Mr. CHURCH:: 1.	Has the government taken cognizance of the remarks of the Right Honourable Neville Chamberlain and the Secretary of State for War there, as to the free city of Danzig made in the British House of Commons, and calling on the British people to sleep on their haversacks, and calling up for duty large sections of the army, navy and air force at once?
United Kingdom	
Africa, British East	 Statistics
Africa, British South	 not
Southern Rhodesia	separately
Argentina	 recorded
United States	
Total
2.	Will any papers on this be tabled?
3.	What was Canada's reply, and what is being done about Canada's security?


Mr. MACKENZIE KING:: 1.	The government are aware of the published statements to which it is understood this question refers.
2 and 3. No communications or papers have been received regarding the statement in question made by the United Kingdom Secretary of State for War, which obviously related directly to instructions being issued to the people of the United Kingdom. The house has been informed of the measures being taken and proposed for the security of Canada during the course of the discussions of the estimates of the Department of National Defence.



ALEXANDER GOW

Mr. GREEN:: 1.	Has a certain Alexander Gow been in the employ of any department of the government at the sea plane base at Jericho, in the city of Vancouver?
2.	If so, (a) during what period, and (b) at what rates of remuneration?
3.	In what capacity, or capacities, has the said Alexander Gow been employed, and what were his duties?
4.	Is the said Alexander Gow a duly qualified and registered engineer?


Mr. MACKENZIE (Vancouver):: 1.	Yes-Department of National Defence.
2.	(a) From November 1, 1936 to March 31, 1939. (b) $205 per month.
3.	Assistant Engineer-Inspecting Engineer for the supervision of bulkheads and slipways.
4.	Is a qualified and experienced engineer, but not a member of the professional associations or institutes.



CORN IMPORTATIONS

Mr. HOMUTH:: 1.	What was the total quantity of corn imported into Canada under tariff item 54-A during each of the last five years?
2.	From what countries was such corn imported, and how much was imported from each such country?


Mr. EULER:: Fiscal years ended March 31
1936	1937 1938 (bushels)		1939
	215,727	25,228	
21,955	282,706		
1,361,384	302,3S1	1,296,990	
		6,404	
1.280,932	1,926.281	783,882	2.000252,860	430,592	429,939	5,421,2262,917,131	3,157,687	2,542,443	5,423,226
Questions



WAR MUNITIONS AND MATERIALS-SHIPMENTS TO AGGRESSOR NATIONS

Mr. MacNEIL:: 1.	Has the Vancouver embargo council forwarded a petition to the government relating to the subject of shipment of war materials to aggressor nations?
2.	If so, what is the number of signatures on said petition?
3.	Will said petition be tabled in the House of Commons?


Mr. MACKENZIE KING:: 1.	No. The petition was forwarded "to the Honourable the House of Commons, the Speaker, Ottawa". The individual petition forms are addressed to the Secretary of State for External Affairs.
2.	The secretary of the Vancouver Embargo Council has stated that the petition was signed by some 41,098 Canadian citizens.
3.	The petition is tabled herewith.
Canada's trade with Germany


Mr. REID:: 1.	What was the total trade of Canada with Germany during the fiscal years from 1935-36 to 1938-39?
2.	What were: (a) the value of exports, and (b) the value of imports as between both countries during the same years?


Mr. EULER:: 1.
Fiscal years
1935-	36	
$14,467,2791936-	37	
19,512,0531937-	38	
23,651,8961938-	39	
27,912,9002.	DomesticFiscal years	Imports	exports1935- 36	
$ 9,907,685 S 4,559,5941936-	37	
11,683,528	7,828,5251937-	38	
11,397,491	12,254,4051938-	39	
10,117,161	17,795,739



ROYAL VISIT


[Stage Direction]
On the orders of the day:
Hon. CHARLES A. DUNNING (Minister of Finance): Yesterday the hon, member for Kootenay East (Mr. Stevens) asked a question in respect of the program of their majesties' visit to Ottawa. I am advised by the interdepartmental committee that full publication will be made in this afternoon's paper.
Mr. STEVENS:: Officially?


Mr. DUNNING:: Yes, giving full details. If there is any further information it may be given later.



GOVERNMENT BUILDINGS-PREFERENCE TO CERTAIN OFFICIALS IN VIEWING PROCESSION

[Stage Direction]
On the orders of the day:
Mr. G. J. TUSTIN (Prince Edward-Len-nox):: Mr. Speaker, it has been drawn to my attention that in certain government buildings lining the route to be followed by their majesties on Friday and Saturday of this week vantage points in the buildings from which one might view the procession are to be occupied by certain higher officials, their families and even their friends, and that those holding minor positions but with years of service in the various departments of government are to be deprived of this privilege. Is this being done with the knowledge and consent of the government?
Hon. CHARLES A. DUNNING (Minister of Finance): Mr. Speaker, the government knows nothing of any such condition as that to which the hon. member refers. We will take cognizance of the question and make inquiries. I presume each department has authority with respect to its own offices. However the matter will have to be looked into.



SUGGESTED HOLIDAY FOR STAFF OF HOUSE ON FRIDAY AND SATURDAY-SPECIAL CIVIL SERVICE LEAVE

[Stage Direction]
On the orders of the day:
Henry Herbert Stevens: Mr. Speaker, may I bring to your attention again a matter which was mentioned yesterday, namely that the staff of the House of Commons should be given full opportunity to participate in this event?


Some hon. MEMBERS:: Hear, hear.


Henry Herbert Stevens: Let me add this word: I do not think any member of the house would wish stenographers and other junior members of the staff to be at their disposal to-morrow. I suggest, therefore, that your honour should definitely issue instructions that the staff should have this privilege.


Mr. SPEAKER:: I am glad this matter has been brought to my attention. The question was brought up yesterday, and may I say I

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will see that members of the House of Commons staff shall have the privilege of taking part in the festivities. Of course some will have to be here in the morning to attend to certain services, but they would be permitted to leave about ten o'clock. Then of course it is understood that in the afternoon the house will convene at three o'clock.
I received a letter this morning from the acting Under Secretary of State dated at Ottawa, May 16, 1939, as follows:
Sir:
I am authorized by the Secretary of State to inform you that on Friday, the 19th instant, the members of the civil service in Ottawa will be granted special leave with pay to participate in the celebration of the visit to Ottawa of Their Majesties the King and Queen. This leave is to be in lieu of that provided for by order in council P.C. 8/932 of the 22nd April, 1939, which will be cancelled because of the very material changes in the plans for the stay of their majesties in this city.
I am further authorized by the Secretary of State to say that this special leave for Friday, the 19th instant, is to apply to government employees in Ottawa who are paid on prevailing rates.
I shall be grateful if you will convey this information to the officers and members of your department.
This I think will apply also to Saturday.
PRIVILEGE-Mr. MacNEIL



STATEMENT IN DEBATE ON DEFENCE ESTIMATES RESPECTING ROYAL MILITARY COLLEGE

[Stage Direction]
On the orders of the day:
Mr. C. G. MacNEIL (Vancouver North):: Mr. Speaker, on a question of personal privilege, when the estimates of the Department of National Defence were before the committee of supply on Tuesday last I made the remark that there was an impression abroad that the Royal Military College was reserved exclusively for the members of aristocratic families, and that the gentlemen cadets were regarded as a snob outfit. Since that time I have received a very courteous communication from the president of the Royal Military College club, in which he assures me that with regard to the procedure of enrolment there is no more democratic institution in Canada, and that in no educational institution is less importance attached to the wealth of the parents of a student. He invited me to assure myself on this point.
I feel it my duty to convey his assurance to the house in order that no injustice may
be done to the members of the selection board or the staff of the college. May I say personally that I readily accept this assurance from officers for whom I hold a very great respect.


Hon. IAN MACKENZIE (Minister of National Defence):: May I say on behalf of
the department that I am indebted to the hon. member for his remarks. They confirm what I endeavoured to convey to the committee the other afternoon.

The house in committee of supply, Mr. Sanderson in the chair.
DEPARTMENT OF NATIONAL DEFENCE Militia services.
178. General stores, including authority for commitments against future years:
Chargeable to capital account-armament and equipment-(commitments $14,306,430), $4,561,595.
Mr. JEAN-FRANQOIS POULIOT (Temis-couata): I have just one observation to make in connection with these estimates. I believe that credit should be given where credit is due. Some years ago I referred to the type of horses which were being used by the Princess Louise Dragoons. They were a heavy type of horse, really suitable only for delivery wagon work. Because of the remarks made at that time by the hon. member for Temis-couata, there has been a great improvement in the appearance of the Princess Louise dragoons. Therefore I feel I must give credit to the hon. member for Temiscouata for that improvement.


Henry Herbert Stevens: With becoming modesty.


Mr. CHURCH (Broadview):: On March 21, the Prime Minister (Mr. Mackenzie King) told me that on this vote an opportunity would be granted for a general discussion of the affairs of the Department of National Defence and Foreign Affairs. I desire to say only a few words this morning. The minister has had charge of this department in a most critical time, and the same remark could be applied to many of his predecessors. I am not one of those who are ready to criticize this department simply because it is the Department of National Defence. I think it must be admitted that some mistakes have been made in this department ever since confederation. Canada has been criminally negligent
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since the war that now that we had the League of Nations to prevent war and as a result could disarm, we could put our feet on the table and go to sleep. I would say to one or two gentlemen to my left that you might as well talk about the American baseball league and the national league as the League of Nations. It used to be a grand thing for our delegates to go over to the League of Nations. Some of them went on boats sailing out of New York and had a glorious time. Some of the ministers went over there too. The very worthy lady member from Grey-Bruce suggested some years ago that I should be sent over as a delegate to the league. She said, I think, that if I had gone over there to criticize, after seeing the league at work, I would have come home to pray.
Something should be done for our militia men, Mr. Chairman. Why should our officers have to be continually putting their hands in their pockets to pay for equipment for their units? In the European crisis the mother country appealed over here a year ago for recruits for the air force, and some of our high school boys had to go to England at their own expense, or at the expense of their fathers and mothers. I say that we should help to build for the future a great national cadet corps. We should buy uniforms for our cadets. If you want to call it militarism, call it that or whatever you like. I am glad they do call it militarism, because if it were not for militarism, for Britain and rearmament, in this country hon. gentlemen to my left and other pacifists in the house and outside would not be enjoying the freedom and liberty they enjoy to-day. This week distinguished visitors, whom we rejoice to see and welcome, came up the St. Lawrence. But how would you like to have seen, last September, Hitler and other dictators, a week before the Munich crisis, coming up the St. Lawrence on a German warship, equipped with pom-pom guns and all the latest equipment carried by modem battleships, accompanied by aeroplanes which could attack us and bomb every public utility in Quebec, Montreal, Three Rivers, Toronto, Hamilton and Windsor in half a day? You would have had that but for the protection afforded by the mother country.
Pacifism extended 'beyond our boards of education to the churches. In almost every pulpit for several years you would hear a minister describing the League of Nations and pacifism and saying that expenditures on the militia were not necessary. But there has been a change. Even the thirty-seventh article of the Church of England says that it shall be lawful for Christian men at the command of the magistrates to take up arms and serve in

the wars. It is one of the duties of the church to preach that, as I see it, to work for God, king and country, and I am glad to see a change coming over the churches in that regard. Some would pray for the king and not give him the means to protect his empire and his throne or to defend the weaker nations that depend on us.
How are we going to get recruits for the militia? I know some of the men in the units in Toronto. Many of them live at Mimico, others in the Eglinton riding, at Thornhill and elsewhere. These men are out of work, they cannot afford carfare on the urban and suburban railways, and thqy have to walk to the armouries to take part in the drill, unprovided with proper boots or equipment or clothing. They have to carry on all this work themselves at their own expense. Why should we not spend a few millions on properly equipping recruits and encouraging them to join a unit for training? You can call it militarism or anything you like-it is necessary for security. Since when has it become a crime for a man to join the militia and defend his own country? What kind of patriotism is this pacifism which is preached in this house during debates on the cadet movement-an organization which teaches discipline, courtesy, respect for authority, manliness, duty, service, sacrifice and comradeship- qualities essential in the world to-day for progress in business and in life? Yet we have those in and out of the house who criticize the cadet movement as a militarist movement. Had it not been for the cadet movement and its training for the militia I do not believe that we should have had the Queen's Own Rifles or the Grenadiers or the Governor General's Body-guard, who, back in the days of the northwest rebellion, marched across lake Superior when the temperature was thirty and forty below zero, before the days of the railway, to save what is now the prairie provinces from being lost to confederation and to prevent our country being dislocated. Had it not been for the action of these men in 1885, units would not have been available to furnish the militia with the man-power to go to the South African war and other wars of the world.
We were told the other day by speakers on the left that some of these estimates are not necessary, that we can look to and lean on the United States, that we can depend on the League of Nations, the Monroe doctrine, pan-Americanism and isolation for our protection. Let me say that if we are to depend on these things alone there will be a day of reckoning. While it is of tremendous importance to the people of this country to be on good relations

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with our kinsmen and friends and colleagues and allies, the people of the United States, and while we have for them the utmost admiration and respect, we must look for our protection to ourselves and to what we have looked to all these years, the motherland and the British fleet. I say to those who preach doctrines of Americanism in and out of this house that the people of the United States speak with two voices. One is the voice of the president, which I call the ambassador side, the other is the voice of congress-the house of representatives and the senate-and congress in recent sessions has sought to limit the president's powers in the matter of treaty making, control of the army and navy, and the right to declare war. What is the policy of the Johnson act? In effect it is to put back the United States in respect of its foreign relations and defence to where it was in the days of Andrew Jackson and George Washington, namely that it should have no foreign alliances nor give any active aid on land, sea or air to any foreign country except when the United States itself is actually invaded and attacked; thus no aid would or could legally be given Canada. Although the Ludlow resolution did not pass congress, the government accepted it as government policy; it backs up the Johnson act, and if its provisions are adopted as regards United States policy in a foreign war that country will be back where it was in the time of George Washington and Andrew Jackson.
We have tried to please and appease the United States; that has been the trouble with British and Canadian policies since the war, to the detriment of armament. To please the United States we tossed overboard in 1922 our great ally, Japan, and at that time there were delegates from this country at the Washington conference. We discarded Japan, our best ally, and sent it over to German arms and the enemy's camp. We did the same, by means of our sanction policy, to Italy, our beloved ally which did so much for us in the great war. I am glad to see that Italy is beginning to regret leaving us, but her people were thrown into the arms of Germany by the pacifism of the League of Nations and, by Canada's sanctions.
Let me repeat that our complete dependence is upon the mother country. When you get down to brass tacks, we have no other reliance for our defence than upon Great Britain.
There are those in this chamber who advocate the appointment of a defence committee representing both houses of parliament. Speaking as a private member of the opposition, I am absolutely opposed to such a step; there is too much silence and secrecy now.
It will be an avenue for the government and members of this house to escape doing their duty. The trouble is that in Canada-it has not been so in England-there has been too much secrecy about all these matters of defence and foreign affairs. Here we are at the ninety-first day of the session, and the eighty-seventh day of the session was the first opportunity which this house had to discuss the question of defence on freedom and security. I have been on some of these select committees, and they are nothing but a burial place for any questions sent to them. They hold a few meetings, and the government of the day, controlling the majority of the committee, writes the reports to this house. That is what has happened in matters such as the railways and radio. They are nothing but a lot of whitewash and eyewash. Instead of sitting here as a house and determining these matters we take refuge in the appointment of a defence committee-for what? Had the government better not get some defence for Canada before they get a defence committee? I am absolutely opposed to such a policy. I care not from what part of the house it comes, I shall vote against it. When it was advocated fifteen years ago I took issue with it. I opposed my own leader after the West Hamilton and Bagot elections, when he stated in effect that he was in favour of the holding of a general referendum before Canada could act or go to Britain's aid if war were declared. I told him right in this house that Mr. General Election would never become by my vote commander in chief of the British forces, or admiral of the British fleet, or air marshal-the forces to which we owe all the freedom we enjoy to-day. I will take the same attitude again if necessary. I am for cooperating and coordinating it all with Britain.
I may say that in this regard I did not agree with the text of the foreign policy of the Conservative convention. I was not at that convention, I was not able to be present, but had I been there I would have opposed the resolution referring to joint action with other members of the commonwealth of nations. Do we want to cooperate and coordinate with South Africa in the isolationist and separatist stand which has been taken there? We see Mr. Pirow, the minister of defence of South Africa, over in Germany, two days after Munich, with Hitler by his side, taking the salute at a march past of 70,000 nazi troops. Are we going to cooperate with South Africa or with southern Ireland? Or do we want the neutrality and isolation of southern Ireland out of the empire altogether? They want to have a non-alien status by which they remain
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out of the empire 364 days of the year and accept, on the 365th day as a non-alien member of the commonwealth, the protection of the British fleet which they now enjoy, but they do not want to give anything in return. No; our policy should be one of cooperation and coordination in defence with Britain.
Reverting to this committee, mere excellence of machinery in a future war will not make up for lack of trained men. Various schools of thought are represented in this chamber. Adequate man power cannot be obtained in the twinkling of an eye; it is to be hoped that a generation of Canadians will arise which will appreciate the importance of security and recognize the necessity of preparation to defend this country, and so avoid the awful lessons which were taught in the great war through the lack of preparation and of trained men, and thus prevent the sacrifice and huge loss of men and the suffering which unpreparedness in 1914 entailed on Canada. Are these mistakes to be repeated, as they will be if untrained men are sent out to defend this country without proper and adequate protection?
As I see it all parties in this country are anxious to avoid war. No one wants it, it is detested. God forbid that we ever see one again, after all this country and the world went through in the great war, with the appalling loss of life and the long stagnation in business. The great war is not over even yet among the sick and the wounded and the suffering. We should have a generation of Canadians that would remember all these things and not go back to where we were but support rearmament by proper preparation give aid to the militia and to Britain.
At the present time the policy of this country is only lukewarm towards the mother country. At the time of Munich we gave her no support, not even moral support, which was all she asked for. For that stand we have been criticized by leading newspapers. We have been criticized because we did not do something practical, like New Zealand and Australia, to get recruits and assist the mother country in the great crisis by a forward rearmament policy on land and sea and in the air. One of the British magazines, the National Review, quotes census figures giving our population: I will read five or six sentences from the article:
In summary, the three major political parties in Canada are all anxious, though in varying degrees, that Canada should keep out of war.
That is true.

Is there anybody in the British empire or any other place who wants war?
The Conservative party is by tradition an Imperialist party, drawing its main support from those quarters predominantly British in sympathy. . . .
I do not say that this article is one hundred per cent correct, but it gives us a sample of some of the criticism in the mother country of the way we deal with these questions, and our lukewarmness. I have always contended when the defence estimates were up for discussion that to-day the dominions are nothing but a burden and a drag on the mother country; she has to go to all these expenditures alone, running to billions of dollars, largely to protect this country and the other dominions, and it is time we did something about it.
. . . the Liberal party owes its success at the present time largely to French-Canadian support, and French-Canada is to-day aggressively isolationist; the Cooperative Commonwealth Federation, weak in numbers but relatively strong in its influence on Canadian opinion, is outspoken in its demands that in any future war Canada shall remain neutral. Of Canada's total population of 10,376,786 some 29 per cent are French Canadians, and another 29 per cent are of European, Irish or American origin; so that a majority of the people have no particular reason why they should fight to protect Great Britain. The remaining minority of British Canadians is to-day probably strongly isolationist in sentiment; but in time of war their ties with the mother country would perhaps prove stronger than the ties geographical, education and psychological that at present draw them towards the United States. Canada's economy, despite the rapid development of her mining industries, is still essentially an agricultural economy, and the Ottawa agreements of 1932, have helped to give Canadian farm products a substantial British market, the importance of which is not likely, in the near future, to be diminished either by a British policy of economic nationalism or the growth of trade between Canada and the United States resulting from the trade treaty of November, 1935. Canada's overseas trade will continue to be of major importance to her, and will make a neutrality policy difficult to carry out. War in the far east between Japan and one or other of the Pacific powers -would probably involve the United States, and this in turn would almost inevitably involve Canada.
However isolationist her people may be, and however disastrous the consequence of participation in war may be upon her national unity, Canada will find it difficult indeed to keep out of another war. For a while she might remain in North American isolation; but only, perhaps, for a while.
What I have just read should be a warning to the people of Canada and an indication of the menace that is hanging over us. British rearmament is the most important factor making for peace in the world to-day and I am glad that Britain is going on with a vigorous program in that direction. The prospect grows

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more certain every day that Britain is once again to become as strong as she has ever been, a dominant force in the world, and she will wrest agreements for peace from Hitler and other aggressor dictators. Britain's security is now a matter of practical politics. Italy is growing more and more tired of her new alliance, and I have no doubt she will wake up to a realization of her true interests.
The defence forces of Britain are necessary on the seven seas, because without adequate protection, such as is afforded by the British fleet, we cannot develop any trade. The submarine menace is the most deadly foe of the people of Canada. Here we have been discussing wheat for three weeks, but what is the use of any policy in regard to wheat or any other commodity in face of this menace to our shipping on the seven seas? The menace of a European war completely overshadows all the discussions that have been going on here on the business situation in Canada.	Enemy submarines could destroy
our trade on the seven seas and we would be powerless without the help of the British navy. It would mean untold disaster to Canada.	In 1918 submarines sank 600,000
tons of our shipping in one month, and all through each month of 1917 it had been the most deadly menace we had to face. Where would we be to-day without the British fleet? There are two thousand less ships of the merchant marine than before the great war, or 1,500.000 gross less than in 1914. Britain's tanker tonnage has decreased during the same period, leaving us weaker in the ships which carry foodstuffs and materials, to the extent of about 3,500,000 tons. Britain had 17,500,000 tons of such vessels in 1914 and she has only 14,000,000 tons now, and during that time the population of Great Britain has increased by four and a half million. She imports 90 per cent of her food and 96 per cent of her raw material, and. as in Easter week of 1918, she could be starved out in a month. Moreover, every merchant ship is regarded as a hostile belligerent and may be fired upon. On the whole, our navy to-day depends not on coal but on foreign petrol from Africa, Persia and South America and its supply can be intercepted by an enemy. While all this is so, add the sudden-shock tactics of the dictators, their brutality, their suddenness of attack, their ferocity and swiftness, and think of Canada without any aircraft to protect us, or any defensive means whatever to save our civilian population from air raids. I raised this question on a motion on going into supply in March, and on the defence votes I was to continue then by request of the Prime Minister then and do so now.
Britain is particularly weak in submarines, though to-day she has to look after not only the Atlantic, as in the great war, but in the next war all the seven seas; and when we reflect that Japan and Italy are now against her, and that Japanese submarines can cross the Pacific from Hong Kong to Vancouver and return without refuelling, we can well realize what we are up against. Italy has established submarine bases which enable the Italians from the bases in the Atlantic to round the Cape of Good Hope and travel to India and back without refuelling. But we have no policy.
What about what I asked on June 16, for an immediate national register of man power, food power, industrial and economic power, which was suggested by me on the first day that parliament met?


The CHAIRMAN:: The hon. member has spoken for forty minutes. I would point out to the members of the committee-and possibly they will all agree with me-that the hon. member for Broadview has been discussing matters irrelevant to the item under consideration, though I did not call him to order. I realized that an agreement had been entered into whereby, on the first item called, a wide latitude of debate would be allowed, but I suggest that the committee should now confine itself to the subject matter of the item now before us.


Thomas Langton Church: May I call your attention, Mr. Chairman, to what the Prime Minister then said to me in reply. He told me in the house-


Frederick George Sanderson: Order. Shall the item carry?


Mr. GREEN:: May I ask-


Thomas Langton Church: Others were allowed to continue for a very few minutes; why shouldn't I?


Frederick George Sanderson: Order.


Thomas Langton Church: I am not going to be
ruled out like that. I move that the committee rise in order that we may get the ruling of the Speaker. I rise to a point of order.


Frederick George Sanderson: Order. Will the hon. member resume his seat.


Thomas Langton Church: No. Mr. Chairman-


Frederick George Sanderson: Order.


Thomas Langton Church: You cannot order me to sit down like that. I move that the committee rise. Under the rules of the house the committee must rise and the Speaker must decide the point of order.	-
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Frederick George Sanderson: If the hon. member will resume his seat for a moment-


Thomas Langton Church: I rise to a point of order.


Some hon. MEMBERS:: Sit down.


Thomas Langton Church: I have a right under the rules of the house to appeal.


Frederick George Sanderson: Will the hon. member please sit down?


Ian Alistair Mackenzie: Perhaps I might say a word. I believe the understanding was that there would be a general debate on the question of policy on the first item, and as far as possible those who were not present on the former occasion were to be allowed to discuss that question. There was general consent both last year and this year to a general discussion of policy on the first item called. I think we will proceed now with the discussion of the item.


Thomas Langton Church: I am satisfied. I was just about through, anyway, if the chairman had given me a chance. I am not going to have him overrule me like that.


Frederick George Sanderson: Order. Shall the item carry?


Howard Charles Green: What anti-aircraft units and searchlight units are there in Canada to-day? And what provision is being made for additional units? I understand that there are no anti-aircraft units at all on the Pacific coast at the present time.


Ian Alistair Mackenzie: This
matter is just in process of reorganization at the present moment, in regard to both searchlights and anti-aircraft units, and it is hoped 'hat there will be these new units on both coasts in the early future.


Howard Charles Green: Are there any anti-aircraft units on either coast at the present time?


Mr. MacNIOOL:: I do not think the minister should answer that.


Ian Alistair Mackenzie: Not all the intended ones.


Howard Charles Green: The other day I asked the minister how long it would take to put a division of our troops into the field in the event of trouble. Will the minister answer that question to-day?


Ian Alistair Mackenzie: I repeat what I said the other day, and I cannot add to my answer. It would depend entirely on what division was called out. A division could be placed in the field over night for the purpose of protecting vulnerable points, but
[Mr. Church 1
for other purposes it might take considerably longer. Only a general answer can be made to a question of that kind; I cannot be specific.


Henry Herbert Stevens: In considering these estimates at this time I find myself under a considerable handicap-I might say, a self-imposed handicap. It has been my view since being a member of the House of Commons that discussions of defence and militia matters and matters of external affairs should be conducted as far as possible on a nonpolitical basis. I think that view is particularly applicable under the present circumstances. If the minister were to answer all the questions I should like to ask it would probably be most unfair to the officers in charge of the active militia and defence forces, and not in the interests of the country generally. But to the extent that such a reserve of discussion is observed the government must assume complete responsibility for whatever is done and whatever results or lack of results flow from their efforts and action. I agree with the leader of the opposition (Mr. Manion) that there should be set up a committee of the House of Commons, possibly of the two houses of parliament, which might hear in secret from the officers in charge of our various units and branches of defence full explanation of the matters before parliament and before the defence department. I believe that would be a sound thing to do, because we are entitled to much information-


Ian Alistair Mackenzie: Hear,
hear.


Henry Herbert Stevens: -which obviously it is not in the public interest to disclose publicly. A handicap is there enforced on hon. members in the discharge of their duty in checking the government in its expenditures.
I understand we are still discussing item
178.	It is a substantial sum. To give detailed information about coast defences, mobile and anti-aircraft armaments, machine guns, searchlight and general equipment, mechanical vehicles, tanks and so on, would possibly not be in the interests of the country at large. However I should suggest to the minister that we ought to have definitely and officially from the government a declaration that the measures necessary for reasonable defence are being taken. I admit that sounds a little weak and anaemic, but I cannot see how we can go much further; at least I am not prepared to go much further in demanding that information be publicly given. It would be doing a disservice to the country if I were to ask the minister exactly what searchlights or antiaircraft emplacements and so on be has on the

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Pacific coast, although I am vitally interested in the matter. But this is a subject which could be dealt with secretly in a committee.
I gather, from the amounts being expended, that definite efforts are being made to overtake the results of what has been Canada's policy for the last several decades, that of doing nothing in regard to defence, and the lack of development during those years.
Let me say just a word, however, on this point. Sometimes it is implied that the preceding government, in fact you might say preceding governments over the last couple of decades, have been derelict in their duty in regard to defence. But it must be borne in mind that Canada throughout its history has been notably a pacific country. We have never presumed to be a military country, and it would be sheer folly for us to attempt to become a military country to-day. Obviously Canada cannot rest its future security on its own ability to resist attack from outside, no matter where it comes from, we can never achieve that. On the other hand in recent years conditions have developed in the world which warrant Canada's making certain preparation for defence, such as may be commensurate with our resources. That, I think, is what is in the mind of the government, as expressed in these estimates. It depends, however, upon the efficiency and wisdom with which these comparatively large grants are expended in the defence of the country. I do not think it is possible for Canada as the hon. member for Broadview (Mr. Church) a moment ago suggested, to take complete responsibility for her defence against any possible attacks. But I agree with him to this extent, that we ought to show a spirit of cooperation with the other dominions and the mother country in this great crisis which confronts us at the present time. I concur in what the leader of the opposition said the other day, that if we could have an examination of these highly confidential matters by a committee of both houses, where they could be carefully reviewed, it would be a desirable thing to do. But speaking for myself I do not feel disposed to press too strongly for information the disclosure of which would obviously be unwise and unfair to the country. With that handicap I simply bow to the situation, and I repeat that we shall hold the government definitely responsible for the expenditure of the large sums that are being appropriated.


Charles Grant MacNeil: I feel that a point has been overlooked by the hon. member for Kootenay East (Mr. Stevens). I agree that we should conduct discussions without acrimony and without seeking partisan advantage. But as
he is very well aware, people generally on the Pacific coast are tremendously interested in this subject. Members of the house, particularly those who represent constituencies either on the Atlantic or on the Pacific coast, should be in a position to take an intelligent part ir general public discussion of these issues, without requiring the disclosure of vital military or naval secrets. And they should be in a position to dispel statements or rumours which are without foundation, or which may tend to undermine public morale or the public confidence in the operations of our staff officers.
In this discussion I am not seeking to secure secret information. I do not desire to have such information in my possession. It is quite another matter, however, to discuss trends of policy. This point arises-and I should like to have further assurance from the minister with regard to it, and also the views of the hon. member for Kootenay East, because of his experience in matters connected with the Pacific coast: We are assured from time to time that a plan of defence has been worked out for the Pacific coast, and that by the erection of fortifications and the placing of fixed batteries at strategic points the strait of Juan de Fuca and Vancouver island can be adequately covered. We are assured by experts that that defence would make it virtually impossible for hostile craft to come within striking distance of Victoria or Vancouver-with the exception, of course, of submarines. We understand also that adequate provision has been made for the laying of mine fields and booms, and for patrols to seek out and to destroy bases which might be established by enemy powers. Then within a few weeks we hear disquieting rumours to the effect that it has been difficult for the department to secure the necessary armaments for that type of defence, namely the 6-inch and 9-2-inch guns. I can understand from the report of the department the difficulty of securing delivery of these guns. But most disquieting rumours are in circulation indicating a lack of that sort of armament. At the same time we notice from the report of the department that it has proceeded to purchase howitzers and mortars, which are of little value for that type of defence, and which are usually regarded as being useful only for purposes of army manoeuvres.
The point I wish to have cleared up and dealt with definitely, for the sake of the people generally on the Pacific coast, is this. Is it not possible now to concentrate on the production of armaments of the kind I have described, purely for purposes of coastal defence, without proceeding to secure howitzers
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and mortars used to bear upon positions held in strength by an enemy, and to reorganize units so that they might concentrate on a defence of that kind? Could that be done, even without proceeding with expenditures which would be involved in connection with army manoeuvres? I hope I have made the point clear to the minister, and that he may find it possible, without disclosing any military or naval secrets, to indicate a trend of policy or of purchasing which will assure the people on the Pacific coast that they are adequately protected.


Ian Alistair Mackenzie: I appreciate the spirit in which the hon. member for Kootenay East (Mr. Stevens) has spoken with reference to the general policy. I repeat what I said the other day, that if there is any desire to have an informal discussion with staff officers before the conclusion of the session, it will be arranged. It could be arranged at the next session of parliament to set up a formal committee, on which I think both houses should be represented.
With reference to the point raised by the hon. member for Vancouver North (Mr. MacNeil) I will repeat what I said the other day, namely, that I am not a military expert. I am in. substantial agreement with what the hon. member has said, but naturally I have to take my advice from technical officers in the department-and of course a mobile army for service in Canada would have to be equipped with howitzers and mortars. That is the policy which has guided the experts of the department. The first preference in the department at the present time is for coastal defence, as such. In my opinion the next preference should be that of anti-aircraft guns. I think if we keep those two preferences constantly in view, and keep them ahead of other technical requirements, we shall do the wisest thing for the defence of Canada, as such.


Mr. MASSEY:: I am sure that those of us who listened intently to the observations of the hon. member for Kootenay East (Mr. Stevens) and the remarks made subsequently by the hon. member for Vancouver North (Mr. MacNeil) were in full agreement with the sentiments expressed. The views expressed by these hon. members have conveyed to the committee, I am sure, the spirit in which all hon. members have made inquiries of the minister.
The hon. member for Vancouver South (Mr. Green), who has asked many questions of the minister, has done so in a spirit which has indicated clearly his interest in the defence of Canada. Naturally he is vitally and 
personally interested in the defence of Vancouver, because his wife and family are there. All of us who have such interests have that same vital concern.
I am sure the minister has felt throughout the entire discussion in committee that there has been no attempt either to embarrass or to criticize him, but that rather the attempt has been to obtain information which is in the public interest in regard to policy. We want to know where we are heading in this matter of defence. After all, in the present year we are being asked to spend about $63,000,000 of public money through the minister's department, and the people of Canada have a right to know what the policy of the department is.
The minister has been straightforward and frank in his answers. He has not made any attempt to withhold information in any shape or form, and we appreciate that. In regard to the policy of giving certain information, I would point out that the other day the minister himself made a speech, upon introducing his estimates, which was a forthright statement of the position of affairs in Canada so far as defence is concerned. I believe every question asked the minister has been based on those remarks. I do not feel that any hon. member should regard the questions which have been and are being asked as designed in any way to embarrass the minister or the department of which he is the head, or to make political capital out of defence measures
a matter which cuts across party lines as no other matter could. All hon. members realize that orders have been placed in the United Kingdom for a large volume of equipment of all sorts. We further fully realize, as I pointed out in the brief remarks I made the other day, that the United Kingdom is not in a position to furnish our requirements, in virtue of the demands which are being made upon her to-day in respect of her own. Naturally, therefore, we are interested in knowing what steps the minister proposes to take to overcome the handicap under which he is placed as a result of a condition over which neither he nor anybody else has any control. Questions have been asked particularly along that line. Some of us feel that the manufacture of arms can best be carried forward in government controlled and operated plants, to function as pilot plants, as has been done so successfully in Australia and, possibly to a lesser degree, in the United Kingdom. We are anxious to know whether steps are being taken further to develop the Quebec, Lindsay and Valcartier arsenals, or whether it is planned to rely entirely upon

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the results of the survey of 2,000 industrial plants, which the minister has conducted in recent months.
These are general questions. Certainly no one can suggest that there is any endeavour to embarrass the minister or to place the country at a disadvantage as a result of the giving out of information which it would not be in the public interest to disclose. The interest of hon. members in seeking information has been purely the interest of Canada and that of national defence.
I listened to the speech made by the minister on the introduction of his estimates, and since then I have read it carefully in Hansard. It was a frank exposition of the position of Canada in the present crisis. I believe all hon. members realize that, regarded from our point of view, the greatest defence arm in modern warfare must be the air force. Accordingly we wish to know to what extent Canada can produce aircraft, and how rapidly that production can be developed. Questions are constantly being asked in the press and elsewhere as to the potential air strength of Canada and what steps can be taken forthwith to develop an air arm adequate for our own defences. Some go even farther and want to know what contribution we can make toward the defence of the empire through the manufacture of aircraft in Canada. Some go even farther than that and say that Canada could-


Mr. POTTIER:: I thought we were going to stick to the item.


Denton Massey: I am sure the hon. member does not object to any particular matter about which I am speaking.


Vincent-Joseph Pottier: The hon. member is
repeating what has been said on a number of other occasions. I think we should stick to the item.


Denton Massey: I think I am within my rights in speaking at the moment, and I accept the spirit in which rather than the words with which the hon. member interrupts me. I have no doubt he is just as much interested in this matter as I am, and I shall be glad to hear his comments when I resume my seat, which I shall do in a moment.
I am sure that the information the minister has given during the course of this discussion is definitely in the public interest. Can he now state to the committee what are, in general, the plans in connection with any policy for the expansion of the air force of this dominion? Is the government planning to increase the number of our fighting planes, and is it felt that the present available equipment is obsolete and should be replaced?


Ian Alistair Mackenzie: It is intended to encourage aircraft production in Canada as much as possible. I believe at the present time there are about ten firms manufacturing aeroplanes in Canada, although not all for the department. In addition, as my hon. friend knows, proposals have been made by the British government with reference to aircraft production in Canada. We are confronted with two alternatives. The first is the development of a long-range policy of aircraft production in Canada, and the second is the necessity of meeting what might be an immediate emergency. Because of the second alternative we have been compelled recently to order substantial numbers of aeroplanes from the United Kingdom and the United States. I think it was our duty as a government so to do, although we would have preferred to have these machines built in Canada. Various types of aeroplanes have been ordered to be built in Canada, such as trainers, fighting craft and bombers. The present policy is really a compromise between the two alternatives.


Denton Massey: The remarks of the minister apply to aircraft in general. Would they apply also to the manufacture of engines?


Ian Alistair Mackenzie: The
desire of the department has always been to have aircraft engines constructed in Canada. That would be the ideal, but the difficulty is that the aeroplane is built around the engine. If we developed only one standard type of engine in Canada it is doubtful whether that engine could be used in the various types of aeroplanes. If we are to establish an aero engine industry in Canada we must develop six, seven or eight types of engines. The difficulty in the past has been that our orders were so small that they did not justify the establishment of such an industry, and we have had to order engines from the United States and Great Britain. If we adhere to the use of the types of planes used by the British air ministry, we shall have to insert in those aeroplanes the type of engine they use. Recently an order has been approved for North American Harvard aeroplanes from the United States, and of course the type of engine in those planes will be the type of engine which is used in the United States.


[Stage Direction]
Item agreed to.
Militia services.
179.	Ammunition procurement, including dominion arsenals - chargeable to ordinary account (commitments $1,738,000), $1,818,023.
Mr. STIRLING:: I understand the cordite for shell filling stations is obtained in Canada under contract.

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Ian Alistair Mackenzie: Yes, from Canadian Industries Limited.


Grote Stirling: Is that an annual contract, or is it for a period of five years or more?


Ian Alistair Mackenzie: I am
informed that the contract has been in existence for seven or eight years.


Grote Stirling: Does it go on forever, or is it terminable?


Ian Alistair Mackenzie: It is terminable, but the orders have been renewed from year to year.


Grote Stirling: I suppose the basic price agreed to years ago is the price that holds to-day? In future when cordite is required and there is only one source of supply in Canada, the purchasing board will have to deal with this one contractor. I suppose the board will be governed by the five per cent clause in the legislation.


Ian Alistair Mackenzie: Yes, presumably.


Grote Stirling: What will be the position if the one producer of cordite is unable to meet these terms? Where will the government turn to for its cordite?


Ian Alistair Mackenzie: My own opinion is that under the terms of the legislation, wide discretionary power is vested in the purchasing board with reference to allowances for depreciation and the like. It certainly is not the intention to make any source of supply impossible; the intention is rather to eliminate improper profits in connection with this type of contract. If the situation outlined by my hon. friend arose I can assure him that steps would be taken immediately to see that our source of supply of any essential commodity would not be unduly restricted.


Mr. McNEVIN:: I have discussed most of the items in which I have a definite interest, and I have also been in conference with the senior officials of the department. I understand there are a number of items which are definitely required by the department. I refer particularly to rifles in large quantities, gas masks, small arms ammunition and anti-aircraft guns and mountings. I understand there is a need of 123 equipments of different types, 348 anti-tank equipments, 504 field gun equipments, 544 infantry mortars as well as a number of medium guns. I do not want to prolong the discussion; I simply want to point out that we have at Lindsay a factory that is up to date in every particular. These items cannot be secured from England and there is dire need for much of this equipment. I

suggest that the production at Lindsay should be definitely increased during the coming year, and that the greatest possible use be made of the plant there.


Mr. LENNARD:: What are the Canadian sources for mobile ammunition, and how far has the development of these sources progressed?


Ian Alistair Mackenzie: To what calibre is the hon. member referring?


Frank Exton Lennard: It is mentioned in the details at page 126, the development of Canadian sources of production of mobile ammunition.


Ian Alistair Mackenzie: There
are two sources of supply in regard to the one calibre, one is the arsenal, for restricted quantities, and the other the Montreal Construction Company for somewhat larger quantities. The results there have been very satisfactory, and the costs at which they are producing are substantially below the costs at the arsenal.


Howard Charles Green: What are the plans of the department for getting this ammunition? Is it proposed to manufacture certain types in the arsenals exclusively and to have other types manufactured by private firms, or just what is the arrangement? Also, have any other shell contracts been let?


Ian Alistair Mackenzie: No
other shell contracts have been let in Canada. The general policy would be to expand the arsenals as much as we can, mostly for the manufacture of small arms ammunition, and to cooperate with industry for limited production of quantities which it would be uneconomical for any government to manufacture.


Howard Charles Green: The plan is to use the
dominion arsenals as pilot plants for the manufacture of field ammunition?


Ian Alistair Mackenzie: The
dominion arsenal at Quebec is up to its production limit of shell ammunition with its present accommodation. That is one reason why a pilot plant was commenced in Montreal. What the policy will be for actual work at the Lindsay arsenal has not been definitely decided. There are two or three alternatives-to build up a reserve of ammunition, or to have the same work as that done by the Montreal Construction Company. A decision will be made shortly.


[Stage Direction]
Item agreed to.

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Militia services.
180.	Chargeable to capital account (commitments $2,553,330), $759,835.
Charles Grant MacNeil: I do not think we have finished with item 177.


Ian Alistair Mackenzie: I understand that items 177 and 178 were carried together, but if my hon. friend wishes to revert to a particular item I shall be glad to have him do so. According to the votes and proceedings item 176 was carried and also 207, but they are omitted from the official records.


Charles Grant MacNeil: Hansard shows that items 177 and 178 were not carried.


Frederick George Sanderson: Item 207 was not carried, and item 177 is not carried; it is marked "stand".


Mr. MacINNIS:: Item 176 is carried,
according to Hansard.


Ian Alistair Mackenzie: I move that item 177 be carried now.


[Stage Direction]
Motion agreed to.
Frank Exton Lennard: Is all the clothing made in Canada?


Ian Alistair Mackenzie: Yes.


Frank Exton Lennard: Although boots do not come under this item, will they be made in Canada?


Ian Alistair Mackenzie: Yes.


[Stage Direction]
Item agreed to.
Militia services-Inspection of stores, arms and ammunition-
181.	Chargeable to ordinary account, $169,522.
Charles Grant MacNeil: What is the method of
inspection of ammunition manufactured outside the arsenals? Who is responsible and what is the procedure of inspection?


Ian Alistair Mackenzie: We have an officer, the chief inspector of arms and ammunition, Colonel Howard, whose duty is to inspect all ammunition whether made in our own arsenals or by any other source of supply.


[Stage Direction]
Item agreed to.
Militia services-Mechanical and water transport-
181i. Chargeable to ordinary account, $120,971.
Charles Grant MacNeil: WThat type of water transport is being procured?


Ian Alistair Mackenzie: There
is an increase in capital account of $8,000, and a total increase of $50,000 on both 71492-2691
accounts. A motor boat is required to supplement existing water transportation facilities between Halifax, the airport at Dartmouth and the outforts generally.


[Stage Direction]
Item agreed to.
Militia services.
186. Non-permanent active militia, $2,830,488.
Howard Charles Green: What steps are being taken by the department to encourage recruiting? In his statement the other day the minister said that the turnover in recruits was very discouraging. Have any steps been taken by the department to remedy that situation? Also would it not be possible to provide for the recruiting of the Pacific coast units, at least, up to their peace time strength in view of the statement by the brigade commander at Vancouver that the forces were less than one-third the number required to man the forts?


Ian Alistair Mackenzie: In reply to my hon. friend's last question, it would depend on the total vote made available for the non-permanent active militia. In reply to the first part of his question, steps were taken last year and have been taken this year by appealing, first, to various departments of the federal government, second, to provincial governments, and third, to all industrial concerns of the dominion to facilitate so far as possible the granting of leave with pay to members of their staffs who are in the non-permanent active militia. The response to that appeal last year and this has been most encouraging. Employers of labour have shown a wonderful spirit of cooperation.
There were two complaints in the past, which are both being remedied through the present estimates; one with regard to the old shoddy uniforms that have been issued since the war, and the other in reference to boots. These are being remedied. There is an amount here for $100,000 to provide boots for the non-permanent active militia for training purposes in camp and for drill purposes in the winter. The boots are a free issue under certain conditions to the members of the militia and will probably last the men two or three years.
To recapitulate, there has been cooperation with industry and with provincial govern-, ments; better uniforms will be provided, there will be a free issue of boots to the members of the militia, and lastly the support of public opinion is greater to-day than ever before in the history of the country.
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Howard Charles Green: What provision is being
made for increasing the training pay. I understand that the men are not paid at all for the drill they do in winter; that they get paid only during camp training in the summer. Different officers of the units have told me that some of the men could not afford to pay carfare and all that sort of thing, and provision should be made for at least their expenses.


Ian Alistair Mackenzie: I know the situation to which my hon. friend refers. There has been some amount of dissatisfaction as a result of changes made in the training plans last year with reference to the allocation of pay for militia units. A financial obligation was placed upon certain units as a consequence of increasing the amount of camp training. In regard to the situation generally, the supplementary estimates provide for an increased vote this year of $100,000 for the non-ipermanent active militia, which will be the largest amount ever appropriated for that purpose. That vote will be divided into $65,000 for additional training, and $35,000 for clerical help in the orderly rooms, for which the units have been asking over a number of years.


Howard Charles Green: Is the vote for the nonpermanent militia this year sufficiently large to enable the units on the Pacific coast to be recruited up to peace-time strength?


Ian Alistair Mackenzie: That is a question on which I should not like to be specific. Naturally to raise all the units up to peace-time establishment the vote would have to be substantially larger.


Mr. MULOCK:: Many militia officers
holding responsible positions in their units have great difficulty in getting leave, particularly at time of camp. I suggest that consideration be given to that point, because no doubt some other hon. members have had representations made to them with regard to it. If these men go to camp they lose the opportunity of spending their holidays or any part of their holidays with their families. I believe some consideration might be given in these cases; possibly arrangements could be worked out with different departments of government.


Ian Alistair Mackenzie: I wrote personally to all my colleagues with regard to the point the hon. member has just raised.


Charles Grant MacNeil: Shortly after the minister took charge of this department he announced a plan of reorganization of the non-permanent active militia with the object of cutting down

duplication of infantry units and converting cavalry into mechanized units. I noticed in the last report that four brigades of cavalry have been mechanized, leaving ten of cavalry proper. Some of the militia units are obviously over-officered, particularly during training periods, in comparison with other units and in accordance with the standards set by the permanent force. May I also ask what progress has been made in reorganizing signals in order that they may specialize in coastal defence work?


Ian Alistair Mackenzie: I am glad to say that the progress has been very gratifying indeed. There are two stages. The first is the reorganization carried out between December, 1935, and December, 1936-that is, following the general policy laid down by the general staff. Various changes have had to be effected with reference to increasing a certain number of technical or mechanical units in regard to signals, batteries, and now with reference to the development of searchlight and anti-aircraft units. So that as expected, the complement arranged two years ago has had to be altered in that direction, and it is likely that some further alterations will be necessary from time to time. As soon as we get the equipment there will be no difficulty whatever in arranging the reorganization of the personnel, in regard particularly to our coastal defences, which are our primary responsibility.


Charles Grant MacNeil: Well, is this a reorganization on the lines of a British army division, or is it a specialized reorganization for coastal defence?


Ian Alistair Mackenzie: I should say that it partakes of both. With regard to the mobile divisions available for transference from one coast to the other, they will be modelled on the British army division. As regards coastal defence, I imagine that we should have to evolve certain changes as a result of our tremendous coast line, and possibly also having regard to our northern border.


Charles Grant MacNeil: Will tank regiments and anti-aircraft inland batteries be given an opportunity under this vote to take at least a portion of their training on the coast or the terrain in which they are expected to go into action?


Ian Alistair Mackenzie: That of course will be decided by the general staff, bearing in mind that the primary purpose of the equipment of such forces is our coastal defence. I suggest that when we get sufficiently advanced they might be transferred for manoeuvres on either coast.

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Charles Grant MacNeil: The minister announced
a reorganization of the air force, the headquarters of the western command to be at Vancouver and the eastern command at Halifax, with a central recruiting and training centre. This seems to me to be an excellent plan. Would it not be possible to follow that plan with regard to the militia? Would it not contribute substantially to the efficiency of the defence forces to do so, rather than to have such a large number of military districts distributed across Canada?


Ian Alistair Mackenzie: It would be quite possible to do so. Whether it should be done, of course, would be a matter of argument and of opinion. I should like to get the opinions of the militia officers with regard to reorganization. This matter of the air force has been worked out in the last few months and is operating quite satisfactorily. Whether, with the greater number of personnel in the militia, we could work out a three-zone control or command is a matter upon which I could not be definite or dogmatic at the present time.


Mr. ROSS (St. Paul's):: Take a regiment like the Queen's Own or the Bodyguard; about how much is the grant it receives?


Ian Alistair Mackenzie: The
amount varies with the numbers on the strength of each unit, in every portion of Canada. Another point, of which my hon. friend is probably well aware, is that the district officer commanding has a good deal of control over the system of allocating funds available for a district in regard to training.


Douglas Gooderham Ross: The commanding officers of some of these regiments are, I believe, rather disappointed at the results of their efforts. This is certainly true of some of the battalions in Toronto. Much of the difficulty arises out of the fact that so many of the men are unemployed, and I understand the amount these regiments get is quite small. It seems to me that, with so many men unemployed, it would be much better if the commanding officers could get more money to spend upon their battalions. Certainly they are giving a great deal of their time to the work. Another consideration which enters into the matter is that much of the money we are spending on armaments may be wasted unless there is more enthusiasm for the militia of the country. I think that every encouragement possible should be given.


Ian Alistair Mackenzie: I quite agree with the hon. member as regards the last part of his remarks.


[Stage Direction]
Item agreed to.
Militia services.
187. Permanent force, $6,087,760.
Grote Stirling: I should like to emphasize the remarks I made the other day with regard to the importance of the permanent force keeping pace with the renewed and extended requirements consequent on the reorganization. The permanent force is required to give instruction, on top of all its other duties, to the non-permanent active militia, and I cannot understand how the minister can expect the permanent force to keep pace with the increased work which it is called upon to perform.


Ian Alistair Mackenzie: I entirely agree with my hon. friend. To meet the expansion which is now taking place, the permanent force should be raised to the peace-time establishment of 6,528. At the present time the strength is roughly 4,000. They are very hard worked; they are on instructional duty practically all the time. There has been some suggestion that there might be a decentralization of the permanent force; that they might be allotted in sections to the training of the individual units of the non-permanent active force; that instead of being in regiments stationed at Winnipeg, Esquimalt and other centres there might be a decentralization of their strength. That of course is a matter of argument. I agree with my hon. friend that we are approaching the time when there must be, in order to get proper training of the non-permanent forces, an expansion of the numbers of the permanent force.


Grote Stirling: I agree fully with the remarks which have been made from several quarters to-day and previously, that the opposition has endeavoured to make its contributions to the discussion constructive, and has certainly succeeded in avoiding partisan criticism. But in this matter, in my opinion, the government is open to grave criticism in that it has not sufficiently strengthened the permanent force to enable it to keep abreast of its work.


Frank Exton Lennard: Has the force been
reduced? I notice quite a reduction in the amount of pay and allowances for all ranks for the coming year. It seems an indication that the strength has been lessened.


Ian Alistair Mackenzie: No, it has not been reduced.


Frank Exton Lennard: Then why the reduction?


Ian Alistair Mackenzie: Under the heading of "pay and allowances" provision
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has been made to carry about the same strength as in 1938-39, namely 444 officers and 3,514 men, a total of 3,958.


Frank Exton Lennard: Can the minister explain, then, the reduction in the estimates for pay and allowances?


Ian Alistair Mackenzie: Yes. The reduction of $60,393 in the sub-allotment is mainly due to the policy of issuing rations in kind to a greater number of personnel.


Charles Grant MacNeil: Are men enlisted in the permanent force liable under the terms of attestation for service overseas?


Ian Alistair Mackenzie: That is a legal question which I would refer to the Minister of Justice. I imagine the members of the permanent force are subject to the terms of the Militia Act. I have not before me a copy of that act. It would depend on the procedure which has been laid down, which my hon. friend discussed fully last year.


William Pate Mulock: I know the difficulty the minister has had and I hope he will realize that what I am about to say is merely a suggestion for consideration. If there is any increase in the permanent force I suggest that consideration be given to the training of young men for anti-aircraft defence. I think it would take a pretty intensive training before these men would become effective. And the same with the heavy coastal defence. In the technical services it might be advisable for the government to consider these two particular branches of defence with a view to having a reasonable increase in the permanent force.


Ian Alistair Mackenzie: We are having a training school for anti-aircraft personnel this year.


Mr. MUTCH:: During the last three sessions I have watched with more than ordinary interest the development of the permanent force, keeping in mind the personnel. I have watched not only what has been done by this government but what has been taking place with respect to the personnel of the permanent forces in the old country, and I have concerned myself particularly with the men rather than with the organization in which they serve.
There are several matters regarding which I am not satisfied. Back in 1934-35 a large number of men were serving in the permanent forces who were married without official permission. Marriage without official permission really does not mean anything, because it was well-known that these persons were married, and they were married with the knowledge, if not with the consent, of their officers.

When I began to be particularly interested in this matter in the Winnipeg area, military district No. 10, these men began to come up for reenlistment and they began to be dropped from the service because of the fact that they were married, although they were not on the married strength. The matter was brought to the attention of the department and there were brought into force regulations that certainly lessened the hardship on many of these men.
In that particular area there were about thirty men who were not reenlisted although there was nothing against them in the records of their military performance, but they were rejected on the ground that they had married without official permission. Of these thirty, according to the information I last had, there were twenty-two who did not succeed in reestablishing themselves in civil life. I should like the minister to consider the position of these men-and there must be others in various places in Canada. I have no complaint against the present regulations, though I did object to the regulations of 1934-35. At present there are a large number of these men who left the service and were not reenlisted by their commanding officers, notwithstanding that they wished to remain in the service. And they had given good service, some of them upwards of five years. In future reenlistments, which I expect, will it not be possible to give these men the first chance, despite the fact that they are married? Most of them have been unable to reestablish themselves, and their services would be valuable. I know of recommendations from commanding officers indicating the general desirability of having these men in the service. There is a gap of five or six months in 1935-36-principally in 1936-when these thirty men were slid out of the service, if I may put it that way. I believe they are valuable men and they should be taken back. If it is at all possible I suggest that they should be given the first opportunity to come back into the units, whether or not certain of the local powers-that-be wish to have them back. That is one matter I should like to have the minister consider.
There is another question about which I am concerned. I believe it is inevitable in Canada, so far as the permanent forces are concerned, that we shall come to two decisions. In the first place we. shall decide to make it possible for other ranks in the permanent forces to provide for their widows. Only in the last couple of days I have had communications from widows of men who died in the permanent forces without pension, and these women are looking for employment

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as scrubwomen. That is not good enough. The majority of the enlisted men in the permanent force would be willing in my opinion to contribute towards a pension fund. Many of them are struggling to buy annuities or life insurance; they are not succeeding very well, and I believe they would be willing to make a contribution similar to that provided by warrant and commissioned officers for the purpose of taking care of their widows. I have known of a number of widows who had to go and scrub and do other jobs of that kind because their husbands could not create an estate out of their army pay.
Another point I have brought to the attention of the minister, one which has received a good deal of consideration, is the question of allowances for minor children of members of the permanent force. I wish to urge upon the minister the position of these young people. I have discovered after some investigation, with considerable assistance, that it is estimated it would cost something less than
8110.000	per annum to pay to the dependents of enlisted men in the permanent forces the same allowances that are given to dependent children of members of the British army, and notwithstanding that the rates of pay vary I believe that would be better than nothing. I am of the opinion, however, that it is scarcely enough and I suggest that a system can be and should be worked out that would prove satisfactory. On the basis of comparable figures, I do not think it would cost more than
8200.000	a year, and in a budget of 863,000,000 that would not be prohibitive.
I do not know much about things military, but I do know something about men, and I suggest that when, as we have done, we are concentrating so much attention on the question of defence we ought to spend a little more time worrying about the conditions under which these men in the permanent force serve, and we should be making a conscious and deliberate attempt to make the terms and conditions of service more attractive in order to attract to the army the type of men who can come up through the ranks and become of real value to the forces. There have been times in the past-I have come across the opinion in my reading-when it used to be said that in England a son who was not of any use was put into the army. I have found in my experience of the British army, limited as that experience is, that statements of that sort are a slander. But there is no reason why in this country, if we are to make defensive military arrangements on a large scale, we should not attract to the service not only those who can get by under direction but those who have brains and ambition enough to make a career
of it. If we had more men of that type in our forces we would get better advice from our military men and a more efficient military service. And these are some of the ways in which this can be done. You cannot put a man in the army and make him forget that he is an ordinary citizen, make him forget the considerations due to his family and children. Two or three hundred thousand dollars spent in the way I have indicated would probably do more to bolster up the morale of these people than anything else. To my mind eighty per cent of them are the salt of the earth. If for twenty per cent of the permament force in Canada I have not that high regard -some of them, in high places, who in my opinion so far as military procedure is concerned are still in the days of the bow and arrow; -I am not going to point any fingers- about eighty per cent of them are efficient and trying to do something. Reform has to come eventually; someone is going to do it, and I should like to see the minister give consideration to improving the conditions of service along the lines I have suggested. It would do more to promote a sympathetic regard for the army on the part of the citizens generally than anything else, and would certainly bolster up the spirit of the men themselves.


Charles Grant MacNeil: Before the departmental estimates are finished I hope the minister will obtain from his officers an answer to my question. The Militia Act states clearly that the governor in council may place the militia on active service within Canada, and without Canada for the defence thereof, provided only that parliament must be summoned within fifteen days. Are the present members of the non-permanent and permanent militia under any obligation to serve overseas, if so ordered, without being required to sign or take oath or make other form of attestation? In the last war men who enlisted were required to sign in the active militia first and also sign a special form of attestation in the expeditionary force.


Ian Alistair Mackenzie: I shall be glad to look that up.


Charles Grant MacNeil: The Militia Act also states that the Army Act now in force in Great Britain shall be in effect in Canada as though enacted by the Canadian parliament, except in so far as it may be inconsistent with the provisions of the Canadian Militia Act. That section of the Militia Act I consider highly objectionable.


Ian Alistair Mackenzie: Has the hon. member the number of the section?
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Charles Grant MacNeil: Not here; I am sorry. Under that section of the Army Act a man may be sentenced to death. Surely a law which may make a Canadian citizen liable to sentence of death should be essentially a Canadian law and subject to Canadian control. This year the minister tabled the king's regulations as applying to the Canadian militia forces, and reference is made therein to the Army Act of Great Britain, section 45, et cetera, particularly the sections relating to disciplinary control of the Canadian forces, and, I understand that the sections are quoted under which a man may be sentenced to death for evasion of duty or desertion under certain conditions. Why is it not possible in Canada to have our own Army Act, or to place in the Militia Act of Canada provisions with regard to disciplinary measures, court martial and sentence of death, and clear this matter up? As the section stands it is quite contrary to the statute of Westminster. The Army Act dates back to 1886. The minister tabled the Army Act of Great Britain this session; it is an extensive volume, and there are numerous amendments; it would take a Philadelphia lawyer to explain its application to the Canadian forces. I urge upon the minister the codification of the Canadian Army Act with regard to disciplinary control of the Canadian forces.


Ian Alistair Mackenzie: I have elsewhere a memorandum in regard to the points raised by my hon. friend, but it is not here at the moment. But very soon the time will come when we shall have to consider amending both the Militia Act and the Militia Pensions Act, because both contain some archaic provisions. I think whoever is responsible next year should carefully consider these acts. The points raised by my hon. friend and those brought to my attention by the hon. member for St. Paul's with reference to certain pensions are questions which require definite consideration.


Charles Grant MacNeil: Will the minister be kind enough during the noon recess to see if the department could answer the question whether a man in the Canadian forces can be sentenced to death under the British Army Act?


Mr. SLAGHT:: I want to add my voice to that of the hon. member for York North (Mr. Mulock) and the hon. member for Yale (Mr. Stirling) in urging an increase in the permanent force. On Saturday last I pointed out that that force is a necessary element, in conjunction with the Royal Canadian Mounted Police, in an anti-sabotage defence program in this country. I do not believe that numerically the present force is sufficient 
properly to protect us. If it be possible for the minister to supplement this item or increase it so that during the next few months the permanent force may be substantially increased, I should fully support any such proposal.


Frederick George Sanderson: Shall the item carry?


Charles Grant MacNeil: It is one o'clock.


Frank Exton Lennard: Is the permanent force to be increased this year?


Ian Alistair Mackenzie: No, only five officers under the estimates now tabled.


Mr. DOUGLAS (Weyburn):: What is the total strength of the permanent force at the present time?


Ian Alistair Mackenzie: Officers 444, other ranks 3,514, total 3,958.


Thomas Clement (Tommy) Douglas: How many of those are located at coastal points?


Ian Alistair Mackenzie: They are situated at various points throughout Canada. We have some in practically every centre of Canada.


Charles Grant MacNeil: If this item carries can I get an answer to my question?


Ian Alistair Mackenzie: Oh yes, regardless of the item.


[Stage Direction]
Item agreed to.
At one o'clock the committee took recess.
The house resumed at three o'clock.
General.
Radio services, northwest territories and Yukon system
[Stage Direction]
207. Chargeable to capital account (equipment and properties), $70,375.
Ian Alistair Mackenzie: I think this item was carried the other day but it was not so marked. Perhaps I could answer the question asked before recess by the hon. member for Vancouver North, as to whether a member of the Canadian permanent force can be sentenced to the extreme penalty under the Army Act. The answer to the question is in the affirmative, but only on conviction for such offences committed under such circumstances in respect of which the Army Act provides that the offender may be liable to suffer the extreme penalty. A person subject to military law can be sentenced to suffer the extreme penalty only by a general court martial. In Canada the finding and sentence

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of such a court martial must be confirmed by the governor in council, and by a field general court martial which would be convened only in the field. An accused is liable to suffer the extreme penalty only if the offence whereof he was convicted was committed on active service, except when the offence is mutiny or sedition. The expression "active service," in so far as it relates to the matters mentioned above, is by section 1S9 of the Army Act defined as meaning whenever a person subject to military law is "attached to or forms part of a force which is engaged in operations against an enemy or is engaged in military operations in a country or place wholly or partly occupied by an enemy or is in military occupation of any country."
By virtue of section 69 of the Militia Act, the Army Act to the extent mentioned in section 69 has force and effect as if it had been enacted by the parliament of Canada for the government of the militia. So that to the extent mentioned above the answer to the hon. member's question is, as stated, in the affirmative. According to the department's records no sentence of death awarded under the Army Act was put into effect in Canada during the great war or subsequent thereto.


Mr. POULIOT:: I have only a few words to say about the estimates for the Department of National Defence. The suggestion has been made by the hon. member for Temis-couata that all technical information concerning this department be considered privately. Canada is probably the only country in the world where the Department of National Defence is an open book for all. Of course that is quite dangerous, if we consider national defence seriously. However, the suggestion I have mentioned was made a long time ago, in the early part of the session, and was afterwards credited to the leader of the opposition. My suggestion was deformed, however. The suggestion which was made later was that the committee should be composed of members of the House of Commons and of the Senate. My suggestion did not go that far. I believe matters of national defence should be considered by members of the House of Commons, who are responsible to the people, and that the senate should deal with national defence estimates as they deal with the estimates of other departments, and either accept or reject them in bulk.
Another thing of which I do not approve in the management of the business of the country is the appointment of interdepartmental committees. To my mind the responsibility for each department should rest on
the shoulders of the minister in charge. Of course there are technical matters which come before the government, but they need not be studied by interdepartmental committees. Each department is supposed to have technical advisers. It is no more necessary to have interdepartmental committees in matters of government than it is for a judge to have a special commission to study a case having to do with electricity. The judge may not be an electrician, but we know that judges have to decide questions of a highly technical nature, and that they must make their decisions upon the evidence of experts. The same should be done in the business of the country. If the ministers are not technicians in every field, they have under them men who are fully familiar with the business of their departments, and who are available to give information in the council room to members of the government. Members of the privy council would have an opportunity to discuss the matter, and to reach a common sense decision. I would ask the minister to be kind enough to take note of these facts and give the committee information respecting all interdepartmental committees which have had anything to do with his department. I would ask him to name each person who has served on interdepartmental committees, the date of his appointment, and the purpose for which he was appointed. This information would give us an idea of what has been done in that regard.
I fully appreciate the qualities of the minister and his deputy and of some of the officials of the Department of National Defence. But the minister should be strong enough-and I am sure he is, provided no one tampers with his action-to do here what Mr. Hore-Belisha has done in England. Of course it is very interesting to compare the pages of Whitaker of 1938 with those of 1939. The names are far from the same, in the same positions. There have been many changes. And of course we have here some experts from England. I am sure some of them were either those who were expelled by Hore-Belisha or those who received their learning in national defence from experts, or so-called experts, who were fired by Hore-Belisha. Therefore the learning our people have received from that source is not worth very much, as it was considered of very little value by the Secretary of State for War in Great Britain.
I would ask the minister a direct question. The other day he made a statement about further expenditures to be considered by a proposed joint committee of the Senate and the House of Commons. Would he state
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definitely whether the matter will be considered this session or during the recess, or only at the next session of parliament?


Ian Alistair Mackenzie: The
item before the committee has to do with radio services, whereas the question of the hon. member has to do with departmental administration, an item which has not yet been called. However, the figures I gave to the house were only the technical recommendations made by the heads of the three services to the council as to what they considered adequate, and no action whatsoever has been taken in regard to them.


Charles Grant MacNeil: I would urge again most emphatically that at this session the minister take action to clear up difficulties which exist under the Militia Act. All male inhabitants of Canada are liable to military service. By order of the governor general they may be summoned to the colours, and by order of the governor in council they may be placed on active service.
Section 69 of the Militia Act says:
The Army Act for the time being in force in Great Britain, the King's regulations, and all other laws applicable to His Majesty's troops in Canada and not inconsistent with this act or the regulations made hereunder, shall have force and effect as if they had been enacted by the parliament of Canada for the government of the militia.
Section 4 of the Army Act reads:
4. Every person subject to military law who commits any of the following offences-
I will not detain the committee by reading offences numbers one to five, but shall proceed with number six:
(6)	Knowingly does when on active service any act calculated to imperil the success of His Majesty's forces or any part thereof; or
(7)	Misbehaves or induces others to misbehave before the enemy in such manner as to show cowardice, shall, on conviction by court-martial, be liable to suffer death, or such less punishment as is in this act mentioned.
Section 7 of the Army Act reads:
Every person subject to military law who commits any of the following offences; that is to say,
(1)	Causes or conspires with any other persons to cause any mutiny or sedition in any of his majesty's military, naval, or air forces; or
(2)	Endeavours to seduce any person in any of his majesty's military, naval, or air forces, from allegiance to his majesty, or to persuade any person in any of his majesty's military, naval, or air forces, to join in any mutiny or sedition; or
(3)	Joins in, or being present does not use his utmost endeavours to suppress, any mutiny or sedition in any forces belonging to any of his majesty's military, naval, or air forces; or
[Mr. Pouliot.l
(4)	Coming to the knowledge of any actual or intended mutiny or sedition in any forces belonging to any of his majesty's military, naval, or air forces, does not without delay inform his commanding officer of the same, shall, on conviction by court-martial, be liable to suffer death, or such less punishment as is in this act mentioned.
Section 12 reads:
(1) Every person subject to military law who commits any of the following offences; that is to say,
(a)	Deserts or attempts to desert his majesty's service; or
(b)	Persuades, endeavours to persuade, procures or attempts to procure, any person subject to military law to desert from his majesty's service,
shall, on conviction by court-martial- if he committed such offence when on active service or under orders for active service,-
I draw attention to these words.
-be liable to suffer death or such less punishment as is in this act mentioned.
Those are sweeping sections to have in an act. I notice that in the order in council in connection with the king's regulations and orders for the Canadian militia, as promulgated in the Canada Gazette of January 14, of this year, frequent reference is made to the sections of the army act which deal with discipline. There is considerable ambiguity in connection with this matter, and I urge that the situation be cleared up, at this session if possible. It seems to me to be highly undemocratic where we have voluntary military service to retain regulations as sweeping as those in force in Great Britain. I do not think sentence of death should hang over the heads of those in Canada who are liable for military service.


Frank Exton Lennard: Have any officers of the permanent force taken refresher courses in the imperial army during the past several years?


Ian Alistair Mackenzie: Yes.
As of November 30, 1938, the particulars are as follows:
Attachments and interchanges:
Imperial Defence College, London Lieutenant-Colonel G. R. Turner Staff college, Camberley Captain H. W. Foster Captain W. W. Lockhart Captain C. Foulkes Captain J. F. A. Lister Staff college, Quetta Captain W. N. Bostock Captain F. N. Ovens Captain A. R. Roy Senior officers' school, Sheerness Major F. M. W. Harvey

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Advanced class, Military college of science, Woolwich
Captain S. E. E. Morress Gunnery staff course, Woolwich Lieutenant J. T. Woolsey Lieutenant P. S. C. McMillan School of military engineering, Chatham Lieutenant H. L. Meuser Lieutenant B. H. Darwin Ordnance mechanical engineers course, Hilsea and Woolwich
Lieutenant C. M. R. Elmsley Lieutenant P. C. King Driving and maintenance course, Bovington Lieutenant F. E. White Physical training course, Aldershot Lieutenant J. W. Ritchie Ordnance establishments, England Lieutenant E. C. Mayhew Armament artificiers course, Woolwich Staff-Sgt. A. E. Esdaile
The following officers have been interchanged abroad:
Major G. A. McCarter, at war office Lieutenant J. S. Ross, to Royal Artillery Captain J. F. G. Morton, to Royal Signals Lieutenant D. Menard, to 18th Royal Garhwal Rifles, India
Lieutenant D. Douglas, to Royal Army Service Corps
The following British regular and Indian army officers are now serving in Canada in exchange for Canadian officers:
Brevet Lieutenant-Colonel G. C. Bucknell, at Kingston
Captain T. C. Usher, to Royal Canadian Artillery
Lieutenant W. B. Rowett, to Royal Canadian Signals
Lieutenant A. R. Hewson, to Royal 22nd Regiment
Captain C. H. Collinssplatt, to Royal Canadian Army Service Corps


Mr. COLDWELL:: The hon. member for
Vancouver North (Mr. MacNeil) has directed the attention of the committee to certain sections of the Army Act of Great Britain. I understand the Minister of National Defence thinks that much of this act is archaic. There are certain provisions in our own Militia Act which provide for a sentence of death for certain offences, and these offences cover a wide range. For example, if a man joins in, or being present does not use his utmost endeavours to suppress any mutiny or sedition in any forces belonging to any of his majesty's military, naval or air forces, he may be liable to suffer death. Everyone will realize how wide that section is. The minister should assure the committee that this section will be gone over most carefully and the capital punishment provision removed in respect of certain offences. The Army Act is a British act and these matters should all be under the jurisdiction of the Canadian parliament.
I do not believe in capital punishment, although there may be cases where it might be defended. At the close of the great war I remember reading in certain London papers that there were grave doubts as to the justification for the capital punishment which had been carried out in many cases. I am of the opinion that this act should be revised by our own parliament, and many of the offences removed from the category of those subject to capital punishment. Cowardice is one of the offences in this category. As was shown during the great war, and according to cases cited in the British parliament, on many occasions cowardice was found to be due to an immature young man being subjected to terrific strain or suffering from shellshock. To include that as a crime punishable by death seems to me beyond the comprehension of the ordinary decent-minded citizen.
I urge upon the minister that he consider the request of the hon. member for Vancouver North that this whole matter of capital punishment of army crimes be made the subject of our own legislation in this dominion at this session. May we have a statement from the minister regarding the matter?


Ian Alistair Mackenzie: I cannot make a definite statement at the moment. Some of the officers of the department have been considering possible amendments to the Militia Act and the Pension Act.


Mr. WOODSWORTH:: I submit that that
is not an answer of the kind which the committee has a right to expect from the head of a department. We are not interested in what the officers of the department may be discussing; we are interested in knowing whether an amendment such as has been suggested will be made this year. I think we should have a definite answer from the minister.


Ian Alistair Mackenzie: The
answer is in the negative, Mr. Chairman.


Mr. McIVOR:: I should like an answer to
the question I asked some time ago:	Does
attestation in the permanent or non-permanent force involve liability to serve overseas if required so to serve.


Ian Alistair Mackenzie: I shall be able to answer that in the course of the afternoon; I have not the answer yet.


Grote Stirling: In giving the committee
the naval program which his officers had recommended the minister was careful to say that it was not the government's program as yet. The program did not include the construction of a training schooner for the Pacific
42S2
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coast, which the minister had mentioned in an earlier speech. Is it the intention of the government to have a training schooner for the Pacific coast?


Ian Alistair Mackenzie: Yes, plans will be prepared during the summer and construction commenced probably next year.


Vincent-Joseph Pottier: What type of naval vessels have we on the Atlantic coast?


Ian Alistair Mackenzie: Two
destroyers, two minesweepers and a training ship.


Howard Charles Green: The other day the minister explained to the committee that the naval staff had recommended as an ultimate naval objective what might be known as a destroyer fleet, comprising eighteen destroyers, together with certain smaller craft. Was that the only plan approved by the naval staff, or did they approve alternative plans including other types of ships?


Ian Alistair Mackenzie: No, that was the definite proposal made by the naval staff.


Howard Charles Green: Has the government adopted this destroyer fleet plan as the plan of the government, and if not, has the government any other naval plan?


Ian Alistair Mackenzie: The
government plan will be made plain as the estimates are presented from year to year. Substantial increases have been made in our naval forces in the last three and a half years.
I was very frank in letting the committee know what the naval staff recommended as an adequate naval force for both our coasts.


Howard Charles Green: Is the government making plans to acquire this destroyer fleet?


Ian Alistair Mackenzie: The
government's plans are revealed in the estimates now before the committee.


Howard Charles Green: On which coast is the new flotilla leader to be based?


Ian Alistair Mackenzie: On the western coast.


Charles Grant MacNeil: There is a question of policy involved here which calls for a full statement. The eighteen destroyers envisaged for the future suggest cooperation with the British fleet. Destroyers serve a useful purpose, but destroyer flotillas are useful only in connection with battle fleets, and if the naval service plan outlined is followed it suggests only one thing, cooperation with the British fleet in larger manoeuvres than simply coastal defence. Destroyers are too fast and too expensive for

ordinary convoy work. Smaller and faster vessels are better equipped for anti-submarine patrol. I think the minister should explain why we are building up a destroyer fleet, whether or not we intend to advance to the cruiser stage, and why instead of destroyers we might not better have submarines. There is a strong body of opinion among the experts that a few submarines would be more valuable than destroyers for coastal defence work. Before we are committed to a long-range program I think we should have a clear statement from the minister. .


Ian Alistair Mackenzie: The
opinion of the naval staff is definitely in favour of destroyers rather than submarines for coastal defence. The proposed requirements are what they consider reasonably adequate for the defence of both Canadian coasts. Destroyers, anti-submarine vessels and very fast torpedo boats are what they now consider most desirable for the defence of Canada.


Vincent-Joseph Pottier: We from the maritimes are particularly interested in this item, having to do with the Royal Canadian Navy.
The question of the hon. member for Vancouver North (Mr. MacNeil) as to submarines or destroyers is one in which I have taken a great deal of interest, and I think the attitude taken by the minister in favour of destroyers is a wise one. In the last war we had a patrol of 123 ships on the Atlantic coast, and we had 21 vessels sunk by submarines off that coast. As I said last year, enemy submarines came within twenty-five miles of the coast of Nova Scotia. I happen to represent a constituency where enemy submarines came within sight of the shore. If that should happen in the next war, we naturally want to be prepared to defend ourselves.
At the outbreak of the last war enemy raiders were at large in the Atlantic and Pacific oceans. There was the Karlsruhe and the Crown Prince Wilhelm in the Atlantic, and Von Spee's squadron in the Pacific, which was annihilated with the destruction of the Emden in the Indian ocean. In any event enemy raiders were at large off our Atlantic and Pacific coasts at the outbreak of the last war, and I have no doubt that the same situation would be repeated in another war, but in more intense form.
We should consider this vote very carefully. To enable the committee to appreciate the menace of enemy submarines I will give the dates when they appeared off our Atlantic coast in the last war. The first one appeared in October, 1916; the next on June 2, 1918;

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another appeared on August 3, 1918, and enemy submarines were also sighted in various places off the Atlantic coast in the months of October and November, 1918. I am giving a list of places on the Atlantic where the submarines were seen, in order of their last appearance.
I do not mean that these are the only places where they appeared, because prior to this they were seen in a large number of places.
I am trying to make the point that they appeared generally on the Atlantic coast, and not at just one place, and in the next war that we may expect that, shortly after they have appeared at one point they will appeal two or three hundred miles away.
Here is the order of their last appearances. We found them 25 miles west-northwest of Brier island, off the western portion of Nova Scotia; then off Shelburne; then off Halifax; then off Yarmouth; then off Canso; then off St. Pierre-Miquelon, and lastly, off St. Johns, Newfoundland, and that was on November 6, 1918, or just five days before the war ended.
In addition to this menace, German mines were laid on the Atlantic coast. I believe one of those mines was picked up and is in the department here. So that we may expect, in view of what happened in the last war, that from the sea we shall be menaced from various directions: first, from raiders; second, from submarines; third, mines undoubtedly will be laid here and there. That is what happened in the last war. When the war broke out we had no suitable patrol vessels. We started a patrol from Halifax to Sydney and Cape Race, Newfoundland. The patrol from Sydney to Cape Race was largely to cover the gulf of St. Lawrence and protect the traffic coming in through the St. Lawrence river. The submarine patrol started in 1917, and an air patrol was initiated in 1918. When it was necessary to start the air patrol from Sydney and Halifax we had to borrow from the United States the aeroplanes as well as the rest of the necessary equipment to form the patrol. A great part of our merchant marine was not suitably equipped to encounter an enemy, but was good for patrol work only; consequently the development of the patrol work was done largely with British and naval vessels. We had to depend almost entirely on their naval equipment, and when it came to our air patrol we had to rely entirely on the United States. That is a situation which I for one hope will not recur if another war breaks out. I realize of course that important expenditures are being made and I approve heartily of votes of this kind.
The hon. member for Vancouver North suggested that he rather preferred submarines to destroyers. I do not agree with him. I
think we should develop especially our destroyer fleet. The other day the minister said that the plans were to have a flotilla of, I think, eight destroyers and one leader. A destroyer has a speed of something like 35 knots an hour. I assume that the raiders which will have to be looked after will be for the most part merchant vessels having speeds of 20 to 25 knots an hour, and we should be equipped with vessels which are not too expensive-which are within our financial abilities-to look after an- enemy of that kind. Each of the destroyers we now have cost, I believe, about one and a half million dollars. I realize it is almost impossible for us to finance and maintain cruisers whose first cost is about ten million dollars apiece, so that I favour the idea of developing, at least upon the Atlantic coast, a destroyer flotilla with the auxiliary equipment necessary for a reasonable scheme of defence. I hope the department will not take too long in putting these nine destroyers on the Atlantic coast.
It is also important to remember that it takes some time to train men for the naval service. You can train men for the air force in from six to eight months. Men for the army can be trained in from six months to a year. But a man required to serve in the navy must train from four to six years in order that he may be brought up to the recognized standard. I suggest therefore to the department that we should not wait too long before we develop the naval arm.
Speaking the other day of the defence of the Atlantic coast, the minister indicated that the policy of the department was to develop a major naval base at Halifax and an auxiliary one at Sydney. I wish to draw attention to the extent of the traffic and trade which can thus be protected, and to which most damage was done in the last war: it is the traffic which goes from the bay of Fundy and along the southeastern end of Nova Scotia. Allow me briefly to define the courses taken by this traffic. First, you have the general coastal traffic along the shore; second, you have the trade routes between Saint John, New Brunswick and the West Indies, Bermuda, South America and Europe; then you have the trade routes from Halifax to the same places; also there is the traffic from the south going up the St. Lawrence; lastly, the traffic from Nova Scotia to New England. Keeping these in mind, I believe that in the near future the department should seriously consider developing some auxiliary naval base near the southeastern end of the province, on account of the traffic which I have indicated and the damage which was done in the last war.
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I am not suggesting that we should take anything from the other naval bases, nor do I think we should depend entirely on Halifax or Sydney. Other precautions should be developed, and in that connection, places along the western end of Nova Scotia should be investigated seriously. That coast has several harbours which I believe would make ideal protection for a fleet of any size, whether ours or any other. I have in mind more than one location, but I should like to draw attention particularly to the harbour of Shelburne. We have there a stretch of water ideally located, protected from all winds, reasonable of approach, some seven or eight miles in length, with an average width of one to one and a half miles and an average depth of between thirty-five and forty feet-I believe the average is from six to seven fathoms. I suggest to the department that they keep this in mind in a long-range view of naval defence.
I commend heartily the course of the department in developing a fishermen's naval reserve. I hope they will not wait too long, and that steps will be taken this summer to carry into effect the statements made by the minister in his opening speech on the defence estimates. I understand that the thought is to have forty boats and 200 fishermen, to be developed into a fishermen's naval reserve. That could be increased materially, and we have on the coast men who would be very valuable in that they have an intimate knowledge of the coast line.
I would stress, therefore, two points particularly : first, the necessity of providing for naval defence along the southeastern coast of Nova Scotia, and, second, the establishment of a fishermen's naval reserve, numerically as large as possible.


Charles Grant MacNeil: Some points have escaped the attention of the hon. member. We have already six destroyers and are about to procure a flotilla leader. The destroyers will no doubt play a useful part in any scheme of coastal defence, but we are discussing now a long-range program and trends of policy that may develop, and I am anxious to see more adequate provision for the very problem the hon. gentleman has outlined. Additional destroyers cannot be obtained in this country but can be obtained in the United Kingdom. The British navy is developing a type of patrol vessel which can be built in Canada, and that is important because it is becoming increasingly difficult for the United Kingdom to supply our requirements in this regard. A destroyer does not carry guns of sufficient calibre to meet any cruiser that might attack the Canadian shore. The destroyer would have to get out of the way unless by means

of torpedo action it could impede a raiding force. Even armed merchantmen may carry guns of larger calibre than those carried by destroyers. But with the construction in Canada of fast patrol vessels, which are less expensive but still fast enough for the work, a number of these boats could be provided for every destroyer that could be secured, and they could be equipped with modern detection devices and could certainly cover the area of our coast much more efficiently than could any destroyer.
Furthermore, for convoy work, ships coming in close proximity to our harbour's, destroyers travelling at the rate of thirty-five knots an hour are altogether too fast. Slower convoy vessels carrying heavier guns would be more efficient. The minister says that in this regard he is in the hands of the staff. I understand the defence council reported to the defence committee of the cabinet. The minister is the political head of the department and is responsible to parliament, and I do not like to hear the statement from him that the staff alone is determining policy in this matter. We know very well that the majority of the staff have been trained with the British Admiralty, and quite properly so perhaps; but they have learned to accept the British tradition and they believe that their only operations will be in cooperation with the British fleet. In recent years, however, the situation has changed, particularly by reason of the fact that potential enemies have found it possible to establish naval bases from which more effectively to raid British shipping.
The British navy can no longer shield this dominion but will have to fall back more definitely upon the protection of focal areas and ports in the United Kingdom. We have therefore a greater responsibility than ever before, and I urge that our naval defence should be more strictly along Canadian lines and that in some respects we should break with the British tradition. At the outbreak of the last war the commanders of some of our ships held that they should remain at their stations and guard Canadian shipping, but by virtue of the Naval Service Act and orders communicated by the British Admiralty they were sent to sea to engage ships which far outranged them in speed and gun calibre.
I am suggesting not lack of defence or inefficient defence, but that form of naval defence which more adequately meets Canadian needs; and instead of additional destroyers, which could be procured from Great Britain only with great difficulty, I submit that the money could be more effectively spent on patrol vessels carrying torpedo firing equipment, depth charges and detector devices,

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vessels capable of operating over a more extensive defence patrol than would be possible with cruisers. In view of the remarks made by the hon. member for Shelburne-Yarmouth-Clare (Mr. Pottier) I suggest that the emphasis should be placed more definitely upon smaller and faster patrol vessels.


Mr. COCHRANE:: I understood the minister to say that in the event of war sufficient cargo tonnage was available. We can all remember that in the last war there was a scarcity of cargo tonnage of all types. At present there is no doubt a large amount of tonnage tied up; a great many boats that were in service during the last war have been scrapped, while the remaining boats are over twenty years old. It is a question therefore whether it would be worth while putting them into service again. May I offer a proposal whereby the government can acquire suitable boats for the defence of our coasts, and that at no cost to the government. I am thinking of boats 260 feet long by 30 feet in breadth and 12J feet depth. These boats could be constructed in my county, and perhaps in other parts of Canada, at a total cost, fully equipped, not exceeding $50,000. They would serve two purposes. Two guns could be mounted on them in peace time, and if England should go to war it would be Canada's duty to supply her requirements in lumber, coal and other commodities. The boats available to-day are too large to enter small ports, and we have it from officials of the Department of National Defence that in the event of a war involving Great Britain, naval raids upon Canada's Atlantic and Pacific seaboards are sure to occur. Cargoes shipped to England originate at many points and are shipped for the most part from small ports. The boats available to-day are too large to navigate in these ports, whereas boats of the type I have suggested could be used to carry cargoes from small ports. And they are quite suitable for the ocean voyage.
There are a number of captains in my county who have not sufficient funds to finance the total cost of a boat but who would be prepared to put up twenty per cent of it, and I believe that some scheme similar to the dominion housing act could be devised to arrange for financing the balance of the cost. If this were done over a period of twenty, or fifteen years, the boats could be fully paid for. The government would have an interest in them and could make arrangements to take them over in the event of war and use them for coastal defence purposes. I offer the suggestion to the minister as one which I think is sound. Not only does it offer many advantages in respect to
defence and the carrying of cargoes to England, but it would give a large amount of employment. The life of a wooden boat is about as long as that of boats built of iron or steel; the one rots, the others rust. Boats of this type can be built at a cost of about 850,000. It would be good business for the government as well as for Canada in general.
We must not forget that Canada has lost her place in transportation on the high seas, and to-day England finds herself in the same position. From my county we ship approximately 100 million feet of lumber, including pulpwood, laths, poles and sawn lumber; but I am sorry to say that ninety per cent of the primary products of my county is being transported in foreign boats. Norway is the only country that I know of to see far enough ahead that a large type of boat would not be suitable, particularly after the war. Norway built during the war, and has continued building them since, a large number of boats of suitable size which are to-day carrying to a very large extent the primary products that are going to foreign ports.
I hope the minister will give careful consideration to this suggestion. I do not mean that we should go into the building of these boats on an extensive scale, but with this large amount available I feel that some $100,000 might well be expended in order that three of these boats could be built. Arrangements could be made to have them fitted with guns in war-time, and for the training on them of naval reserves. I am satisfied that the captains I have in mind, who would have at least a twenty per cent interest in the boats, would be quite willing to cooperate with the department with a view to bringing about some reasonable understanding, thereby making some contribution to the defence of Canada.


Thomas Clement (Tommy) Douglas: In presenting this item, No. 190, the minister is asking us not only to authorize the appropriation of a sum of money but also to approve the naval policy which the item represents. The minister intimated the other day what that naval policy was. When we ask for a reason for that naval policy, the minister says he is advised to this effect by the naval officers. Surely the committee is not expected to believe that the minister accepts the advice of the naval officers without their having given good and sufficient reasons for adopting this policy as opposed to alternative policies. The minister owes it to the committee now to say why this particular policy is to be followed as against other policies. It is not enough for any minister of the crown to say he is advised by his officers that such and such is the best
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course, without giving the reasons which those officers gave and which recommend the policy to him. There has now been considerable discussion as to courses which might be followed, and the government ought to be prepared to state what course they are prepared to follow, and why, and why it is a better or more desirable course to follow than others which have been or might be suggested. This is no time for the minister to shroud himself in silence; he ought to be stating clearly what the policy is and why he is adopting it.


Ian Alistair Mackenzie: A more elaborate explanation of the government's policy with reference to naval, air and land forces was given in the address I delivered in this house on April 26 than has ever been given before in this house. A complete definition and explanation was given of the various roles assigned to each of the three branches of the service. These were carefully thought out and, I think, expressed with sufficient clarity to be intelligible to every hon. member. In that address I endeavoured to correlate the varying functions of the three defence sendees.
In regard to policy, we are now considering the policy involved in the estimates before this committee. The functions of our naval forces were fully set out in my address of April 6. As to the question of destroyers versus submarines, the considered view of the naval staff is that for the defence of Canada destroyers are more efficient and more effective. The submarine is essentially a weapon of offence. The destroyer is effective against cruisers. My hon. friends are entitled to their opinions; I may be entitled to mine, but in regard to these questions I am relying not on my own view but on that of those better qualified to judge than either the hon. member for Weyburn or myself. My hon. friend cannot accuse the minister of not having given a complete explanation of the functions of the three defence services in Canada.


Mr. BARBER:: A short time ago an hon. member mentioned the question of training. I should like to ask a question in regard to enlistment. A number from British Columbia applied for enlistment-some of them two years ago, to my personal knowledge-and so far they have received no further information. I should like the minister when he is giving the information to include the number who applied for enlistment, the number taken on, and whether they are taken on in order of date of application, or how they are selected. {Mr. T. C. Douglas.1!


Ian Alistair Mackenzie: I have not that information under my hand at the moment, but the number of applications is very large in relation to the number that can be accepted within the terms of the estimates which have been voted. An effort has been made to allocate vacancies to the various provinces. Some time ago there was a tendency for enlistments to be more or less centralized around this capital city, but sincere efforts have been made to have every province represented in the enlistments in the forces of Canada.
This is the official memorandum:
For the Canadian navy due regard is given to entering young men from all parts of Canada. The posting of these men on the east or west coast is governed by the demands of the service, but normally those entered from west of Ontario serve on the west coast and the remainder on the east coast.


Harry James Barber: How many have been taken on in the last two or three years?


Ian Alistair Mackenzie: In January, 1937, the strength of the Royal Canadian Navy was 107 officers and 905 other ranks. In March, 1939, the numbers were up to 129 officers and 1,456 ratings. There is an increase of over 500 other ranks between those dates.	.


Harry James Barber: Those would be young
recruits?


Ian Alistair Mackenzie: Yes.


Howard Charles Green: Apparently we are to acquire another eleven destroyers; is it not possible to have some of them built in Canada?


Ian Alistair Mackenzie: Yes, it would be possible to build in this country but the expense would be high.


Grote Stirling: Half as much again.


Ian Alistair Mackenzie: We have had estimates made. It would cost more.


Mr. HEAPS:: Approximately what is the difference in cost?


Ian Alistair Mackenzie: The
estimates vary because of wage schedules, et cetera, indicating a difference of perhaps from 15 to 40, or more, per cent. My recollection of the last figures I got is a cost of between five and six millions in Canada for two.


Abraham Albert Heaps: What was it in England?


Howard Charles Green: What does that five millions
represent?

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Ian Alistair Mackenzie: The cost of two destroyers built in Canada.


Howard Charles Green: Of one destroyer?


Ian Alistair Mackenzie: Two.


Howard Charles Green: What do they cost in
England?


Ian Alistair Mackenzie: I am
not sure, but they are not as costly in England. I believe the last and the most modern that has been built in the United States cost about 86,000,000. The last two we purchased for our own purposes cost about $3,375,000.


Howard Charles Green: The other day the minister said that plans were to be drawn up during the coming year for the construction in Canada of anti-submarine vessels and motor torpedo boats. Is there any vote in this year's estimates for the actual construction of those smaller craft?


Ian Alistair Mackenzie: No.


Charles Grant MacNeil: The Naval Service Act,
at section 45, reads as follows:
The Naval Discipline Act 1866, and the acts in amendment thereof passed by the parliament of the United Kingdom for the time being in force, and the King's regulations and Admiralty instructions, in so far as the said acts, regulations and instructions are applicable, and except in so far as they may be inconsistent with this act or with any regulations made under this act, shall apply to the naval service and shall have the same force in law as if they formed part of this act.
Section 46 states:
The Naval Discipline (Dominion Naval Forces) Act, 1911, enacted by the parliament of the United Kingdom of Great Britain and Ireland shall apply to the naval forces raised by the Dominion of Canada and the ships provided for such naval forces, subject to the modifications, adaptations and exceptions set out in the last preceding section.
There is an order of the house asking for a copy of The Naval Discipline Act 1866, and amendments thereto, and for the Naval Discipline (Dominion Naval Forces) Act, 1911. I have not been able to secure copies of these acts from the usual sources, and I now ask the minister if it is possible to table in the house the copies I should like to have, inasmuch as they apply in very important respects to our naval forces.


Ian Alistair Mackenzie: Yes, certainly.


Charles Grant MacNeil: When will they be tabled?


Ian Alistair Mackenzie: Probably the next sitting day.


[Stage Direction]
Item agreed to.
Naval services.
191.	Naval stores chargeable to ordinary account, $1,451,772.
Howard Charles Green: Are we depending on Great Britain for naval stores, such as guns, antisubmarine equipment, and so on?


Ian Alistair Mackenzie: For the
procurement of them?


Howard Charles Green: Yes.


Ian Alistair Mackenzie: Yes.


Howard Charles Green: We cannot manufacture
any of those supplies in Canada?


Ian Alistair Mackenzie: No. The guns are imported from Great Britain.


[Stage Direction]
Item agreed to.
Naval services.
192.	Naval stores chargeable to capital account, $930,900.
Mr. PELLETIER:: What is meant by the expressions "chargeable to ordinary account" and "chargeable to capital account"?


Ian Alistair Mackenzie: I explained that fully the other day; perhaps the hon. member was not here. It was also explained by the Minister of Finance on a former occasion this session. But if my hon. friend w'ishes, I shall explain it again.


René-Antoine Pelletier: No; I shall refer to Hansard.


[Stage Direction]
Item agreed to.
Naval services.
198. Naval engineering, chargeable to ordinary account, $993,365.
Charles Grant MacNeil: What is the present strength of the reserves?


Ian Alistair Mackenzie: Does the hon. member mean the present strength of the Royal Canadian Naval Reserves?


Frederick George Sanderson: I would point out that we are discussing item 193, not 195.


Howard Charles Green: There has been some suggestion that Coal Harbour in Vancouver should be dredged by the dominion government with the idea of using it as a base for small naval boats. Can the minister tell us whether or not that work is to be done, and if so if that is the objective?


Ian Alistair Mackenzie: I think the work is being done as a general harbour improvement. But incidentally the completion of that work would no doubt provide a
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useful point from which small power boats could put to sea rapidly, when attending to the inlets on the British Columbia coast.


Howard Charles Green: Has the government looked into the possibility of using Turner Valley oil for Canadian naval ships on the Pacific coast and also for British naval ships putting in at our ports?


Ian Alistair Mackenzie: Yes, the matter has been carefully considered.


Howard Charles Green: What is the possibility of using that oil?


Ian Alistair Mackenzie: Nothing has been definitely settled yet in regard to it. Substantial difficulties have been encountered in connection with practical results. I understand, unofficially, that a representative of the admiralty has been in touch with the situation there.


René-Antoine Pelletier: Are any negotiations
proceeding between the federal government and the British government in regard to Turner valley oil?


Ian Alistair Mackenzie: Not as far as I know.


René-Antoine Pelletier: Is the minister aware of any negotiations by any other government?


Ian Alistair Mackenzie: Many
letters have been received by departmental representatives in connection with the point raised by the hon. member for Vancouver South, outlining the possibility and the practicability of running a pipe line from the Turner Valley either to the Pacific coast at Vancouver, or to Fort William. I understand, unofficially, that various people interested in the situation have been making investigations. But no federal government action has been taken.


Mr. LANDERYOU:: Does the government consider an investigation necessary in connection with laying a pipe line?


Ian Alistair Mackenzie: Our
requirements of oil are comparatively small, in view of the limited- number of Canadian naval vessels. But the requirements of the British Admiralty would be a different matter altogether.


John Charles Landeryou: I understand that
Esquimalt is also a base for British ships. Has there been any investigation by the British government into the necessity of establishing a pipe line to the Turner Valley oil fields?


Ian Alistair Mackenzie: So far as my memory goes, I do not think any

investigation has been made through our department. It is possible, however, that it may have been made directly, through their representative.


Mr. MARSHALL:: And there is no representative from the minister's department in England at the present time?


Ian Alistair Mackenzie: Not on that point, so far as I know.


Charles Grant MacNeil: I understand that under the contractual agreement between the British and dominion governments with respect to the bases at Esquimalt and Halifax, the Canadian government has become responsible for the stores and fuel supplies.


Ian Alistair Mackenzie: Yes, it has been for a long time.


Charles Grant MacNeil: I notice that the refueling of some of his majesty's ships was undertaken by a tanker ship sent across the Atlantic, in connection with the royal visit. Have we developed facilities for refueling at these bases?


Ian Alistair Mackenzie: The hon. member will notice in the supplementary estimates there is an item of $300,000 to look after the fueling of Canadian naval ships, for the construction of tanks on Vancouver island.


Charles Grant MacNeil: Does that include ships of his majesty's navy?


Ian Alistair Mackenzie: The
Canadian navy.


Charles Grant MacNeil: And the royal navy, too.


Ian Alistair Mackenzie: I am
afraid the storage capacity of tanks provided would not be sufficient for all purposes.


James Alexander Marshall: Would these ships be oil burners?


Ian Alistair Mackenzie: The destroyers are oil burners.


[Stage Direction]
Item agreed to.
Naval services.
195. Royal Canadian naval reserves, $429,099.
Howard Charles Green: The minister said the other day that some sort of schooner was to be provided on the Pacific coast for the training of naval recruits.


Ian Alistair Mackenzie: Yes.


Howard Charles Green: Would the minister give us details of the methods used at the present time in the training of those recruits? There have been requests for a training ship at

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Vancouver similar to those used in Great Britain, but as yet, no move has been made in that direction.


Ian Alistair Mackenzie: There are several methods pursued by various branches of the naval reserves. As a matter of fact some of the best branches of the naval volunteer reserves in Canada are stationed in prairie cities. They are very efficient, and go for training to the Pacific coast. Training takes place on the Atlantic coast, where they go to the West Indies under sail. They take training in steamship, under naval seamen, and in duties incidental to proper naval training. Of course there is shore training as well. At Esquimalt there are stations which carry out a thorough shore training for the benefit of recruits.


Charles Grant MacNeil: What is the present strength of the reserves?


Ian Alistair Mackenzie: Royal
Canadian Naval Reserve is made up of 67 officers and 197 ratings. The Royal Canadian Naval Volunteer Reserve is made up of 124 officers and 1,396 other ranks. That was the strength in March, 1939.


Major James William Coldwell: Would those figures
include members of the fishermen's reserve?


Ian Alistair Mackenzie: Their
strength was 200.


Major James William Coldwell: Is there to be any addition to this reserve?


Ian Alistair Mackenzie: We are providing in the estimates this year for a total strength of 400. It is intended to have the same force on the Atlantic as on the Pacific.


René-Antoine Pelletier: I should like to revert to item 194 for a moment, and inquire as to where the fuel oil used by the Canadian navy is obtained.


Ian Alistair Mackenzie: From the commercial oil companies. In some cases the storage is only commercial oil, but the naval people prefer to have what is known as naval fuel oil. I understand the Turner Valley oil produces a high grade of gasoline.


René-Antoine Pelletier: Are any of the supplies now being used imported from abroad, and if so from where?


Ian Alistair Mackenzie: I believe most of the oil is imported, but I have not the figures before me.


René-Antoine Pelletier: Could we have the quantities used?


Ian Alistair Mackenzie: I have the figures in my office, but not here.


René-Antoine Pelletier: Will the minister kindly send them to me?


Frank Exton Lennard: I asked that question on a previous occasion and I was told supplies were obtained in most cases from the Imperial Oil Company, the oil possibly coming from the United States.


Major James William Coldwell: Is there any system of promotion in the navy whereby a man could pass all the way up the ladder through the various ranks, or are there barriers in the way?


Ian Alistair Mackenzie: No. As a matter of fact quite a number are promoted to commissioned rank.	v


Mr. QUELCH:: I understand when these boys go on leave they have to pay their railroad fares to their homes.


Ian Alistair Mackenzie: Naval
personnel travelling on duty are allowed special rates over the Canadian railway lines of two and a half cents per mile for first-class passage, and one and two-third cents a mile for second-class passage. This special rate applies in all cases where naval personnel are travelling on duty, and also where ratings are travelling on leave, in which case the department assumes any part of the cost. Where naval personnel are travelling on private business no part of the cost is paid by the department, and they are not entitled to this special rate.


Victor Quelch: I cannot understand why these men should have to pay their fares back home when they go on leave.


Ian Alistair Mackenzie: One-half the cost of transportation is recovered from ratings going on leave. A rating may be granted second-class transportation at the public expense to his home and return, but one-half the cost of such transportation is recovered.


Charles Grant MacNeil: Are the men in the fishermen's reserve being trained, and are the boats being equipped in any way for an emergency?


Ian Alistair Mackenzie: They
were gathered together at a central point in British Columbia for a period of one month. They did a certain amount of shore training, a certain amount of signalling, and went to sea on several occasions to practise formation work. They were trained generally in naval duties which would be necessary for the protection of the coast. I believe this work has been successful in every way.
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Thomas Clement (Tommy) Douglas: Do they receive any training in mine laying?


Ian Alistair Mackenzie: Most
definitely.


Charles Grant MacNeil: Will the vessels be equipped with guns?


Ian Alistair Mackenzie: I imagine they will carry light guns, or rather machine guns.


Victor Quelch: Would the minister consider allowing these men all their fares?


Ian Alistair Mackenzie: I shall be glad to take up that matter.


[Stage Direction]
Item agreed to.
Air services.
196. Royal Canadian Air Force-permanent active air force, $3,992,686.
Grote Stirling: I understand there are twelve aeroplane manufacturing plants in Canada, six of which assemble aero-engines. Have these twelve plants been given every opportunity to supply the requirements of the department in connection with new planes?


Ian Alistair Mackenzie: I would say so.


René-Antoine Pelletier: I understand that under this item provision is made for the building of air fields in various parts of Canada. Could some consideration be given to helping in the development of air fields now being used by air lines not government owned? I have in mind the airport at Peace River, which is used by commercial planes and by planes transporting mail as far north as the Yukon and Alaska. Considerable work could be done in connection with the development of this airport. There is a good deal of commercial flying out of Peace River, and a small expenditure would prove most useful in time of need. I am sure the minister realizes that this is one of the main links in a line of communication that would be absolutely necessary in time of emergency.


Ian Alistair Mackenzie: I shall be glad to consider the representations of my hon. friend.


Denton Massey: On an earlier item the minister was good enough to answer my question referring to the aircraft manufacturers in Canada. I think he will realize that the successful and economical manufacture of aircraft is dependent upon continuous production. Many of these companies have trained a staff of most efficient operators, but at the moment orders are coming in spasmodically. The result is they

have their flat periods when it is difficult to find work for the men. Many men leave the plants, and when new orders come in, their services are not available for production. Has the minister any plan of providing continuous production in these plants?


Ian Alistair Mackenzie: That
matter is definitely before the department.


Denton Massey: A good work is being done in many of the technical schools in providing training which proves highly useful when a lad enters the air force later on. Some of the universities in other countries have most extensive aeronautical courses. Students who graduate from these courses as engineers find their progress much more rapid when they join the air force later. Has the minister any information to give as to what work is going forward at the moment?


Ian Alistair Mackenzie: We are
taking on quite a number of mechanics this year, as my hon. friend may have noticed. I shall be glad to give the other matter he mentions full, consideration.


Denton Massey: Has the government taken any active interest in helping in the development of courses at the school of science in connection with the university of Toronto, and other engineering schools throughout the country.


Mr. BROOKS:: What centres in the eastern provinces will be used for the training of pilots for the permanent air force?


Ian Alistair Mackenzie: There are eight flying clubs where ab initio training will be carried out, and these clubs cooperate with the department under the new scheme. They are located at Vancouver, Calgary, Regina, Winnipeg, Toronto, Hamilton, Montreal and Halifax.


Alfred Johnson Brooks: There will be no training at the air fields at Yarmouth, Truro and Sydney? This training will be carried on only at Dartmouth?


Ian Alistair Mackenzie: At Halifax, under this scheme of flying clubs cooperation.


Alfred Johnson Brooks: What will be the activities of the air force at the port of St. John? Will any pilots be trained there?


Ian Alistair Mackenzie: The chief of the air staff surveyed the situation in St. John a week ago, and he will be making a complete report on the requirements. As my hon. friend knows, a non-permanent squadron is stationed there.

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Denton Massey: How many pilots are now being trained at Trenton?


Ian Alistair Mackenzie: Between 60 and 70 under the old scheme. More will be trained there under the new scheme.
Mr, MASSEY: Where will the fifty British pilots be trained?


Ian Alistair Mackenzie: They will take their ab initio training in Great Britain. Some of our Canadian pilots will take their ab initio training in the flying clubs. The intermediate training will be at Camp Borden, which will be substantially reconditioned and reconstructed for the purpose. The third period of training, the advanced stage, will be taken at Trenton. A total of 126 will be trained under the scheme. Much of this year's vote will have to go into equipment and buildings to provide the facilities required for at least two stages of training. Probably next year, with a similar vote, the number of pilots in training will be substantially increased.


Mr. PERLEY:: Will there be any training at Regina?


Ian Alistair Mackenzie: The
personnel will be divided among the eight flying clubs that I mentioned.


Thomas Langton Church: What is the policy pursued by the minister and the department in respect of the $4,000,000 for the permanent air force? Will the practice in the old country be followed of seeking the aid of school boards, cities and towns, to recruit for the air force?
Some of the graduating high school population might join. I appreciate the activity of the minister and his department, but I think we could obtain a large number of splendid recruits for the permanent and nonpermanent air force by following such a long term policy as they have in Great Britain, Mr. Brown, Minister of Labour there, Mr. Belisha, Secretary for War, with the Air Minister and other ministers, were in the city of York, England, not long ago, addressing the board of education and city council at a banquet in the town hall, where they laid down a long term policy for recruiting the youth of the old country for the permanent and non-permanent air force. Great Britain was behind in building up its air force, but is now catching up. They have a long term policy for the air force extending up to five or seven years, during which period the recruit receives board, clothing, lodging and some pocket money; I think there is also deferred pay, $1.10 a day in the second year. In training for the permanent air force they can also learn a trade as an apprentice, so
that at the end of the training period they are fitted for a position as pilot or air mechanic or in other key industries.
What is the policy of this government for the air force? Have they any such policy as would be adapted to Canada's circumstances? I believe that a very large body of our unemployed youth would make desirable recruits for the air force. We have four thousand miles of country with practically no protection for the civilian population from attacks from the air. I know that we are starting to arm, but it will be years and years before our civilian population will have adequate air protection of any kind whatever. Not only would many of our unemployed youth make desirable recruits for the air force, but it would give them an opportunity to learn a useful calling and take them off relief. Do not forget what Canada did in the great war. Toronto district alone, in the war trained 18,000 mechanics and pilots for the Royal Air Force, and some of the most brilliant air pilots were Canadians. We should have a long-range policy of air defence, which would also help to take care of our unemployed youth in addition to a defence policy. Will the minister tell us what is proposed to be done on such a long-range policy for Canada and the mother country as well.


Ian Alistair Mackenzie: The
training of mechanics will be done in a substantial way as part of the youth training scheme. As I explained when presenting my estimates, provision is made for the first time in the estimates this year for short service commissions in the Canadian air force, following a similar practice adopted in England some years ago of serving four years in the active air force and then a number of years on the reserve.


Thomas Langton Church: Is it proposed to have
any national register of the man power available for the permanent air force or defence purposes? Has any survey been made of possible recruits or a defence register before it is too late?


Ian Alistair Mackenzie: No
definite survey has yet been made.


Major James William Coldwell: Are recruits still being accepted in Canada for the Royal Air Force? The practice has been, as I understand it, to accept young men tentatively in various parts of Canada for the Royal Air Force, and then bring them to Ottawa for a final medical examination. The medical examination here is very strict; I have known young men who have been accepted in other parts
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of the country rejected on medical examination here. I am thinking of a case particularly from Saskatoon, which I brought to the attention of the minister last year. This young man was turned down when he got here, and I have heard of several such cases Could not some arrangement be made to prevent the hardship of being tentatively accepted in other parts of the country and finally turned down here and left more or less stranded?


Ian Alistair Mackenzie: My hon. friend is quite correct. In the old days Canadians who wished to join the Royal Air Force had to go to England and run the risk of being rejected there and sent back home. Under the present system a man may be rejected upon medical examination in Ottawa, but now that we have western, eastern and central air commands, I see no reason why they could not be medically examined with finality before coming to Ottawa.


Major James William Coldwell: Will the minister see
if that can be arranged?


Ian Alistair Mackenzie: I shall be glad to look into the matter.


Denton Massey: A moment ago I asked a question with regard to candidates for the Royal Air Force from technical schools. A few months ago application was made to the Minister of Labour by the board of education of the city of Toronto in connection with the aeronautics course which the central technical school is giving. The difficulty they experience is that they have no adequate equipment, and no building in which to operate, but such work as they have been doing has been done exceedingly well, and those trained in the course have been eminently successful in finding positions. Would it be possible for the Minister of National Defence, as the Minister of Labour states he is unable to take care of the matter, to give consideration to the possibility of extending assistance to the technical school in Toronto to provide training along this line?


Major James William Coldwell: What are the educational requirements for admission to the Canadian Air Force?


Ian Alistair Mackenzie: It depends entirely on the category in which they wish to enlist. There are five or six and more different categories:	enlistment of
unskilled men, enlistment of skilled men, enlistment of air men for training as tradesmen. As regards the last:
In addition to the general qualifications outlined in paragraph 6-

Which I will read later.
-an applicant for enlistment in the R.C.A.F. for training as a tradesman must:-
(a)	Have attained his 18th but not his 25th birthday on the first of June of the year in which his training commences.
(b)	Be a graduate of a recognized technical school and have specialized in a trade allied to an air force trade, or
(c)	Be in possession of a junior matriculation certificate or its equivalent.
13. Airmen entering the air force under the requirements of this section are given instruction in a recognized air force trade. This instruction lasts for approximately one year, and if the airman successfully completes it, he is employed in the trade for which he appears to be best suited, and will be remustered as a tradesman as soon as he passes the necessary trade test, provided that there is a vacancy in his particular trade.


Denton Massey: What are the requirements for aircraftsmen?


Ian Alistair Mackenzie: The
same.


Mr. MAYHEW:: I ask that these qualifications be put on Hansard so that we may have the information.


Ian Alistair Mackenzie: With the permission of the committee, if there is no objection, I shall be very glad to table the regulations.


Some hon. MEMBERS:: Agreed.


Alfred Johnson Brooks: I believe the minister,
speaking the other day, mentioned that there are fifty British airmen training in Canada. Is that correct? Are these British airmen training under our officers and with our facilities?


Ian Alistair Mackenzie: There will be altogether, I believe, from Great Britain, 12 or 14 instructors as well as our own. Of course, the personnel required for training purposes is very substantial indeed, and a large amount of the costs entailed is for the ground personnel and the various types of training personnel required. Special instructors will come over for that purpose.


Alfred Johnson Brooks: It would seem to me, in view of the limited facilities we have for training Canadians who enlist in the air force, and our lack of facilities generally, that it would have been well had our department allowed the British authorities to send over instructors to train airmen in Canada. I understand also that had the original idea been carried out and the British not been limited to training under Canadian facilities, far more British airmen would be training in Canada. Is that correct, and was it the original intention to train British airmen in Canada on a more extended scale than is proposed at the present time?

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Ian Alistair Mackenzie: I believe that when the scheme was first suggested, that statement would be correct. But after they sent an officer over here to survey the situation in Canada the first proposals were substantially modified. They are satisfied with the arrangements now, and have expressed their appreciation of the cooperation they have received.


Alfred Johnson Brooks: Was it the political "situation " that the minister referred to, or the training facilities of the Canadian air force, which limited the action of the British authorities?


Ian Alistair Mackenzie: I do not know anything at all about the first part of the question.


Thomas Langton Church: What was the reason for the change from the original proposal to have British air force instructors come to Canada and assist in the training for one, two or three years, as they did in the great war? During the last war a great many trained British air force men, and men of the British munitions board, came over here as instructors and pilots and trained for the Royal Air Force. Some of them stayed in Canada. Some of their greatest pilots came over to assist us, and we were dependent upon Britain for the training of Canadians in Canada in ten or twelve camps. I fail to see what good reason there is for the change in such a splendid policy. I have been reading about it and have been looking into the reports, and I can see no necessity for the change; quite the reverse, for very few of the Canadian pilots who served in the war are available for this work, and the restriction is not in accordance with good public policy. It would be far better if we had the benefit of the advice of capable men from the British air force. What is the reason for this change, and who recommended it?


Ian Alistair Mackenzie: Following the discussion we had in this house last year, the British government sent an expert over here; he surveyed the situation and went back to Great Britain with all the data he could possibly obtain, and made a report to the government. It is as a result of the report he made that we have the scheme which we have to-day. I assure my hon. friend that there has been nothing but full cooperation between the Department of National Defence and the British air ministry with reference to this whole matter, and we have letters on our file to prove their appreciation of our cooperation.


Alfred Johnson Brooks: What was the original number the British authorities requested should be trained over here?


Ian Alistair Mackenzie: I do not recall the exact number; I doubt if any definite number was proposed. There were numbers suggested from time to time, but my recollection now is, and I am speaking subject to correction, that we offered to train more than the number which eventually they asked us to train.


Denton Massey: Can the minister say when the original request was made, and from whom it came? Did we suggest that we were prepared to train British pilots, or did the request come from the United Kingdom?


Ian Alistair Mackenzie: My hon. friend will recall that we had a discussion about this in the house last year.


Denton Massey: Quite so.


Ian Alistair Mackenzie: I believe a statement was made in this house, and also in the British parliament.


Denton Massey: But at that time the minister stated that if a request were made by the British government, it would not be refused. He said no request had then been made. Subsequently, after prorogation, the question arose again. Did we make the suggestion to the United Kingdom, or did they make it to us?


Ian Alistair Mackenzie: I would not be certain about that. I shall have to look up the record, but my present belief is that we made the suggestion. However, we must be positive of our facts.


Denton Massey: I gather from what the minister said this afternoon that the fifty who are to be trained now are merely a beginning. We hope that we may be able to do more in the future; this is essentially a trial-is that it?


Ian Alistair Mackenzie: That
entirely depends on the future. What I did say was that if the government recommends to parliament next year a vote similar to the item of 86,000,000 for the training of pilots, we shall then have done so much by getting equipment, intermediate trainers, and advanced trainers, and reconditioning the buildings and the grounds which must be reconditioned, that there will be more money available for training personnel.


Denton Massey: Camp Borden is now to be made an all-year field?


Ian Alistair Mackenzie: Yes.


Thomas Langton Church: Can the change to which I have referred be said to have had the effect of showing lack of coordination and cooperation with the air force of the mother country?
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Ian Alistair Mackenzie: It shows the very opposite, because we have a definite expression of appreciation from the air ministry of the cooperation they have received.


Howard Charles Green: Is this a training plan for a period of three years?


Ian Alistair Mackenzie: Yes.


Howard Charles Green: I understood the minister to say the other day that there would not be more than fifty British pilots trained here in any one of these three years?


Ian Alistair Mackenzie: Yes.


Howard Charles Green: So that the total number of British pilots who can be trained under the scheme will be 150?


Ian Alistair Mackenzie: Not necessarily, because the number could be modified from year to year. But the understanding between the two governments is for the period of three years. As to the actual numbers, it says only a minimum of fifty: that could be quite easily changed by amending the agreement next year.


Howard Charles Green: The minister said that the
number of pilots coming from the United Kingdom for training would not exceed fifty in any one year.


Ian Alistair Mackenzie: That is the agreement now. It can be changed at any time.


Charles Grant MacNeil: Will these men be under
the disciplinary control of the Canadian defence department?


Ian Alistair Mackenzie: They will be under the direction of the Department of National Defence.


Grote Stirling: I did not get a definite
answer to my question about manufacturing in Canada. It was not necessary for the minister to rely on his investigation with regard to the twelve manufacturing firms, because to my own knowledge they have been in pretty close touch with the department. Can the minister elaborate on the quantity of work he has been able to give to these manufacturing firms? It would appear that there is an opportunity to employ a largely increased number of men if these people can get orders.


Ian Alistair Mackenzie: I quite
agree with my hon. friend that if we were not confronted with what appeared to be emergent conditions we could give them far more work than we have done in recent months; and I think any long-range policy

should be in the direction of encouraging industrial production in Canada as much as possible. In addition to the orders we were able to place with seven or eight firms, the department were largely responsible for negotiations with the British air mission, and the industry in Canada has been grateful, I believe, for the cooperation it received from the department. I appreciate the position taken by my hon. friend, and we shall be glad to cooperate.


Grote Stirling: Does the minister know
to what extent the British authorities have placed orders?


Ian Alistair Mackenzie: I do
not know exactly.


Major James William Coldwell: How many young men have been recruited in Canada for the royal air force in the last three years?


Ian Alistair Mackenzie: For
some years we have been sending fifteen to England, but last year, under the policy announced in 1937, there were 120, so that to-day there are three schemes-15, 120 and the third scheme I have referred to.


Thomas Clement (Tommy) Douglas: How many
were recruited for the Canadian air force last year?


Ian Alistair Mackenzie: In January, 1937, the strength of the Royal Canadian Air Force was 152 officers and 958 other ranks, or 1,110; and in April, 1939, it was .261 officers and 1,951 other ranks, or 2,212.


Thomas Clement (Tommy) Douglas: Has the
department advertised for artisans?


Ian Alistair Mackenzie: Yes.


Thomas Clement (Tommy) Douglas: What classification?


Ian Alistair Mackenzie: This is
the advertisement:
Recruits
Skilled Tradesmen for R.C.A.F.
Vacancies exist in the Royal Canadian Air Force for skilled men in the following trades:-
Acetylene welder, armament artificer, air rigger, clerk, aero engine fitter, machinist, motor boat crewman, motor mechanic, photographer, sheet metal worker, storekeeper, tailor, instrument maker and wireless operator.
Applicants must be British subjects, between the age of 18 and 31 years, unmarried, medically fit (subject to examination) and willing to enlist for a period of five years. Good prospects, pay dependent upon proficiency. Quarters, food and uniform provided. Any expenses incurred before enlistment must be borne by applicant.


Denton Massey: What is the proportion of successful applicants to the total number?

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Ian Alistair Mackenzie: The
applications are receivable in the districts. We have not the record here, but there are thousands.


Denton Massey: We are limited not by the type of applicant but by facilities to take care of applications?


Ian Alistair Mackenzie: Yes.


Mr. HAYHURST:: At the Edmonton air school in 1929 there was quite a discussion about how to train pilots. A certain amount of civil work was done by the Edmonton instructors and we had local schools at Cam-rose and other places. Is a grant given under this or some other item to encourage these young men in flying? I was a member of an air club at Vegreville and took the ground school course, but the fees are high-$100 for the course and $10 an hour for flying time. We have been doing that work voluntarily.


Ian Alistair Mackenzie: My hon. friend is referring to the flying clubs. They used to be under the jurisdiction of the defence department, but for the past three years they have been under the Department of Transport. The vote for training pilots is the only item in the estimates under which there will be cooperation; otherwise it is under the Department of Transport.


Denton Massey: What coordination is there between the two departments in the training of pilots? Does the Department of Transport train its own pilots?


Ian Alistair Mackenzie: Yes.


Denton Massey: The pilots trained by the Department of National Defence are not transferred to the Department of Transport?


Ian Alistair Mackenzie: No. If there were an emergency the pilots trained by the other department would be of great value.


[Stage Direction]
Item agreed to.
Air services.
200. Buildings and works-chargeable to ordinary account, $111,000.
Howard Charles Green: What was the cost of the Spencer home which was acquired by the air force in Vancouver?


Ian Alistair Mackenzie: The matter was heard several months ago but the judgment of the exchequer court has not yet come down.


[Stage Direction]
Item agreed to.
Air services.
201. Chargeable to capital account, $4,212,000.
Major James William Coldwell: What is this item for?


Ian Alistair Mackenzie: If you refer to civil government air operations; this is to provide for expenses incident to air operations undertaken by the Royal Canadian Air Force for the topographical and air survey bureau. A committee was appointed on air service and it makes recommendations as to the requirements of other departments.


Howard Charles Green: Is this work increasing in volume? I understand that there is a feeling among the private air companies that a good deal of this work should be done by them. They think that it would help them to maintain our air services in the northern part of Canada and that the department should not be doing this work but should be training its men for fighting purposes rather than in civilian aviation.


Ian Alistair Mackenzie: Topography is one of the most valuable parts of the training a pilot receives, and in addition to that, the requirements of other departments of government from the point of view of national development are quite numerous. In my opinion the air force is rendering an invaluable service. It is national work of a high order.


[Stage Direction]
Item agreed to.
Air services.
204. Chargeable to ordinary account, $2,771,840.
Howard Charles Green: How many Canadian pilots are to be trained each year?


Ian Alistair Mackenzie: In addition to the number provided for in the ordinary estimates, there will be a total of 126 under the specific vote.


Howard Charles Green: Fifty British and 76 Canadian.


Ian Alistair Mackenzie: Yes.


Howard Charles Green: The same number each year?


Ian Alistair Mackenzie: Unless we decide to increase the number. Our requirements in pilots will be between 500 and 600 when our final complement is established.


Thomas Langton Church: Under this item, chargeable to ordinary account, has anything been done by the government, as I asked early this session many times, for the protection of the civilian population in case of emergency? Has any study, or survey, or register, been made of that matter before it is too late for it?

42%
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Ian Alistair Mackenzie: That
question was taken up the other day by a neighbour of the hon. member, and I explained that a committee has been functioning on that very point for the last twelve months at least, and certain plans have been drawn up.


Howard Charles Green: What proportion of the cost of this pilot training scheme is to be paid by Great Britain?


Ian Alistair Mackenzie: That has not been definitely decided; the matter is subject to adjustment. The suggestion is that the per capita cost to the British government will be the same as to the Canadian government. That would be refunded to the consolidated revenue fund.


Howard Charles Green: What provision have we in Canada for training pilots for the very fast planes? The minister knows that there was a crash in Vancouver a few weeks ago of a Hawker Hurricane plane; presumably the pilots have not been given a chance to get thorough training in flying these very fast machines.


Ian Alistair Mackenzie: The difficulty in the past, as my hon. friend knows, is that we did not have a sufficient number of advanced or intermediate training machines. As a matter of fact since this occurrence I have seen the pilot who had the crash flying magnificently. We have no worry about the pilots. We have had, in the past, about the machines, but I am glad to say that within the next few weeks we shall have some forty-five planes of that type, so that that difficulty will not occur again.


[Stage Direction]
Item agreed to.
Air services.
205. Chargeable to capital account (equipments and properties) (commitments $761,840), $3,228,160.
Thomas Clement (Tommy) Douglas: What are the commitments in this item?


Ian Alistair Mackenzie: Training of pilots, capital account, for these advanced trainers, single engine, commitment, $441,840-not those coming immediately but those that cannot be obtained this year. Then, aircraft spares, commitment, $200,000. In connection with buildings such as construction of new roadway, heating and steam distribution, stores and electrical and telephone connections, et cetera, $120,000.


Grote Stirling: There is a question I wanted to ask under a previous item. A good many Canadians took advantage of the short service course in the Royal Air Force. The
[Mr. Church.)
term is coming to an end and I know some are most anxious to transfer, if one can use that term, into the Royal Canadian Air Force. Are there any facilities open to those young men?


Ian Alistair Mackenzie: I think that suggestion is very much worth while, and I shall be glad to look into it.


[Stage Direction]
Item agreed to.
Militia services.
621. Engineer services and works: capital account, $145,000.
Howard Charles Green: Will the minister explain
this item?


Ian Alistair Mackenzie: This is required in connection with the defences of the port of Saint John, New Brunswick. It provides for the construction of certain gun emplacements there. They will be of a semipermanent nature, constructed of concrete, with surface magazines. The amount also covers cost of acquiring site, clearing the area and construction of roads and communications.
Further down there is an item of $73,625 in connection with guns for the proposed fortifications. Also general stores, $100,000; clothing, armament and signal equipment-that is for boots for the non-permanent active militia. For a survey of the situation with reference to the possibility of various arsenals and shops for gun production, $20,000. Then, ammunition procurement and general stores, including dominion arsenals, capital account, $203,375, of which $151,375 is for coast defence ammunition. That also is for Saint John. There is $52,000 for Lindsay arsenal and $100,000 for the increased training for the non-permanent active militia, of which $65,000 is for actual training and $35,000 for clerical help and assistance. Then naval engineering: $300,000 for the construction of oil tanks on Vancouver island. For the defence purchasing board, $75,000.


Alfred Johnson Brooks: How long does the minister anticipate it will take to erect the fortifications at Saint John? And is this $145,000 the full amount?


Ian Alistair Mackenzie: No, I
gave two or three amounts; I will give them again. An amount of $145,000 for engineering services and works provides for the construction of certain gun emplacements. The sum of $53,625 is for purchase of certain artillery for the emplacement at Saint John and $151,000 is for the purchase of ammunition for the gun proposed to be obtained.

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Alfred Johnson Brooks: I understand it takes three years to develop these fortifications; is this for the first year or the three years?


Ian Alistair Mackenzie: The guns will be there inside of two or three months- a few months.


Alfred Johnson Brooks: Do they not require the fortifications before they have the gun?


Ian Alistair Mackenzie: This is a semi-permanent fortification, so that we can get at least interim armament there as soon as possible.


[Stage Direction]
Item agreed to.
Militia services.
622. Ordinary account, $100,000.
Howard Charles Green: Does this provide boots for the whole non-permanent militia?


Ian Alistair Mackenzie: I think this provides for 30,000 pairs. Of course we have a stock already that we use only for the permanent force and reserve, and we can get some more next year. I think this will provide all that will be required.


Howard Charles Green: Then the whole militia will not be provided with boots this year?


Ian Alistair Mackenzie: Yes, I
think if we draw on the supplies we now have we shall be able to meet all requirements.


[Stage Direction]
Item agreed to.
Militia services.
626. Capital account, $73,625.
Mr. BROWN:: I see there is an amount of $20,000 for preliminary expenses, including surveys and preparation of plans towards obtaining Canadian-made guns. Is that the amount provided in clause 1 of the Bren gun contract for preliminary expenses?


Ian Alistair Mackenzie: No, this provides for a survey of the possibility of a gun production plant in Canada.


James Alexander Marshall: In his speech of April 26 the minister mentioned that purchases were being made of 14 anti-aircraft guns of 4-5 calibre, and 4 of 3-inch calibre, at a total cost of $1,289,240, and that munitions had been ordered to the value of $553,140. The Daily Express, of London, in its issue of January 12, carried a dispatch stating the following:
The war office announced last night that no further orders are to be given for the 4'5-inch anti-aircraft gun after the initial contracts have been completed.
Tests in the last few days with a 3-7 on a fixed base have shown that it is equal to and even better than the 4-5 gun in performance. It has an equal range but a more rapid rate of fire.
Is this an accurate report, and if so, what about the order that has already been placed? Will any part of it be cancelled, or will the government go through with it, and in the future order no more of the 4-5's?


Ian Alistair Mackenzie: I think the dispatch is fairly accurate. There is a preference for the 3-7, as mentioned in the dispatch. But both are still being used, and each has distinctive properties, as in the case of heavy machine guns and light machine guns. I believe the newer one is now favoured, but the other one certainly has great value. It is correct however that there is a tendency in Great Britain to switch from one gun to the other.


Thomas Clement (Tommy) Douglas: Will the minister give some details as to the $20,000 item for preliminary expenses, including surveys and preparation of plans towards obtaining Canadian made guns?


Ian Alistair Mackenzie: It will
be an expenditure to make a thorough and specialized report in regard to other government buildings, the cost of manufacture in government buildings or railway shops, and matters of the kind, so that we shall have a complete and up to date report with reference to the possibility of producing guns in Canada.


Thomas Clement (Tommy) Douglas: Will the
amount be paid to government officers, to an engineering company, or to whom?


Ian Alistair Mackenzie: It will
be for government officials. If necessary they will call in experts to give advice.


Howard Charles Green: Has any of this work been
done yet?


Ian Alistair Mackenzie: Only in a general way. But this will be a specialized survey for specific purposes.


Howard Charles Green: Is any part of the vote to
be paid to the John Inglis Company?


Ian Alistair Mackenzie: No.


[Stage Direction]
Item agreed to.
Militia services.
625. Non-permanent active militia, $100,000.
Thomas Langton Church: I notice that in the details of this item there is reference to an expenditure of $25,000 for transport and travel. What is the policy of the government with respect to those who are out of work but who have to attend militia drills? Some of these men live outside the city and have to pay suburban and urban carfares. What is the government doing in that connection? Then, what is
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being done about those who attend camp? I believe earlier to-day the minister quoted the Militia Act, wherein it is stated that only two weeks of ordinary holidays shall be given. Should there not be provision under this item including pay for a week at camp?


Ian Alistair Mackenzie: I believe this question was discussed earlier to-day, when it was brought up by the hon. member for Vancouver South. There has been a certain lack of regimental uniformity in connection with allowances, the arrangement depending to a large extent on the various localities and units. The purpose of this vote is to assist units by way of clerical assistance, and to give additional training to the value of 865,000. Dissatisfaction was expressed because the vote for the militia in the main estimates this year was the same as that for last year. On account of the shortening of the hours of civilian firemen there was an actual reduction of $40,000 in training expenditures. This additional amount will eliminate the dissatisfaction, and in addition will give clerical assistance.


Thomas Langton Church: Surely this is not a very
large matter. It would not take as much to transport those soldiers as to carry a dozen delegates to the league. Surely there should be a larger vote for transport and travelling of the non-permanent active militia.


Ian Alistair Mackenzie: They are looked after by the units themselves. It has not been done by headquarters.


Howard Charles Green: What type of assistance is
to be given to militia units? Will someone from the permanent force be attached to each unit?


Ian Alistair Mackenzie: I believe that has not as yet been decided. It may be in the form of an allowance to the units themselves, or it may be clerical assistance from the permanent force. Some of the organizations have asked for a permanent adjutant or orderly room clerk, but I do not think this vote is big enough for that purpose.


Howard Charles Green: Do the territorial units of Great Britain have a permanent force adjutant?


Ian Alistair Mackenzie: That is my impression, but I am not sure.


Douglas Gooderham Ross: What is the present strength of the non-permanent active militia?


Ian Alistair Mackenzie: It stands at about 51,000.


[Stage Direction]
Item agreed to.

Naval services.
626.	Naval engineering, capital account, $300,000.
Charles Grant MacNeil: Is this vote for the construction of buildings and works on Vancouver Island?


Ian Alistair Mackenzie: Yes,
entirely. It is for tanks for the storage of naval oil.


[Stage Direction]
Item agreed to.
General services.
627.	Defence purchasing board, $75,000.
Thomas Clement (Tommy) Douglas: What is the salary or per diem allowance of the chairman?


Ian Alistair Mackenzie: This is only an estimate; I have no idea at all of the exact amount. The matter has not been discussed or decided.


John Ritchie MacNicol: It is only an estimate?


Ian Alistair Mackenzie: Yes.


Mr. TAYLOR (Nanaimo):: I should like to ask a question apart from the usual type of question which has been asked this afternoon. Does any unit in the minister's department exercise jealousy over heraldic and flag displays? There is a frequent use of flags, and also a frequent misuse of flags. Is there any unit which has charge of that?


Ian Alistair Mackenzie: I cannot be specific. Ceremonials come under the branch of the adjutant general. How far his jurisdiction goes in relation to the point raised by the hon. member, I do not know.


James Samuel Taylor: I wish to draw attention to an important lache, if I may so describe it. We have pictures in the lobbies and spread throughout the House of Commons. They are in the office of the clerk of the house, and I am quite sure they are to be seen in the library of parliament and elsewhere, where they exhibit the galaxy of the members of parliament. At the top centre there is a copy of the arms of Canada. The lion supporter is supporting the banneret of the union jack, but, unfortunately, the union jack is in distress. That is represented as for the 17th and 18th parliaments. I hope when it is corrected we shall get out of our distressed condition.


Ian Alistair Mackenzie: I hope my hon. friend is not attributing that atrocity to the Minister of National Defence, because it is not under my jurisdiction. I believe such matters come under the Department of the Secretary of State.


[Stage Direction]
Item agreed to.

Defence Purchasing Board
173. Departmental administration, $438,900.
Charles Grant MacNeil: I have brought to the attention of the government the activities of Japanese interests on the British Columbia coast. In fact, Japanese interests directly related to Tokyo are acquiring important timber lands and mineral claims and even at some points are excavating for purpose of building storage tunnels. A return tabled to the house indicates that the Department of National Defence has no information. Would the minister make a statement as to whether or not steps have been taken by officials of his department to see that strategic sites are not left in the hands of potential enemies?


Ian Alistair Mackenzie: Numerous representations have been made to the department from time to time with reference to the point the hon. member raises now, and raised on an earlier occasion. Officers of the department and of the intelligence service were instructed to make a comprehensive report which is now in the files of the department. I shall be glad to show it privately to my hon. friend at any time he wishes, but as its contents are somewhat delicate, I should not like to discuss them extensively before the committee.


[Stage Direction]
Item agreed to.
Progress reported.


[Stage Direction]
Hon. IAN MACKENZIE (Minister of National Defence) moved the second reading of and concurrence in amendments made by the senate to Bill No. 38, to establish a defence purchasing board.
Grote Stirling: There was one amendment to the effect that the chairman shall be ex officio a member of the defence council.


Ian Alistair Mackenzie: The hon. member brought this amendment to my attention. I took it up with the deputy minister of justice and he believes that because the defence council is mentioned in a former statute, this amendment is quite in order.


Major James William Coldwell: Is that the only amendment?


Ian Alistair Mackenzie: There are two or three minor ones. Perhaps I had better run through them. The amendment to which I have just referred substitutes the words "he shall be, ex officio, a member of the defence council of the Department of National
Defence" for the words "or a shareholder of any corporation or company manufacturing guns, cannon, small arms, munitions, naval ships, military aircraft or other equipment or supplies used exclusively or primarily for war purposes." Then on page 2, line 46, for the words "two other members" substitute the words "one other member." Then a new subsection is inserted in section 7, as follows:
The board shall also have the exclusive power to superintend and enforce the performance of all contracts within the meaning of section two of this act, including such thereof as shall have been already negotiated, executed or partly performed at the time when this act comes into force, according to the respective terms of such contracts, and not otherwise, but subject to variance of such terms by mutual consent in the same manner as if the variance were a contract negotiated after this act comes into force.
This amendment gives the board jurisdiction to deal with existing contracts. Then in section 6 the words "under this part or already negotiated, executed or partly performed at the time when this act comes into force" are substituted for the words "pursuant to the provisions of this part." Then a new paragraph (c) is added to section 7, subsection 3, as follows:
In the determination of net profit, the board shall apply the principles and practices as to accounting and otherwise governing the determination of taxable income under the Income War Tax Act.
In subsection 9 of section 7, for the words "and (b)" substitute the words "or (b) contracts or subcontracts already entered into at the time when this act comes into force, or (c)." The rest are minor amendments.


Major James William Coldwell: The major amendment seems to take away the limitation which we placed upon certain people.


Ian Alistair Mackenzie: In regard
to shareholders.


Major James William Coldwell: After a good deal of discussion we decided that no person who was interested in a company manufacturing arms or munitions ought to be a member of this board. It seems to me that the amendment made in another place really removes from the bill one of the main principles decided upon by this house, and I think the matter should be given some consideration.


Frederick George Sanderson: Shall the amendments be concurred in?


Major James William Coldwell: On division.
Motion agreed to; amendments read the second time and concurred in.

Income War Tax Act



WAYS AND MEANS


[Stage Direction]
The house in committee of ways and means, Mr. Sanderson in the chair
Resolved, That it is expedient to amend the Income War Tax Act and to provide:-
1.	That a taxpayer (other than a company deriving income from a metalliferous mine to which section 89 of the act applies) shall be entitled to deduct from the tax that would otherwise be payable under the act amounts not exceeding in the aggregate ten per cent of capital costs actually incurred and paid in the period beginning May 1, 1939, and ending April 30, 1940, in respect of the construction, installation, betterment, replacement or extension of plant, machinery or fixed equipment during the same period, by deducting, in each of the first three fiscal years of the taxpayer after April 30, 1940, in which the taxpayer has taxable income, an amount not exceeding one-third of the aggregate amount of the deductions authorized.
2.	That any metalliferous mine that comes into production after the 31st day of December, 1939, and prior to the 1st day of January, 1943, shall be exempt from income tax for the first three fiscal periods following the commencement of production.
3.	That dividends paid by a metalliferous mine to a Canadian company during the period that such metalliferous mine is exempt from taxation under section eighty-nine of the Act shall be exempt in the hands of such Canadian company.
4.	That the tax imposed at the source on payments by Canadian debtors to non-residents in respect of films, whether copyrighted or not, be increased to 5 per centum on the total amount of such payments.
5.	That salaries, bonuses, directors' fees, or other like remunerations, paid by Canadian companies to a non-resident, in excess of $14,000, shall not be allowed as an expense of such Canadian company.
6.	That general overhead expenses of companies shall be rateably apportioned between the taxable and the non-taxable income of such companies.
7.	That where any estate or trust is taxable under the act it shall not receive a personal exemption of one thousand dollars.
8.	That dividends paid by a personal corporation out of capital gains after all of the income of such corporation, has been taxed against and received by its shareholders shall be exempt from taxation.
9.	That the resolutions numbered 3, 5, 6, 7. and 8 shall be applicable to the incomes of 1938 and fiscal periods ending therein. Resolution numbered 4 shall be applicable on April twenty-sixth, one thousand nine hundred and thirty-nine. Resolutions numbered 1 and 2 shall come into force as indicated therein.
Hon. CHARLES A. DUNNING (Minister of Finance): This is the resolution to which I referred in my budget address. It provides for a tax credit with respect to certain capital expenditures during the year commencing May 1, 1939. I should emphasize

that expenditures must be of a capital nature and directed toward the earning of income in order to count for tax credit purposes. Therefore it is clear that expenditures made by a person on his own residence or for home improvement or on landscape gardening would not qualify for tax credit purposes. Expenditures which merely effect a transfer of capital will not be eligible except in the case of purchases of new machinery and equipment. Purchases of land, outlays for leases of plants or for purchases of oil or mineral properties, and expenditures on licences, patents and other intangibles will not count for tax credit purposes. In the bill which will be founded upon this resolution it is proposed to exclude residential and apartment house buildings from the operation of the tax credit. Other legislation now in effect deals with this field. It is thought desirable, for the purpose of clarification, to amend this resolution by adding the following proviso:
Provided, however, that if the amount authorized to be deducted is greater than the income tax payable by any taxpayer in any of the said three years, then the amount of such excess shall be allowed as a deduction from tax in any subsequent period in which the taxpayer is entitled to a credit under the provisions hereof, but not beyond the sixth fiscal period ending after April 30, 1940.
The effect of the proviso is this. If we assume that as a result of this tax credit measure, a completely new industry starts in 19-40 and has the experience of many new industries of not earning sufficient to make it liable for any income tax whatsoever during the first year or two, by this proviso, which I shall ask my colleague to move, the tax credit would still be available in future years, but not beyond six years from the commencement of the tax credit period. The only change from the principle of the resolution is that the proviso makes it possible to carry forward a tax credit over the years in which no taxable income is earned.
Mr. HOMUTH:: Suppose an industry over a period of three years had a taxable income but not sufficient to take credit for the amount they would be entitled to deduct; would the credit extend over to the next year?


Charles Avery Dunning: Yes.


Karl Kenneth Homuth: It may go forward four, five or six years?


Charles Avery Dunning: That is right.


Karl Kenneth Homuth: It does not have to be specifically three years?


Charles Avery Dunning: Right, but I should make it clear that the next tax credit must be

spread over three years. A man or an institution does not lose the tax credit by virtue of not being able to take his one-third, let us say, through not earning that much income.


Karl Kenneth Homuth: Suppose he could take off half the first third, which would be one-sixth the first year, and next year he takes off his full third; would he be entitled to take the other one-sixth in the fourth year?


Charles Avery Dunning: Yes, not in the second and third years.


Karl Kenneth Homuth: One-sixth would, of necessity, have to go over to the fourth year.


Mr. LAWSON:: Does the minister contemplate any amendment to the words "incurred and paid in the period beginning May 1, 1939"?


Charles Avery Dunning: No, I was not considering changing that?


James Earl Lawson: I am wondering whether
the use of these words might not discourage certain enterprises which might otherwise be undertaken. Let me point out to the minister one or two circumstances.
To deal for the moment with construction of buildings or plant, the larger the construction which is undertaken, the more fully the purpose which the minister has in mind is served. This resolution was proposed only when the budget came down in the house. Some people, we will say, are encouraged to build a $1,000,000 structure. They have to get out plans and specifications, call for tenders and award contracts. That probably will take a period of two to three months. Having done that, they have incurred liability, but payment will be made only on architects' progress estimates. It would not be possible to construct that building in nine months, having regard to climatic conditions in Canada in winter; and my thought was that so long as the obligation had been incurred, the minister would contemplate that payment for part might be made after May 1, 1940. I was going to suggest that if he hoped to have the resolution produce the effects which he had in mind he would have to make some provision in that regard, so that payment need not necessarily be made by May 1, 1940.
Another matter has been suggested to me; it was not something that came to my own mind. A firm might be encouraged by this resolution to instal a machine costing in excess of $60,000. Certain parts of it have to be imported from the United States. First those parts have to be ordered, then constructed, then imported, and then they are assembled together with other parts made in
Income War Tax Act
Canada. My information is that it would take eight or nine weeks to instal that machine in the plant, employing Canadian workmen to do it. Under the terms of purchase of the respective machines which come from the United States, the purchaser is entitled to four months' trial for satisfactory operation before being obligated to make payment. If the payment has to be by May 1, 1940, my informant tells me they will not instal the machines; but if the payment does not have to be made by then, he tells me they will. I suggest that the minister ought to give consideration to these two situations.


Charles Avery Dunning: I have had and the government has had to give a great deal of consideration to the first one; I must admit that the second is rather new.
Dealing with the first point only, the issue a? to how long we should say in this legislation that the tax-earning period shall last, I point out that a difficulty would arise with respect to any terminal date. I am thinking in terms of one very large installation which might run over the next two or three years, and which is contemplated. What I have had to say to the people concerned in such case3 is this: This is a new departure in tax credits, deliberately designed to encourage investment in capital goods and thereby create employment; I am sure that the Canadian parliament will watch with very great interest the extent to which the legislation attains these objects within the next twelve months.
Consideration can be given twelve months from now to whether or not it is desirable in the interests of the whole Canadian economy to continue for another year either this measure, some modification of it, or some other measure which experience might indicate, as being more desirable, but in the meantime those expenses incurred and paid will qualify. The concern to which the hon. member for York South (Mr. Lawson) refers, would therefore get credit with respect to at least ten per cent of that portion of the capital expenditure which they had incurred and paid. I am afraid that any other qualification would be quite impossible of operation.
What is an "incurred" expense? On the last day of the period mentioned in this resolution a concern might incur an expense by way of entering into a contract which would not be fulfilled for a very long time. Should we thereby make it possible for them to qualify for this very generous help? I assure my hon. friend that I have given a great deal of thought to this, and I have naturally had the usual communications from industries of various kinds. In the main, I am bound to
Income War Tax Act

say, there is an apparent response from industry which is very encouraging indeed, qualified of course by those who are in the position indicated, who are contemplating large expenditures which they do not expect could be completed entirely during the period set by the resolution. My only answer to them can be that this is intended as an incentive to employment now. We do not want to put in the law anything which would make it an encouragement of employment at some time; it is an encouragement to employment now, and they can qualify to the extent that they spend money now on the objective set forth in the resolution. I do not think I can go further than that.


James Earl Lawson: I can readily appreciate
the minister's view with regard to the desirability of getting an immediate expenditure. But the difficulty is, I am afraid, that if he leaves the clause as it is, he may defeat his own purpose. To come back to my illustration, if you are undertaking a million-dollar structure, the smaller part of your expense is incurred at the beginning. For example, you do not provide a tremendous amount of employment in taking out an excavation with a steam shovel.


Charles Avery Dunning: Well, that is done very quickly.


James Earl Lawson: You do not provide a
great deal of employment in the erection of the inner steel structure.


Charles Avery Dunning: Oh, yes.


James Earl Lawson: Well, it is limited compared with the others.


Charles Avery Dunning: There is the making of the steel.


James Earl Lawson: That is true, when secondary industry is considered. But I am thinking of the work on the job itself, because likewise employment is provided to other secondary industries. But when you come to the laying of bricks and the doing of carpenter work, that is where your big bulk of employment comes. We can readily approve the answer which the minister said he had to give to industry; but there is the possibility, which I realize that the minister at the moment will not appreciate, that there might be an election and another government might have a very different view, and I am inclined to think that possibility may discourage some from entering upon a vast expenditure.


Charles Avery Dunning: There is no evidence of fear in that regard by industry.
f'Hr Dunning.]


James Earl Lawson: The trouble is that there is evidence of fear, but the fear is that business men are afraid to express it to the minister.


Charles Avery Dunning: Oh, no.


James Earl Lawson: They have expressed it freely to me, hence I bring it to the minister's attention. Seriously, a practical solution might reside in this. Realizing the minister's desire to create employment immediately, supposing you had words in there to the effect, " incurred and paid, and where incurred but not paid, except on progress estimates from an architect where progress is carried on with due dispatch " -or something of that kind. I realize at once that when you put in words of that kind you leave a large discretion in the hands of the commissioner of income tax. But I do not think it would be possible to leave him a wider discretion than he has under the Income War Tax Act. One of the most beneficial factors in connection with that act is that the commissioner exercises that discretion with such excellent judgment. I suggest to the minister that he is not going to get what he desires if he confines that section to the words "incurred and paid." I am pretty confident of that.
There is another aspect of the matter, on( which I think I mentioned to the minister personally. Someone has already started construction. He may be encouraged to speed it up, he may be encouraged to extend it. If you leave the words in there and they are going to be construed according to the legal meaning, you can give no benefit to such a person and hence you do not encourage him. It seems to me that you might provide a good deal of employment by simply changing the expression to " incurred or paid " instead of "incurred and paid."


Karl Kenneth Homuth: When the minister brought down his budget and referred to this amendment, he made the statement that it was for the purpose of encouraging industrialists in this country to modernize their plants so that they could compete with industries in other countries which were selling their manufactured goods in Canada. I believe the general idea which was in his mind at the time and was left in the minds of the Canadian people was that certain industries in Canada were not as well equipped to turn out an article at a competitive price as were industries in other countries.
To my mind the biggest question in respect of this amendment is not the initial expenditure on buildings and machinery and the labour so provided, but the employment ultimately to be given in these industries

Income War Tax Act
which are modernized and given increased capacity. If that is the view of the government-and I take it that it is; I know it is my idea-then, as the hon. member for York South says, the limitation is going to affect seriously the ultimate aim of this house to provide more employment within our industries. I can well understand, for instance, that textile mills, which have to purchase their machinery chiefly in England, because we do not manufacture such machinery in Canada, would go ahead, remodel their buildings and order their machinery, and that machinery could not be delivered for six or eight or ten months and, in some instances, for a year, because at the present time it is difficult to get delivery of machinery from England. They would spend the money for these purposes, placing themselves in a position to meet competition from other countries, yet they could not claim this ten per cent under this measure because they had not spent the money. The result is they are going to hesitate; whereas if we had a long-range policy, the people of this country, generally speaking, whether heads of industry or in other capacities, having a great deal of confidence in the commissioner of income tax, would be willing to go ahead. I believe that hon. members have a great deal of confidence in the commissioner, and that, as the hon. member for York South has said, we can safely leave it to his judgment. So we could include " incurred " or take the amendment suggested by the hon. member for York South, rather than limit it as the wording stands at present.


James Earl Lawson: Might I suggest an amendment after being given a chance to write something down?


Charles Avery Dunning: The hon. member for
Winnipeg North wishes to speak.


Frederick George Sanderson: I recognize the hon. member for Huron North.


Mr. DEACHMAN:: A depression results from the restriction of the consumers' income. The proposal now suggested by the Minister of Finance (Mr. Dunning) is for the expansion of investments in capital goods. Are we not thereby making a back-door approach to the problem? Would it not be better to lower the sales tax and increase demand, because demand for consumer goods is the beginning of investment in capital goods. There must be a market before you want to establish a factory. If the sales tax could be removed and the sum now absorbed by that tax were used in the purchases of commodities, this would increase the demand for commodities
by the amount of the sales tax, which, as I recall it, is $126,000,000. But the national income is always substantially in excess of the total production of the nation; in fact, the national income is approximately 60 per cent above the total production. We would therefore have, if that be true, an expansion of national purchasing power to the extent of $201,000,000 from a reduction in the sales tax, which amounts to $126,000,000. I am not suggesting for a moment that it would be earned out as thoroughly as that. It is true that not all of it would be invested in consumer goods; some might even find its way into savings banks and increase investments or increase deposits in the banks. Nevertheless a determined effort to move in that direction could not fail to increase purchases of consumer goods with a consequent expansion of business in Canada. I go further. If you can secure an increased demand for goods, or an increased national income, to the extent of $201,000,000, you have practically abolished unemployment, because the additional wages or additional employment created by the production of those goods will provide labour for those who are now idle, and there would be a movement of goods into consumption. Therefore we would expand employment not only in manufacturing but in distribution.
I fancy that the answer of the Minister of Finance (Mr. Dunning) will be, quite clearly and reasonably, that we need the revenue. That is obvious; but at least a start could be made. I should like to see a little more of the experimental spirit in regard to these matters, and we can put it to the test only by making a move in that direction. And that, at best, is all that my hon. friend can do when he makes a reduction in taxation which he believes will encourage capital investment. I suggest that from a fundamental" point of view we are not making the approach which we ought to, and we are trying to establish the factory before we have attempted to provide the market, which is the essential factor, the factor which alone will bring about an expansion in demand in Canada and thereby create increased purchasing power, resulting in a reduction in the money now spent for the relief of unemployment.


Abraham Albert Heaps: I do not know what the minister's expectation is in this matter. I assume that when he introduced this measure in his budget, he hoped that it would stimulate industry to a large extent and in that way provide employment in Canada. But a few moments ago he spoke of the need of providing immediate employment, and I assume he has in mind the idea that this particular

Income War Tax Act

clause may provide immediate employment. It is a well known, fact, I believe, and it has been admitted in this house on many occasions, that in Canada we have the productive capacity in our industrial establishments to take care of a population much larger than we have to-day.


Charles Avery Dunning: Not in all lines.


Abraham Albert Heaps: Generally speaking, I think
the statement is correct. I believe it will be found that our large textile establishments in Canada could take care of a much larger population than we have to-day.


An hon. MEMBER:: No. We are importing 58 per cent.


Abraham Albert Heaps: And we shall continue to
import goods irrespective of the tariff. If the hon. member knows the elementary facts of economics he knows that the moment you completely shut out goods from foreign countries, your export trade goes down. A reduction of imports is a two-edged weapon in our industrial life. I do not, however, wish to go into that question. Generally speaking, I believe that the present industrial establishments in Canada could take care of a much larger population, and with increased capacity they could, if the need arose, meet an almost unlimited demand. This is true of the textile industry, and it is true of a great many other industries in Canada. If I am correctly informed, the textile mills in Canada are working on short time to-day-two, three and four days a week.
If it is the intention of the minister to create employment in Canada, then I must say I do not share his optimism; but perhaps he has information which he has not so far imparted to the committee. Another aspect of the question must, I think, be considered. I cannot believe that this measure will result in an expansion in industry, because before industry can expand, there must be a market in which to sell the goods produced. Unless there is a demand for goods, no industry will go to the trouble and the expense of investing large sums on capital account. They might take advantage of this proposal and go in for replacements, and if they do so I doubt very much whether it will provide the employment for which the minister hopes. Replacements may provide very little employment ; in fact, they may do away with employment. I say that for this reason. I am informed that some of the large industrial establishments in Canada are replacing or intend to replace existing equipment with more modern machinery. They will take advantage of the proposals here made, and the

net effect will be not to provide additional employment but to reduce employment, because in the first place the machinery will have to be imported from outside, and when it is installed it will do away with the employment of a number of people who are to-day employed.
I do not know whether the minister can give us any more concrete information than he has so far given us with regard to this matter.


Charles Avery Dunning: It is easy for us in this house to theorize. We all do it, of course; we must, because we are acting here with respect to matters affecting the economy of the country on the basis of information which we receive from those who are directly engaged in various aspects of that economy. Naturally the evolution of the idea embodied in this resolution was not discussed with anyone prior to the bringing down of the budget. The secrecy which must prevail in such matters had to be maintained in this case. But it must be remembered that- a few years ago the national employment commission, to which reference has so often been made, gave study to this very matter, and among its recommendations was one that a great field of possible employment in Canada was represented by obsolescence rather than depreciation, and that if some encouragement were given, undoubtedly considerable employment would be opened up in dealing with obsolescence in plant and equipment which has been cumulative during the depression years.
Since the budget came down, many hundreds of communications have been received. My hon. friends have dealt with this question from the point of view of large industry only. One of the most encouraging features in the response to that item of the budget proposals has been the tremendous number of letters from those whom I call the small men, for example, the baker who has been putting up for the last seven or eight years with an oven that is not efficient in producing the kind of article he wants, or which, let us say, renders him liable to an accident. He wants to know if a new oven could qualfiy under this provision. Antiquated refrigeration plants in butcher shops and similar appliances are also the subject of correspondence. I give these only as illustrations, but it is in the multitude of these small things that employment is much more likely to be created than in a single instance of a large industry, although there are several very encouraging letters in that regard also. I cannot properly give the name, but there is one concern equipped to-day with machinery which was

Income War Tax Act
second-hand twenty-five years ago; as a result of this legislation it is even now rushing forward plans for replacing a considerable part of that machinery. When I asked, "Will that have the effect of reducing employment in the modernized plant?" the answer was definitely, "No," because modernized machinery would put them in a competitive position in fields in which they cannot now compete, and hence result in greater production.
I listened with interest to the hon. member for Huron North (Mr. Deachman), as I always do. I have no criticism to make of his theory, but it would be a bold Minister of Finance who would to-day propose the abolition of $120,000,000 to $130,000,000 of revenue in the belief that, filtering through in some way, some of it would come back. That has not been my experience of the abolition of the sales tax, although I have no fault to find with the hon. member's reasoning in normal times.
We have had a peculiar experience with this tax in Canada. I frankly confess that I was always concerned lest we should reach the point of diminishing returns. It is possible to get the unit of taxation so high that you defeat your objective; the law of diminishing returns commencing to operate. A curious thing in connection with this sales tax up to now has been that every increase in the unit has been followed by a more than proportionate increase in the aggregate yield of the tax. I do not say that can continue. Nothing would give me greater pleasure than to be able to present a budget here which would make possible a substantial reduction in the sales tax. It is at present one of our major revenue producers. More than 50 per cent of the national revenue comes from corporations. The measure before us at the moment is designed to encourage those people to put their money to work. I am a firm believer that idle dollars mean idle men, and in doing everything we can to encourage investment in permanent industry to overtake the obsolescence of the last ten depression years.
I admit at once that this provision is experimental, and I say to industry: I think I know the Canadian parliament well enough to believe this, that if during the year industry large and small across Canada takes hold and demonstrates that employment can be and is being created by virtue of this tax credit, the Canadian parliament, no matter what its political complexion may be at the time, will give fair consideration to the results from the point of view of extending the term of operation of this provision if national benefit continues to result. I simply ask the committee to give this provision a chance for a
year. To industry I say: Here is your chance, take hold, make this go, demonstrate that from your point of view tax credits mean an incentive; and I can trust the Canadian parliament to deal fairly with them in the future.


Mr. CLARK (York-Sunbury):: Would this apply to the extension of a plant devoted to repairs and equipment of machinery for
sale?


Charles Avery Dunning: My hon. friend means a plant used in the business of repairing other things?


William George Clark: Yes.


Charles Avery Dunning: Most certainly yes.


James Earl Lawson: I was going to suggest an amendment to the minister for his consideration. If he does not see fit to adopt it, I shall have finished with the matter. The phrase now reads "incurred and paid." I suggest that at that point he omit the words "and paid," so that it would read "costs actually incurred in the period beginning May 1, 1939, and ending April 30, 1940," and then add "and paid with due dispatch, but in any event before April 30, 1941." By so doing I believe you might start a good deal of construction that otherwise you will fail to start.


Charles Avery Dunning: It is an idea that I considered, but frankly I am afraid of it.


Mrs. BLACK:: May I say a word to Minister of Justice (Mr. Lapointe), who is acting leader? Of course he and most of the other members are very much younger than the speaker. But I have noticed that many of those very much younger people have been gaping this afternoon, they show signs of weariness. Would it be possible not to sit this evening?


Mr. LAPOINTE (Quebec East):: I confess that it is pretty hard to resist such an inspiring appeal, but on the other hand there are one or two bills which must have their third reading to-night, the senate have been asking for them. Then we might have some estimates of the Department of Mines and Resources. If good progress is made, we might adjourn earlier to-night so that we might have a better sleep in preparation for to-morrow. But let us do something.
Progress reported.
At six o'clock the house took recess.
7H92-2711
1306	COMMONS
Unemployment Relief-Youth Training
After Recess
The house resumed at eight o'clock.


UNEMPLOYMENT RELIEF
[Stage Direction]
Hon. NORMAN McL. ROGERS (Minister of Labour) moved the third reading of Bill No. 94, to provide for the training of young people to fit them for gainful employment.
Denton Massey: Mr. Speaker, I do not wish to detain the house at length, but I do feel there are one or two matters I should like to mention briefly at this stage of the bill. I have mentioned on several previous occasions that I felt it was highly unfortunate that the minister and government could not see their way clear to go much farther with the plans they have already put forward. I also made it perfectly clear that I had no specific objection to the type of training being offered under the youth training plan. I did, however, make reference to the fact that there was a comparatively small number placed in jobs as a result of the training received under this plan.
Speaking on Monday May 15, the minister placed upon Hansard two sets of tables showing the progress that has been made to date. On page 4101 of Hansard it is shown that the maximum dominion contribution authorized last year was $934,382.22, which was essentially double the amount spent in the previous year.


Mr. ROGERS:: 1937.


Denton Massey: Yes, 1937. Then if we
turn to page 4106 we find another table showing a statistical summary from the commencement of the plan in 1937 to March 31, 1939, and in group B, under the heading "Total placed in employment to March 31, 1939," we find the figure 8.029, of whom 3,282 were placed in 1937-38 and 4,747 in 1938-39. It will be noted that the amount of money spent in the second year under the youth training plan was essentially double that spent in the first year, as I have already said, but there has been only a 50 per cent increase in the number of those placed in jobs.
When the minister first introduced his youth training plan, the minister remarked that to a degree it was experimental, and that they were feeling their way. Since the introduction of that plan, he has added to the personnel of his department Mr. R. F. Thompson, who has been supervisor of the plan itself, attached to the Department of Labour. I noted with pleasure the minister's remarks concerning Mr. 
Thompson, and I need not remind hon. members of what I have already said about him. But even with the addition of Mr. Thompson to the staff, even with the experience gained in the first year under this plan, and in spite of the fact that double the amount of money was spent in the second year, I would repeat that there was only a 50 per cent increase in the number placed in jobs.
It seems to me that with the factors bearing upon the case of which I have already made mention, the results obtained might have been expected to be more satisfactory. I fully realize many of the youth training plans do not have direct employment as an objective. They are for physical training, or for some other purpose. But it is disappointing to feel that, with an authorized expenditure of a million dollars, only 4,747 jobs were obtained by those who took training under the plan.
But it is even more disappointing to look at the table the minister placed on Hansard at page 4107, and to note that in Prince Edward Island 589 were registered and took the various courses; in Nova Scotia, 1.383; in New Brunswick, 2,712; in Quebec, 17,352; in Manitoba, 5,292; in Saskatchewan, 9,848; in Alberta, 10,477; and in British Columbia, 21,893; but that in the largest province in Canada, namely Ontario, there were only 2,029, making a grand total of 71,575. So we find that only 2-8 per cent of those enrolled were residents of or came from Ontario, the most highly industrialized and largest province in the dominion. I am sure it is to be regretted that the progress of the youth training plan has been such in Ontario; for surely there are those in this province who could benefit most emphatically from training for industrial vocations of one sort or another.
All I wish to say here is that if the youth of Canada, who are unemployed and are looking for an opportunity to gain what is necessary in the way of knowledge of a craft, trade or training of one sort or another, are thus deprived of a chance to learn how to earn, there is a fundamental fault either in the scheme itself or as a result of the lack of cooperation which exists at the present time between Ontario and the federal government of Canada.
I am sure the minister will be the first to realize that the placing of about 8,000 persons on jobs, after two years of effort in connection with youth training, is actually only a beginning. I fully realize the plan the minister brings forward in this bill is to continue for three years. But if we are able to place only 5,000 a year as a result- of this training, I would suggest that the minister should look further into the plan to see if

Live Stock and Poultry
there is not some fundamental fault with it. I might point out to him what he already knows, namely, that the training itself is only part of the story, and that until from coast to coast we have set up adequate employment bureaux under federal control, to obtain uniformity and efficiency, the situation such as is disclosed in the charts recorded by the minister will prevail. We may remind ourselves that when the national employment commission brought in its report, it recommended most strongly that the existing government employment bureaux be federalized and brought under one head. But so far no steps have been taken in that direction.


Norman McLeod Rogers: May I correct the hon. member in that regard. I have explained that steps have been taken, but it is necessary to obtain provincial consent to close the cooperative employment offices.


Denton Massey: The minister also said it was the plan of the government that if unemployment insurance became an actuality, it would be administered through these offices. But as a result of delay there has been no change in the employment bureaux from their present position to a position where they could be federally operated.
In conclusion, let me urge once more that the minister not only give consideration to this vitally important phase of the development of his youth training project, namely, adequate employment bureaux, but also bear fully in mind that the work he is at present doing, effective and all as it may be to the degree to which it goes, after all only touches the fringe of the problem, and perforce must be expanded broadly before the whole problem is adequately dealt with.
Motion agreed to and bill read the third time and passed.


LIVE STOCK AND POULTRY
[Stage Direction]
Hon. J. G. GARDINER (Minister of Agriculture) moved the third reading of Bill No. 104, respecting stockyards, live stock and live stock products and hatcheries.
Mr. DAVID SPENCE (Parkdale):: Mr. Speaker, I was one who opposed the third reading of this bill the other night. I am sorry I held up proceedings, but I am not sorry I opposed third reading, because this is another thing which will create a great deal of trouble for the people of this country, particularly those in the business world. I happen to be one who was on the committee, and I see I did not scrutinize this bill as I should have done.
Section 9 reads:
(1)	The governor in council may appoint a commissioner to investigate and report on the marketing of live stock or live stock products.
(2)	For the purposes of such investigation, the commissioner shall have the powers of a commissioner appointed under part I of the Inquiries Act.
Live stock products cover a number of commodities, and this commissioner is to be given considerable power. I was mixed up in one of these inquiries one time myself, and it was not a very nice proposition. Generally speaking, whoever brings on the investigation knows nothing about the matter and no specific charges are made. As soon as a commissioner is appointed there will be an investigation, because somebody has to make some money. Hon. members will remember the investigation that was held in Vancouver into the wholesale jobbing of fruits and vegetables. Something was found wrong in that case because these people had been bringing in cars of fruit to Vancouver and then selling them in Calgary and at other points. They probably were making commissions between Calgary and Regina because they were consigning the fruit to wholesale houses of their own. An investigation was held and heavy penalties were imposed.
I am not complaining about that, but immediately afterwards an agitation was started for an investigation into the wholesale fruit trade. That was a big proposition. I believe at that time the law was that if five or six people, we will say eight people, signed a complaint to the government about any particular trade, an investigation would be held. The commissioner appointed at that time was Louis Duncan, who is well known to many of us. I have no condemnation to make of him personally, but, like any other lawyer, he was out to make the money whenever he had the opportunity.


Ernest Lapointe: Order.


David Spence: He kept the investigation going for the three months. When his report was made there was nothing in it against any of the men in the wholesale fruit trade. The organization with which I worked for years before I went into business for myself had their books tied up for three months and it was impossible to conduct their business properly. The commissioner knew nothing about the trade, and no one connected with the investigation knew anything about it. There
Live Stock and Poultry

was some question about proper returns not being made to the man who had consigned his goods. I remember one instance where a return was made for a certain shipment of blueberries which had been sent in by someone up in the north country. Some of those berries sold for S3 and others sold for only 75 cents, but a return was made showing the exact amount that had been received. Instead of Showing so many baskets sold for so and so, the line of least resistance was taken and only the total amount was shown. Otherwise the man would have written in to find out why one basket had been sold for $3, another for $2, another for SI and another for 75 cents. You could not convince the grower that this was due to the quality of his berries being different. Some of his pickers had picked good baskets of large berries, while others had picked small baskets covered with green stuff.
There was another instance where forty cases of strawberries had been shipped in the morning after a high market. The commission man thought the berries would bring the same price. The day before, berries had been selling for 20 cents, and he told his salesman to ask this price. A few were sold at that price to some of the earlier buyers, from the Queen's hotel at that time and from other places. Then some were sold at 18 cents, others at 16 cents, and the rest at 14 cents The average for the whole sale was 16 cents, The commission man made a return showing so many crates of berries sold at 16 cents, which was the true amount. It was not a case of stealing money or doing anything wrong. If that man had been told the different prices at which his stuff had been sold, he would have wanted to know why some had been sold at 20 and others for smaller amounts. We try to avoid having to answer too many letters.
These investigations are nonsense. They are simply a waste of public money. They are simply a means of giving a job to some fellow and give him an opportunity to make a few extra dollars for doing nothing. There is no doubt that if this commissioner is appointed there will be a job created. He will create one for himself, and put a lot of people to a lot of trouble. There is no necessity for appointing a commissioner in this particular case. I hope the minister will consider this matter and throw out this section 9. I am not complaining about what was done to me at the time. The fact is that nothing was done because they had no opportunity to do anything. I was brought up in the right school, and the firm with
fMr. Spence.]
which I worked was in the same position. But they were persecuted worse than anyone else. This simply shows that you never get the right man in an investigation. You always get the man who is not guilty and the guilty man gets away. So why hold an investigation? Why appoint a commissioner for this purpose?
I am simply drawing attention to what may happen if this appointment is made. I am one of those who went through this bill, and I thought it was a splendid piece of legislation. I notice that penalties are being provided for the cattle commission men. There are always penalties for the men who are selling, but there are never penalties for the men who produce. The primary producer is always the honest man. I am not saying that he is not honest, but somebody else deserves some consideration. The reason why business is so bad to-day is that no one has any confidence in any one.
Motion agreed to and bill read the third time and passed.

The house in committee of supply, Mr. Sanderson in the chair.


MINES AND KESOURCES
[Stage Direction]
Mines and geology branch.
1Z1. Bureau of mines-mineral resources investigations, $424,000.
Charles Grant MacNeil: What kind of work is
carried on under this vote?


Hon. T. A. CRERAR (Minister of Mines and Resources):: This vote is to cover part of the regular work of the mines branch. Laboratory and field investigations are carried on in connection with metals and minerals produced in Canada and as to the uses to which they can be put. This vote also covers the treatment of ores. In many instances, complex ores in connection with which owners of the mines have not been able to work out a process by which to segregate the minerals from the rock, are sent to the department. The ore dressing laboratory carries on experimental work of that kind, and frequently tributes have been paid to it by mining men for the assistance it has given in finding methods of treating complex ores. The vote this year, it will be noted, is the same as that of last year. Personally I know of no more valuable work carried on by the branch than the investigational work done in the treatment of ores, and but for detaining the committee I could give many illustrations of the valuable work it has done.

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Henry Herbert Stevens: I should like to corroborate what the minister has said as to the value of the work done by the ore dressing plant in this particular branch. There is no doubt that it has done excellent work.
I hesitate to delay the committee for more than a few moments, but I feel I ought to bring before it a matter which I think merits consideration. I shall make my remarks as brief as possible and ask the minister to give the matter consideration.
The ore dressing plant does excellent work and its work is, of course, experimental and advisory. If anyone has a complex ore which he wishes to have analysed, he can receive the benefit of the services of the plant, which in this way is making a real contribution to the development of the mining industry.
The particular matter to which I wish to refer is the desirability and advisability of establishing on the Pacific coast a custom smelter which would not only treat the ores that are present in large quantities, such as the copper ores of the Britannia mines, but ultimately serve as a custom smelter for the treatment of other ores from properties which do not of themselves warrant the establishment of a smelter. For the last forty years or thereabouts there has been to my knowledge a great mine within thirty miles of Vancouver which has been shipping ore or its concentrates to Tacoma on the United States side, and in recent years, to a certain degree, to European smelters. It is one of the largest mines on the continent, and I do not think I am exaggerating when I say that it has been perhaps the biggest contributor to the success of the smelter at Tacoma, which is one of the largest of its kind in the world. Yet all that we get out of this mine is the mere picking of the ore out of the ground, with perhaps a certain amount of milling and concentrating.
Canada is a big importer of metals in a refined state; we import very large quantities -I shall not give figures-of copper rods, bars, tubing, plates, wire and all sorts of manufactured or refined copper products which are used in further manufacturing processes. We are one of the big copper producers in the world, not the largest but one of the large producers, and particularly is this true of the Pacific coast. We have magnificent properties, and yet we export our copper chiefly in the form of ore or in the form of concentrates. Now that the smelter at Anyox is shut down, we do not even ship blister copper. We import metals that are double or treble the value of the ores we export, and I suggest to the minister that a
careful investigation be made into the desirability and advisability of establishing on the Pacific coast a smelter and a refinery.
I do not say that it should be a government smelter, but I think the government should bring pressure on some of the big mining companies on the coast so that a cooperative effort might be made to establish a smelter there. It would involve a large investment, and this will not be made unless there is definite leadership and considerable pressure exerted, because the easy thing for them to do to-day is simply to ship the ore to Tacoma.
The great Britannia mines-I am not criticizing that company at all because it has carried on its operations excellently-has its stock largely owned in the United States, and consequently there is a tendency, shall I say, to allow the main profit from the property to accrue to the advantage of the United States.
There is another thought which the house should keep in mind. We boast of being a great mining country, and I believe we are. In recent years the development of gold properties in Ontario and Quebec has absorbed our attention, but we are also a big producer of lead, copper, zinc, nickel and other minerals. But because we do not refine these metals here and merchandize the metal from Canada, we do not get credit in world markets of being what is known as a metal producing country. Our ore goes to the United States, where it is refined; and the United States, the western United States, in this instance, gets full credit for the merchandizing of that metal in the markets of the world. It is looked upon not as Canadian metal but as United States metal. We lose that advantage; obviously our prestige in the markets of the world as a' metal country suffers, and that is another reason why I urge consideration of this matter.
It is my desire to make my remarks very brief. There are one or two other observations I should have liked to make and I could have gone into details to demonstrate my point, but I leave the matter with the minister, simply urging that the establishment of such a smelter would be of great service and encouragement to all the smaller mining properties on the Pacific coast. From Vancouver northward to the Alaskan boundary there are scores of small mines, many of which do not warrant the installation of a smelter for the production of concentrates. But if a custom smelter were established on the coast, many of these smaller mines would be in operation to-day and could ship their product to the smelter for refining.
It is true that in the interior we have the great smelter at Trail, and the basis of that
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smelter is the mine at Kimberley, which produces silver leads. I imagine that 95 per cent of the ore treated in that smelter comes from the company's own mine at Kimberley. In addition, the smelter serves many districts in the interior. But it does not serve, except at tremendous cost, many mines on the coast. There might be some rich concentrates shipped to that smelter for experimental purposes or a very small quantity for commercial treatment, but being situated 350 to 400 miles from the coast, it really does not serve the Pacific coast at all. So I would urge consideration of the establishment of a smelter on the coast, not necessarily by the government, but through its leadership.


Thomas Alexander Crerar: In reply first to the question of, I believe, the hon. member for Vancouver North (Mr. MacNeil), these investigations into the treatment of ores are carried out in the ore-dressing laboratory at Ottawa. Ore is shipped into Ottawa from various parts of Canada for testing and examination to discover methods of treating it properly and economically.
With regard to the point raised by the hon. member for Kootenay East (Mr. Stevens), there is a great deal in what he says, but just what steps a government might take towards the establishment of a smelter on the Pacific coast for the purpose which he indicated is a little difficult to decide. I assume my hon. friend does not suggest that the government should go further than to use its moral suasion.


Henry Herbert Stevens: Give leadership.


Thomas Alexander Crerar: Well, "giving leadership"
is a very broad term.


Henry Herbert Stevens: Surely it is. It gives
plenty of scope for action.


Thomas Alexander Crerar: And if I might add, it is a very much over-worked term.


Henry Herbert Stevens: But I am thinking of
real leadership.


Thomas Alexander Crerar: I agree as to the value of a smelter on the Pacific coast. Certainly the mines department would be willing to give all reasonable encouragement short of digging into the public treasury. I do not see that we could go very much further than that. May I observe that the condition to which my hon. friend refers applies only to the Pacific coast. Canada is a producer of base metals in very large quantities. We 
have the Consolidated Mining and Smelting Company's plant at Trail, producing mainly zinc and lead.


Henry Herbert Stevens: Silver.


Thomas Alexander Crerar: Silver also, but I am speaking now of the base or commercial metals. This mine produces and refines both lead and zinc in marketable shape. Another large base metal producer is the Hudson Bay Mining and Smelting Company's plant at Flin Flon, Manitoba.	They also produce
zinc of very high quality, I think I may say the highest-quality zinc produced in north America, probably in the world. Coming to copper, we have a large copper production at Flin Flon, because the mine I have mentioned is a copper and zinc mine. There is also a very large production of copper at Sudbury and at Noranda. Those are our three main producing copper mines, outside the Britannia mine in British Columbia to which my hon. friend referred. There are refining plants for copper at both Sudbury and Montreal, and in those plants copper is carried to the final point of processing for use in wires or rods or any other form which commerce requires. As regards nickel, Canada is the largest producer in the world, and there is a large nickel refinery at Port Colborne. Therefore the business of carrying our base or commercial metals through to the point where they are usable is very well established throughout Canada with the exception of the Pacific coast.
As to what might be done at the Paciric coast, I can give my hon. friend the assurance now that any persuasive power I have, and I am sure, any persuasive power the government has, would be gladly exercised towards getting a smelter established on the coast. I would, however, make this observation, that if there were the assurance of supplies of these concentrates on the Pacific coast for many years ahead, probably capital might be attracted to the building of a smelter. Beyond that, I would not want to commit myself at the present time.


Henry Herbert Stevens: It must be borne in mind that for the last thirty-five or forty years the Britannia mine has been shipping its ore or concentrates to Tacoma or Europe, and that mine alone would sustain a smelter. There is no question as to the quantity of supply.


Thomas Alexander Crerar: Well, the question which naturally arises in one's mind is why those

Supply-M ines
associated with the Britannia mine have not completed the process by erecting a smelter and completing the treatment of their products.


Henry Herbert Stevens: That is very easy to understand, and in this I am not particularly critical of the management. The mine is owned very largely in the United States; it is a great American concern, and naturally the owners favour the treatment of the ore at Tacoma. That is the answer, so far as I can see; and that is the reason I suggest that the government might call in the officials of the company and talk seriously and earnestly to them about the matter, with a view to inducing them to establish a smelter in this country. I can imagine some form of pressure which I do not wish to discuss here. There is a way in which the government could put a little pressure on the company and get it to see the light, as it were.


Abraham Albert Heaps: I understood the hon. member for Kootenay East to say that some of this ore was shipped to Europe and then returned here. Could he explain, or could the minister explain to the committee, how it comes about that it is cheaper to ship the ore to Europe and pay duty on the finished product returned to us, when the finished product could be made in this country?


Henry Herbert Stevens: I did not say, "shipped to Europe"; I said that they did in recent years ship to Europe, but over a period of thirty or forty years they shipped the ore to Tacoma, where it was smelted and refined. I also said that Canada during all this time has imported very large quantities of copper products.


Abraham Albert Heaps: But if they shipped the ore to Tacoma they would still have to pay duty on the finished product coming from the United States into Canada; and I should like to know how they could afford to ship to Tacoma, when there are in this country smelters which can produce finished goods? How can they ship ore to another country, paying freight to Tacoma, ship back the finished product to Canada, paying the freight on the return journey and the duty as well, and still sell as cheaply as can be done in this country?


Thomas Alexander Crerar: It is probably only within the last four or five years or certainly within the last ten years that copper refining plants have been established in Canada. The same is true in a measure of zinc. The mine in northern Manitoba which I mentioned a moment ago as a producer of zinc has been in operation for only seven or eight years.


Abraham Albert Heaps: They have been producing copper for some years at Trail. Is there not a refinery in process of construction at Trail?


Henry Herbert Stevens: They have a refinery.


Thomas Alexander Crerar: Imports of refined copper
have gone down steadily, because we are now in a position to refine our own copper and produce our own requirements. I would expect this to continue and that our imports of refined copper from other countries will soon disappear entirely, because we are doing this work ourselves. The same is true of zinc, lead and nickel. The only place to which- it is not a criticism-the observations of the hon. member for Kootenay East would apply, is on the Pacific coast.


Henry Herbert Stevens: In 1915, I brought this
question to the attention of the house, and the Prime Minister of that day, Sir Robert Borden, asked me to take it up with Colonel Carnegie, who was associated with the munitions board. This I did. Colonel Carnegie went to British Columbia and looked over the field, and a copper refinery was established. But it was established at Trail. I had wanted it established on the Pacific coast. Colonel Carnegie, however, investigated the interior situation, and a refinery was established at Trail for the refining of copper. For some years they refined copper and produced rods and bars. But the mine at Princeton, the Granby mine, closed down; copper prices fell, and Trail then ceased to operate the refinery. Some of the machinery and equipment may be there still, but they have not carried on the refining of copper at Trail for some time. That, however, is not the point. The point is that Trail cannot serve the Pacific coast, which is 450 miles away, and that is where the heavy production of copper ores takes place. That is where the smelter and refining operations should be located. There was one at Anyox which was based upon the production of low grade copper ore from the property at Alice Arm, but that was closed down. It was operated for something like twenty years, but that is at the extreme northerly end of the province, 500 miles away from the Britannia mines to which I have referred.


Robert Wellington Mayhew: I wish to support the
hon. member for Kootenay East in his request. I do not know of anything that would be of greater benefit to British Columbia than a smelter and refinery. Along the tide-waters of British Columbia there are a large number of small mines which could be reached, and the product could be taken to a smelter where
Supply-Mines

coal mines are operating. The result would be of considerable benefit not only to the larger mines but to the smaller ones as well. I do not know in what way the government could give assistance; for I for one would not encourage them to go into business; they are, in my opinion, already sufficiently in business. Some encouragement should, however, be given to the establishment of a smelter on the Pacific coast, especially seeing that we have coal mines there ready to assist in the work.


Abraham Albert Heaps: I have no objection to the
erection of a smelter on the Pacific coast; in fact, I should be glad if arrangements could be made and an industry established there. At the present time, however, the Britannia mines must be shipping ore somewhere for conversion into copper, and I am wondering whether it is shipped out of the country. Can the minister or the hon. member for Kootenay East inform the committee whether that copper ore is exported and brought back into Canada as a finished product?


Henry Herbert Stevens: Once the ore goes out,
its identity is lost and it enters into the general operations of the smelter at Tacoma, or the one at Swansea, or wherever it is sent. I did not wish to labour this question beyond bringing it to the attention of the minister, but the point is this. If we established a smelter and carried on refining operations at the coast, Canada would get the benefit of the labour operations that enter into the production of the refined metal, and that is the most valuable part of the labour.


Abraham Albert Heaps: But there is the other point to be considered, whether Canada could find an export market for the finished product.


Henry Herbert Stevens: Oh, yes.


Charles Grant MacNeil: To what extent is assistance given to prospectors or small operators under this or any other item? What is the policy of the department in granting assistance?


Thomas Alexander Crerar: The department gives no assistance to prospectors apart from the information supplied through geological surveys, mapping and related work.


David Spence: Here is $424,000 spent on inquiries and so on. Who is getting the benefit of this-the government, or some person who has a mine of some kind? It is well to be frank, because the business world is not getting very much of a show in expenditures of this kind. I have many stocks that do not look honest to me, and if the government is spending money for investiga-[Mr. Mayhew.}
tional work I think they should look into the activities of concerns, with high-salaried executives, in which people have money that is stolen away.


Thomas Alexander Crerar: The benefits that accrue from the work carried on under this vote might be described as indirect. Let me give an illustration. The Flin Flon mine in northern Manitoba, which I mention because I am familiar with the facts, was discovered some twenty or more years ago. It was ascertained, after a few years of exploratory work, that there was there a very large body of ore, copper, zinc and gold, with some silver; but it was found that the ore was difficult to treat. It is what is known as complex ore. Quite obviously, if a mine were to be established there, some method of treatment of the ore would have to be found, and I am well within the mark when I say that considerable assistance was given by the ore-dressing .laboratory in Ottawa. They carried on investigational work for months, and as a result partly of their contribution a method was devised of treating this particular ore. What was the result? In northern Manitoba an important industry was established which, before it turned a wheel, had invested, in milling plant, buildings, machinery, water power development and hydro line, over $30,000,000. To-day this industry gives profitable employment to some 1,700 workers. In that community a town with more than 7,000 inhabitants has been established, and it is known that the mine has a long life ahead of it yet. The point I am making is that the department of the mines branch that carries on the work under this particular vote was able to make a useful contribution-*


Henry Herbert Stevens: Hear, hear.


Thomas Alexander Crerar: -to the establishment of this particular mine.


James Shaver Woodsworth: Who owns the mine?


Thomas Alexander Crerar: The shareholders.


James Shaver Woodsworth: Who are they?


Thomas Alexander Crerar: The shareholders, I understand, are mainly in the United States and Canada.


James Shaver Woodsworth: Chiefly United States capital, I believe.


Thomas Alexander Crerar: Possibly, but a substantial amount in Canada. It was United States capital that initiated the enterprise; I know of no good reason why United States capital should not come into Canada and develop our resources.

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James Shaver Woodsworth: It is simply this,
that a number of people come into Canada, make an investment and get the benefit of this expenditure made by the government. It is United States investors who draw the dividends for the life of the mine, which is considerable. I sometimes wonder how far the government is justified in making this great contribution to those who come in and reap the proceeds.


Thomas Alexander Crerar: My hon. friend, when he makes that statement, is showing only a small part of the picture. The fact is that this mine pays corporation taxes not only to the federal government but to the provincial government on its net earnings, a very substantial contribution. In the second place a considerable number of its employees earning salaries pay income tax both to the province of Manitoba and to the federal government and so add to the public revenue of the country-


Henry Herbert Stevens: And that is only one property out of scores that benefit under this vote.


Thomas Alexander Crerar: Quite so. Third, we have the sales tax. A considerable amount of the $2,750,000 more or less that is paid in wages at the Flin Flon mine contributes to the public revenue through the sales tax. In addition, a market has been established there for a great deal of agricultural produce from other parts of Manitoba, because even radishes or lettuce cannot be grown on muskeg or barren rock. The hon. member's statement carries an implication that is not warranted. It is quite true that United States capital came in to develop this property. To my personal knowledge over a million dollars was spent in exploratory work before the option was taken up by the people in New York who held it. I know whereof I speak when I say that there was grave doubt in the minds of investors from the United States whether they had not made a mistake in putting their money into this property. But I say that if capital comes from the United States, develops a property like this, pays taxes including income tax, and builds up a community which provides a market for many of our products- and we certainly need markets in the prairies for all kinds of agricultural products-it is a good and healthy thing for Canada.


Angus MacInnis: I agree to a large extent with what the minister has said. I believe the government are doing useful work in carrying on these investigations or surveys of our natural resources; it is an important part of the functions of government. But I doubt
whether the government go far enough. After spending much time and money on certain useful social services-that is really what it means, as the minister pointed out, the social value of opening up these mines-they have not gone far enough. One thing that is clear is that when you take a certain amount of ore out of a mine there is that much less ore left in the mine. Some day that mine will be exhausted. In various parts of Canada, particularly British Columbia, we have a number of ghost towns that at one time were prosperous mining communities. Millions of dollars, possibly billions, were taken out of those mines. When the best part of the ore was taken out, the mines were abandoned, and the community that had gathered there were left to shift for themselves.
I believe the time has arrived in Canada when the government should take a greater interest in mining in various parts of Canada. I think the minister said they have ascertained that at Flin Flon there is mineral for a number of years to come. I believe that a certain amount of the profits made in these mines should be set aside as a fund to remove the people who work in that community to some other economic field of endeavour when the mine is exhausted.
When I was in Sweden a few years ago, a somewhat similar project was brought to my attention. A gold mine was opened up within the arctic circle; the capital was provided partly by the government and partly by private interests. A model town was built, and every year a certain part of the profit from the mine is set aside so that when the mine is exhausted the community built up round it can be moved to some other economic area, and the people will not be left stranded and become a charge on the state as in this country when private interests have finished operating a mine and abandon it. Such a provision would be a good thing not only for the people concerned but for the government. I would commend that idea to the minister in connection with this commendable work which is being done in surveying and research to get the greatest social value possible out of the resources of Canada.


[Stage Direction]
Item agreed to.
Bureau of geology and topography.
12S. Bureau of geology and topography administration and miscellaneous services, $144,000.
Mr. ROSS (Moose Jaw):: This item and the two or three immediately following ones cover the geological and topographical surveys. I do not notice any great increases in these items, and I think they should be increased. In parts
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of Alberta and Saskatchewan in the last two or three years a considerable amount of oil has been discovered. In the Turner valley there is now a tremendous production. I commend the government for the work done in these different oil fields; they have discovered and given valuable information to those drilling for oil and gas in western Canada. But my criticism is that now we know that under a substantial area of that country there is oil and gas, we should be sending out more parties for topographical and geographical survey work there.
There is the Delbonita field; then to the north is the Blood Indian reserve field. North of that are the Pekisko hills, and then Turner valley. Then there are Moose Mountain and Two Pines. Just south of Calgary a new structure known as Twin Domes has been found lately. Then north of Moose Mountain are Jumping Pound, Greece Creek and Hunter Valley. Just the other day another field came in about one hundred and thirty miles east of Calgary showing a different class of oil, altogether, one we have been endeavouring to find in western Canada. I refer to an asphalt base oil brought in at Steeseville. Last January a new well came in near Lloydminster, on the boundary between Saskatchewan and Alberta.
This means that first of all there must be topographical survey work done by a party, and that must be followed by geologists. As I understand the situation, in the past two or three years we have had only two parties doing geological work and only two or three topographical parties. It has been determined that there is -a strip of land from the United States boundary, about twenty miles in width, running right through the Liard river, about eight hundred miles north, which is all first-class prospecting country for both oil and gas. If considerable work were done by the department, there is no doubt more structures would be developed there, and a great deal more oil produced in Canada.
I hope the minister has in a supplementary item appropriations sufficient to put more parties in the field. If not, I hope he will take the matter into consideration in another year, and see that we have a considerable increase in both the topographical and geological survey parties, so that this useful work may be carried on for the good of Canada.


Mr. NEILL:: I should like to say a word of commendation to the minister for the work done under this item, and of course I would express the hope that he would do still more. In the district I represent is to

be found the Zeballos area which is probably the richest in all Canada-and I am not sure if it could not be said it is the richest
on the north American continent. I do not think in all Canada there is another area of comparative size in which the same rapid progress and development have been made. There are certainly three and very soon there will be four mills shipping gold constantly. The first one which came in ships something like $150,000 worth of gold every month. That is the shipment, not of a year but of a month. There are two other mills shipping, and another one to be brought in. Inside two years a town of 2,000 people has grown up.
Geological surveyors from the department now under consideration were sent out there in the last four or five years. At first they gave only casual reports on conditions. It was, I suppose, desirable that the government should be cautious, and they did not go too far. But the reports they made were such as to draw the attention of prospectors to the area. Unfortunately, the British Columbia mining branch got off on the wrong foot. Their reports condemned this area, which rather gave it a black-eye. But the reports of the dominion government were always favourable, and those reports have been more than amply justified. It was somewhat due to the reports they got out, the surveys they made and so on, that further exploration took place. It is a hard country to prospect because of the wooded conditions in it and also the steep and rugged mountains.
The people in that area are extremely anxious to have further geological surveys made in- order to extend the field. Of course grounds are staked all round, and further information is wanted. I inquired this year if a geological party were to be sent out, and I was told it was impossible to send one until a further topographical survey had been made. I understand there is a party now on the ground, and I hope that will lead to a geological survey next year.
I am not criticizing or complaining, but I am pointing out that this is a fabulously rich area. We do not hear much about it, but stuff that gives 72 ounces of gold to the ton, at the present price of gold, speaks for itself. It is not one isolated claim. There are scores of them which seem to yield about the same proportion, and an enormous new development will take place in the neighbourhood. The government would be well advised to spend money on these surveys. They say, "Oh, it costs money to do that." But when one mine ships $150,000 worth of gold every month, it shows how well repaid any efforts

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by the government would be. I hope the department will enlarge the sphere of its operations at that point because there is ample scope and ample prospect of success.


George Halsey Perley: I should like to endorse what the hon. member for Moose Jaw (Mr. Ross) has said. I believe the minister would be well advised to spend a little more money in topographical and geological surveys in northern Saskatchewan. The well at Lloyd-minster brought into production last year is plenty of evidence of the oil in the northern part of the province. I should like to impress upon the minister the importance of carrying on this work. Would the minister state how many survey parties will go out this year, particularly in the northern area?


Thomas Alexander Crerar: In respect of what the hon. members for Qu'Appelle and Moose Jaw have said, undoubtedly there is a considerable weight to the point of view they express. The discovery of crude oil in large quantities in the Turner valley within the last three years has stimulated exploration for oil in the western provinces. A year ago we had two parties of oil geologists operating. This year we shall have four parties in the field. Those four parties will operate in Alberta.
One of the difficulties experienced by the department is that of getting the necessary personnel to head the parties studying oil formations in the prairie provinces. It is a comparatively new thing in this country. The matter is under constant study, and the policy of the department is and should continue to be an extension of this service, so far as oil is concerned. I repeat, however, that it is necessary to obtain the services of experienced personnel to head geological parties.
In addition to the four parties studying oil structures, we shall have several topographical parties doing mapping work, and collating the related information so as to enable a better study to be made with respect to oil structures in Saskatchewan and Alberta. It is now known from superficial examination that there is probably a very considerable number of oil structures in each of these provinces. The information given by the hon. member for Moose Jaw in connection with recent discoveries in Alberta bears out that statement. I would say that the prospects for the discovery of large fields of crude oil in western Canada are certainly encouraging. I think I am within the mark when I say that in its present dimensions the Turner valley field is the largest crude oil field in the whole British empire by a considerable margin. Of course when one examines the possibilities of this field he must consider the possibility of obtaining markets. This is being studied at the present time by the Alberta government. If markets are to be found, ordinary methods of transporting crude oil will have to be developed. When we consider that this field is only of comparatively recent origin, we must admit that considerable progress has been made. I have no doubt that the resourcefulness of those associated in the development of this field, together with the sympathetic interest of the Alberta, Saskatchewan and federal governments, will make substantial progress in this direction before a great period of time has lapsed.


Mr. NEEDHAM:: Did I understand the
minister to say that four geologists were going out to Alberta this summer?


Thomas Alexander Crerar: Four parties.


Joseph Needham: A great development
is proceeding in the northwest part of Saskatchewan where an abundance of gas has been discovered at Lloydminster. Last fall there was a considerable crude oil development about twelve miles west of Unity by the Unity Valley Oil Company. I understand that six contracts have been let for development work this spring. I do not want the minister to overlook this territory, because we expect it to outclass even the Turner Valley in the not far distant future.


Thomas Alexander Crerar: The question of funds is
perhaps not an important matter at the moment, although it is important in the final analysis. The main difficulty is in getting experienced personnel to head the geological parties, especially those carrying on oil examinations. That is something which, before very long, will be overcome. So far as Saskatchewan is concerned, I am advised that reconnaissance work is being carried on by the department. This is in the form of general examination of structures to gain a lead as to where geological examinations might be more intensively carried on. I think we should keep in mind that this development is only of comparatively recent origin. It is about in the same position to-day as our general mineral development was twenty years ago.


Mr. MANION:: This is a vote that I want to support. Geological surveys and other similar work by the mines branch seem to me well worth while. I am referring not only to this government but to all governments in the past. We must not forget that had it not been for our tremendous mineral pro-
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duction during the past few years it is doubtful if we would have been able to pay our external debt. The total vote for the mines branch is $4,949,000, which includes an item of $3,500,000 for subsidies on coal. This leaves about $1,500,000 to be spent on the mines and geology branch. According to the Canadian Almanac, the 1935 mining production was valued at $429,000,000. I believe I am right when I say there is no other department of the government that spends so little for such a huge production. I do not mean to suggest that this department is wholly responsible for this tremendous production, but it has played its part in research work, geographical and topographical surveys and so forth.
A moment ago the minister referred to the Turner valley oil fields. This field may well become one of the great discoveries of Canada. As long as I can remember we have been hunting oil in this country, but we never found any large quantity until the Turner valley field was opened up. Not long ago an English capitalist whom I know was in this country. He told me he had gone out to Turner valley with Bob Brown of Calgary and his son, and had decided to put into one development $81,000 of his own money. He spoke most optimistically of the chances of a pipe line being constructed from the Turner valley to the coast. If that field develops as we hope it will, there is no doubt that a pipe line will have to be built to the coast, and possibly another one to the prairies or to the head of the lakes. The British government would be quite happy co have supplies of oil on the Pacific coast, and the United States government perhaps would appreciate having extra supplies there. The question of research was mentioned a few moments ago. The item covering this particular work has been passed, but it is only by research that we can hope to make any advance, whether in mining, manufacturing, agriculture or any other industry. As the matter was being discussed, I thought of the International Nickel Company. I cannot give the exact date, but I do not think it is far back of the beginning of this century when these great nickel deposits were lying idle. Yet to-day we produce 90 per cent of the nickel of the world. It was only by research that a method was discovered to utilize this nickel. Because of this research we have to-day one of the great developments of Canada. I have heard members of this house refer to the fact that Americans put money into this country and are taking out large dividends. As the minister pointed out, while some dividends do go out of

Canada, United States money has been risked. Huge sums are paid out in wages and for the purchase of supplies. I have forgotten the exact figure, but I believe about 80 per cent of the value of production remains in Canada despite all the dividends that are paid. This money is paid out in wages, salaries, and the purchase of supplies in this country. The fact that United States money comes into Canada to develop the country is only to the good so far as we are concerned. It only means that whoever discovered the property was unable to get Canadians to gamble on its development. I rose merely to say that in a general way I think we should give every encouragement to our mineral development.
I quite agree that the exhaustion of a mine leads to a ghost town such as the hon. member spoke of, but that cannot be helped; for as you clean out the property, the town cannot carry on. I think every encouragement within reason should be given to the mining industry of Canada to continue to produce. The only industry that surpasses it in production is agriculture, which includes wheat growing and all other branches. Forestry, for example, is $100,000,000 below mining production for 1935. On fisheries we spent $2,000,000 more than we spent on mining, if you leave out the coal subsidies, and in 1935 it produced $35,000,000 of products, or about 10 per cent of our mining production. I wanted to say a few words on behalf of the mining industry, which is such a great asset to the section of the country from whence I come, as well as to northern Ontario, Manitoba, Quebec, British Columbia and some other parts of Canada. I believe this house can do nothing better, generally speaking, than to encourage the expenditure of reasonable amounts of money on different branches of research and geological surveys to encourage the production of mineral wealth from the bowels of the earth.


John Charles Landeryou: The hon. member for Moose Jaw suggested that the government make more intensive surveys of the oil structures in Alberta with a view to increasing our oil supply. While I am in favour of that, I would point out that our oil production has already increased to such an extent that we are unable now to find a market for it, and the efforts of the government should be directed more towards the development of markets than to further production, unless the government is prepared to extend pipe line facilities to the oil producers of Alberta. I would ask the minister how much money has been spent in the last three years, compared

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with what is to be spent this year on surveys of the oil areas of Alberta.


Thomas Alexander Crerar: It is difficult to carry and have available at a moment's notice all the details of expenditure on every one of these items. I have not the information before me, but I can have it supplied to the hon. member if that is satisfactory.


Mr. LANDER  YOU@: The minister can perhaps let me have it later. I believe, Mr. Chairman, that encouragement should be given to Canadian industry and to the investment of Canadian capital in Canadian industry. I know that foreign capital investment in this dominion benefits us to a certain extent, but too much foreign capital invested in a country is not to its best interests. I believe that plenty of capital is available in Canada and that we should give every encouragement to Canadian capital to develop the production of goods from Canadian resources. The government have stated that they are anxious to do something for the oil industry in Alberta. Just what assistance has the federal government given to the oil industry of Alberta during the last three or four years? Have they done anything to assist the oil industry in extending markets, and, if so, just what steps have been taken in that direction?


Thomas Alexander Crerar: So far as extending markets is concerned, to use the expression of the hon. member, the department has not entered that field. Its work has been confined to gathering all available data concerning the geology of Alberta so far as the means at its disposal would permit, and in gathering information regarding the geology of other parts of the country, which information later on has led to mining development. That, together with proper mapping and making the data available, has constituted in the past the work of the department in this respect, and it has not gone beyond that to find markets. That has been left to private enterprise, and private enterprise up to the present has been on the whole pretty successful in achieving that objective.


John Charles Landeryou: I do not think the
government has assisted the oil industry of Alberta to as great an extent as it could have done. I believe that more could be done if there were proper cooperation between the federal government, the department of lands and mines of Alberta, and the oil industry.


Thomas Alexander Crerar: In what way, for instance?


John Charles Landeryou: In dealing with the
importation of oil from Montana and other
foreign oil-producing fields. Surely steps can be taken to make available to the oil producers of Alberta, markets in the adjoining provinces, if not the servicing of British ships on the Pacific coast, and extending a pipe line as far east as the great lakes, so that Alberta oil can be made available to consumers in eastern Canada. Would the minister indicate the degree of cooperation there has been between the federal government and the department of mines and resources of Alberta. Has there been any cooperation?


John Gordon Ross: The hon. member asked what amount of money had been spent in Alberta in the last year. Only a few field parties were out there, and $17,500 was spent on these parties last year. But the hon. member must remember that the natural resources belong to the provinces, and for any work the dominion government do in that direction they should be commended. They have made available to us perhaps the best geologist on the north American continent, and he has done exceedingly valuable work. His work has been followed by those who have had money to invest in drilling wells and endeavouring to find oil. His work has been carried to the point where there is enough known about the Turner valley to-day to enable a pipe line to be put through to the coast. Credit for that should go to this dominion government and former dominion governments for supplying the men they had in the field doing that work. The reason why I spoke in the first place was that with the tremendous oil area there is, with its possibilities of oil and gas, if we continued with just the few parties we have had up to date it would take from thirty-five to forty years to cover the territory, and I was glad to hear the minister say that more parties will be put in the field. The dominion government and the federal Department of Mines and Resources deserve every credit for what they have done. They have shown the way and have done most valuable work in connection with Turner valley and other fields, in order that money might be invested and further discoveries made. As a matter of fact, the work of the geologists has been so good that they have been able to call within a few feet where oil might be found six or seven thousand feet below ground. All this work was done by the dominion government.


Mr. BLACKMORE:: No, you are wrong
a mile.


John Gordon Ross: All the exploratory work was done by the dominion government. Alberta and Saskatchewan have done
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very little, although they are doing what they can. But they have not men of the calibre of the officials the dominion government has in that field; nor can they get them; and I believe we should give all credit to the minister and his department for what they have done.


John Horne Blackmore: Let us hear you name the men.


John Gordon Ross: Doctor Hume.
There is no better geologist in this or any other country.


John Horne Blackmore: Let us hear some more.


Thomas Langton Church: Under the agreement the natural resources revenues belong to the province. I understand that the minister was at the last meeting of the council of mining and metallurgy. Has he received any requests with reference to this item, the bureau of geology and topography, from the mining departments of the universities or from the national council of mining and metallurgy?
The government of Canada is spending a great deal of money on roads and on other agencies, and providing health service and tax relief benefits for the mines of this country. It appears in the minister's own annual report, page 10, that the receipts of the bureau of geology were only $8,465.75; and the total expenditures during the year for the purposes of that bureau are shown at $850,269.94. In the large universities of Canada at the present time, owing to the rapid development of our mines, there is a great increase in the number of students of mining. They go through the course of training in the fall and in the spring; and in the summer months it should be the function and the duty of the department to utilize the services of these students to develop the natural resources of the country, in relation not only to geology but to all branches of mining. That is what Germany has been doing for the last twenty years. In this respect we are marking time and standing still. I have read the reports for the past ten years. Here are a few lines from the last one:
The value of production from Canadian mines in 1937 reached a new record of $457,359,092, an increase of 26 per cent over the previous peak year, 1936. This production was made up as follows: metals, $334,165,243, an increase of 29 per cent, fuels, $65,828,879, an increase of 9-7 per cent, other non-metallics, $22,495,271, an increase of 34 per cent, and clay products and structural materials $34,869,699, an increase of 34 per cent.
In the light of these developments the minister will agree, I think, that students in our universities are selecting the right course. 
Their preference used to be for electrical and mechanical engineering and other departments of science, but now mining is at the top. Has the minister received any recommendation from the council of mining and metallurgy favouring a national forward policy of development in view of what could be done in the mining industry for the people of Canada? I think the department has a duty in this regard. I know that those who go to the department from the universities find it hard to get anything done for them in the summer time. It seems to me that, instead of these appointments being handed over for distribution by the professors in charge of these universities to their bright students, they are handed out on the recommendation of government members. I do not care to say that this statement is wholly correct, but I have found it to be so on three or four occasions in my own experience. I do not say that the department is idle; far from it, it has made a great deal of progress; but I plead with the minister, as I have pleaded for the past ten years, that we should take a leaf out of the book of Germany, go to work and develop the natural resources of this country. Reference has been made to twenty-six metals and to the progress which has been made in mining. It seems to me that the department is too top-heavy in the city of Ottawa. Look at the details of this item on page 103 of the estimates; it is nearly all headquarters-brigadier generals, generals, ordinary captains, lieutenant-colonels and all these dignitaries at the top of the department, leaving the privates in the field to go out and make surveys, develop the country and find out what is going on, with their salaries making up a comparatively small part of the item.
I have been reading the annual report of the university of Toronto, which is one of the leaders in this particular department of science. Some of their brightest students are in the mining school of the university. Before the war Germany utilized in practical work all of its students; so did the Czechs. The result was that their countries became among the most highly industrialized in the world, whereas we are spending in this branch of the administration only $144,000, a thousand dollars less than last year. The same tendency is to be noted year after year; we sit here and pass this item, and I can see no forward policy to deal with what might be done from coast to coast to develop the activities of the department and utilize the services of these capable students. The mining school of the university of Toronto is, I believe, the largest in the history of the university. There are chances for these young men if they will go

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out and do hard work throughout the country, and they are doing it every year. Some of the members of the varsity football team are now going north to get some practical experience in the mines; and if the department would employ also some of the high school students in the summer, it would be doing a good service. In Germany they take care, in the branches I have named, not only of university students but of high school students, and in that way they have contributed to make their country one of the world's great industrial states. I think the minister should inform us if he has received suggestions along this line,, and what is being done about it.


John Charles Landeryou: I do not want to
detract from any credit which is due to the federal government for what they have done for the development of the oil industry in Alberta. But may I point out that it was not until October, 1930, that the province gained administrative control over its natural resources. It was in 1914 that the first oil developments took place in Alberta.


Thomas Alexander Crerar: Not oil.


John Charles Landeryou: Well, speculation in oil. There was great gambling in oil leases, oil shares and that sort of thing-possibly some of them were sold as far away as Vancouver-and I conclude that this was the only thing which developed from whatever contribution the federal government made to the oil industry in Alberta. We cannot give this government credit for developing Alberta's oil industry, because all the development which has taken place there has been since the natural resources were turned over to the province. How the hon. member for Moose Jaw can claim credit for this government for the development of the oil industry, I do not know. Its development has now proceeded to such an extent that we have sufficient proof of the oil structure: something should be done in the way of extending the markets rather than in making more extensive surveys. I should like to know from the minister what cooperation has been given by his department to the department of lands and mines of Alberta in the development of the oil industry-


Thomas Alexander Crerar: I shall endeavour first to answer the hon. member for Calgary East; then I shall address a few remarks to the hon. member for Broadview.


An hon. MEMBER:: Do not waste any
time on him.


Thomas Alexander Crerar: The hon. member for Calgary East has rather an active imagination this evening.


John Ritchie MacNicol: We have plenty of evidence of that.


Thomas Alexander Crerar: He criticized the Department of Mines and Resources for not doing something, or for not doing more, about finding markets. Practically everything that has been done in the study of oil structures in Alberta has been done by the federal government-either this or preceding administrations. It is true the university of Alberta has on its staff a gentleman who has given a good deal of study, although, I believe, more or less incidental study, to oil structures in that province, and with quite useful results, but the main work has been done by the federal department. I would point out further that we get no revenues federally from the production of oil in Alberta apart from the revenue we may receive indirectly from corporation profits tax, or sales tax and the like.


John Charles Landeryou: Or income tax.


John Horne Blackmore: Or the tariff.


Thomas Alexander Crerar: The royalties on the oil go to the province, and properly so. I suggest, therefore, that some responsibility rests upon the province of Alberta for finding markets. We are cooperating in every reasonable way we can. At present, as is generally known, there is a small delegation in Great Britain taking up the matter of interesting British capital in the furthering of development. They have in mind the possibility of a pipe line to Vancouver, which was referred to by the leader of the opposition. We have given every assistance we can in supplying data and information. More than that, at the request of the minister of lands and mines of Alberta, the Hon. Mr. Tanner, we sent over to that delegation, at our own expense, Doctor Hume, who has been studying oil structures in the Turner valley, so that there would be available to the delegation any technical information which he might be able to supply with regard to the geology of the area and its possibilities.
The hon. gentleman apparently lays the whole responsibility on the federal government for finding markets. In this contention he is really going a little too far. If we controlled the resources and obtained the royalties on production, we might perhaps in a way be fairly criticized along the line of the hon. gentleman's observations to-night; but I
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am confident that the industry itself, if it gets the sympathetic support of governments-I do not necessarily mean financial support-will be able to solve the problem of markets within a comparatively few years. After all, I repeat what I stated a short time ago. This development has taken place only within the last few years. If any one had said five years ago that there was a potential field in the Turner valley capable of producing several hundred million barrels of crude oil, he would probably have been laughed at.
The additional information that has been made available through drilling and the study of the structure as revealed in the cores that come from the drilling, has enlarged the area of the available data, so that experienced oil geologists, the best on the American continent, as the hon. member for Moose Jaw has said, have been able with a good deal of certainty to estimate the potential production of the Turner valley. This has happened only in the last year, as a matter of fact. This information is all available. It was not available two years ago, and on the basis of this information I have no doubt that capital can be interested to develop the pipe lines, which appear to be one of the chief necessities in getting this product on the market.
So far as the hon. member for Broadview is concerned, he has not been fully alive to what _ is being done in the department. He criticizes the department because it does not employ university students. As a matter of fact the parties that are sent out by the federal Department of Mines and Resources to do geological work in the field are composed mainly of university students, who are taking courses in mining engineering and geology, and I think I am within the mark when I say that this very year about 150 students from the universities of Canada will find places on these field parties. Why are we doing this? We wish to give all the encouragement we can to the young men in our universities who are specializing in geology or in mining and engineering. It is worth something to young men who are taking these courses to have the opportunity of going into the field under experienced chiefs of parties and doing the actual field work under their direction.
Let me say to my hon. friend that his suggestion is not a new one. It has been followed by the department for a number of years, and it is producing results that are useful not only to the department but, as well, to those students who are getting practical experience in the work that they
[Mr. Crerar.3
have chosen for their future careers. I should like to see more money spent in enlarging our fund of information on the geology of Canada. After all, Canada is a vast country. We do know enough now, however, to be certain of the fact that over immense areas we may reasonably expect to find not only precious minerals but base or commercial minerals as well; and while the hon. gentleman criticizes the expenditure at headquarters, as he puts it, and points to the revenue that is obtained, I would suggest to him, what I suggested to the hon. member for Winnipeg North, that while we do not get results directly in dollars and cents from this expenditure, we do indirectly benefit greatly. For instance, gold production in Canada has increased greatly. In 1935 it was about 8118,000,000; the next year, over $131,000,000; the next year, over $143,000,000.
In 1938 the total gold production in Canada was $168,000,000; and I venture the prediction to-night that in 1939 it will probably be $185,000,000. What does that mean? It means that all these companies engaged in all this development, are making their contributions to the national revenue through the taxes levied on their profits, and through the sales tax not only on the large amount of materials and supplies that they require but through the wages paid to their employees. In addition, many individuals are paying income tax to the federal and provincial governments as a result of this development. In these ways, while we do not directly get dollars back for the expenditures we are voting here to-night, we get them back indirectly. I doubt if there is anything today that has fertilized public revenue in this country more effectively than the mining development that has taken place from one end of Canada to the other. I am sure that the vote we are discussing is a very necessary expenditure if that development is going to continue.


Thomas Langton Church: I did say that the department is doing good work. Could the minister give the division of the two hundred students among the universities?


Thomas Alexander Crerar: I have not that information here, but I can tell my hon. friend that those students are certified by the civil service commission on the reports received.


Thomas Langton Church: Who selects the students?


Thomas Alexander Crerar: Students in the third and fourth years in mining engineering and

Royal Visit
geology are eligible to come into these parties. They apply, and the civil service commission rates them on the standing given by the professors in the universities. That method is working out very well. It is an incentive to the students in their student work because they realize the value of the practical knowledge that they gain through the field work. I should like to see it enlarged.


Alan Webster Neill: The minister was kind enough to nod his approval when I was speaking about the Zeballos area, but that does not show in Hansard. Would he mind saying a few words of encouragement to us, as to his intentions in going on with the work?


Thomas Alexander Crerar: Being a minister charged with ministerial responsibility, I might hesitate to be quite as enthusiastic as my hon. friend about the Zeballos area, but I can say that to-day it is one of the most promising areas in Canada. An old mine manager with many years' experience said to me a few years ago that it takes several years to make a mine. He said: "You may get your surface showings, and they may go down a few hundred feet, but I want to know what is down 2,000, 3,000, 4,000, 5,000 feet." So far as our information goes, this is a promising area, and if its present prospects hold I may say to the hon. member for Comox-Alberni I do not think he has over-stated its possibilities; but I would hesitate to predict just what the future of this area may be, because we have not yet the complete evidence of the depth to which gold bearing veins go. But the information we have points to the correctness of the statement made by the hon. member.


John Charles Landeryou: May I point out to the hon. member for Moose Jaw that there was no development of the Turner valley oil field or of any oil structure in Alberta while control of the natural resources was in the hands of the federal administration. There was, as I pointed out, a little gambling in oil leases and shares, but no real development of the oil structures prior to the return of the resources to the province. May I also point out that the greatest development has taken place since the province has been blessed with a Social Credit government. In giving the federal government credit for the Alberta oil developments, the hon. member for Moose Jaw surprises me, particularly after the minister telling us that because the federal government secures no direct revenue from the oil produced in Alberta he feels no concern about marketing that oil, which, he says, is a purely provincial matter. I would remind the hon. member as well as the minister that
in 1935 we heard a great deal about marketing. The Liberals not only were going to reform the monetary system but were going to extend Canadian markets.


Mr. HOWARD:: And we have.


John Charles Landeryou: But the development of markets for Alberta oil is as important to western Canada as the development of markets for the products of eastern Canada, and the fact that the federal government does not receive any direct revenue from the oil production is no reason why this government should not do everything in its power to extend the markets for Alberta oil.


[Stage Direction]
Item agreed to.
Thomas Alexander Crerar: I understand there is some arrangement to close to-night at ten o'clock. I therefore move that the committee rise, report progress and ask leave to sit again.
Progress reported.



BUSINESS OF THE HOUSE

Ernest Lapointe: That when this house adjourns this day it stand adjourned until to-morrow at two-thirty o'clock in the afternoon.
He said: His Majesty the King will be in the senate chamber at three o'clock.


[Stage Direction]
Motion agreed to.


Ernest Lapointe: I have been asked to give information to members of the house about the arrangements for Saturday. Inquiries have been made as to the facilities for members of parliament to get from the ceremony of the trooping of the colour to the site of the supreme court building for the ceremony there. It has been learned from the acting commissioner of the Royal Canadian Mounted Police that members of parliament who are in the reserved enclosures on the driveway near the centre gate will have no difficulty in proceeding, after the departure of His Majesty and of the Prime Minister, through the centre gate and west along Wellington street to the supreme court building.
However, it will not be possible to arrange any special facilities for members who prefer to witness the trooping of the colour from the windows of the centre block. The police
The Royal Assent

anticipate such large crowds that the task of making any special passage through the crowd would be an insuperable additional burden to their ordinary police duties. Members of parliament are therefore urged, if they desire to be present at both ceremonies, to make use of the reserved enclosures near the centre gate for the purpose of viewing the trooping of the colour. Then they will have no difficulty in proceeding to the supreme court building.
On motion of Mr. Lapointe (Quebec East), the house adjourned at 10.04 p.m., until Friday, May 19, at 2.30 p.m.
Friday, May 19, 1939