Mr. SPEAKER:: I have the honour to inform the house that I have received a communication from two members notifying me that the following vacancy has occurred in the representation, namely, of the Hon. Murray MacLaren, member for the electoral district of St. John-Albert, by acceptance of an office of emolument under the crown.
I accordingly issued my writ to the chief electoral officer to make out a new writ of election for the said electoral district.



RESIGNATION OF MR. T. L. McEVOY

Pierre Édouard Blondin: I have the honour to inform the house that the clerk has received

Hudson Bay Route
the resignation of T. L. McEvoy, Esquire, a committee clerk, House of Commons, which has been accepted, subject to ratification by the house, and that I have directed the clerk to lay upon the table the correspondence and my recommendation in relation thereto.



HUDSON BAY ROUTE


[Stage Direction]
On the orders of the day:
Hon. ALFRED DURANLEAU (Minister of Marine):: On the orders of the day, on February 8, at page 668 of Hansard, the hon. member for Nelson (Mr. Stitt) asked the following question:
What steps is this government taking to have these rates, which are now five times greater than those from Montreal out of Churchill, brought somewhere near a parity with those prevailing out of the port of Montreal.
The Prime Minister in reply stated that Mr. Stitt's question would be taken as a notice and, after giving the position of the imperial shipping committee with regard to the matter, he further stated that it would be looked into carefully and an answer given by the Minister of Marine.
I am sorry that the hon. member for Nelson quoted only part of paragraph 13 of the fifth report of the imperial shipping committee on Hudson bay marine insurance rates for 1934. The last sentence of section 13 of that report, reads as follows:
We recognize, however, that underwriters conduct their business on the basis of recorded results and it must be admitted that, as long as the route is used by comparatively few vessels, a total loss may more than account for the whole profit of a season.
Section 15 of the same report reads as follows:
At his annual interview with the chairman of the joint hull committee, our chairman pointed out that the disparity between the rates for the suspension of warranty in respect of Montreal and Churchill would still be considerable in the coming season, but the chairman of the joint hull committee urged that, owing to the loss of the Bright Fan the loss ratio on the Hudson bay route was such that a further reduction in the rates of premium was not feasible for the present. The chairman of the joint hull committee, however, indicated that, if a considerable number of vessels visited Churchill during the 1934 season and there was no serious loss, the joint hull 92582-464
committee would be prepared to give favourable consideration to the question of a further reduction in the rates of premium.
During the 1934 season of navigation to and from Churchill, thirteen different cargo steamers used the route. Two of them made two voyages each making fifteen voyages in and out of Churchill. All ships made good voyages and the logs of the ships furnished by themselves do not record any accidents or casualties in Hudson bay and strait this year.
The Marine department's report on the navigation conditions in Hudson bay and strait during the season of navigation 1934, has just been completed and copies of it have been transmitted to the imperial shipping committee and a letter has been sent to the High Commissioner for Canada in London, who is Canada's representative on the imperial shipping committee, requesting him to have the committee do all possible to obtain further reductions in Hudson bay marine insurance rates.



CANADIAN NATIONAL RAILWAYS


[Stage Direction]
Hon. E. N. RHODES (Minister of Finance) moved that the house go into committee at the next sitting to consider the following proposed resolution:
That it is expedient to bring in a measure to provide for the refunding of maturing and callable financial obligations of the Canadian National Railways and for the issue of substituted securities therefor, guaranteed by the dominion, in an amount not exceeding $200,000,000.
He said: His Excellency the Governor General, having been made acquainted with the subject matter of this resolution, recommends it to the favourable consideration of the house.
Motion agreed to.

[Stage Direction]
On the orders of the day:
Hon. IAN MACKENZIE (Vancouver Centre):: I would like to ask either the Minister of Finance or the Prime Minister whether the press dispatches are correct that representations have been made by the British government to this government with respect to the attempt that is now being made to lower the rate of interest on outstanding bonds of the city of Vancouver.
Farmers' Creditors Act


Right Hon. R. B. BENNETT (Prime Minister):: The British government through the usual channels asked this government for the facts with respect to the situation. We advised them that the provinces were autonomous and they have taken such action as they thought advisable. We have had no communication other than through the usual channel, the High Commissioner, who inquired what the facts were so far as this government was concerned.



UNEMPLOYMENT INSURANCE

[Stage Direction]
On the orders of the day:
Hon. ERNEST LAPOINTE (Quebec East):: In view of the proposed legislation on unemployment insurance, as the second reading of the bill is fixed for to-day may I ask the Prime Minister to lay on the table of the house the draft convention adopted at the international labour conference at Geneva last year with regard to a scheme of unemployment insurance.


Richard Bedford Bennett: I assume that the hon. gentleman has seen the draft convention which comprises many matters in addition to unemployment insurance. I have not it beside me, but I will lay it on the table.


Ernest Lapointe: There are fewer matters in the convention than there are in the bill of the right hon. gentleman; there are only twenty-three sections as against forty-five in the proposed legislation.


Richard Bedford Bennett: This is not the appropriate time to enter into a discussion, but surely the ex-Minister of Justice knows the details of legislation in each country are not entirely the same as those contained in the draft convention.


Ernest Lapointe: Surely the Prime Minister knows when he introduces legislation like that, he should give to the house the draft convention regarding it.



USE OF DRUG HEROIN

[Stage Direction]
On the orders of the day:
Mr. J. L. BROWN (Lisgar):: Have any
representations been made to the Minister of Pensions and National Health regarding the prohibition of the importation and use of the drug heroin. Has he any statement to make in regard to the matter?


Hon. D. M. SUTHERLAND (Minister of Pensions and National Health):: I was not
very clear as to the question, but I shall read it and give the hon. member an answer to-morrow.



MARITIME RIGHTS COMMISSION

[Stage Direction]
On the orders of the day:
Hon. J. L. RALSTON (Shelburne-Yar-mouth):: Has the government received a
report from the commission headed by Sir Thomas White with regard to maritime claims, and if so, when will the report be made public?


Richard Bedford Bennett: No such report has been received.



FARMERS' CREDITORS ACT


[Stage Direction]
On the orders of the day:
Mr. CAMERON R. McINTOSH (North Battleford):	I have a question to direct to
the Minister of Finance. It arises out of a communication from Mrs. S. Ferguson, secretary of the rural municipality of Great Bend, No. 405, Saskatchewan. In the letter there is this resolution endorsed by the council of that municipality:
That we recommend to the proper authorities that a capable lawyer be appointed by the government to represent farmers in cases of applications for debt adjustment brought before the provincial board of review.
My question is as follows: In view of the fact that loan companies and other corporations in every debt arrangement case passed on to the provincial board of review will be represented by able legal counsel, will the minister, to avoid placing farmers in a position of disadvantage and discrimination, consider the advisability of providing them with competent counsel before the board?
Hon. E. N. RHODES (Minister of Finance):: This matter was brought to my attention some two or three weeks ago by wire from one of the larger agricultural organizations in western Canada. I advised them immediately in reply to the effect that if it was demonstrated in practice that solicitors for the farmers were required to be appointed,

Unemployment Insurance-Mr. Bennett
they would be, but that until such time as it was demonstrated that they were required, they would not be. I may say that this is a matter that I cannot discuss at this stage on the orders of the day, but when we are discussing the details of the farm loan measure I shall be glad to go into the matter at greater length.



HOUSING POLICY

[Stage Direction]
On the orders of the day:
Mr. J. A. MERCIER (Laurier-Outremont):: On January 24, the Prime Minister, on the discussion on a proposed national housing policy, said that at a later date he would state whether a special or a select standing committee should be named to consider the matter. Is he in a position to say when this question will be brought up?


Richard Bedford Bennett: I gather from inquiries made that
the house will be satisfied with a select committee and it is proposed to appoint a committee of fifteen. I have asked the government whip to confer with the whips of the other parties for the purpose of securing the names of their representatives on the proposed committee.



ELECTRICITY INSPECTION ACT

[Stage Direction]
Hon. R. B. HANSON (Minister of Trade and Commerce) moved the second reading of Bill No. 18, to amend the Electricity Inspection Act, 1928 (French version).
Motion agreed to, bill read the second time, considered in committee, reported, read the third time and passed.


[Stage Direction]
Right Hon. R. B. BENNETT (Prime Minister) moved the second reading of Bill No. 8, to establish an employment and social insurance commission, to provide for a national employment service, for insurance against unemployment, for aid to unemployed persons, and for other forms of social insurance and security, and for purposes related thereto.
He said; Mr. Speaker, Bill No. 8 standing in my name, the second reading of which I now
have the pleasure of moving, has been printed in English and in French for some days, and ample opportunity has been afforded to members of the house to make themselves familiar with its provisions. Gur rules do not contemplate the discussion of sections of the bill seriatim on its second reading, but rather a discussion of the principles underlying the measure submitted to the house for its consideration. Therefore I shall content myself with endeavouring to keep within the rules, and shall confine my observations to the general principles of the measure.
It will be observed that the words used are "unemployment insurance." Therefore it is well at the outset to realize that this is an insurance measure, and not a relief measure. Insurance means that on the payment of a sum of money, usually called a premium, and most frequently paid in advance, the person paying such premium is entitled to a benefit if certain events happen or certain contingencies arise. The right to that benefit is dependent usually upon the insured person satisfying certain requirements. That is the essence of unemployment insurance; a sum paid for the purpose of securing a future benefit. In this instance the sum is to be paid by the employer, by the employee and by the state jointly, the sum total of these contributions constituting the premium which actuarially ensures to the beneficiary the benefits mentioned in the measure. To that extent it is not materially different from an ordinary insurance policy, which contemplates the payment of stated sums to the person named as the beneficiary upon certain contingencies or events happening, such payments to be made on conditions named in the insurance policy itself.
The discussion therefore is narrowed down to a consideration of what may be regarded as the basic principles upon which this insurance benefit is to be paid. I have already indicated that the premium is to be paid by three contributors, and that the benefits accrue upon the happening of certain contingencies, and on the condition that the insured has met certain requirements.
Leaving that for the moment, the question of administration becomes of paramount importance. Is an insurance plan of this character to be administered by the state itself, or is an organization to be set up clothed with the powers necessary to discharge the
726	COMMONS
Unemployment Insurance-Mr. Bennett
functions of administration? We have followed the British system in many of the provisions of the bill, but as far as administration is concerned the scheme provided by this bill, as will be observed by hon. members who have read it, is to be administered by a commission. The commission will consist of three persons. They will represent the great mass of employees, the employers, and the government. The provisions that enable labour and the employers to be represented are set out at length in the measure. In addition there is to be set up an advisory committee, which in essence is to be the watchdog of the fund. The function of the advisory committee is indicated by its name. It is expected that there will be a measure of voluntary service, and it has been found in most countries that there are, citizens so well-disposed towards social problems as to render their services gratuitously, but whether gratuitously or otherwise I am not at the moment concerned, beyond saying that the advisory committee will consist of a body of men of the highest possible type, to ensure that the fund is maintained in its integrity and that in every respect the terms and provisions of the statute are observed. In practice I think it will be found, as it has been found elsewhere, especially in England, that such a committee will ensure the commission discharging its duty free from any political considerations.
Then going a step further, it will be found that local committees for advice and assistance are to be provided, and on all these committees both employers and labour will have representation. The bill itself sets forth how these details are to be worked out. Section 36 is important in explaining the functions of the advisory committee. There are three great divisions with respect to administration, namely the commission, the advisory committee and the local committee. The purpose is that, subject to the sufficiency of the fund being maintained, which of course is a matter guaranteed by the membership of competent persons upon the advisory committee, benefits can be either high or low as the premiums paid may ensure. That is, the benefits may be larger if larger premiums are paid, the benefits may be diminished if the premiums are less than those mentioned in the measure. In other words it is the duty of the administrative bodies to see that the fund is maintained in its integrity, that it is sound aetuarially, and that the benefits paid are such as the premiums paid by the insured will purchase.

The next question that might be asked would be, who are to be insured under this measure? The first part of the schedule indicates clearly who are to be insured; I do not think it serves any useful purpose to read the provisions at length, beyond pointing out that they are set forth at page 31 of the draft bill:
Employment within the meaning of part III of this act,-
.	(a) Employment in Canada under any contract of service or apprenticeship, written or oral, whether expressed or implied, or whether the employed person is paid by the employer or some other person, and whether under one or more employers, and whether paid by time or by the piece, or partly by time and partly by the piece, or otherwise.
(b)	Employment under the dominion, or under any province of Canada with the concurrence of the province, or under any municipal or other public authority, other than any such employment as may be excluded by special order of the commission.
(c)	Employment outside of Canada, or partly outside of Canada, for the purpose of the execution of some particular work, by persons who were insured contributors immediately before leaving Canada, for an employer resident or having a place of business in Canada, being employment which if it were employment in Canada, would make the persons employed therein employed persons within the meaning of this act; subject however, to any prescribed conditions, modifications or exceptions.
I read that as indicating the persons included within the purview of the measure. Then in part II the excepted employments are included. It is hardly necessary to point out to this house that all are not insured under this act. There is no measure in any country that insures all persons who may be employed. That, of course, is elementary; it need hardly be mentioned to bring it to the attention of hon. members. The excepted employments are:
(a)	Employment in agriculture, horticulture and forestry.
(b)	Employment in fishing.
(c)	Employment in lumbering and logging.
About that I shall have something to say a little later.
(d)	Employment in hunting and trapping.
(e)	Employment in transportation by water or by air, and stevedoring.
(f)	Employment in banking, mortgage, loan, trust, insurance or other financial business.
(g)	Employment in domestic service, except where the employed person is employed in a club or in any trade or business carried on for the purposes of gain.

Unemployment Insurance-Mr. Bennett
(h)	Employment as a professional nurse for the sick or as a probationer undergoing training for employment as such nurse.
(i)	Employment as a teacher, including teachers of music and dancing, whether engaged in schools, colleges, universities or institutes or in a private capacity.
(j)	Employment in the permanent active militia, The Royal Canadian Navy, the Royal Canadian Air Force and the Royal Canadian Mounted Police.
(k)	Employment as a member of dominion, provincial, or municipal police forces.
(l)	Employment,-
(i)	in the public service of Canada pursuant to the provisions of the Civil- Service Act; or
(ii)	in the public service of Canada or of a province or by a municipal authority upon certification satisfactory to the commission that the employment is, having regard to the normal practice of the employment, permanent in character.
(m)	Employment as an agent paid by commission or fees or a share in the profits, or partly in one and partly in another of such ways, where the person so employed is mainly dependent for his livelihood on his earnings from some other occupation, or where he is ordinarily employed as such agent by more than one employer, and his employment under no one of such employers is that on which he is mainly dependent for his livelihood.
(n)	Employment otherwise than by way of manual labour and at a rate of remuneration exceeding in value two thousand dollars a year or in cases where such employment involves part time service only, at a rate of remuneration which, in the opinion of the commission, is equivalent to a rate of remuneration exceeding two thousand dollars a year for full time service.
Provided that any person in respect of whom contributions have been paid as an insured contributor for not less than five hundred weeks may continue as an insured contributor notwithstanding anything in this paragraph contained.
(o)	Employment of a casual nature otherwise than for the purpose of the employer's trade or business.
(p)	Employment of any class which may be specified in a special order made by the commission, and declared by the commission to apply for the purposes of this act, as being of such a nature that it is ordinary adopted as subsidiary employment only and not as the principal means of livelihood.
(q)	Employment in the service of the husband or wife of the employed person.
(r)	Employment for which no wages or other money payment is made, where the person employed is the child of, or is maintained by the employer.
The list is long, but in reality it may be divided shortly into two classes. One class is
composed of those who, by reason of their employment, are assured of certain benefits; that is, those who are in the civil service and who are entitled to allowances or those who are employed in the militia or the police forces of the country, using those as illustrations. The second class includes those whose employment may be classed as more or less casual and therefore not such as might be anticipated to be within the provisions of an unemployment insurance act. With respect to the latter class, I referred to persons engaged in the logging industry. In some parts of the country that is a very seasonal employment, and it would not be possible for employees to be engaged continuously for a sufficient number of days to bring themselves within the act. But apart from the fact that it may be desirable, during the progress of the bill through committee, to amend its provisions in that regard, I think I should point out that in one part of Canada the occupation of logging extends over the whole year, in which event provision might be made to meet such a case. But apart altogether from the power to amend in committee if it is thought desirable so to do, section 7 contains one of the most important provisions in the act. It enables the commissioners to propose plans or schemes that will enable those who do not come within the purview of the act to be brought within its operation either directly or by means of a special scheme. That is, if on inquiry it is found that, from an actuarial standpoint, the employment is such as would warrant provision being made for that class of employees to which I have referred, then under section 7 provision is made by which that may be done.
Those are the general provisions as to those who may and those who may not come within the operation of the act. It may be a matter of interest to ascertain what the numbers were according to the census of 1931. I use the census figures because there has been so much doubt and conjecture as to the numbers in other cases, and I think it desirable to accept the census of June 1, 1931, for the purpose of indicating to the house the numbers that will be affected by the measure, as indicated by those census figures. The total employees in Canada as shown by the census returns, as of June 1, 1931, were 2,566,001, of whom 2,018,334 were male and 547,667 female. Within the industries that I have just mentioned under part 1 of the act,
728	COMMONS
Unemployment Insurance-Mr. Bennett
according to the census figures of 1931 the total number affected by this bill would be 1,701,834, of whom 1,406,930 would be male and 294,904 female. According to the same figures the number excluded would total 864,187, of whom 611,404 would be male and 252,763 female. Itemized, the figures from the census bureau are as follows:
Excluded Males
Agriculture	 200,468
Fishing and	trapping	 10,379
Logging	 41,480
Finance	 57,627
Miscellaneous, and excluded occupations in	included industries..	301,450
In the finance division 24,822 were female and 227,941 were included in the miscellaneous and excluded occupations in included industries, making a total of 252,763, which added to those males employed in the industries I previously indicated gives a total of 864,167 not included. It will be observed, therefore, that this measure does not include those employed in banks, insurance companies, trust companies or loan companies or under the general designation of finance; those are not included under the operation of the bill, to the extent of the number I have just given.
Having indicated those who are included and those excluded from the operation of the bill it might be thought desirable to ascertain what premiums they must pay; ordinarily that would be the next question that might be asked. That will be found at page 33 of the bill in detail.
In order that there may be a clear appreciation of contributions, I shall call attention to them as I go along. If a male employed person is aged 21 years or upwards, the employer will pay 25 cents a week, and the employed person himself will pay 25 cents per week. A woman would pay four cents per week less, and the employer would also pay four cents less each week. If a young man between the ages of 18 and 21 years is employed he will pay 18 cents per week and the employer will pay a similar sum. A young woman between the same ages will pay three cents per week less, or 15 cents, and the employer will pay the same amount. Between the ages of 17 and 18, which is the lowest class except one, which
I	shall presently mention, the boy will pay
II	cents per week and the employer a similar amount. Girls will pay nine cents and the

employer nine cents per week. Boys aged 16 years but under 17 will pay seven cents per week, and the employer will pay seven cents. Girls of the same age will pay six cents, and the employer of those girls a like amount.
Then if hon. members will turn to page 35 in the bill they will find what the payments of those premiums, plus the amount paid by the state, will enable the people affected to secure by way of benefits. A man aged 21 years or upwards will receive $1 per day or $6 per week. A woman will receive 85 cents per day or $5.10 per week. A young man aged 18 but under 21 will receive 70 cents per day, or $4.20 per week, while a young woman of similar age will receive 60 cents per day or $3.60 per week. Under the classification of 17 years and under 18, boys will receive 45 cents per day or $2.70 per week, and girls 35 cents per day or $2.10 per week. A boy aged 16 years and under 17 will receive 30 cents per day or $1.80 per week, and a girl 25 cents per day or $1.50 per week. There is a provision also for dependents. An adult dependent will receive 45 cents per day or $2.70 per week, and a dependent child 15 cents per day or 90 cents per week.
Those are the benefits to be derived from the payment of the premiums I have indicated. I have already stated that the employers and employees do not make the complete contribution. There is a contribution made by the state, and those who are interested will observe in the measure that the administration costs are to be paid by the government of the country. They will find at page 24 of the bill that the contribution by the government in addition to administration costs, is to be 20 per cent or one-fifth of the sum paid by the aggregate deposits from time to time made by the employers and employees. That sum is to be deposited to the credit of the fund by the Minister of Finance. We propose to keep the closest possible record of the costs of administration. It is but fair to say that in England the cost of administration has been about 12£ per cent. To what extent that may be lessened in this country it is difficult to say, but I should say that having regard to distances it would be highly improbable that the cost would be less, and in my judgment it will be more.

Unemployment Insurance-Mr. Bennett
Perhaps at this point some hon. members may be interested to know the benefits paid under the English plan, converted into our money at the proper rate of exchange, plus 25 per cent which is supposed to represent the difference in living costs between this country and Great Britain. Whether or not that is an accurate statement I cannot say, but that is the figure which economists and
actuaries are prepared to support. The table is an interesting one, and although it is perhaps not desirable to take too much time to read it at length, I shall read a portion of it at any rate. I shall place the complete table on record, and deal in greater detail with those parts which I believe are of interest. The table is as follows:

labinr™nrin^t<uesfif tklfirate?-°f 1^° *ime Pai.d under the British unemployment insurance scheme; also those benefits converted to Canadian currency at S4.86f to £1 and increased by 25% to allow approximately for the difference in cost of living. On the final line are shown the benefits in Bill No. 8.								
Date when benefits became effective	Men	Women	Young men	Young women	Boys	Girls	Adult dependent	Dependent child8/1/13	Ages 18-64 7/- $2.13	Ages 18-64 7/- $2.13	Included under "men" until 1928	Included under "women" until 1928	Under 18 3/6 $1.06	Under 18 3/6 $1.06	No benefit until 1921	No benefit until 192125/12/19	11/- $3.35	11/- $3.35	5/- $1.52	5/- $1.52	
8/11/20		15/- $4.56	12/- $3.65			7/6 $2.28	«/- $1.82		
								
3/3/21		20/- $6.08	16/- $4.87			10/- $3.04	8/- $2.43		
								
30/6/21		15/- $4.56	12/- $3.65			7/6 $2.28	6/- $0-182		
								
10/11/21		Do.	Do.			Do.	Do.	5/- $1.52	1/- $0.30
								
14/8/24		18/- $5.47	15/- $4.56			Do.	Do.	Do.	2/- $0.61
								
19/4/28		Ages 21-64 17/-$5.17	Ages 21-64 15/-$4.56			Under 18 6/- $1.82	Under 18 V-$1.52	7/- $2.13	Do.
								
2/7/28		Do.	Do.	Age 18 10/- " 19 12/-" 20 14/-	Age 18 8/-" 19 10/0 " 20 12/-	Do.	Do.	Do.	Do.
			Age 18 $3.04 " 19 3.65 " 20 4.26	Age 18 $2.43 " 19 3.04 " 20 3.65				
								
Unemployment Insurance-Mr. Bennett
Ages 18-20	Ages 18-20	9/-	2/-13/3/30	Do.	Do.	14/-	12/-	17	9/-	17	7/6	Under	Under	$2.74	$0.6117	6/-	17	5/-	$4.26	$3.65	17	$2.74	17	$2.28	Under	Under	17	$1.82	17	$1.52	10/8/31	15/3	13/6	12/6	10/9	17	8/-	17	6/9	8/-	Do.Under	Under	17	5/6	17	4/6	$4.64	$4 11	$3.80	$3.27	17 Under	$2.43	17 Under	$2.05	$2.43	17	$1.67	17	$1.37	1934 	17/-	15/-	14/-	12/-	17	9/-	17	7/6	9/-	Do.Under	Under	17	6/-	17	5/-	$5.17	$4.65	$4.26	$3.65	17	$2.74	17	$2.28	$2.74	Under	Under	17	$1.82	17	$1.52	$6.00	$5.10	$4.20	$3.60	17	$2.70	17	$2.10	$2.70	$0.9016	1.80	16	1.50	
Note.-The benefits shown above in Canadian currency are the equivalent of the benefits in English currency increased by 25% to allow approximately for the increase in the cost of living.
Unemployment Insurance-Mr. Bennett
732	COMMONS
Unemployment Insurance-Mr. Bennett
This table shows the weekly rates of benefits from time to time paid under the British unemployment insurance scheme, converted to Canadian currency at the rate of $4.86j cents to the pound, and increased by 25 per cent to allow approximately for the difference in the cost of living. On the bottom line of this table are shown the benefits as they would be under the bill which I now sulbmit to the house. I need hardly say that commencing with the year 1913 there is a steady increase in the benefits payable under the British act. When the act began operation in 1913 men between the ages of 18 and 64 received the amount of $2.13; as I have said this money is converted into our currency and 25 per cent added. Women between the ages of 18 and 64 received the same benefit. Boys under 18 received $1.06, and girls received the same amount. Adult dependents did not receive anything in England when the act originated, and in fact did not receive anything until 1921. Nor were there any provisions made for dependent children until that year. After the amendment of 1919 men between the ages of 18 and 64 received $3.35 per week, and women of a similar age received the same amount. Boys under 18 and girls under 18 received the same benefit, namely $1.52 per week.
Then there was the further amendment in 1920 as a result of which men between the ages of 18 and 64 received S4.56, and women received $3.65. Boys under 18 years received $2.28 per week, and girls at that time suffered a lessening, as compared with the figure then paid to men, by being reduced to $1.82.
In 1921 there was a further amendment which brings the sum payable to men between the ages of 18 and 64 up to $6.08 per week, in our money, there were then no dependents' benefits. Women receive $4.87. Boys of 18 and under $3.04 and girls $2.43. Then came the later amendment of 1921 whereby men between the ages I have indicated, namely 18 and 64. reach $4.56 and women $3.65. Boys under 18 received $2.28 and girls $1.82.
Then for the first time provision was made for dependents, and adult dependents are shown at $1.52 per week, and for dependent children there is a further payment to the family head of 30 cents per week. This continues until 1924 at which time there was a further amendment regarding benefits. In that year benefits are brought to $5.47 for men between the ages of 18 and 64 and $4.56 for women. There was no change with respect to boys or girls under IS and no change with respect to dependents except in the case of :hildren. It was then provided that for each

dependent child there should be paid an additional sum of 61 cents-not 30 cents per week.
Then came the amendment of 1928, at which time there was a change with respect not only to ages but to benefits. In that year those who received benefits under the act and were between the ages of 21 and 64 would receive, if men, the equivalent of $5.17 each week, and if women, the amount is S4.56. In the same year boys under 18 receive $1.82 and girls $1.52 per week. The benefits for adult dependents are raised to S2.13 per week, while those payable with respect to dependent children remain at 61 cents as before.
Further and special provisions were made in that year for those of the ages eighteen, nineteen and twenty, for as I have just pointed out under the act of that year provision was made for those between the ages of twenty-one and sixty-four, and not between eighteen and sixty-four; and so special provisions were made for those of eighteen and nineteen and twenty. Boys of eighteen received per week S3.04; nineteen, $3.65; twenty, $4.26; girls of eighteen received $2.43; nineteen, $3.04, and twenty, $3.65.
The law thus remained until 1930 when it was again amended, there being no changes however with respect to men and women but a slight change with respect to those of the ages of eighteen, nineteen and twenty, who were lumped in one class and received a benefit of $4.26 per week for the young men, and the girls received $3.65.
Special classifications were made of those of seventeen, and under, both for the boys and the girls. The boys under seventeen received $1.82, and $2.74 if seventeen years old. The girls of seventeen received $2.28, and under that age $1.52.
There were also certain changes made that year with respect to the benefits payable for adult dependents, the amount being increased to $2.74 per week in our money.
In 1931 there was a further amendment to the statute so that men between the ages of twenty-one and sixty-four entitled to benefit received $4.64 per week, and the women $4.11; the men between eighteen and twenty, $3.50, and the girls between eighteen and twenty $3.27 per week. There were special provisions for girls of seventeen, and under seventeen, the former class receiving $2.05 and the latter $1.37 per week, while boys of seventeen received $2.43, and those under seventeen $1.67 per week. The adult dependent rate was decreased to $2.43 per week.

Unemployment Insurance-Mr. Bennett
In 1934, that is last year, the final amendment to the act was made consequent upon the report of the royal commission which investigated the whole question, to which report I referred a few days ago. In that year parliament once more legislated and provided that men between the ages of twenty-one and sixty-four entitled to the benefits would receive in our money $5.17 per week, and women S4.65; the young men $4.26 if between the ages of eighteen and twenty, and the young women between eighteen and twenty $3.65 per week. Boys of seventeen received $2.74 per week and under seventeen SI.82; while girls of the age of seventeen received $2.28, and under that age S1.52. Again the adult dependent rate was increased from S2.43 to S2.74 per week.
Comparing the figures under the British act of 1934 plus an increase of 25 per cent to offset the difference in living costs between the two countries with the figures under Bill No. 8 now submitted to the house it will be observed that the benefits under the Canadian bill for men between twenty-one and sixty-four are $6 per week as against $5.17 under the British bill of last year, and $5.10 for women as against $4.65 for women under the British bill of last year; and for men between eighteen and twenty $4.20 per week in Canada as against $4.26 under the British bill, and for females between the ages of eighteen and twenty $3.60 per week here against $3.65 per week in Great Britain, converted into Canadian funds. For boys of the age of seventeen the rate in Canada is $2.70 and $2.74 in Great Britain at par of exchange. For boys under seventeen, $1.80 in Canada and $1.82 in Britain; and for girls $2.10 in Canada as against $2.28 in Britain; $1.50 for those under the age of seventeen in Canada and $1.52 for those under seventeen in Britain. The dependent payment to adults in Canada is $2.70 per week as against $2.74 in Britain, and the payment for each child in this country is 90 cents per week as against 61 cents under the British act.
Mr. BOURASSA:: May I ask the right hon. gentleman if with these changes in the benefits in Britain the rates of contribution were changed in proportion?


Richard Bedford Bennett: The hon. gentleman has asked a question about which the royal commission had to make most careful inquiry in Britain because it will be within the memory of my hon. friend from Labelle that the British fund owing to abnormal unemployment had to borrow large sums from the state, and the rates of contribution were not
sufficient to enable the benefits I have indicated to 'be paid. Therefore the British bill was entirely revised and rearranged, and the contributions placed upon a basis that was believed to be such as could be maintained and be actuarially sound under the bill of 1934. That is the reason it has taken considerable time to prepare carefully the measure now before the house and have the actuaries perfectly satisfied that the contributions made will without question pay the benefits provided. I do not know that I could do better perhaps than to read one or two sections from the report of the royal commission which reported on this question. I noted them as being important perhaps from the standpoint of the house, although the report is in the library. The report touches upon the very question which the hon. member for Labelle has just raised, beginning at paragraph 407, which reads:
467. We have considered the desirability of reintroducing the principle of directly relating the period for which a claimant should be allowed to draw benefit to his contribution record. The weakness of a fixed limit of benefit for all contributors is that there is no discrimination between the worker with a good employment record over many years and the w-orker who has paid only the minimum number of qualifying contributions. If the risk of unemployment to which different persons were exposed was entirely free from influences within their control, it might be justifiable to allow all claimants an equal maximum period of benefit, though even then there would be a strong case for favouring the claimant with the better record. As we have stated, this is not the case, and it is necessary to devise practicable safeguards which will at the same time do justice to the general body of insured persons.
408. The alternatives are either (a) as at present to allow a short period of benefit on a uniform basis for all contributors; or (b) to find some automatic method of selecting the claimants who may reasonably be given a title to a longer period of insurance benefit. The second alternative is the one which, in our view, is preferable. As a general proposition, the claimant with the better record of employment in the past is less likely to make unreasonable claims than the claimant whose contribution record is hardly more than sufficient to pass the qualifying test. We are, accordingly, in favour of restoring the principle of relating the period of benefit to the record of insurable employment over a recent period. For administrative purposes, it is desirable that the period to which reference is made should not extend beyond' five years or some such period.
I might make some short observations as indicating the general operation of the English act, as reported in Glen's Unemployment
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Assistance, which at page 112, answers perhaps in a single word the question that the hon. member for Labetle has asked with respect to the English provisions:
(1) Ar. insured contributor who is between the .ages of sixteen and sixty-five years and is unemployed shall, if he proves that the statutory conditions are fulfilled in his case, and if he is not disqualified under the Unemployment Insurance Acts for the receipt of benefit, be entitled, subject to the provisions of those acts, to receive in a benefit year, benefitso and so and so. I shall not take up time in reading it all.
In Canada we have followed the same principle, and the contributions, we are informed by the actuaries, will produce the benefits provided.
It will be observed that there is also a provision whereby the person who is continuously employed and who later finds himself out of employment may be entitled to additional benefits. That is, by his contributions he has earned additional benefits under the provisions of the statute. His good record of employment, so to speak, has operated to increase for him the number of payments that he is entitled to receive under the statute.
I have indicated what benefits are paid, and the next question to ask is this: What are the conditions under which benefits are to be received? Just as in the case of accident insurance one has to ask oneself, looking at the policy, what the conditions are under which benefits are received in the event of suffering accident, so in the event of suffering unemployment we must ask whether or not the conditions imposed by the statutory policy have been complied with. They will be found in section 20 of the bill. It is provided first- of all that contributions for not less than forty full weeks-exclusive of any unemployed days for which he is entitled to a refund of contributions paid by him-shall have been paid in respect of him while employed in insurable employment during a period not exceeding two years immediately preceding the date on which a claim for benefit is made. Secondly, he must have made application for unemployment benefit in the prescribed manner, proving that since the date of the application he has been continuously unemployed. And in the third place, he must show that he is capable of and available for work but is unable to obtain suitable employment. There must be a combination of these three factors to enable him to become a recipient of benefits under the policy he has. The details I do not propose to amplify on the second 
reading of the bill because they are rather numerous and it will take some time to deal with them.
I have thus stated, without going into a mass of details, the conditions under which benefits accrue or attach to the insured person; the sum he is entitled to receive per week for payment of premiums he has made; and the conditions under which and the period for which he will receive benefits. The next point is: How will his claim be settled? The provisions for settlement of the claim are set out in the act, so that the claim can be settled on the spot locally by the insurance officers.
Then there is provision with respect to a board of referees and ultimately the umpire. There is a provision here, to which the trades and labour council indicated the other day they were opposed, for appeal to the exchequer court, not for the purpose of determining the amount to be paid, but questions of law that may arise as to the status of a person under the act. If it is thought desirable when the bill is in committee that such a provision should not be made, I am quite content; but it is placed in the bill in order to ensure judicial interpretation, if doubt arises, as to the insurability of any one affected by the measure. Sometimes judicial determination of the meaning of a section becomes of the utmost importance to maintain uniformity in the interpretation of any measure. I remember that once in my more youthful days, when visiting London, I heard argued in tihe House of Lords a case that involved a small sum of money, but it was important from the point of view of determining the meaning of a statute in order that it might be applied to all cases that might arise; and the acute differences of judicial opinion made apparent to me at once the necessity for judicial interpretation, which sometimes is highly desirable in dealing with certain matters. The provision is inserted in the statute to enable judicial interpretation by the exchequer court to be obtained. If the house in committee thinks it undesirable to pursue that course, it is quite satisfactory, so far as we are concerned, that it should not be proceeded with.
The provisions with respect to settlement of claim will be found in section 27 and succeeding sections of the act. There is one other provision contained in this bill which I think is of very great importance. It is one which in a measure we have acted upon since
1919-20-that is, the setting up and maintenance in efficiency of unemployment exchanges. Obviously, in a country of great distances such as this, it is difficult if not

Unemployment Insurance-Mr. Bennett
impossible to move labour, notwithstanding the fact that the hon. gentleman from Lisgar (Mr. Brown) said that one might be in Halifax to-day and in Vancouver to-morrow. It is not easy to move labour from one part of Canada to another, though it is not difficult to shift it from one part of a province to another; and the maintenance of labour exchanges throughout the country is therefore one of the most important provisions of this legislation. It is intended thereby to ensure that where there is a surplus of labour at one point and a deficit of labour at another, the surplus labour may be made available for supplying the point at which there is a deficit. In my judgment, a complete exchange system in this country will be of the utmost value. I do not desire in any sense to overestimate it. It will be necessary to subdivide the country. Just as in 'England, Scotland and Wales, with a population of forty millions, there are seven divisions in connection with labour exchanges, so there will have to be divisions here; though in a country such as Canada, where distances are great, it will be for the commission to determine what is a reasonable number. I do not think that as large a number as seven is at all necessary or desirable; but that these labour exchanges can and will discharge a most useful and salutary service goes, I think, almost without saying.


Ian Alistair Mackenzie: Will they interfere with provincial services?


Mr. EULER:: I was going to ask whether this was intended to supersede the offices now in existence in the various towns.


Richard Bedford Bennett: 
An hon. MEMBER:: After four years.


Richard Bedford Bennett: Someone suggests four years. If the hon. gentleman had been through the four years I have been through, he would not be talking about anything other than the conditions that obtained during those four years.
I might make it clear that if during the years preceding 1930, from 1922 to 1928 or 1929, we had had a measure such as this, we would by reason of the conditions prevailing in a new country as distinguished from an old, have an entirely different situation from that which we find in an older civilization. I need hardly point out to every hon. member that in a new country with the development of its resources, with employment steadily mounting and increasing, the contributions would also have been mounting and becoming greater and as the claims upon the fund would be fewer because of increased occupation, the surplus which would have developed would have been very
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considerable. But we have faced a situation in which we have paid out very large sums of money for the purpose of assisting the provinces in the discharge of their obligations. Through the provinces we have assisted the municipalities and there has been no fund from which the unemployed have been able to draw excepting by way of relief. I repeat: this measure is not submitted as a relief measure; it is submitted as an earnest effort on the part of the government to provide machinery whereby the condition which has obtained will not again prevail, that such measures as those which have been taken in other countries to meet the situation to which I have referred will be available in Canada, and that by the joint efforts of indvidual workmen, their employers and the state, a condition will be created that will make it impossible to have a recurrence in this country of what we passed through during the last four years. It is for that reason this measure is submitted to the house and without detailing it at greater length I invite in committee a careful scrutiny of its provisions and an examination of its sections so that by constructive efforts made by members on either side we may be able to ensure that the legislation meets the conditions with which we are faced and will be able, as I say, to prevent the recurrence in this country of the sad conditions through which we have passed during the last few years.


Right Hon. W. L. MACKENZIE KING (Leader of the Opposition):: Mr. Speaker,
the bill which is now before us for second reading is entitled:
An act to establish an employment and social insurance commission, to provide for a national employment service, for insurance against unemployment, for aid to unemployed persons, and for other forms of social insurance and security, and for purposes related thereto.
I should like my first word to be that with respect to the principle underlying social insurance, I am most heartily in accord. I would like also in particular to say that I am heartily in favour of the principle underlying a national system of unemployment insurance. The Prime Minister (Mr. Bennett) in the concluding part of his remarks asked why it was that we had not introduced a similar measure some years ago, or rather he put it in a more pointed way, so far as hon. gentlemen on this side are concerned, when he said that, if we had placed an unemployment insurance measure on the statutes some time between 1922 and 1928 or 1929, he would not have had to be meeting the difficulties of the present situation. I

shall take advantage of the Prime Minister's remarks in that connection to place before the house the situation with which the Liberal administration was confronted when it came into office, its attitude toward social legislation at that time, and the reason why in regard to the enactment of social legislation it was not then possible to include a measure providing for a national system of unemployment insurance. I think if the house will bear with me for a short time, it will find that a measure of unemployment insurance could not very well have been added to the other measures of social insurance which were introduced while the late Liberal administration was in office.
In order to make perfectly clear the position and attitude of the Liberal party towards social insurance and unemployment insurance in particular, I should like to go back to the time at which I was chosen leader of my party and to give to the house the resolution which was adopted by the National Liberal convention in August, 1919. That resolution was as follows:
The National Liberal convention accept in their entirety as a part of the Liberal platform, in the spirit they have been framed and in so far as the special circumstances of the country will permit, the terms of the labour convention and general principles associated with the League of Nations and incorporated in the conditions of peace.
Then there followed several items that are set forth in the League of Nations document. The Liberal convention adopted in addition the following resolution:
Also, that in so far as may be practicable, having regard' for Canada's financial position, an adequate system of insurance against unemployment, sickness, dependence in old age, and other disability, which would include old age pensions, widows' pensions, and maternity benefits. should be instituted by the federal government in conjunction with the governments of the several provinces: and that on matters pertaining to industrial or social legislation an effort should be made to overcome any question of jurisdiction between the dominion and the provinces by effective cooperation between the several governments.
Hon. members will see that in the resolution regarding social insurance the National Liberal convention was careful to point out the need of recognition of conditions as they might exist in the country for some time to come. It recognized as well the federal character of the dominion, also the difficulties that might be encountered in seeking to give full expression to the program of social insurance which it was hoped might come into being in the course of a few years.

Unemployment Insurance-Mr. Mackenzie King
The first of the conditions to which attention was directed was the financial condition of the country. May I say that I regard that as an all-important consideration in dealing with these questions of social insurance. Social insurance, in the nature of things, involves a large expenditure of public money, and while that should not be a reason for a government hesitating to bring forward measures of social insurance, it is a reason why in bringing them forward it should be in a position to state exactly how the revenues are to be raised which it will be necessary to have in order to put any proposed scheme into force, and also the extent of the outlay which the scheme will probably occasion in relation to the expenditures of the country generally. That was for us a very important consideration when in 1921 the Liberal government came into office; It is a very important consideration to-day. In order that I may not be misunderstood, may I make clear that if we are to economize, as I think we shall probably be compelled to do all around, the last place at which 1 think economy should begin is with respect to social services. I think great care should be taken to see that those persons in the country who are less fortunate than their fellow men are the ones to receive the first concern of the government.
I shall now speak of the conditions as they were in Canada when the Liberal administration came into office, having before it this resolution with respect to social insurance, and having a strong desire to give expression to that resolution in its fullest terms. I do it for this further reason, that I think the situation to-day in many particulars is more or less parallel with that which existed at that time. When the Liberal government came into office in 1921 the country was going through a time of great depression. Deficits were being added to deficits in the public accounts; taxation had to be increased almost to the limit to which it could be borne by the people. The government of the day was obliged to take account not only of the continuous increase in debt and in taxation, but also of the new obligations that had suddenly come upon this country to an extent the like of which it had never known before. It was the post war period, when for the first time Canada's debt had been so very greatly increased, when the interest on the public debt alone had reached an amount equal to that which at one time would have met the entire yearly expenditures of government. There were pensions to be paid to soldiers who had served overseas, an entirely new obligation amounting, and certain further to amount, to 92582-47
increasingly large sums as the years passed. There were expenses in connection with the reestablishment of returned men in civil life. Added to that were large outlays necessitated immediately for purposes of relief, because then as now hundreds of thousands of people were unemployed, and the dominion was called upon to assist the provinces and the municipalities in providing unemployment relief. Hon. gentlemen opposite will recall that when the government of the Right Hon. Mr. Meighen was in office it inaugurated the system of the dominion supplementing the expenditures of the provinces and municipalities in the matter of relief, as the best scheme to meet that immediate situation. When we came into office we carried on as a temporary measure the system that had been inaugurated by hon. gentlemen opposite. We believed, however, that the only effective cure for unemployment would be found in policies which would serve to revive industry and trade. We felt that once some of the many trade restrictions which then existed were removed, and other policies put into force, we should find that trade and business would revive and that unemployment relief would no longer be necessary.
The situation worked out exactly as we had expected. But for the first four years the government of the day was obliged to supplement from the federal treasury the funds of the provinces and the municipalities for relief purposes. It will hardly be contended that during those first four years, 19211 to 1925, any government dealing with the problems with which the then Liberal government was called upon to deal would have received any real support from parliament in an endeavour to put through at that particular time new measures of social legislation. But may I point this out, that there had come as a firdt obligation and for the first time, in the pensions that were to be paid to returned soldiers, what was in the nature of social legislation. Pensions, whether paid to soldiers or to civilians, fall within the class of legislation to be described as social legislation; it is making provision for those who have incurred sacrifices or who for certain reasons are unable to make provision for themselves, or who cannot be expected to make adequate provision. So that when the Liberal government came into office it was immediately carrying out, to the extent of the payment of pensions at least, the beginning of a scheme of social insurance.
That there may be no mistake as to what the outlays were that the government of the day had to consider, I should like to put


Some hon. MEMBERS:: Hear, hear.


William Lyon Mackenzie King: Hon. gentlemen opposite say "hear, hear."


Ernest Lapointe: Wait a minute.


William Lyon Mackenzie King: I think the trades and labour congress as well as any other body would be more ready to thank a government which is able to give prosperity in great measure than a government which is only able to offer legislation the possibility of the enforcement of which remains to be seen. Hon. gentlemen opposite seem to have forgotten that the most important social legislation so far enacted in Canada was enacted in those very years. I should like to know whether any government before completing one scheme of social legislation would have been justified in attempting to go on with a second. I know my right hon. friend is trying to do everything at once, but he is in a class by himself in that regard. In a few months we shall have a general election. It may be that by taking on a greater load than can be carried everything may yet come to grief. It might be just as wise for him to proceed one step at a time, and above all to make sure that every undertaking is capable of being carried out.
Going over in one's mind the whole scheme of social insurance may I ask where in the order of things is the natural and proper place to begin? As I said a few moments ago social legislation is a type of legislation intended to assist those who, were it not for the legislation passed, might find it difficult or be unable to get along. Of all classes in society which then is the class we ought first to consider? The Liberal administration gave the preference, as I believe any administration in Canada would have done, to the men who have served their country overseas, and to the dependents of those who lost their lives or were incapacitated in the great war. That obligation was accepted by the country and always will be I hope as the first of all the obligations of a social nature. Next to that all important portion of our population there come those who because of advancing years find themselves either unable to earn sufficient to satisfy their essential
needs, or who are thrown out of employment, not through any fault of their own, but simply because of that which we have been discussing so much of late, namely the high rate of pressure at which industry is carried on, the new inventions, the machinery used and the like. Men and women who have given their lives to acquiring skill in a particular industry may find themselves, just because of their advancing years, the first to be thrown out when a period of unemployment comes. The employer, through no lack of sympathy but simply because he has to reduce his staff begins to reduce, and those he lets go first are not the younger persons, not the more active and alert, but those whose years are advancing. They are thrown out of employment first. Knowing that to be so, we felt that those of advanced years were the first to be looked after in any scheme of social insurance. The Liberal administration of the day accordingly brought in an old age pension scheme. In connection with that scheme we had carefully to consider, as I have pointed out, the three factors I have mentioned this afternoon-first, the financial condition of the country and where the money was to come from. That we had settled by 1924 by getting our budget balanced, and for six successive years thereafter having surpluses instead of deficits. The second question was how could the scheme be brought into effect with the cooperation and good will of the provinces among themselves and towards the dominion. It was that consideration which necessitated in the first place the careful consideration of each and every scheme in deciding which should be the one attempted. There was the third all-important consideration, the question of jurisdiction, which had to be solved. We felt that there should be no doubt left in the mind of anyone as to jurisdiction, and that if there were problems related to jurisdiction we should find a way to meet those problems.
How did we proceed with respect to the old age pension legislation? In 1924 in the month of April, I moved that a special committee be appointed to make inquiries into an old age pension system for Canada. This was for a national system of old age pensions. The committee was appointed. The members went into the question carefully, and they agreed with the view, that it was essential to get the views of the provinces before reporting to the house, and so between 1924 and 1925 the various provinces were communicated with. In 1925 on May 1 a special committee was again appointed, and on June 16, 1925, the special committee recommended in favour of setting up a scheme; also that an effort should
742	COMMONS
Unemployment Insurance-Mr. Mackenzie King
be made to receive cooperative action on the part of the provinces. Up to that time some of the provinces had expressed themselves as favourable to a scheme of old age pensions. Others had said that they were not in a position to consider an old age pension scheme, and gave as a reason that the financial conditions with which they were confronted would not permit them to take on further obligations. In 1926, after much debate and criticism from the then opposition, this house adopted the bill for old age pensions. The bill went from this house to the Senate, and in the Senate, as I mentioned a moment ago, it was defeated by a majority of 45 to 21. If the records are looked up it will not be difficult to see the party complexion of that majority.
The measure of social legislation that was introduced here and passed by this House of Commons having been thrown out by the second chamber, does any hon. member say that up to 1926 when that occurred a measure of unemployment insurance could have gone through this House of Commons with any hope of passing the Senate and becoming law?
That is a complete answer in itself if there were not further reasons which make it clear that such a measiure could not have been proceeded with sooner. But in the general election of 1926 the question of the rejection by the Senate of the old age pensions bill was discussed throughout the country, and a Lioeral government being returned with a substantial following it was possible with the hope of greater success to reintroduce the bill in 1927. The bill was reintroduced in identical terms by the then Minister of Labour, the Hon. Peter Heenan, and after considerable discussion passed both this house and the Senate and received the royal assent on March 31, 1927. There is the record up to March 31, 1927. I think I can say that up to 1927, having in addition to what I have mentioned, put on the statutes this national scheme of old age pensions, the government of the day had done all that could possibly have been expected of any federal government with respect to social legislation.
But did we allow matters to rest there? Did we at that time say: This is the end of our social legislation? On the contrary we immediately proceeded to the next form of social insurance we deemed of most importance, namely, a national system of unemployment insurance. We had before us certain opinions as to jurisdiction which had been given by the law officers of the crown while the old age pension measure was under discussion, which opinions applied also to the question of unemployment insurance and had therefore to be 
taken into consideration. So it was deemed necessary to have the question of unemployment insurance dealt with in the first instance by a committee of this house.
Here may I say that a further evidence of the desire of the Liberal government of the day to further these matters of social legislation was the creation of a special committee of this House of Commons to deal with industrial and international relations. It was on the suggestion I think of the hon. member for Winnipeg North Centre (Mr. Woodsworth) that the proposal was first made to have a committee of this house to deal with industrial questions. I pointed out to the hon. member that I thought most of these industrial questions involved international considerations as well, and also that I believed that international questions were becoming more and more interwoven with social problems, and therefore that as a beginning it might be well if we appointed one committee to deal with both international and industrial relations. That committee was established and is a standing committee of this house, thereby giving further recognition by the House of Commons to the importance of social legislation. Resolutions or measures respecting social legislation of the character to which I have been referring naturally went to that committee for consideration in the first instance.
I need not detain the house at the moment by re-quoting the opinion of the Department of Justice of May 23, 1925, with respect to the question of jurisdiction on the matter of old age pensions and similar matters of social legislation. That particular opinion has already been placed on Hansard, and I would simply refer hon. members to the report of the special committee on old age pensions appearing in the votes and proceedings of June 16, 1925, where they will find the opinion of the Department of Justice as given on May 23 with respect to the question of jurisdiction. There it was made very clear that so far as property and civil rights were concerned, they and questions related thereto came within the exclusive jurisdiction of the provinces.
I should like to quote to the house a paragraph from some remarks of my own dealing with old age pensions, in order to make clear that the government of the day regarded the old age pension measure as only a part of its general scheme of social insurance. In Hansard of March 26, 1926, at page 1977, hon. members will see that I am reported a3 follows:
Mr. Mackenzie King: In this country, I should like to see-

Unemployment Insurance-Mr. Mackenzie King
This is interesting, too, as suggesting perhaps where some of the ideas that are incorporated in to-day's legislation may have come from, but I do not even wish to claim that. I will continue with the quotation:
In this country, I should like to see the annuities plan which, as my hon. friend has said, was inaugurated by Sir Richard Cartwright. developed into a comprehensive scheme of social insurance.
But I do not believe that this can be accomplished solely by the federal government; it would have to receive the cooperation of the provinces. We must in some way establish that link between the provinces and the dominion which will conduce to the working out of a great social insurance scheme along these lines. That will not be achieved in a year; as in other countries it will require time. The old age pension phase of the question is one that has an immediate bearing in respect of people of advanced years. Surely, then, we shall not be running any great risk so far as future generations are concerned if we put upon the statutes this year legislation which will hold out an inducement to the provinces to come together in conference for the purpose of discussing social legislation generally.
Further on, at page 1978;
. . . so far as the purpose of the immediate legislation is concerned, it looks to providing a pension for men and women of the generation that is passing away, or will have passed away in the course of a very few years. That is primarily what we are considering at this moment, and in considering men and women of that category we will, I think, be taking the first necessary step to bring about that larger measure of contributory social insurance which is one of the great needs of our time.
May I point out, with regard to this particular measure of social insurance, that not only did we place an enactment on the statutes but we carried out its provisions. Not only did we make a promise to the electorate, but we fulfilled that promise. In 1927-28 the amount paid out of the federal treasury in grants to the provinces on old age pension account was S131.452; in 1928-29 it was $832,687; and in 1929-30 it was $2,806,852, or a total in those three years of $3,770,991. But I would direct the attention of the house to this further fact that while we were paying old age pensions we were at the same time reducing taxation and reducing the debt, with the result that when hon. gentlemen opposite came into office they found the public debt reduced by S244,000.000 compared with what it was at the time the Liberal administration went into office. That is the legacy we left them-not some additional burden but a lighter load of public debt, for which otherwise they would have had to make provision. In other words, we paved the way for them to meet some of
the other obligations. More than that, it is a fortunate thing for my hon. friends that we reduced taxation so materially, for since they have come into office they have found it possible to increase taxes, instead of having to carry in addition to their increases the very heavy load that had existed before. The income tax had been reduced, both as to the rate and as to the number of exemptions for people with moderate incomes. The sales tax had been reduced from six per cent to one per cent; there had been the restoration of the penny postage; the cheque stamp had been reduced to 2 cents on cheques over $10; the receipt tax had been abolished; railway, telegram, and insurance premium taxes had been abolished; substantial reductions had been made in the tariff on implements of production and on articles of domestic consumption. Altogether the reductions in taxation from 1926 to 1930 represented a remission of $116,000,000, which otherwise would have been paid in 1930, had the former rates been maintained. By reduction of taxation and reduction of the debt and our series of annual surpluses we helped to pave the way for any subsequent government, either ourselves or our successors, to go on with measures of social insurance. But the Prime Minister when he took office did not proceed with any measure of social insurance in 1930, nor did he in 1931, nor 1932, nor 1933, nor 1934. We have had to wait until 1935, with an election only a couple of months away, in order to see social legislation such as it is introduced.
I repeat, we carried out our promises. How did the Prime Minister carry out his-in regard to old age pensions for example? Speaking at Chatham, New Brunswick, on July 11, 1930, he said:
"I say to you, if the Conservative party is returned to power we will provide for the payment of old age pensions from the federal exchequer, so that the provinces will not be called upon to contribute a cent and so that the provinces who now find the burden too great will be able to benefit equally with all the provinces of the dominion."
The constitutional point had been raised by the premier. "If," he said, "it is constitutional to pay fifty per cent, would it not be constitutional to pay one hundred per cent? We will pass the law to pay one hundred per cent and it will be legal."
Has that been done? Has any one hundred per cent law been passed? Has the government attempted in any way to make the contribution of the federal government towards old age pensions one hundred per cent? I say to the Prime Minister that before he begins to make additional promises to the electorate
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in regard to these matters of social legislation he had better begin to fulfil the smallest part of the promises he has already made. Let me point out a pertinent consideration. There are being raised at the present time by the provinces questions which when it comes to carrying out these measures will have to be carefully considered, questions namely of the particular sources of income which the provinces are to have and which the dominion is to have. We have already seen that the question of the income tax is to come up, as well as the gold tax. It is very important that these matters which affect the revenues ought at least to be satisfactorily settled before too much in the way of commitment is made in connection with further obligations. However, that is only one of many considerations, and I am not stressing it.
In what I have said I have dealt with the situation as it was up to 1927 when the Old Age Pensions Aot was put on the statutes. Let me now speak of the three remaining years, the period during which the Prime Minister says there ought to 'have been placed on the statutes an unemployment insurance scheme. During those years, we are told, we should have inaugurated such a scheme. Just here may I say that when I come to the time during which the Prime Minister himself was in office I will quote what he said as to the impossibility of having an unemployment insurance scheme on the statute books-not as far back as 1930, but as recently as 1931, as recently as 1932, as recently as 1933 and as recently as 1934. If it was impossible, for reasons of jurisdiction, cited by the Prime Minister himself, and upon which he said every member of the House of Commons was agreed, to have an unemployment insurance scheme on the books during the years from 1930 to the beginning of 1935, how could it have been possible to have had such a measure on the statutes in the years immediately preceding? That is a complete answer to my right hon. friend when he says that we should have had this measure on the statute books. He himself at every possible turn blocked every attempt to enact an unemployment insurance measure.
As I have said, as soon as the old age pension measure was enacted we immediately took up the question of unemployment insurance; and we immediately had a conference with the provinces. I have in my hand a precis of the discussions of the dominion-provincial conference, which lasted from November 3 to November 10, 1927. That report was submitted to the house after the conference was over, and in that particular proceeding of the Liberal administration we are different from hon.
HVfr. Mackenzie King.]
gentlemen opposite; we did not have a conference and decline to give to parliament a report of what had taken place. Instead, we tabled a report as soon as parliament assembled in order that hon. members might see what matters had been up for discussion and the attitude that had been taken by all concerned. Anyone who looks at the report will see what embarrassments there were at that particular time as between the provinces and the dominion in reaching an agreement with respect to an unemployment insurance scheme. As I have said, when the resolution with respect to unemployment insurance was introduced, it was immediately referred to a standing committee of the house. It was the hon. member for North Winnipeg (Mr. Heaps) who introduced the resolution in this house on March 21, 1928. It was as follows:
That, in the opinion of this house, the committee on industrial and international relations be authorized to investigate and report on insurance against unemployment, sickness and invalidity.
How did the government of the day receive his motion? We accepted it. That resolution, coming from a Labour member, we accepted immediately and we carried out to the letter the request that it contained, authorizing the committee on industrial and international relations to investigate and report to parliament on insurance against unemployment, sickness and invalidity. That was at the very first session after the enactment of the Old Age Pensions Act. I think it is important to quote a little from the report of that committee of whieh the hon. member for North Battleford (Mr. McIntosh) was the chairman.


Mr. MANION:: What is the date of the report?


William Lyon Mackenzie King: May 16. 1928. This is the final report of the select standing committee on industrial and international relations. The resolution was moved earlier in the year, but the final report was made, as I have said, on May 16, 1928. At the risk of delaying the house just a little, I will read from the report what I think is pertinent.
Your committee proceeded, as directed, to investigate the subject of insurance against unemployment, sickness and invalidity. The Assistant Deputy Minister of Labour, who was the first witness, presented memoranda of information dealing with the systems of insurance against unemployment, sickness and invalidity which exist in various countries, also a memorandum of information relative to systems of voluntary sickness insurance and benefits which have been developed in this

Unemployment Insurance-Mr. Mackenzie King
country. The Director of the Employment Service of Canada furnished the committee with an outline of the operations of the free employment offices which have been established by the provincial governments in sixty-four centres throughout the dominion, and which are assisted by a federal grant. Witnesses appeared before the committee on behalf of organized labour, public welfare associations, and the Canadian Manufacturers' Association, and expressed the views of their respective organizations on the subject matter of reference.
The Deputy Minister of Justice gave evidence on the question of the respective jurisdiction of the dominion and provincial governments regarding unemployment, sickness and invalidity.
While the time at the disposal of your committee has been too short to make as comprehensive a report as the importance of this matter demands, your committee submits the following recommendations.
These recommendations were adopted unanimously by the house and therefore I consider they are especially significant:
1.	That the necessity of providing some method of unemployment insurance is one that will inevitably have to be dealt with before long, as a solution, in part, of the industrial problems of the present day.
2.	That we accept and endorse the principle of unemployment insurance, based on compulsory contributions derived from the state, the employer and the employee. In this connection. we would point out that a somewhat similar decision was arrived at by a royal commission on industrial relations, which dealt with this subject in 1919.
3.	That, whereas the conditions of unemployment vary so much more from province to province, than those relating to old age, it would be very desirable, for the success of any plav of unemployment insurance that several of the provinces should be willing to act simultaneously. In view of these circumstances, we are of the opinion that this matter should be referred to the various provinces, to ascertain which of them would be prepared to consider adopting legislation of this character, and to what extent.
4.	On the very important subject of the cost of unemployment insurance, your committee has experienced great difficulty in arriving at any definite conclusion owing to the lack of data as to the amount of unemployment, either constant or occasional in character. There appears to be no definite method of ascertaining the unemployment at any given point for any length of time. We. therefore, recommend that the government immediately devise some means whereby the amount of unemployment, over a period of years, could reasonably be calculated.
5.	That as unemployment insurance has been in operation for a number of years in Great Britain, and has recently been thoroughly investigated by a strong committee, and the system reorganized on the basis of their report, your committee would suggest to the government the advisability of obtaining, from Great Britain, expert advice on the subject, which
would be of service in the formulation of a plan or plans suitable to conditions in Canada, and in arriving at the approximate cost.
6.	In order that this matter might be further dealt with, your committee recommends to parliament that at the next session this question be again referred to the committee on industrial and international relations.
As I have said, that report was adopted unanimously. Hon. members who have listened to the Prime Minister this afternoon will observe that in what he is bringing down to-day he has profited, and I think very wisely so, by the recommendations of that very committee, in that he has, so he tells us, been careful to get information with regard to the schemes in Great Britain and other countries and that he has sought to get data as to the numbers of unemployed and the numbers that would be affected. Therefore, in the very period in which the Prime Minister says that we were doing nothing, a committee comprising members of all parties in this house was engaged on this very subject and going just as far as it was found possible to go at that time.
Next year, as was recommended, the committee met again; the government of the day reappointed the committee and its findings are contained in a report under date of April 30, 1929. made again by the hon. member for North Battleford who was the chairman. This report brings the situation with respect to unemployment insurance up to April 30, 1929. What is said in this report?
1.	Your committee would reaffirm the position taken in the final report adopted on June 6th of last session, namely:-
That your committee accept and endorse the principle of unemployment insurance, based on compulsory contributions derived from the state, employer and employees.
That answers the whole question as to where this party stands in the matter of principle on the measure at present before the house. The report was adopted unanimously. The principle of unemployment insurance was accepted by a Liberal administration in 1929 on a report brought in by a committee that had been appointed by the house at that time.
2.	Your committee recognizes that-
This is important to follow. Having endorsed the principle, the committee having given the matter careful study and consideration then undertook to lay down the procedure to be followed. Here again may I point out that this recommendation concerning procedure was approved by all parties in the house. There was no exception taken by any member of the Conservative party or any
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member of the Progressive party or any member of the Labour party; they all agreed that this was the proper method of procedure.
2.	Your committee recognizes that, while it is highly desirable that such legislation should be uniform in all the provinces, and while social insurance has a federal aspect, nevertheless, according to the Department of Justice, under our constitution legislative jurisdiction in relation to the establishment of a compulsory system of unemployment insurance is vested exclusively in the provincial legislatures.
And the present Prime Minister may I add was a party to the acceptance of the report.
3.	Your committee finds that the provinces, on being consulted by the Department of Labour with regard to their attitude towards the establishment of a general scheme, do not appear to be prepared to take immediate action.
4.	L'nder these circumstances, your committee submits the following recommendations:-*
(a)	That with regard to sickness insurance, the Department of Pensions and National Health be requested to initiate a comprehensive survey of the field of public health, with special reference to a national health program. In this, it is believed that it would be possible to secure the cooperation of the provincial and municipal health departments, as well the organized medical profession.
(b)	That in the forthcoming census, provision should be made for the securing of the fullest possible data regarding the extent of unemployment and sickness, and that this should be compiled and published at as early a date as possible.
(c)	That the federal government be requested to bring the subject matter of this reference before the next federal-provincial conference; and your committee suggests, when the agenda for such a conference is being arranged that the provincial governments be invited to send representatives of the employer and employee to discuss the subject matter of this report.
All of which was respectfully submitted and the report carried unanimously. That brings the matter of unemployment insurance up to 1929. In order to make it clear that the government of the day did not leave the matter there, but proceeded further, I have in my hand some correspondence in reply to communications sent out >by the Department of Labour to the different provinces on this matter in accordance with the recommendation of the committee. I shall read only one communication, and if the house will permit I shall place on Hansard the memorandum attached to it. The letter that I wish to read is one from the office of the premier of Saskatchewan, dated May 21,1930, a time when that office was filled by a Conservative premier. I take this communication because it comes as near to the time at which the 
Liberal administration left office as any of the correspondence, showing that up to the last minute we were seeking to get the cooperation of the provinces with respect to an unemployment insurance measure. I give it to the house also for another reason; an effort has been made in a very subtle way to make it appear that objection to this parliament proceeding in this matter has been coming from certain provincial administrations that happen to be Liberal. May I point out, as I did the other day, that no one was more emphatic in respect to no interference with provincial rights than the Hon. Howard Ferguson, who is to-day the high commissioner in London for the present administration. When the present government itself was dealing with the question of the statute of Westminster, even while the matter was in Tory hands, Hon. Howard Ferguson as Conservative premier of Ontario insisted that certain safeguards should be put into that measure in order that provincial rights in Ontario might not be invaded.
Here is the communication of Mr. J. T. M. Anderson, the Conservative premier of Saskatchewan of that day:
Premier's Office Saskatchewan
Regina, May 21, 1930. The Honourable Mr. Peter Heenan,
Minister of Labour,
Ottawa, Canada.
Dear Sir,-With further reference to your letter of March 10th with respect to insurance against unemployment, sickness and invalidity, I wish to say that I have received an opinion from our Attorney General's Department which indicates that this matter falls within the competency of the provincial legislature. It would appear, then, that while any general scheme of compulsory insurance along the lines mentioned appears to be entirely a matter for provincial legislation there would seem to be no valid reason why the dominion might not cooperate by way of legislation for a grant of a sum of money in furtherance thereof.
1 would be very glad to know the attitude of your government in this connection.
For your information I am sending you a copy of the memorandum sent me by our Attorney General.
Yours faithfully.
(Sgd.) J. T. M. Anderson.
Then if the house will permit I shall place the accompanying memorandum on Hansard. It is a memorandum of the Hon. M. A. MacPherson:
Memorandum for the Honourable M. A. MacPherson, K.C.
Re: Legislative jurisdiction regarding a compulsory scheme of insurance against unemployment, sickness and invalidity.
I have the honour to refer to the above constitutional question as outlined in the recent correspondence between the Honourable J. T. M. Anderson. Premier of Saskatchewan, and the Honourable Peter Heenan, Minister of Labour

Unemployment Insurance-Mr. Mackenzie King
in the dominon cabinet, from which it appears that you have been requested to prepare a legal opinion as to whether legislation to this end falls within the competency of a provincial legislature.
In dealing with the subject I think it right to premise, in the absence of any bill or proposed statute containing a definite scheme, that the opinion now given is with respect to legislation following the lines as set out on page 1 (IV) of the final report of the select standing committee of the House of Commons of Canada on industrial and international relations published in 1928, namely, that embodying the principle of insurance based on compulsory contributions derived from the state, the employer and the employee.
In accordance with the dicta of the judicial committee of the privy council as expounded on various occasions, the first question to be determined is whether such provincial legislation would fall within any of the classes of subjects enumerated in section 92 of the B.N.A. Act assigned exclusively to the legislatures of the provinces; for, if not, it can be of no validity and no other question would arise. It is only when an act of the provincial legislature prima facie falls within one of these classes of subjects that the further questions arise, namely, whether, notwithstanding this is so, the subject of the act does not also fall within one of the enumerated classes of section 91 and whether the power of the provincial legislature is not thereby overborne. See Citizens v. Parsons, 7 A.C. 109.
Having proceeded in accordance with the above dicta to examine sections 91 and 92 of The Confederation Act, I find that the subject of compulsory insurance along the lines indicated would, in my opinion, fall directly within clause 13 of section 92, namely, "property and civil rights in the province," one of the classes of subjects with respect to which exclusive jurisdiction has been relegated to provincial legislatures. Turning next to section 91, I have been unable to find that it comes under anv of the enumerated classes of that section. Further, it is now well settled that the general authority to make laws for the peace, order and good government of Canada, which the initial part of section 91 of The British North America Act confers, does not, unless the subject matter of legislation falls within some of the enumerated heads which follow enable the dominion parliament to trench on the subject matters entrusted to the provincial legislatures by the enumeration in section 92 of the act. Attorney-General for Canada v. Attorney-General for Alberta and Attornev-General for British Columbia, 26 D.L.R. 288.
In Citizens v. Parsons (supra) an Ontario act was under review, namely, 39 Viet. Ch. 24. It dealt with policies of insurance entered into or in force in Ontario for insuring property situate therein against fire and prescribing certain conditions which were to form part of such contract. The judicial committee declared it to be valid legislation applicable to the contracts of all such insurers in Ontario, including corporations and companies, whatever might be their origin whether incorporated by British authority or by foreign or colonial authority. At page 111 their lordships, referring to 14 Geo. Ill, c. 83, a statute making provision for the government of Quebec, say:
"In this statute the words 'property' and 'civil rights' are plainly used in their largest sense, and there is no reason for holding that in the statute under discussion they are used in a different and narrower one.
The next question for consideration is whether, assuming the Ontario act to relate to the subject of property and civil rights, its enactment and provisions come within any of the classes of subjects enumerated in Section 91, the only one which the appellants suggest as expressly including the subject of the Ontario act is No. 2 'the regulation of trade and commerce.' "
It was held, however, that the words "regulation of trade and commerce" include political arrangements in regard to trade requiring the sanction of parliament, regulation of trade in matters of inter-provincial concern, and it may be, general regulation of trade affecting the whole dominion; but do not include the regulation of the contracts of a particular business or trade such as the business of fire insurance in a single province, and, therefore, do not conflict with the power of property and civil rights conferred by section 92, No. 13.
It appears to me to be clear that legislation setting up a scheme of compulsory insurance against employment, sickness and invalidity, requiring contributions from the state, the employer and employee would of necessity deal directly and primarily with the property and civil rights of individuals in the province affected, and while the constitutionality of legislation covering this particular species of insurance has not been directly determined by the eourts, I see no reason to doubt that the principles adopted in Citizens v. Parsons would apply. I am accordingly of the opinion that the exclusive jurisdiction to enact compulsory insurance legislation of this nature rests with the provinces.	_
Again, in Attorney-General for Canada against Attorney-General for Alberta and Attorney-General for British Columbia (insurance case) (supra) their lordships of the privy council held in effect that it was within the exclusive competence of provincial legislatures to legislate regarding the business of insurance. At page 292, 26 D.L.R. (supra) their lordships, in answer to the argument that the dominion had jurisdiction under section 91 of the B.N.A. Act, "trade and commerce" say:
" No doubt the business of insurance is a very important one which has attained to great dimensions in Canada, but this is equally true of other highly important and extensive forms of business in Canada which are to-day freely transacted under provincial authority. Where the B.N.A. Act has taken such forms of business out of provincial jurisdiction, as in the case of banking, it has done so by express words which would have been unnecessary had the argument for the dominion government addressed to this board from the bar been well-founded."	_
Turning now to a consideration of the question of insurance as viewed from the aspect of its relation to unemployment and sickness, the first of which would appear to come within the scope of legislation regarding labour in industrial undertakings, and the latter of which would appear to fall within the category of public
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health, the legislative jurisdiction in regard to these matters also in my opinion belongs primarily to the province.
In a reference by the Governor General of Canada to the Supreme court in the matter of legislative jurisdiction over hours of labour (1925), S.C.E. 505, the court held, inter alia:
" That the matter of labour in industrial undertakings in Canada is primarily within the competence of provincial legislatures, but parliament can legislate as to labour in territories not yet organized into, or forming part of, a province and as to labour of servants of the dominion if these are within the scope of the draft convention."
It appears to be only necessary to explain that the draft convention referred to was that adopted by the International Conference of the League of Nations in 1919 limiting the hours of labour in industrial undertakings.
Reference may also be made in this connection to In re the Board of Commerce Act and the Combines and Fair Prices Act, 1919 (1922) 1 W.W.R. page 20, in which ease the privy council held the enactment of 'the above two acts to be ultra vires the dominion parliament. They were designed to prohibit undue combination and hoarding and the committee held their provisions to be an interference with the power to restrict the "civil rights" of the inhabitants of a province, a power exclusively relegated to provincial legislatures by the B.N.A. Act. See page 24 of the report (supra).
I would further refer to the judgment of the privy council in two cases which have particular application to the subject in hand, namely, "In re Reciprocal Insurance Legislation (1924) A.C. 328; (1914) 2 W.W.R. 397, and Toronto Electric Commissioners v. Snider et al (1925) 1 W.W.R. 785. In the case last referred to their lordships held the Industrial Disputes Investigation Act 1927 (Ch. 20, Dom.), ultra vires of the dominion parliament declaring it to be a law relating to matters as to which section 92 of the B.N.A. Act gives exclusive jurisdiction to the provinces. It was also held, approving the board's ruling in In re Reciprocal Insurance Legislation (supra), that the said act could not be justified as an exercise of the dominion's powers under section 91 of the B.N.A. Act with respect to criminal law, or with respect to the peace, order and good government of Canada. It was further held that the mere fact that legislation is for the general advantage of Canada or is such that it will meet a mere want felt throughout the dominion does not render it intra vires of the dominion parliament if it cannot be brought under the heads specifically enumerated in section 91 of the B.N.A. Act unless it is passed because of some extraordinary peril to the national life as a whole, such as a war or, perhaps, an epidemic of pestilence and that the evidence in the case at bar did not show such.
Again, the subject matter of public health appears to me clearly to fall within provincial legislative competence under the heading "property and civil rights" and might also be so claimed under item 16 of section 92 of the B.N.A. Act as being a matter of a local or private nature. There is also item 7 whereby exclusive legislative jurisdiction is conferred on the provinces respecting the establishment, maintenance and management of hospitals, etc., other than "marine hospitals" jurisdiction with respect to which has been specifically conferred upon the dominion by item II of section 91,

namely, "quarantine and the establishment and maintenance of marine hospitals." I am unable to find any other express heading of section 91 which would support the contention that public health generally is a matter of exclusive dominion jurisdiction. With regard to the opening words of section 91 conferring upon the dominion jurisdiction to enact laws for the peace, order and good government of Canada, as has been shown, these words do not, unless the subject matters also fall within one of the enumerated heads of section 91, enable the parliament of Canada to trench on matters exclusively relegated to the provinces under section 92.
For the above reasons and on the above authorities, in my opinion the power to enact compulsory legislation with respect to insurance against unemployment, sickness and invalidity rests with the provinces.
I might add, however, that while any general scheme of compulsory insurance along the lines indicated appears to be entirely a matter for provincial legislation there would seem to be no valid reason why the dominion might not cooperate by way of legislation for the grant of a sum of money in furtherance thereof.
Alex. Blackwood,
Law Officer.
The point I wish to make clear is that this correspondence indicates an objection raised by a Conservative premier of one province saying that the dominion was invading its jurisdiction in seeking, as regards an unemployment insurance scheme, to do other than make a contribution to the province. Should we not have raised one of the greatest issues ever raised in this country if we had attempted to do what the Prime Minister to-day is attempting to do, if we had sought to defy those provincial governments with respect to their rights? We felt that whatever was to be done, to be effective, should be done in the right way and in accordance with the jurisdiction of parliament 'as it is known to exist.
I think I have made fairly clear why the government or any government between 1921 and 1930 could not have gone further than we did in the matter of social legislation, and in particular, with respect to any scheme of unemployment insurance. We had moved steadily ahead, we had carried all parties in this house with us every step of the way. There was as regards procedure no difference of opinion between Liberal, Conservative, Progressive or Labour; all were united in the steps we were taking. By advancing in that way we were taking a course that in the long run promised both certainty and security.
Now we come to the period when the present Prime Minister came into office. The first question I would again ask is: Why have we had to wait until 1935 to have some further step taken, some measure of social insurance

Unemployment Insurance-Mr. Mackenzie King
introduced? Well, the Prime Minister gave one reason, I do not think it is a very good one, in his second radio address on January 4:
Row that we have achieved some measure of control over economic conditions and can operate without fear of imminent disaster we are going to do away as quickly as possible with emergency relief measures and put in a permanent system of sound and scientific insurance against unemployment.
He has not done away with any emergency relief measures as yet. I agree with the Prime Minister that the question of unemployment insurance is an entirely different matter from the question of relief. Unemployment insurance as introduced to-day relates to the future, to a time considerably in the future; unemployment relief relates to the present, and it is the present about which the people are concerned. What the people are demanding from this government is that present conditions shall be remedied, knowing full well that unless they are remedied no legislation in the world with respect to unemployment insurance is likely ever to become of any service to anyone. But when the Prime Minister undertook to say that he was not able to deal with this matter until he got control of the economic situation, I think he was going a little too far. Has he got control of the situation yet? Has he got control of the econmic conditions of the country? Is everything prosperous and going ahead? I do not believe the public share any such view. There was nothing in the situation from 1930 to prevent his going ahead with a national unemployment insurance scheme except the reasons he himself gave and which I shall quote in a few moments.
May I point out what attitude we of the official opposition took? Did we say, We think that because this is a period of depression we should not touch any social legislation until we get out of this period? Or did we say: This is the time of all times to settle these questions as to procedure and jurisdiction so that when the moment does come that we have reached an understanding with the provinces which will permit of the introduction of a system of national unemployment insurance no time will be lost in getting it placed upon the statute books? Did we not state over and over again that we believed that what in part was needed for dealing with unemployment as it might arise in the future was a national unemployment insurance scheme? We took the ground always that along with any measure of the kind there would have to be policies which would serve to revive industry and trade, and that in the meantime as long as we had the problem of relief on our hands it
would have to have immediate attention, the permanent as contrasted with the temporary measures going along parallel with them if you like. The point we stressed over and over again was that, while we were in a period of depression, we could at least settle the question of jurisdiction, we could at least bring the provinces into conference and work out something, and that that was the way in which the government should proceed. In 1931, 1932, 1933 and 1934, every one of these years, we urged that a national unemployment insurance scheme should be introduced. We had been working on such a scheme, as I have shown, before leaving office in 1930. I shall not quote to any extent from what was said, only enough to verify the statement I have just made. In the House of Commons on April 29, 1931, at page 1113 of Hansard I am reported as follows:
As unemployment is incidental to industry as it is carried on to-day, I believe some system of insurance against unemployment is absolutely necessary and should be provided.
That was in 1931. Then on the next page:
having regard to the problem of unemployment before us at the moment, a problem that we know is going to recur from time to time, the government should immediately consider how a system of unemployment insurance can be made applicable to help meet such a situation.
Not consider in 1935, but "immediately" consider. Then further:
We have at the present time a federal system of annuities. I see no reason why the administration should not consider whether some advantage might not be taken of the annuity system already in existence as a federal system so to extend it as to make the moneys paid in as premiums available at times of unemployment, as unemployment insurance to those who make contributions towards it. It might be so extended as to make the system available to its contributors as insurance against sickness or invalidity. There is an opportunity for an immediate step to be taken by the federal government to provide a measure of unemployment insurance. Xo question of constitutionality can be raised with respect to it. I submit the government might well consider whether the system of providing annuities which now for many years has been administered by the federal government, might not be so extended in its bearing upon social problems, as to make it available to meet other risks that arise from industry.
There, I submit, was a constructive idea and suggestion. The Prime Minister says he has met with nothing but opposition from this side of the house. Has he listened to what we have been saying over and over again, from year to year urging the very sort of thing he now says he is trying to do in the bill he
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has introduced, but which should have been done only in a different manner five sessions ago or at any one of the sessions that have intervened?
In 1931 we saw very clearly that the considerations I have mentioned, with regard to financial jurisdiction, conference with the provinces and the like, would have to be considered, together with the necessity for the amendment of the British North America Act. Those factors we brought to the attention of the government. The amendment of the British North America Act was one point that was clear from the start. We have all seen, understanding the jurisdiction to be as we all along have believed it to be, that, if a national scheme of unemployment insurance was to be drawn up, it could be done only in one of two ways. One way was by agreement with the provinces whereby they would act within their jurisdiction and the government of Canada would contribute grants in aid, as has been done in the case of old age pensions; the other way was by amending the British North America Act in a manner that would enable this federal parliament alone to deal with the question. We always said that a conference with the provinces, if properly carried on, would enable us to reach agreement on an amendment of the British North America Act, but five years have been lost in the holding of any conference of the kind. I say here that we will yet discover that such a conference must take place; we will yet discover, before any legislation of this character comes within the jurisdiction of the federal government, that it will have to be by the path of some conference between the dominion and the provinces, and through agreement reached as a result thereof. I pointed out the desirability of a national scheme in dealing with old age pensions as part of a social insurance scheme:
... we believe old age pensions should be a part of the social insurance scheme of this country. But we think it should be a national scheme; it should be administered nationally, 100 per cent of the money raised and the entire scheme administered by the federal government.
We as Liberals were not seeking to be rid off an obligation in connection with a national insurance scheme; we were claiming that as with the case of old age pensions this parliament should be placed in a position to take it over.
We say that the present government ought immediately to take steps to have the British North America Act amended so as to make possible federal administration so that when the time comes to pay the old age pensions

100 per cent, we shall not be met with any constitutional obstacle to the administration of the scheme in its entirety by the federal government.
That was with regard to old age pensions. I have quoted from Hansard of June 2, 1931, at page 2265. On the same date, at page 2266, I am quoted as follows:
... I say the British North America Act should be amended so as to make it possible for the federal government to undertake the administration of that scheme.
That was the old age pensions scheme. If the act had been amended in that regard an amendment could have been secured easily with regard to unemployment insurance as well.
. . . the time has come when the federal parliament should seek to have the British North America Act amended so as to make it quite clear that it will be within the jurisdiction of this parliament to administer an old age pension act . . .
That was as long ago as 1931; that had been stated before, and I have stated it continually since. On November 22, 1932, I dealt with the same matter again, namely, an amendment of the act but specifically in relation to unemployment insurance. Here are my words, as reported in Hansard of November 22, 1932, at pages 1458 and 1461:
We have always recognized that, if there was to be a national scheme of unemployment insurance, or a national scheme to deal with any phase of social insurance, it would have to be by agreement between the provinces and the dominion, or possibly by an amendment to the British North America Act which could be made as a result of such agreement. Taking that view, we advocated two years and more ago that the government should then and there appoint a commission to deal with the question of unemployment and kindred matters, so that once the necessary data had been secured as a guide to the measure to be drafted, whatever steps might be necessary in the way of an amendment to the British North America Act in order to permit a national scheme of insurance to go into effect could be taken at the earliest possible moment.
At that time, from something the Prime Minister had said, I thought he was going to come round in favour of a national scheme, but apparently he then had something else in mind, evidently what he is attempting to do to-day. In my innocence I took him as meaning he was going on at once with a national unemployment insurance scheme, and said:
We shall I trust be able to work in harmony and cooperation with them. We commend them for their action, but at the same time, we cannot but regret that so long a period has

Unemployment Insurance-Mr. Mackenzie King
gone by which might have been turned to good account in furthering and advancing such an all-important measure.
There was an acceptance of what at that moment seemed to be the intention of the government, to introduce an unemployment insurance measure, but one that it would be within the competence of this parliament to enact.
I have referred at different times to the formal statement of Liberal policy with respect to different matters; the position of the Liberal party in regard to some present day problems, which I made in this house on February 27, 1933, and which sets forth the Liberal policy with respect to these questions of unemployment and unemployment insurance. I will place this statement of policy on record again, so that there can be no question in the mind of anyone as to where we all stand on the matter of unemployment insurance:
Unemployment of First Concern
The Liberal party believes unemployment is Canada's most urgent national problem. It would deal with the present emergency conditions through a representative national commission, which would cooperate with the provinces and municipalities in the administration of unemployment relief and in an endeavour to provide work for the unemployed.
As permanent measures the Liberal party is pledged to introduce policies which will serve to provide employment by reviving industry and trade; and to introduce a national system of unemployment insurance.
That is our position. Let me conclude, Mr. Speaker, by pointing out what has been the attitude of hon. gentlemen opposite towards that position. I think I have made it very clear that all through this parliament we have been urging-and we started to carry out our endeavour in a preceding parliament-that there should be a national system of unemployment insurance. But every time we have discussed that matter we have been met by objections from hon. gentlemen opposite, and there has been no one whose objections have been stronger and more emphatic than those of the Prime Minister. Let me read what the Prime Minister said about the power of this parliament to deal with this matter and why nothing had been done up to that time, further, why nothing could be done, in view of what the Prime Minister said. I quote from Hansard for November 22, 1932, at page 1452, with regard to unemployment insurance. At that time the Prime Minister referred to what he had said in 1931. I will refer to 1931 a moment later, but I am taking 1932 because he emphasized
his position then in no uncertain terms. Here is what the Prime Minister is reported to have said:
It will be within the memory of most hon. members that on the 29th of April, 1931, I marie a statement with respect to the question of unemployment. In the course of that statement I discussed at some length the question of unemployment or of social insurance that might become the subject matter of legislation to deal with the question of unemployment and allied problems. I pointed out why the government of Canada could not introduce legislation to deal with that matter. Roughly the reasons are two. One is purely a constitutional or legal reason; the other is an economic reason because of lack of information with respect to the subject matter then under discussion.
Can anything be more definite than that? The government, the right hon. gentleman intimated, could not proceed with an unemployment insurance scheme for two reasons. One reason was the economic one of not having the information. I think they were to blame for not having it, but we will let that pass for the moment. The other was the purely constitutional or legal reason which the Prime Minister urged then, had urged before and kept urging at every subsequent session. Further he said:
The first reason-*
The first was the constitutional or legal reason.
-has been so fully stated to this house on so many occasions that I shall not do more than refer to it very briefly.
Then he does refer to it at some length. What does 'he say? Let me quote only one or two parts of his observations:
But the fact that the second largest province in the dominion has made it abundantly clear that it would not tolerate interference on the part of the federal authority indicates clearly that all the federal parliament can do by way of legislation is to assist the provinces in the discharge of their constitutional obligations,.
As I said, there was an effort to reflect on one province-


Ernest Lapointe: What date was that?


William Lyon Mackenzie King: November 22, 1932. I have made it clear that objections came even from those emphatically Conservative provinces of Ontario and Saskatchewan. Then he states:
That is the judgment of the court 01 last resort so far as we are concerned.
Then, listen to this in regard to jurisdiction -oh yes, and my hon. friend, the ex-Minister of Justice points out that Jhat was a year after the aviation case on which the Prime Minister now rests his authority.
752	COMMONS
Unemployment Insurance-Mr. Mackenzie King


Richard Bedford Bennett: But the aviation case was not the radio case.


Ernest Lapointe: And even the radio case.


William Lyon Mackenzie King: Listen to this, on the matter of jurisdiction:
The question of jurisdiction-
This is very interesting.
,-therefore is at the bottom of all relief which is of a permanent character.
It is not hon. -members on this side of the house- (who have raised the constitutional: ssue; it is the Prime Minister himself. These are his own words:
The question of jurisdiction therefore is at the bottom of all relief which is of a per-niauent character. Any legislation that may be enacted to deal, for instance, with social insurance problems must have the support of the provincial authorities. I made_ that abundantly-clear on more than one occasion here, and it was agreed to I think by every member of the house who had taken the trouble to consider the question. Now pressure has been brought to 'bear by various organisations throughout the dominion to ensure the passage of what is known as contributory unemployment insurance legislation.
That is what we have in this 'bill.
That legislation, to be effective in this country, with jurisdiction divided between the provincial legislatures and the federal^ parliament. could have validity only, if it nad the sanction both of the legislatures and of parliament. That I think has been conceded but that difficulty is one that can be overcome. It can be overcome rather readily if the provinces will agree to such an amendment _ to our constitution as will clothe parliament with the appropriate authority.
But the Prime Minister has given them no opportunity to confer with him at any length to work out the means to that end. Then further:
There are other questions to consider besides those affecting social insurance and social problems. There are problems with respect to taxation. There are problems with respect to the Companies Act.
And so on. Recognizing that there are other obligations as great, he continues:
The British unemployment insurance legislation was predicated upon actuarial computation. The difficulties arose because it was found in practice that the fund had to borrow to enable it to discharge its obligations, and the borrowings became so great that, in the language of the government of the day, it threatened the very solvency of the state itself.
That was another reason that was given why they could not go on. Then the preceding sentence in the right hon. gentleman's observations:
I take it that* the judgment of the house, broadly speaking, was that any measure of social insurance should be contributory in its character, that it could not be otherwise.

Then he speaks about the difficulties about raising money for contributory purposes, and goes on to say:
If in the language of one hon. gentleman who has spoken in this discussion we are to derive any benefit from the knowledge of the past, it can only be because we can rely upon it to enable us to go forward with plans and proposals that will not be shipwrecked because they are based upon guesswork. I pointed out then that the census would be taken in 1931, and I further pointed out that when the census was completed we proposed to have the figures disclosed by the census so analysed as to enable us to deal with the subject, assuming, as we did. that we might be able to make a satisfactory arrangement with the provinces. I therefore desire to make it perfectly clear that in pursuance of the statement which I then made and which I shall now read, it is the purpose of this government to have a conference of the provinces to determine what action may be agreed upon with respect to this and other matters.
As I have said, that conference never took place. I was going to quote from Hansard for 1931, but as I wish to conclude before six o'clock I shall omit any further extracts with the exception of one. At the time to which I have made reference a motion was before the house which had been moved by the hon. member for North Winnipeg (Mr. Heaps) to the effect that immediate attention should be given to the matter of unemployment insurance. Speaking on the motion the Prime Minister said, as reported at page 1099 of Hansard for 1931:
Mr. Speaker, I do not propose this afternoon to traverse at length the ground covered by the hon. gentleman who has just taken his seat (Mr. Heaps). I desire only to point out two or three problems which must be dealt with before this question can be determined.
Before.
First there is the question of the respective jurisdiction of the federal parliament and the provincial legislatures which has to some extent been determined by the law officers of the crown. As has been pointed out by the provincial Premiers, there is no reason to doubt that -with the joint action of the provinces and the dominion some satisfactory solution of this problem can be found.
Then he made a reference to the Minister of Labour of that day and stated that the then member for Kenora-Rainy River (Mr. Heenan)-
-suggested the other day that this matter might have been discussed at the recent dominion-provincial conference. I can only say-
And this is apropos of what the Prime Minister said to me a day or two ago, when I expressed the view that a conference to

Unemployment Insurance-Mr. Mackenzie King
be of any value would take a little time, and he replied that there was no necessity to take time, that it could all be done in a day.


Richard Bedford Bennett: Oh, no.


William Lyon Mackenzie King: Oh, yes.


Richard Bedford Bennett: Not as bad as that.


William Lyon Mackenzie King: Not more
than a day, anyway. But here is what the right hon. gentleman said in 1931:
I can only say that the question could not be dealt with at any such conference in one or two days, or in half a dozen days; there are questions which involve consequences of the most far-reaching effects in every possible way so far as the body politic is concerned.
And so on, and so on. Then elsewhere he
said:
First it suggests that the government should take consideration the immediate establishment of a federal system of insurance. I do not think my hon. friend is well advised in leaving the word "immediate" in his motion for the simple reason and obvious reason that it must be known to him and to every hon. member who has read any book upon the subject-


Some hon. MEMBERS:: Hear, hear.


William Lyon Mackenzie King: -or who has given time or consideration to the problems involved that it cannot be dealt with in three weeks, six weeks, one month or several months. So far as that feature is concerned. I would suggest that he delete the word "immediate" from his resolution. I suggest also that after the word "federal" and before the word "system" he add the word "contributory." thus making it a federal contributory system. Then I will suggest that the words "after satisfactory arrangements have been made with the provinces" be added at the end of the resolution.
He continued to emphasize that point.


Richard Bedford Bennett: The other part is very important, if you do not mind reading it.


William Lyon Mackenzie King: I wish to conclude my remarks by six o'clock. My right hon. friend may read it later on, if he wishes.


An hon. MEMBER:: Why did he change his mind?


William Lyon Mackenzie King: Someone asks why did he change his mind. I think, from his references to others, that the Prime Minister's mind may be easily understood. On April 26, 1932, when the Prime Minister came across some literature which was issued by the League for Social Reconstruction he tried to make it appear that the zeal shown Iby those who favoured unemployment insurance had arisen from motives of advantage in electoral campaigns. I have before me his 92582-48
observations, as they appear at page 2404 of Hansard for 1932. Dealing with the document I have mentioned he said:
The document I have before me is not entitled "the policy of the Liberal party," but at the end I find the words: "The League for Social Reconstruction."
Then I shall read one paragraph from the document the right hon. gentleman quoted, a paragraph which has a familiar sound today:
The present capitalist system has shown itself unjust and inhuman, economically wasteful and a standing threat to peace and democratic government.
That paragraph was contained in the statement issued by the League for Social Reconstruction. There are set forth a number of measures which are said to be part of the policy of the League for Social Reconstruction, number 4 of which reads as follows:
Social legislation to secure to the worker adequate income and leisure, freedom of association, insurance against illness, accident, old age, and unemployment, and an effective voice in the management of his industry.
The vesting in Canada of the power to amend and interpret the Canadian constitution so as to give the federal government power to control the national economic development.
The Prime Minister commented on that as follows:
I commend that to the members from Quebec. There go your provincial rights, there go your provincial constitution.


Richard Bedford Bennett: Hear, hear.


William Lyon Mackenzie King: I continue the
quotation:
Mr. Casgrain: Not at a'll.
At that time the Prime Minister had it in his mind-how it came there I don't know- that Hon. Vincent Massey was responsible for this League for Social Reconstruction and that as president of the National Liberal Federation this policy had been brought forward for election purposes. Now I ask the house to listen to this; hon. members will see why we are getting this unemployment insurance scheme at this moment. I quote again from Hansard of April 26, 1932:
Mr. Bennett: I commend this new declaration to the consideration of the house because it indicates that change for which we have all 'been waiting, namely, an effort to take advantage of what may be described as the unrest and the distrust incident to the present economic condition and to capitalize it for party advantage through the oblique attack of the establishment of social reconstruction.


Richard Bedford Bennett: Hear, hear.

754	COMMONS
Unemployment Insurance-Mr. Mackenzie King


William Lyon Mackenzie King: There, Mr. Speaker, I think is the full explanation of why we have this measure brought down at the present time.
May I say to the Prime Minister that he knows better than anyone else that the final authority that settles these questions of jurisdiction is the courts, and that he cannot by assertion or by assumption give to this parliament any power to deal with these matters ffhich it does not now possess. That is the reason, and the sole reason, why hon. members on this side bring to the attention of the government, as is their duty, and why as leader of the opposition as is my duty I stress the point, that we believe, proceeding as he is, he has adopted a course which will not commend itself to the courts when this legislation comes eventually before them for final decision. In order that I may do the Prime Minister full justice in the matter of the importance he attaches to the judiciary with respect to the interpretation and effect of all legislation, I want to read his words which I have before quoted indirectly, and which I quote directly now. He was speaking at Toronto on February 18, 1932, on the occasion of being called to the bar of Ontario and being made a bencher of the Law Society of Upper Canada. I quote from the Ottawa Journal of February 19, 1932:
Marking centenary celebrations of Osgoode Hall, home of the law courts of the piovince, was the induction of the Prime Minister of Canada as a barrister at law of Ontario.
"I think the judicial branch of government is the most important," said Mr. Bennett, addressing the convocation of benchers of the Law Society after he had been introduced by W. N. Tilley, K.C., treasurer of the Law Society, and sworn in by Clarence Bell, assistant registrar.
"The legislative branch is very important, the executive tremendously so, but in the final analysis the judicial branch of the government is the one to which most attention should be paid. It interprets the acts of the legislative and executive branches, and upon the collective judgment of those we appoint for this purpose depends not only life, liberty and freedom, but the enjoyment of property and all that is thereby involved."
Mr. Speaker, this legislation most certainly will eventually come before the courts for decision. I should like to have seen an unemployment measure passed by this house in accordance with the recommendations of the standing committee on industrial and international relations, a course that would have made the legislation unanimous and would have removed all possibility of doubt as to its validity. When this legislation is passed, there will still be the doubt as to whether it has any validity at all.
[Mr. Bennett.1
In the circumstances, I say to the Prime Minister that in these days of stress and anxiety and suffering for the mass of the people, they are crying for bread and he is giving them a stone. They are crying for fish and he is giving them a serpent; because in addition to their distress and their suffering, when this legislation is found to be ultra vires there will be the sting of bitter disappointment.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.



INTEREST ACT AMENDMENT

[Stage Direction]
Mr. G. G. COOTE (Macleod) moved the second reading of Bill No. 11, to amend the Interest Act.
He said: The principle of this bill is to place in the Interest Act a maximum rate which may be charged or collected on any agreement. The present Interest Act, being chapter 102 of the Revised Statutes of 1927, provides:
Except as otherwise provided by this or by any other act of the parliament of Canada, any person may stipulate for, allow and exact, on any contract or agreement whatsoever, any rate of interest or discount which is agreed upon.
It is these particular words to which I take exception, "any rate of interest which may be agreed upon." The Money Lenders Act, which applies of course to persons engaged in the lending of money, fixes a maximum of twelve per cent as the rate that may be charged; and in the Bank Act there is set a maximum rate of seven per cent that may be charged by the banks. The Interest Act sets no limit. Why place a limit on the rate that may be charged by money lenders but set no maximum rate which may be charged by others? I think we all agree that our experience shows the advisability of placing a limit on the rate that may be charged by money lenders as well as by banks, and I feel it is just as necessary to place a limit on the rate which other persons may collect.
If a limit should be set, what should that limit be? If the banks are limited to seven per cent I can see no reason at the moment why that same rate should not be set for those engaged in general business. Therefore I have drawn this bill, the new section 2 of which fixes a limit of seven per cent. It is a common practice, in western Canada at any rate, to charge rates as high as eight, ten and even twelve per cent per annum. I know that thousands of machine company notes have

Interest Act-Mr. Coote
been drawn carrying a rate of eight per cent until due and ten or even twelve per cent per annum after they are due. Millions of dollars have been paid in interest at these rates, but that is impossible now, with prices as they are. There are millions of dollars owing by retailers to wholesalers, which have been carried on their books for years at the rate of eight per cent, and in many instances the interest is made up and compounded every three months and a draft issued on the retailer. In some instances retailers have told me that they calculate they are paying at least nine per cent per annum in this way, and a general limitation of seven per cent such as I suggest would afford considerable relief to such people. And now that the banks are limited to a rate of seven per cent chargeable to wholesalers, I think this provision I suggest is a very necessary one. Section 3 of the present act provides that when interest is payable on any contract, sale or agreement, and no rate is specified, the rate shall be fixed at five per cent. The new section 3, provides that the rate shall be four per cent. I have proposed that change because it see-ms to me that at the present time all rates should be lower. In section 4 the rate is reduced from five per cent to four per cent. This is where	the	rate of interest is	notannual but is fixed weekly or monthly. A new subsection 5 (a) in the bill fixes a rate of four per cent which may be collected on any mortgage on real estate or any agreement for sale of real estate. I have suggested a rate of four per cent because I believe that the general opinion in this house, as expressed in the debate	last	week,	is that four	percent is probably the maximum which farmers can pay. Certain members however have suggested that	this	is too	low a rate	andthat if it were	fixed	at five	per cent I should
probably get more support for the bill. I may say frankly that it is the principle of establishing a maximum which I am asking for, and if the bill is allowed to have second reading I will move that it be sent to the banking and commerce committee, if that is the wish of the house, and the rate can be decided there. I hope we shall be able to do that.
I do not want to take up too much time, but I feel I should advance a few facts in support of my contention that the rate on real estate mortgages should be lower than it is at the present time and that a maximum should be fixed. So far there has been no limit, and there are to-day some mortgages outstanding at ten per cent, many more at nine per cent, and the bulk in the west at eight per cent. Though in the past many 92582-4Si
farmers have paid off mortgages bearing such rates of interest, that cannot be done to-day. The farmer pays interest out of the products of his farm. In olden times, I believe, he could pay in corn, wine, oil and cattle, but to-day he promises to pay in money and he has no way of monetizing his products; that is done by someone else. To-day, on the average, it takes fifty per cent more of his products to pay his interest than it did at the time he contracted the debt. Further, the farmer can pay only out of his surplus revenue. There are expenditures which he must meet if he is to continue farming, and it might not be out of place to bring before the house a few facts to illustrate the farmer's ability to pay.
Taking the average price of field crop commodities in 1926, the index figure being then 100, we find that in 1930 the index was 57-8; in 1931 it was 46-9; in 1932 it was 43-1; in 1933 it was 52-7, the average for these years being a little less than fifty per cent of their value in 1926. In 1933 the gross value of farm products was only forty-three per cent of what it was in 1928, and by 1933 the average farm income, which had stood at 81,600 in 1928, had fallen to $640. This is the average farm income, and probably half the farms in Canada had a lower income than that shown by the average.
Let me give two or three figures to illustrate the ability of industry to pay interest rates compared to its ability in 1929. In 1929 the gross value of production of the manufacturing industries was $4,029,000,000, and this had fallen in 1933 to $2,086,000,000. I am told that when we speak in terms of millions in this house it goes over the heads of the people; they do not realize what millions mean, but this is another way of stating that for each $1,000 which the manufacturer had for the value of his product in 1929, he had only $500 in 1933. His ability to pay interest had been much more than cut in two. The total amount of wages and salaries paid in the manufacturing industries in 1929 was $813,000,000 and that had fallen to $465,000,000 in 1933. Perhaps I have said enough to indicate that neither the agricultural nor the manufacturing industry can continue to pay rates of interest such as they have done in the past.
There has been a steady depreciation in the money value of all commodities and at the same time for the past five years there has been a steady appreciation of the monetary unit. The holder of money or fixed income bearing securities has found his purchasing power or real income in some cases doubled
Interest Act-Mr. Coote
[Stage Direction]
and in nearly all cases increased by thirty or forty per cent. This has created a grave injustice to debtors; payment in many cases has become impossible and this has resulted in what in olden days would be described as usury. I quote from Mr. Woodlock writing in the Wall Street Journal. He says:
Stated in its simplest form, the prohibition of usury in the middle ages extended to all loans at interest, the use of which did not produce a profit sufficient at least to meet the interest demanded for the loan, or in which the risk or sacrifice on the lender's part was not such as to require legitimate compensation. Probable profit to the borrower, or loss to the lender, justified interest; otherwise in detail that was the rule respecting usury.
If we view the matter in this light, it seems to me that a large part of our debt to-day is usurious and interest thereon has become usury. If the debt cannot be written down, some relief can be given to the debtor by reducing the rate of interest. The country's economy is built on a credit structure. It is quite evident that the structure can be preserved only if the creditor class will make some sacrifice. As Mr. Woodlock says:
It is surely historically true that loans which do not produce the means for repayment are in the long run not repaid'.
And high rate's of interest in the long run are not in the true interest of even the lender.
I would like to give just this one further quotation from Mr. Woodlock. He says:
In the historical perspective of business and industry, when all mistakes have been taken into account and all the changes in the methods and plants duly authorized, it becomes very clear that nature in fact will pay but a very small rate of interest on money-capital, if indeed, in the final book-keeping, she will pay any interest at all.
Two questions are involved in regard to mortgages, that is mortgages already existing and those that may be entered into in the future. I believe the bill as drawn, would refer to both classes and personally I am more concerned with mortgages that are already in existence than with those that may be entered into in the future. I realize the question of federal jurisdiction may be raised in regard to this and I think it is only fair to have the bill go to the committee where that question as well as others relating to the bill may be threshed out.
In conclusion I would just like to say that the principle of the bill as I have introduced it is to establish a maximum rate of interest. It may 'be, as I have said, it is too low; it may be it is too high, but I would just like to say again that if the house would be good

enough to give this bill its second reading and allow it to go to the banking committee
1	am quite1 willing that the rate of interest be determined at that time.
Mr. EUSEBE ROBERGE (Megantic) (Translation):: 
Pierre Édouard Blondin: I regret to advise tKe
hon. member that his amendment is out of order as the house is not in committee and amendments to a bill by striking out sections thereof are not in order on second reading.


Mr. ALFRED SPEAKMAN (Red Deer):: Mr. Speaker, before the minister replies acceding to the request of the hon. member for Macleod (Mr. Coote), may I be permitted to say a few words in support of the principle embodied 'in this bill. I say the
Interest Act-Mr. Speakman

principle advisedly, because I wholly concur in the suggestion of the hon. member that this bill be sent to the committee on banking and commerce, where, if the principle itself is accepted, the actual rates of interest might be determined.
That principle as I see it is of a dual character; that this parliament should where possible impose a maximum rate of interest which may be charged, and that that rate shall be such as to bear some relation to the ability of the borrowers to pay and to conditions as at present they exist in this country. I think it will be accepted as a fact by all that interest rates are in process of reduction, and that that lowering has become manifest in the sale of government bonds, the interest paid to bank depositors, and in other ways. But there is one point which I should like to stress for a moment; it was brought forward and fully developed in the work of the committee two years ago, which went extensively into the question of debt and interest. During what we usually term normal times, that is times of prosperity-I am speaking of them as normal times for the purpose of argument-I think it will be found that the various divisions of the individual and national income are about equal; that is a certain proportion will go to management, a certain proportion to labour, a certain proportion to invested capital. So long as those various parts hold a reasonable balance one with another, and each absorbs only a fair proportion of the individual and national income, so long the machine will run without undue vibration. But at the present time the situation reminds me somewhat of that form of internal combustion engine which derives its steadiness and power from the smooth running of a very heavy fly wheel. Most of us have seen that form of engine. As long as the wheel is in balance and each section corresponds in weight to the other sections the engine will run and perform its functions and not be subject to undue wear and tear. But if for a moment we try the experiment of overloading one section of that wheel until it weighs twice as much as the other sections, only one result can be expected; the wheel, the engine and the building in which it is situated would be scattered to the four winds and with it the unfortunate men who were attempting to carry on its operation. So far as I can see, Mr. Speaker, our situation is somewhat similar to that unbalanced wheel. The income of the nation and of the individual has been greatly lessened, perhaps by half, but that proportion of it which is expended in the payment of
[Mr. Speakman. 1
capital charges remains much as it was before, and is completely out of balance with all the other factors. It now bears no relationship whatever to the amount of the income which goes in other channels, and to my mind the system in which that is revolving is in the same danger as an internal combustion engine would be if its wheel was off balance.
I believe not only that it is fair but that it is sound economically that the principle of this bill should be accepted. It has been argued that in certain loans and certain forms of lending a higher rate of interest should be charged because of the risks involved, yet I would point out that the element which, above all others, increases the risk of a loan is the charging of a higher rate of interest than the invested money can earn. That is what makes a loan risky; that is what makes repayment doubtful or impossible, and because of that principle I believe the acceptance of this bill, with the determination so far as it is within our power and jurisdiction of the maximum rates which might be charged under those conditions, would be a sound move and one which would be of great assistance to those in debt as well as a stabilizing factor in society itself.
I should like to say just a word about those who are in debt. I remember once attending a meeting of some of the financial fraternity, and :I listened with great interest as they propounded two theories, and I call them theories advisedly. One was that the investor was a public benefactor; eveiyone within hearing and everyone who might read those addresses was urged to save up money and invest it, because in investment lay the strength and life of the nation. But on the other hand they were urged never on any account to go into debt, because debt was something abhorrent and an outrage to nature. I wondered in my inner mind at that time whether they really grasped the significance of this fact, that the two are the same thing viewed from opposite sides, and that you cannot have investment without debt. Not one dollar could be invested unless someone in some way was prepared to go in debt to the amount of that dollar. So the debtor is just as necessary a part of our civilization as is the investor; neither could function without the other. That being the case, and if both are equally important and equally essential, I believe the state should make it a business to see that there should be fair play and fair dealing as -between those two classes.

Interest Act-Mr. Euler
I strongly support the principle of the bill for another reason. We in this corner of the house have been urged again and again from both sides to abandon some of our visionary ideas and take note of the realities of life.
I know of nothing more real, more drastic, more pressing and more demanding of immediate solution than the reality of interest payments upon debt. So in dealing with that question I believe we are dealing in a very practical way with one of the most important realities of life as we face it at the present time. I hope and trust, therefore, and in fact I have every confidence, that the minister will accept this suggestion, permit the bill to receive second reading and then have it sent to the committee on banking and commerce, where its details may be discussed, its scope considered and its application tried out.


William Daum Euler: Mr. Speaker, I rise to say a word in connection with this bill because I am very largely in sympathy with the objects that are proposed to be served by it, and more particularly because in at least one of its clauses, that with regard to the proposal to reduce interest on mortgages, it applies to one class of people who have not received a great deal of consideration in this parliament during the last few sessions.
I am not prepared to say whether the rates proposed in the bill, reducing the interest on mortgages to four per cent, should be made retroactive or whether we should enter upon repudiation; I am not much in favour of repudiation. During the last week we discussed in this house a bill intended to relieve the farmers, and particularly the farmers of western Canada. We have had our friends in the corner, as well as hon. members in other parts of the house, year in and year out making a plea on behalf of the farmers, particularly of western Canada and I have no objection at all in that regard. Just a few days ago, in a bill that was before the house, an appropriation of something like 890,000,000 was proposed in order to help the farmers of Canada. I have no particular objection to that, although I am beginning to be a bit apprehensive as to just where we are going to find the money for this particular bill and also for the reform measures which have been proposed by the government. In passing I may say that with regard to unemployment insurance, as with regard to the other measures, one of the vital points to be considered and one of the matters in connection with which I think the house should be taken into the confidence of the government, is just how these moneys are to be raised.
It goes almost without saying-and in this I am suppported by what the Minister of Finance (Mr. Rhodes) said the other day- that of the 890,000,000 which is to be appropriated a fairly large sum will be lost so far as the country is concerned, and the federal treasury will have to shoulder the burden.


Edgar Nelson Rhodes: No.


William Daum Euler: I think my hon. friend did say something to that effect.


Edgar Nelson Rhodes: No.


William Daum Euler: I am quite sure I can find it in Hansard, but the minister can speak for himself.


Edgar Nelson Rhodes: Nothing approaching it.


William Daum Euler: I have every sympathy for the farmers of Canada, and I do not want anything I may say to be construed as suggesting that I am opposing the doing of everything possible for them. The farmer has been described as the forgotten man, but I think there is another forgotten man in our industrial towns and cities. In former days the city of Kitchener, from which I come, was known as the city of homes. I am afraid it is not the case now, but in those days seventy per cent of the people owned their own homes, which it seems to me is a very desirable state of affairs. Of late years, with the unemployment that has come to our artisans-and most of our people are employed in industrial establishments-it has become utterly impossible for these men to pay not only the debt instalments on their mortgages but even the interest and the taxes. They have no work; they have no income, and in the last year or two many of these people in my city, as in other industrial cities of this country, have been losing all they have invested in their little properties. In my own city there are still 4,500 people on relief to-day, more than there have been in three years. I believe it will be conceded that Kitchener is one of the very best towns in Canada, with people noted for their thrift, their enterprise and their intelligence. So far as principal payments are concerned they are protected by the moratorium, but that moratorium does not protect them so far as payments for interest and taxes are concerned. I rise only to say that when the government brings in its reform measure, or perhaps when it has an opportunity to consider the bill in the standing committee, I hope it will not lose sight of those men in our industrial towns and cities who are pressed just as hard as any other class in Canada.
Interest Act-Mr. Rhodes


Edgar Nelson Rhodes: Mr. Speaker, under the rules of procedure in debate the discussion on second reading is confined to the principle involved. On occasions however it is very difficult to discuss the principles of a bill without referring, possibly for purposes of illustration, to the sections of that bill. I know of no bill which has come up for consideration which in a more marked degree required consideration of the individual sections than the measure now before us for second reading. For that reason I am of the opinion that the suggestion made oy the mover, namely that the bill be referred to the committee on banking and commerce, is a sound one. The committee will have time to consider the details, and will be in a position to hear all the interested parties. iV'heii the bill is brought back to this house its provisions may more accurately reflect the general views of hon. members than if it were debated) at length either on second reading or in committee of the whole house. Under the circumstances, and without prejudice, and reserving to the house the full right to take exception both to the principle and to the details of the bill itself, I believe it would be wise to send it to the banking and commerce committee.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the select standing committee on banking and commerce.


[Stage Direction]
Mr. A. W. NEILL (Comox-Albemi) moved the second reading of Bill No. 12, to amend the Railway Act (traffic by water).
He said: Mr. Speaker, the bill is a very simple one, and is almost self explanatory. It is customary for those who oppose a bill to allege that there is lack of precedent for it. However in the present instance I can point to precedents which have run back for twenty-nine years. Section 358 of the Railway Act reads as follows:
The provisions of this act shall, in respect of tolls, tariffs and joint tariffs, so far as deemed applicable by the board, extend and apply to the traffic carried by any railway company by sea or by inland water, between any ports or places in Canada, if the company owns, charters, uses, maintains or works, or is a party to any arrangement for using, maintaining or working vessels for carrying traffic by sea or by inland water between any such ports or places.
I would emphasize the fact that that section has been in existence for twenty-nine years, but has no relation whatever and conveys no

suggestion of its being applicable only to through traffic, carried so far by land and so far by water. It is entirely applicable to carriage by water alone. I might best explain the bill by saying that its provisions are the same as those in the section I have just read, except that I would leave out the word "railway" and the expression '"by inland sea", the idea being ,to make it apply to any company owning vessels and carrying traffic, either passengers or freight, by sea. I do however desire one or two slight changes which should be given in detail.
In the first place I make the section apply to vessels other than those owned by a railway company. In other words I make it apply to all vessels carrying freight and passengers by sea. Although I do not include the great lakes, I have no objection to the section applying to the great lakes, if the committee to which the bill may be referred to desires. However, I am not familiar with the conditions on the great lakes, and I do not wish to raise issues about which I do not know. I make it apply merely to coastal waters of both coasts. I ask that the routes and points of call should be supervised in exactly the same way, and by the same body as is now done under the board of railway commissioners in connection with the points of call and routes of railways. I also make an exception of boats under twenty tons burthen, so as not to require that small ferries should come under the restrictions or conditions of the provision.
Apart from that the section would apply to all vessels, the system which now applies to all vessels owned by a railway. If it is right and proper that it should apply to vessels owned by a railway I cannot see why it should not apply to another company which may probably or possibly be competing with a railway company, but which does not happen to own a railway. I believe the provision would be beneficial to all parties concerned. Communities served by the boats in question which may believe they have been overlooked or are not receiving the service to which they are entitled, or the rates they would like to have, could apply to the board of railway commissioners. On the other hand there is distinct and absolute protection for a shipping company from, we will say, political pressure. Perhaps some member of parliament may want a particular coastal boat to call at his summer home or that of his friends, and for that reason exerts the pressure necessary to have that done. Perhaps directly or indirectly the hint is thrown out that if the suggestion is

Railway Act-Traffic by Water
not complied with there may be difficulty in having a subsidy renewed. That would not be a desirable condition.
Richard Bedford Bennett: Does this apply only to ships sailing from one Canadian port to another Canadian port?


Mr. NEILL:: Yes, from one port in Canada to another port in Canada.


Mr. DUFF:: The coasting trade of Canada.


Richard Bedford Bennett: I just wanted to know that.


Alan Webster Neill: Points of call, from one point in Canada to another point in Canada. The section would create a judicial body which would give fair, even handed justice and full consideration to all claims. No one would suggest that it would be desirable to do away with the board of railway commissioners. Yet at the time of its formation it was bitterly opposed. A railway company is to-day absolutely liable to the conditions I have named, provided they own the vessel. It does not need to be a through port of a journey partly by land and partly by water. On the Pacific coast it is just as applicable to a trip from Vancouver to Victoria as if it were on a ticket from Montreal to Victoria.
If it is asserted that the provision would raise issues with which the technical officers of tire board of railway commissioners are not familiar, I would point out that they now have control of bridges, tunnels and the traffic, rates and charges thereon. They have control of the express companies and their charges, telephone companies and their charges, telegraph companies and their charges, and the fees charged for conducting business over cables. Under section 374 there is provision whereby the board of railway commissioners may control the price-the price, mind you- and the supply of water generated into power, a thing which certainly has no connection with railways. They have power to set the price that shall be fixed and to prescribe the manner in which the power shall be generated, and so on. So it is quite clear that the board has full power and scope and precedent for dealing with anything of that kind, and I would suggest that as all these railway bills go to the railway committee the minister might see his way to allowing this bill to be read a second time with the understanding that it will go to the railway committee.


Mr. T. L. CHURCH (East Toronto):: Mr. Speaker, this matter came up in the house ten years ago. Railways and the telephone
and express companies are subject to regulation by a board created by this parliament known as the board of railway commissioners, and I see no reason why shipping companies engaged in the great lakes and also in the coastal trade should not be subject to regulation in the same way. I was chairman of the Toronto harbour board for a great many years when the waterfront and harbour development was going on in Toronto, and I know something of the labour conditions on the vessels that ply out of that port and on the great lakes. The labour conditions are an absolute disgrace to the people of this country. Men are working on those boats night and day until the fall of the year bringing down the grain on its way from the west to the seaboard, and there are not adequate life saving facilities and life saving stations. As I said in this house in the sessions of 1922 and 1923 these vessels crossing lake Superior have to depend on an American wireless station, and almost every year there are disasters on the great lakes. Such conditions would not foe permitted in any other line of business. Manufacturers, for instance, cannot work their men the way these men are worked on these boats on the great lakes. I do not wish to be harsh in my criticism because I know that shipping is in a precarious state, but I have seen men going out on these ships under conditions that defy all the known laws of hygiene, away down in the bottom of the hold of a vessel twenty or thirty or forty years old, and at night it is worse than the black hole of Calcutta. The health officer of Toronto complained to me about conditions on these ships twelve years ago when I was chairman of the harbour commission. I think that the principle of this bill should foe considered by parliament because labour conditions on the vessels on the great lakes demand reform at the hands of this parliament. I would not take the responsibility of defeating this bill by talking it out. I am supporting the principle of proper labour conditions on the vessels on the great lakes, and I would like to see the principle of this bill considered by a committee of this house with a view to action being taken by parliament.


Robert James Manion: Mr. Speaker, it is almost nine o'clock, and I cannot make the few remarks I have to make within the three minutes or so remaining. While I do not intend to suggest that the bill should be voted down at this stage, and as I desire to make a few remarks, if the house is willing I would ask you, sir, to be good enough to
Patents oj Invention

call it nine o'clock and then on Friday evening when the bill comes up again 1 can go on, if that is satisfactory to the house.


Pierre Édouard Blondin: The hour for private and public bills having been exhausted-



PATENTS OF INVENTION

Richard Bedford Bennett: Before proceeding to the second reading of Bill No. 8, Mr. Speaker, I move that we revert to the order for motions to enable me to make a motion for the discharge of the second reading of Bill No. 7, relating to patents of invention.


[Stage Direction]
Motion agreed to, and the house having reverted to the order for motions:
Richard Bedford Bennett: I move, Mr. Speaker,
that the order for the second reading of Bill No. 7, to amend and consolidate the acts relating to patents of invention, be discharged.
The purpose of this motion is to enable the bill to be gone forward with in the other chamber, leaving the resolution standing as it is, because there has to be an antecedent resolution. Then when the bill comes back from the Senate the money sections will be added to the bill. That has been done before and I believe is sound practice in cases of this kind. This motion is to enable the Senate to be seized of the subject matter of the bill, except the money clauses, and the committee can then consider the bill, and then when it comes back to us we can, if we so desire, have it dealt with by our own committee too.
Motion agreed to and order discharged.



BRITISH NORTH AMERICA ACT


Hon. HUGH GUTHRIE (Minister of Justice) :: Mr. Speaker, while on motions I
omitted to move one this afternoon. It is merely for the appointment of a committee on the subject matter of a resolution which was under discussion a few days ago. I move:
That a select committee consisting of Messrs. Oowan, Guthrie, Turnbull, Ernst, Gagnon, Lapointe, Mackenzie (Vancouver), Ralston and Woodsworth be appointed in accordance with the resolution passed by this house on the 28th of January, 1935, to study and report on the best method by which the British North America Act may be amended so that while safeguarding the existing rights of racial and religious minorities and legitimate provincial claims to autonomy, the dominion government may be given adequate power to deal effectively with urgent economic problems which are essentially national in their scope;

And that the said committee shall have power to report from time to time and to send for persons, papers and records.


[Stage Direction]
Motion agreed to.


[Stage Direction]
The house resumed consideration of the motion of Right Hon. R. B. Bennett (Prime Minister) for the second reading of Bill No. 8, to establish an employment and social insurance commission, to provide for a national employment service, for insurance against unemployment, for aid to unemployed persons, and for other forms of social insurance and security, and for purposes related thereto.
Mr. A. A. HEAPS (North Winnipeg):: Mr. Speaker, when the house adjourned at six o'clock the right hon. leader of the opposition (Mr. Mackenzie King) had just finished a lengthy address on the bill now before the house. If I may say so, his speech was divided into two parts, the first dealing with the constitution and the constitutional difficulties standing in the way of the enactment of this legislation, and the second giving a sort of resume of the activities and efforts of the Liberal party in regard to social legislation between the years 1919 and 1930. The right hon. gentleman laid particular stress on the Old Age Pensions Act that was passed under the Liberal administration. The greater part of his remarks had very little reference to the bill now before the house. I do not wish to follow him in all that he said, but I would like to make one or two observations with respect to some of the matters dealt with in his address.
The right hon. gentleman laid much stress on the constitutional difficulties and the rights of the provinces, but very little stress on the rights of the federal parliament. After all, if this parliament or the provincial legislatures all took the attitude that they were going to stand by the very letter of their rights under the British North America Act, then government in this country would become almost an impossibility. I believe that the members of this house as well as the members of the provincial legislatures ought to take a broad view of the situation as it exists in Canada; for if we are to take a narrow view then progressive legislation will become almost impossible. In the past few years this government, as governments previously have done, has assisted the provinces in the matter of unemployment, and if the federal parliament

Unemployment Insurance-Mr. Heaps
took the stand that the question of unemployment was entirely one for the provinces, then the provinces to-day would indeed be in a very bad position. However, since this bill has been introduced I know of no province which so far has taken any objection to it; in fact, I know of a number of provinces that have hailed with a good deal of satisfaction the introduction of an unemployment insurance bill in the House of Commons.
This afternoon the leader of the opposition, in discussing this measure, hinted at the rights of the provinces with particular reference to Ontario, and he indicated that that province was at the present time investigating its own rights in regard to certain taxation which the federal government was levying there. That sounded rather strange to me, for I read in this morning's paper that the Premier of Ontario had used the following language-it is to be found in a Canadian Press dispatch:
There won't be work unless the federal government assist us. . . . We are not able to do it
ourselves.
That is rather strange, I say, coming from a government who, it is claimed, will stand entirely upon their provincial rights. Then we were told something about the legal obstacles that stand in the way. Unfortunately we are compelled to leave these legal difficulties in the hands of the lawyers, and I presume we must allow them to fight the matter out.
Another objection raised by the leader of the Liberal party to this legislation was the fact that the provincial governments had not been consulted in the matter. I wondered whether, when the old age pensions legislation was passed in 1926, the provincial governments had been consulted in that regard.


An hon. MEMBER:: Yes.


Abraham Albert Heaps: Some of my friends to the right say that the provinces were consulted. Well, I was in the house at the time that legislation was under consideration and one of the objections of the Conservative party was that the provincial governments had not been consulted. And if you will look at the records of the house you will find that when the old age pension legislation was introduced no provincial governments were consulted.


Mr. GRAY:: It was not effective until the provincial governments had passed enabling legislation.


Abraham Albert Heaps: That is not the point. The
provincial governments had a responsibility under that act. whereas under this bill they
have no responsibility. Under this legislation the provincial governments will be relieved of certain responsibilities, whereas under that act they were asked to assume heavy obligations. But the party in power at that time introduced the legislation without consulting the provinces, just as the present government has done in connection with this bill. I cannot see therefore that the argument of the present leader of the opposition has very much to commend it when he urges that the government should have consulted the provinces before introducing this legislation.
The leader of the opposition also complained about the Senate having thrown out the old age pension bill in 1926. It is quite true that the Conservative majority in the Senate threw out that measure in 1926, but I notice that only twenty-one members voted in favour of the bill, one of whom I believe was a Conservative. There were more than twenty Liberal members in the Senate in
1926.	Where did the others disappear to when the vote was taken?
If I wanted to go back into the dim and distant past to look up what had been said by one party or the other I could find a great deal to be said against both parties. I remember that in 1927 when a motion was introduced in this house to have submitted to a committee the question of unemployment insurance we heard language which does not now commend itself to those who used it on that occasion, such as this, for instance:
Whosoever becomes the victim of unemployment. in this country, does so because he has no desire to wrork; he really refuses work.
It was one of the Liberal members who said that, when we were discussing the question of unemployment insurance on March 16,
1927,	as will be found at page 1277 of Hansard. Another member said this:
How is it possible to imagine that the government can grant every request of the country -among others tax reduction-and at the same time establish pensions for old' age, the blind, workmen and destitute people over the whole country? I consider it absurd.
I could go on quoting at great length along this line but it serves no useful purpose and I do not intend to do so. It is more the part of true statesmanship to think of the present as well as the future and to deal less with the past. I have no objection to prime ministers and leaders of oppositions, even the opposition in this comer, changing their minds. It denotes at times not only good tactics but sound common sense when,

Unemployment Insurance-Mr. Heaps
in view of changed conditions, they are prepared to change their own particular opinion. This afternoon we had a speech from the Prime Minister. Now the Prime Minister is a very able lawyer; in fact, if ever I wanted a lawyer to defend me on some particular charge my first choice would be, in spite of my dislike for lawyers, the present Prime Minister. But the right hon. gentleman made one significant admission which I think is unusual for our Prime Minister. He said that he had other ideas for relieving the unemployment situation. Possibly it was a slip of the tongue; he evidently had something in his mind, and I think myself that before he introduced legislation dealing with unemployment insurance we should have had from him what is after all his remedy for unemployment. It is far more important to deal with the problem of unemployment than with the problem of unemployment insurance, and if the government have any remedy now for the most important problem parliament has to deal with, then I suggest that this is the time for the Prime Minister to give us his ideas in the matter. I do believe that before we start on the question of unemployment insurance we ought to deal first with the fundamental problem of unemployment itself. I submit that it will be almost an impossibility, with things as they are, for us to deal in any comprehensive way with the problem of unemployment insurance.
When the bill was introduced in the resolution stage I claimed that with conditions as we have them now, with the numbers of people who are out of work, it would be almost impossible to have what one might term an actuarially sound system of unemployment insurance that would give relief benefits to even a small number of those who unfortunately find themselves out of work at the present time. The figures submitted by the Prime Minister this afternoon showed that at the time of the census in 1931 there were 2,566,031 people who were employed in that year. He claimed that there were affected by the present bill 1,701,834 persons, the vast majority of whom were male employees. But some rather significant omissions present themselves in those figures given by the Prime Minister this afternoon, for in the census figures of 1931 information as to the number of unemployed was not given. We do not know how many of those approximately two and a half million people are out of work now and we do not know how many of the approximately one and two-thirds millions who, it is claimed, might be affected by the bill, would actually come under its provisions.
[Mr. Heaps.)
I would venture to assert that tremendous reductions would have to be made from the figures given by the Prime Minister this afternoon to indicate exactly or even approximately how many people are affected by the proposed measure.
Since these census figures were taken, our unemployed army has grown to a considerable extent, and further there is in the bill a very important provision which states that those who are casually employed would not become beneficiaries under the proposed legislation. I do not know how they are going to define the term " casual worker." For the past five years numbers of men employed in railway shops have been employed only part of the time. Let me take for instance the Canadian Pacific shops. The men employed in those shops are working and have been working fourteen days a month since, I believe, the end of 1929 or some time in 1930. At fourteen days a month, or less than three and a half days a week, on an average throughout the year those men will not have worked twenty-five hours a week. Under the provisions of the bill would those men be termed casual employees? The chances are that if a legal interpretation were given, they could not be called permanent employees because they are working only three and a half days a week and they might quite possibly come under the category of part time or casual employees. This would almost immediately debar from the operation of the measure a vast number of men employed in both the Canadian Pacific and the Canadian National shops, for what applies to the Candian Pacific in the number of hours worked applies in almost the same way to the Canadian National shops as well.
I have had protests from some of these railwaymen's organizations in regard to the bill. In fact, so far as the bill itself is concerned, I have had up to now more condemna tion than I have had commendation from the workers in different parts of the dominion, for we find that to a railway employee or to almost every other casual employee, that is one who is employed only part time, this would mean that he is expected to contribute to a scheme of unemployment insurance almost the equivalent of one cent an hour of his wages. I would like to remind the Prime Minister, although he is not in his seat at the moment, that when the resolution was before the house he promised to give us certain information in the form of printed matter, namely a report of Mr. Andrew D. Watson and Mr. Hugh H. Wolfenden, actuaries, who worked on this bill for quite a considerable length of time. I think he promised hon. members that

Unemployment Insurance-Mr. Heaps
the printed report of those two gentlemen *would be available before the second reading of the bill was taken up. Personally I was waiting for the submission of that document in order that I might have a better idea of the conclusion those gentlemen had arrived at .and the reasons for certain financial provisions of the bill.
Reference was made this afternoon to the .act in Great Britain, the statement being made to the house and the impression probably being given to the country that the proposed legislation to a very large extent followed the act as they have it in the old country. To a certain extent that may be true, but it is true in only a very limited sense, for in England at the present time the legislation is so all-embracing that it covers, I would say, more than one-quarter of the whole population of that country. In Canada I do not think the provisions of the bill will cover ten per cent of our population; that is, assuming we have 1,000,000 insured- and I do not think that figure will be reached for a great number of years-then only shall we have ten per cent of our population covered as against more than twenty-five per cent under the British act. Further, the unemployment insurance act in Great Britain has a definite purpose in view, which is to provide for men and women who are out of work. In this country our bill does not provide for them at all. We start on a completely different basis; we select a number of insurable risks and all the uninisurable risks are discarded until such time as they become insurable risks. The consequence is that we are going to take the good risks that probably do not require insurance, while the poorer risks that require more insurance than the better ones will have to go without insurance at all.
Moreover, the unemployment insurance act in Great Britain has been widened in its scope over a great number of years until to-day, as I said, it has become so all-embracing that very few men or women in the old country are outside its provisions. In Canada where for a number of years we have had such a huge army of unemployed and semi-employed, these men and women will unfortunately be altogether outside the provisions of the bill. That is brought about because the government intend, as was stated here by the Prime Minister this afternoon, to have an actuarially sound system of unemployment insurance. If we are to have a bill that is worth while we cannot have it actuarially sound, for the simple reason that so many men and women are out of work, there is such a vast army
of unemployed, that substantial contributions from the state, far greater than anything contained in the bill, are required in ordeir to give benefits approaching anything worth -while.
Second, are we likely in the immediate or even the distant future to be able to have a bill that will include within its scope the numbers of men and women actually engaged in industry in this dominion? I remember the first session I came to this house one of the questions I raised was that of unemployment insurance, -and practically every year until 1931 without exception I brought that matter up on the floor of this house-advocating some form of unemployment insurance to cope with the problem that was then confronting us. But from the year 1931 on I have not been half so enthusiastic for unemployment insurance as I was prior to that time; not because I did not want provision to be made for the unemployed-quite the opposite-but because I believe that if we are to attack the problem of unemployment successfully we have to attack it from an entirely different angle than mere unemployment insurance. Again, if we are to have a scheme of insurance that will take care of the unemployed, the numbers of unemployed in Canada will have to be reduced very greatly in order that the scheme may be actuarially feasible.
Why do I say I am not so enthusiastic today for such a measure as I was a few years ago? In 1927, 1928 and 1929 I introduced motions in this house, feeling that some form of insurance might be introduced that would take care of the problem in some effective way. In 1931 the Prime Minister was good enough to accept the motion. He stated that during the lifetime of this parliament a bill would be introduced dealing with the question. I have no doubt that it is pursuant to that pledge that we have this bill before us to-day. But when I advocated unemployment insurance in this house the number of unemployed was small compared with the number we have at this time. I was not as wise as some other people; I thought that the depression which struck us in 1929 and continued through 1930 and 1931 would pass away as other depressions have, and that we should again enter a cycle of better times, when the number of unemployed would be reduced. But the depression continued; the army of unemployed has grown larger, and to-day I venture to say that in this country it numbers approximately 600,000 people, in spite of the figures given by the Prime Minister. The hon. member for North Waterloo (Mr. Euler)
"66	COMMONS
Unemployment Insurance-Mr. Heaps
mentioned this afternoon the vast number of men and women on relief in Kitchener. I was told that in Toronto there are now more people on relief than there ever have been, that the number has reached a peak, more being on relief this year than last. With such a great number of people on relief I cannot understand how we can still claim that the number of unemployed has been cut in half since 1932. However, as I say I thought that the acute condition that prevailed in 1929 and 1930 would abate. Such has not been the case; we still have to-day what some refer to as an abnormal condition. I am wondering whether such conditions have not really become normal; for in addition to the vast numbers who are completely out of work we have other vast numbers working only part time, yet the industrial machine is running n the regular manner. So if the present conditions, these so-called abnormal conditions, are really more or less normal, then we must attack the problem from an entirely different angle.
Last year I brought in a resolution on the question of shorter hours and increased purchasing power for the masses of ithe people, and again I was thankful when the government accepted the motion and it passed the house unanimously. But I was very much disappointed when probably as a result of that resolution a bill was brought in ithis year for a forty-eight hour working week. If that is the beet the government can do I am afraid that the lot of the unemployed is not going to be helped. In fact our army of unemployed is going ,to become a permanent thing in this country. I should like to see an attempt made to deal with the question in, a far more radical and fundamental way than anything proposed by the government up to the present time.
As far as this bill is concerned it demands from the employer and the employee a contribution of twenty-five cents a week, while the government is to assume probably from 10 to 22J cents as its share. No doubt this arrangement is somewhat similar to what prevails in other countries, and the benefits proposed somewhat similar to those given in other countries. But in other countries unemployment insurance was introduced a good many years ago, and we are beginning now on an extremely limited scale. I think we should look at this bill in a cold, logical way to see what it really will do.
In the first place I think it is generally admitted that as far as unemployment is concerned it does not begin to touch the question at all. It merely attempts to form a fund out

of which benefits could be paid, and we are not sure as to the amount of those benefits, for the Prime Minister told us this afternoon very distinctly that a committee or commission would be set up to administer the act and that the benefits given might vary from time to time according to the actuarial condition of the fund. For instance at a time when a large number of the insured were unemployed the benefits to be paid might be less than those now set out in the bill. At the present time those out of work do receive certain relief. Responsibility for that rests upon the federal and provincial governments and the municipalities, each contributing about one-third. I venture to say that in a general way the amount of relief granted to persons out of work is about equivalent to the benefits proposed to be given under this bill. If such be the case, what does it mean? It means that what is now a responsibility of the province, the municipality and the federal government is to become a responsibility of the federal government, the employer and the employee; and those who subsequently find themselves in the ranks of the unemployed and who come under the provisions of the bill will not be taken care of by the provincial and municipal administrations. In other words the share now borne by the province and the municipality is to be loaded upon the employer and the employee.
I have said that I have no objection to the principle of unemployment insurance. I did hope, however, that when a bill was introduced the government would have been far more generous, and actually in some way undertake to care for the unemployed in Canada. I know it might be rather a tall order to ask the government to take care of the unemployed men and women at the present time; nevertheless they have to be taken care of in some way, and when we are offered a bill which will have the effect of taking out the good risks and leaving the bad ones to take care of themselves as best they can, we are doing a great injustice to a large proportion of the men and women who still hope to be employed in industry at some time in the future if not now.
Parliament has not, and could not have, any greater responsibility than that of dealing with the problem of unemployment, and whether or not I like it I have to compare the bills now before the house with the impression created throughout the country by the radio speeches of the Prime Minister. I heard those speeches and read them in the press, and when the newspapers asked me what I thought of these new ideas, this new

Unemployment Insurance-Mr. Stanley
deal or whatever you may call it, I was one of the first to say that I congratulated the Prime Minister on his conversion. The only reservation I made in giving my congratulations was that I wanted to see the measures themselves when they came before the house.
I must confess to a certain amount of disappointment in both the present bill and the measure concerning hours of labour. The people of this country expected something more and something better from the government than is contained in either of these measures. You cannot place measures of this kind before the workers of this country and make them believe that they will improve their standard or help their lot in life; after all what the average person wants is a feeling of security, and neither the forty-eight hour week measure nor this unemployment insurance bill will give them any more security than they have at the present time. As I said a moment ago, Mr. Speaker, what I expect from this or any government is that they will get down to fundamentals in dealing with the problem confronting them, and which is likely to confront any government even after another election. We want to see them deal with the problem of unemployment, not only by means of an unemployment insurance bill but also in a more fundamental way than is expressed in the terms of this measure. I expect that about three-quarters of a million people will come under the provisions of this bill, and those men and women will be the people who least require this sort of insurance, for if a person is employed at the present time, under present depressed conditions, he is not likely to be out of work one or two years hence. So I think in this parliament we should have before us those other ideas at which the Prime Minister hinted this afternoon, in dealing with the problem of unemployment.
I confess openly, Mr. Speaker, with regard to this unemployment insurance bill, that it is hardly wanted by those who favoured it and is not wanted by those who opposed it. It is so negligible in the benefit it is to give the working people of the country that I think we will disappoint a great many of them, and I feel that it is almost an injustice to pass this measure unless its scope is made much wider than is the case at present. Perhaps before the bill is through the house the Prime Minister and the government may be in a more generous mood; perhaps the provisions of the act may be widened and the government may make larger grants than have been suggested up to the present. I do
not want to be too harsh in my criticism;
I would far rather be able to stand up and say to the government, "Thank you for what you have done in providing a measure that will be worth while," but a measure of this kind, so limited in scope and in the benefit it is to give, I am afraid will not be received with much enthusiasm by the working people of Canada.
As I have said already, Mr. Speaker, the problem of unemployment is more important than the question of unemployment insurance. I would far rather have heard from the government the proposals they have in mind to deal with the question of unemployment; then, assuming that their proposals could not entirely absorb those who are out of work, an unemployment insurance bill might be a valuable addition to their program, because it might take care of the limited number of unemployed. A program of public works is not a cure for unemployment; desirable though it may be to tide over a temporary situation, it cannot be regarded as a permanent cure. So I hope that before the bill receives third reading we may have from the government a further declaration as to what they intend to do to meet the unemployment situation in this country and what they intend to do for the army of unemployed who cannot now and probably never will be able to become absorbed into the industrial life of this country. Perhaps if they do submit to the house something worth while we might be able to feel a little more enthusiastic about this unemployment insurance measure than I feel at the present time.


Mr. G. D. STANLEY (East Calgary):: Mr. Speaker, I have listened with curious interest to the address of the hon. member for North Winnipeg (Mr. Heaps). There can be no argument against the government dealing with unemployment as best it can; there can be no argument against the obligation which the people of Canada owe to those unemployed in industry, but I cannot understand or justify the hon. gentleman and othen who confuse the consideration of the questioi of unemployment insurance with the questioi of granting relief to those who cannot receive benefits under such an insurance scheme.
The problem of unemployment is unquestionably a problem which belongs to industry as a whole, and in that I include the obligation which the governments of our country owe because of their association with industry. Unquestionably the hon. gentleman is quite correct when he asserts that unemployment is not the result of choice on the
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Unemployment Insurance-Mr. Stanley
part of the workman himself. Nor are those right who assume or imply, speaking in general, that the people who are unemployed are in that position because of a lack of energy or prudence or because of laziness on their part. That, of course, is the absurd argument we hear at times. The fact of the matter is that there is a distinct weakness in *the system of industry as it has been carried on in this and other countries in that it has aot provided for the continuous or steady employment of workmen associated with industry. The hon. gentleman would indicate that we must deal with relief on the one hand or with insurance on the other, and that the presentation to this parliament of a bill to deal with unemployment insurance means that no measures will or can be taken for the relief of the unemployed. Of course that is neither a fair nor a reasonable contention. To my mind there is no reason why tradesmen either within or without the unions should not be able to make their contributions along with others associated in industry who are helping to provide an insurance fund to enable them to carry on their work with reasonable security. The hon. gentleman is quite correct when he states that the workman's greatest need is a reasonable sense of security. The ideal to which he strives is that he may be self-supporting, and by that I mean that during his working years he may be able to earn enough to provide for the maintenance of his family during his whole life. The same should be said regarding industry as a whole; it should be self-supporting in the sense that during the twelve months of the year it will be able to fulfil its obligations to the human element connected with it. There has been a lack of organization which has been more marked in the last four or five years, but which existed even before the depression.
The hon. member for North Winnipeg contrasted what is recommended in Bill No. 8 with measures which have been in operation in the United Kingdom. I shall not discuss the matter in detail, but I will say that there are differences. One does not have to be satisfied that Bill No. 8 includes all the virtues of the legislation in Great Britain in order to conclude that there are virtues in it. We realize that the general principle of the bill before us is the principle which has been followed in the old country for the last thirty years. The details have varied, and improvements have been made there until it reached a point where in 1934 a distinct advance was shown over the legislation which had been in force during preceding years. What has been 
the result in the old country? I do not think anyone would doubt that there has been a distinct change in the psychology of the public in general, and in that I include not only the employees but the employers-industries, governments, trade unions, and the population in general-until to-day, and in fact it has been so for a considerable number of years, we find no real opposition to the principle of insurance. If one were to study the report of the Blanesburgh committee he would find through it expressions of confidence and of approval from all sections of the public. At one point the committee reports:
Nobody has suggested to us that the principle of unemployment insurance should be abandoned. It has been recognized by all who have appeared before us, and we ourselves share the view, that an unemployment insurance scheme must now be regarded' as a permanent feature of our code of legislation.
When we in this chamber undertake to introduce this form of social legislation we are accepting the principle set forth in the report of the Blanesburgh committee. In 1924 the national federation of employers' organizations [DOT]-and I draw the attention of hon. members to the fact that it is an association of employers' organizations-set out their approval in the following terms:
Whatever be the defects of the emergency measures, the experiment of compulsory unemployment insurance, as initiated in 1911, cannot be adjudged a failure in itself. On the contrary, experience since 1911 has proved that it is practicable in normal times to make provision. by way of insurance, for assisting the bona fide workman over periods of temporary and unavoidable unemployment.
Then, passing on down one comes to the Melchett-Tumer group which gave its hearty approval to the scheme. Then the Liberal industrial inquiry gave its approval, and again later the Balfour committee appointed by the board of trade expressed the opinion that-
-both from the point of view of general social welfare and from that of industrial and commercial efficiency, establishing of unemployment insurance in Great Britain had been amply justified, adding that they would find it difficult to imagine how the country would have fared "had not the insurance machinery been available in its time of need." Indeed, as they say, it is a subject of constant comment that "so deep and prolonged a trade depression has produced so little actual suffering in comparison with the experience of far slighter and more transient periods of depression before the war," a condition avhich they attribute in large part to the unemployment insurance scheme.
And so we have various bodies representing all sections of the public giving their hearty approval to the general principle. I realize that there may be criticism of the details,

Unemployment Insurance-Mr. Stanley
but in Canada we have reached the point where social legislation of the type before us is being demanded by the general public. I have no doubt the trade unions of Canada will approve the principle of contributory insurance as it is contained in Bill No. 8, and I have no doubt they will support the measure despite the endeavour on the part of some to confuse a legitimate insurance scheme with a program of unemployment relief. I believe such insurance in this country is not a form of charity; it is not a gratuity, but it is good business. In my view when we provide for the human element in industry we are just using ordinary, common, everyday business tactics. As it is organized to-day society has reached the point where it recognizes that industry cannot survive unless it is prepared to take its part in bringing about social legislation such as that we are now considering.
If one took the time to review the legislation of the old country, he could go through the various amendments that have been made, showing that they did experiment during the years. For example, during the six years from 1920 to 1926 there were sixteen different enactments changing the application of the insurance principle. I think, however, it is safe to assume that the legislation as they have it now is fairly well fixed and that it is a permanent acquisition to the needs of industry in that great country.
What has been taking place in the old country? What has been changing the psychology of their people? During the last thirty-five years the expenditure on social services in the United Kingdom has increased from $180,000,000 to $2,500,000,000. Even since 1908 the expenditure on social services in the United Kingdom has multiplied five times, and the remarkable feature to my mind is that less than one-eighth of the total amount spent on their social services consists of relief extended under the poor laws or as relief itself.
Much has been said in regal 1 to armaments, and it is very interesting to note this fact. In 1914, just before the war, Great Britain was spending on armaments about $350,000,000 a year, a sum equal to that which she was spending at that time on social services. Last year they were maintaining about the same quantity of armaments, at a cost of $575,000,000, about half as much again, but instead of spending $350,000,000 on social services that expenditure had multiplied to $2,500,000,000. While this was going on in the United Kingdom, showing the change in the attitude of the public towards social services there, France had multiplied her expenditure on armaments by six, Italy by five, Japan by five, and the United States by 92582-49
three. In the United Kingdom when unemployment there was at its worst, in 1929, between two-thirds and three-quarters of the number of those insured were persons who were regularly employed, and the average unemployment amongst the men was 140 days and amongst the women 93 days.
Coming to the bill before the house, as the Prime Minister, Mr. Bennett, pointed out this afternoon, this is an insurance bill. It provides for cash contributions by way of benefits for cash paid in by way of premiums, and that of course is an insurance proposition. Granted that it is insurance on an actuarial basis, I think it should be remembered that the bill goes beyond the matter of insurance pure and simple and provides machinery to give thought and organization to the whole question of unemployment as it is to be related to this insurance scheme.
One of the dangers of unemployment insurance which has been spoken of heretofore is that it may steer employers and employees away from the obligation which they have of organizing themselves to keep employment more regular and continuous. The labour exchanges wdiich are to be set up under this bill are a very important feature in the carrying out of any unemployment insurance scheme. The bill provides for the regular and systematic placement of labour; it provides for the mobility of labour, which industry unquestionably requires; it provides also that the commission shall have authority to investigate, take evidence, and keep in touch with the movement of labour so that the proper measures may from time to time be taken to provide for the mobility of labour and the placing of men where their services are required. That means that thought is being diverted to the proper channels to assist in overcoming the difficulties of unemployment in our country.
I do not assume for a moment that this legislation is to be regarded as a measure for relieving the present emergency of unemployment in this country, but I do say this, that when you have the insurance scheme organized, and when the commission is set up with thought and organization behind it, then beyond the actual contributions provided for in this legislation the scheme will assist by serving as a prophylactic, if I may call it such, as a preventive of unemployment which might otherwise be thrown on the labour market. The scheme as we have it before us not only provides through its insurance facilities for the assistance of the men who are employed, but it provides for that thought and organization of which I

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Unemployment Insurance-Mr. Stanley
have been speaking, and it does help to provide the government and the people of this country with an organized system looking to regular employment, which must undoubtedly be of benefit in the years to come.
May I say one word more in regard to these exchanges, and I do not think this point has yet been brought out except that it has been mentioned that it is necessary for cooperation between the provinces and the commission to be set up under this legislation. To my mind there must also be the utmost cooperation between the workmen on the one hand and the exchanges on the other. There must be on both sides that feeling of confidence, that spirit which will help in coordinating the obligations which belong to the exchanges. That cannot be emphasized too strongly because unless the cooperation be such that the employees on the one hand and the employers on the other have the utmost confidence in the con>-petenoe of the exchanges to perform that task of placing labour, of making it more mobile, then one of the most important features will be defeated.
May I bring up this point, which I think is a refutation of what the hon. member for North Winnipeg has said, that the exchange must be for the placement of labour, not as a detective agency, not as a semi police force, not as an agency for the distribution of relief or for the administration of relief measures. To my mind that should be removed entirely to the proper authorities and organizations; that work does not belong to the exchanges which will be set up under the provisions of this bill.
Further, the bill provides preventive measures. Section 7 (c) provides, practically speaking, for juvenile training, one of the most important features of the bill. It gives power to the commission to take whatever steps it may see fit to attain the knowledge and, having attained the knowledge, to apply it for providing preventive measures, the training of the young men. This is to salvage young people particularly from that part of labour which is most overcrowded. And that part is the unskilled labour. In the old country it is shown that ninety-three per cent of the men who drew their benefits under the insurance act were those who had left school before the age of fourteen. There is food for thought in that little bit of information; and if the provision of the bill gives to the commission the authority to use their intelligence, their conscience, their thought and their organizing ability to train the young to a more profitable form of labour, where 
labour will not be so overcrowded, then it will have done a great work in that line alone.
The bill provides for national health in part 4, which is also of very considerable significance. It is a wise intitial step to be taken before any systematic and really effective measures can be pursued for the further extension of social health insurance.
Beyond the immediate active provisions of this bill, section 7 (a) provides for what has been termed in some of the old country discussions the second line of defence-those who have exhausted their benefits of the insurance scheme. Section 7 not only empowers the commission but it puts upon them the obligation to use their time, their ability and their every opportunity to adopt measures that will assist in meeting this particular form of labour problem comprising those who have exhausted their benefits under the provisions of the bill. Then it goes a step further and gives them the authority to consider the whole question of unemployment. That does not bring the unprovided for unemployed under the benefits of the bill, but it does the very thing which the hon. member for North Wininpeg contended, which is that men who have the opportunity, an official body who have the authority, should give the best consideration to the great question of unemployment in a national way. And the measure so provides.
The hon. member for Winnipeg North Centre (Mr. Woodsworth) the other day did suggest that insurance and relief should not be separated. I think that those who have looked into the question of unemployment insurance will take the opposite view, that that is the very thing that should not happen, and that relief should not be grafted on to insurance in any way. If that is done the result will be of course that the employed worker will be contributing to the assistance of the unemployed citizens of the country. In other words, we shall be taxing employment to extend relief to those who unfortunately are on relief in this country. No one contends that nothing should be done for the unemployed. No one contends that the governmental and other agencies should not use their utmost power and thought in meeting that problem. On the other hand, no wise person would suggest that that part of the unemployment distress in this country should be provided for by the contributions which will be made by employed workmen into the insurance fund. That would be at once disastrous to the insurance undertaking; it is one of the things that should not be done. To my mind, this bill should provide, and it does provide for a

Unemployment Insurance-Mr. Neill
dignified insurance contract, and that should not be confused with any relief dole or relief contribution. On the one hand we are legislating for insurance, and on the other, when there is suitable legislation, we are providing for relief. But the insurance bill itself cannot be a mongrel measure, mixing up relief for the unemployed who do not come under the insurance scheme with the insurance benefits extended to those who do come under it.
One of the potential virtues of this bill is that the community as a whole will benefit through the sustaining of the purchasing power of our workmen in all the various classifications under the bill, during twelve months of the year, particularly during those months or weeks when it is impossible for a section of them to find work. It also sustains the morale of that part of our industry throughout the length and breadth of our country; it also prompts our employers to employ more labour. But in addition it has its danger, and that is the danger of demoralization. So often we hear of the demoralization of the employees, but there is not very much danger of demoralization of the employees who come under the measure. The greater danger is of demoralizing the employers or the government or the trade unions or those who may by reason of the smooth working of the legislation refuse to give that careful attention, that organization, which should be continued for the proper working of industry throughout the dominion
I listened with considerable interest to the address delivered by the leader of the opposition (Mr. Mackenzie King) this afternoon. It was a speech of defence and excuses. I am quite willing to allow him that privilege; I shall endeavour to be magnanimous enough to excuse him for his excuses, but after all one has no particular inclination to discuss political platforms of years gone by. As a matter of fact I do not know very much about, nor am I particularly interested in the platforms of the various parties in years gone by. I am not concerned very much with the professions of political faiths, but as we stand to-day, I am concerned with action translated into legislation on the statute books of our country. That is what the Canadian people are interested in; the justification of former contentions or the glorifying or the condemnation of political platforms of years gone by is of very little interest. I agree heartily with the hon. member for North Winnipeg that we are not interested in those matters and that it is no sin for any politician or statesman to change his mind. I do not know nor do I care whether there have been any changes of mind, so long as to-day, when 92582-491
we are considering the question of unemployment insurance, we get a bill which will extend to the workmen of our country the insurance which they have been seeking.
The leader of the opposition may be quite content with the negative policy which he has presented and which he contended had been in existence for so long in the platform of his party, but I must congratulate the government on its positive policy incorporated in Bill No. 8 now under consideration. I presume the right hon. gentleman for the present is opposed to Bill No. 8; I could gather nothing else from his argument, although he did not so state in so many words. But whether the opposition comes by reason of some constitutional argument or by reason of some other argument in regard to principle, is of no significance in the result; if it means opposition to the legislation, if it means an endeavour to defeat the practical scheme comprised in Bill No. 8, then the right hon. gentleman and his party have done their share to oppose what labour in general in this country has been demanding for many years past.


Alan Webster Neill: The title of the bill promises us a good deal more than does the bill itself, which proposes to enact only two things. One is an extension of the employment offices now in existence and the second is a very limited scheme of unemployment insurance. Dealing first with the employment offices, I anticipate it is the design of the government to extend the existing system. I believe there are sixty-six such offices now. I have no doubt that this will be a good policy; it will cost a good deal of money, but I think it will be worth it. I see one point that might cause trouble. Under section 14 the commission has power to make regulations to make advances by way of loan for the fare of unemployed men to some point where they have secured work, and it states that such advances will be a debt due to the commission and recoverable by process of law. It might well be that that would take the form of a lien on the men's wages and we might have this situation: two hundred men at Vancouver might be sent to the wheat fields in Alberta with a lien on their wages. It would take them at least two months to earn enough money to pay off that lien. They might then be thrown out of work and have no money with which to return to British Columbia. Some provision would have to be made to safeguard against a situation of that kind. But the general principle of that feature of the measure is sound and I will gladly support it.
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Unemployment Insurance-Mr. Neill
The second phase of the bill is the unemployment Insurance. I have advocated this for many years and I must support the bill although I am disappointed at the limited extent of it. I accept the principle of contributions because I have always realized that without contributions it would not be an insurance sy-trm; it would be merely a dole. It is evident that those who are now out of work and unable to qualify under the insurance system must be taken care of in another way, but the insurance principle by building up a reserve in good times would help to soften the blow of unemployment when times became bad. Even a much more limited scheme, that of old age pensions, has taken 86,000 people off the labour market during the last few years. While I say that I shall vote for the bill, I wish to offer some criticism that I hope may lead to some alterations in the bill in committee.
I object first to the limited scope of the bill. Four-fifths of the people I represent will have no part or lot in it except to pay their share of the expense. Fishing, lumbering in its various branches, coal mining, pulp and paper mills and farming would include the bulk o.f the people I represent. The fisherman, the individual who owns his boat and gear, and the farmer on his own land, would not come under this bill, because it would be difficult to regard them as out of work employees. In a sense they are capitalists, although I hesitate to apply that name to them; it has become such a term of opprobrium. But when it comes to the lumber workers, those in the logging camps and the saw mills, I cannot understand why they should not be included; they are purely and simply workers. The Prime Minister (Mr. Bennett) was kind enough to suggest that he might take the temper of the house on that matter in committee, and perhaps allow them to come in. I hope he does so.
I wish to refer for a moment to the excepted employments, those which do not come under the bill. The first is employment in agriculture, horticulture and forestry. I do not know why agricultural workers should be cut out. The second exception is employment in fishing. That is ambiguous; I suppose it would cover not only the fi-herman with his own gear but a man working in a cannery or reduction plant for wages. I see no reason why they should be excluded while people working in fruit or vegetable canning factories are included. I think that is an injustice. The next exception is employment in lumbering and logging. I do not know whether the word "lumbering" would include saw mills,
(Mr. Neill.]
but I am rather afraid it would, and if so a change should be made there. Then another exempted employment is in transportation by water or by air, and stevedoring. There is a large body of men on the Pacific coast, I suppose running into thousands, who make their permanent living working on boats. They are a decent organized body, mostly married men, and live in the towns from which the boats sail. And the same applies to stevedoring; there was a time when it was a most casual form of pick-up labour, but that is not the case now. These men are well organized, have their homes and stay by their job, are fairly well paid, and I see no reason why they should not be included. They cannot be regarded as casual labourers. One would think, if the idea is to start in a safe way and keep within the recommendations of the actuaries, that the more people involved the better; because it is well known that if you spread the risk over a larger number of people it can be calculated more accurately and you are better able to meet the demands.
Another exempted employment is banking, mortgage, loan, trust, insurance or other financial business. Why is a clerk in a hardware store or a real estate or lawyer's office or a wholesale grocery to come under the act while a clerk in a bank or insurance company remains outside? Surely the odium that apparently attaches to bankers nowadays need not attach to their often underpaid employees. Then employment in domestic service is excepted unless the employed person is employed in a club or in any trade or business carried on for the purposes of gain. That means that a girl in a cafe or hotel who has an opportunity to augment her wages by tips may come under the act but her less fortunate and lower paid sister in a private house is left out. I see no justice in that. Nurses are also excluded; I see no justification for that.
I do not want to be nasty, but it looks to me rather as if this bill had been framed-


Ian Alistair Mackenzie: "Framed" is right.


Alan Webster Neill: -with a very significant eye upon the eastern industrial worker, the man who works in a factory or foundry or textile industry, while we on the Pacific coast and down by the Atlantic are to be left to shift for ourselves, in the same way that the manufacturing interests in eastern central Canada are taken care of by the tariff at the expense of us in the W'est and those in the far east.
The largest body of men among my constituents w-ho w'ould come under this act

Unemployment Insurance-Mr. Neill
would I presume be the coal miners, but I am a little doubtful if even they will qualify. They work intermittently, they are not fired but are simply laid off, and by that means a much larger number of men get the work spread amongst them. It is quite common for them to draw only three days' pay a week; I have known them to draw only three days' pay a fortnight. It is questionable whether they would qualify under this bill. It might be held that they are not out of employment because they are still working, although in this intermittent manner, and there is a provision that no man can get any unemployment benefit until he has been idle nine days. These men in fact are not idle nine days, although they may work only two or three days a week. There is another aspect of it that rather alarms me; it may be positively harmful to these men and others employed by large concerns both in the east and the west. Any large company, but particularly those I have in mind, coal mining companies that operate on this intermittent system, might fire half their employees. Suppose a company employs four hundred men and they are only working three days a week; the company has to pay for every man, and that would be $4,800 a year. If they fired half of them and employed the other half six days a week they would have to pay only half that sum, so that the company would save S2,400 a year. And that would apply to the big companies in the east, such as Simpson's and Eaton's, perhaps to an alarming extent. Companies often carry people not working full time just in order to keep them going.
I notice also the employer must pay for exempted people. Why draw a distinction between excepted employments and exempted people who are exempt under three specified conditions? But the employer must pay for those exempted people although the man himself is exempted and does not draw any benefit. It does not seem fair that the employer in that case should have to pay for the days he works.
Now a word as to the procedure, which seems to me complicated to say the least; and when procedure is complicated it means trouble. There are two routes by which one may proceed. Under section 27 there are five subparagraphs which cover most of the ordinary points on which disputes are likely to arise in connection with a man's employment or unemployment. These are subject to decision by the commission. Failing settlement by the commission or as an appeal from the commission they can go to the
exchequer court. There are no details as to how the employee is to get there. Going to the exchequer court is a costly thing. The exchequer court comes to the coast only at long intervals. Can you imagine a man having a dispute about S6 a week going to the exchequer court? There are no provisions to say whether the man is to have his expenses paid. The Prime Minister promised some consideration on that point. Then there is another route, a parallel one apparently'; I do not seem to be able to fit the two into each other, but it would seem that he can take one or both. The other route begins with section 28. Let us begin at the ground floor. There is a local insurance officer; he is the local man. Then there is a court of referees, provided with a specially appointed chairman. Then there is a panel to be constituted from which these referees are to be drawn. Above them there are deputy umpires and then an umpire, and above them under subsection 4 we come to the appointment of an unemployment and social insurance commission of three, of whom the Prime Minister spoke this afternoon. One would suppose that was almost enough machinery to run a petty little one-horse insurance scheme like this, but turning to section 36 you find provision made for an unemployment insurance advisory committee, consisting of a chairman and six members. They are not to be paid, but section 37 provides that they may receive an indemnity, which may amount to about $20 a day, and they will be able to run up to about $1,800 or $2,000 a year. This is not to be an unimportant thing: subsection 6 of section 37 states:
The minister may assign to the committee from the public service of Canada or otherwise such professional, technical, secretarial and
ether assistance as the committee may require . . .
So evidently they are going to operate on a considerable scale. What are they going to do; what is to be the work of this advisory committee? They are to advise the commission, and they are to report on the fund administered by the commission. That is found in subsections 1 and 2 of section 36. But why do they need to do that? We have a board of railway commissioners, a pension board, a radio commission, a biological commission and others; they do not need advisory committees. For the life of me I cannot understand why this commission should need such a committee. Then if you turn to section 43 you see that the commission itself, quite properly, is required to make a report
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Unemployment Insurance-Mr. Neill
to the government every year. Then why do they want someone to make a report on them? I cannot see it.
Then if we turn to section 38 we find the inevitable provision that is in all our acts nowadays, giving complete and arbitrary power to this commission to make regulations, or really to make laws. If you will turn to subsection (i) you will find that this commission of three have power to prescribe punishment for the violation of any regulation, including maximum and minimum fines not exceeding S50, and terms of imprisonment not exceeding three months. If that is not illegal it ought to be. Here is a body of men; we have not the slightest idea who are to compose it. They need not be lawyers, but they are to be given power to frame up a little criminal code of their own. They are not limited to the imposition of fines not exceeding $50, and in default imprisonment for three months; they can spread themselves and give anybody, for any offence however imaginary or trivial, of their own conception and defining, three months in gaol as well as a fine. I say that is wrong; I have no hesitation in saying so. I do not care whether or not it is legal. We are getting too much in the habit of turning over these arbitrary powers to these commissions.
Now I should like to say a word as to the benefits. After the man has paid in 25 cents a week for forty weeks and his emplo3'er has paid another 25 cents and the government 10 cents, because the government is obligated to pay one-fifth plus the cost of administration, the workman may get thirteen weeks at $6 a week for himself, $2.70 a week for his wife, and something for his children. I suppose those sums have been indicated by the investigation of the actuaries. But there is a benefit year prescribed, and it is provided that a man cannot get more than thirteen payments in any one year. The benefit year begins when he receives his first benefit, and he has to pay in for forty weeks before that. That will be almost a year, because at odd times he may be sick or he may have to go to his mother-in-law's funeral or something of the kind. It will take him almost a year in which to qualify. Then in the second year he may receive benefits for only thirteen weeks, and thereafter he must pay in for thirteen weeks more before qualifying for any further relief, but he can get only thirteen weeks' benefit in any one year.
That is the end of these two enactments. Again I turn to the title and quote the other things promised.
. . . for aid to unemployed persons, and for other forme of social insurance and security, and for purposes related thereto.

Now I turn to subsection 1 of section 7, which provides that this commission shall try to formulate schemes for the insurance of the excepted classes, for the assistance of people now unemployed who are not eligible under the act, for training them and so on. This might have been and should have been the very crux of the act; it is the most important part. Why has not this been done already; why are they starting only now with instructions to investigate, when this legislation has been in process of incubation for three years? Why were they not devoting their energies to the formulation of a scheme to deal with unemployment, which is more important even than the scheme under consideration? Why do they not put this other advisory committee to work and have them start at once to devote their whole time to this question?
That is enough of that. Sections 39 and 40 deal with national health, and the duties of the commission in this connection could be performed by a competent stenographer. They are to assemble reports, publications, information and data concerning any scheme, and pass it around to anyone who wants it. There is no suggestion that they do anything practical, and I understand that this is due to the fact that as the legislation referred to in the preamble does not apply to health matters because there is no treaty in that connection, it is recognized that this question can be dealt with only through the provinces. I am not finding fault with that; I am merely directing attention to it.
I should like to conclude with just one general criticism, and it applies to both the employment section and the insurance section. It is that all these appointments are to be political. At page 278 of Hansard the Prime Minister said it was his intention to make this measure non-political so far as possible. I believe that if it were left entirely to him and he had everything under his own notice that would be the case to a large extent, but unfortunately these things are not done in that way. Local political associations and so on make recommendations. It is true that the umpires must be judges, but other than that this measure presents an opportunity to make a widespread political machine. Not a single appointment is to be made by the civil service commission. Let us begin with the employment officer. He is a local man, and he is to have a local committee to guide him. See section 13. Right there you have the danger of the office being run as a political machine, or the still greater danger of having it referred to as such. Every

Unemployment Insurance-Mr. MacNicol
man who has a job he does not like or want, or any man who does not want a job, will say, "I was discriminated against because I was not on the right side of politics. Otherwise I could have found a better job." Any arrangement about which it is possible to make such remarks is going to be fatal for the men trying to find work under the scheme, fatal to the success of the office and eventually fatal to the government that would take advantage of such an opportunity. I am not making any discrimination as between one political party or another.
Dealing with the unemployment side of the bill, this unemployment advisory committee is going to be appointed and paid by the government. Then there is this commission under section 4, which is to be chosen by the government and whose salaries are to be fixed in the same way. The umpires are to be chosen by the government as well, but they are to be judges, and they are not to be paid. Then there are the chairmen of the courts of referees, who are to be chosen by the government, not even by the commission. Then we have the panels to be chosen to represent employers and contributors, but mark you this: it does not say they are to be chosen by the employers and contributors. They are to be chosen to represent them, and who is to do the choosing? It will be done by the political commission, of course. The panel gives the thing a nice sound of fairness; the panel is to be chosen to represent the employers and contributors; these panels are to be constituted, whatever that means, by the commission and from them shall be chosen the men for the courts of referees. That makes it possible to have a very fair panel, but a real political choice. It would not matter how many men were put on the panel provided the commission were wised up as to whom they should pick out of that panel. That would give a fictitious air of fairness to the thing, yet it might be political from beginning to end. I notice that the chairman and the referee courts are to be paid at the discretion of the committee. Now we come to the insurance officer, another political appointment, but curiously enough under section 28 of the bill no provision has been made to pay him at all. I suggest the section will have to be altered when we reach the committee stage. With the exception of the umpires, all these appointments are to be political. This is simply asking for trouble. The bill we are now discussing is a new departure, and a great deal depends on getting off to a good start, and the way it is handled in the early days of its operation.
By attaching to it right at the start this odour of politics it is badly handicapped. I suggest that throughout the country the measure would meet with greater approval if some of those appointments, in fact all of them, were put under the control of the civil service commission.
I hope the government may see fit to amend in committee some of the features I have criticized. Otherwise, on the general principle of the measure, I am prepared to vote for the second reading.


Mr. J. R. MacNICOL (Toronto Northwest) :: Mr. Speaker, may I point out that, apart from the views expressed by the hon. member for Comox-Alberni (Mr. Neill) who said he would support the bill, the views expressed by the other hon. gentlemen opposite this afternoon and evening in opposition to the bill are not the views of men at present working in industry. On Saturday last while at home I took the opportunity to speak to foremen of quite a number of large industries in the city of Toronto, a number of which are running twenty-four hours a day. The foremen told me that the men under their charge appear to be heartily in accord with the unemployment insurance proposals offered by this government.
In his observations the right hon. leader of the opposition (Mr. Mackenzie King) stated that the recommendations of several committees which had sat during his term of office and had discussed the question of unemployment insurance could not be adopted because of certain circumstances which he indicated. May I say to him however that during the same years in which the right hon. gentleman held office a number of countries throughout the world, some of which may have been labouring under conditions far worse than those obtaining in Canada, did adopt unemployment insurance legislation. Queensland, in Australia, adopted unemploj'ment insurance legislation in 1922, Russia in 1922, Italy in 1923, Poland in 1924, a number of cantons in Switzerland in 1924, Bulgaria in 1925 and Germany in 1927. Each of these states has adopted a compulsory and contributory scheme. Two other countries adopted voluntary schemes, namely Norway in 1922 and Spain in 1923. If those countries in the years I have mentioned could adopt unemployment legislation I cannot see why Canada could not have taken a similar course. I was associated with business between the years 1921 and 1929, and I have knowledge of the fact that a considerable amount of money was made during that time. During the last two or three years in which it held office the late Liberal govern-
776	COMMONS
Unemployment Insurance-Mr. MacNicol
ment permitted certain companies which had made enormous profits to split their stocks. I am not finding fault with the fact that some made profits; but I maintain that if some extra consideration had also been given the workers in those industries the results would have been more advantageous, and perhaps at that time a system of unemployment insurance could have been set up on their behalf.
I shall not give the names of companies, but will be content to say that in 1929 company No. 1 split its stock twenty to one; in 1929 company No. 2 split its stock eight to one; in 1928 company No. 3 split its stock six to one; in 1928 company No. 4 split its stock four to one; in 1929 company No. 5 split its stock four to one, and again in 1929 company No. 6 split its stock four to one.
I was associated with industry for a long time and I have been of the opinion that the men working in the plants were entitled to more than they were getting out of what they were producing. Long ago I concluded that unemployment insurance would be one method by which the workman would receive more than the actual wages he received for his work. The hon. member for North Winnipeg (Mr. Heaps) said, in effect, that the number who would be affected by the bill is not very large. In making that observation I suggest the hon. member should have remembered that at the time the first unemployment legislation was adopted by Great Britain only 2,250,000 were affected out of a total working population of 15,000,000 or 16,000,000. This government undertakes to cover 1,701,834 workers out of a total working population less than twice this number. I say that in that regard this government at the outset has gone much farther than did the first government, namely that of Great Britain, which adopted unemployment legislation.
Lest I forget I should like to refer to something mentioned by the Prime Minister (Mr. Bennett) this afternoon, something which filled me with hope. He made reference to taking care of those who are not protected by this measure, and alluded to the fact that he was considering the people not covered by the bill, and to whom reference was later made by the hon. member for North Winnipeg. After all, this bill is essentially an unemployment insurance bill; it is not a relief measure. It is designed to take care of men and women employed in industry who may have to suffer temporary periods of unemployment. In my humble opinion the act covers that situation satisfactorily.
It is a well known fact that in all civilized countries the worker's only source of cash supply for the maintenance of himself and

his family in health and comfort is his wages, and that when his wages are stopped because of his being thrown out of work he and his family are at once in economic jeopardy. The average worker in industry and in other vocations	has to	face	not	only	the menaceof being	thrown	out	of	work	because	oflack of work to do, but three other major economic menaces. He may be thrown out of work	because	of old	age;	he may	bethrown out of work because of invalidity; he may be	thrown	out	of	work	because	of
illness. It is for this reason that, in my opinion, on the continent of Europe-because there has been little or no advance in this kind of legislation on the American continent -the great nations help to sustain the purchasing power of their people, as I shall show later, by means of four major acts of social relief. The first is old age pensions, which I shall not discuss because we have the old age pension in this country. But this bill does provide machinery for consideration of factors affecting the national health and perhaps invalidity, and certainly it does take care of the fourth factor, namely, unemployment that results from there being no work for the workers to do.
On motion of Mr. MacNicol the debate was adjourned.


[Stage Direction]
At eleven o'clock the house adjourned without question put, pursuant to standing order.
Wednesday, February 13, 1935