[Stage Direction]
On the orders of the day:
Mr. J. G. ROSS (Moose Jaw):: Mr. Speaker, I would like to ask the government if the report of the auditors made necessary by the order in council of October 10 last, dealing with the equalization of the 1930 wheat pool payments on wheat, has been referred to the government, and if so, what action is the government taking.


Right Hon. W. L. MACKENZIE KING (Prime Minister):: Some days ago my lion. friend told me that it was his intention to ask the question which he has just asked, and I requested him to delay until the government had had further opportunity to consider carefully its policy in this matter. I am now in position to give him an answer. The auditors' report has been referred to the government. It is the opinion of the government that the report of the auditors does not justify the government in making payment under the authority of the order in council passed on October 10, 1935. The government is of the opinion, however, that in view of the policies followed under the previous government in handling, the 1930 wheat pool surplus, the producers of wheat who accepted an initial payment of fifty cents a bushel or fifty-five cents a bushel, basis No. 1 northern, Fort William, are justified in expecting those payments to be equalized at sixty cents a bushel, basis No. 1 northern, Fort William. It is, therefore, the intention of the government to have legislation introduced without delay to provide for the equalization of the 1930 pool payments on wheat at sixty cents a bushel basis No. 1 northern, Fort William.



VIMY PILGRIMAGE

[Stage Direction]
On the orders of the day:
Mr. THOMAS REID (New Westminster):: I should like to direct a question to the Secretary of State (Mr. Rinfret). Has the government decided what leave of absence is to be granted to the returned men employed in the public service who wish to take advantage of the proposed pilgrimage to Vimy this year?


Hon. FERNAND RINFRET (Secretary of State):: Mr. Speaker, I desire to thank the hon. gentleman for giving me notice of his question. On January 10, 1936, an order in council was passed dealing with the granting of special leave with pay to ex-soldier civil servants and their immediate relatives who are eligible to take part in the Vimy and battlefields pilgrimage in 1936, and who desire to do so. The order in council provides that eleven days be added as special leave with pay to the three weeks usually allowed as statutory leave, such special leave not -to be counted as a charge against the employee's special leave credit. The order in council further empowers the deputy heads of departments to grant such additional time as may be necessary for travelling to and from the point of embarkation. The point was raised as to whether this was intended to apply only to civil servants who are under the Civil Service Act. I may say the intention is that the order in council shall apply to all civil servants, whether they are under the
Civil Service Act or not.
*



REGINA RIOTS

[Stage Direction]
On the orders of the day:
Mr. M. J. COLDWELL (Rosetown-Biggar):: I should like to ask the Minister of Justice (Mr. Lapointe) if his attention has been drawn to the publicity given to and the inferences being drawn from a remark which he made in this house last Tuesday, as follows:
I believe the evidence that is being given before the commission will rather be a justification of what the police did, and will rather clarify certain issues which were perhaps dangerous, as to which the people did not have the best information, the information they should have had.
In view of the inferences which have been drawn, I should like to ask the minister if he desires to amplify that statement in any particular.	.


Hon. ERNEST LAPOINTE (Minister of Justice):: I have no such wish.

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Mr. T. C. DOUGLAS (Weyburn):: Does not the Minister of Justice (Mr. Lapointe) consider that the statement he made on Tuesday last, appearing on page 125 of Hansard, prejudices the entire relief inquiry?


Mr. SPEAKER:: The hon. gentleman is out of order in putting such a question.


Thomas Clement (Tommy) Douglas: Mr. Speaker, I have no wish to transgress the rules of the house, and I should like to know in what respect I am out of order. I am asking the minister a question based on a statement he made to this house and which appears on page 125 of Hansard.


Walter Edward Foster: The statement has been made and I do not think it is proper for the hon. member to criticize a speech. He should have made his criticism when the speech was made.


Ernest Lapointe: I have nothing to add or subtract from what I stated on that occasion. I am not responsible for the inferences.



TRACTOR PARTS PRICES

[Stage Direction]
On the orders of the day:
Mr. W. A. TUCKER (Rosthern):: Mr. Speaker, I should like to ask a question of the Minister of National Revenue (Mr. Ilsley) based upon a circular letter which was sent out by the International Harvester Company to its dealers in my constituency. This letter is dated at Saskatoon, February 5, 1936, and reads:
Dealers:	General letter No. 12. Repair
prices for ball and roller bearings, bolts, nuts, washers, screws and rivets-


Walter Edward Foster: I do not think the hon.
gentleman should read the letter; he should put his question directly.


Walter Adam Tucker: I must read the letter in
order to make my question intelligible. It is a very short letter.


Walter Edward Foster: I do not think the hon.
gentleman has a right to read a letter. He should put his question directly as to what the government intends to do.


Walter Adam Tucker: This letter indicates that
effective immediately the prices of parts necessary for duty free farm tractors will be increased 33i per cent. The letter states that this increase in price is made necessary on account of duty now being paid on these parts. Could the minister advise whether there has been any increase in the duty on parts necessary for duty free tractors? If
there has not been any increase, will the government take some action in regard to this increase in the price of parts which are so important to the farmers of western Canada?
Hon. CHARLES A. DUNNING (Minister of Finance): I know of no increase in duties whatsoever. If my hon. friend would place his question upon the order paper I would have a better chance than I have at the moment of answering accurately the latter part of his question.


Walter Adam Tucker: I spoke to the Minister
of National Revenue about the matter, and I believe he is ready to answer my question.


Walter Edward Foster: The hon. member should put his question on the order paper.


Hon. J. L. ILSLEY (Minister of National Revenue):: There has been no increase in
duty whatever since the new government assumed office. There is a duty imposed on the parts mentioned in the letter under other items in the tariff, but they have been in effect for several years past. If the letter is taken to mean that the increase in price is due to an increase in duty, the implication is not justified at all.

Hon. CHARLES A. DUNNING (Minister of Finance) moved that the house go into committee of supply.
Motion agreed to and the house went into committee of supply, Mr. Sanderson in the chair.



DEPARTMENT OF AGRICULTURE

[Stage Direction]
Health of animals, administration of Animal Contagious Diseases Act and Meat and Canned Foods Act, $1,900,400.
Mr. SENN:: Mr. Chairman, I have thought sometimes that the manner in which these agriculture estimates are brought down is such that they do not convey as much information to the committee as they should convey if we are to have an intelligent discussion. Quite a large sum is involved in this item, and it would add very much to the conduct of debate if the minister would state briefly why these expenditures are to be made and what particular functions are performed by this branch of the department.


Hon. J. G. GARDINER (Minister of Agriculture) :: It will be noted that the estimates submitted for the year 1936-37 show a slight increase over those of 1935-36, the total esti-
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mate being increased by $12,484. The different purposes for which this money is to be expended are:
Communication of services, $14,050,
Equipment, acquisition and maintenance,

Compensation, largely having to do with the checking of tuberculosis in cattle throughout the country, $413,937.
Lands, buildings, acquisition and maintenance, $6,500.
Miscellaneous current expenses, $13,300.
Personal services in connection with staffs, $1,120,693.
Special personal services, $1,100.
Kents. $10,220.
Supplies, materials, printing, stationery, etc., $54,000.
Transportation of things, $6,600.
Transportation and travelling expenses of persons, $249,000.


Mr. BARBER:: Is it the intention to bring any new areas under the tuberculosis test this year?


James Garfield Gardiner: Yes. There is the new area in New Brunswick, which I think completes the bringing of that province into the district there. Then there is a new area in Ontario, taking in certain counties around Toronto, from the county of Northumberland through to the county of Halton. There are three new areas in Manitoba, and there are under consideration one or two others that have not yet been passed upon.


Mr. COLD WELL:: In view of the serious epidemic which occurred among horses in western Canada at the end of August and in September this year, has any additional provision been made in this particular estimate to deal with that matter?


James Garfield Gardiner: It is the opinion of the department that that was a disease which was due partly to conditions on both sides of the international boundary-that is, the drought conditions that have prevailed for a number of years. We do not expect that there will be any new outbreak this year and therefore there is no provision for it. Of course, that is something that would have to be dealt with at the time if it developed.


Mr. THOMPSON:: What is the policy of the government regarding the checking of tuberculosis in dairy herds throughout the country? That is a vital question to which more attention should be paid. A closer check should be kept on dairy herds, because I believe a great deal of milk offered for sale to-day comes from diseased herds.


James Garfield Gardiner: There are three different schemes for checking tuberculosis generally.

There is the accredited herd system; there is the restricted area policy in which all cattle are checked over the whole area; and there is the supervised herd plan. In connection with the first two the government pays compensation for stock destroyed, but it does not in connection with the third. All these plans are applied in the attempt to eradicate tuberculosis from dairy and other herds throughout the country.


Harry James Barber: I have in mind particularly the anti-tuberculosis area in the Fraser valley district. What percentage of reactors was there in the last test, or is that district cleaned up completely?


James Garfield Gardiner: I do not know that it can be said that any district has 'been entirely cleaned up, but the trouble has been reduced to such an extent in some districts that the reactors are only one-half of one per cent of the cattle tested, which shows that there has been a marked diminution in the disease in the different districts. The reduction sometimes has been from five per cent to one-half of one per cent, and in other instances from an even higher percentage. There has been a considerable reduction as a result of the policy.


Thomas Alfred Thompson: Is it the policy of the government to extend the testing system further than it has been carried in the past? In my opinion it has not covered the ground as it should.


James Garfield Gardiner: My information is that the maritime provinces, Prince Edward Island, Nova Scotia and New Brunswick, are now restricted areas; that is, they have been set out as an area in which an attempt is being made to eradicate tuberculosis. The government is extending areas in other provinces as rapidly as the funds available will make this possible. The efforts of the department are limited only by the amount of money which this house sees fit to vote from time to time to take care of that matter.


Mark Cecil Senn: Is the amount to be voted for indemnity for cattle in connection with the tuberculosis test more or less than it was last year?


James Garfield Gardiner: The total amount is $6,063 less than it was last year.


Mark Cecil Senn: In my district a disease, not new but one that has become prevalent within the last two or three years, needs looking into. It is known as shipping fever, the

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technical name being hemorrhagic septicaemia. It is a very infectious disease and has resulted in a good many fatalities among herds that have been infected. Has any notice been taken of it by the department? If so, what is being done to eliminate it?


James Garfield Gardiner: The department is not touching it. It is an infection that is widespread throughout the country and one that is somewhat difficult to deal with, but the department is not dealing with it at the moment.


Mark Cecil Senn: Is the bacteriological department taking no steps at all to investigate the matter?


James Garfield Gardiner: The information of the department is that the disease is due usually to bad handling of stock and to poor feeding. It is a disease that is likely to develop in connection with the shipment of cattle, and likely to develop anywhere. Investigations have been made, and it is generally considered to be caused by bad handling and poor feeding, and of course that cause can be removed only by more education among the people in connection with feeding and shipping conditions.


Mark Cecil Senn: A good many of the cases that have come under my notice have been contracted while cattle were being shipped on railway cars. Even at the Toronto exhibition cattle have been infected with the disease, with serious consequences. If the department have not taken any steps towards investigating the matter I advise that they do so, because I believe the disease is spreading, and it is very serious, in some districts at least.


James Garfield Gardiner: I shall be very pleased to take the matter up with the department.


Major James William Coldwell: With respect to the question I raised a few moments ago, the minister said it was considered in the United States and Canada that this was a drought disease among horses.


James Garfield Gardiner: Not exactly a drought disease, but one that develops as a result of conditions of hardship that prevail in the area.


Major James William Coldwell: I was just going to ask the minister if he is aware of the fact that this disease was quite prevalent in the districts around Rosetown where drought had not been particularly severe, and what steps were being taken to study it. I think it is something that should be watched very carefully by the department.


James Garfield Gardiner: I would only say in reply that it just depends upon how large an area the member for Rosetown-Biggar would take in around Rosetown. He says there have been no drought conditions around Rosetown. My information is that the drought conditions extended north, south, east and west of Rosetown, and of course you would have the development of any disease that resulted from that in areas which were comparatively small, where they might have fairly good crops. Right around Rosetown it is fairly true that in some years, when we have had drought elsewhere, the crop has been comparatively good, but parts of that district have been very much affected.


Major James William Coldwell: I said "not particularly" affected. Does the minister or the department consider that this is an infectious or contagious disease?


James Garfield Gardiner: The department is inclined to think that it is not contagious, but it is not in a position to state definitely. The disease has not been confirmed by those who have been investigating.


Thomas Alfred Thompson: Is it the policy of the government to test dairy herds upon application of the farmers, irrespective of the number of pure bred animals that may be in that herd?


James Garfield Gardiner: The supervised herd plan takes any number at all, but the accredited herd plan requires that five of the live stock be pure bred.


Thomas Alfred Thompson: I think that, in checking up on disease, to limit them to five pure bred cattle is a mistake. There are many splendid grade herds in the country, and it is just as important that the milk coming from a grade herd should be pure as that coming from a pure bred herd.


Thomas Clement (Tommy) Douglas: What provision is made to protect consumers against disease in cattle that have been butchered? Oftentimes they are butchered outside and peddled in the town. I know of cases where that has been done, with very serious consequences.


James Garfield Gardiner: That is handled under public health in the different provinces.


Mr. BRADETTE:: Will the minister find it possible to establish a tubercular zone over the Porcupine and Cochrane area-most of the northern area? This is very important on account of the amount of milk that is being used in that section.
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James Garfield Gardiner: In order to have that done it will be necessary in the first place for two-thirds of the cattle men in that area to petition the government to make that an area.


Joseph-Arthur Bradette: They have done that.


James Garfield Gardiner: And after that is done the matter is investigated by the department, and if sufficient funds are available other areas are added as we think it is necessary to add them. At the moment I think that what are already in will require practically all the money that is being voted in this fund. I am informed by the officials of the department that there is no petition in from that area.


Joseph-Arthur Bradette: It is very important that this should be done. The minister will readily understand what it means. In a section of the country where the farmers are really established farmers they get compensation for their losses; but in most cases around the mining areas they are beginners, and when this disease occurs they do not get any compensation whatever: it is a dead loss to those settlers. Their plight is a very different one from what you will find in the older settled sections of Ontario, Quebec and other provinces. The minister will understand that it is impossible to bring raw milk in from outside, from Toronto for instance. We have to produce milk around these mining sections, and the minister will appreciate the plight of these poor settlers when the whole of their cattle have to be destroyed.


Mr. STEVENS:: Have any steps yet been taken to give effect to recommendations made in the report of the price spreads and mass buying commission in connection with the administration of the Meat and Canned Foods Act? It will be recalled it was discovered that certain abuses existed, not only abuses but perhaps inadequate standards and provisions for containers. I am referring now particularly to canned goods, although reference is made also to other classes of goods. On page 241 of the report, dealing with this question of grading and so on, I find these words:
Nowhere are simple numerical grades used for consumer products, and even in one of the best grading systems, that of canned foods, the grade names do not indicate in themselves the position of any one grade in the series. These designations are "fancy quality," "choice quality," "standard1 quality" and "second quality"; "second quality" being, in fact, fourth grade.
It goes on to say, elaborating that a little further:
It is recommended that all grade designations be numerical, as grade 1, grade 2, etc. Should this prove impossible for some products, alphabetical grades might be used, as with eggs for export trade.

Referring to the question of grading canned goods, it has been noticed, and I think commented upon quite widely by those who are interested, that the use of those terms, "fancy," "choice," and so forth, is really meaningless, that there ought to be a standard; and I believe in the department the officers or the inspectors have certain standards. I am not for a moment complaining about those standards, nor am I criticizing the department in respect of its examination of the goods. What I am calling attention to is what we discovered on that occasion, and as I say it has been widely commented upon, that the consumer may be very easily grossly misled. Furthermore it constitutes an unfair competition between different manufacturers. A given manufacturer may have an article which he describes as "choice," "fancy," or something else. What is required in the interests of the consumer is that in canned fruits, canned peaches if you like, or strawberries, there shall be a standard No. 1, No. 2, No. 3 or No. 4 grade, as the case may be, and that these numerical descriptions be set forth in clear, outstanding type which will indicate clearly to the consumer the standard that is being sold. I know perfectly well from my knowlege of the subject that often a secondary grade, known to the departmental officials as secondary, is described on the label in such a way that an ordinary purchaser could not possibly understand that he was buying a secondary grade, and he might really be, and in fact often is, deceived into thinking he is getting a really superior article. And inasmuch as there are different types of labels and descriptions by different firms the competition of price becomes the main competition while actually there may be a great deal of unfairness in connection with the quality.
On that point-and there are other points to which I shall refer later-I should like to ask the minister if any steps have been taken since last session, when the price spreads report was presented to this parliament, to carry out the suggestions contained in that report or to correct the present practice, which in my opinion, and I think in the opinion of many others, is more or less deceptive to the consumer.


James Garfield Gardiner: Mr. Chairman, I am sure the hon. member will agree when I say that some of the matters he has brought forward and the question he has asked would have to be considered not only by the Department of Agriculture but also by the Department of Health. Most of the questions asked by my hon. friend really have to do with another vote so far as they concern agriculture; that is the vote having to do with canned goods.

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Henry Herbert Stevens: I wish to place myself right; this vote refers to the Meat and Canned Foods Act.


James Garfield Gardiner: Yes. Of course meat would naturally come under this item, but I think most of my hon. friend's questions had to do with canned vegetables and canned fruit. However, I do not object to giving him the information now; I am just directing attention to that fact. The only reply I can make is that the different branches of the Department of Agriculture, together with the Health department and others concerned, have been giving consideration to those recommendations, and an effort is being made to work out some better plan of grading and marking which will meet as far as possible the recommendations of the committee. Nothing definite has been done up to the moment, but the whole matter is under consideration.


Henry Herbert Stevens: There is another point
to which I should like to direct attention; that is, the sizes of packages. I think this is one of the most flagrant abuses prevalent in the distribution trade to-day. Passing along the street-you can see it in Ottawa as you can see it everywhere else-I frequently see advertised in the windows, usually of a chain store, certain articles, canned meat, canned tomatoes or any article of common use, at a price that is startlingly low. It is very skilfully done; the inference is that this particular institution is able to sell canned tomatoes, we will say, at a price much below its competitors. Then passing along the street I have seen in another window, of a competing store-perhaps an independent merchant-a can of tomatoes that seems to be exactly the same size, but the price of which is two or three cents higher. Immediately the unsuspecting purchaser will note the question of price, and of course he is drawn to the first store. On examination of the cans, however, it will be found that one is half an inch shorter than the other. Half an inch is not readily discernible to the unpractised eye, but it means a difference of perhaps ten per cent, which of course means that in one can you get ten per cent less than in the other, and therefore the price, although it appears to be lower, may be just the same, possibly higher or perhaps very slightly lower.
Again this is a deceptive thing. My own view, frankly and candidly, is that it was designed to deceive, because it was introduced only a few years ago. Formerly there were standard sizes, although I do not know that there was a law or statute forcing merchants to sell only certain sizes. By common practice over the years, however, certain sizes 12739-is
were accepted and recognized. The old size for tomatoes was a two pound tin, if my memory serves me aright. Now you can buy tomatoes in a number of different sizes, and I am convinced that this is a flagrant abuse. I may say further that the evidence before the committee two years ago, and I think before the commission last year, indicated that some of these large and powerful distributing agencies or institutions were able to buy a certain standard article in a size slightly smaller than the size furnished to others, and this size container was prepared especially for them. Later I believe the same privilege was extended to others, but at first undoubtedly it gave the one institution that was successful in getting the special size a distinct advantage over its competitors. It was a deceptive thing; it was not fair competition, and the consumer obtained no advantage.
There is another form that it takes. What I have said applies particularly to canned goods, but let us consider bottled jam. I do not know whether samples are available now, but samples were available which demonstrated that a bottle of jam was put up in such shape and form that it appeared to contain actually more than it did. It was scientifically designed to deceive the eye, without doubt; in fact it was one of the triumphs of science, the optical illusion that was created by just looking at the jar. Yet the net contents of that jar were very much less than those of a jar used by a competitor.
The minister will please accept this assurance from me, that I am not directing these remarks in any sense as a criticism of his administration of the department; this is a question for parliament, but at the moment he is responsible for the administration of this part of the country's affairs. To my mind it is the duty of parliament to see to it that no such deception is allowed, that that practice is eliminated. There should be standardization of sizes of bottles for jam and of cans for canned goods so that there may at least be some uniformity. I think it would surprise the minister to know what a great variety of sizes there is. For canned fruits and vegetables, peas, corn, tomatoes, peaches, plums, strawberries, about two sizes would be ample to cover the requirements of the trade. This variety of sizes is not in any sense a contribution to efficiency in merchandising. I do not think anyone here who has had experience in merchandising would say I am wrong in that. I am convinced that there is but one object in having this variety of sizes, and that is the object of cajoling-or I would use a stronger term, deceiving-the consumer. I

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am willing to make all reasonable allowance to the minister for the short time he has been in office, but after all, these things were brought out two years ago, and while I am not inclined to press any criticism of the minister I suggest to him that the permanent officials responsible for the administration of these acts might well, shall I say, be brought to task, or at least be asked to explain why they have not made to their minister recommendations for the elimination of this kind of deception practised upon the consumer on the one hand and constituting on the other hand a grossly unfair form of competition. I strongly urge upon the minister the necessity of early and prompt action for the correction of these matters.


James Garfield Gardiner: I appreciate the attitude of the hon. member towards myself as the present head of the department. I can assure him that I am informed by the officials of the department during the short time I have been its head that consideration is being given to the matters he has brought before the committee this afternoon. Again it is a question of dealing with two departments, that of trade and commerce, which my hon. friend understands much better than I do, having himself been in charge of it for a considerable time, and, since we are charged with the administration of the act, the department of which at the moment I happen to be the head. As I said in regard to the other matter so I say in regard to this, that it is under consideration at the moment. I have much in common with my hon. friend in the views I hold in regard to the methods that have been followed in the putting up of packages. Of course I do not know what was the intention of those who first put food products up in these packages. Many people who purchase from chain and other stores where these goods are sold have known for a considerable time that the packages are not as large as some of those purchased in other places at higher prices. There are different reasons why persons purchase smaller packages, I need not discuss that; but it is the desire of the department and of myself as its head that everything which tends to deceive the public should be done away with, and that as quickly as possible. So far as I have charge of the department that will be done.


Henry Herbert Stevens: The minister referred to the fact that for some years I was presiding over the Department of Trade and Commerce. I imagine he inferred I might have done something while I was there. The long and short of it is that it illustrates a clash of

jurisdiction. When I was minister I sought urgently and strenuously to get some action, and I tell the minister frankly I could get no action because of the attitude of the Department of Agriculture. I am not desirous of going into any discussion of that phase of the situation, but it indicates this-and that is one reason I am glad that I am addressing a minister who comes fresh to his task-that the administration should be in the hands of either one department or the other; there should not be this clash of jurisdiction. I am certain the interdepartmental correspondence will show that the permanent officials of the Department of Trade and Commerce have long been of the opinion that there is need for amendments to the act. If the Prime Minister were in his seat-for after all it is the Prime Minister who must decide on matters where there is a dual responsibility-I would appeal to him to give consideration to that phase of the subject, so that there can be no evasion of responsibility.
There is another abuse that I wish to emphasize. The department in the administration of these acts requires that the net weight be shown on the label, but I invite any hon. member whose family is keeping house to go into the kitchen, pick up any canned goods and look at the minute figures in which the weight of the contents is shown -16 ounces, 14, 13, or whatever it may be; the figures should be clear and such as can be read. Furthermore, as this report suggests, they should do away entirely with these odd weights such as 14 1-2 or 13 ounces. The report definitely suggests that the quantity should be 4, 8, or 16 ounces, definite divisions of what the housewife knows as a pound, not 15 ounces, for instance-there was that size; I do not know whether it is still put out-and 14 and 12 ounces.
May I refer to another point in this report which I think is very important. I commend this particularly to the attention of the minister :
It is our opinion that legislative provision should be made for the standardization by order in council of the quantities in which any packaged commodity, whether a food product or not, may be sold.
And that the act should be amended accordingly. I believe the practice at present is this-and I invite the minister to correct me if I state it inaccurately; I am speaking from memory, nearly all these provisions are made by regulation under order in council. I am not one of those who seek, and I am not seeking now, to tie the hands of the administration, but I do think we sometimes

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lean towards an abuse of that privilege. There are certain things that might well be statutory. The act might very clearly state, for instance, that there shall not be more than such and such a number of sizes, or, as I mentioned a moment ago, that all grades 6hall be designated numerically, one, two, three, four, and so forth, or A, B, C, D, et cetera. Furthermore, we might clearly provide by statute that there shall not be any division of a pound except as indicated here, 2 ounces, 4, 6, 8 ounces, and so forth. These are things that could be fixed by statute. I am anxious, Mr. Chairman, that what I have to say shall not be lost on the desert air.


James Garfield Gardiner: I am listening.


Henry Herbert Stevens: I am afraid the minister
is listening with one ear and talking with the other.


Mr. JACOBS:: Are you sure you are not?


Henry Herbert Stevens: I say that the statute ought to determine many of these things, and then the governor in council would be limited in the powers he has for stretching the regulations to cover a variety of things such as I have dealt with. I would very earnestly plead with the minister that in connection with this whole subject the recommendations of the price spreads commission should be given careful consideration and an effort made to eliminate these abuses. I am quite aware that the various acts we now have contain elaborate provisions respecting a variety of matters, but these abuses are obviously present, and it is our duty in the face of past experience so to amend the act as to eliminate them if possible.


Mr. CHURCH:: Mr. Chairman, I was a
member of the Toronto board of health for some years and I saw something of the enforcement of these acts. I would ask the minister to tell the committee what cooperation or coordination there is between his department and provincial health officers regarding the administration of the Animal Contagious Diseases Act and the Meat and Canned Foods Act. We have had many complaints about canned goods, about the cheap stuff that is worked off on the working class. The city of Toronto and the county of York have spent a large sum of money in setting up a modem health department. What is this parliament doing? The government proposes to spend SI,900.000 on the health of animals and only one-fifth of that amount on the health of human beings. It is a wonderful country, Canada, is it not? I agree with the former Minister of Trade 12739-181
and Commerce (Mr. Stevens) that there is a great deal of inefficiency in the administration of these acts. Every person who has been interested in public health must know that there are abuses. When I first served on the board of health in Toronto there was no health inspection, although there was some kind of inspection of food. But the great Doctor Hastings, former medical officer of the city of Toronto, was responsible for having the milk supply of the city of Toronto inspected for sixty miles around the city, and that operated for the welfare of the people of Toronto, children especially, and helped to cut down contagious diseases among animals. I think the minister should	tell the	committee what he intends to do to provide for a more efficient administration of these acts. I was told by one health inspector that you could not enforce	the	act.	He said	"thefederal department	has	taken	it over now."That is how they	get	away	with it.	The
chain stores sell cheap and they dump canned goods into their windows. Prosecutions in Toronto are few and far between, although a lot of these goods are afterwards found by the street cleaning departments. I agree with the former minister that there is great inefficiency, and a lack of cooperation and coordination between the federal department and the public health officials in the large cities. There is room for much improvement in that direction, and I think the minister ought to call a conference of the health officers of the large cities throughout the country with a view to bringing about closer cooperation and coordination.
Then as to prosecutions, we were told last session by the Minister of Justice that all federal law enforcement is in the provinces, and that the federal department has nothing to do with federal prosecutions. I was told a few sessions ago to see the attorney general of the province. I would like to find out what the minister proposes to do along this line. The enforcement of all these acts under the Department of Agriculture should be the duty of the minister, who should see that prosecutions by him are instituted in Toronto and other police courts for violations of the acts. The summons is laid under the act, but the person in charge of the summons has no power. He is only a food inspector for a municipality, and the result is that the consumer is getting the worst of it. I sympathize with the producer because he is having a hard time of it in many ways, but here we are dealing with the health of our people, and we have this government spending only 8475,000 on the health of human beings and 81,900,000 on the health of animals.
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Is that Canada's conception of the worth of human beings, many of whom are unable to get employment and some of whom are starving? Yet the government appoints inspectors, and inspectors of inspectors, and inspectors of inspectors of those who are the chief inspectors. What they do I do not know. There is a great lack of coordination between the health officers in the cities and this department, and it is these local health officers who are most familiar with the situation. They are local men, right on the ground, and they know the conditions in the abattoirs where cattle are killed and where the food is put into cans. They know the operations of the canning companies. The late government did a great thing for public health when it appointed the price spreads commission, and the work of that commission was most commendable from the point of view of public health. If the minister wants a proper administration of these acts he should coordinate with the medical officers of health and with the police departments or police chiefs of the large cities, and his inspectors should see that there is an efficient inspection. Probably the minister has not been long enough in the department to become familiar with it or to do much as yet, but I hope that in the recess he will visit Toronto and try to bring about closer cooperation between the local boards of health in the province and police officials and federal officials so that the consumer will get some benefit from the expenditure of these large sums of money.


Mr. NEILL:: Is the minister prepared to inform the committee what the policy of his department will be regarding pullorum disease in chickens? It is rather a serious matter in British Columbia, and I know that the minister has received representations from a number of people. I have made them myself, but so far without any reply. I hope others have been more successful. The present regulations are founded apparently upon the belief, which is contradicted by some people claiming authority, that the disease is wholly hereditary, and so we are not allowed to sell our day-old chicks in Al'berta or Saskatchewan or anywhere outside the province unless we can produce the pedigree of the chicks' fathers and mothers and aunts and uncles to quite a remote degree. This is very expensive.
There are three complaints made in British Columbia of the manner in which these regulations are enforced. First, the complaint is made that it is very expensive and is calculated to injure the laying qualities of the

birds. It puts them off their laying, and when a bird has been put off its laying it is a long time before it gets back again. It is alleged also that there is another method, known as the quick method, which does not have this effect. This need not be carried out by government inspectors, but can be done by the poultry owner himself at a tenth of the cost. It is claimed that this method is equally effective. The poultry men want to know, and I do not think they will be quiet until they do know, why the more modern, cheaper and *equally effective method has not been adopted. Special provision was made last year, probably on account of the trouble which arose, under which the dominion government paid part of the expenses, but that was only an emergent action.
The second complaint is in connection with the contention that this disease is an hereditary disease. I have seen articles in some of the poultry journals by people who claim to know, contradicting the idea that this disease is wholly of an hereditary character. It is said that too much emphasis is being placed upon that phase of the matter. It is claimed that the diseases may be contracted because of local conditions, because of poor surroundings or improper sanitation, and so on, and that it is not entirely an hereditary disease. The regulations are based entirely upon the idea that the disease is hereditary, that it is conveyed from father to son or from mother to daughter, so to speak. The results of these regulations have been very injurious to the poultry industry in British Columbia. In the past the price of eggs has been low and the price of feed from the prairies has been high. These things have mitigated against the success of these men, and yet the government comes along, no doubt with the best intentions, and states that they must conform to certain regulations before they can sell their day-old chicks. A great many people have been forced out of the business. Not only has it been necessary to test the parents of the chicks, but it has been necessary to test the more remote relations; the whole flock has had to be tested. It is an expensive procedure and the benefits are doubtful. There is another method known as the quick method by which a drop of blood is taken from the chicken and a test made immediately. The laying qualities of the bird and its general health are not interfered with.
This matter is of great importance to British Columbia. I was unable to get a reply from the department as to what their policy would be and the only thing left for me

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to do was to bring up the matter here. I know the minister has not been long in office and has not had time to familiarize himself with every detail of this branch, but I ask him to undertake to look into the matter to see if some redress cannot be given to the poultry owners of British Columbia.


James Garfield Gardiner: Mr. Chairman, there
has been considerable correspondence from British Columbia with regard to the difficulties to which the hon. member (Mr. Neill) has just referred. I may say that these regulations were really set up as a result of the activities of the live stock branch, under which hatcheries are controlled. However, I think it would be just as well to deal with this matter at this time as we have been discussing live stock diseases generally. The general impression in the department, an impression pretty well established by experience, is that this disease is not wholly hereditary, but rather it is one which is transmitted by infection. The objective of the department is to try to prevent the spreading of the disease. The regulations set up do not automatically come into force in the different parts of Canada; they are made applicable in a province only when that province asks that they be applied. The three prairie provinces, Manitoba, Saskatchewan and Alberta, and two of the maritime provinces, Nova Scotia and New Brunswick, have applied to have these regulations put into force within their boundaries. As I understand them, the regulations require that any one who is supplying eggs to a hatchery, the chicks from which are going to be sold to the public, is required to have all his hens blood .tested. Objection to these regulations has been taken in British Columbia. That province has not asked that these regulations shall apply there, and in so far as chicks sold within the province are concerned, the regulations do not apply. However, when they undertake to sell chicks in Alberta, Saskatchewan, Manitoba, or the eastern provinces of New Brunswick or Nova Scotia, they are affected by the regulations.
At the time of the dominion-provincial conference Alberta intimated that they had no objection to chicks being shipped into Alberta provided that the hens in the flock used for hatchery purposes were segregated from those not used for hatchery purposes. In other words, if a poultryman has 1,000 hens of which only 300 are used for hatchery purposes, if he segregates those 300 and has them tested, Alberta is prepared to accept chicks that are hatched from eggs laid by those particular hens. Saskatchewan and Manitoba insist that the entire flock shall be tested, as regards both chicks raised and
sold within the province and chicks brought in from outside. British Columbia is, therefore, excluded from selling chicks in Saskatchewan or Manitoba, unless such chicks are raised from eggs taken from flocks all the hens of which have been blood tested.


Alan Webster Neill: The whole flock.


James Garfield Gardiner: Yes, the whole flock
blood tested. I understand that in some cases, probably in all cases, this has raised the cost to the poultryman. Some misunderstanding has arisen between the poultrymen of British Columbia and the department administering these particular regulations. Everything possible is being done to have the regulations applied in all provinces in order that a disease which has been affecting poultrymen everywhere may be eradicated with the least possible cost to the individuals concerned.


Alan Webster Neill: The minister has shown a
very thorough knowledge of this subject, but there is one point upon which he did not touch. He stated that Alberta and Saskatchewan demand that imported chicks comply with the regulations, but he did not state that these regulations were formulated at Ottawa and Alberta and Saskatchewan had to accept them holus-bolus. If they wanted certain tests applied, the only way they could get them was by adopting the dominion formulated rules. If the dominion rules were less stringent, or, as we might say in British Columbia, more reasonable, Alberta and Saskatchewan would still adopt them and the situation would be eased. These rules were formulated by the dominion at a time when the officials were less informed about the matter, and it was decided that this longer and more expensive method should be used; but since that time there has been devised a quicker test which can be carried out instantly by taking a drop of blood from the bird. Not only is this test cheaper, but it is less dangerous. If the dominion would change its rules I am sure Alberta and Saskatchewan would adopt them; as a matter of fact they would have to adopt them. If the minister would look into this point I think he would see where many of our objections could be met.


James Garfield Gardiner: In the short experience I have had in the department, I did take into consideration, at the request of British Columbia, the change that has been suggested by the hon. member; but I found very quickly, after attempting to make that suggestion to the other provinces, that the pressure is coming not from Ottawa but from those provinces; that is, they absolutely refuse to
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be governed by any other regulations than those to which they now conform and which they regard as proper regulations. I still have some doubt as to whether exactly the same rules should govern in all cases in view of the differing conditions. Saskatchewan is a province where most of the poultry producers are also farmers in a rather large way, and their problem is perhaps somewhat different from that of the man who makes his whole livelihood out of the production of poultry. To begin with, they have smaller flocks and it is probably not a matter of great expense to them to have the test made that is now being carried out. On the other side of the question, however, I am informed by those who have knowledge of the subject that the quick test is only approximately forty per cent effective. This test was known at the time the other one was accepted, and it was known at that time to be only approximately forty per cent effective. Of course, it is the desire of the department as far as possible to eliminate disease, and we take the most effective means to that end. Consideration might be given to some changes in the regulations as we gain further experience, by segregating hens in such a manner as to make the test effective, but up to date we have nothing more effective than we are now doing.


Mark Cecil Senn: I agree with the minister heartily as to the desirability of having baby chicks hatched from eggs coming from blood-tested flocks, for it is very desirable indeed that disease should be stamped out as quickly as possible. But there is another question in this connection that seems to me to be of great importance to the poultry industry. Under the terms of the trade agreement now in effect between Canada and the United States, the hatcheries of Canada will be subject beyond question to very severe competition with chicks coming from that country. I do not know how the department is going to see to it that chicks coming from the United States come from blood-tested flocks. I should be glad if he would explain how that will be done, or why the people of the different provinces in Canada should be subjected to this way of doing things while eggs and particularly chicks are allowed to come from the United States without undergoing that inspection and supervision.


James Garfield Gardiner: I can only say that we are governed more or less by the action of the provinces. For example, in the provinces I have mentioned, where these regulations have been adopted, it is a comparatively simple matter to make arrangements at ports

of entry for a check to be made on the hatcheries from which chicks come, and with regard to the regulations governing them in the United States. But in a province which has not come under these regulations it is more difficult to control the situation, as one can understand. As regards the other question, under the tariff arrangements as they were before, I think the set price from the United States, upon which the tariff was based, was about 30 cents a chick. Of course, the price of a chick in the United States is around 5 cents, while on this side it is 8, 10 or 12 cents, and it can be readily seen that a set price of 30 cents would be prohibitive. In connection with the trade agreement, under the intermediate tariff, the duty on a chick coming across the line is about 5 cents.


Mark Cecil Senn: Is that settled yet?


James Garfield Gardiner: No, I beg your pardon; there is an ad valorem of 17 per cent based on the price, which probably in some instances, on the lower priced chicks, would figure out at a little lower than one cent a chick. Chicks would come across the line under that arrangement much more freely than they did under the previous system, but the request that has been made by the hatchery people is that a definite duty of so much per chick be imposed, and the rate suggested is very much lower than that proposed before. The house is not bound, even if the trade agreement is accepted, to abide by the present rate; we have the power to raise the duty or to do whatever we wish to do in connection with it. That, however, is a matter which I cannot discuss this afternoon; it is something that will have to be discussed when the budget is down. Representations have been made by the hatchery people to have a change of rate on chicks from the United States.


Mr. LENNARD:: Has the department
considered making it compulsory to grade farm products packed for export and, if approved, to have them so marked?


James Garfield Gardiner: I do not know how
far afield I am allowed to go under the rules in discussing this item. That is a mattgr entirely outside the items we are now considering, and perhaps the hon. gentleman would let it stand until a more appropriate time.


Mr. TAYLOR (Nanaimo):: I thank the
minister and those hon. members who have spoken with regard to the poultry question for the excellent information which has been given the committee and recorded in Han-

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sard. This is a matter that closely affects my own constituents in Nanaimo. I am pleased that I shall be able to pass on to them from the proceedings in this committee much valuable information.


Mr. LOCKHART:: May I supplement the remarks of the hon. member for Broadview (Mr. Church) with reference to the question of inspection. I do not think that any direct answer has been given by the minister. It was my privilege a short time ago to go' through one of the packing houses in Toronto and I observed then that a great many carcasses were being rejected on account of tuberculosis. My hon. friend has referred to cooperation between the federal and provincial departments. As regards carcasses that are stamped as completely affected by tuberculosis, does the minister feel sure that the provincial department of health is cooperating to the extent of preventing these carcasses from reaching the hamburger and hot dog stands or finding their way into the canned goods sold in Ontario and throughout the dominion?


James Garfield Gardiner: Replying first to the last question, I can assure the hon. gentleman that carcasses condemned by the dominion inspectors go into the tank immediately, under the supervision of the officials of the department. In connection with the other matter brought up by the hon. member for Broadview, and which has been referred to by the hon. member for Lincoln (Mr. Lockhart), I would point out that under the British North America Act the matter of health comes within provincial jurisdiction. We have really very little legal control in that regard. The department, however, has always assumed that one of its main duties is to see to it as far as possible that commodities produced in this country can be sold abroad. For that reason we have attempted in the first place to keep our live stock particularly clear of disease, because other countries will not admit that live stock if disease is prevalent here. The same idea has followed into the matter of killing and the inspecting of abattoirs where meat is killed, and in the matter of canning and all that sort of thing. As a matter of choice, most of the abattoirs in Canada do require inspection by the department. The department make that inspection; they pass the meats that go out from the abattoirs, and municipalities and provinces alike have the benefit of that inspection. But when it comes to a matter of enforcing the law in that regard, it is in a little different field, and in some cases we are not in a position to act as suggested by the hon. member for Broadview. There are certain things that probably we could not do, that we would have to leave to the municipalities and the provinces, because we have not the authority to enforce. But we have followed the practice of going just as far as we can possibly go in cooperating with municipalities. Probably I should put it the other way round: we have been going as far as the constitution, the laws and regulations of the provinces and municipalities themselves, and the cooperation of abattoirs and people interested in marketing their meats will go, in order to try to enforce all over Canada the same kind of regulation in connection with the marketing of these products. I think probably the best answer I can give as to whether or not we have that cooperation is the fact that the great percentage of the meat that is going out from these abattoirs is government inspected. That would indicate that municipal bodies, provincial governments and the abattoirs themselves are inviting cooperation from the federal government in seeing to it that any meats that are sold to the public are meats that are fit for human consumption.


Norman James Macdonald Lockhart: That covers the matter of carcasses that are going out for consumption over the retail counter. But is the minister sure they do not go into canned products and things of that kind? That was the point I was more concerned about.


James Garfield Gardiner: Well, that would not be possible in any of the plants where inspection is carried out by the federal government. With regard to some others, it may be.


Thomas Miller Bell: Is it not a fact that in the inspected abattoirs, for example, when hogs are slaughtered and there is found to be disease in the heads of the hogs, the heads alone are condemned and the carcasses are sold for human consumption.


James Garfield Gardiner: Yes; with regard to certain diseases, where local infection takes place, that would be true.


Mark Cecil Senn: Are the same standards of health required for meat that goes into cans as for meat sold by the carcass? May I point out that canned meats were imported into this country last year equivalent, I believe, to some twenty thousand head of cattle. What supervision and inspection, if any, are undertaken when that class of goods comes into the country?


James Garfield Gardiner: Official certificates are
supplied from the governments of those countries, just as we have to supply official certifi-
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cates from this country to other countries. We get the same kind of official certificate as others require of us. which gives just as good security as we can possibly have in respect of these countries.


Thomas Miller Bell: Is it not also a fact
that if farmers bring into these inspected areas carcasses that are in any particular diseased, the whole of the carcass is destroyed? Why should not the government enforce the regulations upon the big packers as well as upon the farmers?


James Garfield Gardiner: May I get the intent
of the hon. member's question? Has it to do with carcasses brought in?


Major James William Coldwell: Carcasses slaughtered
on the farms, say, and brought in for consumption in an area where there is inspection.


James Garfield Gardiner: They are under exactly the same regulations as the abattoirs.


Major James William Coldwell: I do not see just how
that can be. If part of the carcass is diseased the whole of it is destroyed should it come from the farm into the city. I believe that to be the case from my own association with a municipal body where we went into this problem very carefully. One of the reasons why we did not adopt meat inspection was just exactly the one to which I have referred. If the animal is slaughtered in the abattoir, then, in the case of certain diseases, only the part of the carcass affected is destroyed. I wonder if the government has considered the making of regulations to ensure equality to all concerned.


James Garfield Gardiner: I am informed that the regulations in so far as they are applied here are the same. Of course there may be regulations in towns and cities or provinces that I cannot speak of from this place at the moment.


Mr. WILTON:: What is the official disposition of a condemned or diseased carcass? The minister made the remark a moment ago that it went into the tank. I am not sure, and many who are not familiar with the butcher business do not know, just what that means. Is it put in there to purify it before it is sold? The thing I am particularly interested in is the final disposition of a condemned carcass.


James Garfield Gardiner: It is put into tanks and rendered, and as I understand it, it is not used for human consumption. Most of it goes for fertilizer.


Thomas Clement (Tommy) Douglas: I asked the minister a
question a short time ago, and I want to pursue it because of the two questions that have been asked. In replying to the questions the minister dealt with meat going over the retail counter and meat going into cans, but what about cattle that have been condemned for dairy purposes and a strong suspicion remains in the mind of the government veterinary that it has been butchered and peddled through the town? Of course he has no authority to act, but is there any way by which the matter can be reported to the provincial and municipal authorities and be taken care of? I know of government men who have strongly suspected that that was going on, but it is not within their jurisdiction to do anything about it.


James Garfield Gardiner: Provincial and municipal.


Thomas Clement (Tommy) Douglas: I was wondering if the
machinery set up could be correlated so that that could be taken care of. It is not the function of the man in charge, and yet it is a tremendous menace to the public health.


Mr. LEADER:: Before this item carries I
would like to ask the minister a question that has often been asked of me. Is it the intention of the government to investigate the prevalence of Bang's disease? Following that up, is it their intention to carry out tests, and if the cattle are found diseased, to slaughter them, and will the owners of the slaughtered animals be compensated as in the case of tuberculosis?


James Garfield Gardiner: The department has
been investigating the spread of Bang's disease and has been doing a good deal in order to check its spread among cattle. As a matter of fact as I understand it we would be compelled to do so, whether we desired to or not, 'because of regulations particularly in the United States with regard to the export of cattle. All the cattle that are shipped to the United States for dairy purposes have to foe tested for Bang's disease, and they are tested by the government here in order to prevent infected stock going to that country, which in the end might affect our trade with the United States.
So far as the question of destroying the animals is concerned, I do not think there is any regulation at the present time requiring that this should be done. There is a regulation which requires the marking of animals which have been tested and are found to have Bang's disease, in order to safeguard those who may purchase breeding stock, so that they may be protected against purchas-

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ing an animal that has this disease. So far, however, no provision has been made for paying for any animals destroyed, and I think I am right in saying that there is no regulation which compels the destruction of these animals.


Harry Leader: I believe the minister is right, but the day may come when the government will have to do something in regard to this disease. From my experience, in some states not only dairy cattle but beef cattle as well must be tested for this disease. I ship cattle to the United States, and I always have my cattle tested for this disease. When the time comes that the government must undertake work of this nature and compel a test, I think for the protection of the live stock industry of this country and also for the protection of the human race, as the hon. member for Broadview (Mr. Church) pointed out to-day, animals found to be suffering from this disease should be slaughtered and the owners should receive compensation.
Mr. GRAY1DON: I should like to direct a question to the minister with regard to something he said early in the consideration of the estimates this afternoon with reference to a proposed tuberculosis free area around the city of Toronto, including the county of Peel. I do not wish to embarrass the minister by asking a question which he may not be able to answer at the moment, but I should like his undertaking that he will let me know what progress has been made towards bringing the county of Peel, which I represent, within that area.


James Garfield Gardiner: It is already established in that district. The counties covered are Halton, Peel, York, Ontario, Durham and Northumberland, and I understand that the tests are starting this week.


Major James William Coldwell: I should like to ask another question. Is any provision made for assistance to veterinary surgeons who are working on these problems in the dried out and drought areas? I have in mind men who gave a great deal of service in connection with the new disease in horses last year. They covered hundreds of miles, and I know they found it very difficult indeed to get payment from the farmers who had been afflicted with drought, grasshoppers, and so on. I wondered if the department had anything in its estimates this year which would enable something to be done for veterinarians, just as some of the provinces and municipalities have done something for the medical men. After all this is a dominion matter, concerning the health of animals, and some provision might be made here.


James Garfield Gardiner: There is an amount of $45,000 in the estimates for part time veterinary services across Canada, but of course the hon. member for Rosetown-Biggar (Mr. Coldwell) will understand that there would not be a very considerable portion of that amount to be applied to the area he has in mind. From time to time I have received communications from veterinarians and others in that district indicating that the farmers are unable to pay the veterinarians anything for their services. Some of these veterinarians have been maintaining themselves with difficulty for four or five years, but have continued to render their services. The municipalities, the provincial government and to a certain small extent this government, have been cooperating in attempting to maintain some of these services, but the number that could be helped would be very limited.


Major James William Coldwell: Is the amount greater
or less than in former years, or the same?


James Garfield Gardiner: It is about the same as
last year. Of course the provision that is made for medical men, that was mentioned a moment ago, is not under any regular vote of any department of government either here or in Saskatchewan. That is under the relief program, for which moneys were provided by this parliament, but those moneys were distributed largely by the provincial government and the municipalities.


Thomas Alfred Thompson: I understood the minister to say a moment ago that the diseased carcasses went to the tank and were largely used for fertilizer. I should like to ask if it is not a fact that when cattle are inspected and found to have tuberculosis, tickets are put in their ears marked "T.B." and they may be sold f d drovers and go into the market and be used for human food.


James Garfield Gardiner: The animals that are
tested and found to be reactors in any of these areas or under any of the schemes of which I have been speaking go to the abattoirs under a licence which keeps them under the control of the department. When the animal is killed it is just possible it may be found that the disease does not exist at all in a form that will affect human beings, and that animal may not be condemned in the same sense as animals found to be full of the disease. After the animal is actually killed
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and examined by those competent to examine it, it may be found that the disease, if it was present at all, would not affect human beings by whom the meat might be consumed.


Mr. MacNICOL:: The answer given by the minister to the hon. member for Lincoln (Mr. Lockhart), as to just what happened to the carcasses that were marked "diseased" and sent to the tank, was hardly full enough for me. I have it in mind that the minister said the carcasses were rendered, which conveys the impression that lard was manufactured out of them, or greases of some kind. What is done with the products thus obtained?


James Garfield Gardiner: All the condemned
animals follow the course I indicated a few moments ago. If they are actually condemned they go into the tank and, as I understand it, every part of the animal follows the course I have indicated. It does not go into human consumption at all.


John Ritchie MacNicol: Then when the minister made the statement a few moments ago that they were rendered, that really had no significance?


James Garfield Gardiner: Well, it has significance, but any greases that are there would not be used as human food.


John Ritchie MacNicol: What would they be
used for?


Mr. McCANN:: How much of this estimate was appropriated for prevention of these diseases? It appears to me to be utter folly to continue from year to year to spend large amounts of money on contagious diseases among animals unless at the same time a positive effort is put forth to ascertain the causes of these diseases and discover some method of prevention. I should like to know also whether farmers are supplied with vaccines and other means of prevention free of cost.


James Garfield Gardiner: I can only say this
department does not handle vaccines for that purpose, but the provincial departments do. That is true at any rate as far as Saskatchewan is concerned; I am not so sure of other provinces. Saskatchewan has been distributing vaccines free for many years. That comes under the provinces. As to what we are doing to eradicate disease, the whole system of dividing the provinces into districts and killing the animals afflicted with disease is for that purpose.


Mr. ROWE (Dufferin):: Is it the intention of the government to impose regulations against Bang's disease similar to those the United States impose against our cattle, or is it now in operation?


James Garfield Gardiner: We have done that.


John Ritchie MacNicol: In the report of the
auditor general for 1934-35 under these several items I notice that some $80,000 or $90,000 worth of motor cars were purchased for the department. Is there anything in this particular item for the purchase of motor cars?


James Garfield Gardiner: In order to answer that question for the whole department I would have to go through all the branches. If it will suit the convenience of my hon. friend I will have that done for another day. For this particular branch there is $7,000 included.


John Ritchie MacNicol: That answers my question with reference to this item. I see it was $85,000 for all in 1934-35; we have not as yet the figures for 1935-36. And now we are going to buy some motor cars again this year.


Percy John Rowe: Referring back to
the importation of breeding poultry, is it the intention of the department to impose similar regulations with reference to the importation of chicks to those with reference to other breeding stock? Personally I think it is of great economic importance to consider that very carefully in view of the recent trade agreement with the United States, realizing that many hatcheries, at least along the border in the different provinces, are fearful that they will be driven out of business under that trade agreement.


The CHAIRMAN:: Order. I do not think the hon. member is in order in discussing anything in regard to the trade agreement under this item.


Percy John Rowe: I submit to your
ruling, Mr. Chairman, but I am certainly not discussing any trade agreement; I am only pointing out that the prospects are that the importation of chicks will be greatly increased, at lower cost than the cost of production in Canada, and that regulations should be imposed and strictly enforced that will give protection not only to the producers but also to those who buy the chicks. The matter is of national importance, and anyone who understands anything about the poultry business will agree, that only blood-tested chicks, as in the case of cattle, tested for Bang's disease should be admitted, because it is only by such careful inspection that any flocks are made profitable. It is of great economic importance to those

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in the poultry business in Canada that they be protected to that extent; it is just as important as protection against tuberculosis. Is it the intention of the minister to see that these regulations are put into effect?


James Garfield Gardiner: It is the intention of
the department to try to prevent disease of that kind being brought into Canada through the importation of chicks. As I explained a few moments ago it is rather difficult to carry our intention into effect in provinces that have not adopted wholly the regulations that this department would like to see them adopt.


Percy John Rowe: Has Ontario
adopted the regulations?


James Garfield Gardiner: They have not adopted them, but they are considering the matter at the present time.


Mark Cecil Senn: Could we have assurance from the minister that while Ontario and other provinces in which regulations are not adopted are making a serious attempt to stamp out pullorum, chicks will not be allowed to come into this country from the United States or elsewhere unless they are free from the disease?


James Garfield Gardiner: I am informed that in
order that we might be able to do that, a change in legislation would be required. If I understand the question it is that since we are controlling the coming in of live stock, such as dairy cattle, we should also control the coming in of chicks; that if we have the power to do the one we should be able to do the other.


Percy John Rowe: You have the
power.


James Garfield Gardiner: Under the present
legislation the department has not the power to do that.


Percy John Rowe: This house surely
has the power to control importation, and I suggest it is ridiculous if we do not impose such restrictions on the importation of what, I repeat, promises to be the greatest number of chicks we have ever had coming into the Dominion of Canada in any one season.


Mr. MUTCH:: How many veterinary surgeons are temporarily employed in connection with the health of animals branch in Manitoba, and what has been the length of their term of temporary employment?


James Garfield Gardiner: If the hon. gentleman
will put that question on the order paper, I will get the information for him.


Mr. STEWART:: I am interested in the
activities of the department in connection with bovine tuberculosis. I understand that certain areas have been established in which the disease has to a large extent been eradicated. One such area I have in mind is the eastern part of Ontario, from the Quebec border to the Rideau river, and I understand that the county of Prince Edward is another. I should like to know what areas in Ontario have been established and treated in that way for the purpose of eradicating tuberculosis.


James Garfield Gardiner: The list I have before me is not complete. It covers the areas in which the disease has been reduced below one-half of one per cent of those tested: Carleton county, townships of Gloucester and Osgoode; Glengarry county, Leeds county, Prince Edward counity and Russell county. I shall _be glad to have a complete list before another meeting of the committee.


Hugh Alexander Stewart: I should also like to know the compensation allowed to owners of cattle in such areas, the amount allowed for a pure bred animal and for grade animals, and whether the compensation is fixed by statute or by order in council,


James Garfield Gardiner: The compensation is fixed by statute, the maximum being $100 in the case of a pure bred animal, and $40 for a grade animal.


Walter Adam Tucker: I do not know whether they are true, but representations have been made to me regarding the effect of the present regulations in connection with Bang's disease. In districts in which it is felt that the disease may exist, the farmers get their cattle tested, and if animals are found to be suffering from the disease they are tagged. Then there is a tendency, it is said, for these farmers immediately to try to get rid of such an animal, with the result that the disease is spread more widely than it otherwise would be. It is also said that this attitude follows when an animal is tagged: The farmers say, "This animal has been tested for Bang's disease." They see it is tagged and nothing is done in regard to it, so they conclude that it is now free from the disease, when exactly the reverse is the case. Does that correctly represent the situation, and, if so, is any attention being paid to it by the minister?


James Garfield Gardiner: I am not quite clear whether the hon. member for Rosthern is speaking of all herds that may be tested by any authority. Of course an individual may test his own herd, but if the testing is carried out under any of the schemes which I
Supply-A griculture

have outlined and for which this department is responsible, animals are tagged and in the case of tuberculosis are followed through by the department, and compensation is paid in respect of these animals. There is just a possibility that some people may have their animals tested without making the fact generally known to the public, and then dispose of animals reacting to the test, but that would not happen under any of the schemes for which this department assumes responsibility.


Mr.   SEISIN@: I was very much interested in the statement the minister made a moment ago that in restricted areas only one-half of one per cent of the cattle are found to be still suffering from tuberculosis. There are, however, throughout Ontario and other parts of the dominion several accredited herds which have been under that scheme for some length of time, and I would ask whether the same percentage prevails in accredited herds as in restricted areas.


James Garfield Gardiner: Yes, the same percentage would prevail in pure bred herds anywhere within the restricted area.


Mark Cecil Senn: But there are accredited herds outside the restricted area.


James Garfield Gardiner: In fully accredited herds there are 7,225 cattle free from the disease; under process of accreditation, 1,384; not tested, 114.


Mark Cecil Senn: It comes within my knowledge that herds that have been free from tuberculosis for some length of time under the accredited herd system have been found to be again infected when the annual test is made. Could the minister give us any figures showing the number of accredited herds that have been re-infected?


James Garfield Gardiner: I understand that about twelve percent of the herds that are accredited afterwards fall down under our test.


Mark Cecil Senn: And they lose their certificate?


James Garfield Gardiner: Yes, and the process starts over again.


Thomas Clement (Tommy) Douglas: Has the appropriation for free tuberculin tests been increased or decreased?


James Garfield Gardiner: It is just about the same.


Thomas Clement (Tommy) Douglas: Does the minister think it will be sufficient adequately to take care of the applications for testing that are likely to be made on the basis of last year's figures?


James Garfield Gardiner: Of course, as the Minister of Finance explained to the house the other day, these are the general votes which are considered to be sufficient to carry on the usual, general activities of the department, but if it is found advisable-and a decision has not yet been made upon this point to go on with this work more rapidly than the present vote would provide for, additional funds would have to be provided in the supplementary estimates.


Mr. RICKARD:: Do the farmers get a bonus from the government for all cattle that react?


James Garfield Gardiner: The owner of the animal is compensated to the extent of two-thirds of its value, the maximum value of grade cattle being $60, making the maximum compensation $40, and the maximum valuation of pure bred stock being $150, making the maximum compensation $100. That is the compensation for stock that is destroyed as a result of the test.


Wilbert Franklin (Frank) Rickard: Does that apply in the tuberculosis tested areas as well as in the accredited herds?


James Garfield Gardiner: Yes.


Mark Cecil Senn: The minister was kind enough to give at the outset the figures in detail of this vote, but he read them rather rapidly and I was unable to get them all down. Would he give the committee the reason for the increase of $12,000 odd in the total vote?


James Garfield Gardiner: There is a decrease in some sections and an increase in others, bringing the net increase to approximately $12,000. There have been increases in equipment and maintenance, $3,000; personal services, part of which is accounted for by annual salary increases, $28,927; special personal services, $100; rents, $220; supplies, materials, printing and stationery, $3,000; transportation, $300. That makes an increase of $35,547, but against that there are decreases as follows: compensation, $6,063; lands, buildings and maintenance, $10,000; transportation and travelling expenses, $7,000, or a total decrease of $23,063, making a net increase of $12,484.


Percy John Rowe: What is included in personal services, $28,000?


James Garfield Gardiner: That is for all the staffs in this particular branch.


Percy John Rowe: I notice that the item for personal services is increased by $28,000, yet transportation is decreased by $7,000. I assume the increase is in the number employed.

Supply-Agriculture


James Garfield Gardiner: Not altogether. Some of it is caused by statutory increases.


Percy John Rowe: Has the minister the number of employees for each year?


James Garfield Gardiner: I have not that information for the branch as a whole; it is given only by divisions. If the hon. member would place a question on the order paper I should be pleased to give that information, or perhaps it could be given at the next sitting.


Mr. PERLEY (Qu'Appelle):: Could the minister give us any information by provinces as to the prevalence of contagious diseases of animals? At the same time he might give the amount paid to each province by way of indemnity for losses from tuberculosis.


James Garfield Gardiner: I could not give that information offhand. If the hon. member will make a motion for the necessary papers I shall be glad to furnish them. It will take some time to compile this information.


Ernest Edward Perley: I think this information is important. We could let this item stand and take up the next.


Mr. BROOKS:: I should like to know whether arrangements are being made in New Brunswick for retesting, and whether compensation is to be paid in the event of reactors being found?


James Garfield Gardiner: I am informed that this will depend upon conditions found when the first test is made or when succeeding tests are made. When the disease is reduced to about one-half of one per cent of reactors, no retest is made for a period of three years. When the percentage is considerably larger, retests are made more often.


Alfred Johnson Brooks: Is the same compensation paid to the farmer in the case of reactors?


James Garfield Gardiner: The compensation in connection with every test is the same.


Mark Cecil Senn: There seems to be some conflict between two statements made by the minister with regard to tuberculosis. He made the statement that in restricted areas the number of cattle affected was one-half of one per cent.


James Garfield Gardiner: No. I gave certain information in connection with a group of counties in Ontario in which the number of diseased cattle had been reduced to that figure, but that was only after .restricted area regulations had been in effect for some considerable time.


Mark Cecil Senn: I understand that an unrestricted area becomes a restricted area just as soon as operations are commenced. I understood the minister to say that in accredited herds 12 per cent of the cattle would become reactors at some future time. Does that mean that the test is only 88 per cent perfect? To what degree does the minister consider these tests approach perfection?


James Garfield Gardiner: An accredited herd belonging to one farmer may be subject to contamination from herds round about, but when you have an area comprising several counties, an accredited herd in the middle of that area is much better protected. The proportion of reactors in accredited herds taken right across Canada is much higher than in the case of protected areas.


Mark Cecil Senn: Would the minister say that this test is 100 per cent perfect?


James Garfield Gardiner: I am not an authority on these matters, but those who are tell me that no test is 100 per cent perfect.


Frederick George Sanderson: Shall the item carry?


Ernest Edward Perley: I think this
item should stand until the minister can give us the information requested. In the meantime we could go on with another item.


Mr. WALSH:: Are the inspectors appointed under the Meat and Canned Foods Act under the Civil Service Act?


James Garfield Gardiner: They are under the
Civil Service Act. I have the figures asked for by the hon. member for Dufferin-Simcoe (Mr. Rowe). The total for 1936-37 is estimated at 534 permanent employees while the total for 1935-36 was 492. In the case of temporaries, for 1936-37 the total is estimated at 188 and for 1935-36 it was 215. The temporary staff is down 27 while the permanent staff is up 42.


Percy John Rowe: What is the reason for 'the increased number? What extra services are to be performed?


James Garfield Gardiner: One reason would be the matter which we have just been discussing, namely, the extension of the district in New Brunswick from a fraction of the province to the whole of it. This will require an extra service. The same thing will be true of the large district which is being added in Ontario. Additional abattoirs are coming under departmental inspection. These additional services require the employment of additional staff.


Mark Cecil Senn: I think the minister told us
that the amount set aside for indemnities was
Supply-Agriculture

$6,000 less than for the previous year. If additional officials are to be employed in connection with additional restricted areas, how does the minister propose to pay for the cattle which cannot pass the test?


James Garfield Gardiner: In answering my hon.
friend, I think I can repeat the answer I gave, I believe it was to the hon. member for Weybum (Mr. Douglas). Our hope is that in connection with this matter we may be able to go much further than these estimates would indicate. If we can go only half way through the season we shall have to let part of these staffs go; if we can secure additional money to permit our going right through the season, we can carry these staffs right through the year. Of course this money would have to be voted in the supplementaries. We are making provision to carry these staffs, but if it is found impossible to do the work, then naturally we shall have to cut down on it.


Mark Cecil Senn: In former years the amount
voted for this particular matter has been absorbed before the end of the fiscal year and proceedings have had to stop, and in some instances farmers who had cattle slaughtered were not indemnified until the new vote was brought in. That was rather an injustice which the minister should take into consideration.


Mr. ROBICHAUD:: Do I understand that where an animal has reacted but the carcass has not been condemned, the owner is allowed to sell the carcass for what he can get and is given full compensation in addition?


James Garfield Gardiner: I did not quite hear the question, but I believe the hon. gentleman wishes to know what happens in connection with compensation, and how much an owner is able to get if the animal is slaughtered. Compensation is paid and the owner is allowed to dispose of the animal at the abattoir for whatever it will bring; but it is disposed of under the supervision of our officials, the department being thereby assured that in connection with the matter nothing is done that may result in the owner obtaining money to which he is not entitled.


Mr. RYAN:: What work is being done by
the temporary employees?


James Garfield Gardiner: In the great majority
of instances this is not a matter of temporary work; the employees are still classified as temporary, and eventually some will become permanent. There may be a few of them who are doing temporary work, but some of these people classified as temporary employees have been on the staff for years.


Percy John Rowe: How does the
minister hope to increase the service, how does he hope to increase inspection and take in new areas, adding 42 to the permanent staff, while reducing their transportation by $7,000 and reducing by $6,000 compensation for the reactors they inspect?


James Garfield Gardiner: My information is that
in connection with transportation, certain economies are possible which the department hopes to be able to make this year; and it will be easy, of course, in a service that requires the expenditure of some $423,000, to effect a saving of $7,000 in operating cost. That should not be difficult if the service is given proper supervision.


Mr. STIRLING:: Do the owners of cattle
that are tested pay fees for the service?


James Garfield Gardiner: No.


William Michael Ryan: How many employees in New Brunswick are working in a temporary capacity, not under the Civil Service Act?


James Garfield Gardiner: I cannot give that information offhand but I could probably secure it.


William Allen Walsh: Are there any regulations
with respect to these temporary employees? In my own district there are some temporary employees who have been acting as inspectors for at least two or three years. Are there governing the conditions of their temporary employment, any regulations which prevent them from becoming permanent employees of the department?


James Garfield Gardiner: As hon. members know, I am more or less new in the administration of a department at Ottawa. I have been accustomed to administering a department in which there is a definite line of demarcation; there comes a time when it is necessary for the government to consider whether they will keep certain persons on the staff or make them permanent. I find, however, that there is no such regulation here. I am told that it is difficult to establish a regulation of that kind in a service so extensive as the federal service. Departments depend to a large extent upon recommendations from the civil service commission.


William Michael Ryan: Will the minister also give
me the number of temporary employees in New Brunswick, where they are working, and the names?


James Garfield Gardiner: The hon. member might put that question on the order paper if he wants all that information.

Supply-Trade and Commerce


Hugh Alexander Stewart: I understood the minister to say that if the owner of a herd of cattle desires to have it established as accredited he must have five head of pure bred cattle in the herd; then the herd is tested and, if it is found free from tuberculosis, the owner receives a certificate that the herd is accredited. Is any compensation paid to the applicant for such a certificate for any cattle that may be destroyed in his herd?


James Garfield Gardiner: Yes, the same compensation as in all other cases.


Ernest Edward Perley: If the minister cannot give the information I have asked for, he might allow the item to stand.


James Garfield Gardiner: It would be absolutely
impossible to bring down in committee the information requested by the hon. gentleman. If he will put a motion on the order paper I shall be more than pleased to submit all the information he asks for, but I am informed by the officials that it would take days to compile it.


William Allen Walsh: I understand that in the
various packing houses and abattoirs there are two classes of inspectors, one a qualified veterinary and the other a lay inspector. Does the lay inspector come under the civil service commission or is he appointed by the minister?


James Garfield Gardiner: The lay inspector as
well as the veterinarian come under the civil service commission.


Harry James Barber: Do all veterinary surgeons in charge of these tests belong to the permanent service? In British Columbia how many under this item are there in the permanent service of the department?


James Garfield Gardiner: They are all in the
regular service, but they may be classed as either permanent or temporary in accordance with what I said a moment ago.


Harry James Barber: How many are there in
the permanent service in British Columbia?


James Garfield Gardiner: The full number of the
field full time service in British Columbia is ten.	[DOT]


Major James William Coldwell: Do I understand the
minister to say that all the veterinaries who perform these tests are members of the permanent staff under the civil service commission?


James Garfield Gardiner: Yes. I am informed
that all the men, even part time men, are under the civil service commission.


Major James William Coldwell: And the part time men are often the local veterinary surgeons, are they not?


James Garfield Gardiner: Yes, quite often.


Major James William Coldwell: I hope that if the
temporary staff is to be reduced and the permanent staff increased, many of the local veterinaries who have been enabled to keep going by the assistance of the government in this way will not be replaced by new men; that if anything is to be done they will have first consideration.


Mark Cecil Senn: The minister was kind enough a little while ago to give us the number of accredited herds that come under this branch of the department at the present time. There is also what is known as the supervised herd plan. Will the minister tell us how many supervised herds there are in the dominion; also how often those herds are inspected, and if possible the figures showing the number of herds that have been supervised and found free, and later found to have reacted?


James Garfield Gardiner: I will give all the information that is before me; I think it covers most of the points raised. Herds tested, 44,450; herds awaiting test, 2,992; total, 47,442. That includes all the provinces. Then the record of testing: Cattle tested for the first time, 122,149; total tests made, 255,123; number of reactors, 1935-36,	3,249; reactors
slaughtered, 3,238. That covers the supervised herd plan.


[Stage Direction]
Item agreed to.

[Stage Direction]
Civil government-Salaries and contingencies, $647,209 20.
Grote Stirling: Would the minister explain the reason for the increase of four in the number of employees?


Hon. W. D. EULER (Minister of Trade and Commerce):: The increases are almost
entirely due to statutory increases in salaries.


Grote Stirling: Do I understand the
minister to say that an additional chief clerk was required due to an increase' in statutory requirements?


William Daum Euler: The item is in connection
with chief clerk Davidson, who went to the wheat board. The position was reclassified later on. That is why the item still appears in these estimates.


Grote Stirling: As indicated on page
102 of the estimates there is an increase of one clerk, one stenographer-there are three more employees to account for, because there is a total increase of four.
Supply-Trade-Mail Subsidies


William Daum Euler: There is a reduction of
one clerk grade 1. There is an increase of one stenographer, grade 2, from 28 to 29. There is an increase of one clerk, grade 2, from 45 to 46. I think those are all the increases. There is only a net increase of one on that page, if I read it correctly.


Mr. DUNNING:: The total of four is for the whole staff.


William Daum Euler: For the whole staff, yes.


Mr. DONNELLY:: I see there is one man, director of trade routes and steamship subsidies, who draws S4,260. Who is he and what does he do?


William Daum Euler: Mr. Bawden. He looks after subsidized steamship services.


James J. Donnelly: To see that the steamships get government subsidies, or what?


William Daum Euler: To see that they do not
get any more than they are entitled to, for one thing. Supervision over the service, to see that the steamship companies carry out the contracts properly. He has been on the staff for twenty years. Subsidies have been in effect for a good many years in this country, perhaps unfortunately.


[Stage Direction]
Item agreed to.
Mail Subsidies and Steamship Subventions
Atlantic Ocean
Canada and the United Kingdom, on the Atlantic, service between, $250,000.
and South Africa, service between,
[Stage Direction]
Pacific Ocean
Columbia and China, service between,
«pl 18,800.
British Columbia and South Africa, service between, $84,000.
Canada, China and Japan, service between, $600,000.
Canada and New Zealand, on the Pacific service between, $300,000.
[DOT] ,^r\nce Rupert, B.C., and Queen Charlotte islands, service between, $12,000.
Vancouver and the British West Indies, service between, $33,000.
Vancouver and northern ports of British Columbia, service between, $18,000.
Victoria, Vancouver, way ports and Skagway, service between, $12,000.
Victoria and west coast Vancouver island, service between, $10,000.
Local .Services
Baddeck and Iona, service between, $8,000.
Charlottetown and Pictou, service between.
$20,000. *
Charlottetown, Victoria and Hollidays wharf, service between, $6,000.
Chester and Tancook island, winter service between, $1,600.
Grand Manan and the mainland, service between, $33,000.

Halifax and Bay St. Lawrence, service between, $2,000.
Halifax, Canso and Guysboro, service between, $6,750.
Halifax and Sherbrooke, service between, $900.
Halifax, LaHave and LaHave river ports, service between. $2,000.
Halifax, South Cape Breton and Bras d'Or lake ports, service between, $3,500.
Halifax, Spry Bay and Cape Breton ports, service between, $4,000.
Halifax and west coast of Cape Breton, service between, $4,000.
Ilie-aux-Coudres and Les Eboulements, service between, $1,100.
Mulgrave. Arichat and Canso, service between, $33,750.
Mulgrave and Guysboro, calling at intermediate ports, service between, $9,500.
Murray Bay and north shore, winter service between, $40,000.
Parrsboro, Kingsport and Wolfville, service between, $1,500.
Pelee island and the mainland, service between, $8,250.
Pictou, Mulgrave and Cheticamp, service between, $11,000.
Pictou, Souris and the Magdalen islands, service between, $37,500.
Quebec, Natashquan and Harrington, service between, $85,000.
Quebec, or Montreal, and Gaspe, calling at way ports, service between, $60,000.
Rimouski and Matane and points on the north shore of the St. Lawrence, service between, $50,000.
Riviere-du-Loup and Tadoussac, and other north shore ports, service between, $8,000.
St. Catherine's Bay and Tadoussac, service between, $3,500.
St. John, Bear river, Annapolis and Granville and other way ports, service between, $1,500.
St. John and Bridgetown, service between, $800.
St. John and Margaretville, and other ports on the bay of Fundy, service between, $2,500.
St. John and Minas basin ports, service between, $5,000.	'
St. John and St. Andrews, calling at way ports, service between, $3,000.
St. John, Westport and Yarmouth, and other way ports, service between. $13,000.
St. John and Weymouth, service between,
[Stage Direction]
Summerville, Burlington and Windsor, N.S., service between, $500.
Sydney and Bay St. Lawrence, calling at way ports, service between, $25,000.
Sydney and Bras d'Or lake ports and west coast of Cape Breton, and Prince Edward Island, service between, $22,500.
Sydney and Whycocomagh, service between, $16,000,
Inspection of subsidized steamship services, $4,900.
Thomas Reid: There is an increase of $100,000 for the Canada-New Zealand service. Would the minister be good enough to explain that increase and tell the committee when these subsidies expire and when new contracts must be signed?


William Daum Euler: This is a one year contract, and it constitutes practically the only increase

Supply-Trade-Mail Subsidies
in subsidies. It is a service carried on by the Canadian-Australian line of which the Canadian Pacific railway is half owner. I think the Union Steamship Company owns the other half. This company has very strong competition from heavily subsidized United States lines, and representations were made to the department that in all probability the service would have to be discontinued unless the subsidy was increased. I think it is the intention of the company next year to provide new steamers on this service, when possibly they will apply for a further increase. In view of the importance of the trade that we have with New Zealand it was thought necessary to make sure that the service would be continued. I admit to the committee at once that it is not very much to my own liking to make any increase. In some cases decreases have been made, which have been emphatically protested against. In this case, however, we thought the increase was justified because of the tremendous competition to which this company is being subjected and more particularly because of the importance of the trade carried on between Canada and New Zealand.


Grote Stirling: Is there not also pretty severe competition with regard to the China service, where there is a reduction of $149,000?


William Daum Euler: There is competition, yes; I must admit it. To be quite frank, the reduction occurs in that subsidy because of the desire to decrease the expenditures of the government all along the line wffierever possible:	We have been saying and many
people have demanded, although not everyone agrees with this, that we ought to make some attempt to balance our budget, and I think about the only way that can be done, unless it is desired to increase taxation, is by decreasing expenditures. This particular decrease was made for that reason.


Grote Stirling: What company has this service?


William Daum Euler: The Canadian Pacific railway.


Grote Stirling: The China service also?


William Daum Euler: Yes.


Mir. WOODSWORTII:: When representations are made seeking an increase, may I ask what statement is required from the company? Does the department receive an itemized statement as to the cost of the service, and so on?


William Daum Euler: Yes; we ask for and receive the financial statement covering the operations of the previous year, showing what their loss 12739-19
or profit may have been. In all cases, I may say, in connection with these larger services quite heavy losses have been shown, especially after allowing for depreciation. As far as depreciation is concerned, one has to use one's judgment as to whether the amount estimated for depreciation is correct and whether the loss as shown is correct.


Mr. BENNETT:: Lloyd's settle that for ships under their classification at four per cent per annum.


William Daum Euler: Nearly all these services show losses after allowing for depreciation. Practically all these services, the Atlantic service, the China service, the New Zealand service and others, carry mail, and if we did not grant a subsidy we would have to pay them a certain amount through the Post Office Department. I should be better pleased if the Post Office Department rather than the Department of Trade and Commerce had to pay for this, but in any case there would be some expense for carrying the mails, though the expense wTould not be as great as the amount of the subsidies.


Thomas Miller Bell: I should like to ask the minister how many ships this company has in operation, what is the size of the ships and how frequently they sail between Canada and New Zealand.


William Daum Euler: The New Zealand service has two ships, the Niagara and the Aorangi, sailing every four weeks.


Major James William Coldwell: How large are these ships?


William Daum Euler: The gross tonnage of the Aorangi is 17,491 tons and of the Niagara, 13,444 tons.


Mr. PELLETIER:: They both belong to the Canadian Pacific Railway Company?


William Daum Euler: Yes.


Mr. MacINNIS:: Are they of Canadian register?


William Daum Euler: No; they are registered in London, England.


Angus MacInnis: Before any subsidy was granted, was any investigation or any report required by the government as to wages and working conditions on these ships?


William Daum Euler: I am afraid I must tell my hon. friend that there is no such specification in the contract and, so far as I know, there has been none. We might be able to insert something of that kind in future, but as yet there has been no stipulation with regard to wages.



Supply-Trade-Mail Subsidies


Angus MacInnis: I raised this question several years ago with a former Minister of Trade and Commerce, and on one occasion it was stated that the matter would be looked into. It is very important that when this government grants a subsidy or any other assistance to a private institution, some stipulation should be made as to wages and working conditions involved, just as is done in contracts for public works.


Thomas Miller Bell: I should like to follow that up with another suggestion. This subsidy is fairly heavy, and it seems to me that the department might inquire into the kind of labour that is used on these ships, inquire into the conditions as suggested by the hon. member for Vancouver East and inquire whether British subjects benefit from these subsidies in the receipt of wages and salaries. That is an important point. We are paying these subsidies and we should endeavour to see exactly how the money is spent, and what the working conditions are.


Mr. MARTIN:: Does the subsidy for the service between British Columbia and South Africa apply to travel both ways? That is to say, does it apply in the case of travel from South Africa to Canada?


William Daum Euler: It applies only one way. This is a three year contract not yet expired.


Paul Joseph James Martin: Am I to understand that it applies only to travel from Canada to South Africa?


William Daum Euler: Yes; the boats return by way of India, I understand. There is no subsidy for that.


James Shaver Woodsworth: Regarding working conditions and wages, we have had this matter up from year to year, and from time to time we are informed that it will be looked into. I do not think that is good enough. We have the Canadian Pacific Steamships on the west coast operating a number of boats manned by Chinese crews instead of by Canadians. I have nothing in particular against the Chinese if they are paid reasonable wages, but the Chinese are employed because they work more cheaply than do Canadians.
Furthermore the complaint is made to me again and again that when these ships need repairs, instead of their being repaired in the dry dock at Vancouver the repair parts are frequently put on board the ship and taken to China and the work is done in China. I do not see why we should give these huge subsidies to ships of British register, manned

almost entirely by English officers although again I have no objection to Englishmen; but what is more serious than all is having people of other nationalities working at a very low wage. Just as we recognize that there should be a fair wage clause in contracts for public works, so surely there should be as a condition of any subsidy a provision for fair wages and labour conditions, and I think we should have some assurance from the minister that there will be.


Thomas Reid: I hope the minister will not take all the remarks of the last speaker very seriously, because I strongly object, even if Chinamen were being paid the same wages, to hiring Chinamen from Hongkong. I have a resolution on the order paper for discussion later, but I do object to hiring men from foreign countries for Canadian or British ships.


James Shaver Woodsworth: I am sure the hon. member for New Westminster will back me up in insisting that we should have control over conditions of labour on board these boats.


Thomas Reid: Yes, I will.


Samuel William Jacobs: How can he back you up when he says you are not to be taken seriously?


William Daum Euler: I suppose the subsidy is given on the basis of service rendered. Perhaps the government in giving Canadian money to these steamship people should have something to say in regard to the wages paid. Of course this is a factor; if we did insist on this point, these ships would not employ Canadians, because they are not ships of Canadian registry. And if it were insisted upon that Canadians be employed undoubtedly the operating expenses would be much greater and doubtless a higher subsidy would be demanded, and would be justified. So we enter the field of what is the right and proper thing to do, whether the government of Canada should constitute itself the guardian of wages generally. I am not prepared to say as to that. There is something in what my hon. friends say, that we should insist that higher wages be paid and that white labour be employed, but I am credibly informed that it is practically impossible to obtain all white labour in the service of these vessels. Oriental labour could not be replaced by white labour without greatly increased expense, and I am told that it is absolutely impossible to obtain white labour to do some of the work on these vessels. I am perhaps not as familiar with this as I might be, but I shall be glad to look

Railway Act-Rates on Grain
into it again. I cannot give any undertaking at the moment that I would be disposed to hold up the subsidy if these boats did not accede in every respect to the request that my hon. friends are making. I say that with all respect to their opinion.


Mr. KINLEY:: I quite agree with the sentiment expressed by the hon. member from British Columbia. This is a vital question in Nova Scotia as well. Any government in paying a steamship subsidy should protect its own nationals. We should protect our seamen upon the sea; other countries are doing this. We are subject to competition which as a young country we cannot face. Perhaps the Merchant Shipping Act is more to blame than is the Department of Trade and Commerce; that question will come up later. But I want to assure the hon. gentlemen that I shall be behind them in every effort to protect the interests of our Canadian seamen.
At six o clock the Speaker resumed the chair and the house took recess.
After Recess
The house resumed at eight o'clock. RAILWAY ACT AMENDMENT
Mr. THOMAS REID (New Westminster) moved the second reading of Bill No. 2, to amend the Railway Act (rates on grain)'.
He said:	Mr. Speaker, the bill which I
have introduced and which is before the house this evening has been brought before the house by myself for the fifth time, I believe, since 1930. Having on previous occasions gone very fully into all aspects of the appeal which we in British Columbia have been making for equality in freight rates, it will perhaps not be necessary for me this evening to go as fully into the matter as I have done in former years. Nevertheless it might perhaps be well for me to mention some of the salient points connected with the fight which we in British Columbia are now and have been waging for many long years past.
It might not be amiss for me to say-and I do not believe I am over-optimistic-that we are expecting during the next four or five years some better results than we have had in our fight on this question from 1930 to 1935.
At the outset, Mr. Speaker, let me assure you and the house, for the benefit of the new members particularly, that in the appeal which British Columbia is making through the medium of this bill we are not asking for
12739-19J
any special consideration. The people of British Columbia are asking simply that they be granted that equality in the matter of freight rates which has existed in the other provinces since the railways first came into existence.
I would ask you, sir, and also hon. members, why it is that when grain is hauled from Calgary or Edmonton eastward it is designated simply as grain, and yet when similar grain leaves the prairie provinces and heads towards the Pacific coast the railway experts or the railway companies classify it as either grain for export or grain for domestic use. They are, in other words, actually saying to the shippers:	Is this grain going to be consumed in British Columbia? Because if it is we are going to charge you twice the freight rate that we charge the people of Japan or Great Britain for transporting similar or better grain. That, in fact, is what the railways are saying to shippers and users of grain, -and they have persisted in saying it for many, many years.
Now this differentiation and inequality cannot be based upon the ground that it costs more to haul grain into British Columbia than it does to haul grain eastward either to the maritime provinces or to Fort William, for might I point out that the cost of hauling grain into British Columbia is not any greater. As a matter of fact, the actual evidence which was produced in the different appeals which have been heard on this question shows that there is no railway expert competent enough to tell exactly what it costs to haul one ton or one pound of grain.
Then again, there has been in the minds of many people that old story about the mountains; that due to the extra grades and extra engines required, and so forth, the people of British Columbia must necessarily pay a higher freight rate than do the people of the east. I shall not go into that question in detail, but I have before me records to show that not only were construction costs of the railways into British Columbia less than in other parts of the dominion, especially into Fort William, but maintenance and upkeep costs, pusher mileage and all that goes into railway operation are much less in British Columbia than in the eastern provinces. It cannot be too often repeated, that the Canadian National railway line into British Columbia has the lowest grade in the Dominion of Canada. I want to repeat that: The Canadian National railway line into British Columbia is the lowest grade of any in the dominion.


Richard Bedford Bennett: Mountain grade.

Railway Act-Rates on Grain


Thomas Reid: Mountain grade or any other
grade. I can give the grades if the right hon. leader of the opposition wants them. I can give the grades into Fort William. It is a low level water grade, and the question just interjected compels me to repeat what I have said because it would seem that not all members believe or fully realize the truth of the statement I have made. I repeat that we have into British Columbia over the Canadian National railway the lowest grade, mountain grade or prairie, in the Dominion of Canada.
I am now going to make the strong statement that the freight rate structure of Canada is antiquated and should be thrown overboard. The railway experts in my opinion are actually blocking the progress of this country by always raising the question of through rates, export rates and such like. They do not seem to realize that we are living in a day of progress with motor transport, and the people of this or any other country are not interested in these special arguments that experts bring forward. What the people of this dominion are primarily interested in is how much or how little it will cost them to transport their produce. It is service they are looking for to-day, and I want to repeat that in my opinion the railway experts are just blocking the progress of this country, and indeed, to the detriment of even the railways themselves.
I am glad that at the dominion-provincial conference the transport question was considered. True, it was not the railway problem which we have that was under discussion but the question of transport, and I was pleased to note in the bulletin which was placed in the hands of every member of the house the following recommendation with regard to the regulation of traffic:
That the Minister of Transport arrange to collect information regarding rates prescribed or charged by public carriers of freight and passengers in the various provinces and rates charged by the railway companies and communicate such information to the provinces to the end that a fair and equitable basis_ may be arrived at for the establishing of uniform rates for highway transportation of passengers and freight.
I wonder how the Canadian people would feel if different rates existed in this country for hauling passengers over the same route or over routes of a like distance. Just to show how idiotic some of the freight rates charged are, I shall give the rates on only a few products. Take coal, eggs, butter, dressed poultry, fresh meats and canned goods hauled from Calgary or Edmonton into Vancouver or New Westminster. The rate on

eggs from Edmonton to Vancouver is $1.10, but if a shipper wants to ship back those same eggs from Vancouver to Edmonton over the same route and by the same train, the cost of transport being no greater, he is charged $1.13. And the same is true with regard to butter. The rate from Edmonton to Vancouver is $1.37 per 100 pounds, but if you wanted to ship that back to Edmonton, oh, it would be just too bad, for the railways would say: We will charge you $1.49. And so on down the list. One could mention five hundred different commodities going over the same route and over a like distance where one rate is charged going to the coast and a higher rate coming back. These railway experts have a fine system. They will tell you that that is the through rate, or advance some other argument, and so we find ourselves blocked always by these so-called railway experts.
I shall give only one or two more instances because I have dealt with the matter very fully on previous occasions. I quite realize that this is not the place to make a complete new freight rate structure for this country; I admit that quite frankly. I quoted what I did with a view to bringing home to hon. members a realization of the idiotic, chaotic and archaic system which has been in existence in Canada for many years. I maintain that the continuance of such a system is blocking progress and is hindering trade. I warn the railroads, as I have warned them before, that if they do not wake up and get rid of some of these railroad experts they will find their rail traffic will have completely disappeared and gone into the hands of motor transport companies. The railroads should consider what has been done in other lands, particularly in Great Britain. In that country a great advance has been made during the past year in railway transportation, but here it seems that the railways are not inclined to make any progress. We have the same old system that was in existence in 1867. The people are now, however, demanding a service at a reasonable price and they are not interested in through rates and expert excuses or arguments.


James Shaver Woodsworth: If general freight
rates cannot be discussed in the house, how can the hon. member contend that a particular matter can be brought before parliament and discussed regardless of the general freight rates structure?


Thomas Reid: If I understand the hon. member rightly, he is asking whether it is right "to discuss one particular freight rate when general

Railway Act-Rates on Grain
freight rates should not be discussed. This I might say is a very particular rate and, besides, parliament has dealt with the question already. In 1897 the Crowsnest pass agreement was put into effect by parliament. This matter was taken up again in 1925 when parliament dealt with the haiding of grain and flour. While there may be something in the argument that this is not the place to discuss general freight rates, the fact remains that parliament dealt with this matter back in 1897 and affirmed it in 1925 when certain amendments and changes were made to the act. I think it is quite proper to bring up in the House of Commons a matter pertaining to the hauling of grain and grain products, a subject which has been dealt with by previous parliaments.
There are one or two points I should now like to make clear for the benefit of those new members who were not here when this argument was advanced previously. The distance from Calgary to Vancouver is 642 miles, while from Edmonton to Vancouver it is 776 miles. The railway board have, however, laid down the rule that freight rates must be computed on the same distance, although the Canadian Pacific railway have an advantage of over 134 miles. Grain leaving Edmonton or Calgary for export, say to Japan or China is carried the 642 miles for 20 cents per hundred pounds. The same grain is carried from the same points to Fort William, a distance of 1,242 miles, for 26 cents. If the grain routed westward is intended, however, for consumption within British Columbia, then the freight charges are quite a different story. Until some small change was made in the tariff arrangements we were called upon to pay, not 20 cents per hundred pounds but 41i cents per hundred pounds. That is what we have to pay on our mill feed requirements which constitute 50 per cent of the needs of the. poultry farmer or the dairyman.
I well remember when I introduced this bill for the first time. There were certain members from the maritime provinces who took the view that if British Columbia was given any concession they would have to rise in their places and demand some concessions for the maritimes. Let me say to the various members from the maritimes that if we had *the same rates enjoyed by the maritime provinces I do not think they would hear much of a kick from us.
I should like to give one or two further instances of haulage distances and freight rates in an effort to show the injustice which British Columbia has suffered for many years. The distance from Fort William to Quebec is
1,142 miles and the rate is 18| cents per hundred pounds. Compare that with the 414 cents paid for 642 miles from Edmonton and Calgary to the Pacific coast. The distance from Fort William to Halifax is 1,723 miles and grain is hauled this distance for only 26 cents *per hundred pounds. Do the railways use cheaper labour, less coal or are their running expenses lower for hauling to the maritimes than they are for hauling to British Columbia? The fact is that the crews receive practically the same wages in both instances and other expenses are the same. As I have pointed out before, grades are lower over the Canadian National Railways into British Columbia and maintenance costs are less than is the case on many divisions around Montreal or Quebec or Fort William. The construction costs in the first instance were also much lower.	[DOT]


Mr. VENIOT:: What is the domestic rate
on western grain to the east?


Thomas Reid: I believe the domestic rate is some 46 cents for the 1,723 miles, but we are paying 414 cents for 642 miles.


William Michael Ryan: Is the hon. member comparing the home consumption rate with the export rate?


Thomas Reid: There is just one rate from
Fort William to Quebec, but there are two rates applying from Fort William to Halifax. The export rate is 26 cents while the domestic rate is 46 cents. The export rate to British Columbia is 20 cents as compared with 414 cents, domestic. When I previously introduced this question the then Minister of Railways, Mr. Manion, had a great number of figures before him and he insisted upon comparing rates charged in Canada with those charged across the line in the United States. Apparently the railway experts had let him down on that occasion, because I pointed out then, as I am going to point out again, that rates from the wheat fields of Montana to the poultry and dairy districts of Washington are more reasonable than those from the prairie provinces to British Columbia. I would point out also that in the United States the grades are far heavier because of the lay of the land on the Pacific coast. The further south you go the higher are the mountains. Edmonton is 1.800 feet lower than Calgary and Seattle is about as much higher than Vancouver.
Let us now' see what poultrymen in the state of Washington are getting in the way of rates. I intend to take distances almost comparable with those I have quoted already. The distance from Montana to Seattle is 732 miles and the rate is 30J cents. Poultrymen and dairymen

Railway Act-Rates on Grain
;n the state of Washington are able to obtain their feed requirements much cheaper than we can in British Columbia. This afternoon we were discussing poultry. Let me point out this interesting fact, that the extra cost we are called upon to pay when we purchase grain for domestic purposes, as compared with that which our competitors have to pay, is equal to two cents on each dozen eggs. That is how it works out on the average per year per hen -I am taking 132 eggs yearly as the basis of my calculation. If we in British Columbia enjoyed the same rate as is accorded export grain, we should save at least two cents a dozen on our eggs.
Again, take Bozeman in Montana, a distance of 764 miles. Grain is hauled there for 31i cents, a greater distance than in the case of grain coming from Edmonton and Calgary; and what is more, it is hauled over higher and steeper grades, because coast grades into the state of Washington are far greater than grades into British Columbia.
I have not, at this time, gone very deeply or at any great length into the question of freight rates as affecting grain and grain products. I could go quite fully into the subject, but I do not wish to weary the house; having introduced this bill for the fifth time, I do not want to be considered a nuisance by discussing the matter at great length on every occasion. As I have said, however, each time I have brought it in, I intend to keep at it until we in British Columbia obtain some measure of equality of treatment. I intend to keep up the fight, not from a personal point of view, but on behalf of our people in British Columbia who have been called upon to pay extra millions of dollars as compared with what people in other parts of the dominion pay, and rates they have enjoyed for many years.
The few remarks I have made with respect to comparative rates should bring home to every lion, member the idiotic system under which this country labours. The railways want, trade, and they could build up trade if they went about the matter properly; but they will never build up trade unless the rates are better adjusted. Moreover, as time goes on, they will have to meet more serious competition on the part of the truck. I know that two years ago and last year trucks were hauling apples from Okanagan into Vancouver to the disadvantage of the railways, and as roads improve motor transport will certainly steal more traffic from the railways so long as they keep within the shell that surrounds them, sticking to the old system instead of meeting competition squarely or giving to the people service for the money paid out for transportation.
[Mr. Reid.l
Let me say this to the new Minister of Railways (Mr. Howe). It would be well for him when investigating the railways to note that in the United States better consideration is given shippers of mixed cargoes, and manufacturers as well, than is given the people of this country in the matter of railway freight rates. Almost, if not quite, on every occasion that I have brought up this subject I have been told that this is a matter not for the House of Commons, but for the board of railway commissioners. Well, I have stated previously and I state again that British Columbia can never hope for justice from the board of railway commissioners.


Mr. HEAPS:: Why?


Thomas Reid: Why? I can tell you why; it is because the board is always, in the words of Edward Bellamy, looking backward. Every time we go before the board of railway commissioners with our plea for justice the statement is made-I have it under my hand- "Well, judgment was rendered on this question away back in 1917 and later and so we cannot alter that decision." How in the name of heaven can you overcome an attitude like that? I am not unmindful that the present interrupter would have liked to support the measure, but he was afraid that if freight rates were lowered the railway men might suffer a reduction in wages.


Abraham Albert Heaps: I have never made a remark
of that kind. I am not, as the hon. member implies, objecting to a lowering of the freight rate structures, but I do object to parliament being a freight rate fixing body.


Thomas Reid: Just the old, old story. This
is an old story and I suppose it has to be told until it is taken in. The hon. member for East Kootenay (Mr. Stevens), in a speech this year, said that this was the court of the common people, the highest court in the land. Having found ourselves up against a stone wall in the shape of past judgments rendered by the board of railway commissioners, we now come into this house, the court of last resort, with the cry of the common people of British Columbia that steps be taken by this parliament and by this government to remove the injustice that was done long years ago and repeated in 1925 when the act was changed and we in British Columbia were left out and discriminated against while those in the east were allowed to enjoy a measure of reasonable freight rates.
The railways usually put up the old argument: If we reduce rates we shall go out of business; times are bad. That cry was made in 1925 and in 1926, but anyone who will look at the records will find that when export rates

Railway Act-Rates on Grain
were reduced, Pacific coast ports became the chief exporting ports of the dominion, and trade increased. It may interest the new members of the house to know, if they are not already aware of the fact, that in 1933 through the ports of Vancouver and New Westminster more grain was exported than through all the eastern ports put together.
I realize the objection put up by milling companies, boards of trade and other bodies, but I submit that it is time we had a real confederation of provinces in this land, and there can be no real union or confederation so long as one province is kept out and treated like a stepchild.


Mr. VIEN:: Is it not a fact that the movement of grain towards Vancouver, which the hon. gentleman has just informed us has increased considerably, has been the result of the decision of the board of railway commissioners in 1927, in the general freight rates investigation, wherein rates on export traffic westbound to Vancouver were lowered to the same basis as rates on the same traffic moving to Fort William?


Thomas Reid: Before I answer that question may I say that I am very glad to have in the house a former member of the board of railway commissioners; I am particularly pleased, because this discussion should become interesting indeed. And let me say to the commissioner, now that I have him in a place where I can speak to him-


Thomas Vien: Former commissioner.


Thomas Reid: Former commissioner. The
rates were presumably lowered, and if any reduction was given by the board of railway commissioners it was only after a great deal of fighting and the expenditure of a lot of money, but they are not yet down to the Fort William rates. On their face they are, but mile for mile they are not.


Thomas Vien: May I correct the hon. gentleman? They are on exactly the same basis through Edmonton except that there is a constructive mileage through Calgary on account of the higher grade.


Thomas Reid: Yes, that is the kind of statement we hear from the railway experts. We have 642 miles for 20 cents, Calgary or Edmonton to Vancouver; 1,242 or 1,238 miles from Edmonton to Fort William, 1,242 miles from Calgary, for 26 cents per hundred pounds. Is there any man with pencil and paper who is good at mathematics? We have 642 miles, 20 cents; 1,242 miles, 26 cents. And then the hon. member said that we have had export rates as in existence to Fort William. Perhaps I am wrong, but I have to be shown.
I see my time is going on, and I want to close before my forty minutes are up. I make an appeal to the government and to parliament to give serious consideration to this bill	of mine.	It i3 not	something in thenature of favoritism for British Columbia. It is a question of equality, to allow our poultry-men and our	dairymen to	have	a chance inthe	markets	of the world as	against theproducers of other countries. It is certainly galling to find, as we did last year, that there was a time when we could have sent to Japan, bought good Canadian grain, brought it back into the Fraser valley and saved twenty-five cents a ton over grain brought directly from the	prairies.	Just think	that	out. Grain
that had left the prairies, was hauled to Vancouver or New Westminster, and shipped across to Japan, and we could have sent to Japan, bought that grain, brought it back into the Fraser valley and saved twenty-five cents a ton. We ask that this grievance be investigated and rectified so as to give us justice and equality. The plea is generally raised that these are through rates, and this rate, and the next rate. It is just about time we examined very minutely some of the railway experts who have been giving such advice to the heads of our railway companies.


Thomas Vien: I did not intend taking any part in this debate, but I would like to correct a few misconceptions which apparently exist in the mind of the hon. gentleman (Mr. Reid) who has just resumed his seat. I think that I can boast of being as sympathetic as any man in this house to the claim of British Columbia for equal treatment. I am not here as a railway commissioner to defend the board, nor even indeed my own decisions. But these questions of freight rates dealt with by the board involve many and very complicated factors. In the first place, the fundamental principles underlying rates on freight for export are not the same as those underlying rates on freight for domestic consumption. If you do not give to the Canadian exporter a rate enabling him to compete in the markets of the world you simply shut him out of those markets. Grain and other products reach foreign markets from various countries where a shorter rail and ocean haul, and sometimes cheaper labour conditions obtain.
In the course of the general freight rates investigation, rates affecting the movement of traffic for export to Vancouver were considerably reduced, and I may say to my hon. friend that rates oni grain from any points in the prairies to Vancouver for export are today exactly the same as those applying to th*

Railway Act-Rates on Grain
same product moving to Fort William. These rates, however, were predicated upon the mileage through Edmonton. The mileage from Edmonton to Vancouver, if my recollection is correct, is 768 miles, and from Calgary to Vancouver, 644 miles. There is a network of railways in the prairie provinces; our two railway systems compete for the traffic originating there, and there is interswitching on their lines at many points. If rates on grain to Vancouver were fixed on the mileage of the Canadian Pacific railway from Calgary to Vancouver, that is 644 miles, on account of the competitive condition existing between the two systems, the Canadian National Railways would be obliged to assume the Canadian Pacific mileage.


Thomas Reid: Would the hon. member let me ask him a question?


Thomas Vien: With pleasure.


Thomas Reid: If that is the case,, why did that not take place in connection with freight rates from Fort William to Montreal, where the Canadian National charge 11 cents as against 30 cents charged by the Canadian Pacific railway?


Thomas Vien: I do not know of any rate of 30 cents on the Canadian Pacific railway as against-


Thomas Reid: Those are the figures I got.


Thomas Vien: -as against 11 cents on the Canadian National railways, unless my hon. friend refers to the all-rail rate and the lake and rail rate from Fort William to Atlantic sea ports. This is a very different question which on some other occasion, I should be glad to discuss. For to-day it should suffice to say that rates from Fort William to the seaboard are controlled by statutes enacted in this parliament, namely the Grand Trunk Pacific and National Transcontinental Railway Acts, whereunder an expenditure of $330,000,000 was authorized to provide that rates on grain and grain products for export should at no time be higher via Canadian channels than rates via United States ports. That was the reason why the board directed that rates on the National Transcontinental railway from Fort William to Quebec in summer to Saint John and Halifax in winter, should never be higher than the lake and rail rates on similar goods via United1 States north Atlantic ports. I repeat that this is an entirely different problem having no bearing on the question before the house.
The purpose of this bill is to extend the Crowsnest pass agreement rates on grain and

grain products moving from Fort William to Vancouver and it sets aside the fundamental principles governing the differential which should exist between rates on traffic for domestic consumption and traffic for export.


René-Antoine Pelletier: If that is the case, and the hon, gentleman is defending this proposition on a mileage cost basis, can he explain why to haul grain 283 miles from the Peace River country to Edmonton costs 24 cents per hundred pounds, but if you ship that grain to Vancouver the additional cost is only two cents, though the distance is so much greater?


Thomas Vien: I imagine that the rates to which my hon. friend refers are the rate from the Peace River district to Edmonton, a domestic rate, and the rate to Vancouver, an export rate, I was just addressing myself to that very question. If you built your rate on goods for domestic consumption on the same basis as your rate on traffic for export, our railways would soon be bankrupt, because there would be nothing left to take care of their overhead expenses and fixed charges.


Some hon. MEMBERS:: Oh, oh.


Thomas Vien: Some of my hon. friends do not agree with me on that point. I repeat that I am sympathetic to the case of British Columbia, but I am trying to explain that rates for export are intended to help the Canadian producer to reach his markets abroad. These rates should never be so low as not to allow the railways to meet their out of pocket expenses and a little more. Then you enable the Canadian producer to reach his foreign markets, and the railways without losing any money, get a little towards their overhead and fixed charges.


Thomas Reid: I do not like to interrupt-


Thomas Vien: I welcome my hon. friend's questions. I am trying to explain a very complicated problem.


Thomas Reid: If the 20 cent rate on export grain from Calgary and Edmonton to Vancouver is a paying rate-and the railways have not denied this-why should British Columbia be charged 401 cents? If it is not a paying rate why should the people of British Columbia have to make up the deficit?


Thomas Vien: We have to distinguish between a paying rate and a not losing rate. If they get their out of pocket expenses following a shipment, our railways, in a sense, do not lose money, but they do not make any. If, however, you predicated your whole rate structure on that principle, where would you get your overhead expenses and fixed charges? Some

Railway Act-Rates on Grain
traffic must contribute to the overhead and fixed charges of the railway. The same principles do not apply to freight for domestic consumption and freight for export. Freight for export would not move at all unless you publish an export rate; freight for domestic consumption must move even at that higher rate. If you had the same rate structure on goods for domestic consumption and for export you would shift the load from the shoulders of the railway users to those of the general taxpayers of the country. We did our 'best for British Columbia in the course of the general freight rates investigation. We were even accused of having flattened the Rocky mountains. We ordered the railways to publish, on freight moving to Vancouver from any points on the prairies, the same rates as applied to traffic moving for the same distances to Fort William, except that because of competitive conditions, the Canadian Pacific, from Calgary to Vancouver, was authorized to assume the mileage of the Canadian National from Edmonton to Vancouver. The Canadian Pacific had a 2 2 per cent grade in the mountains, as compared with a maximum grade of one per cent on the Canadian National. But they had a shorter mileage of 124 miles. If this had not been done, the Canadian National Railways would have been obliged to reduce its mileage from 768 to 644 miles in computing its freight rates. This would have entailed a considerable loss to the two systems.
I therefore suggest, Mr. Speaker, that the rate structure on grain for domestic consumption cannot be predicated upon the same principle as that applying to rates on grain for export, and that the constructive mileage which was permitted to the Canadian Pacific between Calgary and Vancouver is amply justified.


Alan Webster Neill: While the argument of the hon. member for Outre-mont (Mr. Vien) was presented with all the ability of a clever lawyer and also the experience of a railway commissioner, yet we must regard it as rather an ex parte statement under the circumstances. The hon. member for New Westminster (Mr. Reid) and we other members from British Columbia will be apt to take the attitude of the man we read of in the bible whose sight was restored; the Pharisees gathered round and tried to get him to admit, first, that he had never been blind, and, second, that his sight had not been restored. But he swept aside their sophistries and said, "All I know is that whereas once I was blind now I see." So when we have passing our doors on the railways, trains with forty cars of feed of which twenty-five are going to the orient, hauled at a rate of 20 cents per hundred pounds, and the remainder which are coming to British Columbia, costing under identically the same circumstances 41J cents per hundred pounds, we see the matter as does the hon. member for New Westminster.
There are one or two facts that I want to mention before nine o'clock. The hon. member who spoke last referred to export rates.
I would ask this question: Is the export rate profitable to the railways. One would think it is, because they are very anxious to get that traffic. If it is profitable for export it must be equally profitable for domestic use.


Thomas Vien: If the hon. gentleman will allow me-


Alan Webster Neill: I am sorry, I have not time- no discourtesy to the hon. member. Then we have this evidence, which is perhaps not known to many people: In the gallant fight put up by the late Hon. John Oliver, premier of British Columbia, aided by the hon. member for Vancouver-Burrard (Mr. McGeer), who is with us to-day, the export rate to Pacific coast ports was twice reduced in the last ten or twenty years, but on neither occasion was the domestic rate reduced in proportion; therefore, if the differential was correct before those reductions were made, it cannot be correct now. Then we have other evidence that our claim is just, because we had the late government putting pressure ' on the railways two years ago to make a partial reduction. The question was brought up on the estimates and we were objecting that the Conservative government of that day, following the precedent set by the Liberal government before them, had not given a decision. That is, the question had, as provided by law, gone to the cabinet on appeal from the railway commission, and the right hon. gentleman who now leads the opposition (Mr. Bennett) said that even if they had dealt with it their action would probably have been to send it back to the railway board, because he did not think that a body such as the cabinet, made up of men having the political viewpoint, was as well able to deal with that sort of thing as the board of railway commissioners, who have trained experts at their command. And I agree with that view; I think the appeal should be not to the cabinet but to the supreme court of Canada, where these matters could be threshed out without any suggestion of politics and with all the facts before the court.
29S

Railway Act-Rates on Grain
Perhaps I may relate what is possibly just a matter of gossip, and which may be news to the leader of the opposition; but the gossip at that time was that he, being 'then Prime Minister, was so impressed by the merits of our case that while he took the attitude I have indicated and said that the cabineit would not decide the question, yet it is rumoured that he met Sir Edward Beatty and said to him, " Beatty, if you don't do something about that rate, we will." At any rate we know that shortly afterwards there was a getting together of the railway men and the then Minister of Railways, but unfortunately the minister was not a practical railway man while Sir Edward Beatty and the Canadian National men are thoroughly practical, and they put it over Doctor Manion, aided, I am sorry to say, by the acquiescence of the premier of British Columbia, Doctor Tolmie. The reduction was that half the differential between the two rates was taken off. Had this applied to all grains and grain products, that would have been a substantial measure of redress, but it applied only to grain, and only to certain classes, No. 4 wheat I think, and lower; it did not apply to mill feed, bran and shorts, which constitute the greater proportion of the trade. When I brought that up in the house I was confronted by the Hon. Doctor Manion with the statement that the premier of British Columbia had acquiesced, which I am sorry to say was true; he either did not understand the ques-. tion or did not take sufficient interest in it. Had he held out to have the reduction apply also to mill feeds, this would have helped a great deal.
So while I am of course supporting this bill, because that is the only method of redress we have, I submit that if the government of the day cannot see their way to let it go through they should at least act along the line I have indicated, have a meeting with representatives of the two railways and get a substantial reduction in the rate on No. 2 wheat and lower-that is higher numbers but lower quality. I would not ask it for milling wheat because there are factors involved concerning competing shipments to Seattle, but on No. 2 tough wheat, which makes good chicken feed, and lower grades of wheat and coarse grains and all mill feeds, such a reduction would be a great relief to British Columbia.


Mr. DANIEL McIVOR (Fort William):: There were two terms used in the debate so far that interest me very much; one is Fort William and the other is Doctor Manion.

Doctor Manion was the former Minister of Railways and I pay my tribute to him as a clear-headed and able man.
The present Minister of Railways (Mr. Howe) comes from a place which in the minds of some people is of even more importance than Fort William, namely, Port Arthur. I look to the present Minister of Railways for fair play, which I think is all the hon. member for New Westminster (Mr. Reid) seeks. I do not know whether he is an athlete; I used to do a little in that line and the thing we appreciated was fair play. We in Fort William and Port Arthur are not so much interested in freight rates on wheat as in rates on flour; they are practically the same thing. Why is it that you can ship flour from Winnipeg to Toronto or Montreal at as low a rate as from Fort William? Why can you ship certain types of goods from Toronto or Montreal to Winnipeg as cheaply as to Fort William? Why is it that we find it cheaper to ship a certain type of goods from the east to Murillo, which is a small town out of Fort William, and back again cheaper than to Fort William? I know these things will be straightened out by the minister, and I am going to bide my time because I can trust him and have trusted him all the way through.


Walter Edward Foster: The hour for private bills having expired the house will revert to committee of supply.



DEPARTMENT OP TRADE AND COMMERCE

[Stage Direction]
The house in committee of supply, Mr Sanderson in the chair.
Mail Subsidies and Steamship subventions- Atlantic ocean, Pacific ocean, local services, $2,086,850.
John Ritchie MacNicol: When the committee
rose at six o'clock I was on the point of asking the minister a question in reference to a statement that had been made that Canadian ships plying between lower British Columbia ports and ports in northern British Columbia and receiving a subsidy are manned by oriental crews. My question is based on some information that came out last session before a committee of which I was a member, that quite a number of these oriental members of the crew are not Canadian orientals but were signed on at Hongkong, Shanghai and other asiatic ports. Is there anything that the department can do to ensure the employment of Canadians on these ships in preference to asiatics signed on in Asia?


William Daum Euler: Perhaps I might make reference to the report of a committee, the chair-

Supply-Trade-Mail Subsidies
man of which was Mr. Turnbull, of Regina, that was appointed last session to inquire into this subject. I shall read not the whole reference but what I think is the important part:
That it be resolved that the question of employing greater numbers of white Canadian citizens on all ships and vessels of Canadian ownership and registry the owners of which receive a grant of money from the treasury of Canada be referred to the standing committee on industrial and international relations.
That committee sat and took evidence, and I shall read what is pertinent in their report and which, I think, will answer partly, at least, the question asked by my hon. friend. The committee reported with respect to subsidies on the trans-Pacific route, and I take it that my hon, friend referred to that.


John Ritchie MacNicol: No, to the coastwise
trade between Canadian ports on the Pacific.


William Daum Euler: I will read that part of the
committee's report:
It appears from the evidence that there is no contract between any department of the government and the steamship lines engaged in such trade requiring the employment of any proportion of white Canadian citizens. It was represented by witnesses from the departments of government concerned that with respect to freight traffic, Canadian lumber is being carried into a highly competitive market in competition with subsidized American ships carrying American lumber, and that any change that might result in increased cost might endanger that portion of Canadian export trade; and that with respect to the passenger trade there is the additional difficulty in employment of white Canadian citizens where a substantial portion of the passengers are oriental.
The report continues, and this perhaps touches more closely the question my hon. friend was asking:
The evidence submitted establishes that the ships engaged in the coastwise trade, the owners of which receive subsidies, are required by contract to employ British subjects to the extent of two-thirds of their full personnel but these British subjects are not required by the contract to be white Canadian citizens.


John Ritchie MacNicol: Did the minister say
two-thirds?


William Daum Euler: Yes. The report goes on:
This term of the contract is being fully carried out in all cases and as a matter of fact it appears that more than the required two-thirds are white as well as British. The evidence established to the committee that no change in the contracts with respect to employees has been made in recent years.
I might perhaps read the next paragraph, which replies in a measure to the representations that were made 'by my hon. friend from Winnipeg and some others:
YTour committee are of the opinion that while in view of economic conditions and the keen competition existing for international trade the carriage of freight and pasengers should not be unduly hampered and' while it appears from the evidence that owners of ships referred to are making reasonable efforts to comply not only with their contracts but with the spirit of the resolution referred to the committee, nevertheless the departments of _ government concerned should be urged to continue to keep close check on the operations of such ships so as to secure the employment of as many white Canadian citizens as is reasonably possible.
So far as the department is concerned I shall certainly be glad, without attempting absolutely to dictate, because I think that would not be a successful effort, to use such influence as the government may have, to induce these people to employ on their boats British subjects of the white race. I do not know that I can say any more with regard to that at the moment.


Major James William Coldwell: Does the New Zealand government also give a subsidy to these same ships plying between Canada and New Zealand?


William Daum Euler: 
Major James William Coldwell: I should like to make this further observation. We have had a great deal of discussion on this particular point, and a number of matters have been raised on which no information can be given at the moment, as to labour conditions, the type of labour employed, whether white or coloured sailors are employed, and to what extent it is necessary to use one class or the other. This afternoon the minister said that it was almost impossible to obtain white labour on these ships. But I would point out that plying from Great Britain to other parts of the world there are ships of similar type manned by white seamen, and consequently I do not think that argument holds good. In view of this very large subsidy that we are being asked to vote, $300,000 a year for two ships sailing to New Zealand, I think this item should stand over until we have more definite information regarding the matters that have been raised and as to the conditions surrounding this subsidy.


William Daum Euler: I am not sure that any particular purpose will be served by allowing the item to stand for further information. There is no question at all that a good many Chinese are employed on these vessels. Perhaps I can give my hon. friend some of the information he wants now. The total number of Chinese employed on the Empress of

Supply-Trade-Mail Subsidies
Russia and the Empress of Asia is 871. These are the two ships of Canadian registry, the other vessels feeing registered in London. There are about eighty white men employed on each vessel, and on the average a few more than 400 orientals, Chinese.


Thomas Clement (Tommy) Douglas: Has the minister any idea what it would cost to establish a mail service to New Zealand if this steamship service was stopped?


William Daum Euler: Does my hon. friend mean on government boats?


Thomas Clement (Tommy) Douglas: The minister said this afternoon that if this service wTere to stop it would be necessary to spend some money on a mail service, and I am asking what it would cost approximately.


William Daum Euler: Does my hon. friend mean what it would cost to put on new boats?


Thomas Clement (Tommy) Douglas: No, merely to establish a mail service in the event of this steamship service being stopped if the subsidy were decreased.


William Daum Euler: We would probably have to use United States boats, and I do not know what sort of arrangement could be made with them to carry the mails. The cost of carrying the mails on these boats is about $100,000.


Abraham Albert Heaps: Is that in addition to the subsidy?


William Daum Euler: No, that is included in the subsidy.


Angus MacInnis: Referring to wages and working conditions on these boats for which a subsidy is being asked, evidently the department knows nothing about wages and working conditions, and I do not think it is enough for the minister to say that he will try to have as large a number as possible of white Canadian citizens employed on these boats. I am concerned not only about working conditions but about wages paid on these ships, and I am quite satisfied that if reasonable wages were paid, the class of white labour that could be employed wmuld give the steamship company a much better service than does the class of oriental labour which it is now employing. We are not going to improve conditions by merely substituting low paid white labour for low paid oriental labour. That is not getting us anywhere. When we insist upon working conditions that Canadian citizens, whether they be white, yellow, black, brown or any other colour can accept-I am interested mainly in the fact that they are Canadians-then we shall be getting somewhere. Before this

matter is finally settled I think the minister should be in a position to give us some information as to wages paid and working conditions on these boats.


Thomas Clement (Tommy) Douglas: I am absolutely opposed to the whole idea of subsidies. Members of this government went through the country stating that they were opposed to state intervention; that they believed in individual initiative, in ruthless competition and the law of supply and demand. However, the moment a company finds that it is not in a position to finance itself a request is made to the government for a subsidy of $300,000. When the minister was asked this afternoon as to working conditions aboard these ships he stated that as these two ships were under British registry, he doubted whether we would have any control over them.


William Daum Euler: The employment of Chinese does not enter into the question of this New Zealand service, which is the one asking for $300,000.


Thomas Clement (Tommy) Douglas: The minister was asked this afternoon as to the wages paid and the type of labour employed by these ships, and he replied that he doubted whether we could control them because they were not Canadian registered. I maintain that no matter what registry they may be under, if they come to parliament asking for a subsidy of $300,000 we should have something to say about the type of people they employ, the wages they pay and the conditions under which they expect men to work. If they are not willing to comply with these requests, I am sure that ships of Canadian registry could be found to take over the service.


John James Kinley: Mr. Chairman, before the
committee rose at six o'clock a suggestion was made to the minister that it be made a condition of subsidies granted to ocean going steamers that they hire Canadian sailors. This suggestion seemed to receive support from many hon. members. It is a policy which would be most advantageous to the maritime sections of Canada. Since I entered the house I have heard it said many times by members of every shade of opinion that the greatest problem facing this country is unemployment. I represent Queens-Lunenburg, a typical maritime constituency. While central Canada has a problem of unemployment in its cities, our problem is one of finding employment for our seamen. Most of our men have followed the sea since their childhood, and it seems to me that when we are considering unemployment we should consider the sailors who go down to the sea in ships. This matter has received

Supply-Trade-Mail Subsidies
the attention of the Trades and Labour Congress of Canada. That organization held its fifty-first annual convention in the city of Halifax from September 16 to September 20, 1935, and at that time maritime labour received the endorsation of the Trades and Labour Congress of Canada. The following is from the report:
The Nova Scotia seamen's union won the support of labour throughout Canada with their resolution calling upon the dominion government to prohibit non-Canadian labour from being employed on governmentized ships in the marine trade. A trades and labour council resolution, of similar intent, but having to do with Dominion Coal boats, went back to the committee after the mine workers delegates stated that, so far as they knew, the Dominion Coal boats did not come under the freight subventions on coal.
The next day they passed the following resolution:
Resolution No. 37
The Halifax District Trades and Labour Council; the committee reported having amended this resolution by deleting all the words in the preamble following the word "seaman" which made specific reference to the employment of British seamen and chartering ships of British registry and recommended concurrence in the resolution reading as follows:-
Whereas the dominion government has been subsidizing the coal industry as carried on by the Dominion Coal Company, Limited; and whereas, these subventions have resulted in the sales of over 1.000,000 tons of additional through the St. Lawrence districts and west of Montreal, thus enhancing employment for the miners and datal men in and about the mines; and whereas, these subventions do not accrue to the benefit of the seamen. Therefore, be it resolved, that the Trades and Labour Congress of Canada bring this injustice strongly to the attention of the government with a view of having any further subsidies to aid in the promotion of the coal business made contingent upon the Dominion Coal Company, Limited, employing Canadian ships manned by Canadian seamen and paid the fair maritime wages obtained in Canada for such class of work for the said transportation of coal from the mines under their control to any points in Canada or Newfoundland.
When every industry in Canada is seeking protection of one kind or another, the seamen should come under the protective policy of the dominion. When the government grants a contract for supplying goods the contract contains the condition that Canadian goods shall be first and British goods second. Why should not the seamen of Canada be treated in the same way. While we support Canadian industry and Canadian manufacture by insisting that Canadian goods shall come first -I subscribe to this stipulation-we should also see that above all, Canadians should come first, in the coasting trade and, as far as possible, in the ocean going trade. It would be greatly to our interest if the minister could
give us an assurance of this kind, but the road does not seem to be perfectly clear. In 1931, by the statute of Westminster, for the first time Canada obtained control over her men and ships upon the sea. That statute provided for the exclusion of the dominion from the provisions of sections 735 and 736 of the Merchant Shipping Act, and thus for the first time Canada obtained control over her shipping. However, concurrently with the passing of that statute Canada signed the British commonwealth merchant shipping agreement. This agreement was signed at London on December 10, 1931, the day before the passing of the statute of Westminster. I should like to quote part IV, which reads:
Article 10
Each part of the British commonwealth agrees to grant access to its ports to all ships registered in the British commonwealth on equal terms and undertakes that no laws or regulations relating to seagoing ships at any time in force in that part shall apply more favourably to ships registered in that part, or to the ships of any foreign country, than they apply to any ship registered in any other part of the commonwealth.
Article 11
While each part of the British commonwealth may regulate its own coasting trade, it is agreed that any laws or regulations from time to time in force for that purpose shall treat all ships registered in the British commonwealth in exactly the same manner as ships registered in that part, and not less favourably in any respect than ships of any foreign country.
Article 12
Nothing in the present agreement shall be
deemed'-
(i)	to derogate from the right of every part of the commonwealth to impose customs tariff duties on ships built outside that part; or
(ii)	to restrict the right of the government of each part of the commonwealth to give financial assistance to ships registered in that part or its right to regulate the sea fisheries of that part.
* It is clear that under the statute of Westminster-and I am speaking as a layman, because I cannot argue this highly technical legal matter-we for the first time got control of our ships on the seas. But in the British commonwealth merchant shipping agreement, made concurrently with the statute of Westminster, we reverted to the status quo, and we have reciprocity in men and ships with the British empire.
Now the British are eminently efficient on the sea. Britain is' a country with a maritime tradition, with years of service and achievement behind it as regards seagoing vessels; and if there is one game the British know it is the game of the mercantile marine and shipping. Therefore, when this or any other

Supply-Trade-Mail Subsidies
government in this young country asks us t.o compete, absolutely without any protection, with the greatest shipping country in the world, we are doing something that will not help Canada to become a great shipping nation in the near future, or relieve unemployment which is of national concern.
The United States is also a great shipping country; it protects its ocean-going ships. Subsidized ocean vessels must have, for the first two years, one-quarter of their crews American citizens; for the third year one-t/hird must be American citizens; and for the rest of the time one-half of [DOT]the crew must be Americans. I submit, speaking in the interests of maritime Canada and especially of Nova Scotia, that something should be done to relieve unemployment among our men, men with captains' certificates and with long experience on the sea, who are on the beach with nothing to do. I receive numerous applications for positions on government boats; I am flooded with applications from men who have no employment. We have no great farms such as there are in central Canada, nor have we large manufacturing industries; and as a maritime people what can we do if our men are denied the opportunity to go on the sea? Our people must go on the sea, and they are efficient and can serve the country well.
I say to the Minister of Trade and Commerce and to the members of the government that parliament and government should do something to relieve unemployment among our seafaring men. Apparently we are bound by this agreement, and the minister's hands are tied with, respect to the condition in connection with government contracts. I was surprised to hear him say that something had been done in British Columbia, and it occurs to me that perhaps there may be a way out of the difficulty. Provision is made for our giving subsidies, and if that gives us the privilege of stipulating, as a condition of any subsidy, that there shall be a larger number of Canadian seamen on the ships, then that should be done as quickly as possible. If a commission is appointed to look into the matter of unemployment, it will be my privilege to appear before that commission and point out that the people in distant parts of the country deserve some consideration and that the much talked of policy of "Canada First" should find its application in this regard.


Richard Bedford Bennett: 
Charles Avery Dunning: A very low rate of interest.


Richard Bedford Bennett: I have already said that -one and a half per cent, and in one case the interest charged was only three-eighths of one per cent. Under those circumstances I believe we can do nothing other than vote this subsidy. One hon. member suggested we might build the ships ourselves to take care of the mail service. Well, we put $80,000,000 or thereabouts into ships. It is now written off as, shall I say, a non-active asset of this country at this time.


Charles Avery Dunning: That is the kindest way to put it.


Richard Bedford Bennett: As a matter of fact some of these ships did make a little money last

Supply-Trade-Mail Subsidies
year on the Australian service, as perhaps the hon. gentleman knows better than I. But let me finish.
We are now confronted with a simple problem. Shall we maintain a service that connects Canada with Australia and New Zealand through Canadian ports, or shall we be compelled either to dispatch our mails through San Francisco or to ship them to England and have them sent through the Suez canal? The situation gets down to that.


Charles Avery Dunning: Our goods, too.


Richard Bedford Bennett: I am coming to the goods as something separate entirely. I am leaving them out for the moment. I am talking about our mail communications for the moment. Last year we received from other countries, for mails of theirs that we handled through our boats to New Zealand and Australia, something over $50,000. I do not carry the figure in my mind, but at one time it reached as high as about $96,000, so that in any event that is to be credited against the subsidy. It consists of sums we received from Great Britain, the Irish Free State and other countries for handling mail that originated in their countries and passed through our ports on subsidized ships to Australia and New Zealand.
That is the mail service. What about our goods? What about our export trade? What about our imports from New Zealand and Australia? What about the agreements that we have made with them, and their beneficial effect upon our country as a whole, so much so that, if my memory serves me aright, Australia during the past year has been within the first five of countries trading with Canada. How otherwise, mark you, can we maintain this service for what are called perishable products, unless we take the steps I suggest? No subsidy is paid for the purely freight boats that go down fo that country. The Union line, in which I think the Peninsular and Oriental line is interested-it was at one time -do not ask for and have not received a subsidy for the carriage of goods, but perishable products, in which we are so deeply interested by way of both export and import, are carried in these ships that are specially provided with refrigerator chambers to deal with the proper carriage of such commodities. Under the circumstances I do not see how we can do other than vote this subsidy, or else face an alternative that no Canadian cares to face.
That is all I have to say with respect to that, but I do want to say one word more with respect to shipping generally. I recall that there was a time when the Canadian merchant marine occupied a very important place in the world, and when our ships sailed

the seven seas. We have fallen off in that regard; nowadays one will very seldom find our flag in the great shipping ports of the world. I notice a very substantial cut in the subsidy given the Atlantic service; I have not the details before me. I remember the presentation that was made of the case to the previous minister because he brought it to my attention later, as to what had happened on the Atlantic ocean. I wonder whether it is in the mind of members of the committee to pause and consider for a moment the real position of Canada. We have this vast orient which apparently is just beginning to come back to life. The east was the cradle of civilization; apparently the circle is being completed and it is moving back again in that direction. There are hundreds of millions of people in that part of the world, and there we look for some market, or, shall I say, for markets. When Sir William Van Home, away back in the nineties, when his company was poor and this country certainly was not rich, put three yacht-like steamships on the Pacific ocean sailing to the orient, people wondered at his courage. Those ships have been replaced, as we all know, by great steamships, the greatest on the Pacific ocean. Those ships are subsidized, and generously subsidized, by the dominion government, because W'e are thus able to divert, over Canadian rails, through Canada on through bills of lading, a large quantity of traffic that otherwise would travel in another direction. That service is valuable from the standpoint not only of the revenue it produces, but of the employment it gives to men on the railways. In addition it does much to enable us to maintain the efficiency and effectiveness of our relations between Great Britain on the one hand and China and Japan on the other, to say nothing of the close relation that exists between that service and the service to the antipodes.
I mention that because the Atlantic service is a part of that other service. On through bills of lading from Great Britain or France or Germany to the orient you have shipping moving by one of the many lines that come into Canadian ports, across the country by one or other of our lines of rail, and on to the orient. Sometimes, it is true, it travels by other lines than ours, the Dollar line or some other, but it becomes essential, if we are to maintain our lines, that they receive the assistance that we have been so generously giving them. On looking at the estimates I notice that a very much smaller sum is being given on the Atlantic this year than formerly was the case. I can readily

Supply-Trade-Mail Subsidies
understand the attitude of the minister with regard to this problem of subsidies; I might say that I understand the attitude of both ministers, the Minister of Trade and Commerce and the Minister of Finance. It is not improbable that the Minister of Finance has more to do with cutting down the subsidies than has the Minister of Trade and Commerce.


William Daum Euler: He did not in this case.


Richard Bedford Bennett: Usually I have found it to be the Minister of Finance who asks, "Where are we going to find the money?" That is his difficulty and his job, and therefore very frequently, though he may desire to do so, he is unable to provide the necessary money for the subsidies in question.
The service on the Atlantic, apart from the fact that one of the ships is extraordinarily speedy, ranking of course with other ships of her class and tonnage that travel out of New York, has been a very great advantage to this country. I frankly admit that it is difficult to justify the expenditure involved in the construction of such a ship in these days, but I wonder whether the committee will pause for a moment to realize just what it means to Canada, as compared with the United States, to have that ship sailing from our ports, going over to Southampton, returning and sailing regularly every fortnight during the season, giving this country a form of advertising that it would be very difficult to obtain otherwise even by the expenditure of much more money than is involved in the subsidy. The same type of ship sailing from the port of New York, carrying the same type of mail, with the same class of accommodation, the same speed and the same tonnage, if my memory serves me aright would be receiving something like $17 per sea mile as a mail subsidy. I was looking for the figure among my papers, but I cannot find it at the moment. The minister gave it to me last year; I think it was $17. At the very top speed it runs in the United States as high as $24 per mile per voyage. That is what we Canadians are competing against; that is what we Canadians have to meet if we are to maintain our position among the nations of the world. Our very geographical position has imposed upon us obligations and responsibilities. If we are going to maintain our integrity or, in the language of the modern newspaper, if we are to keep up with the Joneses at all, we must provide this assistance. I can only say that I sympathize with ministers who have to deal with this question. Certainly for
one or two years I declined to provide the subsidy, but when I saw what was happening; when I saw the returns and balance sheets, I realized that even though economic conditions were difficult this had to be done if we were to maintain our position as a shipping nation or our position midway between the Occident and the orient among the peoples of the world.
Now I should like to say a word with respect to accommodation on ships, the seamen, the number of seamen and the food. All these matters are regulated by our Merchant Shipping Act, which is a reproduction of the British Merchant Shipping Act, and the board of trade regulations of England are practically those in force here. Hon. members who are familiar with our parliamentary history will recall the long, long story of Plimsoll and his struggle in the British House of Commons with the shipping owners to secure for sailors their rights, to secure for them proper food and decent accommodation, to ensure them against overloading and the destruction of vessels that were unseaworthy but which were put to sea for purely insurance purposes. Only the other day I was reading of the terrific scene that took place in the British House of Commons when Plimsoll made his eloquent appeal. Not because of what he was able to disclose but because of the scene he made public attention was rivetted upon the conditions that existed, and Plimsoll lived to see every ship that left a British port have on her side that loading mark to which we refer as Plimsoll's mark. There is no man who sees any of our ships to-day as they go out to sea who does not realize that this is an enduring monument to the memory of one man's patience and persistence, for every ship bears his mark upon her sides, winter and summer, when she has a deck load and when she has not. Now all accommodation is regulated by that; the number of square yards, the amount of air space, the food requirements, the right of the sailor to have conditions put upon the log, the duty of the master to enter them on the log, his right to go to any British consul and complain of conditions-all these things are matters no longer of uncertainty but of certainty; they are written right into the laws of the country. We have reproduced here substantially the same provisions as exist in Great Britain. The hon. member for Queens-Lunenburg (Mr. Kinley) referred to the fact that we made an empire agreement with respect to shipping. If we had not we would certainly have been in a difficult position, for if hon. members look at the number of deep sea ships we have upon our register they will realize how glad



Supply-Trade-Mail Subsidies
Canadians were, as were Australians and New Zealanders and South Africans, that we could have reciprocal arrangements with respect to shipping between the various parts of the empire. And many of the sailors about whom complaint has been made to-night are Chinese British subjects from Hongkong. They are not foreigners; they are British subjects.


Thomas Reid: That has not been proven.


Richard Bedford Bennett: It has been proven in regard to a substantial number, if my hon. friend will permit me to say so. I was careful not to say all, but I know that substantial numbers of them are, as is indicated by the reports made on inward and outward voyages. The nationality of the Chinese became known to me in another connection while I was in office, a reason connected with another branch of the public service. I think it can be established beyond doubt that a large number are British subjects from Hongkong and other parts of the world.


John James Kinley: Is it not a fact that in Canada you can ship a man of almost any nation in the world, under our merchant shipping laws?


Richard Bedford Bennett: There is no doubt that,
as long as they are sailors, the hon. member for Queens-Lunenburg is correct. And when he speaks of English ships being manned entirely by Englishmen I think he must forget that the ships that ply to the far east are largely manned, so far as sailors are concerned, by Lascars. And while a substantial number of them in certain classes of the complement of the ship-


John James Kinley: I rise to a point of order.
I did not say that English ships were manned wholly by Englishmen. I said that they had equal privileges in Canada with Canadians. I said that considering conditions in Canada; that Canada is a young nation and that the English are eminently qualified on the sea, our Canadian sea-going trade should not be expected to compete with those who are so eminently qualified. When it comes to a question of goods we weigh almost to a milligram as between other countries and ourselves, and I said that we should have the same principle apply to our seamen.


Frederick George Sanderson: Order.


Richard Bedford Bennett: I was concluding what
I had to say. As the hon. gentleman is a new member, although he is experienced in a local legislature, I had no desire to shorten his observations. The rights that we grant under the agreement to which the hon. member refers are nothing comparable to the

benefit and advantages which we have obtained. One has only to compare the two to realize how greatly the balance is in favour of this country and how much greater our advantages are than the benefits we have given under the agreement to which reference has been made. I well recall the circumstances connected with the signing of that agreement, and the discussions that took place between representatives of all parts of the empire. The whole question of shipping is one that has given very great and anxious concern to British public men. Members of the committee who are familiar with the political history of the Right Hon. Walter Runciman will recall something of his recent speech in which he pointed out that the granting of subsidies and bonuses by the United States, and by France, Germany and other continental countries was driving England rapidly into a position where it would appear that there was nothing for her to do other than to follow the same course. As a result of representations which were made to him he was able to convince his colleagues that such action should be taken, and to a limited extent it has been. I mention this because perhaps we have little appreciation of all that is involved-at least I speak for myself when I say I had little appreciation and understanding of all that is involved-in the maintenance of this form of communication between the antipodes and the orient and the countries of Europe and our own country. And while I knew the difficulty of finding money for that purpose, reluctantly I felt compelled to recommend to my colleagues that we should find it in order that this service might be maintained, because it is so vital to the economic and commercial life and the very existence of our country as a trading nation among the nations of the world. These at any rate were the factors that influenced the late government in arriving at the conclusions which they reached. I know the difficulties of the minister, and I suggest that the more closely he examines the situation, the more complete will he find is the case under present conditions for bonuses and assistance to maintain during these dark and troubled days communication between far-off countries and our own.


Mr. McGEER:: There is a decrease of
SH9.000 in the item: Canada, China and Japan service. What is the reason for that?


William Daum Euler: Merely in the interests of
economy.


Gerald Grattan McGeer: There is no change in the
service?

Supply-Trade-Mail Subsidies


William Daum Euler: No.


Gerald Grattan McGeer: Then what was the reason for the increase of 8100,000 in the Canada-New Zealand service?


William Daum Euler: If my hon. friend had been
here this afternoon he would have heard the reason. It is that there was a serious probability that if the subsidy were not increased the service would be discontinued entirely.


Mr. CAHAN:: Is the minister sure that
with respect to the Atlantic service the decrease in subsidy will not result in the deterioration of the service?


William Daum Euler: I rather anticipated that
question. To be quite frank, the reason the subsidy is cut in half, reduced to 8250,000, is merely that by examination of the statement of the company I find that their position last year improved by about $2,500,000. I thought that was a sufficient reason for making a substantial cut.


Charles Hazlitt Cahan: That is the steamship company?


William Daum Euler: Yes. In that there is an
amount of $150,000 which we would have to pay in any case for carrying the mails, so that the actual subsidy is only $100,000.


William Michael Ryan: What company does that
decrease refer to?


William Daum Euler: The Canadian Pacific.


James Samuel Taylor: I find myself
very much in agreement with the words of the leader of the opposition (Mr. Bennett). I am satisfied that in these days we must resort to subventions and subsidies in order to keep open the ocean routes. But I notice at least two that have not been mentioned to-night: the route to South Africa and the route to the British West Indies. These would appear to be new subsidies, or at least subsidies which have not been given for many years.


William Daum Euler: No, they are not new.


Richard Bedford Bennett: But the hon. member is
right; they are only a few years old.


William Daum Euler: A three year contract.


James Samuel Taylor: I should like
to be assured that every effort is being made by the minister and the Department of Trade and Commerce to ensure that as far as possible Canadian bottoms are used on these routes. Can the minister give me that assurance?


William Daum Euler: There are no Canadian owned ships in that service. They are, I believe all of British or Dutch registry.
12739-20J


James Samuel Taylor: Should we not make some effort to obtain Canadian registry for ships going out of our ports and receiving a subsidy?


William Daum Euler: I suppose we might ask it of them, but I do not know that they are under any obligation to do what we ask.


James Samuel Taylor: If we are Canadians we should make every effort to see that our worth shows itself in everything we do. It would be a very simple matter to deal with the matter at the proper time and in the proper place.


Charles Hazlitt Cahan: Is the reason the minister has given for reducing the appropriation for the Canada-United Kingdom service on the Atlantic the same as he would give for reducing the Canada-China-Japan service by $149,000?


William Daum Euler: I think I gave the hon. member for Vaneouver-Burrard (Mr. McGeer) a reply to that question a moment ago. The reason for cutting down the subsidy for the service to China and Japan was, as I said, in the interests of economy. My good friend the Minister of Finance, to whom reference has been made by the leader of the opposition, was rather insistent that we should get our estimates down. He had no particular influence, I might say for his benefit, in regard to these estimates, but the general principle was that the main estimates were to be reduced all along the line; we had to cut here, there and in the other place, and this was one item that was cut for that reason. So far as I am concerned, if this is of any interest to the committee, I am opposed to subsidies. I do not like the idea of subsidies at all, but we have to adopt ourselves to conditions as we find them. I would like to compliment the leader of the opposition upon the assistance he gave and the clarity with which he expressed his view on the question of subsidies. I agree with him. That of course does not mean that the principle of subsidies is particularly sound, but if it is necessary, as it-is, to maintain our trade routes and all the rest of it, we have to adapt ourselves to conditions as they are. For my part I do not desire to go into the granting of subsidies to any greater extent than is absolutely necessary, and from that it follows that any action that might be taken will be in the direction of cutting down subsidies, if that is at all possible, having regard to the service necessary for the Canadian people. I make that observation just by the way. My inclination would be, in the language of the street, to
Supply-Trade-Mail Subsidies

let every tub stand on its own bottom. After all, these are private businesses conducted for a profit, although in most cases these companies are not making any profit; in fact they are suffering losses. But in a general way I should like to save the treasury just as much as possible on subsidies.


Charles Hazlitt Cahan: I quite understand the position which the hon. gentleman takes with respect to subsidies. That is a large question, but parliament has voted subsidies for steamship services for many years; whether a Liberal or a Conservative government was in office, both initiated such votes.


William Daum Euler: I hardly regard that as a good reason.


Charles Hazlitt Cahan: No; but certainly the hon. gentleman does not suggest to the committee that he is reducing the subsidies on two of the most important services of Canada, one by $250,000 and the other by $150,000, without taking into consideration or entering into such negotiations as would assure him that the services will not deteriorate or in fact become obsolete if these subsidies are reduced.


William Daum Euler: I am not very much afraid of that.


Charles Hazlitt Cahan: The minister is not very much afraid of it, he says. Well, I suggest that he is not as astute as he usually is because if he would look into the facts with regard to both these services I think he would have very grave doubts whether they will be maintained as efficiently without these subsidies. Take the Pacific service. I remember that when it was up before our own government a year ago I looked into the Pacific service which is carried on by the Canadian Pacific Steamship Company. I found that they were operating under enormous losses at that time, if my memory serves me aright, and I regard a reduction of $149,000 in the subsidy for that service as likely to deteriorate the whole service and render it impossible for an efficient service to be carried on. With regard to the Atlantic service I was astounded to hear the suggestion from the minister that it is being operated fit an enormous profit.


William Daum Euler: I did not say that. I said that they were two and a half million dollars better off than they were the year before.


Charles Hazlitt Cahan: That depends on what "better off" means, and with w'hat the comparison is made. Can the hon. gentleman lay on the table the figures from which he deduces that there has been a more profitable operation to the extent of two and a half million dollars?
SMr. Euler.]


William Daum Euler: Perhaps I might answer my hon. friend if he wants the answer now. I may have taken the committee into greater confidence than I was entitled to do because these figures are confidential. The reason for making the cut in the Atlantic service was that the company, while still operating ostensibly at a loss, operated at a very much smaller loss than they did the year before. While I am on my feet, I might also say although I do not desire to interrupt my hon. friend, who is rather vehement in his language with regard to the cut on the China service that from 1920 to 1931, as the leader of the opposition very well knows, there was no subsidy at all for that service. They are still being allowed $600,000, so that is not dealing so very harshly with the company.


Charles Hazlitt Cahan: I am not talking about dealing harshly with the company.


William Daum Euler: Well, I am.


Charles Hazlitt Cahan: I am just asking what
ground the hon. gentleman has for concluding that with a reduction of this large amount the service can be efficiently operated either on the Atlantic or on the Pacific. I have dealt particularly with the Pacific.


William Daum Euler: I have given the reason. Let me speak about the Atlantic service for a moment. I am certainly justified in believing that when that company by its statement shows that it is three or four or five or six times better off than the amount of the cut in the subsidy, it will be able to give at least as good a service as it did before when its loss was much greater.


Charles Hazlitt Cahan: But it is still run at a loss.


William Daum Euler: I gave the figures a little while ago. Surely there is no reason to assume, when their loss is now so much less, that they are going to give a worse service than when their loss was greater; that when their loss has diminished they are not going to give as good a service as before.


Charles Hazlitt Cahan: I should think otherwise. When a company has been operating at a loss for so many years it comes to a stage when such losses can no longer be incurred, and if the company has been making an effective effort to overcome that loss I should think it might be encouraged by granting the subsidy until such time as it has made up an income which will meet the current expenses for carrying on the service.


Gerald Grattan McGeer: I had not intended taking part in this debate until I heard that the only reason for the reduction of the subsidies

Supply-Trade-Mail Subsidies
to the Pacific coast services was one of economy. That kind of 'economy will not prove to be worth much to the dominion. If that is the kind of economy necessary for the purpose of balancing the budget, apparently we are going to have a balanced budget at the expense of the Canadian people, at the expense of Canadian trade expansion and at the expense of Canadian institutional services advancing with, from the Canadian government, some measure of assistance such as other national governments throughout the world are giving to similar services. Such action will not prove to be an economy; it will prove to be an effective way, not of balancing the budget, but of continuing an unfavourable balance to Canada and the suffering of losses on the part of companies and seamen.
If there is one place where we should be acting to meet intensive competition made possible by national activity, it is on the Pacific ocean. We should not forget that during the last fifty years Japan has risen from a place unknown to the position of one of the leading nations of the world. By appropriating to their own use all that has been developed in western civilization in the way of culture and education, in politics and finance, in industrial and productive activity, in commerce and diplomacy, and in war power, tlie people of Japan have risen to the first rank of the leading nations.


Mr. BAKER:: Therein lies the danger.


Gerald Grattan McGeer: My hon. friend says,
"Therein lies the danger." What are we in Canada, as part of the British empire, doing to hold our place of leadership in the world's greatest theatre of potential development and trouble, the Pacific ocean? We have in British Columbia and Alberta two of the richest provinces in the dominion. The Canadian section of the north Pacific is richer in natural resources than are Australia and New Zealand combined. What are we doing to fulfil our responsibility on the Pacific ocean? We should realize what is being done by the motherland in Singapore and Hongkong and by our sister dominions in the antipodes and do likewise. But all we do is to reduce a rather niggardly subsidy that should be increased to encourage development on the Pacific. That kind of economy is not going to help the Minister of Finance to gather the taxes necessary to meet the obligations of the dominion. It is not going to help the cities of Vancouver, Prince Rupert and Victoria to gather the taxes necessary to meet their municipal obligations. It is not going to help British Columbia and Alberta to distribute
their grain, lumber, minerals and innumerable other products to Pacific ocean markets. These products should be flowing into these markets in much greater volume than they are at the present time and this volume will not be increased until this country recognizes that it must maintain not only an internal but an external transportation service to all the markets of the world.
I appreciate that these are times of great difficulty, but it seems rather extraordinary that a nation like Japan, with fewer resources than the dominion, or a country like Great Britain, with fewer resources than we have, can find the money and the means to build and develop a shipping service for commerce and at the same time maintain a naval program costing far more than its ocean shipping service. We in Canada have no naval service to maintain and yet we cannot continue to pay a niggardly subsidy for the development of^ our shipping services. Just recently the shipping service of Great Britain was recognized as being in need of assistance and an extensive program of subsidies was brought into effect.
I should like to point out one other matter to the committee. Japan has adopted another technique; she has appropriated to herself that of Great Britain in establishing protectorates over Egypt and India by establishing control over Korea, It is not a question of what Japan may do to-morrow; we know what she has done already in the way of expansion. Unquestionably she is moved to establish the government in Manchuria, and she has now arrived at the point where she can establish a measure of authority over northern China. She has devised a form of Monroe doctrine and has sufficient authority to say to London that she will not approve a sterling loan to the Nanking government. We in western Canada feel that there are great opportunities as well as great responsibilities for the empire on the Pacific ocean. These opportunities and responsibilities are not confined to western Canada; they are not confined to the dominion as a whole; they apply to Canada as a nation and as one of the members of the commonwealth of nations known as the British empire. We should not overlook the fact that there are only about 70 millions of people of British extraction in the 500 millions of people who make up this empire. The position of leadership which the people of the British empire have held in a world of 2,000 million people is something that has been challenged before, is being challenged to-day and will be challenged in the future.
Supply-Trade-Mail Subsidies

If in our desire for economy we allow ourselves to be bound by the outworn, impossible, impractical and absurd conventions of orthodox economy and orthodox finance, which have been abandoned by every country that appreciates the future, then having put the wealth of our nation in pawn, we are now sacrificing the possibilities of progress to pay the pawnbrokers' exactions. It may be that this is the way in which we are going to manage the currency and credit of this nation so that it may be issued in terms of public need. But if we are going to sacrifice trade on the Pacific ocean in the name of economy, we are going to repudiate the most important promise that ever was made by any government to the people of a nation, namely, that currency and credit would be created and issued ini terms of public need. The kind of economy involved in this reduction, will prove to be a ghastly expense to the people of Canada, and it is not the kind of economy that .they expected they were going to receive after the last general election.


Charles Avery Dunning: While the Minister of Trade and Commerce does not need support in view of the fact that he takes the responsibility and has been kind enough to absolve me from it in connection with these reductions, I think, after the very eloquent and informative remarks to which we have just listened, I should at least indicate my full support of him in what he is trying to do in the way of economy in this matter. I do so for the reason that the committee might reach the conclusion that some great disaster is about to fall upon the trade of Canada across the Pacific ocean as a result of the reduction of $149,000 in the subsidy to be paid for the Canada, China and Japan service. I did ask every one of my colleagues to endeavour to secure the discharge of the various public services under their control for the least amount of money. If that is orthodoxy, then I am orthodox. I believe it is my duty to the taxpayers of Canada to ask all my colleagues to endeavour to secure the discharge of the public services under their control for the least possible expenditure of money, and I am prepared to stand on that. I am sure that the Minister of Trade and Commerce assured himself that no detraction from the service now being rendered on the Pacific ocean would take place as a result of the saving to the public treasury of this $149,000.


Charles Hazlitt Cahan: That is the assurance we desired to have.


Charles Avery Dunning: The minister can base his views with respect to the matter only upon information which is supplied to him, as my hon. friend well knows, confidentially by the companies operating.


Charles Hazlitt Cahan: That was quite sufficient.


Charles Avery Dunning: On the basis of that information he makes up his mind and makes his recommendation to the government of Canada, reasonably sure, as I say, that the service will not be impaired and merely desiring to secure for the people of Canada the maximum of service for the amount of money voted. Now that is a simple matter. It does not relate itself to a world crisis; it does not really relate itself to the rising power of Japan; it does not really relate itself to a world war. It is a question of whether in the judgment of the Minister of Trade and Commerce of this country the service now being given to Canadian trade across the Pacific can ibe performed for a lesser subsidy than was paid during the last year. I am standing by the Minister of Trade and Commerce.


Gerald Grattan McGeer: There was no assurance of that kind given at all. When I asked the minister the reason for the change he gave the curt reply that it was merely economy. With respect to the Atlantic service he gave the other reason, namely, that there had been an improvement in the general returns made, warranting his opinion that no harm would be done to that service. But in reply to my question-and that is the only reason I spoke- he said, "Well, we have decided to economize on the Pacific," quite irrespective of what is going to happen on the Pacific. Well, we have had a little intimation of what has happened in discriminatory freight rates and a great many other matters, and in British Columbia we feel, at least as the representative of one of the constituencies of that province, I feel that we have to make ourselves heard a little bit; and I can assure the Minister of Finance that if he is going to economize by paring things on the Pacific, things which I think we need out there and which I do not think he should pare, then I will use not only Japan but anything else I can think of to convince the committee that the minister is wrong in that regard.


Henry Herbert Stevens: I am quite sure that the minister is at liberty to make a statement in this connection. Has he received any information from the company which is given this Pacific subsidy that the service will be curtailed somewhat by the reduction? I

Supply-Trade-Mail Subsidies
recall very well that two years ago, when a larger reduction was proposed than was actually made, it was stated that the service would be somewhat curtailed, I believe by extending the service from two to three weeks, or cutting out one voyage in. connection with each of the ships, or a portion of a voyage, or one voyage on two or three ships. In any case, if this results in cutting down that service then it simply means that the traffic will go to the Japanese ships or the President line, that is, the Dollar line, running from China to Japan to Seattle, San Francisco and so on. It means something similar to what has happened in the competition on the Australian route, which I notice the minister has recognized by an increase in subsidy, that is, competition of the Matson line with the Canadian-Australian line. That competition has become so real that I venture to say that a very substantial proportion of the Australian business that used to come through Canada is now diverted through San Francisco and Los Angeles. That is a distinct loss to Canada and I am glad to see that the minister has increased that subsidy. It was originally 8100,000. Then it was increased to $150,000, then to $200,000, and now he has increased it to $300,000, which is away below what the United States government pays to its lines. The China-Japan route is the old main route, on the Pacific, of the Canadian line. The Canadian Pacific, of course, was the pioneer on that route; I remember forty years ago when the old Empresses, little vessels of 5,000 tons, were looked upon as the most wonderful ships on the Pacific. They look very small to-day.	Then there was
a gradual development to the larger vessels. I will venture this statement, that there will be a curtailment in the service commensurate with the reduction, in subsidy, and I would ask the minister whether he has any assurances as to the maintenance of the service.


William Daum Euler: I am very glad my hon. friend has asked that question. I have no intimation whatever from the company that there will be any curtailment or that any curtailment will be demanded on the basis of this subsidy. I may say this, that the company concerned is not pleased with the cutting down of the subsidy; I hardly expected anything else, but I will say also to the hon. member for Vaneouver-Burrard (Mr. McGeer) that although I am not able constitutionally to go into heroics, I am just as much concerned about the prosperity of this country as is perhaps, any other hon. member. I am not doing anything by way of cutting down subsidies with the knowledge or hope or belief that the trade of Canada is going to suffer. Further, I am not afraid to retrace my steps if I find I am wrong. If I should be convinced, as I am not-and I do not think I shall be-that by reason of cutting off $100,000 or a little more from a certain subsidy the interests of this country are going to be vitally affected, I shall not be afraid to alter my course. This action might still be taken. I do not think it will need to be, but if it must be I am perfectly prepared to take it. As I say, however, I cannot go into heroics and assert that because of a small cut in the subsidy the whole of the trade on the Pacific is going to be ruined. But if such a danger should arise, I think we could take steps to avoid that terrible catastrophe. I desire that if possible the vote be passed. If not, I would make a motion that the committee rise.


Gerald Grattan McGeer: There was not any desire on my part to go into heroics. I wanted to give the committee some facts on the situation with regard to trade development. One feature to which I did not refer at all but which the minister might look into, might induce him, instead of decreasing the subsidy, substantially to increase it to the benefit of the people of Canada. We know that as a result of competition on the Asiatic coast much of the work of repairing and improving and reestablishing ships is done on the docks on the other side of the Pacific. Much of the employment that is given on the ships is governed by the same conditions. I feel that the time is coming when we should be prepared to recognize the necessity of developing a Canadian merchant marine service that will permit us as a nation to help the British empire to enjoy during the future the same kind of leadership in the Pacific theatre of trade that the British empire has enjoyed in the Atlantic during the last 200 years. We have in Vancouver a port that is not only competing with every other port on the Pacific ocean, but definitely competing with the port of Seattle; and if the minister would take a trip along the Pacific coast, as I have done recently, look at what the United States government is doing in Honolulu, in San Diego, in San Pedro, in San Francisco and in Puget sound at Bremerton, which is part of the port of Seattle, and note what is being done in the establishment of a naval and airplane base in Alaska, he would find that although Vancouver enjoys the unique position of being the largest grain shipping port in the world, it is not securing anything

Supply-Trade-Mail Subsidies
like the measures of assistance that ports of the United States competing with Vancouver, and ports in China and Japan and Australia and New Zealand are now securing. If I spoke in a way that could place my utterances in the realm of heroics beyond the constitutional capacity of the minister, may I say to him that I am only beginning, and if I have worried him to-night he is going to have a rather bad time in the future.


William Daum Euler: Go as far as you like.


Gerald Grattan McGeer: I appreciate the attitude that the minister has taken, because I think there is an opportunity of doing something in the development of Pacific ocean trade; that we can possibly advance subsidies to the benefit of Canadian seamen, Canadian dock workers, and Canadian trade generally.


Mr. McNEVIN:: Mr. Chairman, I think that the Canadian taxpayer-


Frederick George Sanderson: Order, we have a motion to rise.


Richard Bedford Bennett: Oh, no, the minister did not make a motion.


William Daum Euler: My suggestion was that the item might carry, but, if not, I would make that motion.	.


Richard Bedford Bennett: If the minister made the motion he made it before the member for Vancouver-Burrard spoke. Therefore that member should not have spoken. Since he has spoken, the hon. member who now rises to speak has the right to speak.


William Daum Euler: I did not make a motion. I merely intimated to the committee that if the debate were to continue I should prefer to make a motion that the committee rise.


Thomas Bruce McNevin: The Canadian taxpayer will recognize that an expenditure of almost $2,087,000 is a substantial amount to grant as a shipping subsidy. The minister is to be commended for making this reduction, and, with the expectation of increased trade, we would be well advised to pass this item.


Hugh Alexander Stewart: I submit that we will make better progress if we take these items one by one, as we did the items on Public Works. We have been running backwards and forwards from one to another. If we call one item and deal with it and finish it, we will get on more rapidly.
Item stands.



KAILWAYS AND CANALS

[Stage Direction]
Chargeable to Income-Miscellaneous-
Board of Railway Commissioners: maintenance and operation, $230,000.
[Mr. McGeer.)
Hugh Alexander Stewart: Would the minister explain the items that go to make up the decrease in this appropriation? Have any services been discontinued?


Hon. C. D. HOWE (Minister of Railways and Canals):: The items are as follows:
Salaries of staff, $185,000.
Official reporting, including amount of reporting contract, $4,800, $8,800.
Official car, operation and maintenance, $3,000.
Printing, $5,000.
Stationery, $4,000.
Telegraph and telephone, $1,000.
Travelling expenses of board and staff, $18,000.
Contingencies, $4,568.
I may say that while there is a reduction of $15,854.04 from the amount voted last year, the amount actually expended last year was about $11,000 less than the amount voted; in other words the amount expended last year was $234,854.04.


Hugh Alexander Stewart: There is some reduction
in connection with the car. How is it proposed to bring that about?


Clarence Decatur Howe: The expense of the car is
entirely a matter of its use, and it is not anticipated that the car will be used as much this year as it was last.


[Stage Direction]
Item agreed to.
Miscellaneous services, $38,500.
Hugh Alexander Stewart: There is a decrease of
$13,500 in this item. Would the minister explain, for the information of the committee, what is covered by this expression " Miscellaneous services"?


Clarence Decatur Howe: There is a decrease of $1,500
in administration expenses. There is a decrease of $2,000 in the maintenance and repair of official government cars. There is a decrease of $5,000 in repairs and alterations to the governor general's cars. There is a decrease of $6,000 in Beauhamois surveys and investigations, due to the abolition of the position of resident engineer, and a further decrease of $800 due to the abolition of the board allowance for the resident engineer. Then there is an increase for Beauhamois surveys and investigations, amounting to $1,800, to provide for carrying out flow measurements by head office. That makes up the net decrease of $13,500.


[Stage Direction]
Item agreed to.
Railway employees' provident fund:	to
supplement pension allowances under the provisions of the Intercolonial and Prince Edward Island Railway Employees' Provident Fund Act so as to make the minimum payment

Supply-Railways and Canals
during the period January 1, 1936. to March 31, 1937, the sum of $30 per month instead of $20 as fixed by the said act, $27,300.
Abraham Albert Heaps: I believe this is the item
that deals with the employees' provident fund. Would the minister be good enough to explain to the committee the position of this fund, how many employees are affected and how long he expects to continue paying out this money?


Clarence Decatur Howe: The number of retired employees in receipt of pensions is 1,764. Employees contributing to the fund during September, 1935, the latest figures available, numbered 8,603.


Abraham Albert Heaps: Do I understand that this is a contributory fund in which the employees and the railways participated?


Clarence Decatur Howe: This is the Intercolonial fund, and it is contributory. I will give my hon. friend the explanation. The Intercolonial and Prince Edward Island railway employees' provident fund provides for the payment to retired employees of a monthly allowance of one and one-half per cent for each year of service of the average monthly salary received by each employee for the eight years immediately preceding his retirement, such monthly allowance to be not less than $20. Because of the fact that the cost of living greatly increased after the passing of the act in 1907, the minimum rate of $20 per month was found to be inadequate, great hardship and even privation being suffered by those who had retired under the provisions of the act at that minimum rate. For the purpose of affording a measure of relief to these former employees of the crown an appropriation has been provided in the parliamentary estimates since 1921 to make the minimum pension allowance $30 instead of $20 per month as provided by the provident fund. That is the purpose of this vote, to increase that payment of $20 to $30 to meet the increased cost of living.


Abraham Albert Heaps: It seems to me, just from the casual statement made by the minister, that approximately one-eighth of the employees are on pension. Could the minister inform the committee as to the state of the fund on an actuarial basis?


Clarence Decatur Howe: This is only one of several funds of the Canadian National Railways. It is a fund of the old Intercolonial. It is a closed fund, closed a number of years ago. The purpose of this vote is to raise the minimum payment from $20 to $30 per month.


Abraham Albert Heaps: I think the minister stated a few minutes ago that something like eight thousand employees are still paying into the fund.


Clarence Decatur Howe: That is correct.


Abraham Albert Heaps: I was under the impression that it was from moneys contributed by the present employees, plus the amount given by the government, that the existing pensioners were deriving the benefit. Now I am told that the fund has been closed. I should like to have that point cleared up.


Clarence Decatur Howe: It is closed to new entrants. The people who are in the fund are still contributing and will contribute until they become pensioners themselves.


Abraham Albert Heaps: Then I take it that the old employees are pensioners under the old arrangement between the company and its employees, and that in the old fund there was sufficient money to permit payment of $20 per month to existing pensioners.


Richard Bedford Bennett: No, that is not quite right. The hon. gentleman is asking how the fund is made up. I happen to come from the section in which it originally started. Contributions were made by these people; the fund is now closed, and there are some eight thousand people contributing. In 1921 the monthly payment of $20 was found to be inadequate and was increased to $30, and since then we have been paying about $27,000 every year for the purpose of maintaining the fund in its integrity and enabling $30 a month to be paid.


John Ritchie MacNicol: Does the number of pensioners decrease yearly, and, if so, how much less is the number under this estimate than it was under the estimate of a year ago?


Clarence Decatur Howe: I have before me the amount of the expenditures, indicating that the fund reached its peak in 1931-32 and has been getting slightly less each year since then.


Abraham Albert Heaps: What was the number of pensioners in 1931?


Clarence Decatur Howe: I am sorry I have not that information. I will get it if the hon. gentleman so desires.


[Stage Direction]
Item agreed to.
Progress reported.
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
Questions
[Stage Direction]
Wednesday, February 19, 1936