by the provincial government that what the armed forces had already spent on relief would be a part of the $5,000,000 grant, and the amount spent by the armed forces on protecting and repairing the dikes would be a part of the diking costs.
The Canadian army has also undertaken for the present to make available to the diking board a small staff of engineers and the 23rd field squadron of engineers to assist in carrying out a portion of the work. The federal government has designated Mr. F. G. Goodspeed, assistant chief engineer of the Department of Public Works, to share with provincial authorities responsibility for work on the dikes and related matters, and has designated officials of the Department of
Inquiries oj the Ministry

Agriculture and the Department of National Health and Welfare to assist the provincial authorities.
Further supplementary estimates will be introduced in parliament today or tomorrow to provide the authority for the expenditures to be made by the government of Canada under these arrangements; also further supplementary estimates for the special expenditures of the Department of Public Works in its own operations made necessary by the emergency.
While the destruction of property in the Fraser valley reached the proportions of a national disaster, there is reason to be profoundly thankful that so few lives were lost because of the prompt and effective measures taken by members of the armed services as well as by the civil authorities to meet the emergency, and especially because of the magnificent voluntary efforts put forth by the citizens of the province. May I add that the co-operation of the federal and provincial governments in the constructive work of the diking board should give to the people of the Fraser valley a greater sense of security than they have known hitherto for their homes, their families, and their future.
In conclusion, I wish on behalf of the federal government to express warm appreciation of the untiring efforts of the members of the Fraser Valley relief and rehabilitation commission, General Hoffmeister and Hon. Mr. Hamber.


Mr. JOHN BRACKEN (Leader of the Opposition):: I am sure the house has listened with interest and approval to the statement made by the Prime Minister with regard to the plans for co-operating with the province of British Columbia in connection with the flood disaster in the Fraser valley. However, just one question occurs to my mind. The Prime Minister has indicated that a Fraser Valley diking board is to be set up. I did not catch by whom that board is to be set up, or to whom it is to report and be responsible. Perhaps the Prime Minister would make that point clear. I did not hear clearly what the recommendations are with respect to the flooded areas outside the Fraser valley in British Columbia. Perhaps the Prime Minister would amplify his remarks on that point.


William Lyon Mackenzie King: The board will be a joint one under federal and provincial authority. Details have yet to be worked out.
As to the flooded areas outside of the Fraser valley, as well as areas within the Fraser valley,

it was felt by both the province and the dominion that the whole matter could best be managed if the government made a substantial grant to the province for all purposes of relief and rehabilitation; the province, in consideration of the size of the amount of the grant which is being made, to take care of those areas that are outside the Fraser valley.


John Bracken: The amount of that grant has not been determined?


William Lyon Mackenzie King: Yes. The federal grant is $5,000,000.


John Bracken: Is that included in the $5,000,000?


William Lyon Mackenzie King: Yes.


George Alexander Cruickshank: I understand the $5,000,000 is a token grant to the provincial government, to be administered by them for rehabilitation purposes. Is that correct?


William Lyon Mackenzie King: It is more than a token grant. It is a substantial grant, and it is to cover the expenditures in regard to rehabilitation. The provincial government takes full responsibility for the administration of the moneys given to it by the federal government, and full responsibility for the work of rehabilitation from now on.


George Alexander Cruickshank: I understood the Prime Minister to say that certain other funds would be available to the provincial government in connection with the loss of crops. Is that correct?


William Lyon Mackenzie King: I cannot say to my hon. friend what other funds may be available, other than those mentioned in the statement I have just made. Perhaps I should repeat that portion of the statement for my hon. friend's benefit:
In view of the lump sum grant by the federal to the provincial government, the government of British Columbia, together with the flood relief committee, the Red Cross and the local authorities, will assume responsibility for whatever relief and rehabilitation measures they deem necessary in the flooded areas not only in the Fraser valley but elsewhere throughout the province, except as regards the repair and reconstruction of the dikes and the removal of water and debris in the Fraser valley. It has also been agreed by the two governments that the armed forces will remain to assist the province until the emergency is ended, and it has been tentatively agreed that the end of the emergency will be regarded as occurring when the water level at Mission falls to 18 feet.


George Alexander Cruickshank: I presume the
Premier of British Columbia is satisfied with this token grant of $5,000,000. Is that correct? I am not.

Inquiries of the Ministry


William Lyon Mackenzie King: I stated to the house a day or two ago that I would make a statement, which would be approved by the premier of the province and by myself before being given to the house. The statement I have read has the approval of both the government of British Columbia and the federal government.


Mr. FULTON:: I understood the Prime Minister to say the amount spent by the armed forces would be deducted from this amount of $5,000,000. I think that is a pity; but does that mean just the amount that has been spent for materials that have been used, or would it also include the pay and allowances of the armed forces who have been helping in this work?


Mr. ABBOTT:: Perhaps I might answer that question. It is not intended that it should include the pay and subsistence allowances of the armed forces, but only extra expenditures made by the armed forces in connection with the work they are doing.


Mr. GREEN:: Could the Prime Minister give us any estimate of the total damage that has been suffered, including the cost of rehabilitation? Apparently he has made a settlement with the Premier of British Columbia for $5,000,000 plus three-quarters of the cost of repairing the dikes. Surely there has been some estimate of the total damage, including the cost of rehabilitation; or is this settlement made without either government having any idea of the approximate damage done?


William Lyon Mackenzie King: No doubt my hon. friend is aware that a commission was appointed, of which Hon. Mr. Hamber and General Iloffmeister were members. This commission has given careful examination to these matters; they have gone into the matter of the probable loss as a result of the disaster. This is the amount that has been recommended to the federal government by General Hoffmeister, who was our representative on the commission.


Howard Charles Green: But can the Prime Minister not give us the estimated total damage? Apparently a settlement has been reached. There must be some idea of the total damage that has been suffered.


William Lyon Mackenzie King: I cannot give it to my hon. friend immediately, because I have not the figures with me, but the commission has made that recommendation. They have gone into the whole matter themselves;
and I think the country has complete confidence in the commissioners who are dealing with this matter.


Howard Charles Green: Can the Prime Minister get that figure?


James Horace King: Order. The house will realize that there is no motion before it, and I cannot permit a debate on this matter at this stage. Hon. members may put questions, but they should understand that a debate cannot be permitted.


George Alexander Cruickshank: Shall we be going into committee of supply some time today?


Douglas Charles Abbott: I point out to the hon. member for Fraser Valley that there will be a special item in the estimates which will have to be voted before we prorogue-


George Alexander Cruickshank: We won't prorogue for a week.


Douglas Charles Abbott: -covering this grant, and full opportunity will be given for anyone who cares to do so to discuss the whole matter.


George Alexander Cruickshank: I should like to direct a question to the Minister of Finance, which he may take as a notice of motion because he may not be able to answer it now. I should like to know how much money has been paid by the federal treasury to burnt-out drought areas in any part of Canada during the past twenty years. The reason I ask this question is that I am told it is nonsense, that we cannot pay for flood relief.



INQUIRY AS TO PRESENTATION OF REPORT OF SPECIAL COMMITTEE

[Stage Direction]
On the orders of the day:
Mr. DONALD M. FLEMING (Eglinton): I should like to direct a question to the Minister of National Health and Welfare in his capacity as chairman of the special committee on prices. When does the minister propose to table in the house the report which was adopted by the committee in the early hours of this morning by a majority vote of Liberals and C.C.F. as against the contrary votes of the other members of the committee? My second question is, will the report as tabled contain the recommendations which the majority of the committee purported to adopt in excess of the powers granted the committee by the house? The report was steamrollered through the committee last night, and it is a monstrosity.
Inquiries of the Ministry
Hon. PAUL MARTIN (Minister of National Health and Welfare):: I do not propose to deal with the last observation of the hon. gentleman, but I hope to be able to table the report some time today, subject to circumstances over which at the moment I have no control.



OLEOMARGARINE


[Stage Direction]
On the orders of the day:
Mr. JAMES SINCLAIR (Vancouver North):: I should like to ask the Minister of Justice a question which was asked earlier this month by the hon. member for Broadview (Mr. Church) and the senator from Waterloo. Has the government yet decided to accede to the unanimous resolution of the senate asking that the validity of the present ban on the manufacture and sale of margarine in Canada be made the subject of a reference to the Supreme Court of Canada?


George Alexander Cruickshank: When the farmers are flooded out.


Right Hon. J. L. ILSLEY (Minister of Justice):: No, the government has not had an opportunity, with the intense pressure of the work of the session at this time, to give consideration to this question.



IMPORT PERMITS


[Stage Direction]
On the orders of the day:
Mr. RODNEY YOUNG (Vancouver Centre):: Will the Minister of Trade and Commerce inform the house as to the facility and speed with which permits will be granted for machinery and equipment imported from the United States for use in the fishing, logging, construction, mining and sawmill industries?


Right Hon. C. D. HOWE (Minister of Trade and Commerce):: As is well known, the policy established for the issuance of import permits under the terms of the Emergency Exchange Conservation Act provides that such permits will be issued for the importation of equipment required for essential industries, provided that such equipment is not available from Canadian sources. As the fishing, logging, construction, mining

and sawmill industries are considered essential to the economic welfare of Canada, import permits will not be withheld for equipment to be used by those industries, provided that alternative equipment cannot be obtained from Canadian manufacturers. Such permits as are requested will be issued immediately, provided that the proper information as to the end use and the non-availability of suitable alternative equipment from Canadian manufacturers is supplied at the time the permit is requested.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Mr. ANGUS MacINNIS (Vancouver East):: Press reports this morning indicate that the efforts of the Minister of Labour to open negotiations in the steamship companies' seamen's strike have fallen through. Is the minister going to make any other effort to bring the two parties together?


Hon. HUMPHREY MITCHELL (Minister of Labour):: Mr. Speaker, I expected that the question would be asked this morning. I think I had better read the letter which I sent to Mr. Buckley with reference to the telegram he gave to the press yesterday. My letter states:
I have your telegram of June 24 and I have copy of the telegram you sent Mr. Matthewson.
There are two phases of the situation which might he mentioned:
The first is that a report which I quote hereunder has reached me and I am sure I do not need to make any comments. These events would have an effect, of course.
Welland

"Sixteen men were moving toward Port Colborne to man the ship John T. Burke tied up at Welland South dock. They were in a panel truck. Near Chambers corners the truck was stopped by a group of men travelling in a lorry, painted red. This group of men attacked the crew, beating them up unmercifully, with the result that five are now in hospital, five are missing and six are suffering from minor injuries.
The Ontario provincial police later impounded a Red-army-style lorry and detained ten men travelling in it."
Montreal-"Last night in Montreal harbour the crew of the S.iS. Mont Sandra went aboard the S.S. Kinmount, which was tied up at No. 3 grain elevator.
They were armed with axes and smashed various parts of the ship's furniture and equipment. They attacked the crew of the Kinmount, injuring four of the men to the extent they had to go to the hospital, and threw the galley stove overboard."

Inquiries of the Ministry
The other phase of the situation which I call to your attention is the fact that conversations between the negotiating committee and Mr. Matthewson were to be exploratory. I made this quite clear to you in our discussions. In your wire to Mr. Matthewson I think the difficulty is that you were too definite.
We are continuing our efforts.


Mr. CHURCH:: What is the intention of the government in connection with such occurrences as these? It is the duty of the government to try to bring the parties together. This has now reached the proportions of a national emergency. There is $10,000,000 in the estimates to pacify Europe; why not try to pacify those at home and bring the two sides together and settle matters?


Mr. FERGUSON:: Mr. Speaker, when is the government going to do something about unions taking the law into their own hands and carrying on in the manner in which they do? There is utter disregard of the laws of this country. I would ask the Minister of Justice how much longer we are to tolerate a handful of men deliberately breaking the law, and owners of property trying to carry on without proper police protection.


James Horace King: Order.


Julian Harcourt Ferguson: How much longer are men going to be able to attack other people's property with crowbars and axes, without the government stepping in and stopping that kind of nonsense?


Angus MacInnis: I should like to direct a supplementary question-


Some hon. MEMBERS:: Answer.


James Lorimer Ilsley: Mr. Speaker, it is not always possible, I presume, for the authorities to preserve completei order in a country. But in this instance, as I have repeatedly said, the responsibility is that of the provincial authorities rather than the dominion authorities, for the preservation of law and order is within their territorial jurisdiction. The dominion has jurisdiction along the lines and in accordance with the principles I have stated to the house on several occasions.


Julian Harcourt Ferguson: Is it not the duty of the dominion government when piracy occurs to take immediate steps? That is not a provincial matter-it is piracy on the high seas, and that is a matter coming under the jurisdiction of the dominion government.


Angus MacInnis: Mr. Speaker, in connection with the question of the violation of law, which
has been raised by the Minister of Labour, is not the root of the dispute the fact that the companies have violated the labour code as set out in P.C. 1003? When the minister is answering this question, will he say whether the lake seamen's union has been certified by the labour relations board, and if any agreement between the companies and the lake seamen's union has been registered with the board?


Humphrey Mitchell: The question who is breaking the law is before the courts; therefore from my point of view the matter is sub judice. Groups of people outside can say all they like about the courts, and they are doing that in some parts of the country. People who ought to know better are doing it. But I cannot express an opinion upon it.
I would say this to my hon. friend-and I think what I say covers the whole field-that it is a difficult situation, as he well knows. I am sorry for both sides to the dispute, although I believe there is a measure of blame on both sides. But there is no use in the labour department, my officials and myself, doing our utmost to settle a dispute of this kind if other parties concerned are going to try to negotiate an agreement through the newspapers. That makes it doubly difficult.
I thought last week, if I may say so at this time, that we had reached a point where the parties concerned would sit down together in the cities of Toronto and Montreal. But circumstances over which I had no control prevented that from happening. I place no blame at the present time. But I do believe this, that you can conduct a strike without this kind of thing about which I have told Mr. Buckley. I do not believe that kind of action helps the Department of Labour, nor does it help the good people on either side of the dispute in the efforts made to bring it to a conclusion.
I hold no brief for the employers in this dispute, but when they are ready to sit down with these people and then get news of that kind-well, I do not know how you can expect any sensible individual to bring the dispute to a successful conclusion.
I do know this, that a good many people who express their views in some of the newspapers of this province think they have the answers to all these questions. They are the people who write the editorial, and who never settled anything in their lives. If they have the answers, I wish they would come forward with them and I will give them good jobs '* my department.
Inquiries of the Ministry



RADIO BROADCASTING


[Stage Direction]
On the orders of the day:
James Sinclair: Mr. Speaker, I should like to ask a question of the Minister of National Revenue. Has the Canadian Broadcasting Corporation a regulation which bans political broadcasts for forty-eight hours before election day, and up until the closing of the polls on election day; and is that regulation still in force?


Hon. J. J. McCANN (Minister of National Revenue):: It is still in force.


James Sinclair: Then I should like to ask two supplementary questions. If it is still in force, why did the C.B.C. ladt night not only permit but give fifteen minutes free time to Mr. M. J. Coldwell to broadcast from Regina for political purposes over a period of an hour and a quarter before the polls closed in Saskatchewan? My second question is: Why, two weeks ago, did the C.B.C. permit a private station in Vancouver Centre to carry, on the evening of June 6, a transcription to a forceful speech by the hon. member for Nanaimo (Mr. Pearkes), which was not intended to improve the vote of the government candidate two days later in the by-election on June 8?


James Joseph McCann: I am unable to give the answers at the present time to the hon. member's questions. However, the estimates of the C.B.C. wiH probably be up today or tomorrow, and the hon. member will then have an opportunity to ask his questions. I am sure, with the officials here at that time, I shall be able to answer him.



TELEGRAPHS AND TELEPHONES


[Stage Direction]
On the orders of the day:
Mr. J. T. RICHARD (Ottawa East):: Mr. Speaker, I should like to ask a question of the Minister of Finance in connection with the telephonertelegraph service. What section of the telephone and telegraph services has been taken over by the Department of Finance from the Department of Public Works? Will the employees of the Department of Public Works now engaged in this work be transferred to the Department of Finance on the same conditions of employment and salary? Has the depart-

ment entered into any negotiations with the Bell Telephone Company of Canada Limited?


James Horace King: Order. I suggest that the hon. member put his question to the minister when the committee is considering the estimates.


Jean-Thomas Richard: We will never get an answer otherwise.


Douglas Charles Abbott: I shall see that an answer is
obtained.



YUGOSLAVIA


[Stage Direction]
Mr. JULIAN H. FERGUSON (Simcoe North): Mr. Speaker, I should like to ask a question of the Minister of Justice. How much longer is the distribution throughout Canada by the Yugoslav government of insidious, poisonous, lying propaganda to be permitted- propaganda such as we have been receiving through the mails from the Yugoslav legation? How soon is democracy going to take the necessary action to nip this poisonous weed in the bud? How much longer are we to have to put up with it?
James Lorimer Ilsley: I will look into the matter about which the hon. gentleman has questioned me. His question has been in such a form that I think possibly the hon. member does not expect an answer.



INCOME WAR TAX ACT


[Stage Direction]
Hon. DOUGLAS ABBOTT (Minister of Finance) moved the second reading of and concurrence in amendments made by the senate to Bill No. 330, to amend the Income War Tax Act.
Mr. MACDONNELL (Muskoka-Ontario):: We cannot hear what is going on, and as far as I am aware no one knows what the amendments are.


Douglas Charles Abbott: The amendment is to give effect to an amendment which I agreed to in the banking and commerce committee of this house, namely, to make the rate of interest on tax arrears thirty days after assessment seven per cent, not eight per cent. The amendment was made at my request.
Motion agreed to; amendments read the second time and concurred in.

Income Tax Agreement



INCOME TAX


[Stage Direction]
Hon. J. J. McCANN (Minister of National Revenue) moved the second reading of Bill No. 395, respecting an income tax agreement between Canada and New Zealand, signed at Ottawa, in Canada, on the twelfth day of March, 1948.
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Macdonald (Brantford City) in the chair.
On section 1-Short title.
James Joseph McCann: The full text of the agreement as signed at Ottawa on the 12th of March, 1948, by the Hon. D. C. Abbott, Minister of Finance for Canada, and the Hon. Walter Nash, Minister of Finance for New Zealand, is set out in the schedule to the bill.
The purpose of the agreement is to avoid, where possible, the double imposition of income and similar taxes where Canadians are carrying on business in New Zealand or otherwise receiving income from New Zealand sources, and where New Zealanders are carrying on business in Canada or otherwise receiving income from Canadian sources, and it also provides that the taxation authorities of the two countries may exchange information which may be necessary to make the agreement effective and to prevent fraud and avoidance of taxes which are subject to the agreement.
The purpose of the bill is to give the agreement the force of law in Canada, and it provides that in the case of inconsistency between the agreement and the operation of any other law, the agreement will prevail to the extent of such inconsistency. The Minister of National Revenue is given the authority to make orders and regulations to carry out the provisions of the agreement, which orders and regulations shall be published in the Canada Gazette and laid before parliament.
The agreement is based on the principles established in the preceding income tax agreements which Canada has made with the United States and the United Kingdom. Double taxation is avoided by a reciprocal system of tax exemptions and tax credits.


James MacKerras Macdonnell: Do I understand correctly that this bill follows closely or exactly the precedent set up in connection with the United Kingdom and United States?


James Joseph McCann: That is right.


James MacKerras Macdonnell: There are no special circumstances which would affect the situation. I should like to get an idea of the amount and the number of people involved.


James Joseph McCann: I do not think we have any figures of the amounts likely to be involved. After it has been in operation for a year, one might be in a better position to answer that question. The terms of this agreement, as outlined in the schedule, are almost identical with the terms of the agreements with the United Kingdom and the United States.


James MacKerras Macdonnell: Have any representations been received from Canadian firms or individuals in New Zealand who are actually concerned?


James Joseph McCann: The representations made to Canada were made by the New Zealand government.


[Stage Direction]
Section agreed to.
Sections 2, 3 and 4 agreed to.
Bill reported, read the third time and passed.


[Stage Direction]
Hon. DOUGLAS ABBOTT (Minister of Finance) moved the second reading of Bill No. 397, to amend the Emergency Exchange Conservation Act.
He said: This bill proposes a number of changes in the list of items subject to import control under the Emergency Exchange Conservation Act. Before explaining the nature and purpose of these changes, I wish to review briefly the results that have been achieved to date under the program of exchange conservation, and to indicate certain measures of relaxation that may be possible if our reserve position continues to improve at a satisfactory rate over the next few months.
The house will recall that before the introduction of the exchange conservation measures on November 17 of last year, our exchange
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reserves, that is to say, our official holdings of gold and United States dollars, were declining at an alarming rate. The figures are familiar enough, and I shall not repeat them on this occasion. It is sufficient for my purpose to recall that during the period from the beginning of 1947 until the middle of November the rate of decline was about 870 million per month, a rate which, if it had continued unchecked, would have exhausted our then remaining reserves of approximately $500 million within a short period-indeed probably before today we would have been completely out of gold and United States dollars.
Drastic action had to be taken, and was taken. The comprehensive program which was developed has been in operation for only about seven months, and indeed, some parts of one aspect of the program, the restriction of capital goods imports, have only recently been put into effect. Nevertheless I am pleased to be able to report that the program is working -working indeed more satisfactorily than I myself had dared to hope. As I shall explain in greater detail in a moment, we have reduced our imports of goods from hard currency areas; we have reduced our travel expenditures in such areas; we have obtained an increasing proportion of our needed supplies from other sources, and we have had a very encouraging increase in our exports to the dollar area as well as to the world as a whole. As a result of these changes in the trend of our trade in goods and services, not only have we stopped the rapid decline in our exchange reserves, but we have reversed the trend and have had an encouraging improvement in our reserve position.
As I have said, our exchange reserves amounted to approximately $500 million when the program was put into effect. They dropped to $461 million on December 17. Knowing the experience of some other countries with somewhat similar programs, we had expected that these reserves would show a further substantial drop before the declining trend could be got under control. That figure for December 17, however, proved to be the low point, and since that time there has been a fairly steady upward trend, wholly apart from the increase in our holdings of United States dollars due to the drawings upon the Export-Import bank loan. On June 23 last, the date of the latest report I have received, they amounted to slightly over $742 million. This total includes $140 million obtained by drawing upon the Export-Import bank loan. If we deduct the amount of these borrowed funds, we have a balance remaining of $602 million,

representing the result of the working of ordinary economic forces.
I think it. will be agreed that the increase thus indicated from the low point of $461 million at December 17 is a gratifying one. It is true, of course, as I indicated in the budget speech, that during the period in question there were one or two items of a special or non-recurring character. These accounted for an increase in our reserves of the order of $60 million. But there were also during the same period offsetting items on the other side, including advances of $112 million to the United Kingdom under the 1946 loan and of about $74 million to other countries under various export credits. As the house knows, drawings on the loan to the United Kingdom have been suspended since mid-April, and the further amount to be drawn by other countries under various export credits will be small; some of these credits have already lapsed, and all will have terminated by the end of the year. I need not remind hon. members that if the portion of our exports so financed could have been sold for cash rather than for credit, there would have been a further increase in our cash reserves of $186 million during the seven months in question. We hope to play a further part in promoting world recovery, within the limits of our reasonable capacity, but we cannot continue to do so on the scale of the recent past, and thanks to the assistance which western Europe will now secure from the European recovery program approved by the United States Congress, that should no longer be necessary.
While I have expressed a large measure of satisfaction, and indeed of gratification, with the results up to date of the exchange conservation program, I wish to emphasize that we cannot as yet afford to be complacent. We have still a considerable distance to go before we can regard our holdings of gold and United States dollars as satisfactory. We must continue to increase those holdings to the point where they will be adequate to meet the drains which will undoubtedly occur from time to time-whether due to internal boom and consequent high imports, or to internal misfortune such as a crop failure and consequent low exports, or to the financial difficulties of some of our best customers, or to worldwide economic fluctuations. But while we must face realistically the task still ahead of us, we have reason to be proud of the progress already made.
Each part of the exchange conservation program has contributed to the improvement in our exchange reserves which I have described. I am informed that the limitation

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on travel funds has effected very substantial savings of United States dollars, and I wish to pay tribute to the way in which Canadians have accepted this very necessary but nevertheless vexatious restriction on their freedom of movement across the border. I am also gratified by the friendly attitude of our American neighbours who might well have misunderstood our motives, but who are, in fact, visiting this country in great numbers-considerably larger numbers, I believe, than last year.
A few days ago figures were released to the public, showing the effects upon imports of the restrictions imposed upon items included in schedules I and II of the Emergency Exchange Conservation Act during the first quarter of 1948. The figures for April are now available, and with the permission of the house I would like to place on Hansard figures for the first four months of the year so that they will be available in convenient form to hon. members.

[Stage Direction]
(in thousands of dollars)
	January-April 1947			January-April 1948		
	Scheduled Countries	Non- Scheduled Countries	Total	Scheduled Countries	Non- Scheduled Countries	Total
Food and Tobacco						
Meats, poultry and eggs	1,336	i	1,337	24	90	114Tea (indirect imports)	833	-	833	-	_	_Grains and cereal foods	1,055	18	1,073	372	1	373Cut flowers	163	2	165	1	_	1Fresh fruits and vegetables	6,294	2,264	8,558	2,014	392	2,406Canned vegetables	473	*	473	176	12	188Shell fish	233	7	240	1	1	2All other foods and tobacco	1,320	127	1,447	273	30	303Total foods and tobacco. ..	11,707	2,419	14,126	2,861	526	3,387Paper Products	Complete items	1,853	57	1,910	677	33	710Partial items	6,241	75	6,316	4,815	179	4,994Total paper products	8,094	132	8,226	5,492	212	5,704Perfumery and toilet preparations..	118	47	165	10	8	18Paints and varnishes	691	17	70S	309	15	324Glassware	212	20	232	13	4	17Household hclioware	450	62	512	59	6	65Refrigerators	1,674	*	1,674	121	-	121Washing machines	1,216	-	1,216	85	-	85Plumbing fixtures	611	3	614	42	1	43Boats, pleasure	150	1	151	9	1	10Heating and cooking equipment	2,811 233	55	2,866	139	29	168Electric lamps	-	233	12	*	12Lumber	3,401	433	3,834	1,353	194	1,547Sundry wood products	286	74	360	57	7	64Furniture	2,040	123	2,163	312	75	387Pianos	114	2	116	1	1	2Phonographs, coin-operated	185	-	185	44	-	44Furs, dressed and manufactured	1,017	114	1,131	26	94	120Ornaments, jewelry, precious	stones	1,283	473	1,756	161	127	288Fountain pens and pencils	249	*	249	34	*	34Synthetic casings	398	-	398	429	_	429Tourist purchases	2,788	*	2,788	92	*	92All other complete items	1,250	71	1,321	362	26	388All other partial items	16,793	557	17,350	14,393	788	15,181Grand Total	57,771	4,603	62,374	26,416	2,114	28,530Total-Partial items	23,034	632	23,666	19,208	967	20,175Total-Complete items	34,737	3,971	38,708	7,208	1,147	8,355
5849-371J
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IMPORTS UNDER SCHEDULE II (QUOTA LIST) (in thousands of dollars)
-	Category 1 Fruits and vegetables	Category 2 Textiles	Category 3 Leather	Category 4 Miscel- laneous	Category 5 Prepared foods	TotalsImports from: Scheduled Countries: January-April 1947	11,201	62,018	3,768	7,603	2,290	86,880January-April 1948	6,542	19,964	1,987	3,346	408	32,247Imports from: Non-Scheduled Countries: January-April 1947	188	19,150	2,380	1,866	454	24,038January-April 1948	1,172	29,409	2,280	1,483	1,374	35,718
Note: The above tables compare imports of goods covered by Schedules I and II of the Emergency Exchange Conservation Act during the first four months of 1948 with the corresponding statistics for 1947. It will be noted that some imports continue to be shown under the prohibited list of Schedule I during the first four months of 1948. This arises out of the fact that not all of the commodities included in the statistical classification under which imports are classified were covered by the prohibitions. Also in certain instances permits were granted to deal with cases of exceptional hardship, as provided in the Act.
The figures in these tables show that imports from scheduled countries, that is, the United States and certain other dollar countries, under schedules I and II were $86 million less during the first four months of 1948 than during the corresponding period of 1947. Goods which were prohibited under schedule I accounted for $31,000,000 of the decrease, and those placed under quota by schedule II for the remaining $55,000,000. The average monthly decrease in imports from these scheduled countries was thus $20-5 million in the first four months of this year as compared with the first four months of last year.
Turning to imports from non-scheduled countries, that is, countries which might roughly be termed non-dollar countries or countries which are also short of dollar exchange, the results are equally satisfactory, though for a. different reason. As hon. members know, the government adopted a policy of non-discrimination in its import restrictions as being the best policy from Canada's long-term point of view as a trading nation. In applying that policy an attempt was made, however, to place as few restrictions as possible on trade with non-scheduled countries. The results for the first four months show that imports from soft currency countries of goods listed in schedules I and II of the aot were 32 per cent higher in the first four months of

1948 than in the first four months of 1947. British trade has been affected scarcely at all by the prohibitions under schedule I, and it has already begun to benefit considerably from the operation of quotas under schedule II.
My colleague the Minister of Trade and Commerce (Mr. Howe) gave to the house a detailed survey of the results of operations under schedule III of the act, which comes under his jurisdiction, and there is therefore no need for me to repeat (the information he gave. However, I do think it worthy of comment that during the past seven months it has been possible for us to continue to import the capital goods and materials required to enable us to carry on the expansion of our industrial capacity which has been under way since the conclusion of hostilities. As my colleague emphasized, the program is designed not merely to save dollars in the short run, but also to help us to solve our long-run problem of achieving a better balance in our trading relationship with the dollar area.
As the government has endeavoured to make clear on a number of occasions, our approach to the dollar problem is essentially a positive approach. We introduced restrictions with the greatest reluctance, and only because they were vitally necessary to stem the decline in our reserves. In any event, as I have already outlined, they have had the desired results. But

Emergency Exchange Conservation Act
the government is much more gratified by the increase that has taken place in our earnings from exports. In each month since the turn of the year the value of our commodity exports to the United States has exceeded that for the corresponding month of 1947 by a substantial amount, the increase for the whole period from January 1 to May 31 being $136 million, or approximately 34 per cent. Making the same comparison for exports to all countries, the increase is $111 million, or 10J per cent.
The future is a matter of uncertainty, and I would be the last to indulge in gratuitous prophecy. But I do think that the results achieved dwing the past seven months, on both the negative and positive sides of the program, are such that I should indicate at this time that, if serious setbacks do not occur in the meantime, the government plans to relax the restrictions on the imports of certain goods that are habitually consumed by Canadians and are looked upon as highly desirable, if not altogether essential.
In particular, the government believes that it will be possible towards the end of 1948 to take certain of the commonly consumed fresh fruits and vegetables off the prohibited list and put them under quota so as to permit Canadian consumers to obtain a reasonable quantity of this fresh produce when domestic supplies are beginning to become relatively scarce.
This indication of policy is in line with the statement which I gave in reply to a question of the hon. member for Fraser Valley, which appears on page 1431 of Hansard for February 20, 1948. At that time I said:
As I now see the situation and as I now view the prospects of our exchange position I think it is highly improbable that a complete removal of these restrictions with respect to fresh fruits and vegetables will occur much before the end of this calendar year, and it may be that some degree of restriction will continue into the early part of 1949. As far as possible it would be the government's intention not to remove or relax these import controls at a time when that action would have serious or disastrous effects on the marketing of Canadian produce. But I cannot bind the government to any unconditional guarantee that no produce grown in Canada in 1948 will have to face any competition from imported goods. As I said nearly three months ago, the government intends to relax restrictions on basic or essential items such as cabbages, carrots, potatoes, and onions when it becomes clear that Canadian supplies are nearing exhaustion.
As hon. members know, the government (has already permitted limited importation from time to time of certain fresh vegetables, such as cabbages, carrots, potatoes and onions.
Furthermore, the government is hopeful that importations of citrus fruits which are
now under quota will continue to be available in at least as large quantities as up to now and if possible that the quotas will be enlarged.
Meanwhile, steps will be taken to authorize the resumption next winter of imports cVf British West Indies tomatoes, which for a number of years, since the application of a high tariff against them by the United States, have been grown especially for the Canadian market. These imports will be subject to quota limitations related to imports from that area in recent years.
Summing up the situation in so far as fresh fruits and vegetables are concerned,
I expect that next winter, while we may have to continue restricting the importation of the less commonly used and more expensive items, it will be possible to have available not only adequate supplies of citrus fruits but also reasonable supplies of such staple vegetables of widespread consumption as lettuce, celery and tomatoes at a time when Canadian supplies are not available.
I now turn to the contents of the bill that is before the house. The amendments to schedules I and II are few in number and simple in character. The amendments to schedule III are more extensive, but they are in large part merely consequential upon changes in tariff wordings which were made in the budget in order to provide for reduced rates of duty on various imported materials and components required by Canadian industries. They will be dealt with by my colleague, the Minister of Trade and Commerce.
I wish to summarize briefly the proposed changes in schedules I and II, for which I am responsible. These changes will be brought provisionally into force as of tomorrow. The Minister of Trade and Commerce will deal with schedule HI later.
Schedule I. Three of the seven changes which it is proposed to make in schedule I are merely clarifications; two broaden existing provisions to cover goods which may be imported in substitution for other goods which are already prohibited, and two involve the addition of completely new items. The combined effect of these changes is expected to be a substantial additional saving of foreign exchange and more equitable treatment as between competitive or partially competitive products. The substance of the various amendments is as follows:
(a)	The explanatory note at the head of schedule I is expanded in order to make it clear that no description in the prohibited
[Stage Direction]
Emergency Exchange Conservation Act
list shall be deemed to include any goods classified under a tariff item listed in schedule H.
(b)	A new item is inserted to cover acoustical wallboards, pads and tile of any material. Acoustical wallboard of wood fibre was already covered, but similar or competitive products made of asbestos or gypsum were not.
(c)	The gummed paper item is reworded to make it clear that it applies to printed as well as to unprinted gummed paper.
(d)	A new item is inserted to cover synthetic resin soft sheets or strips, and manufactures thereof. It includes such products as plastic shower curtains, aprons, tablecloths, et cetera, and the pliable sheeting from which they are made. It does not include the hard plastic materials which are used extensively for structural and industrial purposes. Nor does it apply to any articles included in schedule II. They will remain subject to quota without change.
(e)	The item covering mirrors is expanded to include mirrors of glass coated with any material. Formerly it applied only to silvered glass.
(f)	A new item is inserted to cover asphalt tile.
(g)	A provision which is no longer necessary, by reason of the addition of the proviso to the note at the beginning of the schedule, is repealed.
Schedule II. Three items are inserted in category 4 of schedule II. They cover vacuum cleaners, motorcycles, bicycles and tricycles.
Bicycles and tricycles are a new addition to the schedule which appears desirable in view of a sharp increase in imports from scheduled countries. Vacuum cleaners and motorcycles are being transferred from schedule III to schedule II, and imports from scheduled countries will be subject to quota. Production parts will remain subject to control under schedule IN.
While the effect of the bill is to impose some further restrictions on imports, the new items do not differ in character from the items already included in the Emergency Exchange Conservation Act. They are designed to effect savings in dollar exchange where least harm will be done to the economy as a whole and to leave greater resources available for the importation of the more essential items.
Mr. HARRIS (Danforth):: The minister mentioned motorcycles and bicycles. Would his statement in that regard apply in equal 
measure to the parts that go to make up a motorcycle or a bicycle, such as the saddle?


Douglas Charles Abbott: Those are under schedule III, production parts. Schedule II, which is the quota schedule, would affect only the entire machine and not the parts. I suggest that we could handle those questions better in committee.


Joseph Henry Harris: May I ask a supplementary question?


James Horace King: Order. I suggest that the hon. member wait until the house is in committee.


James MacKerras Macdonnell: Mr. Speaker, I have a few brief comments to make on what the minister has said. I should perhaps have been more impressed by the minister's statement if it had been shorter. I was rather reminded of the remark, "Methinks the lady doth protest too much". The minister was at pains to point out that everything was lovely, but I was not sure, as he read the statement, that everything was in fact quite as satisfactory as he suggested. However, some progress has been made, and we should be unaffectedly glad. I confess further that when the minister says that everything is good, or pretty good, and in the next breath tells us that he has had to draw down $140 million of the $300 million, I have a sense of disturbance and the feeling that all is not so well.
We must remember that by the unwise policy pursued until November of last year the government precipitated a perfect spate of buying so that there was bound to be something of a reaction. We need not therefore take too much comfort from the improved figures; nevertheless, to the extent that there is an improvement, we should take what comfort we can.
I would remind the house that notwithstanding the very favourable picture the minister has attempted to give us, we have had to draw in our horns a bit with regard to the credits we were hoping to make, and to take the view that our position does not warrant our doing just what we had hoped to do, and that to me is also regrettable.
The minister explained how the various measures had worked effectively, but I do not find any attempt made to give any figure to show the effectiveness of the blessed 25 per cent austerity tax. It may be that the suggestion of the report that has been freely circulated, though I understand without warrant, may be realized a little later than

Emergency Exchange Conservation Act
the month of December, as the minister now tells us. I understand there are gentlemen sitting to your right, Mr. Speaker, who would like to question the December date and bring it as close to us as June.
There is one thing I should like to mention.
I think it is an interesting commentary on the pleasing picture which the minister has sought to give us that we shall be asked in a few minutes to consider another bill, to amend the Foreign Exchange Control Act. In that we seem to be pursuing still further the inquisition into-one might almost say the persecution of-our citizens.


Douglas Charles Abbott: The inquisition of smugglers.


James MacKerras Macdonnell: We shall deal with that when we come to it. At the moment, however, it shows that the government is scraping the barrel as much as it can to get dollars, and to the extent that it is doing so properly, in the circumstances it has created, that of course is the only thing left for it to do.


Clarence Decatur Howe: Perhaps I might supplement the remarks of my hon. friend by a description of the bill as it applies to amendments to part III of the act.
Category III provides for some further amendments in wording in order to conform with the revised Customs Act and for bringing radio repair parts under control. Category IV similarly brings under control all radio repair parts not covered in III, and also all parts of electric light fixtures and electric appliances. In the past, repair parts, with the exception of automobile repair parts, have been admitted freely and without requiring a permit. It has been found very difficult, however, except in a few cases, to distinguish between imports of repair parts and imports of similar parts for production purposes. In these circumstances it appears fairer all round to put imports of all parts under control and on a quota basis.
Category V covers amendments which, I believe, will provide for better administration. In the four tariff item numbers affected, it is proposed to delete that part of the wording which provides that permits will not be necessary for importations which do not exceed a certain value. Experience has shown that a more specific definition is required to cover such exclusions, and it is proposed, subject to this amendment being approved, that a type of general permit will be provided under each of the tariff items noted, to allow for what might be termed "casual importations," to values not exceeding the values now stated in the act, which are made by an importer for his own use and which are not intended for resale.
It will be noted that minor changes are proposed to the wording and punctuation of certain of the items. These changes become necessary to define the meaning of the items included in the act and are in accordance with the accepted wording of the customs tariff.
Category VI brings fibre glass and glass wool and a number of industrial chemicals into schedule III. Fibre glass imports were originally prohibited, but the prohibition was removed by order in council when it was established that imports were essential for insulation in various appliances such as refrigerators and stoves. Imports have increased substantially from $938,000 in 1947 to current annual rate of $1,400,000. It now appears that the imported fibre glass is being used for a number of general insulation purposes which could be quite satisfactorily served by Canadian products. By including fibre glass in schedule III it will be possible to restrict imports to those essential for technical reasons for certain specialized insulation requirements.
Imports of the industrial chemicals which it is now proposed to include in schedule III totalled something over seven and a half million dollars in 1947. It is believed that it is now possible, as a result of improvements in the domestic supply position, to save some appreciable amount of exchange on these items.
Perhaps this is an opportune time to make a few observations on the general development and progress of our capital goods import control-.the administration of schedule III. On June 10 last I gave a detailed review of the statistical results of our controls to date, and a description of our organizational approach and procedure. I need not reiterate the details of what I said before, but I should review briefly the record of .the administration of schedule III up to the present.
To begin with, it must be appreciated that the problems in administering schedule III are very different from those of schedules I and n. The administration of all the schedules is directed to the same objective, of course-to conserving United States dollars; but from the very nature of the different commodities and situations with which they deal, the methods adopted must be different. Schedules I and II are designed primarily to cut down imports of consumer goods which we can, in a pinch, do without. Schedule III is designed primarily to control and direct imports of capital goods to the most constructive .purposes and best national advantage from an exchange point of view.
The dollar value of imports from the United States of goods enumerated in schedule HI was held at $187 million in the first four months of
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1948. This represents a reduction, although not a large reduction, from the levels reached by these same imports in 1947. The larger part of the savings so far is accounted for by automotive vehicles and parts, where my original estimate of a S75 million saving in 1948 is well on the way to being realized. Other items have been brought under control from time to time, many of them at very recent dates; so that the full effect of the program is not yet apparent in .the import statistics. With a new list of items announced to take effect on June 26, eighty-nine per cent of the original schedule III items have been brought under control, and these accounted for ninety-six per cent of all the imports in schedule HI in 1947.
Three different methods have been followed in the detailed administration of the schedule III items. These procedures have been developed as being appropriate in each case to meet the needs of the problems which were encountered. Dollar allotments are issued to manufacturers who are importers of parts for production use enumerated in schedule III. These vary a good deal from one industry to another, but they follow the general lines of the formula established in the automobile industry, which latter has been published in detail. Up to the present, about 1,200 of these dollar allotments have been issued.
In cases not subject to dollar allotments, import permits are issued on an individual basis to cover the particular shipment concerned. Up to the end of May, $21-5 million of import authorizations were granted in this way. The third meithod of control is project approvals, which cover all imports necessary for a particular construction project or industrial plant. These project approvals are, in effect, an assurance to the builder concerned that individual shipment permits will be issued as they are needed.
The whole program has been developing in a very substantial and encouraging way. I gave some concrete examples in my statement on June 10. Substantial expansion is planned, and is now getting under way, in a number of important manufacturing fields affected by the import restrictions. From automobiles to automobile parts, radar to television, typewriters to washing machines, micro-motors to buses, heating pads to penicillin, Venetian blinds to asbestos cement pipe, biscuits to grape juice, we have new products and new industries springing up weekly. A pattern has developed which we think is a seund economic approach to the problem of the best distribution of activity between United States parent companies and Canadian branch plants. A number of arrangements have been worked out by which the Canadian plant concentrates 
on a standard model for both the domestic market and for export, and the United States parent turns over the export markets for this particular model to the Canadian plant. This is, of course, a feasible proposition only if the Canadian plant can meet the United States plant costs. I am glad to say that in most of the cases we have examined it was clear that the Canadian plant, on the mass production basis which the export orders made possible, could compete advantageously with the United States plant.
There are long-run implications of this development of particular interest to us. There may have been, some element of pressure in inaugurating these developments, but they have proceeded only because the companies concerned are satisfied that they are basically sound and economically advantageous. While the exchange and import restrictions are, we hope, of temporary duration, the stimulus given Canadian industry, the new markets found for Canadian products, the recognition of Canadian industrial and cost advantages, are all constructive factors which will continue.
Our natural resources development programs also have long-range objectives in view. It is not enough for us to consolidate our wartime industrial expansion, or to meet our exchange problem solely by defensive means. We must build for the future, and build on the basis of an economically sound international division of labour. It is by this method, and this method only, that we shall assure a balanced position for our foreign trade, which is of such great importance to our general economy. Consequently, I welcome the evidence that new investment in Canada is looked upon as not only sound from the point of view of supplying the domestic market, but as advantageous in supplying all world markets open to us.
An interesting development in this connection has been in the motion picture business. A group which includes all the major United States motion picture units has formed an association known as the Canadian Co-operation Project. The specific objective of this project is to make what contribution the movie industry can to a solution of our exchange problem, and more specifically to spread general information about Canada and whip up tourist interest. As an example of the efforts of this group, while there were 61 Canadian subjects in American newsreels in 1947, there have already been 64 this year. Just yesterday contracts were concluded covering some $2,000,000 to $3,000,000 of feature productions in Canada, which Canadian interests are financing on approximately a fifty-fifty basis, and from which Canada will

________Emergency Exchange Conservation Act
get a pro rata share of vorld earnings. A number of other commitments, chiefly for short features of tourist interest, have been made and others are being negotiated. In view of the way the American movie industiy is plugging Canada, the least I can do is plug the production "Neighbour to the North" which is appearing at a local theatre. This will give an idea of the type of assistance, which cannot always be measured in dollars but which has very important dollar importance, whieh this industry can give.
We are accused on one side of a new protectionism, and on the other of a new socialist dictatorship. We are accused at one and the same time of not doing enough in a positive way to encourage Canadian industry and economic expansion, and of encouraging so much that we are intensifying an already highly inflationary situation. As usual, the truth lies somewhere between the two extremes.
There has been, of course, an inevitable but temporary element of protectionism in banning imports of a number of consumer goods in high demand in Canada, but at the same time steps have been taken to expand competitive production in Canada and to stimulate exports, even at the expense of some continuing shortages in the domestic market. On the other hand, these measures have not been forcibly imposed on defenceless industry by a dictatorial bureaucracy: they have been worked out with the wholehearted co-operation of responsible industry in this country by the simple expedient of putting the facts of the situation in each case squarely before the industry concerned. This means that there is nothing immediately spectacular in our positive program-no highly advertised five year government plans-but we do know that we are building firmly and practically.
If anything, we have more cause for concern over the criticism that we are attempting too much than that we are not doing enough. The magnitude of the current investment boom in Canada is almost alarming. We forecast new capital investment, in 1948, of S2-8 billion at the beginning of the year; the indications are that this will be exceeded. Fortunately we have been able to arrange for increased supplies of basic products and building materials required in this connection, and the more essential parts of the program, such as housing, and necessary industrial and utility expansion, have not been delayed. In fact, we are already reaching a stage at which the very large capital investments made both during and after the war are beginning to pay off materially in increased production. I would not minimize, however, the pressure that continues on scarce supplies-on construction
labour of all kinds, on key materials such as steel, and of course, on our United States dollars and the things that must be imported from the United States.
There is a fundamental point I would like to emphasize. Our exchange problem and the measures we have taken to meet it arise directly from the terrible destruction of the last war. I refer not only to the human and material destruction, but to the breakdown of the former international exchange and trade systems and to the loss of free government institutions in some parts of the world. At the same time we have on this continent, and in this country, employment, production, income, and, in general, prosperity and standards of living higher than ever before.
I am sure that most Canadians do not appreciate the tremendous strides Canada has made in the world scene in the last decade. We are today the third trading nation in the world, by quite a wide margin. Our wartime industrial development was no flash in the pan; we have gone on since the war, converted and expanded, and our industrial efficiency and output today compare favourably with that of any other country in the world. I could reel off a list of first in every field, from housing construction and family allowances to power developments and paper production, that bear witness to our productivity and, I should add, to our good fortune.
We who are sitting here have been privileged to see Canada grow from economic adolescence to maturity, and to become one of the leading commercial and industrial countries of the world. It almost seems that we have profited from the war destruction and the necessary post-war rehabilitation. But I think on this our conscience can be clear. We have done more per capita to assist European recovery than has any other country. We intend to continue contributing to the extent of our resources, in co-operation with the United States, through the Marshall European recovery program. Apart from any other considerations it is obviously in our long-run interests to do what we can to restore the basis for a free world trading economy. This will require some degree of sacrifice from this country, some temporary abstinence, some restrictions on otherwise worthwhile projects. To make an effective contribution to European recovery we must develop a substantial over-all surplus of exports. To some extent we can do this by producing more. To some extent we shall have to do it oy consuming less. Every export from Canada has an appreciable United States dollar-content, direct or indirect. Until there is a greater degree of multilateral trade, and
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until exchange convertibility can be restored, we must maintain controls that will reduce our less essential imports from the United States, and also controls that will direct imports in the capital goods field to their most useful purpose. The latter controls are the particular responsibility of the Department of Trade and Commerce, and the best effort of that department is being directed toward administering these controls fairly and efficiently, in the best interests of Canada's financial stability.


Edmund Davie Fulton: Mr. Speaker, the statements of the two ministers are indeed important and extremely interesting. Taking them together, as the hon. member for Muskoka-Ontario (Mr. Macdonnell) has said, we should not refrain from giving what credit may be due and expressing satisfaction with what progress is being made. With the hon. member, however, I do feel that if the government or the ministers wish to take credit for the way in which this program is working, we should be careful to see that they are really justified in doing so.
The figures given by both ministers, first as to the increase in our reserve of American dollars, and second as to the change in the export trade picture, are quite impressive. As has been pointed out, however, the increase in our United States dollar reserve is not so impressive when it is remembered that $140 million is the result of our drawing upon a loan.
The other comment I wish to make in that connection is that while we may be building up slightly larger supplies of United States dollars, we have not yet reached the stage where we can say with confidence that our trade situation is such as to enable us even to start looking toward the removal of these controls. If we do, our supply of United States dollars will immediately rush down the drain again. We have no more United States dollars than we had when this program was started last November, and I do not think we have seen anything which would lead us to assume that we have yet gone very far in changing the trade picture along the road to the eventual goal of being able to take off these controls. In fact, even although the Minister of Trade and Commerce (Mr. Howe) says the government has this point in mind, the industries we are building up, and the pattern of development we are undertaking, is inevitably being built up within what must be the narrow limits of controls, and of the policy which the minister has in his mind.
Instead of enabling us to take off those controls, the effect may be the very opposite,

namely, to compel us to keep them on. In other words, the more we build up these things with controlled exchange, and the more we operate along those lines while not permitting it to operate along other lines, the more urgent it becomes to keep those particular lines going and, as a result, to keep the same controls. Certainly in these circumstances more pressure will be put on by the industries which have been built up under that system. They will press not to change the situation and not to expose them to the vagaries of free exchange and free competition from without our borders.
That was the danger we saw when this program was inaugurated. We are pleased that we have actually got more United States dollars than we had at that time; but we do not think that the danger has been lessened in any way. We think our Canadian economy is built up along what are in fact unsound lines, lines which will eventually compel us to keep those very controls which on all sides, when the program was begun, were admitted to be undesirable.
If we have come to the point where we can relax restrictions and contemplate imports which will cost us United States dollars, if the situation has been eased to that extent, then it seems to me that instead of doing this -or certainly as well as doing this-we can take at least more items out from under the 25 per cent excise tax, which forms the other side of the program. I believe as a matter of fact that it would be better to give that relief before giving this relaxation, or the type of relief along the lines indicated in the bill.
Where it is applied, obviously the 25 per cent tax increases the cost of living. I shall not embark upon a long dissertation upon the cost of living. I have no doubt the minister has received as many representations in the matter as he cares to receive. Biut he cannot deny that this cost of living increase, apart altogether 'from the economic side of the picture, is having a serious effect upon the outlook of the people of Canada. They are beginning to wonder whether governments care very much what happens to the cost of living.
It is important economically, certainly, and it is also important from the .point of view that the people are finding it difficult to meet that rising cost. Everything that can be done should be done as soon as possible to reduce the cost. Instead of giving relief by releasing import restrictions, or certainly as well as doing that, there should be further relaxation of the 25 per cent excise tax by taking some of the items out from under that tax.

Emergency Exchange Conservation Act


Mr. L. W. SKEY (Trinity):: Mr. Speaker, wihat I have t-o say will be brief. It seems to me, however, that statements as important as those made this morning by the two ministers ought not to pass without one further comment. What I have to say has to do with what Canada is being paid for these exports about which the minister spoke when he said that United States subsidiaries here are taking over the export market for their parent companies.
If we are being paid in United States dollars, that is fine. If we are being paid in sterling credits, thus adding to Canada's sterling credit situation, that is not so good. But if we are being paid in Canadian dollars which our government has lent these other countries then we are in the position of financing exports of the subsidiaries of companies in a foreign country. Will the minister tell us exactly the currency in which we are being . paid?


Douglas Charles Abbott: Convertible currency for everything, except what is sent under United Kingdom credits or credits to the other western European nations. We do not deal on any other basis. It is cash.


Lawrence Wilton Skey: A cash basis, fully convertible?


Douglas Charles Abbott: Yes; we cannot afford to do anything else.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Golding in the chair.
On section 1-Schedule I amended.
James MacKerras Macdonnell: I was not aware when I made my observations a few moments ago that we had a doublebarrelled statement this morning. Having heard them both, I feel that the firm of Abbott and Howe, in the advertising field, ought to be a great success, because it certainly did a good job in advertising the exploits of the government.


Clarence Decatur Howe: And you spread the gloom.


Douglas Charles Abbott: The achievements Of the government.


James MacKerras Macdonnell: Achievements, real or alleged?
I do not propose to take much time of the committee, but I do wish to comment on one phrase used by the Minister of Trade and Commerce, one to which I listened with considerable interest. I refer to his statement to the effect that investments are developing at an almost alarming rate, and that the investments are chiefly investments in capital goods.
Let me say to the minister, when he speaks of alarm, that the present situation is due largely to the measures he took himself by reason of the extravagant double depreciation.
I would remind him further of what I said in the house before, that the present cost of living is due in some measure, even in substantial measure, to the fact that goods and services and labour have been taken away from commodities which sustain the life of the consumer, and put into capital goods. When the minister says he is alarmed I would remind him that the alarm is justified, and is brought about by a condition which in substantial measure he has created.


Mr. CASE:: I can see nothing in the bill to determine the method employed to regulate the value of the Canadian dollar. This is a bill to amend the Emergency Exchange Conservation Act. What rule of procedure did the government employ to determine the artificial value of the Canadian dollar? In the ordinary course of events the dollar would have been at a discount of ten per cent, and had it been allowed to seek its own level it probably would have receded still further. Be that as it may-


Douglas Charles Abbott: I do not want to interrupt my hon. friend, but I wonder if he would make his remarks on the next bill, which is an amendment to the Foreign Exchange Control Act. I think it would be more in order.


Wilfrid Garfield Case: Would it be proper to ask what regulation is passed to determine the value of the Canadian dollar?


Douglas Charles Abbott: That is done by the Minister of Finance under the provisions of the Foreign Exchange Control Act.


Mr. JAENICKE:: During the course of his statement the minister said that the imports from soft currency countries were $30,000,000 in respect of goods under schedules I or II.


Douglas Charles Abbott: They showed an increase of that amount over the corresponding period for last year.


Frank Eric Jaenicke: If I understand aright, schedule I is the prohibition schedule under which import permits would be issued by the minister in case of hardship.


Douglas Charles Abbott: That is right.


Frank Eric Jaenicke: Outside of the tomatoes which we got from the Bahamas and Jamaica, what other permits were granted under schedule I?


Douglas Charles Abbott: There are a number of items which are partly banned. The statistics are all
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in the tables which I placed on Hansard today. The principal increases are in the quota items under schedule II.


Lawrence Wilton Skey: When the minister says "fully convertible", what does he mean?


Douglas Charles Abbott: I mean in hard currency, in cash, in currency which can be converted into United States dollars, which is the currency we want. If we sell in the Argentine the exporter must get his payment either in United States dollars or in a currency such as Swiss francs, which is convertible into United States dollars. In other words, we cannot afford to sell except, for hard currency, or currency which we can convert into United States dollars. It will have to be either gold or convertible exchange.


Mr. GIBSON (Comox-Alberni):: This might be a good place for the minister to express his well-known sympathy toward those who require kerosene operated refrigerators. Could a small quota not be provided which would show what our intentions are? I do not think the minister fully appreciates how the people in a riding such as mine get along. We do not have many of the summer campers and luxury tourists for whom the minister is afraid to provide these kerosene operated refrigerators and thus create a loss in foreign exchange. Many people in my riding are able to get fresh vegetables not more than once a week. The hon. member for Vancouver North says that the same thing applies to his riding. No ice is available, and these people cannot go down to a corner store to buy fresh vegetables or fresh meat because the store is not usually a large enough establishment to have an alternative method of refrigeration. I think if the minister would give some thought to this he could even offer an amendment now. I would be most grateful to have it as a gesture of good intentions toward these folk.


Douglas Charles Abbott: I indicated a moment ago in my statement, in rather guarded terms it is true, that I contemplated that if we continued to improve our position, we would be making a progressive relaxation. I felt that this fall we might be able to establish reasonable quotas for fresh fruits and vegetables such as lettuce, tomatoes and celery. I will say to my hon. friend that having regard to the general indication of relaxation which I gave, I think it will be possible to give early consideration to the establishment of a quota for kerosene operated refrigerators.


Mr. HERRIDGE:: I concur in the remarks of the hon. member because what he has said would apply to many people in small towns in British Columbia.


Edmund Davie Fulton: I would point out that summer is here, and those who live in out-of-the-way places find it difficult to get along without these refrigerators. The other day I referred to the minister a case in which a man was able to get in supplies only once a week, and he needed to have some way of keeping those supplies. I am glad the minister intends to give consideration to this matter, but I hope he will be able to do something before the hot weather is at its 'height.


Mr. JACKMAN:: The Minister of Finance said that these changes in the Emergency Exchange Conservation Act will affect substantial savings of exchange. Does he mean we shall have to go still further with the imposition of restrictive measures, which he appears to dislike and which the people of Canada abhor?
Taking the exchange reserves as of December 17, 1947, the low point, as being S461 million; then taking the present position and adjusting for pluses and minuses, I note that we are up $189 million. Eighty-six million dollars of that came through savings effected under schedules I and II. If I remember correctly, there was no great saving under schedule III, under the Minister of Trade and Commerce, because of the great expansion in manufacturing facilities. If I am wrong, he will correct me.
What I should like to find out from the combined ministers is whether of the $189,000,000 which we have added to our exchange reserves, $86,000,000 approximately has come from these restrictions and $103,000,000 from the normal trade channels ex no legislative restrictions whatsoever. I feel that if we have bettered our position through these restrictions only to that extent, then we are simply applying a palliative; we are not getting to the root of our troubles, and the outlook is bleak.
I would feel much better about the whole matter if I thought that our ordinary commerce position was such that we were rectifying our exchange position by natural means, and perhaps through some of the constructive means which the Minister of Trade and Commerce said would be undertaken and which are now perhaps in operation to some extent. Will the minister let me know whether my calculation is approximately correct?


Douglas Charles Abbott: I should like to think that the saving was $189,000,000, but unfortunately it is $141,000,00. The difference in our reserve position as between the low point of December 17, 1947, and June 23, 1948, excluding our Export-Import bank borrowings, is $141,000,000, the difference between $602,000,000 as of the latter and $461,000,000, which was the low

Emergency Exchange Conservation Act
point on December 17. That represents our exchange receipts from all sources, including invisibles such as the tourist trade. It is impossible to pin-point any portion of it and say that that was due to the restrictive side of the program, but the figures which I mentioned in my speech indicate an estimated saving on last year's figures as a result of the restrictive programs. What our imports would have been without the restrictive program, no one can say.
On balance the position is this: Our net reserve position has shown a moderate but steady improvement, and that has been due both to the restrictive measures which were imposed and to the positive measures in the form of increased exports to dollar areas, which have been substantial.


Harry Rutherford Jackman: I should like to be right on these figures. I understand that on June 23 we had 8742,000,000 in reserve. I have deducted from that the $140,000,000 which came from the Export-Import bank. That leaves $602,000,000. Then the minister mentioned that there were certain non-recurring items of $60,000,000 which we should deduct. I do not know what they were, but that makes $542,000,000.


Douglas Charles Abbott: We should add the $186,000,000 that we sold on credit if we are going to do that. My hon. friend would do better to take the net figures. The low point was S461,000.000 in December, while the figure today ex the import bank borrowings is $602,000,000, a difference of $141,000,000.


Wilfrid Garfield Case: What part has the loan played in these plans?


Douglas Charles Abbott: We have drawn $140 million upon the Export-Import bank loan. When that act was before the house it was explained that it was arranged as a measure of protection. Obviously $600 million is far too low a figure for our exchange reserves, having regard to the volume of our transactions. Even when we include the $140 million we have already drawn upon the Export-Import bank loan, the figure is still too low. We still have another $160 million in the Export-Import bank loan when we see fit to draw it.


Harry Rutherford Jackman: The minister led me up the wrong alley. I put the figures down as he was speaking. Naturally we deduct from the $742 million the $140 million obtained by drawing upon the Export-Import bank loan, leaving 8602 million. We are agreed up to that point. Then the minister said there were certain non-recurring items which should be deducted.


Douglas Charles Abbott: Not necessarily non-recurring items. In fairness I pointed out that there were special items to the amount of $186 million.


Harry Rutherford Jackman: I have that figure, but then the minister added, non-recurring items of $112 million.


Douglas Charles Abbott: $186 million.


Harry Rutherford Jackman: And cash for exports, $186 million. I left that out entirely, because I did not want to bring in anything which should not properly be taken into the calculation. Exactly what are the non-recurring or special items of $60 million to be deducted, and what are the special or non-recurring items of $112 million to be added?


Douglas Charles Abbott: The $60 million represents special deductions, some, I think-I have not the date here-under the non-interest-bearing loan to the United Kingdom. But the essential figures were given in my statement, and my hon. friend when he has these figures before him in Hansard will be able to analyse them more completely.
Our reserves in cash and United States dollars are $742 million, of which $140 million represents drawings upon the Export-Import bank. That is up from the low figure of $461 on December 17. Included in that is $150 million of special payments. I pointed out that drawings on the loan to the United Kingdom have been suspended since mid-April; various exports credits of other countries have lapsed, and if all these exports had been sold for cash our reserves would have been much larger.


Harry Rutherford Jackman: The minister mentioned $112 million. What did that represent?


Douglas Charles Abbott: I have not my notes here; I sent them up to Hansard. But from memory I think the $112 million were drawings on the United Kingdom loan and the $74 million were drawings on other export credits.


Harry Rutherford Jackman: In regard to the $60 million which the minister mentioned as a special payment from the United Kingdom-


Douglas Charles Abbott: There were two or three items; I think $34 million was from the United Kingdom.


Harry Rutherford Jackman: How do we get United States dollars through that transaction? I thought that the repayment of that loan was through realization on Canadian securities still held by Britishers. They sold them, and that paid off part of the loan; but how did that become United States currency unless the Britishers sold C.P.R. stock, we will say, which they held in the United States?
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Douglas Charles Abbott: I have not that information before me, but the arrangements included the sale of both Canadian and United States securities.


Harry Rutherford Jackman: The interest-free loan to the United Kingdom is being repaid partly in United States currency, is it?


Douglas Charles Abbott: I can get that information for my hon. friend.


Harry Rutherford Jackman: I mention it as one of the reasons why we received more United States or hard currency than the British figures would indicate. I should be glad if the minister would get that information.


Douglas Charles Abbott: I shall be glad to get it.


Mr. TIMMINS:: I draw the minister's
attention to the underlined words in section 1(a):
Provided that where any goods described in this schedule are included in a tariff item listed in schedule II, those goods shall not be deemed to be included in this schedule but shall be deemed to be included in schedule II.
In other words there is a transfer from schedule I to schedule II. Does that just happen automatically? The explanatory note says:
The underlined words are added to clarify the position where goods that are described in schedule I may also fall within a tariff item in schedule II. The effect of the amendment is that in such case the goods may be imported subject to quota and the import of the goods is not wholly prohibited.


Douglas Charles Abbott: I am not an expert on tariff schedules, but this amendment is required to avoid ambiguity regarding certain goods described in schedule I but which also fall within a tariff item in schedule II. This proviso makes it clear that such goods are entitled to entry under quota under schedule II and are not prohibited under schedule I.


Harold Aberdeen Watson Timmins: The minister is just
repeating the words I uttered.


Douglas Charles Abbott: I think I gave a more elaborate explanation.


Harold Aberdeen Watson Timmins: Yes, he did use the words "certain goods". How does the public find out what these "certain goods" are, which may come in under quota and which are prohibited? The public is in a beautiful jumble about it.


Douglas Charles Abbott: There are certain things which have a general description in schedule I. Take, for instance, desk sets. If they come under a tariff item listed in schedule II, schedule II prevails over schedule I. My hon. friend as a lawyer will appreciate that there may be a conflict between the two, and this
[Mr. Jackman.!
proviso makes it clear that schedule II governs in case of a conflict. It is up to the importer, if he sees desk sets prohibited under schedule I, to see whether there is a tariff item in schedule II which includes a particular type of desk set which he can bring in under quota. That is the purpose of the amendment.


[Stage Direction]
Section agreed to.
On section 2-Schedule II amended.
Harry Rutherford Jackman: In regard to goods transferred from schedule III to schedule H, are bicycles and tricycles allowed to come in under quota?


Douglas Charles Abbott: Under permit, I think, at present, but under the amendment they will come in under quota.


Harry Rutherford Jackman: If we put a quota on bicycles and tricycles it will have the nondiscriminatory provision attached to it. We do not want United1 States bicycles to come in here, but we should not discourage, in fact, we should encourage British bicycles to come in. I presume that if this goes through, the quota will apply against all countries equally and it may therefore endanger one of our imports from the United Kingdom.


Douglas Charles Abbott: I think this will encourage, as has happened in other cases, imports from the United Kingdom, and discourage them from the United States. We have been importing bicycles heavily from the United States, but putting bicycles in category IV of the quota section will, I am informed, permit British bicycles to continue to be imported in substantial quantities but will restrict United States importations for which we have to pay in United States dollars, which we really cannot afford to do.


Mr. BRADSHAW:: Does this apply to bicycle saddles as well?


Douglas Charles Abbott: No, I answered that earlier. Production parts are under schedule III. This applies only to the completed article. Parts come in, as they did, under schedule III, under the permit system.


Albert James Bradshaw: In my riding a manufacturing plant is producing chiefly bicycle saddles. There has been a decrease in its volume of sales of bicycle saddles. The plant is equipped to supply bicycle saddles for the whole dominion, but more United States funds have been spent on bicycle saddles in the first month of 1948 than in the whole year 1946. Approximately S62,000 has gone to the United States in the first four months of 1948 as compared with 178,000 for the whole of 1947. If saddles continue to be imported at. the present

Emergency Exchange Conservation Act
high rates there will be spent needlessly from $50,000 to $75,000 of United States funds. This is not in the million class, but it puts an industry in my riding out of business.


Douglas Charles Abbott: I am familiar with the case, and I may say that it is not intended to put any restriction on imports of bicycle saddles under 612.


John Horne Blackmore: Why should there not be a restriction on American bicycle saddles?
Section stands.
Progress reported.
At one o'clock the house took recess.
The house resumed at three o'clock.



REPORT OF SPECIAL COMMITTEE

[Stage Direction]
The house having reverted to the order: Presenting reports by standing and select committees:
Paul Joseph James Martin: Mr. Speaker, I have the honour to present the report of the special committee on prices, copies in English and French, together with all exhibits and the evidence.


Mr. DIEFENBAKER:: Will a copy be made available to each member today?


Paul Joseph James Martin: Mimeographed copies are being distributed to all members as quickly as possible.


John Bracken: I understood before I came in that the Minister of National Health and Welfare had made a statement with respect to the report of the prices committee. From what I gather, he did not indicate whether a motion would be made for concurrence. May I ask him to say now whether he proposes to have such a motion made, and if so, when?


Paul Joseph James Martin: It is my intention, with the consent of the house, to move concurrence tomorrow afternoon at three o'clock, in accordance with arrangements which I understand the whips are trying to make with the various political groups.



EMERGENCY EXCHANGE CONSERVATION


[Stage Direction]
The house resumed consideration in committee of Bill No. 397, to amend the Emergency Exchange Conservation Act-Mr. Abbott -Mr. Macdonald (Brantford City) in the chair.
The CHAIRMAN:: The committee is considering section 2. Shall the section carry?


John Horne Blackmore: Just before the
luncheon recess I understood a question was raised as to why some provision had not been made for shutting out United States bicycle saddles so as to protect the bicycle saddle manufacturing industry in Canada. I am not sure whether the minister answered that.


Douglas Charles Abbott: I did, but briefly. It is not proposed to put restrictions on the imports of saddles. Incidentally, under the tariff item, harness and saddlery, including bicycle saddles, are covered by 612. There is no intention of imposing prohibitions against the importation of these articles. It is only the completed machine that is placed on a quota list.


John Horne Blackmore: I would ask the minister to explain why that should be. Why should not an industry in Canada, which is capable of producing the needs of Canada, be protected against competition from the United States?


Douglas Charles Abbott: As I have tried to indicate, this measure is not introduced for protective purposes. It is introduced in order to conserve exchange. When we impose protective devices, it is done through the tariff and not through the import restrictions. These may have an incidental protective effect, but that is not what we want. What vve want is exclusion in order to conserve United States dollar resources, and there is no intention of putting on any protective devices so far as bicycle saddles are concerned.


John Horne Blackmore: I have some difficulty in following the minister's reasoning. I find it hard to see why a dollar of United States currency saved as the result of shutting out bicycle saddles is not as valuable as a dollar of the same currency saved by the shutting out of any other commodity from that country.


Douglas Charles Abbott: In 1947 there were imported 96,778 saddles valued at $106,396. Of this, $26,187 worth came from the United Kingdom, $1,978 from the Netherlands and $78,231 from the United States.


John Horne Blackmore: Could not Canadian manufacturing concerns have manufactured all the saddles we needed in Canada had they been given encouragement?


Douglas Charles Abbott: We are not preventing the Canadian manufacturer from manufacturing all the saddles he wants, but he has to do it in competition with manufacturers elsewhere. Protection is provided under the normal tariff, but we are not introducing these restrictions
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for protective purposes. It has never been the intention to do that, and as far as I am concerned it will never be the intention.


John Horne Blackmore: All other restrictions we have had since December 17 were merely for the purpose of conserving United States dollars. Why would not the restriction of imports of saddles have conserved United States dollars just as well as, and certainly with far less annoyance than, the restriction of imports of lettuce from the United States?


Douglas Charles Abbott: We would have to restrict them from all sources, including the United Kingdom, or put them under a quota.


John Horne Blackmore: The minister shut out United States lettuce and lettuce from commonwealth sources. Why should it not be just as reasonable to shut out United States saddles and saddles from other sources?


Mr. FRASER:: This morning the minister-said that at the end of the year he might allow lettuce, fresh fruits and other such produce to come in. He did not fix a definite date. Does he not think that in fairness to the farmer he should fix a date so that the farmer can make arrangements to supply our needs until that time?


Douglas Charles Abbott: My statement was carefully worded.


Gordon Knapman Fraser: I know it was.


Douglas Charles Abbott: It lives up completely to the assurance I gave in February last that restrictions would not be removed in such a way as unnecessarily to harm the Canadian grower, and a phrase I used this morning was that these quotas would be established when supplies of similar Canadian produce had become exhausted.


Gordon Knapman Fraser: If the farmer had been informed last year that restrictions were going on, he could have supplied our needs. Why not give him a chance to supply our needs up to the time contemplated?


Douglas Charles Abbott: That is exactly what I said this morning.


Gordon Knapman Fraser: I know it is. The farmer can grow more if you allow him to grow more.


Douglas Charles Abbott: Such things as lettuce and tomatoes will not keep after a certain period-


Gordon Knapman Fraser: Celery will.


Douglas Charles Abbott: Celery will, I know.


Gordon Knapman Fraser: Turnips will.


Douglas Charles Abbott: I qualified my statement this morning by saying that if we keep on

progressing as we have done, I hope to be able to do it, but I cannot give a more definite date.


John Horne Blackmore: I am seeking the
principle on which the minister's exclusion behaviour was based. Let us take for example coal oil refrigerators. Exclusion was accomplished there and is still in effect. What was there about coal oil refrigerators that would qualify them for exclusion, in order to save United States dollars, when United States bicycle saddles were not excluded?


Douglas Charles Abbott: Refrigerators all came from the United States; only some of these saddles did. Refrigerators were far more valuable, costing more than the comparatively small amount involved in bicycle saddles. That is the only answer I can give.


John Horne Blackmore: If that is so, I am still looking for a fundamental principle, and I imagine there must be a fundamental principle underlying this. I understand that barber chairs, for example, are excluded, provided that they have in them a certain percentage of metal. I understand that United States bicycle saddles are not excluded. They have a certain amount of metal in them. What I should like to find out is why the barber chair should be excluded for the sake of conserving United States dollars and these saddles not be excluded for the same reason. The minister has already indicated that if we excluded United States bicycle saddles we would have to exclude saddles from the Netherlands and Great Britain. I am informed that the Jones Manufacturing Company, which makes bicycle saddles, could have supplied the total requirements of Canada if they had been given a chance to do so.


Douglas Charles Abbott: There is nothing to prevent them from doing that.


John Horne Blackmore: Why not shut out these others and give them a chance?


Douglas Charles Abbott: Let them compete with the others.


John Horne Blackmore: Evidently the reason why they cannot is that the others come in and compete with them.


Douglas Charles Abbott: They have already a substantial duty to protect them. I think they ought to be satisfied with that.


John Horne Blackmore: With regard to barber chairs, there is more than a substantial duty; there is an absolute restriction. I do not wish to labour' this matter, but if we are to save Canadian dollars the principle should apply across the board instead of with respect to

Emergency Exchange Conservation Act
everything we can produce in Canada. This admission of United States bicycle saddles looks to me to be an infringement of the rights of the Jones bicycle and saddle manufacturing company. I hold no brief for them, except that I am interested because they presented their case before the banking and commerce committee, and I thought it was a good one. I thought that the government ought to be prepared to explain, in a form more satisfactory than the explanations thus far made, why they did not give the Jones manufacturing company far more consideration than they have up to the present time.


[Stage Direction]
Section agreed to.
On section 3-Schedule III amended.
Mr. MERRITT:: In section 3, subparagraph (5) on page 8, the minister will find an amendment referring to tariff items 427 and 427a. Those items are basket items: "All machinery composed wholly or in part of iron and steel, not otherwise provided". As I understand it, the amendment changes the tariff item as applied to schedule III by excluding the words "over 8200 in value". It is this particular aspect of the amendment that I want to direct to the attention of the minister.
May I point out first of all that this is a basket item. Under these two items a wide variety of goods which do not come under specific items will be excluded. I would have thought that it be advisable to maintain the $200 limit for this reason. Since the minister probably does not know for sure what items will be caught in item 427.1 would have thought that the $200 clause would greatly reduce the paper work that must be done when somebody brought in some small item worth $20 and had it taken from him at the border because he did not have a permit. I should like the minister to state why it was found necessary to make this clause tighter than the ordinary tariff item which originally existed in the schedule.
I have another point, which is really the same kind of thing, in connection with this basket item. As I understand it, under this item a large amount of machinery has been caught which is used in British Columbia by cannery operators. I am informed that the bringing of 427 under the restrictions has caused considerable alarm out there in producing industries which want, to import goods that are necessary in their production and that are not manufactured in Canada; and when I say that, I refer to item 427a in particular. Among the things that have been caught, as I understand it, are lumber carriers and other mobile lifters. They are in great demand, and they perform a useful
function in a sawmill or cannery. I do not think they can be used effectively in anything but productive employment. They are used, of course, in warehouses, to carry lumber around, and to carry cans of fish after the fish is canned.
My second suggestion to the minister apart from the $200 item, is that he give consideration to excepting from 427 and 427a some of these specific items which have been caught by the basket, and which, as I understand government policy, it is not particularly desired to restrict. The policy of the government seems to be to issue a permit when goods are to ibe used in productive employment, or at least for stimulating additional production. I would think he might well except these carriers from the operation of the general basket item. Will the minister comment on that?


Clarence Decatur Howe: With regard to the $200 minimum value, it was found to be too indefinite for customs purposes. It was intended for casual importations only, but iwe believe that it wild be used to clear a great volume of small shipments which was not the intention of the act. Noiw it will be possible to get a permit for casual importations for a person's own use, which is an ad-ministrable item. But ordinarily any shipment, unless a general permit has been issued, must be cleared by special permit.
With regard to the second question, why items cannot be exempted, there are several difficulties. One is that usually the tariff item covers materials used for logging, fishing and mining, which are obviously proper for importation, but which are also used for other purposes which may not be so proper. For instance, a donkey engine is used for dogging, and it is also used for a good many other things. Then there is the further fact that while my hon. friend refers to items not made in Canada, most items are made in Canada; and if there is a Canadian source, obviously it would not be proper to give an import .permit. The system of clearing applications for import permits is a rapid process. All the information is at hand; there is ample staff available, and I see no reason why any particular section- of the community should be treated differently from any other section in the matter of requirements for obtaining permits.


Charles Cecil Ingersoll Merritt: My point was a little more restricted than that. I did not ask for a general exemption in respect to imports used in the logging, fishing and sawmill industries. I asked -whether the minister would give a specific exemption for carriers and mobile
5854	COMMONS
Emergency Exchange Conservation Act
lifters, and other items which I have not in mind at the moment by name, which he may not wish to restrict but which nevertheless may be caught 'by the basket item. To exempt carriers and mobile lifters would relieve the people out there a great deal, unless of course the minister wants to restrict their imports, as I understand he does not. It is an item *with respect to which they feel keenly. Could the minister not make an exception of that one article, which as I say cannot be used on the street or in the home, or anything like that, but must be used in production?


Clarence Decatur Howe: Well, Mr. Chairman, permits for the two items mentioned are issued freely if we know the end user of the items. If they are simply brought in for stock, permits are not issued. I do not know where the hardship comes in. A man does not buy those every day in the week; he has some little notice of his need for them. Now that the cost of air mail has been reduced from seven cents to four cents, I see no hardship in having to send an air-mail letter and getting a prompt reply.


Charles Cecil Ingersoll Merritt: There is the matter of the additional paper work. If the permit is to issue as a matter of course, I imagine they will be better satisfied; but then I do not see why this is included at all.


Clarence Decatur Howe: It is issued as a matter of course, provided we know the end user. If it is simply a dealer importing we do not issue permits, and do not intend to do so. If it is a bona fide user applying for an item, then the permit issues.


James MacKerras Macdonnell: I want to ask the minister a question about the elimination of the $200 ceiling. I noticed that the minister told the hon. member for Vancouver-Burrard there was "no hardship" in sending a request by air mail, and I say that is just an illustration of the fact that when we get into this control business it goes on and on. The minister has taken out this $200 ceiling, and I observe the reason he has given for it. I should like to know the magnitude of the importations or requests under that basis, and the evidence on which the change was made. Presumably the $200 ceiling was considered carefully when it was put in, and I should like some indication that there has been real evidence of a situtation which required this change, rather than just a desire to make the thing more complete and have more people under control.


Clarence Decatur Howe: The reason is that considerable confusion exists in clearing these items of less than $200.
Mr. MACDONNELL (Muskoka-Ontario); That is not what you said before.


Clarence Decatur Howe: If a man gets a $200 item every day he may set himself up in business fairly well without coming under the regulations at all. It is much more satisfactory to let him apply for what he needs in the usual way, no matter what it is. If he needs blanket permission, he can apply for it and give his reasons, and the permit will be issued.


James MacKerras Macdonnell: I thought that might be the reason, but the minister did not give us that before. Now we are clear on the point.


Mr. McKAY:: As a matter of information, would the minister tell us what is the basic chemical indicated on page 8, line 46? I thought I knew something about chemistry, but this has me floored.


Clarence Decatur Howe: All I can say is that the tariffs indicate that very valuable imports are made under the item, and I am told it will be manufactured here in Canada in sufficient volume.


Eric Bowness McKay: What is it?


Clarence Decatur Howe: I don't know. If I did I would not be a member of parliament.


James MacKerras Macdonnell: This bill was brought in in a hurry; most of us did not see it until a few moments ago, and I should like to ask one general question. Are the other changes, which at first blush look formidable, more or less of the nature of the change the minister has just described? Is there any change of real magnitude in schedule III?


Clarence Decatur Howe: We have added a list of heavy chemicals. The original restrictions did not apply to that field. The reason was that we had not a report from the proper officers as to what should be done in that respect. We find a considerable unnecessary leakage of United States funds in the importation of heavy chemicals which are available in Canada at satisfactory prices. About all we have done is change the wording of the items and add the list of heavy chemicals.


Mr. MOORE:: A short time ago a leading newspaper stated that schedule III had not yet been proclaimed, and that large quantities of heavy machinery were being imported without much reference to these requirements.

Foreign Exchange Control Act
Has this schedule now been proclaimed? If not, when does the government intend to have it proclaimed?


Clarence Decatur Howe: I explained this morning that it was proclaimed by stages, the reason being that we wanted to confer with the trade and work out a pattern which would effect the maximum saving in exchange without shutting down industry. I said that at the present time eighty-nine per cent of the items had been proclaimed, and that they represented ninety-four per cent of the total value of imports included in the items.


Charles Cecil Ingersoll Merritt: I understand that items 427 and 427a have just been proclaimed.


Clarence Decatur Howe: That is right.


Charles Cecil Ingersoll Merritt: Within the last few days.


Clarence Decatur Howe: Yes.


Charles Cecil Ingersoll Merritt: Can the minister give us any idea of the total savings he expects to achieve under these clauses?


Clarence Decatur Howe: We cannot estimate savings. I could give the total imports, but they have nothing to do with the savings, which will depend upon the number being brought in unnecessarily.


[Stage Direction]
Section agreed to.
Section 4 agreed to.
Title agreed to.
Bill reported, read the third time and passed.


[Stage Direction]
Hon. DOUGLAS ABBOTT (Minister of Finance) moved the second reading of Bill No. 396. to amend the Foreign Exchange Control Act.
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Macdonald (Brantford City) in the chair.
On section 1

Buy apd sell foreign currency only from and to authorized dealers.
James MacKerras Macdonnell: Is the minister going to say anything about this clause?


Douglas Charles Abbott: I do not know that there is much I can add to what I said yesterday when the bill was introduced. Its purpose is to close a loophole which it had not been realized existed in the act. The loophole was brought to the attention of the officers of the control board as the result of a case in the magistrate's court in Toronto. The facts of the case were these: A Canadian resident in Toronto, between September 1946 and April 1947, bought in the United States about $15,000 worth of cameras which were shipped to him in Niagara Falls, New York, c.o.d. Evidence was given at the trial by two witnesses from Buffalo and Niagara Falls, New York, who produced and identified the original records of the railway express agency under which this man was shown to have received the shipments at Niagara Falls, New York, and that he paid therefor at the railway express agency office amounts totalling about $15,248 in United States currency. Four other witnesses gave evidence indicating that this man was ordinarily resident in Canada.
At the conclusion of the evidence for the prosecution, counsel for the defence argued that there was nothing to show that the accused had received in Canada any part of the moneys paid for the shipments, and that sections 19 and 22 do not impose obligations on residents with respect to transactions taking place entirely outside Canada. The magistrate accepted this argument and dismissed the charges. An appeal has been taken.
As I said yesterday, the intention of course in drafting the Foreign Exchange Control Act was that so far as it relates to transactions by residents it should have extraterritorial effect; and in most sections this is made clear by the use of the words "in Canada or elsewhere". The committee will appreciate that if it is maintained, this decision would seriously prejudice the administration of the act, since it would mean that any Canadian resident who obtained payment of United States funds while in the United States-for example, for exports from Canada-could dispose of the funds there without committing an offence.
I believe the committee will realize that in order to carry out the intent and purpose of the Foreign Exchange Control Act, if this decision in Toronto is sound, the loophole must be plugged. In other sections the expression "in Canada or elsewhere" is used, but in these sections, numbers 19 to 22, for some reason those words are not used.


James MacKerras Macdonnell: I am sure that we all agree that however bad or regrettable a law may be, when it is on the statute book we must not allow it to be made a fool of. So far as this measure is necessary I have no comment to make with respect to it. But I do draw to the attention of the minister the fact that section 22, as it will now read, will be very broad indeed. It states:
Every resident, other than an authorized dealer who, either in Canada or elsewhere, has or acquires the ownership or possession of foreign currency-
Foreign Exchange Control Act

And so on. That applies to a person going to the United States, who, not through any commercial transaction at all, but by reason of his relationship or friendship with some other persons, may receive some money. He would then come under the purview of this section. In effect he would thereby become liable. Is that a fact, and if so, could not the minister devise some amendment which would not apply to that kind of case?


Douglas Charles Abbott: There would be no intention of attacking a case' such as the hon. member has described. The general rule envisaged under the act is that a resident of Canada who comes into the possession of dollar exchange is obliged to account for it, as the act says, to the authorized dealer, who in effect is the Minister of Finance. The case my hon. friend has in mind is that of a man who might be down in the United States and who would have obtained a permit to go there. A friend might give him S50, which he would be free to use. I suppose the hon. member is suggesting he might be committing a breach of the law if he did not turn it in.


James MacKerras Macdonnell: I am not suggesting many people w-ould have consciences as delicate as that of the minister. But would it not be possible to make it clear just what is meant? I imagine the intention is to apply to moneys which would develop in the course of business transactions, and not in the course of ordinary personal relationships. Is that a fair statement of the situation? If it is, then it seems to me the bill as it stands now goes too far.


Douglas Charles Abbott: There is no change in the law as it stands, except to make it applicable to Canadian residents outside their own country. I think the intent of the act is that those of us who come into possession of foreign exchange-and I refer more particularly to United States dollars-are obligated to turn that money in. We are obligated to turn in to the common pool any surplus which we are not entitled to use legitimately. I do not know how we can change this particular section to give any greater safeguard to individual Canadians who might be travelling in the United States. I can assure the committee that we have no desire to persecute people, but without this change there would be a glaring loophole in the law which would be completely improper if allowed to remain there, and to remain unchanged.


Frank Eric Jaenicke: Let us suppose a Canadian has received an inheritance in the United States. He is entitled to a payment out of the estate of, we will say, his uncle. He wants to

leave it down there and lend it to somebody else. 'Could he do that, or would he be precluded from doing so by section 22?


Douglas Charles Abbott: I 'have not my officials 'before me. I think the policy up to the present time has been to allow Canadian residents to retain investments in the United States, subject of course to the obligation of turning in to the exchange control board the revenues received from those investments. Mind you, the act must be broad enough to enable the exchange control board, if it becomes necessary to do so, to take over all foreign investments. The act has always had that provision in it, as other exchange control acts have. Our exchange position has never been such that we have had to require our residents to turn in their foreign investments for Canadian currency. They have had to do that ito a very large extent in England, but we have never had to do it here, nor do I expect that it will be necessary. Nevertheless there is porwer in the act to do it.


Gordon Knapman Fraser: I have in mind the case of a woman who during the past winter went to California. When passing 'through Windsor, she received from her daughter in that city $500 in United States currency. What would happen in that case?


Douglas Charles Abbott: I believe the mother would be perfectly free to spend the $500 in the United States as she saiw fit. If she came back to Canada with $100 she would have to turn it over to the board, because only $10 is allowed.


Mr. HAZEN:: What is the definition of a resident, under the act?


Douglas Charles Abbott: I should have a copy of the act, but I have not one with me.


Douglas King Hazen: I had a case brought to my attention recently which I should like to mention. A Canadian employed by a company in tliis country was transferred to a city in the United States. He could not find a house to rent, and was obliged to buy one. After a time the company transferred him back to Canada. He 'then sold the house, paid off his mortgage, and had some dollars left. He went to his banker and said he wanted to have the money transferred to Canada, because he was coming back to this country. The banker said, "We will get Canadian funds and have them deposited to your credit in Canada." Apparently this was done. Some considerable time later he received a letter from the foreign exchange control board asking him what he meant by doing a thing like that. The board told him what he had

Foreign Exchange Control Act
to do iwas to send that money back to the United States, get Canadian funds in its place, and bring those funds back to Canada. His reply was: "How can I take the money back to the United States? I have spent it;
I have not got it to take back." The whole thing seems so bureaucratic and silly.


Douglas Charles Abbott: I will look into the facts of the case.


Mr. GILLIS:: I want to ask the minister a question, which is perhaps in a reverse direction, as it has to do with money going out of Canada. I wrote to the minister about the case of a resident of Canada whose wife and family are in France. He cannot get transportation to bring them to Canada and he is restricted to sending them 810 a week for maintenance. I could not believe that such restrictions were in effect. I wrote the minister some time ago, but as yet I have not received an answer.


Douglas Charles Abbott: It may be that with the pressure of work I have not been able to reply to my hon. friend. The position is that the banks are limited to permitting $10 a week to be given out, but an application could be made to Ottawa and these applications are frequently agreed to. If so, the applicant would be permitted to send an appropriate amount to his family depending upon their requirements abroad. In giving general discretion there has to be a top limit.


[Stage Direction]
Section agreed to.
On section 2-Resident required to sell all foreign currency to authorized dealer.
Harry Rutherford Jackman: There does not seem to be a definition of "resident" in the act.


Douglas Charles Abbott: There is. I have the act here now.


Harry Rutherford Jackman: Suppose a Canadian goes to the United States to work for a week or two, or a month, and is paid in United States funds. Surely he does not have to turn that money over to an authorized purchaser and not use any of it down there for his own expenses?


Douglas Charles Abbott: Where a Canadian is moving to the United States to take up work, the practice is-


Harry Rutherford Jackman: Just to take a temporary j ob.


Douglas Charles Abbott: -to apply for a change of status. Of course, he would be entitled to pay his expenses in the United States, but so long as he remains a resident of Canada
he would be obliged to sell any surplus to the exchange control board when he came back to Canada at the termination of his temporary employment. The definition of resident is to be found in section 2, subsection (u) of the Foreign Exchange Control Act. It is a long definition, and perhaps the committee would not wish me to read it.


Harry Rutherford Jackman: Suppose a man goes
to the United States to work for three or four weeks on a reorganization project. He would have considerable expenses while there. Surely he would not have to turn over his gross receipts?


Douglas Charles Abbott: He would have to turn over his net receipts.


Harry Rutherford Jackman: The act does not say, one way or the other.


Douglas Charles Abbott: He would have to turn over his net receipts after the payment of all expenses incurred while down there.


Harry Rutherford Jackman: He might have to pay United States taxes as well.


Douglas Charles Abbott: He certainly would not have to turn over United States taxes he had paid.


Harry Rutherford Jackman: You do not say that he is allowed to pay the tax there. This section states explicitly that he must turn over everything he receives. Canadians do not want to be made criminals without having any idea of so becoming. Looking at the other side of the page I notice that the old section 22 provides that a Canadian may not have any United States currency in his possession, that he must turn it over to the authorized agent.


Douglas Charles Abbott: The only change being made in section 22 is to insert the words, "either in Canada or elsewhere", which are underlined.


[Stage Direction]
Section agreed to.
Section 3 agreed to.
Bill reported.
Mr. ABBOTT moved the third reading of the bill.
Mr. HARRY R. JACKMAN (Rosedale): Mr. Speaker, it appears to me that section 3 of the bill is meant to help the United Kingdom foreign exchange board. Surely if a Canadian wishes to cash a cheque for a person from another country he should be free to do so. As far as I can see, under this section you might become liable if you accepted a negotiable instrument from a person whom you did not know was from another country.
Supply-Labour
[Stage Direction]
Is this section designed to help our own foreign exchange control or to help that of some other country?
Motion agreed to, and bill read the third time and passed.
[Stage Direction]
The house in committee of supply, Mr. Golding in the chair.

[Stage Direction]
Demobilization and reconversion-
1J/2. Bureau of technical personnel and placement of university graduates, $39,569.
Angus MacInnis: Last evening I had
received permission to say something on item 138.


Humphrey Mitchell: Mr. Chairman, I should like to take a moment or two to answer the hon. member for Cape Breton South.
Last evening, in discussing mobility of labour, the hon. member for Cape Breton South was of the opinion that the arrangements which unemployed men in certain areas of the maritimes could be furnished with transportation to other places in Canada where jobs were available had been cancelled. He said he understood I had made a statement to that effect in this house. I think he is mistaken, and if I gave any such impression,
I was mistaken. The fact is that the arrangements in regard to providing transportation to move men to employment have not been cancelled, and have been in effect since early in 1947.
On February 17, page 1283 of Hansard, I made a statement of this kind reporting on the progress of the transfers, and my parliamentary assistant made a further and more extended statement on June 16 last, that latter statement appearing on page 5284 of Hansard.
In his statement my parliamentary assistant discussed a movement of men whose fare was paid as well as transfer of men in the ordinary way where the government did not pay.
While I am on this subject I may say that we have done a great deal in the matter of taking care of what the hon. member for Cape Breton South describes as "pockets of unemployment", by seeing to it that through the clearance system of the national employment service the unemployed persons are, to use technical jargon "exposted to jobs". That is the technical phrase they use. Once a fellow has been to a university he sometimes uses peculiar expressions.
Where the placement necessitates a long journey we often supply transportation under 
one of two methods: first, where we can, we have the employer provide the transportation on a refundable basis; and secondly where this is not possible, the government itself provides the transportation.
Some of the places where the government supplies transportation are those my hon. friend mentioned, namely, in the maritimes, Halifax, Cape Breton, New Glasgow and Pictou, and during the winter we arranged a movement from Vancouver city to eastern Canada.
Many transfers were arranged where the companies paid the fare. For example, the Ontario Hydro moved a large number of men, and a number of lumber companies advanced fares.
The plans developed for transferring men from one part of the country to another have worked out wonderfully well and have resulted in alleviating the unemployment situation in their home areas. The actual number moved from the maritimes at government expense was 2,644. During the winter the movement slowed down.
Some questions were asked in regard to displaced persons. First of all, I should like to say that there is a very close arrangement with the immigration department. When employers offer to engage displaced persons their statement is checked to make sure that the workers are not available in Canada, and if in the opinion of the national employment service there is no need to bring people from the displaced persons camps, that application is not accepted. We insist on prevailing wages being paid, and see to it that the working conditions are good, that housing is available, and that the charge for board is not unreasonable.
After the men or women are placed, we have a follow-up system through the employment service, and periodically visits are made to see that there is no difficulty.
As I stated, we make periodical inspections and in addition where there is any complaint from either the employer or the employee we check at once, and occasionally we do make transfers. In other words, a person is not required to stay with an employer if he finds conditions unacceptable.
Some question was raised as to the type of undertaking. We have not provided for a contract; we have adopted the plan put into effect by the British government, which is that the displaced person makes application to come to Canada, and in doing so agrees to follow the line of work provided for him by the Minister of Labour for a stated period, usually one year. With the consent of the

Supply-Labour
house I should like to put on Hansard the form used, called "Memorandum of undertaking7'.


The DEPUTY CHAIRMAN:: Has the
minister permission to place this document on Hansard?


Some hon. MEMBERS:: Agreed.
(The form, follows:)



DEPARTMENT OP LABOUR GOVERNMENT OF CANADA

[Stage Direction]
Memorandum of Undertaking with the
Minister of Labour
(Surname) (Christian Names) Identity Serial
Cert. No. No.
do hereby undertake that on my arrival in Canada I will accept employment in	
or such other employment as may be selected for me by the Minister of Labour for Canada or his authorized representative, at the wage rate and under the working and living conditions prevailing in the locality of employment for comparable classifications of employment, and that I will conform to the prevailing rules and working regulations of the industry in which I am employed.
I understand that I may be required to reimburse my employer for costs paid by him for my transportation to place of employment, under terms and conditions as to repayment approved by the Minister of Labour for Canada.
I agree that I will remain in the employment mentioned above, or such other employment as may be selected for me from time to time by the Minister of Labour for Canada or his authorized representative, for a period of one year.
I acknowledge receipt of a copy of this undertaking.
Dated at	 on this... day of	
(Signature of Emigrant)
The above memorandum of undertaking was interpreted to the above-named in his own language. I hereby witness his signature.
(Signature of Witness)
(Title of Witness)
Our experience has been that the D.P.'s themselves are appreciative of the fact that they have been brought to Canada, and on the whole they are quite willingly carrying out their undertaking. On the other hand we have had cases where attempts have been made to find ways and means of getting into other occupations. For example, two girls who were placed with a hospital in Saint John thought it would be a good idea to leave Saint John and go to the United States. Of course when they were discovered in the United States they got into trouble and were returned.
We do impress on the D.P.'s that they have an obligation, and we do require them to live up to it as far as we can. I must say that in this the national employment service has been remarkably successful. Never before has greater care been taken in arranging a movement of workers to this country, and I must say to hon. members that I am sometimes astounded at the success we have had. As I said last night, hundreds of letters of approval and appreciation have been received from the D.P.'s themselves and from employers. The Ontario hydro-and this is significant, Mr. Chairman-has taken sixteen hundred D.P.'s and has had only one man leave. I do not know of a smaller turnover in any undertaking in this country, and I think it reflects credit both on those in charge of the industry and on the men themselves. As I stated last night, there is nothing to prevent any of these D.P.'s from joining any organization they wish to. In passing I might say that they are carefully screened. We do not want any communists, and so long as I am in control of this movement no communist will knowingly be allowed to enter Canada from Europe. Let that be clearly understood.
Clarence Gillis: Or nazis either.


Humphrey Mitchell: Or nazis either. There is a big enough place for those fellows to play elsewhere, without upsetting our economy in Canada. I think a man, whether he is a D.P. or any other kind of immigrant, has a colossal nerve to come into this country and preach a philosophy or ideology which has for its purpose the overthrow of democratic institutions as we understand them. We can well get along without that kind of people.


John Horne Blackmore: Hear, hear. Let us do it.


Humphrey Mitchell: I would be remiss in my duty if I failed to express our appreciation of the great help we have had from the Y.W.C.A., the Catholic Women's League, the Canadian Red Cross, provincial educational institutions, the Sisters of Service and church organizations. I wish to pay tribute to the great assistance that has been rendered by all these organizations, particularly in the movement of young girls from displaced persons' camps in Europe. It is a difficult thing to move large groups of young girls from Europe to a strange land, and every precaution is taken to see that they are well taken care of and placed in what we consider to be good homes in this country.
The hon. member for Cape Breton South also mentioned pockets of unemployment. It is true that such pockets do develop in every
Supply-Labour

country, and Canada is no exception. In transferring unemployed persons to other places, two methods are followed with regard to transportation costs. In some cases the employer advances the fares; in others the government pays the fares. This plan has worked wonderfully well and thousands of men and women are moved through the agency of the national employment service every month.
The arrangement in regard to the fares of unemployed people from Halifax, Sydney and Cape Breton has not been cancelled, and I regret if I gave any such impression. The operation has continued since it was first started in 1947. The total number moved to date is approximately 2,700. Those are cases where the government paid the fare. Speaking from memory last night I said the number was 2,800. It is not to be expected that married men will be too ready to leave their homes, and there has not been as great a movement as might have developed but for this fact. Usually we can find housing in the new location for single men but not for families.
Never before has better service been given the workers of Canada in the matter of finding them suitable jobs. I firmly believe that the high level of employment in Canada is due in no small measure to the fact that we now have in Canada a national employment service, which is giving excellent service to employees and employers alike. In the year 1947 our various offices placed 769,849 persons -I said around 700,000 last night, speaking from memory-which is evidence that both employers and employees are using the service.


Angus MacInnis: Will the minister give the most recent employment figures available, either for the larger cities or for different areas, such as the maritimes, Quebec, Ontario, the prairie provinces and British Columbia?


Humphrey Mitchell: We have not at hand the figures for the larger cities, but if they are available I shall be glad to supply them. On April 29 the number of men and women, was 165,452. When you are handling some 5,000,000 men and women gainfully employed in the industrial and commercial structure of the country, thait is a very good figure. It compares favourably with the figure given by any other country. If I may say so, the figures are dead before they are born. They change from day to day, and particularly at this time of the year when you get weather such as we have had yesterday and today. In such weather in the building trades you get a labour turnover that is to be expected. I think it can be truthfully said that the labour situation at the moment is as tight as it has

ever 'been, having regard to what the hon. member for Cape Breton South has said witu reference to certain centres. On June 17 the figure had dropped to 119,120.


Angus MacInnis: Can the minister give the number of persons on the insurance register as at May 31, or the latest date he has?


Clarence Gillis: And will the minister give it province by province?


Humphrey Mitchell: The hon. member wants to have it province by province and the hon. member for Vancouver East wants to have it by larger centres. I will get as good a breakdown as I can. At the end of April the number of persons drawing unemployment insurance 'benefits was 139,477.


Lawrence Wilton Skey: I was interested in the minister's statement that displaced persons coming in are not restricted from joining any organization. Has the department some means of informing those who are coming in of their rights in Canada and of the fact that they cannot be compelled to join certain organizations? Are ithey informed as to what they should do when approached by agents of certain foreign powers or people who are interested in spreading communist propaganda?


Humphrey Mitchell: There is a letter written in English, German, Polish and French. As regards communist organizations-I like to call them by itheir right name, communist or fascist-I believe that people coming into the country have had enough experience in Europe to know they will not be involved in any overnight revolutions in Canada. They went through a wonderful university in Poland, Germany, Latvia and all the other countries from which they come.


Lawrence Wilton Skey: In some of those countries they cannot trust the police, and ithey should know that they can trust the police in Canada.
M.r. GILLIS: I wish to thank the minister for his answer to the questions I posed last night. I assure him that I did not ask those questions simply for the purpose of delaying ithe proceedings. I really had complaints on the points I mentioned and I am glad' that the minister gave a comprehensive answer. Again I wish to thank him.
Mr. 'MITCHELL: On my part, I am glad that my hon. friend asked the question he did. Let the light shine in.


Clarence Gillis: That is right.


Humphrey Mitchell: The intelligence is not all on one side of the street.


[Stage Direction]
Item agreed to.

Supply-Labour
Demobilization and reconversion-
1J/8. To provide for expenses that may be incurred in the arranging for and the movement of workers from outside Canada and to work on farms and other essential industry in Canada when Canadian labour is not available to meet the need; including costs connected with the supervision and welfare of persons already immigrated to Canada under former authorized labour movements, and administrative expenses connected therewith, $700,000.
Angus MacInnis: Are the workers mentioned in this item the same workers to whom the minister referred a little while ago?


Humphrey Mitchell: The same people.


[Stage Direction]
Item agreed to.
7SO. Fair -wages, conciliation, industrial relations, industrial disputes investigations, including the administration of legislation relating thereto, and for activities re promotion of cooperation in industry, between labour and management-further amount required, $14,000.
Angus MacInnis: On the orders of the day I asked some questions in regard to the labour dispute, and I wish to follow that up a little further now. The minister mentioned that the efforts at reopening negotiations had fallen down because, as I understood him to say, certain violence had occurred at one or two points. I understand that these incidents occurred last night or yesterday, but the refusal of the shipping companies to enter into negotiations had been declared the day before, June 23. I was talking to the secretary of the Trades and Labour Congress of Canada, Mr. John Buckley, and he told me that the minister had advised him by letter to get in touch with Mr. J. A. Mathewson, K.C., of Montreal, with a view to opening up negotiations so as to find a settlement of the dispute.
I believe the minister said that Mr. Buckley's telegram was too specific, that he implied too much. Surely that is a very small point on which to base a refusal to enter into negotiations. I understand that one reason why the companies concerned refused to negotiate is that they claim they have an agreement already with another union. I would ask the minister whether an agreement has been registered with the national war labour board. I do not know whether the law requires that agreement to be registered. Have the companies produced any evidence to show that they have an agreement with another union?


Humphrey Mitchell: The answer is no.


Angus MacInnis: Another question. Has the national war labour board certified any other bargaining agencies for these unions except the Canadian seamen's union?


Humphrey Mitchell: The answer to that is no.


Angus MacInnis: The minister in reply to my question said that the decision was now for the courts, that the question was sub judice and that he could make no reference to it. Perhaps that is so; but did not the union, before it took the question to the courts, have to get permission either from the war labour board or from the minister for that purpose?


Humphrey Mitchell: When I spoke of certification I should have broken that down. In the Canada Steamship Lines there is no certification; there is in the Colonial Steamship Lines. Yes; they had to get leave to prosecute, and they got it from the national labour relations board, on which the parent organization of the Canadian seamen's union is represented by Mr. J. A. D'Aoust.


Angus MacInnis: The implication, then, as far as the national war labour board is concerned, in granting permission to prosecute, is that there has been a violation of P.C. 1003. I think that must be accepted. The minister says there has been no certification for one of the companies; which one was it?


Humphrey Mitchell: Canada Steamship Lines.


Angus MacInnis: Is it not a fact that the reason there is no certification is that the company refused to have a vote taken among its employees?


Humphrey Mitchell: No. I do not think that is an altogether correct assumption.


Angus MacInnis: That is my opinion. I should be glad to be corrected by the minister.


Humphrey Mitchell: A continuing agreement was in force there. We made some endeavours last year. If I may, I should like to say this to my hon. friend. I do not know whether I should think out loud or not on these matters, but last year we kept this thing running by the skin of our teeth, if I may say that. I was particularly interested in feeding the people of Europe and keeping the people of Canada warm last winter in view of the gas and oil situation on a world-wide basis. Steps were taken to take a vote on the Canada Steamship Lines, but it was late in the season and the ships were going up and down the lakes. That was what stood in our way. We must remember this, though; there is a tremendous turnover in this industry. In normal times there is practically a new set-up every year. It is not like the Steel Company of Canada, or the Canadian Pacific, or one of those big organizations in which there is some degree of a stability of employment. The turnover in this industry is tremendous, things being what they are. I used to be an employee myself, so that I am not casting any reflections.
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Angus MacInnis: The fact that there is a large turnover in. the employment in this industry would perhaps point to the fact that conditions in the industry have something to do with it.


Humphrey Mitchell: I would say so.


Angus MacInnis: People do not usually leave an industry in which conditions are good.


John Lambert Gibson: They are frozen out of this one.


Angus MacInnis: If the average individual leaves a job today, generally speaking he must find a job tomorrow; and he will not leave a good job in order to take a chance on getting a poor one. There may be people who would throw up a job and take a chance, but the average person likes security and will stick to a good job when he finds one.
The point I wish to make in this matter, and I think I have just brought out the evidence to support it, is that in all this dispute the steamship companies have been absolutely unco-operative with the government, and that they have defied and ignored every law on the statute books. Until they conform with the laws and carry them out, they have no right to claim, nor have we, that the other side has no case.
There is another report that was made by a conciliation board, which I have not been able to obtain. It is not made public for the reason, I think, that this case is in court. But I think that report should be made public as well as the Brockington-McNish report. As the minister said a few moments ago, it is time that we let the sunshine in and let it be known that all the good people are not on one side of the railway track.


Clarence Gillis: The seamen's case in court now is based on P.C. 1003. Parliament is likely to prorogue tomorrow night.


Humphrey Mitchell: We hope.


James Sinclair: Saskatchewan fixed that.


Angus MacInnis: It fixed a great many things.


Clarence Gillis: You had better ask the
Minister of Agriculture when he gets back.


James Sinclair: He is coming back with his shield, not on it.


William Henry Golding: Order.


Clarence Gillis: All the bills that have -been passed at this session of the house will be receiving royal assent. Bill No. 195 will then be replacing P.C. 1003. How will that affect

the seamen's case in court? Will not P.C. 1003 go out automatically and the law then be the provisions of Bill No. 195?


Humphrey Mitchell: I would not think it would have any effect at all. I am thinking out loud- at the moment. There is a section in the act

I cannot think of the number of it at the moment-that makes provision for the continuance under the new bill, the industrial disputes bill, of a particular agreement that was negotiated under P.C. 1003.


Clarence Gillis: Yes, any other agreement.


Humphrey Mitchell: That was necessary
because, while this dispute is difficult and miserable, it was necessary to take care of the good people. I am not casting any reflection on the labour organizations or on the employers. I should like to say this if I might, and then I am through. I think my hon. friend knows my views about labour organizations, and I express this one frankly. I think the proper place in which to correct an organization is on the inside, not on the outside. If you do not like the policy that has been followed by your officers, the proper thing to do is to clean up on the inside. Political parties have to do that, and you have to do it in your family; but you should not go out and talk about it.
I was always taught-and I am a great believer in the rule that the simple things govern the destiny of our civilization-that a family row should stay inside the family and should not be carried out to the street. That is a rule in which I believe, particularly with regard to labour negotiations. The less said until you get negotiations under way, the better. People being as suspicious as they are by nature, the less said publicly, the more chance you have of settling a dispute. I know people like to see their names in the newspapers. I suppose that is only natural. But in labour negotiations, when people are suspicious and hang on to little phrases and expressions of opinion, the less said the better, until a settlement has been reached. I think you can have a brass band when the matter is settled, and it is then all right to go to our newspaper friends and say, "Here is the settlement; three cheers for the red, white and blue". I think that is the proper way to do it.


[Stage Direction]
Item agreed to.
731. Labour Gazette and other publications authorized by Labour Department Act-further amount required, $19,090.
Mr. McIYOR:: I have been waiting for an opportunity to say a word, because I find in the House of Commons it is a good policy to

Supply-Labour
be a good listener; but when one has something to say, the opportunity usually comes.
I do not forget the day that I stood up when I was on the other side of the chamber, when the Prime Minister had a vacancy in the Department of Labour and was looking for a minister. He was advised by leading labour men that there was one man in Canada who had a great record and that he would make a good Minister of Labour. I think a judicial and legally trained mind can be of great benefit in any department of government; but there is one department in which I think a minister should have firsthand experience-


James Sinclair: Every department.


Daniel (Dan) McIvor: -he should know what it is to toil; he should know the problems of labour, and how to handle them. He should have a head on his shoulders, and he should have patience. I congratulated the Prime Minister upon the appointment of the present Minister of Labour.


William Henry Golding: Order. The item before the committee has to do with publications authorized by the Labour Department Act.


Daniel (Dan) McIvor: I am going to prove that the minister has made good, by giving the record of the past year. During the fiscal year ending March 31, 1948, the Minister of Labour handled 135 cases under the wartime labour relations regulations, P.C. 1003. The breakdown of these cases is as follows:
Dominion cases dealt with
Settled by conciliation officer	 19
Settled by conciliation boards	 1
Settled following board procedure	 8
Still in hands of conciliation officer ______ 11
Still in hands of boards	 8
Negotiations still in progress after board reports	 5
Total	 52
Provincial cases dealt with
Settled by conciliation officer	 17
Settled by conciliation boards	 12
Settled following board procedure	 24
No settlements	 25
Cases reverting to provincial authorities 5
Total	 83
That makes a grand total of 135 cases handled. If this government is not prepared to take off its hat, figuratively speaking, and pay its respects to the Minister of Labour and his officials for the way in which they have dealt with these matters, then I think it is lacking in courtesy and appreciation. Last year, when the minister said a good trade union would be of great benefit to the workers, 5849-372J
I agreed. A well-run labour union is a great benefit, not only to the workers but to industry; and we have such a union at the head of the lakes, in Fort William. I advised the president and other members of that union to keep party politics out, because it would be a curse to them sooner or later, and they have agreed to do so. Today they are putting labour on a sound foundation; and I pay my respects to the minister and wish him and his officials all success as they carry on their work.
Mr. WILLIAM'S: In looking at the regular and supplementary estimates, I see that nearly 8300,000 is devoted to these purposes. That is shown in item 133 and in the item now before the committee, 730.


William Henry Golding: Order. The item before the committee at the moment is 731.


Mr. WILLIAMS:: I do not think so, Mr. Chairman.


William Henry Golding: Item 730 was carried.


Arthur Henry Williams: No, sir. Before it was carried, if it was, I was on my feet several times.


William Henry Golding: If the hon. member wishes to speak to item 730, certainly we will permit him to do so, but the item was carried and I called item 731.


Arthur Henry Williams: Then I would appreciate your permission to speak to item 730.


Some hon. MEMBERS:: Agreed.
'Mr. WILLIAMS: This $300,000 is quite a large sum, but notwithstanding the size of it we still have quite a number of industrial disputes in this country. The nature of those disputes is not always easy to assess, and often they are difficult to settle. I am not one of those who think a Minister of Labour is a sort of magician. After all, he is human; and there are times when it becomes practically impossible to settle a dispute. On the other hand, many disputes could be settled easily if action were taken quickly. By way of illustration, a dispute has been going on now for five months, involving a good, old-established trade union and an old-established industrial concern. I am referring to the John Bertram company in Dundas, near Hamilton, and the international association of machinists. In 1943, for the first time, they got a union into that plant.


Humphrey Mitchell: If I may raise a point of order. I have absolutely no jurisdiction over that dispute. It is a provincial matter, and the place to raise it is in the provincial legislature. I think my hon. friend has come to
5S64
Supply-Labour

the wrong house. Mind you, I know the Bertram company. I used to live in Hamilton, and I know many of the men employed there. I have known the machinists union ever since I have been in Canada and count many of their officers, including their international president, as personal friends. I have spoken to them in a personal way about this dispute, but I have no authority whatever in connection with it.


Clarence Gillis: That is a point I should like cleared up. P.C. 1003 was accepted by the Ontario government and made applicable to all industry in this province. That definitely links the Department of Labour in Ottawa with the regulation of industrial disputes in Ontario, even if it only means working with the minister of labour provincially. The same thing was done in connection with Bill No. 195. It was made applicable to all industry in Ontario because Mr. Drew accepted it.
A moment ago the hon. member for Fort William told us that everything was just fine. I think the hon. member for Ontario was quite justified in pointing out that there are places in this province where the Minister of Labour should be exerting whatever influence he may have on the Ontario government in order to clean up such disputes as we have at the Bertram plant. Mind you, I am not concerned about the company, nor am I so much concerned about the employees. The community is affected, however; it is the real sufferer. While no one wants to exert pressure on the minister, under the set-up in this province I think he has some jurisdiction.


Humphrey Mitchell: I have to take my advice on questions of law from the justice department. In a recent case in my hon. friend's province, the supreme court definitely stated, if my memory serves me correctly, that under the British North America Act the provincial government has not power to delegate authority to the federal government. I forget the name of the case, but I presume that point will be argued before the Supreme Court of Canada. In Saskatchewan a couple of years ago- and I am not offering any criticism, because Mr. Williams, the minister of labour there, is a personal friend-they had a strike at a box factory in Prince Albert. I am just wondering what would have happened in this house if I had risen and expressed my opinion on that dispute.
Speaking internationally, it is my belief that this world would be a better place if people would stay in their own back yards. That is a sound principle to apply to any kind of legislation. The world would be a better place today if some of the international crackpots were out of the way; and if there were more people with some degree of common sense,

like my hon. friend the member for Cape Breton South, the world would be a happier place in which to live. Naturally my sympathies are with the men engaged in labour-and I see the hon. member for Vancouver East is ready to deliver a blast. Frankly, however, we cannot become involved in the jurisdiction of the provinces. In Quebec there is a premier who believes in the principle of provincial rights, and we have that same condition right across Canada. And the only place-


William Henry Golding: I do not
believe we should permit a long discussion on an item which has already been passed, particularly if it has nothing to do with the item before the committee. Hon. members are always willing to permit an hon. member to make representations, with respect to the item in hand. The one before us now has to do with the Labour Gazette and other publications.


Angus MacInnis: I am afraid I shall have to differ with you, Mr. Chairman. You see, between the time I begin to rise from my seat and the time I have succeeded in getting your eye, you are about three items ahead of me. You will have to make some allowance for the fact that we are getting older. In my view we are on item 730, and about it I should like to say only a word. The minister remarked that I was about to deliver a blast, or something of that kind when, as a matter of fact, I am coming to his defence. I think the hon. member for Cape Breton South is a little bit out. I happen to sit next to him, and I do not want to be unfair to him; but in this particular I think he is somewhat wide of the mark.
The mere fact that the Ontario legislature has accepted P.C. 1003 does not give the Minister of Labour any right to interfere in labour disputes which come under the jurisdiction of that provincial government. Until the administration has been transferred by the province of Ontario to the federal government-if that can be done under our present constitutional set-up-the Minister of Labour has no right to interfere. I think he is quite right when he does not interfere, and he ought not to do so until his assistance is asked for. At that time I believe he should be willing to help.


Arthur Henry Williams: I am still taking this opportunity to speak to item 730, unless the Chairman rules me out of order, notwithstanding the point of order raised by the Minister of Labour. He was somewhat mistaken in his point of order, because I was not going to ask him-

Supply-Fisheries


William Henry Golding: Order. If
the hon. member is going to discuss the strike, then I must ask him not to do so. If he has in mind some other matter which would come under this item, he might be permitted to go on.


Arthur Henry Williams: I was going to make the point that the antagonisms which arise because of delays in disputes increase greatly the difficulties of the department, and consequently those of the minister. I was not going to ask the minister to intervene in the dispute in question. I was going to attempt to bring out, by referring to this as well as some other disputes, the financial advantage which might accrue to the department by politely and courteously offering its services before these antagonisms develop, instead of sitting back and waiting until it is asked to come in. If I am permitted to go on I would develop that point a little further.


William Henry Golding: The hon. member may proceed if he will deal with that principle and not with something in which the government is not involved.


Arthur Henry Williams: That is the principle I have in mind. Certainly I do not intend to ask the minister to intervene in matters over which he has no jurisdiction. I understand clearly the distinction between the jurisdiction of the federal Minister of Labour and the respective jurisdictions of the ministers of labour of the provinces. I suggest that, instead of our waiting until a strike takes place, some action should be taken. For instance, the federal minister has jurisdiction over the railways, if we wish to discuss a case in point. The minister and his department endeavour to do all kinds of things before conditions reach a stage where settlement becomes increasingly difficult. I wish that in other phases of activity a similar disposition would be shown by those charged with the responsibility of settling labour disputes. Instead of waiting until people's minds become inflamed, I wish they would step in a little earlier and offer some help.
I do not think it is good policy to stay in your own back yard when you can render some assistance to your neighbour in clearing up some dirt in his back yard. I believe that in these questions of labour relations we can be neighbours. After my experience in labour relations, I am positive we can render considerable service and consequently reduce the enormous costs involved, instead of making it necessary to go through protracted negotiations and conciliations which, in the final analysis, are recommendations only and the
decision as to whether one or other of the parties will accept the final finding of the board of conciliation is still left.
I offer this only as a suggestion in the light of my personal experience in these matters. If the minister does not wish to accept what I have said as useful information, that is his privilege. I offer it, however, as one who, though new in the house, is old in this phase of industrial relations.


[Stage Direction]
Item agreed to.

[Stage Direction]
95. Departmental administration, $277,500.
Mr. REID:: Mr. Chairman, before I speak to this item, there are a few matters of general interest I should like to mention. May I first extend my congratulations and best wishes to the newly appointed Minister of Fisheries from British Columbia. For many long years British Columbia has been asking for representation in the fisheries department. It has been long held by those in the east that the minister holding that portfolio should come from the maritimes, even though British Columbia produces over 50 per cent of the fish and fish products produced in Canada. When the maritimes are mentioned it means one, two or three provinces, but British Columbia alone produces 50 per cent of all the fisheries of Canada, including those in inland waters. Hence we felt that we had a good case for recognition. I am therefore glad to say that at long last we have been given that recognition, and I wish the new minister every success in his new duties.
I should like to place before the department one particular matter which I think should receive serious consideration by the minister after the session is over. I refer to proposed power development in British Columbia which if carried out as proposed will destroy two-thirds of the sockeye salmon run on the Fraser river. On March 27 an announcement was made in the press that a big aluminum plant would be established in British Columbia. The production of aluminum, it appears, requires electric power.
It is not generally known, although it is to members from British Columbia, that the government of British Columbia has made a complete survey of the potential water powers of that province. The latest bulletin which I hold in my hand was issued by the water powers branch of the provincial government in 1938. Any hon. member who is interested can get a copy which contains very complete maps and graphs showing the potential hydropower development.
Supply-Fisheries

I am speaking now more particularly as a member of the international Pacific salmon fisheries commission. We who are interested in fisheries, particularly those of the Fraser river, have for some time viewed with alarm the possible development of hydroelectric power in British Columbia. That alarm is caused by what took place in the United States. In spite of the fish ladders which were constructed on the Columbia river at a cost of many millions, the fact is, despite all the wonderful statistics published by the United States fisheries department, salmon fishing on the Columbia river is gradually going down.
True, the fish ladders which were constructed have permitted the salmon to get up over the dams to reach the spawning beds; but, although the authorities have tried for twelve years, no one has yet discovered how to bring the little fingerlings down over the dams, and that is the crux of the entire situation. Fingerlings bj' the millions are unable to negotiate the large falls. They have protected them to a certain extent in going through the turbines, but investigation has shown that millions of the fingerlings die, or are lost when migrating down stream over the dams.
In the past, the fisheries department, no matter under what government, has not taken any great interest in .what happens or might happen to the fish after dams have been built. I should like to cite one instance. The British Columbia .power company erected a hydroelectric plant on the Alouette river to supply Vancouver and other places with electricity. The entire river was dried up, and today it serves no purpose so far as the salmon fisheries are concerned.
The press report which I hold in my hand states that the Aluminum company are about to proceed to construct an electric .power plant on Chilko lake. Most of the projects set out in the book which I hold in my hand have in mind the construction of dams, but this .project indicates that something new is to be done. The water from the lake is to be taken away by means of flume or tunnel and dropped into another lake. Chilko lake by the way .produces about two-thirds of the sockeye salmon in the Fraser river.
They would take the water from the lake and perhaps take it into Bute inlet. I say "perhaps," because one or two different schemes are outlined. They are going to utilize the water from the lake for the development of electric power. That water will be taken from .the Fraser river entirely and the lake drained or used. Sockeye salmon will be prevented from going to Chilko lake, first by the dam at the inlet to the lake and, second, by the fact that the water from

the lake is to be drained off for the development of power and diverted on to the sea.
In 1913, before the disaster which occurred, at Hell's Gate, an estimated 2,500,000 cases of salmon were produced from the sockeye going up the Fraser river. If one takes an average of ten salmon to a case that equals 25,000,000 salmon. We estimate that in those days at least 20,000,000 salmon went up the Fraser and its various tributaries to spawn.
Then the disaster at Hell's Gate occurred, but I do not intend to go into that at the moment. Fish ladders have been constructed, there by the two governments, the government of the United States and the government of Canada. Last year 3,000,000 sockeye were counted going up to the spawning beds, while 6,000,000 were caught by the fishermen of the United States and Canada. When you consider the difference between the run of 1947 and that of 1913 you will understand why the members bf the commission are so much alarmed, and perturbed over this projected industry.
' We are not arguing as members of the commission that there should not be any development of hydroelectric power from the waters of British Columbia, but we do point out respectfully to both the provincial government and the industrialists that in the interior of British Columbia there are water areas which could be utilized for the development of power and to which no salmon go. We have made a complete survey of the lakes and rivers of British Columbia and can show by our charts, maps and data the lakes and rivers which .produce salmon and also those which do not produce .any salmon.
Before projects such as the one which I have mentioned are carried out-and this one would destroy two-thirds of the sockeye run of the Fraser river-we say that these water areas should be examined. As it is now, without any consultation with the federal Department of Fisheries or the international Pacific salmon fisheries commission, projects detrimental to the fishing industry on the Fraser river and its tributary streams and lakes are commenced, or proposed.
I have stated on many occasions that the provincial authorities do not look very kindly on the fisheries of the Fraser river. They are power-minded, and I use that phrase in a double sense, meaning hydroelectric power, and second, the power of complete control over these rivers. Fisheries come, of course, under the dominion government, and the provincial authorities are therefore not as much interested in salmon as they should be. Although we have approached the provincial government

Supply-Fisheries
on many occasions and have had assurances from at least two premiers and their deputies; yet when industrialists come along and ask for the right to construct dams and go ahead with power projects they are given every assurance that their applications will be granted, and neither the dominion Department of Fisheries nor the international Pacific salmon fisheries commission is made aware of what they are doing.
They had the same trouble in the state of Washington, and the federal authorities at Washington, D.C., took the matter up with the provincial authorities of Washington state, whose authority compares with the province of British Columbia. On this side of the line we call them provinces, and on the other side of the line they call them states. The federal authorities persuaded the Washington state authorities to pass a statute, a part of which I am going to read, and I suggest to the Minister of Fisheries that he take serious note of this and between now and next session take this matter up with the provincial government of British Columbia with a view to their passing similar legislation.
The act passed by the state of Washington provided:
In the event that any person, firm, corporation or government agency desires to construct any form of hydraulic project or other project that will use, divert, obstruct or change the natural flow or bed of any river or stream or that will utilize any of the waters of the state or materials from the stream beds, such person, firm, corporation or government agency shall submit to the department of fisheries and the department of game full plans and specifications of their proposed construction or work, complete plans and specifications for the proper protection of fish life in connection therewith, the approximate date when such construction or work is to commence and shall secure the written approval of the director of game.
I say to the Minister of Fisheries in all kindness that it is time that we had some such protection in Canadian laws. As it is now, the only protection we have is contained in section 20 of the Fisheries Act, which reads;
Every slide, dam or other obstruction across or in any stream where the minister determines it to be necessary for the public interest that a fishpass should exist, shall be provided by the owner or occupier with a durable and efficient fishway, or canal around the slide, dam or other obstruction . . .
I shall not take time to read the whole of the section, but I draw the minister's attention to this section 20 of the Fisheries Act and point out to him respectfully that it is no protection whatsoever to our fishing industry, because when you come to examine it carefully you find that no action can be taken until the dam is actually constructed, in which case the
run of fish for that year may be completely wiped out before any action can be taken by the dominion government.
I am not going to thresh old history. I merely point out that on one of the tributaries of the Fraser, the Alouette, a dam was built for the development of power and it wiped out a valuable salmon run which before had gone up the Alouette river.
I am greatly concerned, and I know the international Pacific salmon fisheries commission is also greatly concerned in regard to the project I have mentioned, and I say in all seriousness to the minister that no time should be lost after the session in making representations to the provincial government, first of all, to find out whether it is true; second, to find out whether permission has been granted; and third, to request that before any licence is granted the whole fisheries industry, and particularly that of the sockeye salmon industry, be examined as to the possible effects upon it by the construction of the dam, provided that a licence is granted by the provincial government to proceed with the project. I am not going to labour the point further, but I thought I would take a few minutes to impress upon the minister the seriousness of the matter, because action is necessary now before the project is further proceeded with.
There are one or two other matters I wish to place before the minister for his consideration after the end of the session. First, I would suggest that we have a fisheries representative in the external affairs department of the government. In the United States, when their minister of external affairs is dealing with nationals of other countries, a fisheries expert sits in to advise and is thereby enabled to give some protection to the fisheries of the United States. The time has long since passed in this country when we should have such an official attached to the Department of External Affairs.	i
In support of what I urge, let me recall what happened regarding Newfoundland and Great Britain. I do not know who fell down on the job, but I know that almost since confederation Canada has been the chief supplier of salt cod to Italy and various other countries on the continent of Europe. We understand that there is at the present time a dearth of United States currency in Great Britain, which is hampering her trade to quite an extent, but some time ago the news came out that Great Britain had made United States funds available to Newfoundland to enable her to capture our market for salt cod in Italy and other countries. Something like nine thousand tons of salt cod were sold by Newfoundland to Italy and othwr
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countries, through Great Britain assisting Newfoundland with United States dollars. Had we had at that time a fisheries expert attached to the Department of External Affairs, a deal of that kind might not have been allowed to go through.
My fourth point is this. There should be closer co-operation between the department and the fisheries research board. Two years ago I made what was interpreted as a violent attack in this connection. I did so knowingly, because I felt that the fisheries research department had to be shaken up in some way. I am not going to indulge in any carping criticism, but I might mention that between sessions I visited the station at Nanaimo, and I must say there is need for closer co-operation between the minister's department and the officials of the fisheries research board. The first step has been taken. We have one officer attached to the board, but that does not establish sufficiently close co-operation.
There is another matter which I would ask the minister to consider between now and the next session, and that is off-shore fisheries. Off the coast of Vancouver island, beyond the three-mile limit, the nationals of the United States and Canada are fishing, and from reports reaching me I think it is safe to say that the fisheries close to Vancouver island are being depleted. It is true they are outside the three-mile limit, but the United States has taken action to protect its own nationals who fish beyond the three-mile limit off United States territory. We cannot sit idly by and see our off-shore fisheries depleted by nationals of other countries.
May I also bring to the minister's notice the importance of a decision with regard to Hecate strait. I made a speech on this subject last year and I do not intend to repeat it on this occasion, but Hecate strait was designated as Canadian waters many years ago. In fact Canadian or government vessels have in past years chased off American boats. Looking to the future, I suggest that steps be taken to proclaim Hecate strait Canadian waters. I point out that if we allow United States fishermen to fish in those waters with impunity there is nothing to hinder vessels from Japan and Soviet Russia from entering the waters and depleting them, and when they do so we shall find ourselves in some difficulties if we try to chase them off. They will reply that Americans had been fishing there.
I suggest also to the minister that some thought be given to a revision of the Fisheries Act. I do not know how many years it is since the act was revised, but in between sessions the minister should look that question

over with his officials. If he does, I think he will find that my suggestion that the act be reviewed as soon as possible is a good one, and, if acted upon, it would be a step in the right direction.
One further remark I wish to make has reference to the dyeing of seal furs. I could take up all these matters under the several items as they came up, but I think it might be better for me to deal with them all at the same time. That would save time. In connection with the dyeing of seal furs, I notice that there is an estimate of $550,000. That matter was debated when the treaty came before the house, but I would suggest that steps should be taken, even if money has to be spent, for the setting up of a dyeing establishment in British Columbia.
After all, no province except British Columbia, if you get down to the morals of the thing, can claim any of the money we receive from the United States on account of the sale of these furs. Bear in mind that the people of British Columbia had an industry there. It is true they were hunting seals in open waters, and at some other time I shall give the history of that. At the moment I simply point out that we in British Columbia have a moral right to the moneys obtained from these furs, because it was British Columbia fishermen who were put out of business when the treaty went through. It affected no other fishermen in Canada. Some thought should be given to this matter, and I am confident that the minister will look into it with a view to establishing an industry in the dyeing of these furs.
It cannot all be done m one year, because the process is a secret one; but why should we send our furs either to St. Louis or to Great Britain? When we investigate the establishment of industries, I think it will be readily agreed that this is one industry that belongs to British Columbia. I am willing to debate that with any member of the committee.
I close by again wishing the minister every success in his new position.


Hon. R. W. MAYHEW (Minister of Fisheries) :: I will try to answer some of the questions the hon. member has put to me in so kindly and constructive a manner. I wish to thank him for the job he has been doing and for the way in which he has made his presentation to me.
As regards the Chilko lake power plant of the Aluminum Company of Canada, that is a new development. At the present time it is really not on paper. It is talked of, but I do not mean to say it is not a possibility or even

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a probability, though it is quite a new venture. I assure my hon. friend that it will receive the immediate attention of the department; in fact, it has already received attention. Further attention will be given it, and as I shall be going to the west coast soon I will take that occasion to discuss the matter with the provincial government.
It is quite true that our legislation would enable us to tell anyone developing power plants on any of our rivers that he must provide fish ladders. The hon. member for New Westminster is quite right. At the same time, we would be a little late with our present legislation and we shall have to take that into consideration.
The hon. member referred to the fisheries department being represented with external affairs, and I can assure him that there has been the closest possible liaison between the two departments. That will be continued. The Department of Fisheries is one department that is greatly concerned with what goes on in our relations with our neighbours, and I assure the committee that that is the case at the present time.
As regards the Newfoundland and United Kingdom deal on cod fish, that is an offer by the United Kingdom to the Newfoundland government. It is one that we would have no control over; but we can negotiate and are negotiating with the United Kingdom government, seeking to be put in the same position as the government of Newfoundland in the matter of fish.
So far as the liaison with the research board is concerned, we have already representatives on that board in the persons of Doctor Needier and Mr. Sutherland, and) another official whom we expect on our staff very shortly, Doctor Pritchard. So that that is taken care of.
As regards the curing of fur seals at the present time, that is done in the United States in St. Louis and at Martin's in London. Apparently they are the only people who have the knowledge necessary to cure these seal skins. It is not simply a question of building a plant; you must get the technical knowledge to do the curing when the plant is established. That may be obtainable in some form or another. These seal skins are worth $20 per skin more with the St. Louis process than they are with the process in England. This matter must be given considerable study before we would embark on the building of a plant, but all the items the hon. member has brought to my attention will receive consideration.
The hon. member referred to the Fisheries Act. I have inquired about that, and I find that it has been some time since the act was 5849-373
really reviewed. I have asked the legal adviser to have a look at it to see what changes, if any, need to be made.


Mr. PEARKES:: As representing the constituency adjacent to that represented by the minister, I offer him my congratulations on his appointment as Minister of Fisheries. I am quite certain that he will bring the full measure of his ability and his long experience to the department, and I express the hope that he may hold that appointment for the rest of his parliamentary career.
I should like to ask one question which concerns fisheries in the northern part of our province. The international boundary between British Columbia and Alaska runs from a point northwest of Prince Rupert due west to the southern end of Prince of Wales island, known as Point Muzon. I was rather disturbed the other day when the Minister of Mines and Resources said quite recently consideration had been given on a technical level with regard to the changing of that international boundary. If that international boundary is moved further south-and I presume that is the direction in which it is intended to make any change-our valuable salmon-halibut fisheries in the Dixon entrance and perhaps in Hecate strait will be seriously interfered with. It is a matter of tremendous importance to the fishing industry. I wish the minister would tell us how far those negotiations with the United States have gone for the changing of the boundary, to which the Minister of Mines and Resources referred at page 5684 of Hansard of June 22 of this year.


Robert Wellington Mayhew: Preliminary steps have been taken with the Department of External Affairs, objecting to any change in boundary that would alter the fishing grounds of Canada. It has only been preliminary, but I assure the hon. member for Nanaimo that is going on and will be prosecuted to the limit of our ability.


George Randolph Pearkes: Did I hear the minister say that his department was objecting to any changes?


Robert Wellington Mayhew: Any changes that would be detrimental to the fishing industry of Canada.


George Randolph Pearkes: If the boundary were moved farther south, thus giving a larger share of those northern waters to the United States, surely that would be detrimental to the fishing industry of Canada, would it not?


Robert Wellington Mayhew: I would naturally think anything that lessens our area at all would be detrimental. But the matter is under study
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at the preseat time and has beea taken up with the Department of External Affaire.


George Randolph Pearkes: The minister cannot give us any further information on the subject? It is one of national importance as well as one of importance to the fishing industry. Obviously some sort of consideration is being given at the present time to changing the international boundary of Canada. I think the people of this country are entitled to know what is behind this move. Why should Canada desire at this time-if she does so desire-a change to be made? This is something that just cannot be passed over without some explanation from the government. I wish the minister would explain as fully as he possibly can how far these negotiations have gone, what are the proposals which have been made either by Canada or the United States and how they will affect the fishing industry of Canada. It is something about which the people of Canada should be informed. It is something in which the fishing industry of British Columbia would be most vitally concerned.


Robert Wellington Mayhew: I am afraid there is nothing more that I can add to what I have said. Negotiations are going on. The province of British Columbia has also been brought into the discussion, and the interests of Canada will be taken care of.


Charles Cecil Ingersoll Merritt: At whose initance were those negotiations started?


Robert Wellington Mayhew: It was referred to us by external affairs, so that I imagine it started in the Department of External Affairs. Probably the hon. member's question would be better directed to that department.


Charles Cecil Ingersoll Merritt: I mean, by which country were negotiations started? Is it a change desired by Canada or a change desired by the United States?


Robert Wellington Mayhew: I cannot answer that at the present time.


George Randolph Pearkes: The Minister of Mines and Resources used the expression "until quite recently, at the technical level." I presume that the negotiations have now moved forward from the technical level to the cabinet level, if the matter has been referred by one department to another.


Robert Wellington Mayhew: It is still on the technical level, so far as I know. It has not been on the cabinet level yet.


Mr. WINTERS:: As a member from the east coast, I should like to start by saying a word of welcome to the new Minister of Fisheries. We regard it as a fitting tribute to
fMr. Mayhew.]
the great industry on the west coast that, after all these years, they should finally have their first Minister of Fisheries. We also feel that they have the night man in the job; one who has had a significant and successful career in industry and who brings a great deal of experience to the portfolio. I should also like to say that we were pleased about the appointment of the parliamentary assistant, the hon. member for Prince. We feel that in the balance between east and west the government has a strong combination that will produce.


Daniel (Dan) McIvor: And take care of all in between.


Robert Henry Winters: I should like for just a fe*y moments again to bring to the attention of the committee some of the problems which are facing commercial fishermen. The fishing industry has always to struggle to fit into any economic pattern and present-day conditions present real problems. I think the difficulty has greater emphasis on the east coast, but fishermen the country over usually feel that they are in an orphan industry.
When the national income is high, people purchase highnpriced foods and eat fish far too seldom. When the national economy is tight, there is not enough money to pay a reasonable price for fish, with the result that the fisherman suffers again. It is in the nature of a marginal industry; it reacts first to an economic let-down and benefits last from an upswing.
It is fully realized that if Canadians would eat more fish, the industry would be much healthier, and so would our Canadian citizens. But until the internal consumption goes up quite materially, we shall have to depend to a large extent on foreign markets, where we are at the mercy of various governments. Our national consumption of fish is still far and away below our national production.
With the price of meat high, a solution of part of our cost of living worries is to eat more fish and less meat. Now is the golden opportunity for the industry to make a determined attempt to expand domestic consumption; but in order to do so, it will be obliged to put on the market a good quality product. This involves a comprehensive inspection, and in this both the department and the industry 'have been making good progress. This is, however, a field for a considerable amount of further development.
In the fresh fish market our best customer is the United States. The predominant export on the east coast, apart from lobsters, is fresh fillets of cod and haddock. Much has been said of tariff concessions gained at Geneva, and we are not unmindful of the splendid

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work done by our representatives. But the best that could be done for cod and haddock fillets was to have the outstanding tariff rate bound at what it was. In other words for our most important fresh fish product, there was no change in tariff; but we are in a little better position as a result of a revision of the quota system, whereby the United States now allocates the total quota on a quarterly basis instead of annually as heretofore. This enables us to compete on better terms with countries such as Iceland which might otherwise flood the United Staites market at one season of the year and, in so doing, use up most of the quota.
Prices of fresh fish increased during last winter to the point where fishermen could make a decent living if catches were good. As is well known, deep-sea fishermen work on a share of the catch basis; the shore fishermen, of course, earn in direct relation to the amount of fish they catch. During the winter the weather was against our fishermen and fish were scarce. In the spring and early summer, fish have been plentiful and the price has held, but the weather has been most adverse. As a result, though deep-sea schooners and draggers have done well recently, shore fishermen have not been experiencing good catches and returns have been relatively low. The lobster season in many districts was not up to average, and fishermen who count heavily on this product have suffered varying degrees of disappointment.
The salt and pickled fish branch of the industry is having its own special and serious problems. This branch depends almost entirely upon the export market in the West Indies. The ironic problem here is that, though the demand is good, the countries which wish to buy cannot do so because of a shortage of dollars. For provinces such as Nova Scotia and for industries such as fishing, which historically have looked for their prosperity to foreign trade, the impact of the present relationship between dollar and sterling countries is a heavy blow. This is a problem to which our financial experts should give their best attention.
I wish to associate myself with the remarks made by the hon. member for New Westminster, who gave a splendid presentation of the fishery problems of the west coast. He pointed out that the United Kingdom appears to be discriminating against Canada in favour of certain empire countries in the matter of dollar dealings. Recently there have been concessions on the part of the United Kingdom to certain of our competitors, which have given them an advantage over Canada in the European market. The hon. member for New 5849-373J
Westminster referred specifically, I think, to dealings with Greece. While we in Canada have no wish that anything shall be done to upset arrangements entered into with other members of the British commonwealth, the least we should expect from the mother country is to be treated on the same basis as the rest of the commonwealth with respect to an industry that is so vital to our welfare.
With regard to dry salt fish, there is a problem arising out of a United States regulation for which it is difficult to account. The regulation provides that a higher duty shall apply to fish having less than 43 per cent moisture than to fish having more than 43 per cent moisture. The continental United States market is not important to us, but the trouble is that the regulation applies to Puerto Rico, in which we are vitally interested. The rate on fish having more than 43 per cent moisture was reduced in 1922 at the request of New England fish processors, who wished to obtain cheaper fish to process and market as boneless fish. A wet fish is used for this purpose. Neither the tariff nor the differential applying at 43 per cent is of any importance to the United States or Canada when only these two countries are concerned; but the trouble is that the differential influences Puerto Rico to buy a wet or green fish at lower tariff rates, and Nova Scotia fish, having a higher moisture content, do not stand up well in warm climates. In other words, we cannot assure the quality that is so vital in international dealings, when the moisture content of our fish is high. On the other hand, Newfoundland and Labrador dried fish, with the higher moisture content, do not deteriorate so rapidly in warmer climates, with the result that Newfoundland has a decided advantage over us in this market. Then, too, when it is considered that there is no satisfactory and consistent method for determining the moisture content of dried fish, it must be concluded that the 43 per cent line of demarcation is pretty arbitrary.
This may not sound important, but I can assure the committee that it is of the greatest consequence to salt fish producers in Nova Scotia. We urge our negotiators at any future trade talks with the United States to do their best to have the differential removed. Failing that, we would urge that the moisture content at which the differential applies be increased from 43 per cent to around 50 per cent, thereby giving us a better chance to compete with Newfoundland. At a recent meeting of the banking and commerce committee, Mr. F. Homer Zwicker of Lunenburg was given an opportunity to present this case on behalf of the salt fish exporters association.
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He was given valuable assistance by the senior hon. member for Halifax, who is a member of that committee and quite familiar with the situation, and who realizes the difficulty under which our salt fish trade is obliged to operate as a result.
The fishing industry is a hard one for all concerned. The returns to operators and fishermen alike, depend upon the amount of fish caught, export markets and our own domestic consumption, all of which are highly variable. Add the hazards, discomfiture and hardships endured in open boats in all kinds of weather, and one can well imagine that there is no other industry in which personal initiative and courage run higher. Fishermen c-annot demand and get pay raises with assured incomes as can labourers in other industries. They can only share in what they catch, and be paid only in relation to what consumers will pay for their products. Nevertheless the conditions under which deep-sea fishermen work and the returns to all types of fishermen have improved. Recently the hon. member for Cape Breton South stated that production increased by 196 per cent between 1938 and 1945, and that since the war it had gone back to about what it was in 1938. This is entirely contrary to the facts. The total value of sea fish landed in the three maritime provinces and Quebec in 1938 was $8,687,000, while in 1946 it was $34,358,000. In 1947, despite the fact that there was a strike of three months' duration, the value of the catch was $23,288,000, or almost three times what it was in 1938.
The same hon. member referred to the fisherman as the forgotten man, and pointed to his low income. It is true that returns to fishermen are not as high as the government or the industry would like to see them, and shore fishermen in particular often do not receive adequate compensation in relation to (he work they do and the hazards they take; but it is fair to look at the over-all picture. In the first five months of 1948, six schooners, picked at random, shared $997.68 per man, or very close to $200 a month. Of six drag-gers .for which I have figures for the same period, each deck hand averaged $1,255.32, or $251 a month. On some draggers the men averaged over $300 a month. In 1939 the price of cod and haddock averaged about one and a half cents a pound for the whole round fish. In 1945 the price of codfish varied from 34 cents to 4 cents, and the price of haddock from 41 cents to 5 cents. The 1948 prices to date are the same as those in 1945. Therefore, whereas the hon. member from Cape Breton South says that conditions in the fishing industry improved up to 1946 and then

receded to where they were before the war, the encouraging fact is that, with continued heavy fishing and sustained prices, it is a reasonable estimate that deep-sea fishermen will get as much or more in 1948 than they did in 1946.
The statements made by the hon. member for Cape Breton South are the sort of characteristic inaccuracies which are harmful to the industry and to the maritimes. At a recent meeting in Cherry Hill, the Rev. Fred Young, who, I understand, is a professional organizer for the C.C.F. party, discussed fishing problems. As reported from Bridgewater on May 7, the Rev. Mr. Young stated that, while the Lunenburg county fisherman is getting from three to four cents a pound for his catch, the Halifax consumer pays twenty-nine cents a pound for the same fish. He may, or may not, have been aware of a gross inaccuracy; nevertheless he is comparing unlike quantities. It is true that the fisherman is paid from 34 to 4 cents a pound for the fish in the round, whole state; but it takes about three pounds of this fish to make a pound of fillets; and it is the price of fillets which Mr. Young quotes at twenty-nine cents a pound. The spread, including processing, distribution, selling, refrigerating, and other costs is, therefore, between twelve cents and twenty-nine cents, and not between four cents and twenty-nine cents, as is used for propaganda purposes. In the same report Mr. Young continued his attempt to spread unrest in the industry by making the mysterious statement that a C.C.F. government in Canada would establish floor prices under fish, thereby lowering consumer prices and greatly increasing consumption.
As I have said before in this discussion, and on previous occasions, the shore fisherman is the man who, more than any other, works abnormally hard for uncertain returns in the face of great hazards. He is constantly running the risk of losing his boat and his gear, and at the present time there is no means whereby he can obtain insurance such as that available to registered or tonnage boats. This has been a matter of concern, and some months ago I asked the department to undertake a study with a view to determining the feasibility of initiating an insurance program with the premiums to be shared jointly by the fishermen and the government. I was pleased to learn that this matter had been raised as far back as 1931 by one of my predecessors, an outstanding Conservative member, Mr. W. G. Ernst, who later became minister of fisheries. Unfortunately, for various reasons, no plan was brought forth at that time, nor has any suitable program been worked out for the east coast to date.

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The Department of Fisheries has assigned to the problem personnel who have given it the most searching study and have compiled comprehensive figures on losses, damage and other factors. I wish to compliment the department upon the manner in which they have applied themselves to this study and to express the hope that a plan can be formulated which will be satisfactory to the fishermen; for it would provide a vital stimulant to inshore fishing, which is that phase of the indiustry most urgently in need of support. It would enable these fishermen to operate with more confidence and would serve to provide an element of solidarity and stability, which the industry can well use.
I should like to endorse the remarks of the hon. member for New Westminster respecting his suggestion that a fisheries expert be included in the Department of External Affairs. To my mind that is a good suggestion. I believe also that we could use more men with a detailed knowledge of fisheries in the Department of Trade and Commerce.
May I repeat what I said last year with respect to the continental shelf. I believe it is time the Canadian government took some steps to extend Canadian sovereignty over those waters which normally we regard as our own home waters, namely, the waters usually embraced within the limits of the continental shelf.
In closing, may I again extend the best wishes of the east coast fisheries to the new minister, and hope that he will remain in his office for some considerable time.


Mr. ARCHIBALD:: Mr. Chairman, I should like to compliment the minister upon his appointment. It is good to see a Minister of Fisheries from British Columbia. I have enjoyed in the past the co-operation of the Department of Fisheries, and I have no doubt that it will continue in the future.
I have only one or two points I should like to mention at the present time. First, there is the matter of the short halibut season, and the fact that the fishermen in the Canadian halibut fleet are interested in seeing that the international halibut commission be given more power, so that the season may be spread out over a longer period of time. The purpose would be to prevent such a large mass of fish from coming in, in such a short space of time, and thus prevent a depression in the market. This short season is bad for the fishing grounds. It is hard to handle such large quantities in so short a space of time. I have no doubt that there will be some depression in fish prices, and these large quantities coming on the market will help to depress the price still
further. I would ask the department to take an interest in this matter so that such a crisis might be averted.
The suggestion by the hon. member for New Westminster in which he asks for a fisheries expert in the external affairs branch is a good one. I should like to see a little more aggressiveness on the part of Canada when we are dealing with the United States. It would seem that we take their desires at face value, but that they are slow when we ask for concessions.
Then, possibly the minister would answer the question I asked the Minister of Trade and Commerce the other evening, namely, about fish livers. I shall not repeat my question in detail, because the minister is familiar with it.
May I speak respecting the need of proper repair equipment in northern British Columbia for patrol vessels? The department needs that equipment, and I should like to see them move from their present quarters at Dodge Cove to quarters at Seal Cove, where the Department of Transport is now located and at which point the Department of Fisheries controls one area. Those facilities are needed because the boats require constant attention in the northern waters.
Then, in the matter of research, at one time there was an office at Prince Rupert. I shall not go so far as to say that a full station should be established there; but in view of the amount of fish going through there, there should be established at least a substation at that point. I am sure if that were done it would be appreciated by the fishing industry.
Again let me say that I wish the minister a long term of office in his department.


Robert Wellington Mayhew: Probably the hon. member for Skeena is aware that during the last week and at the present time the halibut commission have been holding a meeting in Ottawa, and that they have been discussing the question he has raised. They are placing their suggestions before the department. What may follow I am not now in a position to say, but I know the matter is under study.
It was suggested that there should be a representative of the fisheries department in the Department of External Affairs. I have already said that there is close liaison with that department. I think it is more important that there be a man who understands fisheries in the Department of Trade and Commerce, and I am happy to say that there is such a man there now.
May I say that I fully realize the value of promoting sales in any industry, and particularly in this one. That matter will have the closest attention. But I would point out that if you are to have sales volume you must go
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right back to the fisherman. You must see that the fish is properly stored in his boat, that he has proper transportation facilities to get his fish to market, and that the handling, even in the smaller stores, is done in the right way. A long process must be followed to get the fish from the boat to the table, and each move is vital. I consider that the merchants in our various cities and towns are simply the agents of our fishermen.
The part this government must play is to carry out proper inspection at the different stages the fish must go through to reach the table. It is only by good merchandising that we can increase the production of this industry. So far as I possibly can do it, that will be done. As hon. members go through the estimates they w'ill find, as they stop at the different items-I hope they will not stop at every item-that large amounts are being asked for to carry on research and inspection work, the very things that I have just said we should try do to.
At the present time we have in the department a staff of capable young men who were brought there by the late Mr. Bridges when he was minister. We are beginning to feel the results of his work in this department. I am sure that with the energy and enthusiasm of our departmental officials we can go on to develop this industry.
I had intended making some lengthy remarks, but other arguments broke in and I shall not go on with them at the present time. However I want to say that I am happy to have as my parliamentary assistant the hon. member for Prince. He is from The Island, and with the minister being from another island on the Pacific I think we shall be able to achieve results.


James Sinclair: I had intended to confine my remarks to one or two later items, but the remarks of the hon. member for New Westminster on the Chilko lake situation brings me to my feet at this time for an obvious reason. Chilko lake and Bute inlet are in my riding, so that we immediately have that conflict of interest between power development and the fishing industry.
Chilko lake development is one of the most unusual in British Columbia, or for that matter in Canada. As hon. members know, the interior of British Columbia is cut off from the coast by the great barrier of the coast range. The great watershed of the Fraser river is to the east of that range. Some 150 miles north of Vancouver a great fjord, Bute inlet, cuts the range. On the other side of the last mountain between the height of Bute inlet and the interior of British Columbia lies one of the

largest lakes in British Columbia, Chilko lake. This lake is at an elevation of almost 3,000 feet.
Normally the waters of that lake find an outlet through the 400 miles of the Fraser river to the sea. The proposal is to drive a tunnel through this one mountain and tap this tremendous volume of water which lies at this great height of 3,000 feet. Normally such a power development would be used to send power to Vancouver and New Westminster, but because of the mountainous nature of the country the only way in which the power can be used is to use it normally. That is why there has been no development of that site until now. It would take an industry like the Aluminum Company of Canada to make proper use of that power.


James MacKerras Macdonnell: Is the reason why power could not be transmitted the high cost of constructing transmission lines?


James Sinclair: The reason is the whole coast mountain range with its long fjords cutting across. This would require a land1 line of at least 2,000 miles to reach Vancouver. The result is that the power must be used locally by locating a power plant at the head of this long fjord.
As the hon. member for New Westminster properly said, this is one of the great tributaries of the Fraser river, and if all that water is diverted into Bute inlet it will have a serious effect, not only on the main body of the Fraser but on its tributaries. As a result, the great salmon run in the Fraser river will be seriously injured. I think between these two extremes is a type of development which will permit a flow of water out of the lake as well as allowing salmon to come in to spawn and the fingerlings to get out.
One point brought out by the hon. member was an excellent one, the fact that this must be done now. Unfortunately, until now the various provincial governments have paid little attention to the value of our streams as salmon streams. The Aluminum Company of Canada is spending $1,000,000 on surveys in that area and, unless immediate action is taken, it will be too late. One of the first tasks of our new British Columbia minister of fisheries should be to protect the salmon industry's interests in lake Chilko.
Another interesting point arises here, the flood situation. I am quite sure the hon. member for Fraser Valley will welcome this development, because the siphoning off of this great amount of water would certainly tend to reduce the flood threat on the Fraser river during the spring. This brings up once

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more the point which the hon. member for New Westminster emphasized in his capacity as a member of the international salmon commission. This great Fraser river is not just a salmon stream or a power stream; it must be regarded as a stream in which flood control, power development and the salmon interests all play a part.
Perhaps this is the 'time to mention that the fisheries department has been instrumental in creating a new industry of tuna fishing on the Pacific coast. This type of fishing has been carried on extensively in recent years in Mexico and California, and lately some of out fishermen have been venturing out farther and farther from shore to engage in this type of fishing. The Department of Fisheries has provided great assistance in furnishing a pilot boat for our fishermen.
There is being developed on the west coast still another new industry in which I believe one of our colleagues is interested. I do not know whether the whaling industry can be called a fishing industry. When industries are started in eastern Canada they are quite often helped with subsidies, and even when they get going there seems 'to be a tendency to continue to pay those subsidies. T)f this whaling industry should have a difficult time in its first year of operations I hope the fisheries department will remember the assistance they have given and are still giving in these estimates to various kinds of fisheries on the eastern coast.
My last point is in connection with another form of assistance of which our west coast fishermen are badly in need. I intend to speak of it at some length on the estimates of the Minister of Public Works, and that is why I am particularly pleased that we have a -British Columbian as Minister of Fisheries, one who comes not only from British Columbia but from the coast, and one who, as a private member, pleaded hard with the Minister of Public Works to obtain for the fishermen on the Pacific coast a little dredging for their harbours, fishing floats, breakwaters and so forth, which this country so readily provides for the eastern provinces. I intend to deal with that at some length on the appropriate estimates, but just now I would recall to the Minister of Fisheries his own difficulties as a private member in obtaining fishing floats for Victoria and assure him that, though he now has our solid support, he will have our vociferous support if he will go as hard after the Minister of Public Works in his ministerial capacity as he did as a private member.


John Lambert Gibson: herring, but we can use our facilities in processing them into meal and oil to make it a satisfactory operation.
With the money that is now available to the minister through the fisheries prices support board, I trust that he will give a great deal of thought to the opportunity he now has of making fish available to the housewives all over this country. Never before was there a time when the price of beef and other meats was so high. It is the minister's golden opportunity to make fish with its valuable protein content so attractive to the housewives of Canada that we shall have a vastly greater sale of fish.
The fisheries prices support board purchased 190,000 cases of chicken haddie from the eastern coast. I believe that is all right. The only difficulty, it seems to me, is that nobody knows what to do with this chicken haddie. I do not know whether the minister has ever purchased any for his own use; but I have done some baching myself, and I know it is an excellent pack of nice white meat, wholesome and appetizing in appearance, but I have never met anybody in Canada who knew how to cook it into a tasty dish. If some spices or smoke were added to it, it would be a worthwhile product, and I would urge the minister to encourage the fisheries prices support board to do something to popularize this excellent food.
Take salt cod. The minister knows that to maritimers it is the finest food produced' in Canada. It is an excellent product. It comes packed in a wooden box and is not in itself unattractive, but not ten per cent of the housewives in this country have any idea how to cook it properly and serve it to their families, although there is no finer food produced in Canada. There is never an opportunity for maritime members to purchase a salt fish cake. Even the chef in the restaurant does not know how to cook it, and if a chef like that does not know, it is not likely that our housewives would know any better how to cook it.
I would also suggest that the minister ask the fisheries prices support board to go out and spend some money in providing freight cars to bring our fish from the coasts to markets all across Canada. The fisheries research board has been doing some work in that direction in co-operation with the railroads, although I do not think the railroads have been as co-operative as they might have been. I would ask the minister to set aside sufficient money to equip two experimental cars with their own diesel-engine operated low-temperature refrigerating equipment to bring our Pacific coast and eastern coast fish into central Canada in first-class condition. I bring that 
to his attention particularly, because a little while- ago in the parliamentary restaurant I had some fresh halibut from the Pacific coast and it tasted as if it had just come out of the sea. One week afterwards I ordered it again and it was like eating a piece of cotton batting. That was merely because it had not been properly refrigerated.
Progress reported.
At six o'clock the committee took recess.
After Recess
The committee resumed at eight o'clock.



FURTHER SUPPLEMENTARY ESTIMATES, 1949

[Stage Direction]
A message from His Excellency the Governor General transmitting further supplementary estimates for the financial year ending March 31, 1949, was presented by Hon. Douglas Abbott (Minister of Finance), read by Mr. Speaker to the house, and referred to the committee of supply.
[Stage Direction]
The house in committee of supply, Mr. Golding in the chair.
William Henry Golding: The committee is considering item 95, fisheries.


Mr. McLURE:: Mr. Chairman, prior to the adjournment of the debate at six o'clock I had what might be termed a rather lefthanded compliment paid me by the Minister of Public Works when he said that if I started to speak he would tell the Chairman not to look at the clock. I took that to mean that he wanted me to be brief. I know that brevity is golden; but at the same time, when we are dealing with these fisheries estimates, I for one will not allow them to go through en bloc just for the purpose of accommodating some hon. members who wish to get home a little earlier to their constituencies.
The fisheries are an important item and we should look carefully into the estimates for them. Even if we have to spend an extra day or so here, what does it matter. I challenge any member of this house on either side to present a better record than mine in attendance in the chamber or in days absent during the session. For that reason I for one am not going to be brushed off too hurriedly in the consideration of these estimates.
I have noticed that on many occasions in the discussion of fisheries I have found it necessary to congratulate a new minister, for the simple reason that so many hon. gentle-

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men have occupied that portfolio. The different ministers of fisheries have been excellent men, but I do not believe that the government has given them its best support. The men in that department are able men, and even if they do not get the fullest support of the Minister of Finance, the Minister of Public Works and the Minister of National Revenue, they carry on and do a splendid job.
I have spoken several times on the fisheries of Canada, especially from the standpoint of my own province; and, as I have said, I have had occasion to congratulate a number of ministers directing that department even in my short time in this house. Altogether I have congratulated nine of them, and now I congratulate the new minister from British Columbia who occupies that important position. I hope that in the near-to-hand shuffle of cabinet ministers which will take place again, he will not be shuffled into some other department. In the last four months we have had four or five ministers in the department. That is not fair to the hon. gentlemen who fill the portfolio, nor is it fair to the fishing industry as a whole.
While congratulating the minister, I wish to extend my felicitations to his parliamentary assistant, who represents the constituency of Prince, which is adjacent to my own constituency of Queens. I hope that in the position he now holds he will give his very best to the fisheries of the maritime provinces in particular and generally to the industry throughout Canada. I might also hold out this hope for him, as I have seen it expressed already in the press, that in the coming cabinet shuffle which may take place in the next month he will find himself in the musical chair occupying the portfolio of Minister of Fisheries if a shuffle is made again of the present minister.
I will not say very much more about these two newly appointed hon. gentlemen, but I hope they will spend their energies and devote their abilities entirely to the fisheries of the maritimes and generally, of course, to those of Canada as a whole. In the maritimes at the present time our second primary industry is not what it should be. We are up against many difficulties.
The department has found it difficult this year to get a market for certain of our canned and processed fish. I shall deal with that later on, because I have a question or two which I wish to ask the minister.
This debate was opened by the hon. member for New Westminster, and rightly so. Who could introduce a debate on fisheries more capably than or even as well as the hon. member for New Westminster? I have heard him on many occasions and I am always glad to
listen to him. I say that for many reasons; for one thing his accent, and for another, his knowledge of our fisheries in general and particularly his knowledge of the industry in his own province of British Columbia. I doubt whether there is any other man in this house who can hold a candle to him in that regard. Another reason for which I admire him-I cannot enumerate them all-is the way in which he boosts the fisheries of British Columbia. He is just as good in that respect as he is in playing the bagpipes, and that is an accomplishment. At one time I was hoping that I would be able to congratulate the hon. member for New Westminster, but his sojourn as parliamentary assistant to the Minister of Fisheries was short lived; I do not know whether it was two days or two weeks. However, he is still occupying an important position as parliamentary assistant to another minister.
When the hon. member for New Westminster was speaking on fisheries, he spoke as if there was only one area of fishing in Canada. We have three great fishing areas, namely the west coast-British Columbia in particular-the inland fisheries and the maritime fisheries. We must all agree on this. The fish products from those three areas are the best in the world. The fish from nowhere else can hold even second place to those taken from the west coast, inland and maritime fisheries. However I think all will agree with me when I say the maritime fish are the best fish. We may not have the quantity, but, of all the fish in the world ours are the de luxe food from the briny seas. We have such fish as lobsters, scallops, oysters and mackerel-


John Lambert Gibson: Suckers.


An hon. MEMBER:: That is the taxpayer.
Mr. MoLURE: -not to forget, as I did one time before, the New Brunswick salmon.
The hon. member for New Westminster, in congratulating the minister, said this appointment was British Columbia's due. In this I do not disagree with him. But in looking over the past seventeen years' history of appointments of ministers of fisheries, we find some eleven or twelve appointments; and five of those were from the maritimes, four from the inland provinces, and two from British Columbia. As I said, I do not disagree with the hon. member, because those whom he represents have a right to have a minister from the coast at certain times.
I might mention further that we in the maritimes had been promised that in 1945 we would have representation in the cabinet of this government. However, we did not get that. In 1945 I urged upon the Prime Minister
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the fulfilment of his promise to give us a portfolio for the province, so that we would be represented in the cabinet. Now the best he gives us is a consolation prize, by making one of our members a parliamentary assistant.


Humphrey Mitchell: And he is a good member from Prince Edward Island.


Winfield Chester Scott McLure: Yes, I agree with that. I have already said so. However I should have liked to have the promise fully implemented. As I said a while ago, probably in the next shuffle, which will come sooner or later, we may have representation in the cabinet.
There are many matters that I should like to bring up besides those I have already mentioned, but I shall deal with them as they come up in the estimates from time to time, and probably we can have the questions answered better in that way. I said a moment ago that our fish were excellent. What we are asking for today in our province is fishery inspection. We should have compulsory inspection in the whole of Canada. I know some hon. members agree with me in that, among whom I think would be a first-ranking member, namely the hon. member for New Westminster. I am sure he would also urge this on the Department of Fisheries and on the government. In this connection I placed a question on Hansard at page 5582. When the minister is replying I wish him to pay special attention to this question which is as follows:
Has the request of the Prince Edward Island fish canners and packers for compulsory inspection of all their canned and processed fish products been granted? If not, why not?
When the canners and packers themselves, representing the fishermen and everybody engaged in the industry, come to this department and ask for compulsory inspection, I am of the opinion that it should be granted. I hope that the minister, when he replies, will tell me and this committee that inspection for the province of Prince Edward Island, if not for the whole of Canada, will be granted as has been requested.
I shall not follow all the remarks made by the various speakers, because it would take too much time. As I said, many hon. members are in such a hurry to get away that they would be quite satisfied if I sat down immediately. However, as I said, I do not intend to be brushed aside in that way. I will take my allotted time if I want it, and then deal with some of the other matters as they come along.
Another matter to which I wish the minister to pay special attention is another request from the fisheries federation, the packers, the

fishermen, and all the different organizations in Prince Edward Island. It is this:
Will the fisheries prices support board or the Department of Fisheries endorse and support a participating advertising sales promotion plan for their canned and processed fish products from the province of Prince Edward Island ?
If not the whole of Canada. We are applying for this only for our own province.
If not, why not?
To those two questions I shall await the official answer of the minister when he replies.
Another matter about which I wish to speak is the educational service rendered by the Department of Fisheries. The educational service to our fishermen and to our fisheries should be, and it is, a matter of the greatest importance. That education should begin at the fisherman's equipment and should be carried on through all these stages of fishing, no matter of what kind, until the product is ready to go to the market. Then, when our fish start for the market we should have proper advertising; we should have proper salesmen, men who can go out and talk fish, who know the food1 value of fish, who can thus bring it before the people of Canada and find out if the consumers of Canada can be persuaded to eat, as some hon. members said when speaking this afternoon, the finest food they can eat. If they had the proper education, I believe they would start in to eat more fish. If a few pounds more were eaten by each of the inhabitants of this dominion we would find a ready market for everything our fishermen could catch.
I want to mention a matter that has to do with the Minister of Public Works. We know the best quality of fish are caught in the colder waters, the stormier seas. Consequently on the north side of our province, or any other province, where the waters are cold and the storms severe, we must have protected harbours. On the north side of Prince Edward1 Island we have few harbours, and we do not have the protection we should. In my constituency there is a harbour known as North Rustico, one of the best fishing grounds in the maritime provinces. I do not say it is one of the largest, but there the people really are fishermen, doing nothing else for a livelihood. On several occasions I have appealed to the Minister of Public Works for a wharf or breakwater to protect the houses, shanties and other buildings of the fishermen along that harbour. I am sure that if the matter had been presented to the minister by his engineers in a proper way, he would have seen that the work done so far is absolutely use-

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less. The department should put on an engineer who will take the opinions of 'the fishermen and build something that will not be washed away by the first storm. During the past two years some $10,000 has been spent on 'this protection, but what have we today? We have not had any severe storms, but the work is practically all washed away. A few days ago I recevied a suggestion that the engineers should undertake a survey of that harbour before the fall storms begin; otherwise government property, including the lighthouse, and the buildings of the fishermen will all be washed away.
I have also been advocating the dredging of the bay so that the fishermen can bring their boats up to their own stages. Today they have to leave them a mile and a half away. In 1932 or 1933 this bay was dredged, but since then it has filled up with silt from the land, so that now we have only a narrow channel requiring a fishermen, even at high tide, to anchor his boat away down at the mouth of the harbour and carry his fish ashore. Last year the minister promised that this dredging would be done; but as yet, so far as any benefit to the fishermen goes, it is still only a promise. When we reach the public works estimates I shall forget about fisheries *for a moment and take up that matter with the minister.
As I said, I am going to take up a few other matters as we come to them, and this is all I have to say in a general way. I shall now await the reply of the minister to the two questions I asked, which are found on page 6582 of Hansard.


Howard Charles Green: The May issue of The Bulletin, issued by the fisheries council of 'Canada, has a leading article entitled, "Right Hon. C. D. Howe says fish will be low on priority lists of goods for ERiP," meaning, of course, 'he European recovery plan. The article points out that there is great uncertainty as to what will be the requirements for fisheries products under that plan, and I wonder if the minister could give us some light on that situation. In an address at Winnipeg on May 31 the Minister of Trade and Commerce apparently said 'it was unlikely that there would be much call for fisheries products, and of course that might affect us seriously on the Pacific coast particularly in connection with our canned salmon.


Robert Wellington Mayhew: Each country getting support from the Marshall plan decides for itself what products it wants. Our difficulty is to get the various countries to specify fish. In an attempt to have our quota established, we
have been in contact with the Department of Trade and Commerce, and that is about all we can do about the matter. If these countries say they would prefer some other type of food there is nothing we can do about that. We have recognized that this is a possible outlet for some of our fish, and we have done what we could ourselves and have also pressed the matter through the Department of Trade and Commerce.


Howard Charles Green: The decision is made by the country getting the commodities. Is that right?


Robert Wellington Mayhew: That is right.


Howard Charles Green: What are the prospects, for example, with respect to the United Kingdom?


Robert Wellington Mayhew: I think the hon. member is pretty well acquainted with the situation. Our prospects are not very bright because of the dollar shortage in the United Kingdom. I am afraid that the situation is not as good as we should like to see it.


Howard Charles Green: But I mean under the Marshall plan. Have the British asked for canned salmon or other fisheries products under that plan?


Robert Wellington Mayhew: No. The hon. member for Queens asked with respect to the extension of fish inspection. On the east coast we are going just about as quickly as we possibly can with the number of men available. There has been inspection of pickled fish, and recently the department instituted a compulsory inspection of salted fish. The department has already announced its intention to carry out compulsory inspection of canned fish as part of the long-term program to improve quality. On the east coast there are several hundred canneries, however, and as yet the department has not available men with the training necessary to carry on that inspection. Steps are being taken to add to the inspection staff for Prince Edward Island and elsewhere. This new staff, along with the official inspectors and officials of the canned fish laboratories, will work with the cannery operators in giving advice and guidance as to quality control. Meanwhile the Fish Inspection Act is being revised, with a view to giving the department proper authority for compulsory inspection and grading.


George Randolph Pearkes: The minister referred to these superior types of young men who are entering the outside service of his department in the fish inspection branch. I should like to endorse those sentiments, because a great many of those young men are ex-servicemen.
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However, those who are entering in the lowest grade have 'been discouraged by the wages they are now receiving. Most of them are working for salaries of less than $2,000. Although an increase given earlier this year dated back to October, that increase is not on the same basis as the one which was given to fisheries inspectors grade 2. I would ask the minister to look into this question personally, with respect to salaries paid to the junior officers of his department, namely the grade 1 fisheries inspectors. He will see that the increase made this year for those grade 1 fisheries inspectors was not on the same basis as that made for the grade 2 inspectors. The grade 2 inspectors were given increases based upon their second year of seniority, whereas the grade 1 inspectors received their increases based upon their minimum salary. The young ex-servicemen affected feel that this is not quite fair.
I do not expect the minister to answer this evening, because I realize that in the few minutes now at his disposal he would not be able to look into the situation thoroughly. I am, however, asking him to .make a personal investigation into the matter and to find a way in which he can make the salary increases authorized to grade 1 fisheries inspectors comparable with those authorized for grade 2 inspectors.


Douglas King Hazen: I would1 direct the minister's attention to the details as they appear at page 126 of the estimates. According to those details, in 1947-48 there were seventy fisheries inspectors, grade 2; and eight fisheries inspectors, grade 1, or a total of seventy-eight. In 1948-49 there are only seventy altogether, made up of five senior fisheries inspectors, forty-five fisheries inspectors, grade 2, and three fisheries inspectors, grade 1. There is one other group which I do not see at the moment.
I was under the impression that a number of new inspectors were taken into the service and that the service was to be built up. I believed that there were openings for young men, and that a number had applied. I know that in New Brunswick some were taken on. Why is it there are only seventy this year, while there were seventy-eight last year?


Robert Wellington Mayhew: This -list gives only the permanent inspectors, and does not show the temporaries. Last year the list included temporary as well as permanent employees.


Douglas King Hazen: Why should a different method be adopted this year from that which was used last year? I know these young men in New Brunswick took their examinations and several of them were appointed. I should imagine the same would be true in the other provinces. If

the appointments were made I presume they would be permanent. If the temporary ones are shown in 1947-48, why is there this change in policy in the manner of setting them out?


Robert Wellington Mayhew: The temporary employees are not included in this list. It will be recalled that we took on quite a number of young men last year. They are finding their way from the temporary to the permanent list. In the first year they are on a temporary basis, and when they are placed in the permanent service a reallocation is made.


Douglas King Hazen: Why are there not more shown this year than there were last? What is the explanation?


Robert Wellington Mayhew: This year there are 143 temporaries and 62 permanents.


Douglas King Hazen: I understood the minister to say they were all permanent in 1948-49. Apparently that is not correct.


Robert Wellington Mayhew: Seventy permanents were employed last year.


Douglas King Hazen: Can the minister give a breakdown of the inspectors by provinces?


Robert Wellington Mayhew: It would take a little time, but we can get it for the hon. member. I doubt if I could give it tonight.


Douglas King Hazen: Are there any permanent guardians? There is an item fishery officers and guardians, and I should like to know if any guardians are employed in addition to inspectors?


Robert Wellington Mayhew: All guardians are temporary.


Douglas King Hazen: In connection with guardians, could I have a breakdown for the three maritime provinces showing the periods they were employed last year; the periods for this year, if it is no too early to do that; what their duties were; the districts in which they were employed, and what they were paid?


Robert Wellington Mayhew: That will require some little calculation, but I shall get it for the hon. member.


Douglas King Hazen: I should like to have that.


[Stage Direction]
Item agreed to.
97. Building fishways and clearing rivers, $50,060.
James Sinclair: All British Columbia
members have expressed their appreciation at having a British Columbia Minister of Fisheries. I doubt if there is an item in the department's estimates about which we have talked more in the past than this one covering the clearing of streams and the building

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of fishways. I have talked more and got less understanding about this matter, because the previous minister from the maritimes did not understand this British Columbia problem.
Our chief industry in British Columbia is logging, which has a most detrimental effect upon many of our salmon streams. Logging creates stoppages in a great many of these streams, with the result that sockeye and other salmon cannot get up to the headwaters to spawn. We have always protested that this item was hopelessly inadequate; and it may be a welcome sign that it is increased from $25,000 .last year, when the department was under a maritimes minister, to $50,000 this year, when we have a British Columbia Minister of Fisheries. But even that amount is hopelessly inadequate to do the job of clearing many of the smaller salmon streams apart from the Fraser river.
The second matter of building fishways is an old story as far as I am concerned. I have been here eight years and I have seen six different ministers of fisheries. I have in my hand a file which I have built up throughout those years in connection with one little item. The fishermen of Pender Harbour in my riding cannot understand why this bit of work has not been done. Once again I am going to bring forward this little problem at the risk of boring the committee. Perhaps I should not say at the risk of boring the committee, because the hon. member for Queens has quite properly pointed out that this matter of fisheries is of extreme importance to the two maritime coasts of this country. Every session we find that the only opportunity we have to discuss fisheries is on the last night or the second to the last night of the session. Then we are asked, like the hon. member for Timiskaming has just asked me, to hurry up because we want to get through.
We sit here and listen to complaints about wheat and coarse grains, and we never suggest that hon. members talking about those matters should hurry. Therefore I do not feel at all backward about raising problems which are just as important to the fishermen of my riding as are the problems of wheat marketing, coarse grains, fat cows and what have you.


John Horne Blackmore: The wheat growers are listening to you now.


James Sinclair: That is a courtesy we gave to you, and I ho,pe we can convey our story to hon. members as you have conveyed your story. This is a simple story and it has been often told here. The town of Pender Harbour might be referred to as the Lunenburg of the Pacific coast. It has a landlocked harbour and some excellent fishermen live there who range
the entire coast. Their fishing area is not at home. However, they have a most unusual geographical arrangement, in that there is a small stream three miles from the entrance to the harbour. At one time sockeye salmon were to be found in that stream. It was logged many years ago, and the loggers built a small dam at the entrance to the creek to hold water in Sakinaw lake. When the dam was there the sockeye salmon were able to spawn.
The loggers left and the dam fell into disrepair. Although at that time it would have cost the fisheries department only $900 to repair it, they did not care to do so. When the dam went out, the level of the lake fell, exposing all around the lake for many miles the gravel bars on which the salmon used to spawn. Without the fishway, the salmon were able to get into the lake only at high tide.
Year after year the fishermen of Pender Harbour have asked the department to build a small wooden dam and a small wooden fishway at costs which ranged anywhere from a low of $2,000 to a high of $5,000. There were years when 10,000, 12,000 and 14,000 sockeye salmon were caught at the mouth of that stream. It is a particularly happy fishery, in that it is used by the young boys who are just learning to fish and old men who are too old to go out along the coast of Vancouver island and the Queen Charlotte islands, to the more remote fisheries.
Minister after minister and deputy after deputy, including the present deputy with whom I spoke in private the other evening, as well as the western director, have all said that they would examine into this. They sent a biologist to examine the salinity of the lake. This year, after a visit by the western director to the fishermen's union last fall, they sent an engineer in. They were getting real good. However, they sent in an eastern engineer who knew nothing at all about salmon fisheries, and all he did was to fall into the lake and lose his notes.
When I spoke to the Minister of Fisheries right after he had been appointed about this matter of Sakinaw lake he said he would go there to meet these fishermen. They will be delighted to meet the new Minister of Fisheries, but I do not think they will be over-impressed if once more there is to be another meeting on Sakinaw lake.
I suppose I could ask for an order for return in connection with this matter, but I am quite sure that the total of the travelling expenses for all these officials who have written reports about this matter would more than equal the $5,000 which would be the maximum cost of replacing this dam. I bring this up, so that I can go back to my fishermen at Pender
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Hhrbour and say, "We have a new minister, and once again I have brought up this question in the House of Commons about the public expenditure necessary to restore this real sock-eye salmon fishing". I should like to know from the minister what his plans are for the Sakinaw lake situation and Pender Harbour.


Robert Wellington Mayhew: I understand that there are four problems in connection with Sakinaw lake. The first was the salinity, but an inspection has taken place and the conclusion arrived at is that that would n.ot interfere with the fisheries. Another problem is what the spawning beds are like in that area, and an inspection in that connection will be carried out this fall when the fish come up the river. The site for a dam has already been chosen, and it is estimated that it will cost $2,000. The fourth problem is the acquiring of water rights from the provincial government. I can promise the hon. member for Vancouver North that we will give him a definite answer, either yes or no, before the end of the year.


Mr. SINNOTT:: I share the views of the hon. member for Vancouver North. I believe this estimate is very small in comparison with the work there is to be done. I draw the attention of the minister and his parliamentary assistant to conditions on the Red river, where the fish ladders are in very bad shape, and in need of repair. There is not enough water running down the fish ladders for a minnow to climb up, let alone a fish. On the Winnipeg river, one of the largest inland rivers in Canada, which runs from the Lake of the Woods to Lac du Bonnet and empties into lake Winnipeg, where some of the best sturgeon in the country are caught, two big power plants have been established, and there is the immediate prospect of another one being built. The power plants which are there now have no provision for fish ladders, and the consequence is that the fish coming up the river to spawn are stopped and cannot get up. There are no fish above these power plants.


Robert Wellington Mayhew: If I may interrupt the hon. gentleman, he is addressing the wrong department. He should go to the fisheries department at Winnipeg. We have no jurisdiction over the area he speaks of. That is a provincial matter entirely.


Douglas King Hazen: Was a fishway erected near the mouth of the Nashwaak river near Fredericton, and, if so, what have been the results so far as the salmon are concerned?


Mr.   MacN AUGHT@: Discussions have been going on for a number of years regarding the

dam on this river and its effect on the salmon. It is believed that something may come out of these discussions.


Douglas King Hazen: I hope that something will come out of them. I would urge the minister to look into the matter and see if steps cannot be taken, and taken soon, to have a proper fishway put in that dam. There is a beautiful river there.


Mr.   MacN AUGHT@: Experiments have been carried on, but there is no evidence that the dam prevents the fish from going up the river.


Douglas King Hazen: What is the position of the fishway at the mouth of the Salmon river beyond St. Martin's in Saint John county? There have been many complaints, which I understand have been looked into with a view to improving conditions.


Mr.   MacN AUGHT@: The officials tell me that plans are in preparation and that the work will be proceeded with this year.


Herbert Wilfred Herridge: In view of the international treaties in existence, why was no protest made by the Canadian government when the United States built a dam at Grande Coulee on the Columbia river and made no provision for salmon to go up the upper reaches of the Columbia?


Robert Wellington Mayhew: That is in the United States, but my understanding is that they did build a fishway at great cost when building the Grande Coulee dam. I do not believe it has been a great success, because the fish in the Columbia river are not going down in numbers.


Douglas King Hazen: There is another dam which interferes with the fish getting to their natural spawning grounds. I refer to the dam known as Miller dam at Newcastle Creek, in Queens county, New Brunswick. I have here a letter dated March 15 of this year from Mr. A. J. Hicks, provincial secretary of the New Brunswick fish and game association. He says in this letter:	<
One of the most important issues in respect of fisheries during recent years has been the proposed fishway on the Miller dam at Newcastle creek. The Grand Lake branch has been advocating such a move for the last ten or fifteen years, but without avail. It has been suggested that the dam could very well be dispensed with. Repeated requests have brought assurance from at least two of the recent ministers that such action was contemplated, but that was as far as it went. There is a great deal more to the story, but the last experiment will probably be the installation of the fish trap in order to determine whether or not salmon use the stream for spawning.

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Has that matter been thoroughly investigated, and has any decision been made about either removing the dam or installing a fishway?


Mr.   MacN AUGHT@: At the present
moment the department are carrying on investigations to find out how many fish go up this stream. The investigation has been going on for some years, dating back to 1938, when the question first arose.


Douglas King Hazen: Was a trap put in for the first time this year?


Mr.   MacN AUGHT@: Yes.


[Stage Direction]
Item agreed to.
99.	Fish culture, $350,000.
Winfield Chester Scott McLure: There is a small increase in this vote. The government purchased for the Department of Fisheries a number of old mill dams in the different provinces-I am speaking now of my own constituency-for the purposes of fish culture. Work was started at Simpson's dam and at St. Andrew's dam and was supposed to have been completed two years ago. What progress, if any, has been made with this work? I would also ask what success the department has had with lobster culture on the British Columbia coast?


Mr.   MacN AUGHT@: The hon. member
knows a large number of unused mill dams were constructed at various times in the past for mill operations. The matter he speaks of has received a great deal of consideration over the years, and about two years ago it was decided to carry out investigations to indicate whether, by the reforming of the mill ponds through repairing the dams, the trout industry might be rebuilt. There are problems of reproduction, because a large proportion of the trout runs have been sea-running fish. There is also the matter of the fish population that can be supported in a given area, depending upon the supply of food. Arrangement for the investigation has been made with the province, the fisheries research board and this department co-operating.
I believe the hon. gentleman referred to Simpson's pond. That has been repaired and made ready for operation, and materials are now in process of being obtained for rebuilding a dam at what is known as Andrew's pond near New Glasgow, Prince Edward Island. Another site near Pownal known as Jones' or Worth's pond, has been selected, and it is hoped that the necessary work can be completed early in 1948 or 1949.


John Horne Blackmore: Can the minister give an over-all picture of his plans for developing
the industry? This would be an appropriate opportunity for him to do so. Does he intend to do something to increase the fish population throughout the country? If so, by what device? I am not quite sure what the cost of fish culture is throughout the country, and I should like to hear something about the minister's plans.


Angus MacInnis: Perhaps the minister
might also answer the second question asked by the hon. member for Queens as to the success of the work on lobsters on the Pacific coast.


Robert Wellington Mayhew: The lobster experiment on the Pacific coast I would not care to describe as a success. Some of the lobsters that were taken out and set free have been lost; but some that were in crates are still living. It is known they have molted, mated and berried as usual, but we cannot say with what conclusion. This is the fifth experiment with lobsters in British Columbia. In Washington they have had a good many and none of them to date have been successful. However, we have not yet had the final report on the last experiment.


John Horne Blackmore: Could the minister
give a general over-all picture of his policy with respect to fish culture? I am considerably interested in this, because our fisheries are running down everywhere in Canada and that is not a satisfactory condition. For the last fifty or sixty years the general attitude of Canadians has been that Canada is something to exploit, something out of which we should make all the money we can, leaving the remains to those who come after us. That is poor management, and I cannot think of any way whereby that tendency will be checked except by a determined attitude on the part of the House of Commons. I for one wish to see that trend reversed. I wish to feel that Canada is improving in every respect, building up its forests, farms, fisheries and all the other things that go to make Canada what it is. Is the minister planning a long-range program which would envisage such a process so far as our fisheries are concerned?


Robert Wellington Mayhew: I do not wish to take up the time of the committee, but the amount of the estimate is $350,000 for fish culture. What the hon. member wishes to know is our general over-all plan for increasing the fishing industry in Canada. Is that it?


John Horne Blackmore: I might be more specific. I have heard the hon. member for New Westminster speak eloquently, enthusiastically and earnestly about the deterioration in
Supply-Fisheries

the salmon industry. I have never heard a minister announce a policy whereby that trend will be arrested and development started in the other direction. I should like to hear a hopeful note. Surely we are not going to allow this industry to deteriorate. The minister speaks of taking up time. Just as the hon. member for Vancouver South has said, every year during the time I have been here it has been my experience that we have never got down to fisheries until the last two or three hours, and then one has almost to apologize for spending some time on the subject. I do not know how we shall develop the fisheries of Canada if we do not take some time in discussing them, to see whether the money we vote for the industry is properly spent. Will the minister give us an assurance that everything is being done to develop the industry.


Robert Wellington Mayhew: I must reply to the hon. member. In the first place, the halibut fishery on the west coast had been going down nearly to nil. The halibut commission was formed and it has taken charge of rehabilitation of this fishery. We now have in British Columbia the largest halibut fishing industry-


James MacKerras Macdonnell: How long did that take?


Robert Wellington Mayhew: It started in 1927. They are doing exactly the same thing with salmon. We have the international Pacific sockeye salmon commission, one of the members of which is the hon. member for New Westminster. We contributed $1,000,000 as Canada's share in building the Hell's Gate fish ladders to increase the run and conserve the fish population of the Eraser river. W'e are spending a considerable sum of money, as will be noted in the estimates, on inspection and research. Our fish last year was worth in the neighbourhood of $120 million to Canada, and we are taking every step to build that up to something near what it should be. I do not know how far we can go, but our difficulty is, in part, to get the fish in good shape into central Canada. We are a little differently situated in Canada from most countries so far as our fish is concerned. Where we have our fish we have a fairly small population, and that is one of the reasons why it is more difficult for Canada to develop fisheries than it is for some other countries.


John Horne Blackmore: Can the minister report, in regard to the salmon fisheries, a degree of success comparable with that which he has reported in regard to halibut?


Robert Wellington Mayhew: It has not been going on for as long a time. The Hell's Gate ladders

have been in operation for only one year. It is proving a success, and no one denies that it has been a good experiment.


John Horne Blackmore: What is the situation on the eastern coast? What is the particular fish about which the people in New Brunswick and Nova Scotia are concerned?


Robert Wellington Mayhew: On the Atlantic coast, conservation applies to lobsters and oysters, and work is being done in that direction.


Eric Bowness McKay: What about mackerel and
cod?


Robert Wellington Mayhew: They are working on lobsters and oysters just as they have done with salmon.


John Horne Blackmore: Are they making
progress comparable with that which the minister has reported in regard to halibut?


Robert Wellington Mayhew: They are definitely making progress in lobsters and oysters.


[Stage Direction]
Item agreed to.
100.	Oyster culture, $45,790.
James Sinclair: Our oysters on the west coast are mainly from Japanese seed brought in from that country, and of course that was cut off during the war. Has the fisheries research board been able to develop a method with respect to oyster seed for the west coast, so that we can develop this industry in Canada instead of having to rely on Japan?


Robert Wellington Mayhew: Experiments are going on now.


Winfield Chester Scott McLure: With regard to this item for oyster culture, I see there is a small increase this year in the estimate. It should be much larger, because we are not able to develop nearly the amount of oysters that the trade is demanding. What were the royalties collected in 1947, and what were the rental fees for 1947? Is the department considering doing away with royalties on all these leases in 1948?


Mr.   MacN AUGHT@: The royalties on the oysters marketed amounted to $510.45. The lease rentals amounted to $3,030.19. Consideration has not been given to the abolition of the royalties.


Winfield Chester Scott McLure: The amount collected is so small that it is hardly worth having them.


[Stage Direction]
Item agreed to.
Fisheries Research Board of Canada-
101.	Operation and maintenance, $894,690.
Mr. BAKER:: I do not propose to take up very much time of the committee, but I wish to commend any expenditure the Department

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of Fisheries has seen fit to put in under this item 101 this year, or may see fit to put in a like item in any other year for the operation and maintenance of the fisheries research board. My wife happened to christen the ship Harengus, which is used by the joint fisheries board of Newfoundland and Canada for research purposes. That ship has been doing a great deal of good work. I consider our knowledge of fisheries is really only in its infancy. We should do anything that can be done along these lines. We shall learn a great deal in time to come. I shall not take any more time of the committee except to say that I am glad to see that this item has been approved.


Mr. ROSS (St. Paul's):: This afternoon the hon. member for Nanaimo said something about Canada's giving up her boundaries to the United States. That sounded peculiar to me. If we give up our boundaries to the United States and so on, and if we are getting so close to that country, it seems to me that we should have been represented in Philadelphia in order to have our opportunity to name Dewey as candidate for president of the United States. I am not sure about where we stand.


William Ross Macdonald: Order.


Douglas King Hazen: I believe that about two years ago lobsters were transported by air from the Atlantic and transplanted in the Pacific ocean. This was an experiment for the purpose of finding out if those fish could be developed there. Wbat is the result of that experiment? Not long ago I read that a most exhaustive hunt for these lobsters had been made in the waters of the Pacific, but that after a thorough search, only one had been found. What is the position?


Robert Wellington Mayhew: I just finished making a statement on that subject at the request of the hon. member for Queens. It is on the record.


Douglas King Hazen: That is all right, then. I shall not pursue the matter further.


James MacKerras Macdonnell: I should like to ask a few questions, and I do not intend to make any apology for raising them. This idea that we must scurry through at the last moment just because the government has not seen fit to bring these matters on in time is all wrong. I am sorry to hear people apologize for asking questions. It was the hon. member opposite, who, I think, had some interesting things to say, but seemed to feel that he should not say them. We should sit here just as long as there is anything to be said. I object strongly to this hurry and scurry.
I should like to ask a question about this item, which is for nearly $1,000,000. I should like to know something about the fisheries research board. I hope the minister will not feel this atmosphere of hurry, but will rather just take his time. In particular I should like to ask how this money is expended geographically because, though we may forget it, there is quite a considerable fishing industry on the great lakes, and sometimes one is concerned lest it is disappearing. For instance, I discovered that in Georgian bay, around Parry Sound, fishing, which used to be a considerable industry, seems to have perished altogether. I should like the minister to deal with that matter at some length.


Robert Wellington Mayhew: I will give the hon. member a breakdown by stations of the item for research:
Headquarters	 $ 34,582
Nanaimo	 261,775
Vancouver	 111,266
Central part	 35,933
Gaspe	 57,117
Halifax	 111,367
St. Andrews	 222,197
Atlantic salmon	 4,030
Atlantic herring	 12,000
Toronto	 19,423
Northwest Territories	 12,000
East Arctic	 13,000
Total	 $894,690


James MacKerras Macdonnell: My question was not merely as to the amounts, although I wanted them. I should like to know something about what we are doing. We are spending $1,000,000 and that is an important amount. Incidentally, I notice that little is going into the great lakes area. I can speak for one part of that area and say there is every reason why more should be expended there, because the situation is bad indeed. I should like to have this question dealt with.


John Lambert Gibson: While the minister is acquiring from the records the information necessary in order to answer the question asked by the hon. member for Muskoka-Ontario, perhaps I might be permitted to say a word. I should not like to have this vote pass without expressing the appreciation that I and all the fishermen on the west coast feel for the new idea the department has brought forward this year, in stationing a fisheries vessel a considerable number of miles off the west coast of Vancouver island, in order to assist in the development of the deep-sea fisheries on the Pacific coast. I do not think many Canadians have been aware of the tremendous wealth of marine life available to our fishermen off the continental shelf; and I am sure that the research to be undertaken
Supply-Fisheries

by the department under the scheme evolved this year will be of tremendous value in the development of the Pacific coast fisheries. I want to express my keen appreciation of the excellent work being done by the fisheries department in this regard.


Thomas Reid: I should like to offer the minister one suggestion in reference to research work. The United States places scientists on its warships when they are at sea. At points twenty, thirty or forty miles off the coast these fisheries biologists and scientists test the water for salinity, temperature and what is known as plankton, the minute particles in the water which the fish obtain as the water goes through their gills. It is expensive to build or buy or hire a large vessel and crew and send it out to do that kind of work; but the United States have found it convenient and much less expensive to place two or three scientists on their off-shore patrol naval vessels and provide them with the necessary equipment for this experimental and investigational work outside the three-mile limit. So I suggest that this idea might be considered by Canada because I think it is high time we followed along the lines of other nations and found out more about the temperature of the water, the salinity, the plankton and so on, with a view to ascertaining where many of the species of fish go and how they travel.


Robert Wellington Mayhew: I hope I have not given the impression that I want to hurry through with these estimates. As a matter of fact, the very opposite is true.


James MacKerras Macdonnell: I do not think the minister has given that impression.


Robert Wellington Mayhew: I was hoping that I might get a better grasp of the whole industry, and I rather welcome these questions though I do not like to see the committee delayed. I have here a detailed report of what goes on in the various divisions with respect to this research item, and if there is any particular section the hon. member wishes me to deal with I shall be glad to do so. It would take me perhaps twenty-five or thirty minutes to read all the information I have here.


James MacKerras Macdonnell: I am not suggesting that. I should like to know, first, whether I am correct in understanding that the department is responsible for the fisheries of the great lakes, as it is for the fisheries of all navigable waters. Am I right in that, to begin with?


Robert Wellington Mayhew: No, we do not administer the great lakes. We do administer Great Slave lake and Northwest Territories and the

two coasts. When you look at Canada on a fisheries map it is entirely different from looking at it from an agricultural standpoint. Altogether the coast line is nearly twenty thousand miles long. Therefore a great deal of work has to go on in many different places. This may seem a fairly sizeable amount of money, but when spread over the whole area it really is not so very much. I would offer no apologies for asking that this amount of money be spent on research, a field which is so capable of development and in which so little has been done up to the present time. Rather I would apologize for the smallness of the item.


James MacKerras Macdonnell: Still I want to follow this a little. The minister referred to an expenditure of some $20,000 at Toronto. Of course it may be that through some accident you did some work there, even though apparently you are not interested in inland fisheries. If you are not interested and not responsible for the inland fisheries, however, I need not pursue the matter further along that line.


Robert Wellington Mayhew: That $20,000 was for
printing, publications and so on.


Ronald Stewart Moore: I should like to direct the attention of the minister to a problem which confronts the fresh-water fishing industry in the three prairie provinces. I appreciate that the federal department deals mainly with the salt-water fishing industry, but in the prairie provinces we have a problem known as infestation, which has been serious in recent years. It is quite true that the research branch of the department has done a good deal in endeavouring to find a solution of this problem, but up to the present the situation has not been met successfully. I would urge the minister to look into the matter and see that further scientific work is carried out, in the hope of finding a solution of this problem, since the fresh-water fishing industry in the prairie provinces is important to us, and at the present time it is threatened by this infestation.


Robert Wellington Mayhew: The amount to be spent this year in that area for white fish research is $50,000.


Mr. KNIGHT:: In southern central Saskatchewan we do not have much commercial fishing. However, we do have the Winnipeg goldeye, a good, game, valuable little fish, which we can catch in both branches of the Saskatchewan river. There is a mystery in connection with the goldeye, in that it is disappearing and no one seems to know why. I believe the research branch of the fisheries

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department has carried on some investigation, and I am wondering how they are getting along with it and if they are finding any reason for this disappearance. Not so long ago I heard the sergeant-at-arms of this house ask some of the western members where he could get a supply of goldeye for the parliamentary diningroom, which to me is a sign that the supply is limited.
I believe smoked goldeye is almost internationally known to gourmets as a typical Canadian dish. Next to maple syrup it is perhaps the dish known to most people as most typically Canadian. The industry of catching and smoking goldeye is centred in the city of Winnipeg, Manitoba, and the greatest quantities are caught commercially in lake Winnipeg. The goldeye go up the rivers to spawn, and I am interested, owing to the fact that the southern branch of Saskatchewan goes through my home city of Saskatoon.
Various theories have been advanced as to why the goldeye has disappeared. Some people say it is due to disease. Many others hold that it is by reason of the fact that the rivers have been dammed here and there. About 1932 a dam was built across the river near Saskatoon as a relief project; and while fish ladders were built into the dam it is a fact that if you want to find where the fish are you may do so by watching the small boys who go down to the dam to fish on Sunday mornings. You will find that invariably they fish on the side of the dam toward Hudson bay, if I may put it that way. So, if the goldeye are always more plentiful on that side of the dam that seems to be proof that these dams do interfere with the spawning of these fish.
I should like to see something done in this connection. I know the department has been inquiring into the matter. This is something typically Canadian we should try to preserve, and I wish to know if the minister has any information on the matter.


Robert Wellington Mayhew: Goldeye investigation
started in 1945, and we hope to have it completed by 1949. Up to date 814,000 has been spent, and the amount appropriated for this year is S4.500. The results of the investigation extended to Alberta, and revealed a new commercial source of goldeye in lake Claire, a western tributary of lake Athabaska. Information has been obtained on spawning, growth, habits, food, physiological tolerance, net mesh size, and effect of dams. The plan is to obtain more detailed spawning information in lake Claire, continue the goldeye studies and develop management practices tc be made effective by regulation. Full information should be obtained on the life history of the goldeye, spawning areas and general distribution, and studies of the causes of depletion of stocks in lake Winnipeg continued. It has been shown that the results from trapping the young fish in the autumn in marshes and shallow lakes of the Saskatchewan delta by a series of dams constructed for the benefit of muskrats, has been one of the main causes of the depletion of this species, and it has been shown that the young fish can be flooded from these areas to deeper water by judicious operation of the dams. These flooding operations have been started, and a marked improvement in supply is anticipated.


Robert Ross (Roy) Knight: I believe that if these fish ladders were made more effective it would have a good effect. There is no doubt that the fish are more plentiful on the north side of the dam than on the south side. One can go there and get a whole bagful of goldeye in a morning on one side of the dam if he knows what bait to use. But on the other side he will get practically nothing. This appears to prove conclusively that these fish dams are not sufficiently easy to get up, if I may put it that way.
How is this appropriation being spent? The minister has told us that some research is going on. What about the actual spending of the money?


Robert Wellington Mayhew: The money is being spent for payment of the scientists who are doing that work at the present time. We have scientists who are studying the goldeye. We hope they will be able to make a full report in 1949.


[Stage Direction]
Item agreed to.
Fisheries Research Board of Canada-
102.	Construction and improvements, $75,(KM).
Mr. HAZF.N: Is the minister in a position to tell us for how many miles off the shore of Canada the dominion government claims jurisdiction over the fisheries? I do not know if the minister is in a position to answer that question at the present time. I understand, however, that the law says we claim jurisdiction up to what has been called the three-mile limit. But on September 28, 1945, the President of the United States issued a proclamation, in which apparently he extended the limit of the jurisdiction of that country to a very great extent.
Mr.   MacN AUGHT@: Under what item
does that come?


Douglas King Hazen: I do not wish to embarrass the minister by asking the question on this item,
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if he would have it otherwise. However I would bring the matter to his attention, because it is of some importance.


Mr.   MacN AUGHT@: It might come more properly under the next item.


[Stage Direction]
Item agreed to.
103.	To provide for Canadian share of expenses of the international fisheries commission appointed under treaty dated March 2, 1923, between Canada and the United States for the preservation of the north Pacific halibut fisheries, $31,500.
Mr. H1AZEN: I am speaking now without having made any careful study of the matter recently, but I have pointed out what was done by the President of the United States. In part this proclamation stated:
Where such activities have been or shall hereafter be developed and maintained by its nationals alone, the United States regards it as proper to establish explicitly bounded conservation zones in which fishing activities shall be subject to the regulation and control of the United States.
Those concessions iwere not confined to the three-mile limit. On the same day another proclamation iwas issued, which dealt with the continental shelf. That proclamation claimed rights for the government of the United States away beyond the three-mile limit, in what was described as the continental shelf.
I believe a resolution was introduced in this house at one time in this connection, but I understand that it was dropped afterwards, and we heard nothing more about it. If the minister is in a position now to answer I would ask him t-o tell us over how many -miles off the shores of this country Canada claims jurisdiction over the fisheries.
Robert Wellington Mayhew: At the moment the three-mile limit is all over which we can claim jurisdiction. So -far as the United States proclamation is concerned, I am informed that they have not taken any action in the matter. The government is dealing with that matter at the present time.


Douglas King Hazen: Has the United States congress ever passed an act confirming the proclamation of the president? Does -the minister know if it is necessary for congress to do so before the provision whuld come into force?


Robert Wellington Mayhew: They have not passed anything that has been brought to our attention. I do not know what their la/w would be in that respect or whether they can do this by proclamation. At any rate the matter is now being examined by our government.


Howard Charles Green: By which department?

Mr. MAYH'EW: The Department of External Affairs.


[Stage Direction]
Item agreed to.
105. To provide for Canadian share of expenses of the international Pacific salmon fisheries commission to overcome obstructions to the ascent of sockeye salmon at Hell's Gate canyon and for investigating and overcoming obstructions to such salmon at other points on the Fraser river watershed, $250,000.
James Sinclair: I notice here an amount for clearing obstructions in the Fraser river, and an amount provided for Canada's share of expenses of the Pacific salmon fisheries commission. This vote has been reduced from $300,000 to $250,000. In view of the undoubted damage by the Fraser river floods this year to both Hell's Gate and the bridge over Hell's Gate, I would have expected that this appropriation would have been larger ra'ther than smaller. Can the minister explain why it is smaller this year than it was last year?


Robert Wellington Mayhew: This $250,000 is the balance of $1,000,000 on the Hell's Gate canyon project. When these estimates were prepared we had no knowledge of the present floods. If there is any special work to be done-and there will be this year-it will probably be taken out of this vote.


[Stage Direction]
Item agreed to.
107. To provide for transportation, dressing and dyeing and other expenses incidental to receiving and disposing of fur seal skins accruing to Canada pursuant to provisional fur seal agreement between Canada and the United States by exchange of notes dated December 26, 1947, $550,900.
Winfield Chester Scott McLure: When the hon. member for New Westminster was speaking this evening I did not know whether he said that part of the seal fisheries up in the Pribilofs belonged to British Columbia or not. I notice that he is in the chamber, and I should like to know what he said in that regard. There is an increase of $80,000 in this vote over last year. Is that because it is expected that there will be a larger catch this year?


Robert Wellington Mayhew: No, it is because freight and curing costs are expected to be greater.


George Randolph Pearkes: I regret that the catch will not be larger, as no doubt the committee will gather from the remarks I made earlier. Could the minister tell us how much we derive from the sale of furs?


Robert Wellington Mayhew: The total was $469,985.


George Randolph Pearkes: It is ridiculous that we should expend $470,000 last year on transportation and get in return only $469,000.

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Robert Wellington Mayhew: That is the net profit.


[Stage Direction]
Item agreed to.
108. To provide for the destruction of har'bour seals, $30,000.
James Sinclair: How much was paid out last year in British Columbia?


Robert Wellington Mayhew: The bounty is $5 per seal, and the amount paid in British Columbia was $13,205.


James Sinclair: How much was paid on the eastern coast?


Robert Wellington Mayhew: Nova Scotia, $5,935; Prince Edward Island, $995; New Brunswick, $2,685.


Douglas King Hazen: Is that a bonus for destruction?


Robert Wellington Mayhew: Yes, $5 per seal.


[Stage Direction]
Item agreed to.
Special-
111. To provide for assistance in the construction of vessels of the dragger and/or long-liner type, subject to such terms and conditions as may be approved by the governor in council, $200,000.
Winfield Chester Scott McLure: What assistance was given ill connection with draggers for scallop fishing?


Robert Wellington Mayhew: There is no subsidy on that.


Winfield Chester Scott McLure: What is the item for?


Robert Wellington Mayhew: This is to provide a subsidy of $165 a ton for the building of small trawlers, and a loan may also be obtained from the provinces joining in the scheme. It is to encourage fishermen to use larger and better boats on the Atlantic coast.


Winfield Chester Scott McLure: The boats which the
ordinary fishermen use are not of the dragger type. A certain amount of money has been voted under research to survey the scallop beds in order to find out where the best are located. This will be a good industry in the maritime provinces. Last year or the year before, support was given to two or three concerns in Nova Scotia. Application was also made from Prince Edward Island for assistance in the construction of draggers. I do not think anyone outside of one firm got any assistance.


Douglas King Hazen: How much was expended last year? How many vessels received assistance? Can the minister give us a breakdown for the maritime provinces?


Robert Wellington Mayhew: A total of $40,504 was spent last year, all in New Brunswick.


[Stage Direction]
Item agreed to.
Special-
112. To provide for assistance in the construction of bait freezing and storage facilities, subject to the approval of the governor in council, $50,000.
Winfield Chester Scott McLure: I should like to harve a breakdown, especially in connection with Prince Edward Island, of the money spent last year.


Robert Wellington Mayhew: No money was spent last year. The available supply of bait at the various centres has long been one of the difficulties facing the fishing industry, and different plans to overcome it have been tried. While a similar item was included in the estimates last year, the departmental organization had not been developed sufficiently to enable the consideration necessary in order to establish regulations. At the moment new regulations are being placed in final shape, and it is expected that they will be promulgated almost immediately.
The plan in mind contemplates assisting in the cost of bait storage space that would be provided as an adjunct to a fish cold storage plant at present existing or to be built. Consideration would also be given to assisting in the providing of space in a general cold storage plant.


[Stage Direction]
Item agreed to.
709. Fisheries inspection, including fishery officers and guardians, fisheries patrol and protection services-further amount required, $265,700.
Winfield Chester Scott McLure: The hon. member for Saint John-Albert had a considerable discussion with reference to this item, and I have no doubt he wants to expand his ideas on it and find out how many inspectors we are to have and how many guardians in connection with the patrol service and the general protection services.


Robert Wellington Mayhew: This amount is to take care of increases in salaries. There is no significant addition to the field staff.


[Stage Direction]
Item agreed to.
711. Oyster culture-further amount required, $5,520.
James Sinclair: When this item was before the committee on the main estimates I raised the question of the provision of oyster seed in British Columbia. Up to now we have had to rely on Japan for our seed, and the result is that our oysters do not produce regularly every year. The hon. member for Queens has sent me a note asking why we did not get our seed from Prince Edward Island where oyster seed is produced annually
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at our biological stations. Prince Edward Island oysters have a great reputation and are superior to the Japanese oysters we grow in British Columbia. Has anything been done in that connection?


Robert Wellington Mayhew: I have been told that nothing has been done. They are two different types of oysters.


James Sinclair: How do they know t'he Prince Edward Island seed would not be satisfactory if they have not tried it? Olympia oysters in the state of Washington are produced from east coast oysters.


Robert Wellington Mayhew: The point is well taken. It is no use saying nothing can be done until you try it.


John Horne Blackmore: Has the minister
invited the various provincial governments to meet with the federal department with a view to planning a policy of fisheries development and to give leadership to the province?


Robert Wellington Mayhew: A conference of the provincial fisheries departments with the dominion department is planned for this fall.


John Horne Blackmore: Does the minister feel satisfied that he has money enough for the work of his department, or has 'he difficulty in getting enough?


Robert Wellington Mayhew: I do not think we have been whittled down much this year. Some items have been cut, but when you can justify an expenditure you can always get the money.


John Horne Blackmore: I am glad to hear that. I like to see a man have money enough to do the job, and then I like to see him do the job.


[Stage Direction]
Item agreed to.
Special-
715. To authorize and to provide for the fisheries prices support board to reimburse the Canadian Commercial Corporation for administrative expenses in connection with the purchase of 190,000 cases of east coast canned fish on behalf of fisheries prices support board under chapter 42, statutes of 1944 and order in council P.C. 1229 dated March 25, 1948, $7,500.
Winfield Chester Scott McLure: Can I have an answer now to my second question on page 5582 of Hansard, reading as follows:
Will the fisheries prices support board or the Department of Fisheries endorse and support a participating advertising sales promotion plan for their canned and processed fish products from the province of Prince Edward Island? If not, why not?


Robert Wellington Mayhew: The department by this vote is requesting an increase for the promo-

tion of sales. The request of the hon. member that special assistance be given to the producers of one province would hardly be feasible for the federal government. Any scheme of sales promotion in which the federal government would join with the fishing industry would have to be a national scheme. There has been no request from the fishing industry as a whole for the government to participate in such a scheme.


Winfield Chester Scott McLure: There has been a request from the fishermen of Prince Edward Island.


[Stage Direction]
Item agreed to.

[Stage Direction]
Pensions and other benefits-Militia Pension Act-
242. Government's contribution to the permanent forces pension fund, $4,100,109.
George Randolph Pearkes: This amount of money is payable as the government's share toward the pension fund of personnel of the active forces. I should like to bring to the minister's attention the fact that these pensioners are very much in the same position as other pensioners across the country; and while we have seen increases made in the pensions which have been awarded to veterans under the Department of Veterans Affairs, these men I speak of are suffering from the very same handicaps as the veterans under the Department of Veterans Affairs. I realize that there are other groups of personnel, such as the superannuated civil servants, who might be classed in the same category; but I have received representations from a great many men who are under this pension scheme and who have asked whether it is not possible for the government to consider some means of increasing their pension because, wh6n they made their contributions over a period of twenty or more years, the cost of living was very much less then than it is now. If we want to encourage men to go into the regular forces of the armed services we want to be able to offer them a degree of security when their service is passed. I would ask the minister whether he has considered the desirability of increasing these pensions. I realize there are difficulties in the way.


Hon. BROOKE CLAXTON (Minister of National Defence):: That question was raised earlier in the session and I made a reply based on a statement made earlier by the Minister of Finance in connection with civil service superannuation, that these pensions were matters of contract and these pensioners were in exactly the same category as others with regard to pensions. Pensions either from the government or from civil employers could not be

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altered without changing everything that had happened up to then. It would be difficult to change a particular category. The hon. member who raised the question will appreciate that those who are enjoying pensions on account of their service in the armed forces, and those who may enjoy pensions in the armed forces are in a favourable position compared with either civil servants or other employees in Canada. We feel that ithe matter is one which must be regarded in its entirety and that it would be impossible to differentiate between one class and the other. But I would point out something which I think the hon. member knows very well, and that is that pensioners who are former members of the armed forces are in a favourable position compared with the others.


George Randolph Pearkes: I realize the difficulties that exist in this particular respect, but I cannot agree with the minister that the pensioners under the Militia Pension Act are in more favourable circumstances than personnel who are drawing pensions from other government pension schemes such as the civil service. I would point out that these men have been on service during a large portion of their lives; and, while it may not be possible to increase the pension, I suggest to the minister, in view of the fact that recently the Department of Veterans Affairs have opened hospitals across the country to personnel who are in receipt of war veterans allowance, he should confer with the Minister of Veterans Affairs to see whether it is not possible to enable those old soldiers, sailors and airmen now pensionable to have the advantages of veteran hospitals on the same basis as those recipients of war veterans allowance. Will the minister say that he will take that matter into consideration?


[Stage Direction]
Item agreed to.
Demobilization and reconversion-
243. To provide for the orderly establishment and organization of the defence forces of the army, navy and air services on a peacetime basis, and to authorize total commitments for this purpose of $255,514,584. including authority, notwithstanding section 29 of the Consolidated Revenue and Audit Act, to make commitments for the current year of $227,082,515, and commitments for future years of $28,432,069 against which commitments it is estimated that actual expenditures in 1948-49 will not exceed $207,082,515.
George Randolph Pearkes: This is a principal item, and it embraces really all the essential elements of this department's estimates. They deal with the army, the navy and the air force. Has the minister any suggestion as to how he wishes to deal with this question? We cannot
pass this important item by just saying, "Carried". I have several questions to ask the minister, and I expeot others have, too. We should have some orderly method of dealing with it.


Brooke Claxton: I am in the hands of the committee, and anything that hon. members wish to discuss now we might take up. That would be the right way to proceed.


George Randolph Pearkes: There are many questions one would like to ask in order to get information which, in my opinion, is necessary in connection with this vote. I will deal, first of all, with the strength of the forces, which would come under the items of pay and allowances. Those items of pay and allowances are grouped under three different services, and therefore I shall have to deal with all three at the same time.
The Minister of National Defence in his statement yesterday gave certain figures as reported at page 5782 of Hansard, and the first question I would ask is this. The figures shown in the columns for navy, army and air force are opposite the heading "Authorized for additional commitments". What are those additional commitments?


Brooke Claxton: The cabinet authorized the figures of 7,500 for the navy, 18,750 for the army and 12,075 for the air force, or a total of 38,325. These were the authorized establishments for these three services and the total for the whole. Subsequently to these authorizations having been granted-I should think the date would be January or February, 1947-submissions were made to the cabinet defence committee, and then to the cabinet, for increases in the establishments for certain specific purposes, and they resulted in the additions of 375 for the navy, 1,329 for the army, and 2,121 for the air force; so that the establishments are as set out on page 5782 of Hansard, as stated by the hon. member: 7,875 for the navy; 20,079 for the army; 14,196 for the air force.


George Randolph Pearkes: Thank you. When we come to the question of reserves, in 1946, the figure given for the reserve army as being the minimum requirements, during the presentation of his estimates by the then Minister of National Defence, was 187,864. That was not reduced, but the recruitment was authorized in 1947 only up to a strength of 90,000. That figure was given by the present Minister of National Defence in a return which was tabled during this session, to be found on page 2327 of Hansard. Yesterday the minister announced a target figure of 47,102, and when referring to
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that he took some credit for the fact that the army had recruited up to 76 per cent of that total.
This is the first time I have heard of this target figure, and I must say it is a unique method of bringing units up to strength by cutting the establishment in half and then declaring that the unit is approximately 70 per cent of strength. A somewhat similar case, and I fancy a more serious one too, is that in connection with the Royal Canadian Air Force auxiliary squadrons. In 1946 the figure was set at 4,500. The limitation imposed by the present minister in 1947, which was, I believe, approved by parliament, was 3,121. My authority for that will be found in the figures given by the minister on March 10 of this year, as reported in Hansard at page 2059. And now we have a target figure of 2,632, and we find that the percentage is only 32 per cent recruited. I hope there is not to be any further reduction in order to bring the percentage up. When was the decision made to set this reduced target figure, and has any announcement been made before with regard to that?


Brooke Claxton: Yes. The first question raised by the hon. member was with regard to the figure set for the establishment of the reserve army, at a total which he gave as 187,864, which I have not had a chance to verify but which I accept. That is the establishment set out by my predecessor for a reserve army of six divisions, which would be the scale of organization for all Canada in the event of an emergency. But I think the hon. member would be the first to admit, on the basis of his own experience, that anything like that figure would be quite out of the possibility of our raising in peacetime. Establishments are set by units and by strengths, and they are intended to be a description of the force that we would have in the event of a total mobilization. When that was set out, I think the minister of defence of the time indicated that the target for that particular year was something a great deal less; and from year to year the defence services set their targets based on what they believe they can train and on what they believe they can get. Both factors are taken into consideration.
The figures for the navy, army and air force for this year were set out by me in my statement yesterday at page 5782 of Hansard. There is no need to repeat them. But the figure set out for an establishment of six divisions remains as it was set out by my predecessor, in 1945, at the figure described by the hon. member. There is a difference

between the establishment and what one can do with activated units and their staffs of officers, N.C.O.'s and men.


George Randolph Pearkes: Yes, I agree. I think the minister will recall that I referred some years ago to the fact that this original figure was a foolish and boastful statement to make. I am quite certain that it is beyond the realm Of possibility. I want to emphasize the fact that here we started out with an organization, as the minister has just said, based on six divisions. He found1 in 1947 that it was impractical to get anywhere near that number, so he reduced it until we were down to 90,000. Then, because he has found this year that it is impractical to reach that figure, he has cut it in half again. The semblance of six divisions has gone up in air; it has vanished. There is not even the vaguest skeleton. You may have it on paper, but when you have cut so drastically as that, I think you will agree with me that the idea of six divisions is at the moment not within the realm of reality.
I wish to emphasize this point. It is just supporting what I said yesterday that we are trying to build on time-honoured, though time-worn-out formations, and present conditions require an entirely different approach to this subject of national defence. I think this is strong evidence in support of what I said then.
May I ask another question with regard to the strength of the active army, particularly the field force? We have been told the units-or if we have not been told, I think it is generally known-comprising the field force or, as it has sometimes been referred to, the mobile brigade. Will the minister give us the total number of men in the field force, or the mobile brigade as it has been referred to? If he considers it fitting, I should like to have the numbers by units. But he may feel that, for the purposes of security, it is not advisable to give that information. If he will give the total, well and good. But if he can give us the numbers by units, I should like to have that information.


Brooke Claxton: With regard to the hon. member's first remarks, there is a great deal in what he said with which I might agree. But the idea of setting out a six divisional set-up is not to provide targets from year to year for us to aim at, but rather to provide the nucleus upon which we could build and organize should a national emergency occur. There was never any intention, as he knows, that we should recruit to anything like the strength of 187,000.
With regard to the mobile group, as he himself suggests there may be some reasons

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of security why we should not give the actual strength, unit by unit. I can tell him that, of the present total strength of men in the army of Canada, about twenty per cent are in the mobile brigade. Our expectation is that that percentage will increase as recruiting goes on. As I indicated yesterday, the armoured and infantry battalions are undergoing unit training at Petawawa and also at Wainwright, Shilo, Chilliwack and Valcartier; and this will be the first summer in which we will be able to have unit training for that force. As I think the hon. member knows-and I will be frank with him-it will be extremely difficult for us to protect that force from other demands. When, for example, the emergency occurred in the Fraser valley, the training of some units had to be interfered with, when they were sent from as far away as Calgary; and every now and then a demand for an extra commitment is made from here or there. On that account I was very glad indeed to be able to announce yesterday that we are going to recruit over and above our target, so that we hope to build up the force as speedily as possible, and train it as well as that may be done.


George Randolph Pearkes: Then I take it that this is the first year in which any grouping of these regiments into a field brigade has taken place?


Brooke Claxton: As battalions, that is
right.


George Randolph Pearkes: This the first time as units?


Brooke Claxton: That is right.


George Randolph Pearkes: So, that, as a mixed
brigade or brigade group they have not yet had any training as such?


Brooke Claxton: That is right.


George Randolph Pearkes: Then the minister referred to the Fraser valley, where a number of reserve army units have been training. Will the personnel of those units be authorized to carry out their annual thirty days training in addition to the time they have spent in the flooded area?


Brooke Claxton: Yes, they certainly are authorized, and the army would be very glad to see them do it. But these men have already given from their ordinary civilian occupations periods of time dating from May 23, when the first unit came out on active service in Kimberley. Whether or not they will be able to devote more time to training this year will depend on the individual unit, but we shall be prepared to provide pay and allowances for every officer and man, who may be qualified to
train, in addition to anything they may have received in respect of the service they rendered in the flooded area.


George Randolph Pearkes: Even though that training is done at local headquarters and not in camp?


Brooke Claxton: Yes.


George Randolph Pearkes: Because all these units give additional time?


Brooke Claxton: Right.


George Randolph Pearkes: I am not going to take up much more time, but I want to ask one question regarding the Royal Canadian Air Cadet Corps. In the past it has been customary to take these lads to some camp adjacent to or right in one of the R.C.A.F. stations and give them certain instruction in regard to the machines generally. In addition, some of the boys are permitted to have flights, in order that they may become air-minded in the early stages. But before they are permitted to go up as passengers, they have to obtain waivers from their parents. That is acting as a deterrent to some of these boys because their parents are not prepared to sign the waiver. They feel that, as long as the boys are in the uniform of the R.C.A.F. and training, perhaps with the idea of ultimately joining the auxiliary service, they should not be required to do so. Surely we have sufficient confidence in the R.C.A.F. to believe that there is the minimum of risk involved when these boys are taken up. If we want to encourage them to take an interest in the air arm, surely this country can afford to accept whatever risk there may be. So I would ask the minister if for the future he will cancel the regulation which makes it necessary for an R.C.A.F. cadet in uniform to obtain from his parents a waiver in favour of the government before he is permitted to go up on a sight-seeing or passenger flight.


Brooke Claxton: Royal Canadian Air Force cadets may fly either with R.C.A.F. pilots in R.C.A.F. planes or, as is the case with the great majority, in planes of the royal flying clubs, which are civilian-owned and operated, and work under contract with the Department of National Defence. I am not quite sure whether waivers were required in the first instance; I would rather doubt it. They might have been required in the second case, but certainly I shall look into the whole question. As a matter of fact, this business of waivers with regard to liability in respect of people flying in R.C.A.F. planes has been the subject of active consideration by the department over the last five or six months. It involves difficult legal problems; and the bill I had hoped to introduce in the house to deal with all these
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matters had a clause with respect to it. We are still looking into the matter, and I shall be glad to take the hon. member's representations into consideration.


George Randolph Pearkes: I know that last year cadets flying in R.C.A.F. planes were required to obtain waivers before they went up.


Mr. LENNARD:: I want to make a short reference to the sea cadet movement. As I pointed out to the then minister of national defence tiwo years ago, when pay and allowances were brought in for the officers on the training establishment for sea cadets, any remuneration they received should be in the form of allowances, because their pay is subject to tax. That creates a hardship on these men who are training the sea cadets. I have personal knowledge of these matters, because for several years during the war I was active in the sea cadet movement. Hardly a month goes by when these sea cadet officers do not provide out of their own funds something for the boys in their units. That always has been and probably always will be the case, and it is a hardship to put them on pay and then have that pay taxed in some cases up to a considerable percentage of the total. That is not encouraging. I bring this matter to the minister's attention because I consider it to be unfair.
I should like to ask one or two questions with respect to the navy. I am sure the minister is quite conversant with the situation, but I would remind him that a year ago one of the great complaints in Halifax was that the married personnel did not have suitable housing accommodation for their families. I know several chaps who were extremely interested in their work, but who were greatly dissatisfied because their families could not be properly housed in Halifax and, in some cases, had to remain in central Canada. Perhaps the minister would state just what the situation is now.


Mr.   OLAXTON@: With respect to the men who, as the hon. member quite rightly said, and as I agree, give their time to the work of the sea cadets and then find their pay subject to income tax, I would point out that they are in the same category as all members of the reserves of the three services. That involves a large question which I am afraid I must leave on the lap of my hon. colleague the Minister of National Revenue. I have had some discussions with the Minister of National Revenue and the Minister of Finance in this connection, because I feel, with the hon. member for Wentworth, that it is an important consideration. Having been,

as I think he was, one who served and gave all his pay for some considerable time to this kind of work, it is hard to pay income tax on it after you have given it away. So I can assure the hon. member I have made representations to my colleague ,and I shall be reinforced in those representations by the remarks he has just made.
I must say, of course, that from their point of view there is the desirability of trying to get everyone in Canada to pay income tax. Those are two factors to be considered. We would like very much to have this pay and allowances for part-time servants of Canada in the reserve forces when they are working in the navy, the army, the air force or the cadets regarded in the same category. But thus far we have not been able to work it out. I shall keep the matter in mind however, and I shall be glad to put forward the hon. member's representation.
With regard to married personnel at Halifax, we have, as he knows, a program for building married quarters which I announced in the house a month ago. The number of units planned for Dartmouth is eighty in the next year, and that will do quite a lot toward relieving the worst of the situation there.


Frank Exton Lennard: Have any been completed in the last year?


Brooke Claxton: Quite a number of conversions have.


Frank Exton Lennard: That is additional accommodation.


Brooke Claxton: Yes.


Frank Exton Lennard: Another matter I would bring to the minister's attention is a complaint made by many of the naval personnel stationed at, we will say, Halifax, whose homes are in central Canada. They find it difficult to pay their fares on their annual leaves. Has any consideration been given to issuing an annual warrant for annual leave to their home destinations?


Brooke Claxton: That is a matter under active consideration. If it were only a question of the navy which, as the hon. member knows, is centred chiefly on the two coasts, at Halifax and Esquimalt, it would not be a very difficult-matter. But we have tried to put all three services on an exactly equivalent basis with regard to pay and allowances. Once you step out of that extreme situation of Halifax or Esquimalt, you get into the realm of considering such places as Borden, Shilo, Rivers, Chilliwack, Valcartier and so on, with all the difficulties involved in trying to arrive at some basis of a fair allowance. That is a matter under active consideration.

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Frank Exton Lennard: I know some months ago there were some complaints about food in the navy, especially when personnel -were at sea. Has the allowance for food per day per man been raised in the past twelve months? I believe it was sixty-tiwo cents per man per day a year ago. Is that correct? Has the allowance been advanced since then?


Brooke Claxton: The ration has not been increased, but the cost of the ration has increased in accordance with the increase in the cost of living. I might say that, to provide for conditions at sea, the navy receives an extra allowance over and above that received by the army and air force personnel. I believe the amount is five cents a day. I must say my experience, from moving around and eating meals served the men in a great many establishments and ships is that, by and large, the meals are very good. I might not have arrived at the right time, but I have sat down with literally hundreds of men and talked with them and never had complaints about the food. I have had lots of complaints-but never about the food. If there is any complaint about it I would suggest that it is not due either to the amount provided to buy food or to the size of the ration. It might be due to the conditions of service, or the way in which the food is presented. We are trying to improve that steadily in the navy, as in the other two services.
The hon. member, who is very much interested in this, might find some considerable improvement in that respect within the last twelve months.


Frank Exton Lennard: I have had some little experience. There is one thing I do know about the navy, and that is that, generally speaking, the officers get the same food as the men. Probably, when the minister was dining he was in the wardroom.
There is another matter I should like to bring to his attention, and this applies to the men at sea. It is not right that they should eat their meals in quarters where their clothing is hanging and where different equipment is scattered about. If a cafeteria system were set up, and it were placed in a location apart from their sleeping quarters, it would be a great improvement.
In this respect I believe the United States navy allows, or some months ago did allow, $1.10 a day per man for food alone. I understand that food in the United States navy is very good. I believe the complaint in the Royal Canadian Navy has not been as to the quality of the food. While it may have the required calories, it does not have the bulk. I believe that if many of these young lads had 5849-374J
more bulk it would solve much of the difficulty. If they received more bulk they would be better satisfied. They complain about the small quantity of food. The nutrition may be there, the calories and all that sort of thing which they require for sustenance, but they do not think they receive enough of it. That is something the department should consider.


Brooke Claxton: I can assure the hon. member that I am very much interested in this question of food for the troops. One of my sins for a very short period of time was that I was a quartermaster sergeant in world war I. It is a confession I have never made before.


James MacKerras Macdonnell: I always thought you were a sergeant major.


Brooke Claxton: I graduated from the first post to the second. On that account, as well as others, I have been interested in this subject; and when I have made inspection tours I have found, as have other hon. members who have had the experience of inspecting, that things tend to be a little laid on. I have two or three things that are of particular interest; one is fire protection and prevention; another is food, and another is living accommodation.


Howard Charles Green: Were you ever a cook?


Brooke Claxton: No.
With regard to the remarks of the hon. member for Wentworth, I did have the good fortune to visit San Francisco last August on my way to Australia. While there, I did a most improper thing. I was being shown over a dockyard by the admiral who was in charge of arranging the tour, and suddenly I said to him, "Do you mind if I see the messing accommodation in one of your destroyers? I have heard that they are better than ours in that respect". He said, "No, not at all; step aboard anyone you see". We went aboard a destroyer in process of refitting, and went over it. It was rather like our Tribal class in size and style. I saw there the messing and bunking accommodation, and also their cooking arrangements. I had just been over one of our Tribal class; in fact I spent a day on her, so I had become familiar with the accommodation. I must say that, in consequence of that, I am not sure which system is the better. If you divide the accommodation available for the men into bunking arrangements and messing accommodation you have very much constricted quarters. I am not too sure that our arrangement is not the better.
With regard to the galley and refrigeration arrangements and all that, ours were just as good as theirs. It was an interesting experience; and it left me, being interested in the
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subject, with an open mind. Certainly it is a thing that has to be followed up and watched.
With regard to the cafeteria system, we follow that almost entirely throughout the shore establishments and big ships. It is applied in part on the small ships.


Frank Exton Lennard: I notice that the amount for the sea cadets is increased this year. Is that because of increased camp accommodation, or has the service grown?


Brooke Claxton: The arrangements with regard to the sea cadets provide for the same number, but the cost of accommodation has increased.


Eric Bowness McKay: In order to preserve a
quorum in the chamber, may I suggest that the radio, which is being listened to with such rapt attention out in the lobby be moved either into the chamber or into the opposition or government lobby, so that we can all hear it. It seems to me that bon. members are more interested in the Louis-Walcott fight than in transacting business. May I make another suggestion? While the minister is giving full and complete replies to the questions being asked, it seems to me that his replies might be more brief and not take up so much time. We are not going to finish much business tonight.


Howard Charles Green: There are four or five questions I should like to ask, the first having to do with the reserve army. In other days it was recognized that if Canadian troops had to fight they would be fighting abroad, and that gave a longer time in which to train our forces. Now we hear that any war which may occur may be fought, at least partly, in Canada. When the minister and his predecessors have spoken of the armed forces they have always emphasized that fact.
As we all know, we are to have a small active army. There is to be only one mobile force, which at the moment is not recruited up to strength. The main force is to consist of the reserve army. It was pointed out back in 1945 that the policy was to have six divisions and, I think, two corps staffs. I have the Hansard here, and the minister's predecessor stated at that time that the total number would be between 135,000 and 150,000. It is now evident that we are not going as far as he had planned in making preparations for the building up of that force.
How long does the department consider it will take to put that reserve army into the field as a fighting force? I think we are entitled to have that information. It may very well be that the plans are such that the

force could not be put into the field for a long time. If the job is to defend Canada in these days of warfare in the air, in these days of no warning that war is coming, the reserve force may never have a chance to get into action. That is one of the key factors to keep in mind when we are determining what our defence measures should be. Can the minister answer that question?


Brooke Claxton: That is one of those questions where one would have to know when the war broke out, who the prospective enemy was and what he was doing. I cannot answer that question. If it is related to invasion of Canada, then by whom-I should like to ask that-and with what force?


Howard Charles Green: I do not think that is a fair question for the minister to put to me. He said yesterday that a certain nation could send over 1,000 planes.


Brooke Claxton: I never said anything of the kind; I said exactly the opposite.


Howard Charles Green: That they might send them over.


Brooke Claxton: I did not say that.


Howard Charles Green: Then let us forget about that. I think the minister went pretty far yesterday in the statement he did make. But surely the department has in mind how long it would take to put the reserve army into the field. Suppose war were to break out a month from now or in six months from now; how long would it be before we had that reserve army in the field? I point out to the minister that this is vital, because that is the force on which we must depend for our defences. If the department cannot give that information then I think it should be able to.


Brooke Claxton: Neither this department nor any other department in any country of the world can give that unless you give the assumptions on which we have to work. You give Us those, and I will give you or I will get my experts to give you the answers. I am not going to give any carte blanche answer to that kind of question, because there is no doubt that I would be wrong.


Howard Charles Green: I do not ask for the exact length of time, but surely the department must know approximately how long it would take to field the reserve army.
Mr. CLAXTON; For what purpose, where and when?


Howard Charles Green: In Canada, for the defence of Canada.

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Brooke Claxton: We can do a certain job tomorrow and a much bigger job next week and so on. It will go on, on that basis.


Howard Charles Green: Of course that is really no answer at all. I take it from the answer the minister has given that he does not know.


Brooke Claxton: I know how difficult it is to answer that kind of question unless I have the facts and assumptions on which it can be answered. I have seen enough of staff course problems that are put to staff officers to know they must have the assumptions on which to give answers. You give me the assumptions and I will get the staff officers to give you the answers, but I cannot give answers without the assumptions.


Howard Charles Green: I suggest that the minister put his staff to work on that question.


Brooke Claxton: They have worked on questions of that kind. If you provide the assumptions they will provide the answers.


Howard Charles Green: When the minister is expecting the citizens of Canada to form an army on a voluntary basis, some guidance should be given to them, more than is being given by these answers this evening. We have to get down to bedrock to a much greater degree than the minister has done.
Just about a month ago there appeared a Canadian Press dispatch in the Vancouver papers, headed and reading as follows:
U.S. still maintains two bases in north. Canadian landing fields kept up by Americans to prevent disuse, Ottawa, May 25.
Defence department officials have confirmed a Washington report that members of the United States armed forces still are maintaining two Canadian landing bases on Canada's northeastern frontier.
The Washington report said housing facilities were being built by the United States at Frobisher Bay and Fort Chimo.
It was understood the maintenance crew was a carry-over from the second world war, when the then highly-secret "Crimson Route" was established. The route was a series of landing fields established for short-range aircraft being ferried across the Atlantic.
Since the war, rather than have the air fields fall into disuse, Canada had agreed with the United States that the fields be maintained by American personnel, an official said.
Why should Canada not be manning these two posts herself? Why do we have to have the United States manning these two posts in northeastern Canada?


Brooke Claxton: In consequence of our arrangements for joint defence, the United States undertakes certain jobs and the Canadian government undertakes certain jobs. The United States asked our agreement to
their rebuilding some of the quarters at Chimo and Frobisher Bay which were unfortunately falling into a state of disrepair, and also to building some married quarters. Those married quarters are being built for us at our expense as well as for them. We agreed to that being done. At the same time we are doing joint operations for them in our north. At one place it is convenient for one country to do it, and at another it is convenient for the other country to do it.


Howard Charles Green: Is there any reason why Canada should not be manning her posts herself? It would be perfectly all right to let the United States use them, but why should Canada not man them herself?


Brooke Claxton: Why should the Americans not contribute to the cost of manning posts which they themselves are occupying in accordance with our arrangements? I cannot see any objection to that.


Howard Charles Green: It is all right for them to contribute, but why should Canada not be manning these posts rather than the United States?


Brooke Claxton: I am not too sure about those two posts. There are three posts, I think, in Canada, and they are rather small ones, in respect of which the number of United States personnel is larger than the Canadian personnel. That is only three out of quite a number. Generally speaking, there is a Canadian in charge and there are more Canadians than Americans in these places. If there are any exceptions it is because the United States has a particular interest in a particular place, but gradually we will take care of that.


Howard Charles Green: I suggest to the minister that these two posts should be manned by Canadians. Let the Americans use them all they wish, but I cannot see any reason why we should not be manning them with our own personnel.
Another question has to do with the Canadians who served at Hong Kong. As the minister knows, these men have not yet been given Pacific pay. The 1,600 odd men who were recruited in 1945 to go to the Pacific did receive Pacific pay; but these other young men who went to Hong Kong in 1941 and suffered hardships and abuse such as no other Canadian troops have ever suffered since confederation, are not paid Pacific pay. The matter has been raised in the house on other occasions, and just this week we find in the report of the special committee on veterans affairs that a brief was heard by the committee which was submitted by the veterans of Hong Kong. The
Supply-National Defence

committee forwarded the brief to the Department of National Defence because, of course, the committee had no power to act upon it, since they were dealing only with questions having to do with the Department of Veterans Affairs.
We on the Pacific coast feel deeply about this matter. These young men went out from Vancouver harbour on that ill-fated expedition. Many of them are now in hospital in Vancouver, and we can tell by looking at the men themselves, even though they are fit, wdiat they have been through. On June 21 an editorial appeared in the Vancouver Province, entitled, "Must They Fight Twice for their Pay?" I think that editorial sums up the sentiment of Canadians from coast to coast with regard to these Hong Kong veterans. I do not think any reason can be given for withholding from them that Pacific pay. Certainly paying them the difference between the old rate of pay and the Pacific rate of pay can be no compensation to them for the sufferings they endured in Japanese prison camps, and I hope that the minister can announce to the committee tonight that these men are to receive the Pacific pay. May I have an answer?


Brooke Claxton: If pay were any compensation for sufferings-


Howard Charles Green: It wrnuld be some.


Brooke Claxton: -I would be only too happy to make the announcement my hon. friend wants. This question has been before the government since, I think, late in 1945. It has been considered on a considerable number of occasions. I have had quite a number of communications from the Hong Kong Veterans Association of Canada, and the matter has been given active consideration. Since then, that association has appeared and made a very good presentation to the committee on veterans affairs. I shall be very glad that the matter be once more brought before the cabinet for consideration.


Howard Charles Green: My final question has to do with the financial assistance given to the reserve units. I have received a submission from a commander of one of the units on the * Pacific coast. As the minister knows, I have shown him that communication. This commanding officer suggests that there should be an allowance to each regiment cf between $3,000 and $4,000 a year. His particular regiment is now getting $824.18 a year. He is an officer with an excellent fighting record overseas and an excellent record in the non-penmanent active militia before the war. He has gone back to the command of his regi-
ment and was out on duty with it for several weeks during the floods in British Columbia. I think his submission is absolutely correct. He points out, if I may quote two paragraphs from his letter:
To the writer's knowledge, based upon some years of experience in the non-permanent active militia and the reserve -army, N.P.A.M. units and reserve army units by and large have never received sufficient military allowances from the government to cover the actual cost of running the units, the operating deficits of these units being made up -by donations of pay from serving personnel-
Not only from the officers but also from the men.
-or by donations from wealthy benefactors, or both.
It is the writer's strong conviction that reserve army units should receive government allowances in accordance with the type, strength and location of the unit, sufficient in amount to enable the commanding officers to run a successful and aggressive unit without having to depend upon donations from either within or without the unit to cover such expenses.
Our reserve army is serious business. We are expecting it to defend this country, and I think the day has gone by when the officers and men should be compelled to put up their own money or go and find a sugar daddy and make him an honorary lieutenant-colonel or an honorary colonel in order to get the finances with which to run the regiment. I do not think that is in line with the beliefs of the Canadian people. I do hope that at the present time some better arrangement can be made for the financing of these reserve units.


Brooke Claxton: This question has been an active one with the department for-a number of years, and last year we had a meeting with the council of defence associations, representing the various corps of the Canadian army. The consequence of that was to increase the unit allowances and change the capitation grants in respect of each unit. Since then, we have had two meetings of members of the council representing the reserve associations, and they are giving us figures on how this is working out.
I think ou-r feeling is along the lines of those represented by the hon. member for Vancouver South, and that some further adjustment must be made. We are in close touch with the representative of the reserve associations and the matter is receiving active consideration. Our expectation is that some further grant may be made.


Lawrence Wilton Skey: I wish to support as strongly as I can the remarks of the hon. member for Vancouver South in regard to the Hong Kong veterans, and it will not take me more than a few sentences to state my position. I was pleased to hear the minister say that his

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department was still considering it sympathetically, but I must add that eighteen months constitute quite a long time to have had the matter under consideration, and action is about due. In fact, it is long overdue.
These men are being denied their just rights on the merest of technicalities. There is no need for me to argue their case tonight, their cruel imprisonment and their great courage.
I wish the minister had been present when they presented their brief in the veterans affairs committee.


Brooke Claxton: I had already received it.


Lawrence Wilton Skey: I am glad to hear that. They showed great sportsmanship. They did not come with a grievance but came simply to give us the facts. The Canadian people were,
I know, glad to do everything they could to rehabilitate Canada's veterans. That was one thing that went through the house with unanimous consent, if we ever had unanimous consent. The Canadian people do not want this matter left on their doorstep. If they owe a debt to any of the veterans of Canada for their service during the last war they owe it to the Hong Kong veterans, and they do not want it left on their doorstep. I hope the minister will be able to get his department to come to a decision shortly.


James MacKerras Macdonnell: As I have listened to the debate, and I have done so for quite a while, I confess that a feeling of bewilderment has come over me. I did not know whether I was taking part in a solemn farce. Either we believe that we need some defence, or we do not. One hon. member last night assured us that we did not need any, because he could give us his assurance that no danger would arise. Unfortunately, I cannot say the same. As I say, I have had a feeling of bewilderment; I did not know whether this was a serious discussion or a sort of Gilbert and Sullivan comedy.
Apparently we have a skeleton; not a complete skeleton, I gather. As I listened to the hon. member for Nanaimo describing what was going on, that feeling of bewilderment which I have already suggested came upon me all the more forcibly, coupled with a sense of a farcial element in this whole matter. Take the "target". That struck me as a most diverting idea. You have an establishment which you cannot reach, so you cut it in two, and when you cannot reach it you cut it in two again. It reminds me of the story of the man who came to a banker with a number of worthless stocks on which he wished to borrow money. He valued them high enough to show a surplus, and the banker said, "Mr. Smith, if vou only valued all those securities at twice
as much, you would have twice as great a surplus." I think we are in very much the same position.
When I heard the minister say, not without some complacency, as I thought, that we were almost as good as we were in 1939 or thereabouts, it struck me that there were farcical elements in that too, because we all remember the position in which we found ourselves in 1939.
I do not wish to stop there and leave the impression that I am blaming the minister or that I think the minister has no answer. In one way, he has a perfect answer, and I think he has given this perfect answer. That answer is that he cannot get people to enlist, that we know there is full employment, and that we know, therefore, that conditions are such that we can have only a skeleton of a skeleton.
But my complaint is this. The people of Canada are not allowed to know that. If the people of Canada knew they had only a skeleton force, a force that could not do anything; if they knew they were defenceless, and if, having that knowledge, they said, "All right", that would be up to them. If they have no patriotism left, or if they accept the view of the hon. member for Cape Breton South, that there is no danger facing them, that is their concern. But I suggest that it is the duty of the government to tell us the truth, to let the people of Canada know the truth, and not to let items appear in the press such as I read yesterday. I read an item in the press yesterday to the effect that the Minister of National Defence was quoted as saying we could defend ourselves against 1,000 aeroplanes. I thought he must have been misunderstood. But there, again, I do not blame the minister.


Brooke Claxton: You do not blame me for what appears in the press, do you?


James MacKerras Macdonnell: No, but I am blaming the minister for this, that the impression has been left throughout the whole course of this debate that things are not so bad; that we are doing not so badly; that there is nothing really much to worry about, and so on. My complaint is that the people are not being told the truth. The people should be told the truth; we here should be told the truth, and if the people are told the truth and they accept the situa-ion, that is up to them.


George Randolph Pearkes: I can hardly allow the minister's answer to the hon. member for Vancouver South to pass without some challenge, and that is regarding the length of time it would take to put some of our forces
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in the field. It is inevitable that, in the proposals to which the minister referred yesterday, plans must be drawn up as to when the first division, or the second or the third division, could be mobilized if they were required. Similar plans existed, to my knowledge, in 1939. We had the example of 1939. We know how long it took for the first division to leave these shores. War broke out in the early part of September, and in early December the first division, untrained, left Canada to complete its training in the United Kingdom, where fortunately it had quite an extended period before being required to go into action.
I am not going to press the minister to give an answer. I do not believe it is in the interests of the security of the country that he should give an answer, but I refuse to accept the idea that no plans are made as to when, under certain sets of circumstances, troops can be made readily available. I suggest that it is not in the interests of security to announce those plans, but I wish that we might have a little more honesty in that respect. I have mentioned the time it took for the reserve army as trained in 1939 to be able to leave Canada to go to the war in that year. I do not think there is any need to labour the point.
I said yesterday that the reserve army is no more efficient today than it was in 1939. It has not had unit training. The minister admitted, and it is known everywhere, that we have been concentrating on the training of officers and non-commissioned officers. I do not know that anyone will grumble with that policy, but the fact remains that it is highly doubtful whether the first division of the reserve army today could be mobilized any more speedily than was the case in 1939.


Lawrence Wilton Skey: I wish to follow up the point made^ by the hon. member for Muskoka-Ontario and refer to the situation in connection with enlistment in Canada. I say to the minister it is my sincere belief, though there may have been improvement lately, that his difficulties with proper recruiting stem from one source and one source only, and that is the rates of pay which the armed services are offering. I think he told us in his speech that they had increased by ten per cent. As the minister well knows, the cost of living has gone away beyond that. It has risen 50 per cent. The cost of food is 90 per cent above what it was in 1939.
These rates of pay are quite out of line with present-day living costs. More than that, they are technically out of line, because the soldier, the sailor and the airman of today are quite different fighting men from what they were in 
1914-18 or perhaps even in 1939. As the minister said in his speech, the infantry man has at least six different sets of weapons to learn; the sailor must be a specialist in wireless, radar or some other technical side of naval work; and, as we all know, the airman has a tremendous number of technical requirements to fulfil before he is of any use in that sphere.
These men have jobs they can do in industry. If the minister wants them to go into Canada's active service forces, he must offer them a rate of pay that is at least somewhat competitive, and a ten per cent increase over the rates of pay during the war is certainly not enough to attract men with the technical capacity to master the techniques required in the armed forces of 1948.


John Horne Blackmore: I iwish to associate myself with the remarks made iby the hon. member for Vancouver South concerning the Hong Kong men. It makes me feel ashamed to be a Canadian when I learn that the Hong Kong men are still being considered instead of their being rewarded for the kind of experience they went through. It passes my understanding how the officials of the department could disregard in this case the fact that these men went over there untrained, into almost certain calamity.-and they went over there under several other circumstances that were altogether undesirable-purely because Canada was not properly prepared. Then they went through probably the most awful experiences that any group of men in the war went through. In many cases their health was permanently destroyed. Their chances for happiness are, in most cases, gone, if I am correctly informed. Now we hear albout their being considered, instead of being rewarded as heroes of that kind ought to be rewarded.
I would say in a general way that if the minister wants an explanation of why his recruiting is not progressing as he would like it to progress, he will find one of 'those reasons in the fact that rumours have gone over this land concerning the way in which we have treated the Hong Kong men. These stories get about. I wonder how many members of this house right now would like to see their boys, if they had any, go into the army when there was probably a fifty per cent chance of such a boy going through the experiences of a Hong Kong man? I wonder how many would vote to see their boys go in there? I will wager that not a single one in this house would do so. That being so, how can one expect other people to want their boys to go into the army when there is

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a chance that those boys will go through the harrowing experiences these Hong Kong boys went through, and then be simply considered and considered for months and months and years. I hope we never have to hear once more in this house of these Hong Kong boys being neglected. I hope they are rewarded, without delay, well enough so that they feel that they have been in some measure recompensed for the terrible sacrifices they made in this nation's difficulties in an hour of the gravest kind of peril.
Mr. MA.CDONNELL (Muskoka-Ontario): I wish to ask one question about the Royal Military College. The college is being reconstituted., as I understand it, and I should like to ask the minister whether it is the aim of the college to follow its former practice? I may think it may be fairly said that at one time it concentrated mainly on regimental officers. I want to know whether the scheme of training now contemplated will take as its aim the training of people who can do the best and most up-to-date military thinking that they can be capable of?


Brooke Claxton: I cannot see the difficulty in the remarks of the hon. member for Muskoka-Ontario. The idea back of the institution of the Royal Military College at Kingston is that we shall have for the three services a training institution which will provide the youth of Canada with a training second to none, measured by university standards, during the academic year; then, in the summer months, it will lead to their spending three and a half months on practical work with the service they select in the branch of the armed services for which they are fitted. Our expectation is that we shall establish new standards in this college equivalent to those of the universities throughout Canada, and that the men who graduate from our college will be well qualified to serve their country either on a full-time basis as members of the active forces or on a parttime basis as members of the reserve forces, but, above all, as citizens of Canada.


James MacKerras Macdonnell: I am afraid I did not make my question plain to the minister. I will state it a little bit differently. What I want to know is whether the military college, in addition to doing those things that I assume it would do-and they are obvious enough-would attempt, as far as possible, to take the place of what we might call post-graduate work and research work in the ordinary civilian university.


Brooke Claxton: No, not at all. It is not a post-graduate college. It is a college which will train the men who go through it in work which is equivalent to under-graduate work in the universities. It is equivalent for the first two years, year by year; and then, if carried on to the full four-year course, it will be equivalent to three years of engineering in the university. Post-graduate work in the armed forces will be carried on with the army staff college, the air staff college and the national defence college.


[Stage Direction]
Item agreed to.
Demobilization and reconversion-
244. Defence research and development, subject to allocation by the treasury board, and to authorize commitments against future years in the amount of $1,990,900, $15,997,392.
Howard Charles Green: Can the minister explain how the plan is working out under which the Canadian Commercial Corporation is doing all the purchasing for the defence forces? As he will remember, there was a good deal of questioning as to whether that was a wise plan. I think he himself had some doubts last year as to how it would work out. I should like to have a report this evening.


Brooke Claxton: I remember the hon. member for Vancouver South raised this question in connection with the amendments to the bills brought before the house early in 1947. At that time I think I frankly said we were trying this out. The Department of Munitions and Supply, which had done our purchasing during the war, gradually contracted; but it has preserved its records and some of its key personnel, and they have been incorporated into the Canadian Commercial Corporation, which has been entrusted with the job of acting as agent for the present Minister of Trade and Commerce in doing purchasing for the Department of National Defence. We find that it does not lead to delay; that the corporation uses its resources of information and trained personnel to ascertain from whom we should procure supplies. By and large we are finding that it is working out very well. Also it preserves a nucleus, should it be necessary in some future emergency again to organize a large purchasing agency.


Howard Charles Green: How does it tie in with the industrial defence board?
Mr. CI.AXTON: They do not cross at all, except that the industrial defence board, which is an advisory body, has been asked to advise the government on the measures taken in connection with procurement, purchasing and so on. As yet, we have not had a report
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from the industrial defence board, but no doubt the members of that board will look into the matter and report to the government.


Howard Charles Green: Is there any liaison between the industrial defence board and the Canadian Commercial Corporation?


Brooke Claxton: Yes. The industrial defence board has among its members a representative of the Canadian Commercial Corporation.


[Stage Direction]
Item agreed to.
Demobilization and reconversion-
780. To provide for the orderly establishment and organization of the defence forces of the army, navy and air services on a peacetime basis, and to authorize total additional commitments for this purpose of $63,744,537, including authority, notwithstanding section 29 of the Consolidated Revenue and Audit Act, to make additional commitments for the current year of $32,238,578 and additional commitments for future years of $31,505,959 against which additional commitments it is estimated that actual additional expenditures in 1948-49 will not exceed a further amount of $15,000,000.
George Randolph Pearkes: Is anything included in this vote for plans in connection with civil defence?


Brooke Claxton: No. Any expense in connection with civil defence will be paid out of the appropriation for the administration of the department.


Lawrence Wilton Skey: Is anything included in this vote to take care of the payment to the Hong Kong veterans, if the department should decide they deserve it?


Brooke Claxton: No, nothing is specifically provided. If the government changed its decision with regard to Hong Kong pay that would be met out of the provisions for pay and allowances.


Lawrence Wilton Skey: Has the government taken a position yet?


Brooke Claxton: Yes, back in 1946; and it was reported to the house in a return.


Howard Charles Green: Is the money available if the government should change its mind?


Brooke Claxton: Yes.


Howard Charles Green: The men would not have to wait for another session?


Brooke Claxton: No, they could be paid. It will be the responsibility of the government; the money is available.


Howard Charles Green: This item provides over $4,000,000 for search and rescue work, including navigational aids. Can the minister tell us the position taken by his department with regard to the suggestion that a Canadian coastguard

service should be set u,p? Time and again on the Pacific coast we have to call on the United States coastguard service to come to the rescue of ships in distress. I do not think anyone from that coast would disagree when I say we believe that a Canadian coastguard service should be established. What is the situation on that point?


Brooke Claxton: Whether or not a Canadian coastguard service should be established is a matter of government policy which would have to be decided by the government as a whole.


Howard Charles Green: Has any decision been reached on that point to date? If not, is it under consideration?


Brooke Claxton: Offhand I cannot answer my hon. friend. Perhaps he should direct his question to the Prime Minister.


Howard Charles Green: Does the minister know whether it is even under consideration?


Brooke Claxton: It has been under consideration.


[Stage Direction]
Item agreed to.

[Stage Direction]
Customs and excise divisions-
293. General administration, $1,329,134.
Some hon. MEMBERS:: Carried.


James MacKerras Macdonnell: No. I presume the minister is going to say something about his department.


James Joseph McCann: The estimates for customs and excise consist of three main operating votes: general administration, inspection, and port office operation. There is a further vote of $300,000 for expenses which cover the customs-excise seizures, and the revenue from these seizures for 1948-49 is estimated at about $400,000.
The total expenditure for 1948-49 is estimated at $15,926,000 odd. Of this total, some $13250,000 represent salaries of our permanent and temporary officers. Salaries represent 83-26 per cent of the total expenditure. Moreover, of the total amount to be expended on salaries, some 78 per cent is chargeable to the various port offices, our district offices which are located throughout Canada and where by far the greatest percentage of our employees are stationed.
I might give a brief statement with reference to the estimates. General administration amounts to $1,329,134; inspection and audit, $1,811,716; port office administration, $12,485,392, and customs-excise seizures, $300,000,

Supply-National Revenue
against which there is an offset of revenue of $400,000. This year there is an increase of S2.251.850, which represents an increase of 16-47 per cent over the 1947-48 estimates. That increase is accounted for in this way: general administration, $139,918; inspection and audit, $80,737; administration of the ports, $1,621,815. Of the increase, 81-2 per cent is on salary account.


Gordon Knapman Fraser: What was the increase in revenue?


James Joseph McCann: The revenue for 1947-48 was $1,163,743,000, and the cost of collection was 1-22 per cent.	*


James MacKerras Macdonnell: What are the amounts collected under the Excise Act amendment? I want to know the amount collected and what it cost to collect it.


James Joseph McCann: To what amendments is my hon. friend referring?


James MacKerras Macdonnell: What we call the 25 per cent excise tax; the amendments passed in March, I think.


James Joseph McCann: We have before us only the figures for the fiscal year. We have a breakdown showing the different items of excise tax collected, but there is no breakdown for the special 25 per cent tax to which the hon. member refers.


James MacKerras Macdonnell: I am anxious to have that. The minister knows we objected to this tax, and I want to have before the committee evidence as to what it has yielded and what it costs to collect. If the minister cannot get the figure tonight, perhaps it could stand until tomorrow. But I want to have it.


James Joseph McCann: I do not think it would be possible to make an allocation with reference to the particular cost of collecting this 25 per cent excise tax, because it goes into the general cost of the ports at which it is collected.


James MacKerras Macdonnell: I thought perhaps the minister would say that. I would be content with an allocation which the minister would consider fair; I shall not be hard to please in the matter. But I wish to have a figure which the minister would consider fair. The hon. member for Rosedale suggests to me that there may be special people doing it. My interest is to have a figure as to what it costs to collect that tax. As I say, if the minister will give me what was collected, which, I take it, can be ascertained without difficulty, and then will give me what he considers a fair estimate of the cost, I shall not cavil at it.
5849-375J	' lay


James Joseph McCann: I can give the amount, but I cannot break down the cost of collecting the tax. From the time it went into effect until March 31, the actual taxes collected
were as follows:
Automobiles	 $14,195,435.36
Cameras, projectors, slides and
films	 479,000.00
Electrical appliances	 3,215,000.00
Fire arms	 117,101.00
Motorcycles and motors	 178,800.00
Outboard motors	 165,193.00
Phonographs, radios and tubes 3,364,356.00
This makes a total of approximately


James MacKerras Macdonnell: And the cost of collecting it was what?


James Joseph McCann: As I said, the cost of collection of that particular tax has not been allocated, nor has it been kept separate from the cost in any port of collecting all the taxes which come into that port.


James MacKerras Macdonnell: If the minister could take his total cost of collection, he could pro rate the total cost against the total collection and perhaps give a figure in the morning.


Leslie Alexander Mutch: His guess is no better than anybody else's.


James MacKerras Macdonnell: I think it might be.


James Joseph McCann: I submit that it is not possible to give a figure as to the cost of collection of any particular tax. I might say we have collected taxes amounting to over a billion dollars, and it included taxes on forty-seven different types of items. The cost of any particular item is not segregated from the general costs of the ports. We can give the figures with reference to the total cost of collection over the past year. But here we have collected taxes on cables and telephones, stamps, stock transfers, furs, automobiles, lighters, candy, soft drinks, luggage, tobacco, cigars, cigarettes, sugar, glucose, carbonic acid-all those things. I cannot give any idea of how much it cost to collect the tax on playing cards, for instance; and nobody else can. It would take a Philadelphia lawyer to figure it out.


James MacKerras Macdonnell: I am not asking the minister to do anything impossible. I am asking him to take the figure of the total receipts and costs and from them to take a rough pro rata figure. I am not asking him to go into a multitude of details. His officials have the total figure,
*5904
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and they can work it out in five minutes. That is all I am asking; and I want to have it.


Loran Ellis Baker: It would add considerable to the cost to figure out what the cost of collection is.


Harry Rutherford Jackman: Perhaps you can tell us how much it would be.


Mr. FLEMING:: There is something wrong with the accounting.


James Joseph McCann: Last year the total cost of collection was 1-22 per cent of the revenue collected. That will not vary much, and I would say the cost of collection in this instance, relative to the amount collected, would be in the neighbourhood of 1-22 per cent, or probably -5 per cent.


James MacKerras Macdonnell: That is a fair answer. Will the officials figure it out and give me the figure? I am not good at arithmetic.


James Joseph McCann: That is as near as I can give it to the hon. member.


James MacKerras Macdonnell: But give me the actual figure. Let them figure the percentage out and give me the actual figure.


An hon. MEMBER:: Get an adding
machine.


William Henry Golding: Shall the
item carry?


James MacKerras Macdonnell: No, it is not carried.


James Joseph McCann: Roughly it comes to $14,000 or $15,000.


James MacKerras Macdonnell: All right. I will move that that amount be struck out of the estimates-the $14,000. My motion is that the cost of collecting the tax imposed by the Excise Tax Act amendment be reduced to $1.
I wish to say a few words in connection with that. This committee will recall that a considerable fight was put up against the imposition of this tax. The committee will also recall that various reasons were alleged, and that we found great difficulty in making up our minds as to the final reason which prompted the government to put it through. The first idea was that it was not for taxation at all. But eventually it turned out that it was for several reasons, if for any reason.


Some hon. MEMBERS:: Carried.


James MacKerras Macdonnell: I am not making any apology for this. This idea that we are to be hurried into slurring these things over because they are brought up at the last minute does not go down with me. And if people try interrupting they will get more.


Howard Charles Green: Hear, hear.


James MacKerras Macdonnell: Let me say that this tax has been criticized from coast to coast. It has 'been criticized now in the report which we got today. There has never been any satisfactory reason alleged for its being imposed. And I think now is the time for members of this House of Commons to make up their minds whether they have the courage of their convictions-which I know many of them have-and vote for this amendment which asks that the cost of collecting the tax be stricken out.


Some hon. MEMBERS:: Question


William Henry Golding: Order.


James MacKerras Macdonnell: Probably the Chairman has difficulty in reading my writing.


William Henry Golding: The amendment is out of order. We are dealing with item 293. Shall the item carry?


Some hon. MEMBERS:: Carried.


James MacKerras Macdonnell: No; just a minute. Will the minister give me the rule under which he is ruling it out of order?


William Henry Golding: Which of these votes does the hon. member wish to reduce?


James MacKerras Macdonnell: Vote number-


William Henry Golding: The amendment is to strike out $14,000.


James MacKerras Macdonnell: Perhaps the minister can tell me whether it is item 293 or item 294.


James Joseph McCann: I do not think the hon. member is right in either of them.


William Henry Golding: What is the hon. member dealing with?


James Joseph McCann: The hon. gentleman is not right in his selection of either item. This is a matter that has to do with the running of the ports of entry throughout the country where the taxes are collected.

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James MacKerras Macdonnell: Perhaps it is item 295.


James Joseph McCann: It would come more
properly under item 295.


James MacKerras Macdonnell: Then we shall wait until we reach item 295.


Winfield Chester Scott McLure: The total to be voted for this department is S44,994,942; there is $25,323,721, of which 77 per cent or $19,676,221 is for temporary assistance. What is the approximate number of temporary employees?


James Joseph McCann: The hon. gentleman is including in his figure the customs and excise division, the taxation division, the national film board and the government office economies control division, as well as the Canadian Broadcasting Corporation. If he will let us know just what questions he wishes answered relative to the customs and excise divisions, which we are now dealing with, I shall give him an answer.


Winfield Chester Scott McLure: The total amount to be voted is almost $45,000,000.


James Joseph McCann: Not for customs and
excise.


Winfield Chester Scott McLure: For national revenue, with which we are now dealing.


William Henry Golding: The item before the committee is item 293, general administration, $1,329,134.


Winfield Chester Scott McLure: That is under national
revenue.


William Henry Golding: It is the item of general administration.


Winfield Chester Scott McLure: Cannot we bring up anything under that item with regard to the administration of the whole department?


William Henry Golding: We shall
have to deal with the item before the committee.


Howard Charles Green: I submit that that ruling is not in accordance with the rules of this house. Under the administration item of any department, an hon. member is entitled to bring up questions which affect the department as a whole. That is exactly what the hon. member for Queens is doing, and I submit that he is entirely in order.


James Joseph McCann: May I clarify the situation? For estimate purposes, national revenue is divided into different divisions which are dealt with separately. Customs and excise is one division, for which we have an administration item. Another division is taxation, for which
we have an administration division. As Minister of National Revenue I am responsible for the national film board, the Canadian Broadcasting Corporation and the government office economies control division. The last three divisions which I have mentioned have nothing to do with the Department of National Revenue, except that I happen to* be the minister in charge of them and. therefore, for the purposes of the estimates they are listed under national revenue.


Howard Charles Green: In each department there is one item on which we can discuss the general affairs of the department.


James Joseph McCann: It is split into two here.


Howard Charles Green: But the minister cannot get away from a general discussion of his departmental affairs because of that.


James Joseph McCann: I am not trying to get away from anything; I am trying to explain.


William Henry Golding: If the hon. member will turn to page 202 of the- estimates he will find the details of the item we now have before us, which deals with administration. As we come to the other items, we can deal with the matter the hon. member has, in mind.


Winfield Chester Scott McLure: This item is for $1,342,134 and the amount for temporary assistance is $314,076. However, the total for temporary assistance in the Department of National Revenue is $19,676,221. Surely we should have some idea what that total is for.


James Joseph McCann: If the hon. member wants to know the number of employees in the different divisions we can give him the exact number in the customs and excise divisions now under the general administration item, and then we can give him the number of employees in the taxation division.


Howard Charles Green: Why not give him the total number of employees in the Department of National Revenue?


James Joseph McCann: You will have to take into consideration the fact that there are practically five departments with separate heads. There is a deputy minister of customs and excise, and a deputy minister of taxation whose duties are entirely different and separate.


Howard Charles Green: The minister should have a good secretary who could tell him how many employees are under him.


James Joseph McCann: There are approximately* 18,000 in my department.
Supply-National Revenue


Herbert Wilfred Herridge: I should like to refer again to a matter which I have brought to the attention of the minister on two previous occasions, because it is of great importance to the people whom I have the honour to represent. I have asked that an office of the Department of National Revenue be established to serve the East and West Kootenays. An office is to be established at Kelowna to serve the Okanagan district.
Mr. MoCANN: I think what the hon. member as talking about has to do with income tax offices, which would be under the taxation division.


Herbert Wilfred Herridge: Yes.


James Joseph McCann: We have not yet come to that.


John Horne Blackmore: Before this item carries, I should like to talk a matter over with the minister for a few minutes. I have been greatly interested, in the McCann commission of which we have heard a lot this year, and I should like to find out where I can discuss it. Those who are best, qualified to advise me tell me that it should be discussed under the estimates of the Minister of National Revenue, under either item 293 or item 306 or item 308 of the minister's estimates. If the minister will tell me under which item he will entertain a discussion of this matter, which will probably be a searching one, I shall be glad to wait until the end if he so desires.


James Joseph McCann: The matter referred to has absolutely nothing to do with the Department of National Revenue. The circumstances with which the commission named after me had to do were certain complaints by veterans with reference to treatment and with reference to those who treated them and the institutions in which they were treated. I was chosen to be chairman of that commission because of my profession, not because of my position as minister, and it has absolutely nothing to do with the Department of National Revenue. We made a report to the Department of Veterans Affairs, and the hon. gentleman had an opportunity to discuss it on veterans affairs estimates or in the veterans affairs committee or probably on the budget, if he wanted to. But it has nothing to do with the Department of National Revenue, and I am not in a position to give him any information on it tonight. So far as I am concerned personally, it did not cost the country one five-cent piece.


John Horne Blackmore: That is an interesting story, all right.


William Henry Golding: Order. The hon. member is completely out of order in 
discussing that matter on this item. It has nothing to do with the Department of National Revenue. Speeches in committee must be strictly relevant.


John Horne Blackmore: I cannot hear you, Mr. Chairman, because of those noisy people over there on the opposite side of the chamber. If you will keep them in order we shall make better progress. If we are being delayed it is because we have to listen to a lot of chirping going on over there. The minister has suggested that this matter could be discussed under veterans affairs estimates, but I challenge the minister to find an item in those estimates where it could be discussed.


William Henry Golding: Order. I
must ask the hon. member not to discuss the matter further under this item.


John Horne Blackmore: Mr. Chairman, there is no item in veterans affairs estimates under which it can be discussed, so far as I can see.


William Henry Golding: Order. This is no place for such a discussion, because it has nothing whatsoever to do with this item.


John Horne Blackmore: If the commission did not cost anything, it must come under administrative expenses, I should think, of national revenue.


William Henry Golding: Order. I must again ask the hon. member not to discuss the matter further, because it has nothing to do with this item.


[Stage Direction]
Item agreed to.
Customs and excise divisions-
295.	Ports, outports and preventive stations, including pay for overtime of officers notwithstanding anything in the Civil Service Act, and temporary buildings and rentals, $12,485,392.
James MacKerras Macdonnell: I wish to move to reduce this item by $14,000. I shall read from Beauchesne, third edition, citation 484:
Amendments moved for the 1'eduction of a grant are proceeded with under the general rules governing amendments. For instance, on a resolution granting $10,000 for a certain purpose, a member may move that the amount be reduced by $2,000. This amendment then takes the form of the original motion offering, in lieu of the sum thereby proposed, a reduced sum for the acceptance of the committee.
It goes on to say that if one amendment is rejected another one may be proposed. Pursuant to that rule, I m'ove that item 295 be reduced from $12,485,392 to $12,471,392, and I submit that I am within the terms of the rule I have quoted.

Supply-Labour


William Henry Golding: The only reason the hon. member was out of order before was that he was trying to move his amendment to item 293,
Amendment negatived: yeas 16; nays 38. Item agreed Ito.


Some hon. MEMBERS:: Twelve o'clock.
Mr. MoCANN: There are two items, Mr. Chairman, 799 and 800 under the customs and excise divisions, totalling 826,012 and having t.o do with inspection, overtime pay to officers at ports and so forth which I should like to have called.
Customs and excise divisions-
799.	Inspection, investigation and audit services-further amount required, $4,512.
800.	Ports, outports and preventive stations, including pay for overtime of officers notwithstanding anything in the Civil Service Act, and temporary buildings and rentals-further amount required, $21,509.


[Stage Direction]
Items agreed to.
Resolutions reported, read the first and second times and concurred in.

Mr. FOURNIER (Hull):: Mr. Speaker, I move that the house do now adjourn. Tomorrow we shall consider the amendments made by the senate to Bill No. 338, respecting income taxes. They are small amendments. Then Bill No. 398 to amend the Manitoba Natural Resources Act. Then we shall take up supply in the remaining departments, the rest of national revenue, public works, legislation, finance, the Prime Minister's office, some supplementary estimates before the house. Then the Minister of National Health and Welfare will move concurrence in the report of the prices committee. There is only one other item that will remain to conclude the business of the session, namely, the resolution in the name of the Prime Minister, and I hope we shall be in a good humour tomorrow to take that on.


Angus MacInnis: May I ask the Minister of Public Works at what time of the day the prices report will toe moved?


Alphonse Fournier: I wanted to suggest to my hon. friends-I have not discussed it-that tomorrow we sit from eleven to one and adjourn to two, then continue with estimates until three o'clock. I believe the Minister of National Health and Welfare announced that he would move concurrence in the report at three o'clock if that is satisfactory. I think
that could easily be followed. I shall see my hon. friends tomorrow morning.
Motion agreed to and the house adjourned at twelve midnight.
[The following items were passed in committee of supply]:



DEPARTMENT OF LABOUR

[Stage Direction]
142.	Bureau of technical personnel and placement of university graduates, $39,569.
Vocational training-
143.	Vocational training for discharged members of Canada's armed forces; payments to the provinces for capital expenditures for vocational schools, buildings and equipment; and to provide for dominion contributions towards replacement by a province or municipality of machinery used in war emergency training; including undischarged commitments of previous years, $5,790,090.
144.	Wartime labour relations board, $17,500.
145.	To provide for re-location, maintenance and welfare of persons of the Japanese race in Canada and to provide such financial assistance for repatriation of persons of the Japanese race as may be authorized by the governor in council, $325,000.
146.	To provide for the effective organization and use of agricultural manpower, including recruiting, transporting and placing workers on farms and related industries and assistance to the provinces pursuant to agreements that may be entered into by the Minister of Labour with the provinces and approved by the governor in council, $375,00.
147.	To provide for payment to the national film board for educational films for exhibition, $24,000.
148.	To provide for expenses that may be incurred in the arranging for and the movement of workers from outside Canada to work on farms and other essential industry in Canada when Canadian labour is not available to meet the need; including costs connected with the su-pervision and welfare of persons already immigrated to Canada under former authorized labour movements, and administrative expenses connected therewith, $700,009.
Unemployment insurance commission-
149.	To provide for transfer of labour to and from places where employment is available in agriculture and industry and expenses incidental thereto, $400,000.
727.	Annuities Act-administration-further amount required, $38,000.
728.	To provide authority for payment out of the government annuities fund to Charles E. Finlay of the sum of $2,138.67, being a refund of part of the premiums paid in respect of government annuity contract No. 68,181, together with interest on the said sum at the rate of 1J per cent per annum, compounded annually from August 22, 1940, to the date of payment, $1.
729.	To provide authority for payment out of the government annuities fund to James W. Morris of the sum of $2,607.24, being a refund of part of the premiums paid in respect of govern-
Supply-Fisheries
[Stage Direction]
ment annuity contract No. 88,825, together with interest on the said sum at the rate of 1J per cent per annum, compounded annually from May-14, 1944, to the date of payment, $1.
730.	Fair w*ages, conciliation, industrial relations, industrial disputes investigations, including the administration of legislation relating thereto, and for activities re promotion of cooperation in industry, between labour and management-further amount required, $14,000.
731.	Labour Gazette and other publications authorized by Labour Department Act-further amount required, $19,000.
732.	To provide for expenses that may be incurred in the arranging for and the movement of workers from outside Canada to work on farms and in other essential industry in Canada when Canadian labour is not available to meet the needs, including the duty of obtaining applications from employers and the placement of the workers on arrival in Canada and including costs connected with the supervision and welfare of persons already immigrated to Canada under former authorized labour movements and administration expenses connected therewith-further amount required, $250,000.
733.	To authorize and confirm the continuance of regional boards known as "advisory boards, Labour Department", established by P.C. 6387 of August 10, 1943, P.C. 512 of January 12, 1044, and P.C. 5209 of July 24, 1945, to act in an advisory capacity to the Ministry of Labour for the co-ordination of the work of the various divisions of the Department of Labour and the immigration branch of the Department of Mines and Resources, and to provide for payment of per diem allowances to board members and their necessary travelling expenses for attending board meetings; the whole, subject to the conditions and provisions of the aforementioned orders in council which were not continued under the Continuation of Transitional Measures Act, 1947, $1.

[Stage Direction]
95.	Departmental administration, $277,000.
96.	Fisheries inspection, including fishery officers and guardians, fisheries patrol and protection services, $2,438,000.
97.	Building fishways and clearing rivers, $50,000.
98.	Educational extension service, including grant of $3,000 to Lunenburg Fisheries Exhibition, $200,000.
99.	Fish culture, $350,000.
100.	Oyster culture, $45,700.
Fisheries research board of Canada-
101.	Operation and maintenance, $894,690.
102.	Construction and improvements, $75,000.
103.	To provide for Canadian share of expenses of the international fisheries commission appointed under treaty dated March 2. 1923, between Canada and the United States for the' preservation of the North Pacific halibut fisheries, $31,500.
104.	To provide for Canadian share of expenses of the international Pacific salmon fisheries commission under treaty between Canada and the United States for the protection, preservation and extension of the sockeye salmon fisheries of the Fraser river system, $99,500.

105.	To provide for Canadian share of expenses of the international Pacific salmon fisheries commission to overcome obstructions to the ascent of sockeye salmon at Hell's Gate canyon and for investigating and overcoming obstructions to such salmon at other points on the Fraser river watershed (revote), $250,090.
106.	Grant to the United Maritime Fishermen's Association, $3,000.
107.	To provide for transportation, dressing and dyeing and other expenses incidental to receiving and disposing of fur seal skins accruing to Canada pursuant to provisional fur seal agreement between Canada and the United States by exchange of notes dated December 26, 1947, $550,000.
108.	To provide for the destruction of harbour seals, $30,099.
Special-
109.	To provide for the extension of educational work in co-operative producing and selling among fishermen, $80,090.
110.	To provide for the administration expenses of the Fisheries Prices Support Act, 1944, $200,000.
111.	To provide for assistance in the construction of vessels of the dragger and/or long liner type, subject to such terms and conditions as may be approved by the governor in council, $290,090.
112.	To provide for assistance in the construction of bait freezing and storage facilities, subject to the approval of the governor in council, $50,099.
799. Fisheries inspection, including fishery officers and guardians, fisheries patrol and protection services-further amount required, $265,790.
710.	Fish culture-further amount required, $10,099.
711.	Oyster culture-further amount required, $5,520.
712.	Fisheries research board of Canada- operation and maintenance-further amount required, $48,700.
Construction and improvements
[Stage Direction]
713.	Further amount required, $78,000.
714.	To provide for the acquisition of lands required by the international Pacific salmon fisheries commission, as required by article VIII of treaty dated May 26, 1930, between Canada and the United States for the protection, preservation and extension of the sockeye salmon fisheries of the Fraser river system, $2,000.
715.	To authorize and to provide for the fisheries prices support board to reimburse the Canadian Commercial Corporation for administrative expenses in connection wtih the purchase of 190,090 eases of east coast canned fish on behalf of fisheries prices support board under chapter 42, statutes of 1944 and order in council P.C. 1229, dated March 25, 1948, $7,500.

[Stage Direction]
232.	Miscellaneous maintenance and adjustments (war of 1914-18), $26,668.
233.	Battlefields memorials, $57,230.
Pensions and other benefits-civil pensions-
234.	Robert Allen, $192.50.
235.	Walter Pettipas, $515.90.

Supply -National Revenue
236.	Florence Walker, $360.
237.	Arnold Truman Townsend, $420.
238.	Michael Mountain, $420.
239.	Mrs. Alice Smuck, $480.
240'. Mrs. Mary Whittington, $200.
241.	Mrs. Eleanor F. Nixon, $1,287.55. Militia Pension Act-
242.	Government's contribution to the permanent forces pension fund, $4,109,109.
243.	To provide for the orderly establishment and organization of the defence forces of the army, navy and air services on a peacetime basis, and to authorize total commitments for this purpose of $256,514,584, including authority, notwithstanding section 29 of the Consolidated Revenue and Audit Act, to make commitments for the current year of $227,082,515, and commitments for future years of $28,432,069 against which commitments it is estimated that actual expenditures in 1948-49 will not exceed, $207,082,515.
244.	Defence research and development, subject to allocation by the treasury board, and to authorize commitments against future years in the amount of $1,006,000, $15,997,392.
780. To provide for the orderly establishment and organization of the defence forces of the army, navy and air services on a peacetime basis, and to authorize total additional commitments for this purpose of $63,744,537, including authority, notwithstanding section 29' of the Consolidated Revenue and Audit Act, to make additional commitments for the current year of $32,238,578 and additional commitments for future years of $31,506,969 against which additional commitments it is estimated that actual
additional expenditures in 1948-49 will not exceed a further amount of $15,000,000'.
781. Defence research and development, subject to allocation by the treasury board, $3,800,000.
DEPARTMENT OF NATIONAL REVENUE Customs and excise divisions-
293.	General administration, $1,329,134.
294.	Inspection, investigation and audit (including the former preventive service undervaluation unit), $1,811,716.
295.	Ports, outports and preventive stations, including pay for overtime of officers notwithstanding anything in the Civil Service Act. and temporary buildings and rentals, $12,485,392.
296.	To provide for payment of expenses, law costs, refunds and awards arising out of seizures and charges of contravention of customs or excise laws, $300,000.
Taxation division

*
297.	General administration, including authority to create positions and make appointments, within the division, notwithstanding anything contained in the Civil Service Act and the said positions and staff so appointed are hereby wholly excluded from the operation of the said act, $1,813,574.
Customs and excise divisions-
799.	Inspection, investigation and audit services-further amount required, $4,512.
800.	Ports, outports and preventive stations, including pay for overtime of officers notwithstanding anything in the Civil Service Act, and temporary buildings and rentals - further amount required, $21,500.
[Stage Direction]
Saturday, June 26, 1948