Mr. S. W. JACOBS (Cartier) moved:: That the petition of Joseph Paul George Marcoux and the petition of Adjutor St. Jean, presented on the eleventh instant, each praying for a bill of divorce, be referred, together with the report of the clerk of petitions thereon, to the standing committee on standing orders for the purpose of considering the suspension of standing orders 92 and 93 (3) (a) and (c) in relation thereto.


[Stage Direction]
Motion agreed to.

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

Mr. LENNARD:: 1.	When will the new federal building at Hamilton be ready for occupancy?
2.	When do the leases expire on the several buildings now housing the various federal departments at Hamilton?
3. What rentals are being paid for the following buildings at Hamilton: (a) the Lennox building; (b) the McPherson building?


Mr. CARDIN:: 1.	It is expected the building will be ready for occupancy August 15, 1936.
2.	Lease expires
Space in Canadian National railway station (Post Office)	 August 1, 1936
Jolley Motor Garage (radio car)	 August 1, 1937
Lennox building, 16-22 King St. East- (Taxation Offices)	 On one month's notice
Duffield building (Post Office and Customs)	 April 1, 1938
41 Stuart St. (National Defence)	 August 1, 1940
Commercial Club (Trade and Commerce and Immigration)	 December 1, 1937
Bruce building (Trade and Commerce)	 October 1, 1936
Pigott building (Labour)	 On one month's notice
Pigott building (Radio and Pensions and National Health)	 On one month's notice
Pigott building (Fruit Inspector, Agriculture Department)	 July, 1, 1936
Leavitt building (Department of Pensions and National Health).. July 27, 1936 242-246 James St. North (National Defence)	 September 1, 1936
3.	(a) Lennox building, rental $9,900 per annum; (b) McPherson (Duffield) building, rental, $20,000 per annum.


SUMMERSIDE, P.E.I., EXPERIMENTAL FOX STATION
Mr. BROOKS:: 1.	What sum was expended on the experimental fox station at Summerside, Prince Edward Island, in the fiscal year 1935-36?
2.	How many breeding foxes were on the ranch at the 31st of March, 1936?

3.	How many foxes were raised on the ranch in the fiscal years ending the 31st of March, 1933, 1934, 1935 and 1936?
4. How many fox pelts were sold in the fiscal years 1934-35 and 1935-36, and what was the average price received therefor?
5. How many men were employed on the ranch in the fiscal years ending the 31st of March, 1935, and the 31st of March, 1936?
6.	Have any additional men been employed on the ranch since the 1st day of January, 1936?

Questions
7.	If so, whom, when, at what salary, and for what periods?


Mr. GARDINER:: 1.	Experimental Farms vote, $14,921.67; Public Works Construction Act, $1,748.96.
2.	103.
3.	1933, 43; 1934, 77; 1935, 98; 1936, 171.
4.	Total pelt crop 1934-35, 52, with average price $39.88-sold in fiscal year 1935-36. Total pelt crop 1935-36, 80, with average price of those already sold $37.61.
5.	March, 31, 1935-3 full time unclassified men, 7 temporarily on construction work. March 31, 1936-3 full time unclassified men, 6 temporarily on construction work.
6.	Two additional labourers and 1 graduate assistant.
7.	C. Barlow-April 21, 30 cents per hour; R. Silliphant-May 1, 35 cents per hour; W. R. Inman, May 1, 50 cents per hour.


CRAB ISLAND, ONT., LIGHTKEEPER
Mr. LALONDE:: 1.	Is Crab Island (L'lle Rosalie) situated in the Ottawa river near Montebello, a part of the province of Ontario or of the province of Quebec, and, in either case, for what reason?
2.	Was there a lighthouse or a light on this island, as an aid to navigation, under the jurisdiction of the dominion government?
3.	If so, in what year was it erected?
4.	Who was the lightkeeper on January 1, 1936?
5.	Was the lightkeeper a temporary or permanent employee?
6.	Has he been dismissed from his position, and, if so, for what reasons, and who recommended his dismissal?
7.	Who has been appointed his successor, and upon whose recommendation?


Mr. HOWE:: 1.	Crab Island (L'lle Rosalie) is part of Ontario, being on the Ontario side of the boundary.
2.	Yes.
3.	1912.
4.	Alphonse Seguin.
5.	Permanent.
6.	No, he died.
7.	Temporary arrangement only in effect. Civil Service Commission have been asked to make an appointment.


SASKATCHEWAN POSTAL SERVICES
Mr. COLD WELL:: 1.	Has one J. J. Martin a contract for carrying mail between Prince Albert, Saskatchewan, and Steep Creek post office?
2.	How often is the mail delivered?
3.	What amount is paid for this service?
4.	Were changes in regard to Steep Creek, Fanford and Saskatchewan Forks post offices made at the request of the said J. J. Martin?


Mr. ELLIOTT (Middlesex):: 1.	Yes.
2.	Twice per week.
3.	$449.
4.	No.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. BLANCHETTE:: 1.	What is the total number of farm owners in the dominion?
2.	How many farm owners are there in each province ?
3.	What is the total value of these farms in each province?
4.	What category of farming has been found most remunerative for the past five years?
5.	What category of farming has been found least remunerative?


Mr. RINFRET:: Return tabled herewith.



LEGAL FEES-MR. SOMMERVILLE AND MR. WHITE

Mr. PELLETIER:: How much was paid to Mr. Peter White, K.C., and Mr. Norman Sommerville, K.C., since 1930 for legal fees and travelling expenses?


Louis Édouard Fernand Rinfret: Return tabled herewith.



NATIONAL HARBOURS BOARD


[Stage Direction]
The house resumed from Thursday, April 23, consideration of Bill No. 17, respecting the national harbours board-Mr. Howe-Mr. Sanderson in the chair.
On section 2-definitions.
Mr. MACKENZIE (Vancouver):: I move the following amendment:
That section 2 of the bill be amended as follows:
_ (a) By striking out the word "transport" in the seventh line on page one of the bill and inserting in lieu thereof the words "the crown named by the governor in council to administer this act;"
(b) By striking out the words "under the various acts" in the thirteenth line on page one of the bill and inserting in lieu thereof the following: "to administer the harbours of Halifax, Saint John, Chicoutimi, Quebec, Three Rivers, Montreal and Vancouver by the acts."


[Stage Direction]
Amendment agreed to.
Mr. LAPOINTE (Quebec East):: I wish to refer to something which is rather of a personal nature. While I was away, on April 23, 1936, my right hon. friend the leader of the opposition, referring to the fact that he
National Harbours Board

had not proceeded to introduce a bill implementing the Gibb report, said at page 2085 of Hansard:
But there never was submitted to council a draft bill in the sense of having finality, though there were discussions. I found, however, opposition among our own people as well as opposition from this side, led at that time by the present Minister of Justice (Mr. Lapointe), so that it would be absolutely impossible for us to get the bill through. When I say "impossible" I mean impossible in that sense.
I do not know where my right hon. friend gathered the idea that I was opposed to the bill or to the Gibb report. On the contrary I was in favour of it; I was hoping that this measure would be introduced by my right hon. friend in order that we would not have the responsibility of introducing it ourselves, and I expressed myself accordingly to my colleague from Quebec South. I am sure my right hon. friend could not find anywhere in Hansard or in private conversation anything that would justify this statement.


Mr. BENNETT:: Mr. Chairman, when I made the statement it was -based on information I received following a question which the hon. gentleman asked in this house as to whether or not it was the intention of the government to proceed to implement the Gibb report. My memory is that the hon. gentleman asked that question on more than one occasion. As there was a distinct cleavage of opinion -to the right of the Speaker I naturally inquired as to what was the attitude of the opposition, and I was informed that my hon. friend the present Minister of Justice was opposed to it, and if we introduced it he could join with those who did not believe in it and the -government would not be able to put it through. That was one of my reasons for making the statement I did. Apparently I was inaccurately informed, and I am very glad that the hon. gentleman was a supporter of the Gibb report and would have supported any bill that -might have been introduced by the government to implement that report. It would have been a striking contrast to any evidence that we had of the willingness of hon. gentlemen opposite to support anything that emanated from the government during the five years we were in power.


Ernest Lapointe: My right hon. friend is not fair to me, because if he will recall I was the first in the house to rise and support his bill on radio broadcasting.


Richard Bedford Bennett: Yes, and ever since hon. gentlemen opposite have been trying to undo what was then done.


Ernest Lapointe: Because
my right hon. friend should have done better in carrying it out.
Section as amended agreed to.
On section 3-Board constituted.


Ian Alistair Mackenzie: I move
the following amendment:
That subsection 1 of section 3 of the bill be amended by inserting after the word "under" in the nineteenth line on page one of the hill the words "the direction of."


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 6-Board to have jurisdiction over certain harbours, works and property.
Mr. ISNOR:: Before we take up section 6
I should like to direct the attention of the minister to section 4. It will be remembered that on April 22 I brought to the attention of the minister an amendment asking that a subsection be inserted directing that freight, wherever possible, should pass through Canadian ports. The exact wording was:
The board shall so direct, provide and procure that all freight destined for export by sea which is consigned within Canada for carriage to National Railways either at point of origin or between that and the sea shall, unless it has been by its shippers specifically routed otherwise, be exported through Canadian ports.
In suggesting that amendment to the minister I do so not with any particular port in mind, but rather in order that our Canadian goods destined for export shall go through Canadian ports, and our workmen in those ports shall profit from the handling of those goods. My suggested amendment is not prompted by sectional pride, but is for the direct benefit of each and every one of the seven ports mentioned in this bill. Therefore I hope the minister is not going to pass over section 4 without giving this suggested amendment serious consideration. May I refer to the national ports survey report made in 1931-32, and deal with a few of the figures therein contained in regard to the shipments of grain alone. The report shows the exports of Canadian grain which went through Canadian and United States ports respectively, and gives the following figures:
Canadian Grain Exports Through Through	United
Canadian	States
ports	ports
Crop year:	bushels	bushels1926-	27	
159.400,000	137,458,0001927-	28	
213,008,000	116,082,0001928-	29	
263,177,000	139,870,000
National Harbours Board
The average for five years is 120,000.000 bushels shipped through the Canadian ports and 59,000,000 bushels shipped through American ports.
With figures like these facing us, the minister, in bringing into effect a new organization to administer our ports should consider every possible means of encouraging more freight traffic to go through our own Canadian ports. As I said, this is not a sectional cry at all but relates to every one of our ports.
I stated when I first introduced this amendment that the minister is no doubt familiar with all these figures. I could give a great many more, and I could read extracts from the press in various sections of Canada to support this contention. I could present resolutions from boards of trade in different parts of Canada, all having the same purpose of producing more work for the men in our Canadian ports. This seems to be an opportune time to bring sueh an amendment before this committee. The same provision is word for word in the Canadian National-Canadian Pacific Act, and I think it was put there for a purpose. It might be contended that the national harbours board has been created to look after just such matters as this. But by having this provision in the act it will have the tendency to draw their attention to it in a much stronger manner than if it were not there.
If it were not for prolonging the discussion I could go back, as other lion, members have done, to the British North America Act, 1S67, and show why railways connecting the different parts of Canada were considered so important. I merely say that if they were important at the time of confederation they are just as important now in carrying our goods from end to end of Canada and transporting them for export through our own Canadian ports. I therefore trust that the minister will give my suggested amendment favourable consideration and that it will be accepted.


The CHAIRMAN:: There is an amendment to section 6, moved by Mr. Mackenzie (Vancouver) :
That paragraph (a) of subsection 1 of section 6 be amended by striking out the words "ale now" in the forty-fourth fine on page 3 of the bill, and inserting in lieu thereof the words "at the date of the coming into force of this act were."


[Stage Direction]
Amendment agreed to.
Mr. GREEN:: Before section 6 is carried
may I ask the minister whether any provision is to be made in the bill enabling him to appoint local advisory councils? I think such a provision is of particular importance 12739-191
to the port of Vancouver, because that port is so far removed from Ottawa; there is bound to be delay in dealing with problems that arise in the port and it will be very difficult for the central board to keep in touch with conditions there without some local advisory board representing the different interests using the port. Then, our problems, as the minister knows, are those of a Pacific port in direct competition with the ports of Seattle and San Francisco, the problems are quite different from those of ports on the Atlantic and the St. Lawrence. Finally, our port has been developed by private interests to a much greater extent than have any of the other great Canadian ports. For these reasons I suggest that there should be some power under the act whereby the minister may provide for the appointment of such councils.


Hon. C. D. HOWE (Minister of Marine):: There is nothing in this bill which prevents the establishment of local advisory councils if it should be found that they are necessary. But it was considered that the port manager would give all the necessary local contact, and that there would not be need for local advisory councils. But if the need becomes apparent I can assure my hon. friend that local councils will be established, which may be carried out under the terms of the bill.
To the hon. junior member for Halifax (Mr. Isnor) I may say in reference to section 4 that his proposed amendment received very careful consideration. Of course there can be no objection whatever to including the amendment in the bill except this, that the entire purpose of the bill is to do exactly what his proposed amendment asks. In other words, this bill covers the administration of seven seaports in Canada. The whole purpose of the ports and of the organization behind them is to attract outbound commerce for export through these ports, as well as imports inbound from foreign countries. Our organization is set up for that purpose, and every effort of every member of the organization must be directed to that purpose. My only objection to including the proposed amendment is that to state it in the bill might lead people to believe that there was no real purpose behind the bill which we have introduced. It would weaken rather than add to the purpose the hon. member has in mind.


Gordon Benjamin Isnor: The minister may believe that the suggested amendment is unnecessary, but I suggest it will do no harm. If it does no harm, why not include it? In my view it will do even more than create good feeling.

National Harbours Board

It will make people in the extreme eastern and western parts of the country realize that their interests are being safeguarded to a greater extent.


Howard Charles Green: If the minister finds it will be helpful to have a local advisory council at the port of Vancouver I understand he will provide for such council by bylaw under the present bill.


Clarence Decatur Howe: Yes.


Richard Bedford Bennett: Under what authority in the bill?


Clarence Decatur Howe: I may be mistaken, but I see nothing in the bill which prevents us from obtaining advice anywhere we like. I think there would be no great difficulty under the bill to secure advisers of any kind we wish.


Richard Bedford Bennett: I am afraid that is not quite sound.
Section 6 as amended agreed to.
On section 10-Acquisition of real estate or personal property.


Ian Alistair Mackenzie: I move:
That subsection (2) of section 10 of the bill be amended by striking out the words "acquired and held in the name of" in the thirty-seventh line of page 4, and by inserting in lieu thereof the words "vested in."


[Stage Direction]
Amendment agreed to.
Section 10 as amended agreed to.
On section 13-Bylaws.
Ian Alistair Mackenzie: I move:
That section 13 of the bill be amended as follows:-
(a) by striking out the word "board" in the seventh line on page 6 of the bill and substituting in lieu thereof the words "governor in council";
(b) by striking out the word "board" in the second line on page 7 of the bill and substituting in lieu thereof the words "governor
in council";
(e) by striking out subsections 2, 3, 4, 5, 6 and 7 thereof on page 7 of the bill and by substituting in lieu thereof as subsection 2 the following:
"(2) Bylaws made in accordance with the provisions of this act shall, when published in the Canada Gazette, have the same force and effect as if enacted herein."	*


Richard Bedford Bennett: I only direct the attention of the government to the fact that it has enacted in section 13, notably in paragraph (h), a provision to which most violent exception was taken in days past. That is, the governor in council is now authorized to prescribe a penalty "that may be imposed on any person violating any bylaw which the board is authorized to make under this act."

As a matter of fact the governor in council is at present authorized to make the bylaws. Although there have been changes in the main body of the section, paragraph (h) in my copy has not been changed, and it provides for a fine up to S500 or sixty days imprisonment. That is to be done by the governor in council, one of the matters to which most violent opposition was expressed in the last few years. I point out that in some way paragraph (h) should be amended because it says "any bylaw which the board is authorized to make."


Mr. CAHAN:: The proposed amendment
makes the change.


Richard Bedford Bennett: I did not understand it
to do so. Does it cover all the sections?


Mr. DUNNING:: Yes.


Richard Bedford Bennett: I was referring to the
last -copy on my file.


Clarence Decatur Howe: There may be an error. The second change was not put in the last copy of the bill.


Mr. POULIOT:: I do not find it worse
than engaging the credit of Can-ada for millions of dollars by order in council.


Charles Hazlitt Cahan: Is it clear that the amendment to section 13 means that wherever the word "board" is found in the section as now printed, the words "governor in council" will be substituted?


Clarence Decatur Howe: Yes.


[Stage Direction]
Amendment agreed to.
Section 13 as amended agreed to.
On section 22-Recovery of penalties.
Ian Alistair Mackenzie: I move:
That section 22 of the bill be amended by striking out the words "moneys due and" in the fifth line on page 11 of the bill.


Clarence Decatur Howe: This is to correct an error
which appears in the old act. Obviously we cannot collect money under the criminal code.


[Stage Direction]
Amendment agreed to.
Section 22 as amended agreed to.
On section 37-Powers of board.
Ian Alistair Mackenzie: I move:
That section 37 of the bill be striken out and the following substituted in lieu thereof:
37.	(1) The board shall possess and be
vested with all the powers, rights and privileges belonging to and possessed by or vested in each of the corporations at or before the coming into force of this act, or to which they, or any of them, may be or become

National Harbours Board
entitled, and shall be liable for all lawful claims against, and obligations of the said corporations.
(2) Nothing in this act contained, shall prejudice or affect the rights of any person which may have existed at or before the coming into force of this act against any of the corporations or any action or legal proceeding taken to enforce such rights and such rights may be enforced by action against the board and any action or legal proceeding instituted before the coming into force of this act may be continued against the board.


[Stage Direction]
Amendment agreed to.
Clarence Decatur Howe: The hon. member for St.
Lawrence-St. George proposed a further amendment which would make the board liable in tort. I had no personal objection to the inclusion of this amendment, but the law officers of the crown hold the view that it would make a decided change in the policy of the government in matters of this kind, and have advised very strongly against including the amendment.


Charles Hazlitt Cahan: Before the section as
amended is carried, I move:
That section 37 of the bill be amended by adding the following subsections:
"(3) That the board shall become and be liable to be sued in tort, and that in the case of any such suit in tort, the same procedure shall apply as that which regulates the conduct of similar cases between subjects, including such matters as discovery, the receiving and paying of costs by the board, and the like.
(4) Service upon the board of any writ or process may be effected by personal service upon an officer or employee of the board at any of the harbours over which the board has jurisdiction.
Under the existing law the crown, that is to say, the government, cannot be proceeded against, either by petition of right or otherwise, for any alleged wrong on the part of its servants. The only remedy for any such wrong is against the individual employee of the government who is deemed responsible for the wrongdoing.
I suggest that when the government of this country, as in this case, undertakes the ownership, direction and operation of any great public utility, such as a railway, or undertakes the operation of elevators, warehouses, wharves or docks, the procedure by information and petition of right should be abolished or superseded, and the crown, as a litigant, should be liable to be sued in tort and be subjected to the same procedure as in ordinary cases between subjects, including, as I have suggested in the amendment, such matters as discovery, receiving and paying of costs and the like. In other words, that the crown, owning and operating public utilities, should
12739-191J
be placed in the same position in the competent courts of the country as regards power and liability to sue and be sued as subjects of the crown inter se. I am strongly of the opinion that the crown, in respect of its administration of such public utilities, should be liable as any private commercial or industrial corporation is liable to be sued in tort for the wrongs which may be committed by its officers, agents or employees. Take the case of this public utility extending from the Atlantic to the Pacific administering the great harbours of Canada, operating railways and tramways, operating elevators and public docks; should not such organizations, when they through negligence of their servants commit wrongs, be liable to answer as other commercial and industrial companies must answer in the ordinary courts of competent jurisdiction of the country?
At the present time I do not wish to review the decisions, but it is perfectly clear that under this act as at present drawn, any damage which is done to shipping, domestic or foreign, at the wharves and docks operated by this company, any injury done to commercial men who are sending their teams and their agents to these warehouses and docks to conduct their ordinary business, any injury that is done to others by the negligence of the government or its employees or agents, cannot, as this bill is at present drawn, be the subject of an action for damages in the provincial courts of competent jurisdiction in Canada.
I might quote more than one opinion of eminent judges of this country who have suggested that this defence of acting for the crown should not be permitted as a defence with regard to the operation of these utilities, but a very late case is that of the Temis-kaming and Northern Railway Commission, reported in 70 Ontario Reports, 1934, at page 701. The court of appeal of Ontario dealt there with a very simple case, and the decision of the court was rendered by Mr. Justice Davis, then of the court of appeal, and now of the Supreme Court of Canada. He suggested that this bar to the assertion of the civil rights of those who suffered from the wrongs committed by a railway owned by the crown and operated by its agents should certainly be abolished. In this particular case the court of appeal had to consider whether the commission apointed by the lieutenant governor in council of Ontario to administer a public undertaking, that is, this particular railway, in the right of the crown as representing the province, was not liable for the damages resulting from running
National Harbours Board

over a motor ear and destroying it by the negligence of the operatives of the railway. Mr. Justice Davis, at page 70, said:
The crown can do no wrong, and the immunity of the crown for the tortious acts of its servants and agents is well established as a constitutional rule of law. It is, like other royal prerogatives, not to be treated as personal to the sovereign, but as a constitutional right conferred on the sovereign upon principles of public policy for the benefit of the people. These prerogatives of the crown form part of the law and, generally speaking, are 'as ancient as the law itself."
And he refers to the case of The Queen v. McLeod, 1883, in the Supreme Court of Canada Reports. He proceeds:
In recent years parliaments have assigned to ministers and civil servants vast powers of subordinate legislation and administrative business and have endowed them with many functions, sometimes judicial or quasi-judicial, and the subject of the right of action for tort against government departments has not only been before the courts for consideration but has been the subject matter of much inquiry and discussion both in England and in this country. There can be no doubt of the right of our legislature, by distinct enactment to limit or abolish this old constitutional immunity in respect of government business, but not only the wisdom of so doing, but the authority to do so is entirely a matter for the legislature. The court must administer the law as it finds it.
I wish to commend to the consideration of the government and of parliament the fact that in these days when the government is undertaking large and extensive public services, many of them in competition with commercial and industrial enterprises, it should assume the same liability for the torts or wrongs committed by their servants as must be assumed by other public companies which are not operated in the right of His Majesty, and by all private companies of every sort and description and kind. In order that this matter may be considered I desire to press the amendment which I have read, and which I had previously submitted to the Minister of Marine for the consideration of himself and his officers.


Ian Alistair Mackenzie: Mr. Chairman, I have just one brief reference to make to the amendment that has just been submitted. Even- if everyone should agree with the general principles enunciated by the hon member for St. Lawrence-St. George (Mr. Cahan) I think it is highly improper to introduce the application of a general principle in a special act. If we were to carry out the recommendation made by Mr. Justice Davis in the case the hon. member has mentioned, that would be a matter of general government policy and would apply to all departments of
[Mr. Cahan.1
government, and there is no precedent for introducing into special acts such as this, dealing with one particular department of government, a general principle applicable to all departments. If we were to make the particular principle my hon. friend advocates applicable here and- not make other departments of government subject to its application, that in itself would constitute a discrimination in legislation. I agree very largely with some of the observations which the hon. member made and those which he quoted from Mr. Justice Davis, but this is not the way, I submit, to effect the application of the general principle which he advocates. I commend to the government the consideration of the general principle which is applied to all legislation. There is no discrimination in connection with this particular piece of legislation now before the committee.


Richard Bedford Bennett: I am unable to agree with the Minister of National Defence (Mr. Mackenzie), for the simple reason that this is a special form of legislation which deprives those who may have a right of action of that right of action against the Halifax harbour commissioners, the Montreal harbour commissioners, and other harbour commissioners.


Ian Alistair Mackenzie: Have
they that right of action now?


Richard Bedford Bennett: I understand some of the harbour commissions have been sued in the courts because of negligence.


Ian Alistair Mackenzie: Not so far as I know.


Richard Bedford Bennett: It is my understanding that the harbour commissioners of Montreal were sued in connection with the movement of grain. Litigation went forward in the courts in my time. I can only say that. This is not an ordinary department it is a department which is competing with those who are operating utilities of the same kind. Suppose we have this case. The Cunard-White Star line have a dock upon which facilities have been established. Because of negligence a workman is injured. On the railway operated by the Montreal harbour board, or by their general manager, as it would be now, a workman is injured. In the one case the workman takes his action in the courts, and, if he establishes negligence, he succeeds. In the other case, where the railway falls under the provisions of this act, he can sue only by petition of right, which has to be printed and submitted to the Minister of Justice, and by him to His Excellency.

National Harbours Board


Charles Hazlitt Cahan: They cannot proceed even by petition of right.


Richard Bedford Bennett: As it stands now, on a tort he -would not have the right to do that. Is that quite fair? Here are two enterprises being conducted side by side. Over here are the facilities on the dock of the Cunard-White Star line; over there is the terminal railway of the Montreal harbour. In the one case a workman is injured through negligence and he is able to bring his action; in the other case the workman is injured, perhaps by negligence even more abundantly clear, but he cannot maintain an action. The answer may be that he is taken care of under the workmen's compensation act or otherwise, but I think it is time this sort of thing was stopped. My colleague, the former Secretary of State (Mr. Cahan), referred to the judgment of Mr. Justice Davis in the Ontario court of appeal. In England they set up a commission headed by the late Lord Tomlin for the purpose of considering the matter. Certain recommendations were made and a bill was actually introduced in parliament, but it did not get through because of the pressure of other business. We passed a special act in this country between 1911 and 1917 under the government of Sir Robert Borden-the exact date I cannot recall-by which claims against the Intercolonial Railway could be litigated. Perhaps the Minister of National Revenue (Mr. Ilsley) will remember the date of the act which allowed the Intercolonial to be sued for certain classes of claims.
Is it not time that we made a little progress in this direction? If the crown has been guilty of negligence through its servants, why should not the crown be liable, just as the Cunard-White Star line or the Canadian Pacific would be liable? The only way to take a step forward is to do it now. We are setting up a utility to compete with other utilities; for instance, they operate cold storage depots, terminal railways, storage and elevator plants. In regard to what the Minister of National Defence has said, it will be recalled that the action brought in Quebec was in connection with certificates which had been forged by a servant of the harbour commission. The question was litigated, but the matter was settled before it was finally determined in the courts. I do not know whether a fiat was issued, but I do recall that the action was instituted in the superior court rather than in the exchequer court. Surely we are now in position to make an advance. I think the time has come when Canada can afford to step forward and do

that which jurists in Great Britain, in Canada and other parts of the world have long regarded as the sound thing to do.
I am sure the Minister of National Defence would be the first to say that if one of his fellow citizens was injured on the docks of the harbour commission, he should have the same right of action as if he were an employee of the Canadian Pacific. It is time this discrimination was stopped. I think we should add to the bill to give it a more far-reaching effect. To do that would be not only a distinct improvement but would show that we are ready to take a step forward by giving to all employees who are injured the same right of action against their employers, whether they happen to be the government or a private corporation.


Clarence Decatur Howe: The purpose of this bill is to unite several harbour commissions into one harbour board. We have made absolutely no change which will affect the individual corporations. In other words, the individual corporations were not liable in tort, and this corporation likewise will not be liable. I went into this matter very carefully with the law officers, because it seemed reasonable to me that these employees should be given the right of action, but I was told that to insert such a provision in a bill of this kind would be a com-plete departure from British law. If the principle that the king can do no wrong is to be abolished, it seems to me that this is hardly the place to do it.


Richard Bedford Bennett: It may not be desirable to do it in all cases, but it is a different thing where you are operating a utility. There is a difference .between saying that the king can do no wrong and that three civil servants who comprise a commission can do no wrong. The title has been placed in the crown so that the crown will be free from the interference which might come about because of the imposition of undue taxation. That question actually arose. The hon. member for Halifax (Mr. Isnor) will recall that the city of Halifax had a case which went to the Supreme Court of Canada in connection with the imposition of a business tax on the lessee of a portion of the harbour front. The same question has arisen in Vancouver. It is a long cry from saying that the king can do no wrong-remember that this maxim had its origin in the birth of the law-to saying that these three eminent gentlemen can do no wrong in the conduct of harbour business. It seems to me that we are dealing with a matter in which there is more than a general

National Harbours Board
principle at stake. A utility is being administered for the public and it will tend to make the officials a little more careful if this is done. It is not as though the particular law to which the hon. gentleman referred were inflexible, because it is not. In nearly every age there has been a judge who has suggested that this should be done in a particular case with which he might be dealing. When he gave his judgment, Mr. Justice Davis was dealing with a publicly owned railway which was operating in a territory traversed by more than one road. He said that the publicly owned railway should be liable for tort or otherwise just the same as any ordinary railway. In this case, where you have a utility, does it not seem to be reasonable that we should make an advance now and not wait for some future time? It is not as though this were a monopoly, because down here there is the Anchor line, the Cunard line, and the Canadian Pacific steamships, and if they are negligent in the conduct of their business the employee has his right of action for negligence, while over there, where there is a warehouse or an elevator, because the employee happens to be under the direction of a general manager who is the servant of a commission which represents the crown, he cannot recover. It is not fair. It is a situation which arises because of modern developments. I think it was the last appointee to the Supreme Court of the United States, Justice Cardozo, who delivered recently a lecture on the judicial habit. In speaking upon that subject, he pointed out how desirable it is that judges should make their minds responsive to the changes that are taking place in civilization. The United States supreme court has always been moved by those considerations, notably in a great judgment of Chief Justice Marshall in earlier times. In England, in the case of Allen v. Flood, we find the House of Lords moved by those considerations. Now here is a great chance for the dominion of Canada to make a step foward, by making the crown, as an employer of labour in the operation of a utility, liable for damages in tort just as a private employer or corporation would be.


Ian Alistair Mackenzie: If I agreed with all that the right hon. gentleman said and all that the hon. member for St. Lawrence-St. George said, the proper procedure would be to change the general principle of the law and apply it to every department of government.


Richard Bedford Bennett: No.


Ian Alistair Mackenzie: Otherwise you would have in this legislation the application of a principle affecting one department of the crown in the Dominion of Canada and not affecting any other. Is not that correct?


Charles Hazlitt Cahan: No other department operates like public utilities.


Ian Alistair Mackenzie: Or in any
other British country?


Charles Hazlitt Cahan: No, it is not.


Ian Alistair Mackenzie: My hon. friend seeks to apply a principle with respect to this piece of legislation that does not apply to any other department of the crown in Canada. They are not liable in tort for the operation of government railways.


Richard Bedford Bennett: But for the operation of their system they are liable in suit every day. I have sued them myself.


Charles Hazlitt Cahan: It was not so stated, but in previous discussions of this bill, as I have contended, to make it particularly clear that this property which is administered by the proposed board shall be free from taxation in the several provinces, we have declared by specific legislation that the property is vested in His Majesty in the right of the dominion, and consequently that the board should be deemed to be an agent of His Majesty in the administration of the act. But in fact this property is no more the property of the crown than Canadian National Steamships is the property of the crown. Every dollar invested in Canadian National Steamships was taken from the consolidated revenues of this country. Those ships are owned by the government as much as are these wharves and docks, yet because Canadian National Steamships is incorporated as a company it is liable to actions in tort, it is liable for damages which are due to the inefficiency and negligence of its officers and employees. Furthermore I suggest that the subsidiaries of the Canadian National Railways as at present constituted are liable to be sued in tort. I notice that the adviser of the minister is suggesting something to the contrary.


Charles Avery Dunning: You must have very good ears.


Charles Hazlitt Cahan: Oh well, I could read by the movement of his lips what was being said. But I still differ. In large measure the Canadian National Railways in their operation are liable for the wrongs committed by servants, and so far as my memory goes, in every

National Harbours Board
case in which action was brought against its individual employee or servant because of a wrongful act committed by him in the service of the railway, and judgment was recovered, the government, recognizing this principle, assumed the liability and paid the judgment. That is so far as my experience goes, although it is not so very extensive. Now we have begun in a large way to operate through a department of government these public utilities. The minister who will assume, under the measure now proposed to the house, the office of Minister of Transport, will conduct the Canadian National Railways, a public utility, Canadian National Steamships, a public utility, the harbour board, a public utility, and certain other minor boards which may be regarded as public utilities. I say that when the government is entering upon the ownership and administration of these utilities iD competition with many private services, it should assume, as other public corporations have to assume, and as all private corporations have to assume, the liability for wrongs done in the administration of a similar service. No other department of government conducts services of this extent and this kind.


Mr. MacLENNAN:: Will the employees
of the national harbours board have the benefits of the compensation laws?


Clarence Decatur Howe: Yes. The government has
a compensation act of its own which makes applicable to its employees the various provincial compensation acts. Every precaution which is taken by a private firm to protect its employees is taken by the government, not as a matter of compulsion but as a matter of grace.


Charles Hazlitt Cahan: But this amendment which
I propose does not refer so particularly to employees. It simply means that if, driving down on a public wharf to go on board a steamship as a passenger, through the negligence of the operatives of the Montreal harbour railway my family and I are destroyed, there can be no action for damages, although I might have lost my life and the lives of my family by the negligence of the driver of the locomotive. It means that in the operation of large elevators such as we have, if through the negligence of the operators a steamship company lying alongside the wharf suffers damage to the extent of hundreds or even thousands or tens of thousands of dollars, it has no remedy whatsoever, although if it were lying alongside a private wharf, similar negligence on behalf of the owner of the private wharf would found a good claim for damages in the courts. I
have nothing more to say. I have put this amendment before the committee, and I suppose it will be voted down, but I insist that it is a matter which should have received more careful consideration.


Clarence Decatur Howe: The hon. member for St.
Lawrence-St. George has strong sympathizers on this side of the house. It is solely because the officers see great difficulties ahead that his amendment has not been accepted, but if he will allow us to pass the other sections and hold this over for further consideration we shall be very glad to do so.


Charles Hazlitt Cahan: I am anxious to assist the
minister in every way. Suppose that he proceeds: we will hold section 37 as at present amended.


Mr HOWE:: Yes.


Charles Hazlitt Cahan: Subject to further consideration of the motion outstanding. Now the minister has a slight amendment to section 38-


Frederick George Sanderson: An amendment to section 37 has been already carried.


Charles Hazlitt Cahan: Quite so, but before the
section as a whole was carried I moved another amendment and I wish that amendment to stand, as the minister suggests.
Section 37 stands.
On section 38-Proceedings relative to construction of works in navigable waters under jurisdiction of the board.


Charles Avery Dunning: I move that section 38 be amended by striking out	the	words	"oftransport" in the seventh line	on page	14	of
the bill.


[Stage Direction]
Amendment agreed to.
Section as amended agreed	to.
On section 39-Acts repealed.
Charles Avery Dunning: I move that section 39 of the bill be struck out and the following substituted in lieu thereof:
39. The Quebec Harbour and River Police Act, chapter one hundred and sixty-nine of the revised statutes of Canada. 1927, and the acts mentioned in schedule "A" to this act, except sections fifteen, sixteen and seventeen of the Saint John Harbour Commissioners Act, 1927, chapter sixty-seven of the statutes of 1927, are hereby repealed.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
National Harbours Board
[Stage Direction]
On section 40-Commencement of act.
Charles Avery Dunning: I move that section 40 be amended by inserting after the word "act" in line 15 on page 14 of the bill the words "in whole or in part" and by inserting after the word "date" in the same line the words "or dates."


[Stage Direction]
Amendment agreed to.
Charles Hazlitt Cahan: I should like to call the minister's attention to one matter that struck me. I refer to section 16, subsection 4, of the bill, on page 9:
Such vessel may be seized and sold under any writ or warrant of execution or of distress issued by any court of record upon the judgment or conviction at the suit of the board against the vessel, the master, owner or person in charge thereof.
I would suggest for the consideration of the minister and his legal advisers that this should read "any court of competent jurisdiction" rather than any court of record, because we have many different kinds of courts of record in this country, and only a court of competent jurisdiction should be entitled to so proceed. I suggest that for the consideration of the minister before the bill comes up for final passage through this committee.


Clarence Decatur Howe: I shall be glad to take that under consideration.
Section as amended agreed to.
On the schedule.


Charles Avery Dunning: I move that the said bill be amended by adding thereto as schedule "B" thereof, the following:
Then follows the descriptive matter contained in the last reprint of the bill.


Charles Hazlitt Cahan: Do the descriptions remain the same in the new schedule "B"?
Mr. HOWE; There is just one change. We were requested to change the description of the north arm of Vancouver harbour, and hame made it read "the Indian arm-formerly known as the north arm." We consulted the geographical board and were advised that this description is correct. That is the only change.


[Stage Direction]
Amendment agreed to.
On section 15-Rates and tolls.
Gordon Benjamin Isnor: I should like to ask the minister if, while considering the various amendments to this bill, he and his officers considered the establishment of free zones or free ports in connection with the activities of the harbour board.


Richard Bedford Bennett: What does the hon. gentleman mean by that?


Gordon Benjamin Isnor: Not exactly what a great many people have in mind. I certainly do not want to see free ports established which would bring about the erection of barriers between various provinces, or anything like that, but I do feel we could establish free zones. Consider the province of Nova Scotia, or the port of Halifax. I believe we could set aside a certain area in which goods could be landed and placed in warehouses or reshipped, as the case might be, which would mean very much additional labour so far as our harbour front is concerned. That is the free port or zone that I have in mind.


Clarence Decatur Howe: The matter of free ports is something quite apart from this bill, and there would be no place for it in the bill even if the government were inclined to adopt the policy. It would require a great deal of legislation, apart from this.


Gordon Benjamin Isnor: My question was whether it was considered when the minister was dealing with the setting up of the harbour board.


Clarence Decatur Howe: It really has nothing to do with the harbour board and it was not considered in that connection.


Gordon Benjamin Isnor: I do not know whether that answers the question. I believe it has a direct bearing in connection with the activities of the harbour board. As I understand it they are to create business for the various harbours mentioned in the bill, and if this is one way in which greater business can be procured for any one or all of these ports then I say it comes within the jurisdiction of this central harbour board to consider such an angle.


Clarence Decatur Howe: The question of free ports is a matter of customs regulation, a matter of tariffs, and has nothing to do with the management of the ports.


Gordon Benjamin Isnor: No, but it has to do with the creation of business.


Clarence Decatur Howe: If the customs department will create a free area we will administer it through our present machinery.


Richard Bedford Bennett: Section 15 was allowed to stand for a very special reason. Perhaps the minister will recall that we thought it was very arbitrary; I pointed out that if the Minister of Justice were on this side of the house he would regard it as such an arbitrary exercise of power as to shock his Liberal sensibilities. If he will look at it he will see

National Harbours Board
that the board may levy such rates and tolls as may be fixed by by-law. That is now done by the governor in council, though it was not at the time we were discussing it. Then the section proceeds:
... and may, with the approval of the minister, commute any rates or tolls so fixed on such terms and conditions and for such sums of money as the board deems expedient.
That is a wide power.
(2)	The rates and tolls on goods landed or transshipped in or shipped from any harbour under the jurisdiction of the board shall be paid by the consignee, shipper, owner or agent of such goods, and goods shall not be removed from the harbour until such rates or tolls are fully paid or security for payment accepted by the board.
(3)	No officer of customs shall grant a clearance to any vessel to leave

And so on. The point we were making is that as it then read that left a large discretion in the hands of the board to levy these rates and tolls, and with the approval of the minister they could commute them. That was giving *to the board a power of discrimination against which at times I have heard very strong protests in this house, in connection not with this legislation but with legislation somewhat similar. It invites pressure, and in view of the attitude taken by the government in respect to the rest of the bill it must be unsound. It is not so bad now, since it is to be done by by-law and not by the mere passing of a resolution, and that by-law will have to be passed by the governor in council, because the rates and tolls are as fixed by the by-law and that is fixed by the governor in council. So that part of the objection we made a few days ago has disappeared, to the extent that the responsibility is now that of the governor in council rather than of the board. But to permit them with the approval of the minister to commute or reduce tolls is but inviting pressure. For instance, take the case of Montreal and Sorel-not an imaginary case, but a real one-or Montreal and Quebec. During the last five years, in order to secure some traffic for Quebec, the harbour board there reduced the tolls to a rate lower than that which prevailed at Montreal, so that grain would be carried to Quebec harbour and stored there rather than at Montreal. That of course is well known. Also it is well known that the difficulty experienced as between those two ports existed in connection with Sorel, where additional elevator space is being constructed. Giving this power to the minister-it is really the power of the minister, because it is with his approval-to "commute any rates or tolls so fixed on such terms and conditions and for such sums of
money as the board deems expedient" I think is something that if possible we should avoid. I pointed out the difficulties of placing that power in the hands of any minister, with political pressure as it is. I still think it is very much to be deprecated. For instance you might have a contest between Fort William and Port Arthur. It is difficult to imagine that, because the rates to those two points are the same and they do not come under this bill, but there might be difficulty as between elevator space further up in Bur-rard inlet and space lower down. These things happen. In the case I put, which is a real one, the conflict is between Sorel and Montreal, and the result of the action taken with respect to Quebec was that a good deal of difficulty arose, but because contracts had been made the rates were reduced at Montreal to meet them, and of course in the end the business was unprofitable. To clothe the minister with this power to say yes or no, notwithstanding what the board may say, is to create a situation which, as I pointed out the other evening, would be intolerable. But it is not quite as bad as it was the other evening, since power to make by-laws is taken from the board and the minister and given to the governor in council.


Clarence Decatur Howe: The matter of preventing one port from competing with another by cutting rates is one against which we can hardly legislate. We hope to correct that by having all the harbours under the one control. But I think my right hon. friend will agree that there must be some method of commuting charges, in various special circumstances where a charge is levied that is not justified even though it is under a tariff. We are trying to avoid setting up an inflexible machine to run a business which is highly competitive. I hardly think we can get along without the power, but I assure my right hon. friend that it will be administered very carefully.


Richard Bedford Bennett: I quite appreciate the point the minister makes, I followed him the other evening when he said that we have endeavoured by consolidating all these harbours under one management to obviate competition arising between ports. But this is placing the minister in a position that I think is almost intolerable, being subject to the pressure of commuting rates that have been levied properly at one port, say Montreal, and then Sorel introduces a lower rate and gets more business and at once application is made to the board to reduce the rates now being charged with respect to transactions that have passed through Montreal elevators. The minister can say he has no power
Customs Tariff

under the statute. But under this section the board says: Well, you have; all you have to do is say yes, and Mr. Jones says it is very important for him at the next election that this should be done. I merely state the cold, stark reality of these cases. It is not from any personal experience of that kind, I assure the minister, because the cases to which I refer, the competition between Quebec and Montreal and that movement of a few million bushels of grain, arose long prior to 1934 or 1935. Of course it was expected under the judgment of the board of railway commissioners that grain would move in large measure into the Quebec terminal, but it did not, and they had to make it cheaper to store it at Quebec than at Montreal. I still think the section is a bad one, but the minister says: Trust me and we will see that it is properly administered, which is the usual excuse made for the exercise of arbitrary power.


[Stage Direction]
Section agreed to.
Progress reported.


[Stage Direction]
The house in committee of ways and means, Mr. Sanderson in the chair.
Customs tariff-267. Crude petroleum not subjected to any other process than natural weathering and removal of foreign matter and water, when imported by oil refiners to be refined in their own factories:-
(i)	-8155 specific gravity (42-0 A.P.I.) or heavier at 60 degrees Fahrenheit: British preferential tariff, free; intermediate tariff, free; general tariff, free.
(ii)	Lighter than -8155 specific gravity (42-0 A.P.I.) at 60 degrees Pahrenreit, per gallon: British preferential tariff, J cent; intermediate tariff, J cent; general tariff, 1 cent.
Mr. ROSS (Moose Jaw):: I wish to draw
the attention of the committee to some facts in connection with this item. It has been changed in the schedule. At one time it covered all crude petroleum entering Canada, [DOT]7900 and lower in specific gravity. At the present time the item is split into two sections, the first section specifying -8155 specific gravity, or 42-0 A.P.I., or heavier, and the second section specifying lighter than -8155 or 42-0 A.P.I.
Crude oils coming into Canada are received by the refiners who transform them into refined petroleum products. There are in this country two classes of refineries, the small refinery or distillation plant, described by some people as a skimming plant, and the large oil refineries which have distillation and cracking equipment in connection therewith. Crude oil, heavier than 40 or 42 A.P.I. is

used by the larger refineries equipped with these cracking systems. Crude oil, lighter than 40 or 42 A.P.I., is used by the small refineries equipped with only the distillation or skimming process. The change in the item places a half cent tariff against crude oil used by the smaller refineries.
For many years the larger refineries in Canada have had the greater part of Canadian business, and in the last few years, when there have been excessive tariffs against the importation of petroleum products from the United States they have practically had the market to themselves. During that time the smaller refineries started up, because under the low freight rates for crude oil they could import light crude oil which carried a greater percentage of gasoline, kerosene and distillate when used only for distillation purposes, they could thereby sell gasoline distillate and coal oil at lower prices. The large refinery gets about the same amount out of the heavier crude oil, when the cracking process is used.
It is almost too long a story to go into in detail, but we know that the oil and gasoline business is of great importance to practically every' primary producer in Canada. However, we are pretty well in the hands of a monopoly, so far as the oil business is concerned. Any industry we can get to compete with the monopoly should be encouraged as much as possible by any government holding office in Canada. The tariff change will place the small refiner in a position where he will have to pay one-half cent per gallon more on his high grade crude oil. That will not put him out of business, but when one goes into the history of the oil business he finds that a few years ago, in an endeavour to stop the importation of light crude oil into Canada a submission was made to the board of railway commissioners to have the crude oil freight rate split at 40 degrees gravity, so that the railways would be able to charge a higher freight rate on the high grade crude oil than on the low grade product, and thereby to a large extent, if not completely, shut out the importation of high grade crude oil by small refineries.
Judgment was rendered on the application, the main point of the decision being that because parliament recognizes all crude oil as crude oil, and because we do not differentiate between low and high grades, the board of railway commissioners could not see. its way clear to make any split in the rates. I am not greatly worried about the half cent tariff imposed under the item, because I believe I know the purpose of it. Some of the smaller refineries have been importing oil which they claimed was light crude, when in

Customs Tariff
fact it was not. It was what is known as spiked crude. That is gasoline with a certain amount of crude oil placed therein, so as to lower the specific gravity and place it in the category of crude oil shipped in under the crude oil rate. We know that has been done in the past, and I believe it is the purpose of the government to endeavour to stop that practice, because I understand it is not a practical proposition to spike oil at 42 or over in face of a one-half cent tariff. I suggest, however, that when we put a half cent tariff on crude oil we are going in a roundabout way to accomplish our purpose.
The principle is that of placing a tariff on a raw product to endeavour to stop smuggling of the finished product across the border. In other words, the Minister of Finance might as well put a tariff on hides to prevent someone from smuggling shoes across the border. I am exercised about the change because I am afraid that the moment the differentiation is made in the customs tariff between high and low grade crude oils the railways, either of their own volition or at the instigation of the large refineries in Canada, will again appear before the board of railway commissioners and ask that the rate be changed. If that should come about and the rate is changed on the higher grade crude oil, of necessity this will put the smaller refiner in Canada out of business. I warn the railway companies now that if any such procedure is taken, and if they go to the board of railway commissioners asking for a change in the crude oil rate, or to put a higher rate on high grade crude I, or some other person, will go before the board at the same time and ask for a reduction in freight rates, at least in western Canada, on all petroleum products.
The railway companies derive tremendous revenue from the shipment of petroleum products consumed in the Canadian west. In 1935 the Canadian National Railways and Canadian Pacific Railway combined gathered a revenue of about $6,700,000 in western Canada on the shipment of this commodity. They have an exorbitant rate on all petroleum products, whether moving from the American boundary, from the refineries in the middle west, from the great lakes to the west or from Vancouver to the east. As a matter of fact, that is how the large Canadian refinery has its opportunity to charge excess prices in the west for petroleum products, and the reason is this: Crude oil coming north from Oklahoma, for instance, carries a freight rate now of fifty-four cents per 100 pounds. Gasoline from the same group 3 carries a freight rate of 9-77 cents per gallon.


Richard Bedford Bennett: From Oklahoma to
where?


John Gordon Ross: To Regina or Moose Jaw. The small refiner must bring his crude oil in at that fifty-four cents freight rate, but the large refiner is in a much better position. I speak with knowledge because I happen to have a large refinery in my riding. They carry on a very large refining business, buying their crude oil. I believe they have control of the crude oil that enters the Dominion of Canada at Coutts, Alberta.


Richard Bedford Bennett: They own wells in the United States at Oklahoma?


John Gordon Ross: Yes; there is a pipe line that comes up close to Coutts, and from that point they import their crude oil for their refinery at Moose Jaw at a rate of 23J cents per 100 pounds. There is another rate of twenty-six cents per 100 pounds, which is made, I believe, because they compete with a pipe line from Cut Bank. So the large refinery is paying half the freight rate that the small refinery pays to-day. Now, when a large refinery can bring its crude oil in at a freight rate of twenty-six cents per 100 pounds, and the only competition it has from the outside is on gasoline which carries a freight rate of 9-77 cents per gallon, hon. members will realize that the large refinery has a tremendous advantage on the Canadian business.
Since I came to Ottawa this year I have been in touch with the railways to see if we could not get a better freight rate from Fort William and Port Arthur and from Vancouver, in order to have more competition with the refinery in the middle west, but their claim is that if that were done all freight rates in the west would have to be lowered in correspondence with these long haul rates, and that the railways would lose a tremendous amount of revenue which they are getting to-day. I have not pressed the point and I do not intend to do so, unless some move is made by the railways and others to endeavour to raise the rate on high grade crude in order to try to shut off the small refinery in the west. As I said a moment ago, I think the oil business in Canada is a tremendous monopoly. I believe that sincerely, and I want to give the committee one or two figures which, I think, will show to some extent at least the advantage which is being taken of the people of Canada by this monopolist industry.
I asked the customs department yesterday or the day before to procure for me prices
Customs Tariff

on gasoline at certain points in the United States. I asked them to give me the export rate on gasoline of 64 to 66 gravity, out of New York, and the price they gave me was 6i cents per gallon for 60 to 64 gravity and 6} cents per gallon for 65 and up. Those are all good gasolines. May I say, first, that there is a certain method of handling gasoline which is generally adopted. Either an export price is taken, or a tank ear price in an internal market. Then, a set spread is allowed for the distributors between tank car and tank wagon and between tank wagon and filling station, or service station as it is called. These spreads are not the same everywhere, but they are very closely the same in most places.
In New York you take 6| cents per gallon as the export price for good gasoline. You add to that a spread of 3J cents, which is the spread between tank car and tank wagon. You add to that an additional 31 cents, which is .he spread between tank wagon and service station through the pump. You add to that the tax in the state of New York of five cents per gallon. That gives you a price of 18-75 cents, or 18} cents per gallon. That is the exact price which the person in New York who pulls up at the service station pays for his gasoline.


Mr. MacNICOL:: Imperial or United
States gallons?


John Gordon Ross: 
Mr BENNETT:: Was that not done
primarily in connection with water shipments that came into Montreal from Roumania and Russia ?


Mr. DONNELLY:: It was done in 1934.


John Gordon Ross: I am referring
to spiked crude. I think the customs department had had some trouble with some of the smaller refineries which were importing this stuff from across the line.


Richard Bedford Bennett: I think it was originally
in connection with water importations into Montreal.


John Gordon Ross: That may be,
but I do not know. As I say, I feel that we have been in the hands of a monopoly and I am afraid that some people in this country will try to use this changed schedule in an effort to shut out the small refineries. Naturally I do not want to see that done as I believe they offer the only real competition to the large oil companies. A half cent per gallon will not shut them out although it will make some little difference. It may enable the customs department better to handle their business, but I do not know. I had intended to move an amendment to this item, but I shall not do so at this time. I do not believe my judgment is infallible; I may be wrong and these people may not be contemplating doing what I think they are. However I want to give warning that should there be a change in the freight rate on this high grade crude or should there be put into effect any regulations which would tend to stop the importation of this high grade crude oil, when the next budget is brought down I shall move an amendment. I want to serve warning on the railways of Canada and the large refineries that if they make any move towards raising the freight rate on this high grade crude, an application will be made to the board of railway commissioners to lower the freight rates on gasoline and petroleum products throughout *western Canada
With the wide spread there is in gasoline prices, it is a wonder to me that Premier Pattullo of British Columbia is forced to look round for money to pay his interest charges. All he has to do is to step into the gasoline business and he will get all the money he needs at the present time. The people are paying a tremendous amount of money to the oil companies for no service
at all; the companies are well paid in the price they get, without the six cents per gallon. As I say, I do not intend to move an amendment at this time, but I give warning that one will be moved another year if any change is made in the freight rates or the regulations of the department which would tend to stop the importation of light crude oil used by the small refiners.


Mr. DOUGLAS:: I am very glad that the hon. member for Moose Jaw (Mr. Ross) has presented this case. He is to some extent an expert on gas, I mean in liquid form. I know he has presented the case much better than I could and because he has done so,, it will not be necessary for me to deal with the technical side with which I am not quite so familiar. I want to approach this matter from another angle. Prior to the bringing down of the budget the cut-off point was 47-6, whereas it is now proposed that it shall be 42 gravity. This means that the light crude oil which hitherto came in free of duty will now be subject to a duty of one-half cent per gallon. The large refiners have cracking plants in which they can handle heavy crude oil, but scattered throughout Manitoba and Saskatchewan are a number of small refineries, really just skimming plants, which are not capable of handling the heavy crude oil. This change in the tariff will mean an increase in their raw material of about one-half cent per gallon, and I am told that this will mean an increase of one cent per gallon in the price of the gasoline they sell. I should like to quote from the Leader-Post of May 16 which contains an article by Mr. Grant Dexter, one of our brilliant young journalists in the west. He says:
There are a number of skimming plants in operation in Manitoba and Saskatchewan. Some of the largest of them are farmers' cooperatives. The half a cent tariff on their raw material will mean at least a cent, possibly more, on the gasoline. More than that, it is feared that once parliament declares these light crudes not to qualify as bona fide crude oils, they will take the gasoline freight rate instead of the crude oil rate. The difference is more than four cents a gallon.


Charles Avery Dunning: If my hon. friend will permit me, I should like at this point to point out something which will perhaps make the matter easier for him. This item does not involve a declaration by parliament that the lighter crude is not a crude oil. In fact, the two are kept together in the one item, crude petroleum.


Thomas Clement (Tommy) Douglas: I realize that.


Charles Avery Dunning: It is a very important distinction.
Customs Tariff


Thomas Clement (Tommy) Douglas: I am merely pointing
out what is thought in some quarters. This is not giving any licence to the railways to make that decision. Still there is fear that that will be done. It is feared to some extent in the district from which I come. We have at least half a dozen small refineries. I hold in my hand a sheaf of telegrams and letters which show that these people fear that very thing. That fear will have a twofold effect: first of all, upon these small refineries, and there are quite a number of them, which are owned by local business men, and into -which, even in these bad years, they have put their extra bit of capital; they fear that these refineries will be subject to the half cent duty and be put out of business. As a result of the price spreads investigation we have heard a great deal in the past two years about monopoly and about getting away from monopoly, and in no way could we better get away from monopoly than by encouraging small business men to develop local industries. But apparently we are to go about the matter by placing a duty on light crude and not on -heavy cr-ude, and consequently perpetrating an act -of favouritism in behalf of the large oil concerns while discriminating against these small refineries. The second effect has to do with the fact that many of these skimming plants are owned by farmers' cooperatives. They provide at as low a cost as possible gasoline for -the farmers of southern Saskatchewan, who, as the Minister of Finance knows, to a very large extent are power farmers. This will mean for them an increase in the costs of farm production. It will mean that they must pay more for their gasoline, so that it will cost them more to put in their crop and more to take it off. It means more. It may mean that many of these small farmers' cooperative refineries that have been built through the years will now be -put -out of business.
What is the reason for the imposition of this duty? Two reasons are advanced. The first is that much of the crude oil coming into the country is not truly what is called light crude but is a synthetic crude or a freak crude; that a distillate has been put in and consequently this synthetic crude has a larger recovery than the pure heavy crude oil. With reference to that argument, it seems to me totally unfair that in -order to get at the people who are shipping in a synthetic crude we are to penalize those who are sending in a pure crude. A more direct method would be better. An analysis of the oil could be demanded at the point of entry into the country; certain steps could be taken to prevent the incoming of synthetic crudes.


Charles Avery Dunning: What steps?


Thomas Clement (Tommy) Douglas: As I suggested, an analysis of the oil could be required.


Charles Avery Dunning: That does not help you.


Thomas Clement (Tommy) Douglas: That -the analysis of the oil shall be, as the hon. member for Moose Jaw (Mr. Ross) suggested, the same as the analysis at the mouth of the well.


Charles Avery Dunning: That does not help you.


Thomas Clement (Tommy) Douglas: Surely the Minister of Finance does not suggest that it is absolutely impossible to determine whether the oil is a free crude or a genuine crude.


Charles Avery Dunning: Later my hon. friend will probably permit me to tell him.


Thomas Clement (Tommy) Douglas: Certainly. It would see-m that a much more direct method could be found, one which would deal directly with those who are bringing in freak crudes, yet would not penalize t-he people who are bringing in genuine light crude oil. What we are about to do is, in order to get at one class of people, to punish another class of people and ruin a small industry which is growing up in local centres.
Another claim which is made is that these refineries have produced a lower grade of gasoline which is harmful to the oars and tractors of those who use it, although they are unaware of the fact. This could be overcome by the provincial governments requiring that the test of the gasoline be placed on -the gasoline tanks, or that those handling gasoline should be compelled to post a notice of the analytical content of the gasoline they are selling. Again it seems to me that the more direet method would be the better one, rather than an indirect method which is going to place a burden not only upon those who deserve it, but upon those who are endeavouring to render a very fine service.
The placing of this half cent a gallon on this light crude oil is going to work a serious handicap on the small refinery and on the farmers' cooperatives. It would look to many people, whether the Minister of Finance agrees with us or not, as if it were a direct sop to the large oil concerns in return for the reduction in the duty on gasoline and distillate. It would look to many as though the voice may be the voice of the government but the hand is the hand -of the large oil concerns.


Charles Avery Dunning: That is pretty cheap.


Thomas Clement (Tommy) Douglas: I do not think so.

Customs Tariff


Charles Avery Dunning: Oh, yes, that is pretty
cheap.


Thomas Clement (Tommy) Douglas: This is apparent, that,
as the hon. member for Moose Jaw said, there is already an oil monopoly. This half cent per gallon duty on light crude oil will make that monopoly complete. If any competition has grown up in the last few yeans, this half cent will do very much to remove it. The hon. member for Moose Jaw said that he is not prepared to move an amendment; he feels that it should be left until next year. I think, if it is left until next year, in all probability it will not be of much use; these small refineries that have recently grown up, some of them having been built as recently as last winter and this spring, will be put out of business. I feel that the time has come to take a definite stand on this item, and I think the members of the committee should consider it very seriously. With that in mind I beg leave to move, seconded by the member for Rosetown-Biggar (Mr. Coldwell) that this item be restored to its former level. I therefore move this amendment:
That the duty on crude petroleum lighter than -8155 specific gravity at 60 degrees Fahrenheit, listed in item 267 (ii) be removed, and that this item be restored to the free list as heretofore.


Charles Avery Dunning: I shall not at the moment raise any question of order with respect to the amendment which has just been moved. I am not sure as to its order. Possibly the hon. member who moved it might have been willing to listen to the facts from the point of view of the government and of the minister before reaching the conclusion that, as he expresses it, while the voice is the voice of the government, the hand is the hand of the big oil companies. However we are accustomed to that from that particular part of the house, and I will pass it by, except to say this-


Richard Bedford Bennett: It used to come from this side, though.
Mr. DUNNING -that if my hon. friend has been observant at all since the budget, he will find that more public criticism of the budget in relation to this petroleum schedule has come from the big oil companies than from anyone else, and that criticism is apparent all over the country. The schedule which is now before the committee, and the first item of which is under discussion, is a complete petroleum schedule, following the most exhaustive inquiry into the oil business which has ever been conducted in Canada, as I think the volumes comprising the board's report will testify. A serious effort has been
made by the board to arrive at the facts regarding an industry which is most complex in its various aspects, and while I hold no brief for the tariff board I can say this, after a close study of the report, that I commend most highly both the manner in which the investigation has been conducted and the thorough manner in which it has been reported upon.
I fully expected someone to take the position which has been taken with respect to this single item of lighter crudes, because it is the one item in the schedule in connection with which there is an increase of duty. My hon. friend who says that the voice is the voice of the government while the hand is the hand of the oil companies takes no account, of course, of the fact that the duty in which the big oil companies are mainly interested, namely the duty on gasoline, has been reduced by this government from two and a half cents to one cent per gallon. He can cast reflections on the good faith of the government with respect to half a cent per gallon on certain crude oil, which is part of an item representing an infinitesimal proportion of the use of this commodity by Canadians, forgetting altogether the overwhelming evidence on the other side which is found in the fact that the duty on the article which is most truly competitive from the standpoint of most Canadian consumers has been reduced, as I say, from 2J cents per gallon to one cent per gallon.
Now a word with respect to the facts, and I am going to speak very plainly, just as plainly as the legal requirement of confidence on the part of the tariff board with respect to certain information placed in their hands by the companies will permit. As is well known, the tariff board may accept and indeed may force from companies coming before it information which it treats in confidence because of its competitive nature, but it is at liberty to communicate that information to the minister. I have not the right to pass it on. I have the right, however, to tell this house the honest conclusions I have reached with respect to it. There are some facts, of course, that are public and that speak for themselves in connection with these small so-called refineries. They are not really refineries at all in any proper sense of the term. They do not undertake the refining process in connection with oil. The name "skimming plant" correctly describes them. That, however, is a legitimate operation if carried on in connection with a legitimate commodity recognized by Canadian law.
Customs Tariff

These plants are present mainly in one section of Canada, due to the peculiar combination of freight rate matters mentioned by my hon. friend from Moose Jaw. The majority of them have been guilty of defrauding the customs of Canada and have settled for very considerable sums for so doing. A number of cases in that connection are still pending, and I know I am within the mark in saying that over $50,000 is being collected from these companies as a result of their fraudulent practices in connection with the importation of what they described as crude oil and which, under the specific gravity test in the old tariff, it was not possible accurately to classify by means of the ordinary methods.


Richard Bedford Bennett: Crude oil in its natural state.


Charles Avery Dunning: Crude oil in its natural state, but the gravity test as provided offered no means by which the customs authorities could accurately determine whether or not it was in its natural state.


John Ritchie MacNicol: It was just bootlegged gasoline.


Charles Avery Dunning: Customs Tariff

government approached the matter, as I am convinced the tariff board did, with the idea of doing a constructive piece of work from the point of view of the consumers of these products in Canada, and with a view to the best interests of the industry itself.


Frederick George Sanderson: The amendment before the committee, moved by Mr. Douglas, relating to item 267, paragraph (ii) is as follows:
That the duty on crude petroleum lighter than '8155 specific gravity at 60 degrees Fahrenheit, as listed in item 267 (ii) be removed, and that this item be restored to the free list as heretofore.


Charles Avery Dunning: I am trying to look at the bearing of that upon the item.


Richard Bedford Bennett: It is within the item.


Frederick George Sanderson: I am of the opinion that this amendment is out of order. Paragraph 552, page 164 of Beauchesne's Parliamentary Rules and Forms, 1927, states:
Though it is the function of the committee of ways and means to impose rather than to repeal taxes, examples of the repeal of taxation effected in this committee are to be found upon the journals. Proposals for the variation or modification of taxation can therefore be made in the committee; but these proposals must be grafted upon the financial scheme submitted by the government, and must not affect the balance of ways and means voted for the service of the year. Amendments, therefore, can be proposed to substitute another tax, of equivalent amount, for that proposed by the government, as, for instance, a proposal to substitute probate and legacy duty on real property as an alternative for an inhabited house duty, the necessity of new taxation, to that extent, being already declared on behalf of the crown.
And paragraph 556 on page 165:
The house can make amendments which diminish the amount of reduction of taxation, or postpone the day when the reduction takes place, although the amendments may increase to that extent the charges proposed to be levied upon the people.
So long as an existing tax is not increased, any modification of the proposed reduction may be introduced in the committee on the bill, and is regarded as a question, not for increasing the charge upon the people but for determining to what extent such charge shall be reduced.
My ruling therefore is that the amendment is out of order.


Richard Bedford Bennett: The Chairman having made a ruling I am bound to obey it, but it has very serious consequences, and should be more carefully considered by Mr. Speaker at a later date. It is apparent that in this house from time to time similar resolutions have been moved in committee. From what was said, however, I gather Mr. Chairman is of the opinion that the amendment could properly

be moved when the bill is in committee. If that is so, then it is merely a matter of delaying the motion. Perhaps that is the proper course to pursue. While on the resolution it might be improper to move the amendment, certainly when the bill is in committee it is competent to move a resolution to reduce an item or even to make it free. The amendment is:
That the duty on crude petroleum lighter than -8155 specific gravity at 60 degrees Fahrenheit, as listed in item 267, section (ii), be removed and this item be restored to the free list as heretofore.
Perhaps it might be clearer to say that the word "free" be substituted.


Charles Avery Dunning: All that is necessary is to strike out the whole item.


Richard Bedford Bennett: Yes, but the sense of the amendment is quite apparent. There is authority, I believe, for the view that in committee of the whole house an amendment of this kind may be questionable. In some journals hon. members will find that similar resolutions have been made, but obviously, I submit with deference, when the bill reaches committee stage in the house there can be no doubt as to the right of an hon. member to move an amendment.


Charles Avery Dunning: I am inclined to agree that it could be moved at the proper time, but I do not question Mr. Chairman's ruling.


Mr. MAYBANK:: When I decided to speak upon this item I did not know that there might be an amendment before the committee. May I say that I regard with considerable dubiety any increase in the tariff such as is proposed. I might have questioned, for a time, as to whether I should have supported such an amendment as has just been ruled out, but after the manner in which the amendment was placed before the committee, if I had any doubts at all the mover of the amendment completely set them at rest by the manner in which he presented his argument. I feel, with the Minister of Finance, that the manner of the hon. gentleman who has just sat down, in presenting arguments against government measures, is not merely ungenerous, but typically ungenerous.


Richard Bedford Bennett: The hon. member should have been here in the last five years.


Ralph Maybank: Of course the objects during the last five years were entirely different objects to shoot at, and probably deserved all the darts that could be thrown at them.


Richard Bedford Bennett: Quite so; that is a general observation.	.

Customs Tariff


Ralph Maybank: I am glad that the leader of the opposition has spoken, because I tell him frankly that after the manner in which the country was handled by him in the last five years there would not be enough darts to be thrown at him that could properly stick. There are not enough darts.


Richard Bedford Bennett: So generous 1


Ralph Maybank: The country was in a worse condition in the last five years than it was ever in before, or will be again.


Mr. STEWART:: Like the rest of the world.


John Ritchie MacNicol: Do not be so conclusive.


Ralph Maybank: If the right hon. member will undertake to give his reply in due course, well and good. What I am saying to him now, with all the force possible, is said as a result of an interruption which he had no right to make.


Richard Bedford Bennett: That is generosity!


Ralph Maybank: While he has been in this house a long time, and I have been in it only a short time, it may be just as well even at his time of life to learn what it is to be courteous.


John Ritchie MacNicol: Is this not all out of order?


Ralph Maybank: And I would like to add this-


Richard Bedford Bennett: This is wholly out of order. If anybody but a supporter of the government did it, a question of order would be raised.


Mr. ELLIOTT (Middlesex):: That is out of order.


Richard Bedford Bennett: The other evening the hon. member directed attention to the fact that the discussion was not relevant, and it happened to affect a member of the government. I now call upon the chair to apply the same principle.


Ernest Lapointe: That is out of order; it is a reflection on the chair.


Richard Bedford Bennett: No. I ask the chairman to apply the same rule.


Ernest Lapointe: Is it a reflection on the chair.


Frederick George Sanderson: I am of the opinion that the first hon. member to be out of order is the leader of the opposition. I think the hon. member, for Winnipeg South Centre, in some of his replies, was out of order, and also the hon. member for Davenport.


John Ritchie MacNicol: I just objected to the abuse of the hon. member.


Frederick George Sanderson: They are all out of order.


Ralph Maybank: If I may proceed I would simply point out that there are some people who desire to slap other persons, but they make certain that the other person's hands are tied and that he cannot slap back. I think probably that is already apparent.
With reference to the amendment and the attack upon the Minister of Finance, may I say that while I do not like the increase in the tariff, no person except one who was trying to be captious could make a statement such as was made by the hon. member, namely that while this was the voice of the government it was the hand of the oil companies. Of course that is nonsense.
. Nevertheless I wish to point out the situation with respect to certain cooperative concerns in western Canada. I believe their plants may be described as skimming plants-I do not know whether they have been operating in some improper fashion; of course the confidential information to which the minister has referred is not in my possession-But I know that these cooperative concerns are dear to the heart of the farmer, and he receives great benefit from them. I think it must be admitted that a half cent duty will make a great difference to those cooperative enterprises.
But that is not my point. A couple of years ago the railway companies approached the board of railway commissioners asking for an increase in the freight rates on crude oil of a certain class, that is the class of oil with which we are now dealing. Their proposition was that as the crude oil in question is a little nearer gasoline the freight rate ought to be nearer the rate charged on gasoline. Substantially that was the argument adduced. The answer of the railway commission was in the negative, and the rate sought by the railway companies was not allowed. The reason was that there was not any classification of crude oils. Crude oil was simply crude oil, and the rate applicable was the rate on crude oil.
In the present instance we are making a division or a classification. If the case of the railway companies were being presented to-morrow for the first time, instead of in 1934, the judgment of the railway commission could not be given on the same grounds. In 1934 the commission said that they could not make a division and that crude oil was just crude oil. If the application were made to-morrow the commission could not make the same answer. Therefore I say that in the present instance we are making it possible for the railway companies to ask for an
Customs Tariff

increase in freight rates and, if we may judge from the past decisions, it is almost certain that the increase will be granted.


Charles Avery Dunning: Has my hon. friend read the judgment in detail?


Ralph Maybank: Yes, and I think I am giving a fair interpretation of it. Of course I know it is open to other interpretations and that my own interpretation is not necessarily correct. I know that the railway commission is the body which is charged with the duty and is capable of interpreting its own judgments, but I think any person reading the judgment will see the danger to which I am referring, and the danger of my interpretation being right. That is the point. You cannot be certain until you are back inside that court again what interpretation will be put upon it, but there is that danger I have pointed out. If the railways make that application over again and get an increase in freight rates, the cooperative to which I have referred- are definitely and finally out of business. That is the serious aspect of the situation. I am gratified by the explanation given 'by the minister, but I am wondering whether he could not go this much further and give this committee some assurance that we can count /ipon at least the same railway rate. I think we can stand half a cent on the tariff, but can the minister give us the assurance that we can count upon the same railway rate during this year, within which, as he says, this industry will be under constant observation. It seems to me that if we could be sure of that we would not need to worry, but with this danger hanging over some of these concerns the situation is very serious indeed. It is not simply putting half a cent on the tariff that we have to fear, but whether or not by reason of the division we thus make we may be leading to something which is much worse still. I would be very much happier if the minister could add to what he has already said by giving us some assurance along that line.


Charles Avery Dunning: That is a fair question and one which, of course, gives concern. It is difficult to give such an assurance as my hon. friend from Winnipeg South Centre requests, but only for the reason that such matters are by law under the jurisdiction of the board of railway commissioners for Canada, but for the further reason that the rate affected is, of course, an international rate, a combination freight rate, and there are possibilities because of that fact. I would, however, point out that so far from the new tariff item providing greater grounds for distinction from the freight rate point of view, I am of opinion that it provides less ground than the tariff

which it is replacing, for the reason that there are three separate crude oil items in the former tariff effective up to May 1, and existing at the time the ruling with which my hon. friend is familiar was given by the board of railway commissioners. That is to say, there was in the former tariff much greater ground in that the crude item was separated into three items with different rates of duty than there is when the crude is contained as it is in the new tariff in a single item. I could, of course, only argue as to what view the board of railway commissioners would be likely to take, but I can repeat again what I said so carefully a little while ago. I propose to ask the tariff board to keep in touch with the developments which follow' the changes in duty proposed in the petroleum schedule, and particularly to keep informed as to the price situation and as to the performance of the major companies in rectifying the uneconomic conditions of distribution, and to study the relation of railway and other transportation to the petroleum industry.
My hon. friend can be assured of this, that there will be very keen interest on the part of this government in any application for a change of freight rates in respect of this particular item. I think he does not expect me to go further than that. It is difficult to indicate what action could be taken, but we are keenly interested, and I know that he and-others in this committee will hold me responsible one year from now for whatever may have happened in the interval of a nature which does not conform to the statement I have just made.


Mr. PERLEY (QulAppelle):: It is not very often that I find myself in accord with the hon. member for Moose Jaw (Mr. Ross), but I am inclined to agree very much with what, as a gas expert, he has stated this afternoon.
I was also very much interested in the statement made by the minister. I think every government meets with one difficulty when it comes to deal with tariffs, and that is the possibility of misunderstanding on the part of the consuming public.
Freight rates, as the hon. member for Winnipeg South Centre has said, no doubt enter into this question. As the minister has stated, the change in the tariff under the United States agreement was well received, and the farmers of the west thought they were going to get their gasoline cheaper, which is what they are primarily interested in, but they regret that the increase in the- sales tax will practically absorb any reduction that may come about in the price of gasoline as a result of the Canada-United States trade agreement.

Customs Tariff
There is a feeling prevailing among the farmers of the west that this change in the tariff discriminates against the small refineries, of which there is a large number in Saskatchewan, as we all know. The system of refining by the small refineries is a skimming process, and is not conducive to getting the best results or as complete a separation as the cracking process used by the large refineries. The farmers of the west consider that the large companies have a decided advantage in that respect, and they believe that the cost to the consumer will be increased in the neighbourhood of one cent per gallon; that is the increased cost of gasoline and distillate put out by the small refineries.
But my chief purpose in rising this afternoon was to bring to the attention of the minister one or two protests that I have received from the west. I hold in my hand a resolution which was passed at a meeting of the Orangeville Cooperative Association Limited, which is an organization of the farmers in the district around Moosomin and Rocanville, a very large district. This is a very active organization, the president of which is Herbert C. Watson, and the secretary, George Burden. The resolution passed by this association on May 14, 1936, reads as follows:
Whereas the tariff on crude oil entering Canada from the United States has been changed from the cut-off point of 47-6 gravity to 42-0 A.P.I. gravity, or lighter, we protest this as being very unfair to the small refineries as it will increase the cost of production at least one cent per gallon on gasoline and distillate to them by having to pay this one-half cent per gallon tax. The major companies will still get theirs duty free and it appears like discrimination against the minor ones.


Charles Avery Dunning: Could the hon. member tell me from what small refinery that particular farmers' cooperative obtains its supplies?


Mr. PERLEY (Qu'Appelle):: I assume it is the refinery in Regina.


Charles Avery Dunning: Is my hon. friend certain of that?


Ernest Edward Perley: This particular cooperative association operates in the eastern part of the province, and I am sure they get their gasoline and distillate from the refinery in Regina.. I know in my own town of Wolseley it is delivered in tanks from that point.


Charles Avery Dunning: I thought that as it was so far east it would likely come from Winnipeg.


Ernest Edward Perley: No, I think it comes from Regina. I know they all have their tanks delivering through that district from the Regina refinery. I have had several
other protests from similar organizations and individual farmers, and I hope due consideration will be given to them and possibly some reduction made in the duty.


Charles Avery Dunning: I should like to make it doubly clear that in my remarks this afternoon with regard to practices contrary to law I did not include the cooperative enterprises to which my hon. friend has reference, and particularly the one which we know of officially as the consumers' cooperative refinery at Regina. I did not include that one in the grouping of ten of which I spoke as being controlled by one holding company. However, it is indisputable that the profits are enormous, so much so that had the one-half cent per gallon duty been in operation it would have taken but a small proportion of the profits actually made. I believe the basis of this business is the passing of the profits along to the shareholder consumers.


Richard Bedford Bennett: Are they included in the importers of crude which really was a mixture of gasoline and crude?


Charles Avery Dunning: We do not know of any instance in connection with the consumers' cooperative.


Ernest Edward Perley: May I say that the letter accompanying these protests did mention consumers' cooperative at Regina.


Charles Avery Dunning: That is the source of supply in that case.


Mr. OOLDWELL:: Mr. Chairman, if abuses existed in connection with the ten refineries to which the minister has referred, it is unfortunate that this particular method has been adopted to rectify the condition. Those of us from western Canada who are not associated with the party opposite are interested in seeing that nothing is done to impose higher tariffs on the various commodities in use on the prairies and throughout Canada. It seems to me that this method of dealing with an alleged abuse is fundamentally wrong. I think the minister and the government must take some notice of the very widespread feeling that exists that Canada is in the hands of several large oil concerns, one of which, it is frequently stated -I have not the proof for the statement, although I have it on good authority-controls between seventy and eighty per cent of the oil business of the country. The people of Canada who are consumers of gasoline are puzzled by the very conditions which the minister noted a few moments ago in connection with the varying price levels in various parts of the country and the varia-
Customs Tariff

tions in prices referred to by the hon. member for Moose Jaw (Mr. Ross) in the central prairies and British Columbia and the Atlantic area and Ontario. I was glad to hear the minister say that the criticism which he made does not hold good with regard to the consumers' refineries cooperative association at Regina.


Charles Avery Dunning: With respect to evil
practices.


Mr. COLD WELL:: These cooperative
associations for the handling of gas and oil have grown up because the people using petroleum products desired to find some method of getting around this great monopoly. I should have liked to see this difficulty met in another way. The amendment has been ruled out of order, but I believe the minister would be well advised to consider a different method of handling this particular situation. He would be well advised from the point of view of the government, in which I am not particularly interested, and from the point of view of the creation of general harmony in the country in which we live, to reconsider this item carefully. I am quite sure that the fact that the people regard the country as being in the hands of a great petroleum and oil monopoly must of necessity make them draw conclusions which may not be always warranted. Our primary producers should be given the benefit of cheaper fuel oil and gasoline. I think ultimately these great monopolies in oil, farm implements-we are investigating this particular one at this time and are receiving very confusing information-the marketing of grain, and so on, will have to be controlled by the government instead of monopolies indirectly controlling the government through price levels and other means
Item stands.
Progress reported.


[Stage Direction]
At six o'clock the house adjourned, without question put, pursuant to standing order.
Friday, May 22, 1936