[Stage Direction]
Second report of the standing committee on railways, canals and telegraph lines.-Mr. Ross (Moose Jaw).

Right Hon. W. L. MACKENZIE KING (Prime Minister) moved:: That the name of Mr. Ross (Calgary East) be substituted for that of Mr. Mcllraith on the standing committee on banking and commerce.


[Stage Direction]
Motion agreed to.


Hon. J. G. GARDINER (Minister of National War Services):: Mr. Speaker, I desire to place on the table of the house a copy of the regulations having to do with national registration.
With the permission of hop. members I should like to make a short statement. First I would call the attention of the house to the fact that, as stated on an earlier occasion, it is our objective to have the registration completed by the end of August. In order to have that done it is necessary that we proceed as rapidly as possible with the preparation of regulations, and the instructions to go with them.
I should like to thank lion, members for having acted so expeditiously in connection with the selection of registrars and assistant registrars for the different constituencies. I believe at the present time returns from only five constituencies are missing, and by this evening we hope to have those five. This afternoon, along with the regulations, I shall place on the table of the house a list of all registrars and assistant registrars in the different constituencies, with the exception of the five already mentioned, concerning which we have not yet received recommendations.
The regulations have been prepared as hurriedly and at the same time as carefully as possible. There may be some slight mistakes which later on we shall have to correct, and those concerned will be notified accordingly should any correction be necessary.
There is one particular matter which, because of the attention it has received in the public press, I should like to cal! to the notice of

National Registration
hon. members. I refer to the definition of a "single man". A single man is a person who was unmarried on July 15, 1940. I am afraid that some people have attached more importance to that than is warranted by the regulations. All that it could possibly mean in these regulations is that a man is considered single in this registration. When lists are required for the first call for training he will be reported to the militia department as single. It will be found in a subsequent regulation that after a little time has expired each man who has married will have to report within thirty days and he will then be listed in our records as a married person. There had to be some definition of single man for the purposes of the registration. Any order that is made as to the date for calling up will be made by the Department of National Defence rather than under these regulations.
I think this is all that it is necessary for me to say at the moment. Should obvious mistakes be found I would consider it a favour if hon. members would call my attention to them so that we may have them rectified as soon as possible.


Hon. R. B. HANSON (Leader of the Opposition):: I had intended to ask the
Minister of National War Services (Mr. Gardiner) when the regulations under the act would be completed and laid on the table, but I understand from the statement which he has just made that that has been done. I had thought at first that what he was tabling referred to the copy of a letter which we received from the office of the chief registrar, dated July 15, and which enclosed a list of the registrars and deputy registrars.


James Garfield Gardiner: I notice that the forms have just been distributed. Probably it would have been better to place them in the post office boxes. I am tabling the complete regulations, the order in council under which they were passed, and the list of appointees.


Richard Burpee Hanson: So far we have not been supplied with those?


James Garfield Gardiner: For the registration only, not having to do with the calling up of men.


Richard Burpee Hanson: I had intended to ask the minister to clarify his statement of Friday last with respect to unmarried men. The explanation he has just given is quite clear; we understand that this regulation regarding age applies only to the registration.
I should like to call the attention of the minister to the fact that the public press has
contained considerable in the way of interviews, either with the minister or with one of the national defence ministers, containing more information with respect to these matters than we have had so far in the House of Commons. I hold in my hand a press release which appeared in one of the eastern Canadian papers and which contains a wealth of information which, it seems to me, should have been given in the house. I have no doubt the department is proceeding with the work, but having regard to the principle involved I do suggest that this information be given in parliament before it is given to the public press.


James Garfield Gardiner: The only suggestion I would make, having reference to the registration, is that if we are going to be able to complete it in the necessary time it may be that some information will have to go to the public before it is given to the house. However, we shall see to it that everything that does go to the public is put in the hands of members just as soon as we can get it there. Time is of the essence of this operation. If it were necessary to hold some action over from Friday night until Monday it might mean a delay of two or three days in getting the job done. I hope hon. members of the house will bear with us if at times we do hand out some information to the public in order that the public may be acquainted with what is going on and help to speed up the operation as much as possible.


Hon. GROTE STIRLING (Yale):: I understood the minister to say that we had been given copies of the regulations, but it appears that all we have received is a copy of the letter of July 15.


James Garfield Gardiner: If the hon. member has not received them among the forms distributed, they have been tabled, and hon. members will have them this afternoon.


Mr. A. W. NEILL (Comox-Albemi):: The minister says that he has laid on the table of the house a copy of the regulations. That is true-one copy; but that will not suffice for all the members of the house. It will be weeks before we shall all be able to see that one copy.


James Garfield Gardiner: I indicated to the leader of the opposition a moment ago that copies of the regulations would be placed in the mail boxes of all hon. members before to-night,


Alan Webster Neill: Thank you.
1596

Rules of the House-Procedure



RULES OF THE HOUSE


Mr. SPEAKER:: The Prime Minister (Mr. Mackenzie King) on Friday last requested that I should give an opinion for the guidance of the house on the practice of questions asked before the orders of the day are called. As I stated on Friday, I had already been considering this matter and as a matter of fact I had discussed the desirability of drawing the attention of the house to the standing orders governing such procedure. In dealing with questions of procedure in this house one must necessarily take into account the historical records and background from which, and upon which, our standing orders were framed, but I do not think it necessary at this time and on this subject to go beyond our own Canadian practice and experience. In this connection I must consider parliamentary usages and customs which have not the force of standing orders but which nevertheless are part and parcel of our parliamentary practice. Standing order 44 contains the provisions relating to questions. Its terms are clear and definite. It reads:
(1)	Questions may be placed on the order paper seeking information from the ministers of the crown relating to public affairs; and from other members relating to any bill, motion, or other public matter connected with the business of the house, in which such members may be concerned; but in putting any such question or in replying to the same no argument or opinion is to be offered, nor any facts stated, except so far as may be necessary to explain the same. And in answering any such question the matter to which the same refers shall not be debated.
(2)	(a) Any member who requires an oral answer to his question may distinguish it by an asterisk.
(b) If a member does not distinguish his question by an asterisk, the minister to whom the question is addressed hands the answer to the Clerk of the House who causes it to be printed in the official reports of the debates.
I shall not read paragraph 3, as it does not bear upon the subject I am now discussing. If the standing order was strictly interpreted, it is obvious that a very large proportion of the oral questions asked before orders of the day are called would be out of order. In fact, members have not exercised sufficiently their rights under standing order 44, but have too frequently endeavoured to seek information on the orders of the day being called. And these supposedly oral questions are now developing into lengthy prepared statements, which is quite irregular. This standing order fMr. Neill.]
44 must be read in conjunction with standing order 45, which provides for 48 hours notice to place a question on the order paper.
But I refer the house to Beauchesne's Par-liamentay Rules and Forms (second edition), page 55, where will be found a quotation from Bourinot, which reads as follows:
191. When the orders of the day are called by the Speaker and before they are read by the Clerk Assistant, it is the practice sanctioned by usage but not by any positive rule, for members to make personal explanations or ask questions of the government, in reference to an inaccurate report of their speeches in the official records, or in the newspapers; or in denial of certain charges made against them in the public prints; or in reference to certain remarks which had been misunderstood on a previous occasion, and which they had not before had an opportunity of explaining; or in respect to delay in obtaining returns or to the incompleteness of certain returns brought down under the order of the house; or relative to the state of public business, or other matters of public interest. But these remarks should be brief as they are only tolerated, there being no question before the chair when they are made, and no discussion should be allowed when a minister has replied to a question nor after a member has made his personal explanation. In asking a question, a member must not attack the conduct of the government. If a member wishes to make personal explanations in reference to remarks which have fallen from another member, the latter ought to be in his place.
There is one debatable sentence in that section, the one referring to questions "relative to the state of public business or other matters of public interest."
While I say it is debatable, the words in themselves are, I think, clear but it will sometimes be difficult for the chair to decide what is a "matter of public interest" and sufficiently so, to justify a question. But I would call hon. members' attention to the well known Canadian practice as formulated at page 57 of Beauchesne's Parliamentary Rules and Forms, second edition, which states "a question which could be inserted on the order paper is not allowed on the orders of the day being called". That rule has been departed from during this session, but if it were observed more strictly many of the oral questions would be unnecessary.
I do not refer to the discussion of definite matters of urgent public importance which is provided for under standing order 31 and which is always within the rights of hon. members and may be exercised subject to the provisions of that order.
To sum up: There is only one standing order governing questions seeking information

Questions
from ministers of the crown. It is standing order 44, which provides that such questions may be marked with an asterisk if oral answers are required. Forty-eight hours' notice must be given of these questions, which must be laid on the table of the house before six o'clock and printed in the Votes and Proceedings. On the orders of the day being called, members may ask ministers to explain certain matters in accordance with the practice expounded by Bourinot and sanctioned by usage. It is not done under the authority of a standing order, and therefore such questions may be either permitted or disallowed by the Speaker, who must judge each case on its merits. The practice has been followed so long and so regularly in this house that, if not impossible, in my opinion it would be inadvisable to stop it. Yet, having said that, I am of the opinion that the practice has been used more freely this year than in other sessions, probably owing to the members' anxiety about the war situation. It seems to me manifestly unfair to compel ministers to answer questions on important matters without an opportunity of consulting their chief officers; and it would be arbitrary to deprive private members of the privilege of putting certain questions of immediate urgency on the orders of the day being called. The principle on which the practice has been tolerated in past years should be respected, that is, the reading of long series of questions elaborately prepared is not to be allowed on the orders of the day being called.
Hon. members must confine themselves to the questions they desire to put. They may not enter into an argument upon asking a question. They cannot add any remarks upon it after a question has been answered. A question the answer to which involves an expression of opinion cannot be put.
A member in putting a question cannot state an opinion, and he must confine his observations to those which are absolutely necessary to make the question intelligible.
A certain latitude will be given in war time, but no question leading to a discussion or seeking information as to the policy of the government or its future intentions is permissible from the floor of the house; it must be asked in accordance with standing order 44.



QUESTIONS

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

Mr. HATFIELD:: 1.	How many bushels of American potatoes entered Canada free of duty during 1939, and on how many bushels was duty paid?
2.	How many pounds of Canadian lard were exported to Great Britain during 1936, 1937, 1938 and 1939, and what was the average price per pound in the respective years stated?


Mr. MacKINNON (Edmonton West):: 1.	Potatoes, seed:
Free	 31,125	bushels
Dutiable	 nil
Potatoes, other than seed:
Free	
958,937	bushelsDutiable	
98,185	bushels2.	Exports of Canadian lard to United Kingdom, calendar years 1936 to 1939:Calendar year	Pounds	Value1936	.. 29,099,400	$3,389,7591937	.. 29,639,300	3,707,5181938	.. 16,605,600	1,632,5711939	.. 7,160,400	519,796



MUNITIONS AND SUPPLY-METROPOLITAN ELECTRIC COMPANY CONTRACT

Mr. ROY:: 1.	Who signed the tender with respect to the $90,000 contract awarded to the Metropolitan Electric Company, of Quebec?
2.	Who signed the contract on behalf of the said company, and when?
3.	Were tenders received, and, if so, from whom, and at what price?


Mr. HOWE:: 1.	L. W. Mercier.
2.	O. J. Holder, June 22nd, 1940.
3.	No.



DOMINION-PROVINCIAL RELATIONS COMMISSION -PERSONNEL AND COST

Mr. HAZEN:: 1.	What is the total cost, including printing, of the royal commission on dominion-provincial relations to date?
2.	What were the names of the counsel to the said commission, and how much were they paid?
3.	What were the names of the commissioners, how much were they paid in salary, and how much for expenses ?
4.	What other expenses were incurred by the said commission?


Mr. ILSLEY:: 1.	$533,600.02.
Questions

2.	Fees	Travelling expenses	Louis St. Laurent	
$12,145	.... $1,136 62	$13,281 62John McG. Stewart	
18.900	.... 2.315 27	21,215 273.	Salary	Living Travelling allowance expenses	$34,496 89Hon. N. W. Rowell	T - - - ....	$2,800 00 $1,130 22	$ 3.930 22Joseph Sirois	
$16,125	.... 5,262 96	21,387 96H. F. Angus	
16,900	.... 7,095 41	23.995 41R. A. MacKay	
19,450	1,009 72 5,456 52	25.916 24J. W. Dafoe	.... 4,025 52	4.025 524. Other expenses (included in Communication services 	total of No. 1):	$ 4,304 72	$79,255 35Miscellaneous	18,631 41	Salaries 	251,779 71	Professional services	11,132 04	Rents	5,452 56	Printing and stationery	76,757 84	Freight, express, etc	691 25	Travelling expenses 	37,936 43	Living allowances 	13,161 82	$419,847 78



$533,600 02 PRODUCTION OF SUPERPHOSPHATE

Mr. HATFIELD:: 1.	What was the total tonnage of potash imported from Germany for the years 1935 to 1939 inclusive, and what was the invoice cost of same?
2.	What was the total tonnage of sulphate of ammonia imported 'into Canada during 1939, from what countries and at what price?
3.	What was the amount produced in Canada and the amount of Canadian production that was exported to the United States of America, and at what price?
4.	What was the amount of superphosphate produced in Canada in 1939, by what companies, and what was the average selling price per ton to Canadian manufacturers?
5.	What was the total amount imported, from what countries and at what invoice prices?


Mr. MacKINNON (Edmonton West):: 1.	Imports of potash from Germany calendar years 1935 to 1939:-
Potash, muriate Potash, sulphate
Calendar	of,	crude	of, crude	year	cwt.	Value	cwt.	Value1935	113,301	$ 89,140	17,301	$ 18,0851936	199,446	184,987	7,694	8,9891937	292,939	330,449	87,428	111,5291938	193,422	184,854	54,961	64,6671939	51,238	57,349	36,003	42,4412. Imports, by ammonia, calendar (Mr. Ilsley.]	countries, year 1939	of sulphate of	Country	Cwt. ValueUnited States	
20,540	$	35,266Belgium	
43,800	59,588Totals	....	64,340	S	94,8543.	Production of sulphate of ammonia, calendar year 1939-129,865 tons valued at $3,112,977.
Exports to the United States of sulphate of ammonia during the calendar year 1939, were 38,782 tons valued at $904,489.
4.	Under	the	Statistics Act,	information
concerning the operations of individual firms may not be disclosed. There are only two companies producing "superphosphate", therefore, figures are not published. The names of these companies were:
.Canadian Industries Limited, P.O. Box 10, Montreal, Que.
Consolidated Mining and Smelting Co. Ltd., Trail, B.C.
5.	Imports, by countries, of superphosphate or acid phosphate of lime, during the calendar year 1939:-
Country	Cwt. Value
United States	
1,656,947	$771,471Belgium	
109,400	71,351French Africa	
112	31Netherlands	
316,060	136,199Totals ....	2,082,519 $979,052
Questions



BONAVENTURE COUNTY, QUE., PUBLIC WORKS

Mr. ROY:: 1.	Has the dominion government carried out any works at Alverne, St-Jean-de-Breboeuf, Mission St-Louis, St-Alphonse, St-Elzear and St-Jogues, Bona venture county, during the months of October, November and December, 1939?
2.	If so, by whom were such works requested?
3.	What is the nature of the undertakings?
4.	What department or branch paid the cost, and under what appropriations?
5.	What amount was spent at each of the above-mentioned places?


Mr. CARDIN:: 1.	Yes.
2.	P. E. Cote, M.P.
3.	Road improvements.
4.	(a) Public Works Department.
(b) Vote 522 S.S.E. 1939-40-Development of tourist highways.
5.	Alverne, $774.90; St.-Jean-de-Brebceuf, $578.32; Mission St.-Louis, $849.90; St.-Al-phonse, S750.20; St.-Elzear, $1,395.90; St.-Jogues, $805.80.



PAN-AMERICAN DEFENCE CONFERENCE

Mr. CHURCH:: 1.	Has the government received from the government of the United States or others an invitation to attend a pan-American defence conference at Havana, Cuba, to be held soon?
2.	Will all correspondence be tabled?
3.	Will the British government be consulted before any action is taken?


Mr. MACKENZIE KING:: 1.	If the question has reference to the meeting of the foreign ministers of the American republics which is opening in Havana, Cuba, on the 20th of July, the answer is, no.
2.	and 3. Answered by No. 1.



'NATIONAL DEFENCE-PORT OF GASPE

Mr. ROY:: 1.	Does the government intend to equip and utilize the port of Gaspe for the defence of Canada?
2.	If so, when will the work thereon be started ?


Mr. RALSTON:: Mr. Speaker, I would ask that this question be dropped. In the first
1938-April	$ 400,306	00May 	
398,489	00June	
444,906	00July	
394,368	00August 	
420,546	00September	
442,473	00October	
492,252	00November	
434,848	00December 	
434,373	001939-January 	
439,840	00February	
459,880	00March	
37,719	00
place it asks for a declaration in advance of government policy, and in the second place it asks for what would probably be regarded as information with regard to the defence of Canada which should not be divulged.



BAIK-DES-SABLES, QUE., WHARF

Mr. ROY:: 1.	What amount was voted in 1939 for the wharf at Baie-des-Sables?
2.	Has the contract for the project been awarded ?
3.	If so, to whom, and at what price?
4.	Has the work been carried out, and, if not, why?
5.	Did the government pay any money to the contractor for wood, stone, etc.?
6.	If so, for what reason, and upon whose recommendation ?


Mr. CARDIN:: 1.	$25,000.
2.	Yes.
3.	(a) Bertrand & Brother, L'Orignal, Out. (b) Approximately $76,832.80, unit prices.
4.	(a) No.
(b) Contract being closed out due to war conditions.
5.	Yes, $14,332.50 for lumber.
6.	Terms of contract authorize the payment of 50 per cent of actual cost of materials delivered.



UNEMPLOYMENT RELIEF-FEDERAL CONTRIBUTIONS TO QUEBEC PROVINCE

Mr. ROY:: 1. How much money was contributed monthly by the dominion government to the province of Quebec for unemployment relief from March, 1938, to March, 1939, and from April, 1939, to April, 1940?


Mr. McLARTY:: The following amounts
have been paid to the province of Quebec for direct relief distributed during each of the months indicated. The payments shown for the months of April, 1939, to March, 1940, inclusive, do not represent the ultimate dominion contribution as complete accounts have not to date been received from the province in respect to any month during that period.
1939-April 	$ 318,090	78May	
320,415	78June 	
273,746	64July	
273,434	39August 	
239,386	31September	
221,052	44October 	
254,602	31November	
249,199	31December 	
364,938	531940-January 	
385,785	13February	
380,755	97March	
397,236	18

Questions

The expenditures set forth for the period April, 1939, to March, 1940, inclusive, represent 40 per cent of the claims made by the province to date. The agreement in effect during the period April, 1938, to March, 1939, provided for a dominion contribution of 30 per cent of the total expenditures incurred by the province and its municipalities, or $4,800,000 for the twelve-month period, whichever was the lesser.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. ROY:: 1.	Is Mr. Gordon Ross, of Quebec, an employee of the government?
2.	If so, what is his remuneration?
3.	Does he receive any allowance for expenses?
4.	What monthly payments were made to him since he entered the service?


GASPE PETROLEUM DEPOSITS
Mr. ROY:: 1.	Has the government taken action regarding the utilization, as part of Canada's war effort, of the petroleum deposits of Gaspe?
2.	If so, what action has been taken?
3.	Who has been entrusted with such duty?



SALT FISH BOARD


Mr. ROY:: 1.	Has the government directly or through the medium of the salt fish board distributed bounties to the fishermen of Gaspe, Bonaventure and Magdalen islands, during the months of September, October and November, 1939?
2.	If so, what amounts and to whom have these bounties been paid in the parishes of St-Simeon, St. Charles de Caplan, St. Bonaventure, New-Carlisle, Paspebiac, Hopetown, Port-Daniel and Gascons, county of Bonaventure; Newport, Ste-Adelaide, Grande-Riviere, Ste-Therese, Anse-du-Cap (cape-Cove), Anse-a-Beaufils, Perce, Barachois, Belle-Anse, St. Georges, Douglastown, Cap-des-Rosiers, Anse-au-Griffon, Riviere-au-Renard, St. Maurice, Cloridorme, Grande-Vallee and Grande-Made-leine, in the county of Gaspe; Havre-Aubert, Etang-du-Nord, Havre-aux-Maisons, Grande-Entree, Grosse-Isle, in Magdalen islands?
3.	What officials in each county were entrusted with the duty of distributing bounties, and what was the nature of the distribution?
4.	In each parish what merchants have been favoured, what is the total amount paid under this heading, (a) in the county of Bonaventure; (b) in the county of Gaspe; (e) in the Magdalen islands?
5.	What amounts have been paid by the salt fish board to the fishermen of Gaspe as bonus, during the first three months of 1940?



NATIONAL DEFENCE-APPOINTMENT OF CHAPLAINS

Mr. CHURCH:: 1. What are the present regulations of (a) the Department of National Defence, (b) the Department of National Defence for Air, (c)
[Mr. McLarty.l
the naval services, for the appointment of chaplains in this war, and what are the existing rules and regulations in relation to the same?
2.	Will a copy of them or any orders in council be tabled?
3.	Will all letters and communications on the subject and of the revision of these regur lations be tabled, and information as to who authorized and recommended these regulations to the government?
4.	Were any letters or resolutions filed with the government or any officer thereof, asking for a revision?



MOTIONS FOR PAPERS


Mr. HAZEN:: For a copy of the following documents concerning the slaughter of animals at national park at Wainwright, Alberta:
1.	Report that any of the animals so slaughtered were infected with tuberculosis, showing when, by and to whom such report was made;
2.	Statement showing numbers of each species of said animals reported to be infected with tuberculosis;
3.	The order for the slaughter of said animals, showing the date, by whom made, and to whom directed;
4.	The authority for the sale of the meat of said animals for food, showing when, by and to whom it was given.



BAIE DES SABLES, QUE., WHARF

Mr. ROY:: For a copy of all correspondence, letters, telegrams and other documents exchanged between A. J. Lapointe or any other person, and the Department of Public Works relative to the wharf at Baie des Sables project in 1939.



CANADIAN ACTIVE SERVICE FORCE


[Stage Direction]
On the orders of the day:
James Layton Ralston: Mr. Speaker, I should like to put on Hansard, if the house will permit me, a statement with regard to General McNaughton's appointment as lieutenant-general. The announcement was made as was indicated by my colleague the Minister of National War Services (Mr. Gardiner), but some of these things are matters of concurrent announcement. I think this matter is of sufficient importance, having regard to the choice which has been made of a Canadian for this responsible post, that I should place on Hansard this statement:
With the consent and approval of the government of Canada, Major-General A. G. L. McNaugliton, general officer commanding the first Canadian division, has been chosen to command a new corps which the war office has set up.

Private Bills.-Divorce
Included in this corps will be certain British formations and also the first Canadian division and its ancillary units.
General SIcNaughton will have the rank of lieutenant-general.
I believe that all Canadians will take keen satisfaction in this recognition of the very distinguished services of General McNaughton and of the outstanding ability which he shows as a military commander.



PRIVATE BILLS


[Stage Direction]
Bill No. 36, for the relief of Elizabeth Pauline Tingley Kidd.-Mr. Hazen.
Bill No. 37, for the relief of Nancy Patricia Lytle Rowat.-Mr. Hill.
Bill No. 38, for the relief of Henry Carl Mayhew.-Mr. Mcllraith.
Bill No. 39, for the relief of Laura Lucrezia Green Stinson.-Mr. Mcllraith.
Bill No. 40, for the relief of Irene Nellie Kon Simpson.-Mr. Hill.
Bill No. 45, for the relief of Elma Jane Harris Aspell.-Mr. Hazen.
Bill No. 46, for the relief of Edith Leanora Holland Bonet.-Mr. Bercovitch.
Bill No. 47, for the relief of Dorothy Lavinia Worsley Baker.-Mr. Casselman (Grenville-Dundas).
Bill No. 48, for the relief of Eugene Belanger. -Mr. Mcllraith.
Bill No. 49, for the relief of Rebecca Cohen. -Mr. Mcllraith.
Bill No. 52, for the relief of Ethel Cahan Naihouse.-Mr. Bercovitch.
Bill No. 53, for the relief of John Roy Fumerton.-Mr. Bercovitch.
Bill No. 54, for the relief of Paul Edouard Tardif.-Mr. Mcllraith.
Bill No. 55, for the relief of Pearl Aizanman Morris.-Mr. Bercovitch.
Bill No. 56. for the relief of Molly Goldfarb Goldberg.-Mr. Tomlinson.
Bill No. 57, for the relief of Muriel Agnes Martin Beech.-Mr. Hazen.
Bill No. 58 for the relief of Alfred Reinhold Roller.-Mr. Mcllraith.
Bill No. 59 for the relief of Sarah Kerzner Spilberg.-Mr. Factor.
Bill No. 60 for the relief of Christina Smith Dunlop Andrique.-Mr. Edwards.
Bill No. 61 for the relief of Anna Shepherd. -Mr. Abbott.
Bill No. 63 for the relief of Margaret Somerville Sickinger.-Mr. Hill.
Bill No. 64 for the relief of Remain Cleophas Moreau.-Mr. Macdonald (Brantford City).
Bill No. 65 for the relief of Dorothy Florence Donn Martin.-Mr. Graydon.
Bill No. 66 for the relief of Phoebe Doris Edge Pott.-Mr. Graydon.
Bill No. 67 for the relief of Filomena Grego Sauro.-Mr. Bercovitch.
Bill No. 68 for the relief of Kathleen Irene Mae Stephens Morrissey.-Mr. Macdonald (Brantford City).
Bill No. 69 for the relief of Dorothea Frances Poyser MacDermid.-Mr. Macdonald (Brantford City).
Bill No. 70 for the relief of Sheila Alice Dolly Young Dodge.-Mr. Factor.
Bill No. 71 for the relief of Margaret Louise MacDonald Russell.-Mr. Hill.
Bill No. 72 for the relief of Edward James Holt.-Mr. Factor.
On division.
Mr. E. G. HANSELL (Macleod):: Before these bills are read the third time, may I just say that some of us are a little alarmed at the rate at which divorce bills go through, not only in the House of Commons but also in the divorce committee. I held my watch out and discovered that these thirty divorce bills went through the second reading in committee in less than twelve minutes. Of course, we all recognize that in the passage of these bills, since they are all the same, it becomes a matter of routine; and it may be that the divorce committee in the other place regard these bills similarly as being matters of routine.
We have seen lately in the public press references to one case in which there was perjury. If all such cases were properly investigated we might discover similar instances of perjury, and collusion, too, perhaps. I suggest that when these bills are before the committee a little more attention be paid to the cross-examination of witnesses.
I am not entirely opposed to divorce on the proper grounds. What I am particularly concerned about is the sanctity of the marriage law and the sanctity of the home. Making divorce as easy as it seems to be made by what the hon. member for Temis-couata (Mr. Pouliot) referred to the other night as done by keyhole peepers is breaking down the sanctity of the marriage law and the sanctity of the home. The other night when the hon. member for Temiscouata made some observations on these divorce bills his speech was regarded in a somewhat jocular fashion. But there is tremendous truth in what the hon. member said. If there is one thing that legislative bodies in Canada are responsible for perhaps more than any other, it is upholding the moral laws of this country.
I suppose there are a good many reasons why two of the provinces do not see fit to send their divorce cases to the courts. I
Private Bilk-Divorce

believe that in the conduct of divorce cases the judiciary are a little more careful in cross-examination than the divorce committee in another place. I attended a sitting of that divorce committee on one occasion, just as a little experience, and I was surprised to see five or six cases go through in a couple of hours. I felt that the committee regarded it more or less as routine. I raise my voice in objection to the routine manner in which these divorce cases go through.
There are other matters that one might mention concerning the present divorce bills. There is a clause in these bills giving the right to remarry. Personally I think that clause is not needed; the fact that the marriage is dissolved seems to me to give the parties the right to remarry.


Mr. HOMUTH:: Not in all churches.


Ernest George Hansell: I am talking about the bill itself. I am not certain how the bill reads; perhaps some hon. member can inform me whether that clause gives both parties the right to remarry. I fancy it is the one who is suing to whom it is given. Well, t'hat is the party who should have the right to remarry. Why should he, or she. have to be given permission by law to be remarried, while the other, who is the guilty party, can get married anyway? It. seems to me somewhat foolish.
Then there is the matter that the hon. member for York ton (Mr. Castleden) was concerned about and brought up the other day, in regard to the right to remarry. I am not going into the details, but there does not seem to be any examination in the divorce committee as to the health qualifications of these people to remarry. That is very important. We want to build up a sturdy race in Canada, and more attention should be given to that aspect of the evidence.
The house can take these remarks for what they are worth, but I believe I am voicing the opinion of a great number of hon. members. These are things that we do not like to discuss openly; nevertheless they are very important.


Mr. A. G. SLAGHT (Parry Sound):: I desire to express myself as in accord in part with the hon. member who last addressed the chair (Mr. Hansell). I suggest that this outmoded farce in which against our will we are made the principal actors year after year ought to be ended. I cannot conceive that there is a single member of the House of Commons who would not deprecate the farce that has been enacted in the number of minutes that the hon. gentleman has recounted.

I begrudge twelve minutes of the time of this house in war time spent upon such a stupid, farcical, hypocritical task. If any province in our dominion feels that divorce should not be granted by law, it is entitled to have its way if we abolish this practice. If we tell ourselves that we are perpetrating this practice because one or two provinces are not prepared to have divorces submitted to the courts, let those provinces go the whole way and see that no divorces are submitted to their courts. But I do appeal in this matter to the government and to the leader of the opposition and the leaders of the other parties; some means should be devised to end this practice.


Mr. DANIEL McIVOR (Fort William):: It is a well-known fact that the bulwark of our nation is the Christian home. Without it a nation will fall to pieces. A little while ago we had a certain type of divorce law before this house, and it was given the six months' hoist. This whole question should be taken into consideration, not only divorce, but marriage, and not only the health of human beings who seek to remarry after divorce should be considered but the question of marriage on unduly short notice. To me this is one of the biggest questions that our country has to face. To me it is not a question which city has or will have the right to control the most divorcees, whether it is Toronto the good, Montreal the religious, Fort William and Port Arthur the progressive, or Vancouver the hopeful. I am not particular, but I say that our government should take into consideration this whole question of divorce and of marriage as well, because they are linked indissolubly together.


Mr. T. C. DOUGLAS (Weyburn):: I am sure there is hardly an hon. member of this house whose feelings on this subject are not very much those that have been expressed this afternoon with reference to the passing year after year of these divorce bills. It is to be hoped that the Prime Minister (Mr. Mackenzie King) either through some branch of the government or through a committee of this house set up for the purpose, will reconsider the whole question of the modus operandi of handling these cases.
Secondly, I appeal to the Minister of Pensions and National Health (Mr. Mackenzie). I am not a member of the committee that investigated these cases, but I am told by those who are members that there have been divorces granted in which the evidence was that one of the parties had contracted a social disease. Surely we are not turning loose on an unsuspecting public,

Private Bilk.-Divorce
with the right to remarry, people who have contracted social disease and have been recognized by this house as having contracted such disease. That surely is something which should engage the attention of the minister of national health. People who are granted divorce because they have contracted venereal disease ought at least to be dealt with in such a manner that the public safety will not be endangered.


William Lyon Mackenzie King: Mr. Speaker, I should like to say one word on this matter. I agree with the hon. member that it does seem a waste of time to sit here and simply give formal assent to bills of the category before us coming from the other house. I would point out, however, that it is not quite as bad as if we had to consider the bills in the first instance, and had not adopted the practice of leaving the investigation of these matters to a committee in the other house.
Periodically we have heard discussions similar to that which has taken place to-day. Only a few years ago such discussion did result in some progress being made, in that additional courts were established in the provinces to deal with divorce. The government of the day hoped, I believe, as hon. members generally hoped, that all the provinces would follow that example. I believe there remains only one province in which divorce courts are not to be found, and perhaps the discussion this afternoon may serve in some measure to advance the day when divorce courts will be set up in the remaining province.
I believe all I can say at the moment is that it should be remembered the obligation of dealing with divorce is placed on parliament by the British North America Act. Without taking pretty radical steps we cannot very well divest ourselves of that power and authority. Parliament has decided that the best way in which to meet the obligation is to have a special committee in one of the houses, and to deal in the main with all such matters there.
I cannot understand why there should be any reflection upon the proceedings of that committee. Possibly some hon. members know more about it than I do, but I would hardly think that any reference to collusion in connection with proceedings of a committee in another house would be in place here. All I can say at the moment is that naturally the government will give consideration to the discussion which has taken place this afternoon. Whether or not at this session it is going to be possible to adopt a different method, I cannot say. I imagine we shall have to put up with the present practice for at least the balance of the present session.
But I should not like the impression to go abroad that these are bills of a nature which parliament can refuse to entertain, so long as the obligation to legislate with respect to divorce is placed upon the federal parliament under the constitution.
I do say it is better to have consideration of these matters in the first instance in another house, where possibly they have more time for such matters than we have here, and for us to perform our part either of refusing altogether to agree to what has been done elsewhere, or of accepting what has been done in the more or less formal manner in which thus far we have been obliged to accept it.


Richard Burpee Hanson: Mr. Speaker, there are one or two
observations I should like to make. I did not quite hear the 'allusion of the hon. member for Macleod (Mr. Hansell) who first raised the matter for discussion. However if I understood him correctly he said that a situation had developed wherein divorce bills were allowed to pass through the senate when it was apparent that there had been collusion. If that is what the hon. member said, then we ought to take exception to that statement. At all events some reference was made by him to collusion, and if I did not hear correctly, I am sorry.


Ernest George Hansell: The hon. member has not quoted me correctly. I was referring to the necessity for examination.


Richard Burpee Hanson: I heard
that.


Ernest George Hansell: I was referring to a specific court case, and was showing how by crossexamination we may be able to prevent such things as collusion.


Richard Burpee Hanson: Of course there is ample opportunity for cross-examination. The point I make is this. I know the gentleman who is chairman of the divorce committee of the senate. He is a fine and upright man who would not wink at collusion or anything of the kind while that committee sits under his chairmanship. I should not like to have anything said in this chamber which would cast 'any reflection upon that gentleman, who sits in the other house. 1 believe that much against his will he is performing an important public duty which under our constitution is placed upon his shoulders, and I should not like any reflection to go out from this house respecting the way in which justice-because after all it is justice- is administered in another place.
British Children



OTTAWA ELECTRIC COMPANY AND OTTAWA GAS COMPANY

[Stage Direction]
Mr. G. J. McILRAITH (Ottawa West) moved that the house go into committee to consider Bill No. 34, respecting the Ottawa Electric Company and the Ottawa Gas Company.
Motion agreed to, bill considered in committee, reported, read the third time and passed.


[Stage Direction]
Hon. N. A. McLARTY (Minister of Labour) moved that the house go into committee at the next sitting to consider the following resolution:
That it is expedient to introduce a bill to enact a scheme of national unemployment insurance to be administered by a commission appointed by the governor in council, and to create an unemployment insurance fund from contributions from specified persons and from moneys provided by parliament, for the payment of insurance benefits, to be administered by the commission assisted by an advisory committee; with provision also for the organization and maintenance of an employment service administered by the commission with the advice and assistance of a national employment committee; also with power to the governor in council to establish committees and boards subsidiary to the commission and to enter into agreements with the governments of other countries for reciprocal arrangements relating to unemployment insurance; with provision for the remuneration of the commissioners and the appointment and remuneration of such officers, clerks and employees as may be required for the due carrying out of the provisions of the act and for the costs of administration.
He said: His Excellency the Governor General, having been made acquainted with the subject maitter of this resolution, recommends it to the consideration of the house.
Motion agreed to.


[Stage Direction]
On the orders of the day:
Hon. GROTE STIRLING (Yale); The leader of the opposition (Mr. Hanson) has been called out for a moment, but he asked me to ask the following question of the Minister of Mines and Resources (Mr. Crerar). Will the minister make a clarifying statement on the position of the British government with respect to the sponsored programme for sending British children to Canada? Press reports 
indicate that the British government has greatly modified its earlier evacuation programme, and this has led to confusion in Canada. Second, has this government taken any action in the meanwhile to curtail the evacuation of British or other children to Canada under private auspices? What is the true present position in respect of all these matters?
Hon. T. A. CRERAR (Minister of Mines and Resources):: Mr. Speaker, I am not in position to make a clarifying statement on the position of the British government with respect to the matter referred to in the question; indeed it would be presumptuous on my part to do so. With regard to the second part of the question, I may say that up to the present time, as I have said in the house before, no obstacles have been placed in the way of the movement of children or other British people to Canada under private auspices or under arrangements which they may be able to make themselves. Instructions to that effect were sent many weeks ago to our immigration office in London. It may perhaps be necessary for us to examine more closely than we have in the past the movement of certain groups of children, such as school children, from a private school in Great Britain to a private school in Canada. Within the last few weeks there have been a few instances in which such movements have taken place apparently under the misapprehension that funds were available for the maintenance of the children in Canada. The immigration officers were under the impression that this arrangement had been made when as a matter of fact it was not completed. I think the house will agree that it is not desirable that children in a private school in Grea/t Britain should move to Canada unless some arrangement has been made for their maintenance here and the payment of their tuition. This is all I can usefully say on the question.



WAYS AND MEANS


[Stage Direction]
The house in committee of ways and means, Mr. Macdonald (Brantford City) in the chair.
7. That schedule I to the said act be amended by repealing section 1 thereof and substituting therefor the following:
"1. (a) Automobile adapted or adaptable for passenger use, with seating capacity for not more than ten persons each, valued at $700 or less, 10 per cent.
Over $700 but not more than $900, 10 per cent on $700 plus 20 per cent on the amount in excess of $700.

Special War Revenue Act
Over $900 but not more than $1,200, 10 per cent on $700 plus 20 per cent on $200 plus 40 per cent on the amount in excess of $900.
Over $1,200, 10 per cent on $700 plus 20 per cent on $200 plus 40 per cent on $300 plus 80 per cent on the amount in excess of $1,200.
(b) Automobiles adapted or adaptable for passenger use with seating capacity for more than ten persons, 5 per cent.
Provided that the tax collected under paragraph (b) above shall in no case exceed $250 per automobile;
Provided further that the tax on automobiles shall apply on the total price charged for such automobiles, which price shall include all charges for accessories, optional equipment, servicing, financing, warranty or any other charge contracted for at time of sale, whether charged for separately or not, but not to include heaters or radios;
Provided further that the tax on automobiles shall apply to any such vehicles in transit to dealers or others;
Provided that if a new and unused automobile is on the twenty-fifth day of June, one thousand nine hundred and forty, in the hands of a dealer and not delivered to another purchaser the tax shall be paid by such dealer when such automobile is delivered.
Provided further that the tax shall not apply to automobiles imported:
(i)	Under customs tariff items 702, 706, 707 and 708:
(ii)	By a bona fide settler on a first arrival;
(iiil By a beneficiary resident in Canada,
under the terms of a will of a person dying in a foreign country."
The ACTING CHAIRMAN (Mr. Macdonald, Brantford City):: An amendment has
been moved to this resolution which reads:
That paragraph 7 of the resolution proposing amendments to the Special War Revenue Act, notice of which was given on June 24, 1940, be amended by striking out the fourth proviso reading as follows:
"Provided that if a new and unused automobile is on the twenty-fifth day of June, one thousand nine hundred and forty, in the hands of a dealer and not delivered to another purchaser the tax shall be paid by such dealer when such automobile is delivered."
and substituting therefor the following:
"Provided that in the case of every new and unused automobile in the possession of an automobile dealer on the twenty-fifth day of June, one thousand nine hundred and forty there shall be imposed, levied and collected an excise tax of ten per cent based, in the case of an imported automobile, on the duty paid value and. in the case of an automobile manufactured in Canada, on the sale price of the manufacturer to the dealer payable at the time of the delivery by such dealer of such new and unused automobile to a purchaser: And provided further that the minister shall have power to define for the purpose of this section what constitutes a new and unused automobile: And provided further that a refund or deduction may be granted to an automobile dealer liable to pay excise tax under this provision in respect of ar automobile, of the amount of excise tax previously paid in respect of such automobile under the provisions of this part."
Shall the amendment carry?


Mr. MacNICOL:: I believe the minister was to give us some information in connection with automobiles in transit.


Hon. J. L. ILSLEY (Minister of Finance):: The other night the hon. gentleman asked whether a similar amendment should not be introduced to cover automobiles in transit. If I remember correctly, I told him that such automobiles were subject to taxation because they were considered as being in the hands of the manufacturer. That is, if they were shipped with draft attached to bill of lading the result would be that the manufacturer would be retaining control over the automobile until the draft was paid. Perhaps I could sum up the situation in regard to this tax on automobiles by citing a few cases. I am not sure that I can make it clear except by answering questions, but I shall try.
The principle of existing contracts entitling a purchaser to relief has not been admitted as a general rule in taxation legislation. What I mean is that if a person has made a contract for the purchase of an article and a tax is later placed on that article, the tax has to be paid. There is no exemption for existing contracts with regard to automobiles in transit from the factory to the dealer where a draft is attached to the bill of lading. That automobile is subject to the tax just as though it were in the manufacturer's hands. For taxation purposes, that automobile is in the same position as though it were on the floor of the factory.
A car purchased f.o.b. the plant and in the possession of a common carrier on June 25, the date the tax came into effect, would be treated as a car in the hands of a dealer and would be subject to the relief provided by the amendment now before the committee. Such cars are subject to a flat ten per cent tax instead of the more onerous tax provided for in the budget. A car purchased f.o.b. the plant and being driven away by a dealer or an agent before or on June 25 would be considered as a car in the hands of a dealer and be subject to the ten per cent tax provided for by this amendment. A car purchased f.o.b. the plant and being driven away by the owner or the customer before or on June 25 would be considered as a car having passed into consumption and not be subject to the tax imposed by the budget, either in its original or modified form.


Richard Burpee Hanson: June 25, should not there be an allowance? Who drives it away should not mean anything so far as the application of the tax is concerned. The question should be: Was the car sold prior to the date in question? I suggest that this is the crux of the whole matter.


James Lorimer Ilsley: The test under the sales
tax provisions of the Special War Revenue Act is the delivery to the purchaser. It saves inquiry into circumstances which may not be susceptible of proof or concerning which there might be a great deal of uncertainty. But when there is something definite that you can go on-


Richard Burpee Hanson: Physical
delivery.


James Lorimer Ilsley: Physical delivery is the test, and that is the test that is applied here. As to cars in transit, the question was very properly raised by the hon. gentleman the other evening as to when there is a delivery. When a common carrier intervenes, delivery is regarded as having taken place at the time the car left the plant where it was sold f.o.b., the manufacturer not retaining control or possession of the car by attaching a draft to the bill of lading. But where that is done the car is in his control until the draft is paid, and delivery is regarded as having taken place when the car arrives at its destination. There is that distinction. I remember explaining the distinction in the house four years ago when the sales tax was increased from six to eight per cent, and we had a similar discussion on that occasion, although the change then being made was not on all fours with the change now being made. We try to put our finger on that point-the moment of time when the physical delivery takes place, and when the common carrier comes in we make the distinction that I have outlined. It is a distinction well recognized in the law of sales.


Richard Burpee Hanson: Yes, of
course.


Karl Kenneth Homuth: Throughout these resolutions we have been continually breaking contractual obligations. We have done it in connection with insurance, annuities and so forth. The minister has said that if you have a contract for a car, and the car is shipped with draft attached, you are liable to the tax. But a car is shipped with draft attached because perhaps of the financial condition of the agent who is purchasing the car. The manufacturer will not deliver the car to him because of his financial position. And the tax is levied. Someone has to pay it, and the purchaser has to do so. In many of the smaller villages the local dealer may not be
(Mr. R. B. Hanson.]
in a position to lay out large sums of money to place several cars on the floor of his garage or showroom; therefore he orders the car from the company to sell to his local customer. The car is shipped with draft attached because of the dealer's financial position, and the customer has to pay the tax. They could ship the car f.o.b. plant, and if the dealer's financial circumstances are known to be good, the manufacturer will do that. F.o.b. simply means that the purchaser pays the freight from the plant. The man who buys a car that has been shipped that way will not have to pay this excess tax, simply because the dealer from whom he purchases it is in a better financial position to handle the car.
Again, a car may be driven away from the plant not paid for. The manufacturer may have sufficient confidence in the dealer through whom the car is purchased or in the purchaser himself that the car is allowed to leave the plant without being paid for. That car would not be subject to the tax, but a person who was in straitened circumstances would have to pay the tax.
We are perhaps levying the tax on those least able to pay. It strikes me as unfair to the purchaser who buys his car from an agent who is not as financially sound as other agents. I can hardly see the fairness of it at all.


Mr. DIEFENBAKER:: I would ask the
minister a concrete question as to the application of this tax. Suppose an enforceable agreement is entered into with the purchaser for the delivery of a named car, and that a portion of the purchase price has been paid, delivery to be made after the 25th of June. Upon whom does the tax fall? The minister will understand what I mean. There is an enforceable contract between the parties for a given car, properly designated and properly described, delivery alone being postponed.


James Lorimer Ilsley: The hon. gentleman is asking me to interpret a contract. I should not like to be held to my opinion but it would be that the purchaser would be entitled to delivery of the car free of tax if he had contracted to buy the car at a fixed price.


Richard Burpee Hanson: The dealer would be out the tax?


James Lorimer Ilsley: I should think so.


Richard Burpee Hanson: There is in the law of sales-it is a long time since I studied the law of sales-the question of actual delivery and of constructive delivery.


James Lorimer Ilsley: Yes, that is right.


Richard Burpee Hanson: And. as
I take it, the department is hewing very close

Special War Revenue Act
to the line. They are taking the principle of actual delivery and designating it a physical delivery. No allowance is made for any question of constructive delivery.


James Lorimer Ilsley: I do not remember just what "constructive delivery" is.


Richard Burpee Hanson: I won't
take the time of the committee to give my hon. friend a lecture on constructive delivery. I dare say he remembers as much about it as I do.


Karl Kenneth Homuth: There is still a question in my mind as to whether this thing is right. When a car is shipped, draft attached, the reason in most cases is that the shipper is doubtful of the credit of the man to whom the car is shipped. That is true in every other line of business; it is why shipment is made with draft attached. In the other case it is shipped f.o.b plant. There is no assurance that the car has been paid for because it is so shipped; there is no assurance that it is going to be paid a month or two months hence. It may be a matter of a contra account; we do not know. But the minister differentiates here between draft attached and f.o.b plant. What assurance has the department that the car has been paid for, or who has taken delivery, or what delivery means?


Angus Lewis Macdonald: Shall the proviso as amended carry?


Karl Kenneth Homuth: Wait a minute. Surely
you are not going to pass this without at least some explanation from the minister as to what it means. There are dealers all over the country who want to know what position they are in. and they are entitled to know.


James Lorimer Ilsley: If the hon. gentleman will put his question I will try to answer it.


Karl Kenneth Homuth: I want to know why the minister differentiates in the matter of taxation between a car shipped draft attached, and a car shipped f.o.b. plant. The car shipped f.o.b. plant may not then have been paid for, or may be paid for a month or two months hence.


James Lorimer Ilsley: The main thing for taxation purposes is to find out in whose hands the car is. In ninety-nine cases out of a hundred there is no difficulty, but where a common carrier intervenes between seller and buyer, rules have to be laid down by the department as to in whose hands the car is. The matter of payment is immaterial. It is a matter of in whose possession the car is. The fundamental general rule in the law of
contracts and sales is that the common carrier is the agent of the buyer except where the seller retains the possession of the article by attaching draft to the bill of lading.


Richard Burpee Hanson: It retains the jus disponendi.


John Ritchie MacNicol: Give us that in English.


James Lorimer Ilsley: The right of disposal.


Mr. HANSON (York-Sutbury):: No, payment is not the criterion. Where a car is shipped, draft with bill of lading attached, to a consignee who is the actual buyer, according to the minister it would be pre-attached to the actual buyer, the user, the retail customer. I am not trying to put the minister in a hole o' mything like it. Let me state the matter n. another way. There are two alternatives. If the draft by the manufacturer is on the dealer with the bill of lading attached payable to the manufacturer's order, to be delivered against payment, then, according to the principle which the minister has enunciated, the dealer has the right of possession and he must pay the tax, no matter what the relations are between him and his customer. If on the other hand the consignee is the retail buyer, that is, the man who is to become the actual possessor and operator of the car, there is no tax-in a case where the payment does not enter into the situation at all he will not have to pay tax-for payment is not a criterion of taxation.


James Lorimer Ilsley: Yes; a car delivered to a consumer before the date of the budget is not taxable. If it were shipped-I think such cases would be very rare

by common carrier to the consumer-


Richard Burpee Hanson: I agree with that.


James Lorimer Ilsley: -without any right of
disposal being reserved to the manufacturer, it would be, in the eyes of the law and for all purposes, in the hands of the consumer, the user of the car. It might be on the train going to the place where he lived, but it would be his and would be free of tax. But if the right of disposal were reserved by the manufacturer, it would be in the manufacturer's hands, and the tax would attach.


Karl Kenneth Homuth: Who is the consumer-the ' dealer or the ultimate purchaser?


James Lorimer Ilsley: If the hon. gentleman had followed his leader I think he would have understood. His leader made it very clear; he was trying to distinguish between a purchase by a dealer and a purchase by a con-
160S
Special War Revenue Act

sumer direct from the factory. We have been talking about the consumer, who is not a dealer.


Richard Burpee Hanson: What is the situation with regard to cars which the dealer has had on hand for some time and which are used for demonstration purposes? Are they in the class of unused automobiles? Most dealers have some cars of this class, and most of them do not have on hand any of the new cars; they are wise and get rid of them.


James Lorimer Ilsley: The department applies the rule that if they have gone a thousand miles or more they are regarded as used cars.


Mr. ESLING:: The other evening I interpreted the minister's explanation to mean that when a car was in transit the dealer was responsible for the tax. The dealer is really the owner of the car when the car is in transit, is he not?


James Lorimer Ilsley: Not necessarily.


William Kemble Esling: May I put clearly for the minister the case I had -in mind the other night? The budget came down on the 24th of June. This purchaser of a car, a private citizen, goes to his dealer and says, "I want to purchase such and such a car," and pays so much by way of deposit. Because of the distance and by reason of war orders that car is in transit to-day, although it was purchased and an initial payment made some time ago. The point to which I wish to draw the minister's attention is the discrimination which occurs. Had that car been purchased by a resident of Ontario, living within a short distance of the plant, there is no question that the car would have been delivered before this tax became operative; but since it was bought through a dealer living in British Columbia there was a long delay in transit. No matter whether the tax falls on the dealer or on the purchaser, it is there, but it would not have been there had the purchaser not [DOT] been so far away. The same conditions apply in respect of the maritime provinces. Those living at a distance are penalized on that account because there is a delay in transit. The fact that the purchase and the payment were made on the eleventh day of May indicates clearly that the purchaser had no idea of evading the tax. Would the minister be good enough to consider that concrete case and tell us where we stand?


James Lorimer Ilsley: I told the hon. gentleman the other evening where the dealer stands in such a case. The point the hon. gentle-

man is making is different from the one that we have been discussing. He is arguing that where the dealer has sold the car to a purchaser, to whom presumably he has delivered it at a fixed price, it is unfair for him to be obliged to pay on that car any tax that is imposed after he sells it. I regret that the government cannot accept the principle that where resales have been made before the tax is applied, that should be regarded as a ground for taking the tax off everybody. We cannot do that, and if it is a case of British Columbia versus Ontario or the maritime provinces versus Ontario, then I can only say that we have to treat everyone in Canada according to the same rule. It is unfortunate. Purchasers far away are a little more likely to be caught by the tax under those conditions, but we would not be justified in drawing a line somewhere, at the head of the lakes, say, and at Quebec city, and treating people west of one line and east of the other differently from other citizens in Canada. This is one country and the citizens must all be treated according to one rule.
The hon. member said that the argument has been made this afternoon that in certain circumstances if the car was in transit the dealer would not be liable for the tax. The car is taxable whether it is in the manufacturer's hands or in the dealer's hands on June 25, but the tax that is collectible, if it is in the dealer's hands, is a flat ten per cent, according to the amendment which is now before the committee. If it was in the manufacturer's hands on June 25-or in the possession of the common carrier when draft is attached; I include that-then the tax is the full graduated tax provided for by the budget, which is a very heavy tax on the higher priced cars.


John Ritchie MacNicol: In the example the hon. member has given the dealer would lose?


James Lorimer Ilsley: It depends upon his contract with the purchaser. I should imagine the dealer would lose.


John Ritchie MacNicol: The purchaser having bought the car on May 11 either paid the full price or gave a portion of it and the car belongs to him.


James Lorimer Ilsley: Yes. Nothing was discussed more than the probability that when the budget came down heavy taxes would be imposed on cars, and everyone who was in the business or was connected with the business conducted his operations with that possibility in the back of his mind. If therefore dealers did not protect themselves under their contracts, they have themselves to blame to a

Special War Revenue Act
certain extent. Perhaps I am going a little too far in making that statement, but certainly a tax on automobiles was no surprise to people in the automobile business.


John Ritchie MacNicol: A dealer in the town of Chatham who ordered his car on May 11 would have got delivery by May 15, but a man in British Columbia being several weeks away could not get delivery within the time to escape the penalty of ten per cent. I can see the minister's point. There must be a stop somewhere, but I can also see that some people are penalized through no fault of their own but merely because they live at a distance.


Richard Burpee Hanson: The minister is making delivery the test and nothing else.


James Lorimer Ilsley: Yes.


Richard Burpee Hanson: I suggest that the question of bona fides might have been given consideration. The officials will say that that is harder to check up on. It is, but if there is a firm order for sales, an enforceable order, as one hon. member has put it, payment having been made, that is of course .a bona fide sale, and I suggest that some consideration should be given a case of that kind. If it is the decision of the government that actual physical delivery shall be the test, and if they rigidly adhere to that principle, I suggest that some damage will be done to dealers and they will have to pay taxes on cars which otherwise they would not pay. The minister says that everyone expected this tax. Well, everyone expected a tax on gasoline. The tax did not come in one case and it did in the other. But that is not a safe ground to put it on. People were warned that cars were going up and a great many people did act on that principle, but I should not like to base the tax on the principle that people ought to have known that it was going to be imposed.


James Lorimer Ilsley: We should be doing the same thing if the tax had been a surprise to every one. We do it in every budget. In the case of imported cars, unless they were imported before June 25, the tax applies. We do not inquire whether there was a contract to import them at all. That is the general rule. Importers know they may be caught if they are not careful, and indeed they may be caught even if they are careful.


Karl Kenneth Homuth: On other occasions when tax proposals have been brought down in this house and a certain tax has been made applicable prior to a certain date, representations have been considered. The minister has
said that all people in Canada must be treated alike. Coming from Ontario I am not so sure that the day will not come when we shall have to give some consideration to the question of distances in Canada from coast to coast. People in western Canada and British Columbia and people in the maritime provinces have to pay a certain toll for purchasing goods in Ontario. Personally I regard that as good for our Canadian economy, but I am not so sure that concessions will not have to be made in other directions, as in this matter for instance, if we are to work out a national economy that will be worth while. I think there is something in what the leader of the opposition has said and some consideration should be given to the contract.


[Stage Direction]
Amendment agreed to.
Resolution as amended agreed to.
5. That the said act be amended by adding thereto after section eighty-eight the following section:
"88A. (1) In addition to any duty or tax that may be payable under this act, or any other statute, there shall be imposed, levied and collected a war exchange tax of ten per cent on the value for duty of all goods imported into Canada, payable by the importer or transferee who takes the goods out of bond for consumption at the time when the goods are imported or taken out of warehouse for consumption.
(2)	The tax imposed by this section shall not apply to any goods imported into Canada,-
(a)	which are entitled to entry under the British preferential tariff, or under trade agreements between Canada and other British countries;
(b)	Which are entitled to entry under Customs Tariff items 360, 460, 690, 690a, 696a, 700, 700a, 701, 702, 703a, 704, 705. 705a, 706, 707, 708, 709; or to fish caught by fishermen in vessels registered in Canada or owned by any person domiciled in Canada and the products thereof carried from the fisheries in such vessels.
(3)	Where the war-time prices and trade board reports to the governor in council that any producer or producers of goods have taken advantage of the tax imposed by this section to increase the price of such goods by an amount greater than is justified by any increases properly arising from such tax in the cost of materials or parts entering into the production of such goods or to maintain prices of such goods at levels greater than are so justified, the governor in council may, upon the recommendation of the said board, impose upon all or any of the products of any such producer an excise tax at a rate not to exceed ten per cent of the selling price of such products for such period of time as he may determine, remove or induce customs duties applicable thereto for such period of time as he may determine, fix the prices thereof and/or take such other measures and impose such penalties as he may determine."
Mr. HANSON (York-Sunbury); The minister was good enough to allow this resolution to stand because I had made some representations to the Department of Finance about it.
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[Stage Direction]
I wish to have a ruling on a case of this kind: Goods of a class or kind not made in Canada-caterpillar tractors-were ordered by a dealer in Canada under a firm order at a fixed price f.o.b. point of delivery in Canada, duty, sales tax, freight and all other charges paid. This was a written order which would be enforceable under the statute of frauds. The goods may or may not have been made up, but they did not arrive in Canada prior to the date of the budget. They were ordered through a dealer for contractors about to do war work, namely, clearing for the construction of airports, under a firm contract, at a price fixed with all charges paid, laid down in Canada. Some of them were in transit before the budget was delivered; some of them were ordered but not actually shipped. But if no allowance is made in either case the dealer has to pay this tax, and it is an amount of some importance. I had the matter up with the Deputy Minister of Finance, and he said consideration would be given to it.
James Lorimer Ilsley: The hon. member said "all charges paid".


Richard Burpee Hanson: Perhaps I was using the term loosely-all the then known legal charges paid. This tax was not even contemplated. The minister has not the excuse that the public ought to have known that this import tax was going on. The dealer must lose the amount of the tax, because while his customer could not make him deliver the actual article, certainly he could make him pay damages for non-delivery; if he had to have that particular type of implement he might sue for specific performance, or, in the alternative, for damages. Unless some consideration is given to that particular type of importation one dealer that I know will lose several thousand dollars; for he had the sole agency for this particular implement, and he had made his contract in the terms which I have stated. I took the matter up with the department immediately he notified me, and it has been under consideration.
A grave injustice would be done to the dealer in this case if he had to pay the tax himself. If, per contra, the minister has the power to do this, why not say by statute that on delivery the buyer shall pay the tax? That is where it belongs; he is going to make money out of the government with the use of this machine. I do not say it would be good ethical practice to say by statute that the incidence of the tax should be passed along to the ultimate consumer, but there would be some justification for it. I should like to know whether the department has come to any conclusion with regard to this matter. Perhaps I should have communi-

cated with the commissioner of excise, but I did not know by whom the act was to be administered. Having sent the matter to the Department of Finance I thought I was doing the best I could for my people. If the buyer has to pay this tax it is a great injustice. I submit that the consumer ought to pay it.


James Lorimer Ilsley: I do not think that a provision enacted by this parliament which would be an attempt to saddle the tax upon the consumer in a case of this kind would be constitutional. I know very little about constitutional law, but it would appear to me that the consumer who has entered into a contract for the purchase .of goods at a fixed price would have ithe right, if the dominion parliament came along and said he must pay that price and something more, to contend that the dominion parliament was interfering with the contract he had made; it would be a direct interference with property and civil rights. I doubt if it could even be done under the War Measures Act, because not everything can be done under that act, but only a limited class of things. For that reason I think thait an attempt by this parliament to pass the tax along to the consumer when there has been a resale would be ineffective. Cer-. tain dealers, and importers other than dealers, in making contracts for the resale of imported articles, protect themselves against additional taxes, whether war taxes or otherwise. The other day an importer came to me who thought that the tax ought to be remitted on a commodity of which he was a large importer and which he had resold. He made no attempt to conceal the fact that under ithe contract for resale he had the right to collect the additional duty from the purchaser. His point was that the war exchange tax raised the price unduly and would make the burden on the purchaser too heavy. In the case the hon. gentleman has put, the dealer could have protected himself against additional rvar taxes, but I assume he did not do so.


Richard Burpee Hanson: Not as far as I know.


James Lorimer Ilsley: It seems to me that the only relief we could afford would be to take the tax off altogether in cases where there had been a resale by an importer prior to June 25, 1940.


Richard Burpee Hanson: As distinguished from actual delivery.


James Lorimer Ilsley: Yes, I am not talking about delivery-where there had been a bona fide sale. We have not done that, and we do not care to do it. It is not usual. We have had seventy years' experience with that kind of transaction. When the duty was raised on

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tea, as it has been, or on sugar, in the years gone by, so far as I know there has been no provision to protect the importer in cases where he has made a resale, in which event he would not be taxable, and the importer who had not made resale would be taxable. Whether or not that discrimination would be justified, I do not know. But we are merely following the regular practice, in putting on this tax, which in effect is a customs duty. We are simply following the regular practice when we say that goods imported, or taken out of warehouse for consumption, after the tax goes on, must pay the duty, entirely regardless of any transactions which have been entered into between the importer and other persons.
The case the hon. member has described is not the only one. I have in mind another distressing case. An importer in western Canada made arrangements for the importation of certain goods. He agreed to sell those goods. They are not in Canada yet, but they will enter the country either in the latter part of this month or in the early part of August, and he will have to resell them at the price he agreed to take for them, a price which did not include the tax. He did not protect himself because he had not the tax in mind.
I am inclined to think that in some cases the ten per cent tax, or the ten per cent increase in the tariff where the goods are dutiable, is not going to cause actual loss. In many cases it will cause only loss of profit or reduction of profit.


Richard Burpee Hanson: Of course
that is not an argument. A man is entitled to be paid for doing business.


James Lorimer Ilsley: I know that.


Richard Burpee Hanson: It comes
out of the dealer's pocket. The minister should not be dogmatic about it.


James Lorimer Ilsley: The leader of the opposition is picturing the loss that is going to come to this man, and is appealing for consideration by virtue of the effect it will have upon that man's personal fortunes. When that kind of appeal is made-and that is the only kind which can be made in circumstances such as these-so far as I can see, there is no right or wrong in the matter. We are following the regular practice; the matter of ethics or of principles is not involved. The matter of raising the duty ten per cent, or imposing a ten per cent duty on duty-free goods, and calling it a war exchange tax. is a matter of practice. We are doing what governments have done from confederation, when they have raised taxes. And I would point out that ten
per cent is not such an undue increase that heavy losses are going to occur to persons because they have resold, assuming they have made no profit at all on the resale.


Richard Burpee Hanson: I did not altogether agree with the minister with regard to the first thesis, namely the passing on of the tax. I was looking at that only from the ethical point of view, and had not considered it from the point of view of constitutionality. I agree with him that probably it would be unsound constitutionally for parliament to attempt to do anything of the sort. Therefore he may eliminate that feature of the discussion.
I suggest, however, that his comparison with the raising of the taxes on tea and sugar is not quite apt. We realize that of course these are commodities which have to be imported. There is always a supply of tea and sugar in Canada, and they can be obtained from various sources. But the implement I have in mind is of a class or kind that cannot be obtained elsewhere. We will say that the goods were actually in transit to the dealer on the day of the budget, or on the day after, when the tax went into effect. The minister falls back on the time-honoured argument that this has been regular practice for seventy years. To my mind, antiquity in itself does not carry any commendation with it. If something is unjust, then it is unjust- I do not care whether it is three centuries old or whether it became effective on the day the budget was presented.
I have often thought that the putting into effect of a tax on the day a budget is brought down, is, on balance, the correct procedure to take. I say that because I am afraid that unless some such action were taken at once, a good deal of injustice would be done to the treasury. The circumstances are somewhat similar to those war-time regulations respecting the dead-line in connection with marriages. In that connection three days were given, with the result that only yesterday over in Hull I am told there were two hundred marriages.
I am wondering if the same principle applies. Surely this is a different principle. As I say, the plea of antiquity does not commend itself. The minister is telling me that this is a convenient thing to do from the point of view' of the treasury. This is a procedure which more than anything else will protect the treasury. If I must put my plea on an equitable basis I shall do so, and will say that this is an unjust thing to do.
I say that in respect of a firm contract, such as the one I have mentioned, where the goods
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have been in transit and in fact are to be delivered, in equity this tax should not be imposed. I am not so sure there is so strong a case in respect of goods which have not been shipped, because I believe arrangements could be made to cancel such contracts, unless the person concerned was very anxious to have the goods. If he wanted them he could be asked to pay. But in respect of goods in transit I believe there is a sound argument in law and in equity against the practice of the department. Certainly I am not respecting the department's procedure because of its age, or simply because the department has carried it into effect for a period of seventy years, because it is the convenient procedure for the department to follow.
I wish between now and the time the bill is introduced the minister would give consideration to commodities of a class or kind which cannot be obtained in Canada, have to be ordered, and are connected with special work on war contracts. I do not suppose, however, that that plea will soften the minister's heart.
We cannot have airports such as the ones in Scoudouc, Salisbury, and these other impossible places where they are building airports- some of which I may say should not be built there at all-without this class of machinery. After all, if it is a question of profit I should like to know who is going to make the profit on this class of business. Is it the importer or the war contractor? I saw great numbers of contractors here in Ottawa from the maritime provinces trying to get these contracts for airports. The department has gone round, distributing one here, one there, and one to the other fellow; and they have frozen out a few who did not have sufficient pull to get in under cover, and get one of these contracts.
Let me tell the minister and the committee something more: In the county of Westmorland, where these three airports are being built, no man can get a job in connection with building them unless he has a letter from the Liberal machine. I have sent that information to the Minister of National Defence (Mr. Ralston). He invited us to give evidence of cases to him, and I have sent him the facts respecting a man building an airport at Scoudouc. The Dexter Construction company regretfully told a man who had communicated with me, a man whom I know and who was sponsored by me, that he could not get a job of driving a truck at the airport unless he had a letter from the Liberal machine of Westmorland county. Shame on a government that will allow that sort of thing to go on in war time, and especially after we had a statement from the Minister of National Defence that specific instructions had gone out stressing that this sort of thing was not to obtain! [Mr. R. B. Hanson.1
I do not doubt that the ministry did send out that instruction, but if they did their machines in the various constituencies just ignored it.
I can cite another instance. The Patterson Construction company have a contract to fill in the yards of the Canadian National Railways at Moncton in order to provide more storage space. A man went to this contractor to obtain a job, and I am told that the boss on the job said, "It is a crime, but you cannot get a job here unless you have a letter from Mr. So-and-so," the local dispenser of patronage in Moncton. I can give his name because I have it upstairs, if the minister wants to know. This is the sort of thing that is going on in connection with war contracts. I admit immediately that this has nothing to do with this resolution, but the matter just came into my mind and I had to say something about it. Does the minister approve that sort of thing?


James Lorimer Ilsley: No, I do not.


Richard Burpee Hanson: I am sure he does not. Let him and me get together with someone else and see if we cannot wipe out this disgraceful state of affairs which is obtaining in my province and throughout the maritime provinces in connection with war expenditures, the money for which is being obtained by just this kind of taxation. A man who needs a job cannot get it unless he has a letter from the local Liberal machine. As far as I am concerned, if they continue to do that sort of thing in my county, I am going to say. "Go, ahead; every time you do that it means votes for me." But it should not happen.


John Ritchie MacNicol: The votes should happen.


Richard Burpee Hanson: From the point of view of an equitable basis, some consideration should be given where a machine is in transit. I do not say that this should be done as a matter of course without some investigation by the department as to the bona tides of the transaction. I invite the minister and his deputies to consider the suggestions I have made. In such a bona fide case, if the dealer receives no consideration from the government, it will involve a further payment on his part. I shall not refer further to cars which have not been shipped.
I have told those who inquired that there was not the slightest chance of their receiving any consideration. They might have some other remedy.
The minister says that these people should have guarded against the possibility' of a tax

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being imposed. Perhaps we should all be as wise as Solomon. If we had as much foresight as we have hindsight we would know what to do in a given ease. I suppose I have drawn thousands of contracts in my day. I have tried to think of everything that should be put into those contracts to protect the parties, but one cannot think of everything. Many of these young business men have not had much experience with taxation budgets and they cannot be expected to think of everything. May I make an appeal to the minister's heart if I cannot gain my point in any other way? He should give consideration to a case of this kind.


Mr. COLDWELL:: Mr. Chairman, I want to repeat what I said during the debate on the budget itself. Before the bill comes down I do hope the government will give some consideration to relieving agriculture of this particular tax on farm implements. At the present time our agricultural industry is in the doldrums and is likely to remain there. A few moments ago the minister stated that in effect this tax was an additional tariff of ton per cent. For a long time the people of western Canada have urged that because of the fact that they had to use implements which were to a large extent imported, implements of production should be allowed to enter Canada free of duty. Successive governments have recognized the justice of that plea to some degree, and farm implements have been allowed into the country either free of duty or at greatly reduced rates. Mow we are faced with a sudden substantial increase in the tariff, for that is what it is as regards farm implements.
If there is any justice in the plea of the leader of the opposition-and I believe there is-that machinery used in connection with air fields or our air industry should be given consideration, a similar plea on the part of agriculture is justified, I think to an even greater extent. I ask the government to consider relieving agriculture of this additional burden and to provide for this relief between now and the time the bill is brought down. If the government do not see fit to do that, then I ask that they use all their power to see that Canadian manufacturers do not take advantage of the increased tariff on imported implements to raise the price level of Canadian manufactured implements. I urge that they use that power if they decide not to exempt agricultural machinery from this tax.
In spite of the fact that the duty on agricultural implements was reduced by the budget which followed the accession of this government to power, and in spite of the fact that a careful inquiry was made into the farm implement industry by a committee of this
house which made certain findings and recommendations for the protection of the farmer, nothing has been done about them; there have been during the last five years periodic increases in the prices of farm implements. Now we have a budget which imposes an additional burden upon a depressed industry. The part of the country from which I come, including the constituency which I represent, is largely wheat growing. The farms are highly mechanized with tractors, combines and trucks, and this tax is going to be a burden upon those farmers who must replace their implements with machines and repairs which originate in the Lnited States. So I am making this plea again, and I am quite sure there are other members in all parts of the house, particularly those who come from the part of Canada from which I come, who share this view with me.
Since I do not want to occupy the time of the committee by rising again, there is a minor matter I should like to mention before I sit down. A few minutes ago I was in the library, endeavouring to get one of two recent publications which are published in the United States and to which I wished to refer. I understand that there is great difficulty in getting some United States publications into Canada at the present time on account of the uncertainty regarding the levying of this particular tax. That question will be for the Minister of National Revenue (Mr. Gibson),
I presume, but I bring it to his attention while I am on my feet because our library is far behind in recent United States publications which we use for reference.


Mr. REID:: Mr. Chairman, it was not my intention to speak at this time, but in view of the remarks made by the leader of the opposition accusing the government of political patronage in certain districts and stating that a line from the Liberal organization was ' necessary in order that a man might get a job, I plead with the hon. gentleman to help me m my riding where just the opposite state of affairs prevails. I am glad that he is in his seat. I am sure he will be interested to learn what is taking place on the Pacific coast.
We have out there in my constituency what was intended to be an emergency landing field and airport, but those having to do with the selection of sites have decided that they cannot use the present landing field at Langley Prairie, on which some $90,000 has been spent. The field was seeded to grass and clover and last year produced a fairly good crop of hay.
A local farmer, a widow close by, endeavoured to get the cutting of this hay, but it was given to another farmer close by, who had been at one time the local provincial Conservative
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member at Victoria. Evidently he did not require it for his own use but re-let it or gave it to another man. I protested at the time, pointing out that it was unfair that this good lady should not have been given the opportunity she sought, and I thought the matter would be looked into and dealt with more carefully this year. But what happened this year? The lady through one of her sons tendered twenty cents an acre for the cutting of the hay, and I was greatly surprised to find that the department had handed over the cutting to the same party who got it last year, free of charge, the department receiving no money at all. When I hear accusations being made about people having to get a line from some Liberal organization before they could get a job, I thought I might depend upon the leader of the opposition to help me out in my riding where conditions are just the opposite. Here is a case where not only is the government losing money, but some partisanship is being shown in the opposite direction. I am not going to sit quiet and listen to stories from the east as if they described conditions generally throughout the country, because such is not the case in British Columbia.


James Lorimer Ilsley: Mr. Chairman, I have an amendment to move which will be in line with the suggestion made by the hon. member for Rosetown-Biggar (Mr. Coldwell), but before moving it may I suggest that we have all agreed not to go into these bypaths in the discussion of the budget resolutions. The leader of the opposition started it and I did not want to interrupt the hon. member for New Westminster (Mr. Reid), when he was attempting to reply, but that little incident shows the importance of our adhering closely to the rules, and I hope this will be the end of it.
The hon. member for Rosetown-Biggar asked the government to make sure that the ten per cent war exchange tax would not be used as an excuse for the raising of prices, particularly by Canadian manufacturers competing with imported goods. Subsection 3 of section 88A was designed to meet that situation, but further consideration has been given to that subsection and a carefully drafted clause has been prepared which I think will give the war-times prices and trade board adequate power to investigate and take remedial action where any exploitation of the war exchange tax is attempted. I would ask my colleague the Minister of National Revenue (Mr. Gibson) to move the amendment.


Mr. GIBSON:: I move, Mr. Chairman:
That resolution No. 5 be amended by striking out subsection three of the proposed section 88A and substituting therefor the following:

"(3) No person shall take advantage of the. tax imposed by this section to increase the price of goods by an amount greater than is justified by any increase in cost properly arising from such tax or to maintain prices at levels higher than are so justified and, where the war-time prices and trade board reports to the governor in council that, in its opinion, any person has so taken advantage, the governor in council may, upon the recommendation of the said board, for such period of time as he may determine, impose upon all or any of the goods produced, sold or dealt in by such person an excise tax at a rate not to exceed ten percent of the selling price of such goods, remove or reduce customs duties applicable thereto, fix the prices thereof and take or authorize the said board to take such other measures under the war-time prices and trade board regulations as the said board may recommend; and, for the purpose of investigation and any recommendation by the said board and for the purpose of preventing any aforesaid advantage from being taken by any person, the said board shall have in respect of any aforesaid person and goods the powers conferred on it from time to time by the said regulations as if such goods were necessaries of life as therein defined, and the taking of any such advantage shall be deemed to be an offence against this act and the said regulations, and the penalties prescribed in said regulations shall extend and apply thereto."


John George Diefenbaker: When the budget was introduced, the then Minister of Finance (Mr. Ralston) said, as reported at page 1021 of Hansard, that the purpose of this tax was to conserve exchange. I should like to deal with that particular phase for a few moments.
The stand and view I take is that experience to date of the operation of this tax has not confirmed the minister in the expectation and intention that he had in mind, particularly in the matter of the importation of fruits and vegetables to which I shall make reference a little later.
In the city of Montreal the application of this tax with respect to fruits and vegetables has in no way confirmed the opinion which the minister then expressed.
I wish also to support the statement made by the hon. member for Rosetown-Biggar (Mr. Coldwell), that this tax, designed as it is to conserve exchange, should have exempted from its application farm implements; for as I see it, in spite of the amendment now suggested, there will be imposed upon the farmers of Canada a further tax of approximately $2,000,000 irrespective of whether or not advantage is taken of this tax by Canadian manufacturers of farm implements.
During the year 1939 there was imported into Canada some $20,000,000 worth of farm implements. There is no need to state again in this chamber the position of agriculture in western Canada, but I could not allow this opportunity to pass without again pointing out to the committee what it already knows, that

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to-day the only industry in Canada which is required to produce at a price lower than the cost of production in many instances is the agriculture. Every other industry-munitions manufacturers, supply manufacturers and all others-receive in addition to their costs of production a reasonable profit. But the position in which the western farmer finds himself to-day is this, that irrespective of the yield that he has, he continues to produce at a cost lower than the cost of production, and nothing is being done, in order to assure him of what all manufacturers in Canada are entitled to, namely a reasonable profit. But at a time like this, when, instead of the farmer receiving parity prices, the gulf between the cost of the things he sells and the cost of the commodities he buys continues to widen, to his detriment, this further tax is imposed upon agricultural implements, among other things.
Whenever this session the question is raised in this house as to what will be done in regard to agriculture, the answer received is that the matter is being considered. But we know that as far as agricultural implements are concerned, in spite of the reduction in the tariff over a period of years, prices have continued to rise, I am not alluding to what has happened in the past two years, when one would naturally expect a rise because of the diversion of metals and other commodities to military purposes; the price rose before that. What have the government done? They had a committee investigate the matter, and the longer the committee sat, the higher went the price. In 1938 the government of Saskatchewan petitioned the government of Canada to take proceedings under the terms of the Combines Investigation Act, but nothing was done. To-day, when the farming communities of western Canada are in a plight never before paralleled, the government impose a further tax. They say it i3 to conserve currency ; in point of fact, it is simply another tax, because, if what happened in the fruit industry is any criterion, a ten per cent tax will not conserve exchange. The amendment does nothing to relieve agriculture in any degree of the extra payment it will have to make by reason of the imposition of this exchange tax.
My suggestion to the minister is this: Do not load on agriculture a further tax at a time when farmers in western Canada and Canada as a whole are contributing their share, in many instances at a loss. It must be remembered that they have no protection. I would not argue this way, it being war time, if I believed that this tax would conserve currency. But ten per cent can do very little in that direction; it can only have the effect of an increase in price.
There are a great many ways in which currency could be conserved to the extent, if any, which will result from this tax. In the first place it could be done by a simple amendment on the part of the Department of Agriculture providing for the payment to the farmer of one cent a bushel a month for the storage of wheat while on his premises. During the last year there have been stored in the United States of America approximately
20,000,000 bushels of wheat upon which either the Canadian government or private institutions in Canada are paying to the United States $200,000 a month as storage fees. Is there any excuse for that? Is there any justification for the utilization of facilities in the United States, when, by a simple amendment, it would be possible to conserve $2,400,000 a year in Canadian currency and give the western agriculturist an additional three or four cents a bushel, depending on the length of time that the wheat was kept in storage on his farm? No extra cost to the Canadian people would be involved, and at the same time exchange would be conserved.
Consider the matter of pork products. We talk of saving exchange; yet during recent months, when the Canadian farmer has been asked to increase pork production for war purposes, we have imported millions of pounds of United States pork to the detriment of our farmers, and of the people as a whole in the matter of exchange. In January of this year imports of United States pork into Canada amounted to 8,727,891 pounds; in February we imported 14,797,781 pounds. Millions of Canadian dollars were spent in the purchase of United States pork products to the detriment of the Canadian farmer. Will a ten per cent tax keep out this flow? In recent months a quota has been applied; yet even so we are importing from one and a half to two million pounds of pork products a month.
Or take the importation of butter. In 1939 it was reduced to very small proportions, but in 1938, while some 14,000,000 pounds were in storage in Canada, we imported from the United States and other countries butter to the value of $1,400,334.
We talk of conserving exchange; what about the cheese situation to-day? In 1939 Canada imported $377,000 worth of cheese products.
I might cite the position in respect of other commodities. By considering what has happened in recent weeks in the fruit and vegetable industries, one may ascertain how well this tax will work out for the conservation of exchange. The fact is that fruits and vegetables are being imported in ever-increasing quantities to the detriment of the Canadian producer. The hon. member for Peel, representing a constituency in which these industries are very important, has drawn the
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attention of this and other parliaments to this matter without success. Yet what do we find? To-day huge supplies of foreign fruits and vegetables are piling into Canada, depriving the Canadian producer of a portion of his home market. I am not going into details, but it seems to me that if this tax is to operate to conserve exchange-and that is the reason and the justification for it-it will have to be increased considerably beyond ten per cent, so as to stop the flow of farm products into this country. In 1939 there was brought into Canada $6,473,000 worth of fruits, exclusive of oranges, bananas and the like. In war time we endeavour to conserve our resources, and Canadians would be willing to sacrifice the luxury of obtaining, earlier in the season than they can be produced in Canada, fruits of the kinds this country can supply. Y7et, instead of imposing a tax which would conserve exchange, we are to be content with an increase of ten per cent, which will be inoperative and ineffective in connection with this particular industry.
I might illustrate the position by referring to carload imports of peaches or plums from the United States into the Montreal market during the past few weeks. The cost in the United States is approximately $1,000 per carload and the freight payable is also about $1,000 per carload. In the week beginning June 27 and ending July 3 there came into Montreal, after the imposition of this tax twenty-eight carloads of plums, a luxury at this time, which cost the Canadian people in Canadian exchange $56,000. The same is true of peaches and other fruits. It is not as though fruits of this kind grown in Canada are excelled in any other country; the only point is that we get them earlier by allowing them in. I suggest to the minister that if he wishes to protect the Canadian farmer, the producer of this type of commodities, the tax should be made sufficiently high to keep out of the country most of these imported fruits.
Consider also the matter of vegetables, including potatoes. We imported last year vegetables to the value of $5,376,000, of which potatoes amounted to $706,121, and the rate of importation during the present year is higher. We have on hand in Canada out of the last crop potatoes which in many instances are unsalable because the market has been destroyed by the influx of the United States product.
If this change in the tax is to be protective, if it is not a tariff for revenue purposes but is designed to conserve exchange, why should it not be raised to a level that would guarantee the Canadian farmer his own home market?

The main fruit markets in Canada are Montreal, the largest, and Toronto, Winnipeg and Vancouver. Will the ten per cent tax operate to prevent the importation of luxuries from the United States? The figures in connection with what happened in the Montreal market in the first week the tax was in effect show exactly how the tax will operate. It will mean that the consumer will have to pay more, but it has not resulted in any reduction in importations. During the week from June 27 to July 3, 1939, apple importations amounted to fourteen carloads and in 1940, to eleven carloads. There was a reduction. The importations of grapefruit increased from twelve to eighteen carloads; tomatoes, from forty-six to fifty-four; plums, from twenty-two to twenty-eight; apricots, from one to three; peaches, from two to five; cherries and berries, from eight to thirteen.


John Ritchie MacNicol: An increase?


John George Diefenbaker: Y'es. The increase in potatoes was from thirty-seven to forty-nine. In other words, in the main in the case of fruits and vegetables, during the first week the tax was in force there was an increase in importations into Canada over those of a year ago.
My suggestion to the minister is this. First, except farm implements from the operation of the tax, and second, in order to conserve exchange, bring in legislation providing for the payment to the farmer of one cent a bushel a month for wheat stored on his premises. Protect the Canadian farmer, the producer of fruits and vegetables; protect the Canadian farmer who produces pork and pork products; protect the Canadian farmer who produces butter, eggs and commodities of that sort. Raise the tax so as to protect the Canadian farmer in his home market, and at the same time conserve currency for Canada at this critical time.


James Lorimer Ilsley: The hon. member is arguing for a selective tax; that is to say, he advocates the removal of the tax entirely from certain imports and the imposition of a very much higher tax on certain other imports, the consideration being the protection of agriculture.


John George Diefenbaker: And the conservation of exchange.


James Lorimer Ilsley: And the conservation of
exchange, but I should say, mainly, the protection of agriculture. The hon. gentleman realizes that we have a trade agreement with the United States, and while I am not in a position to say anything positive about the effect upon that trade agreement of any

Special War Revenue Act
attempt to impose a range of protective duties with the view specifically of keeping imports from the United States out of Canada, I should imagine that there would not have been a chance of saving the trade agreement with the United States if we had taken the course suggested by the hon. gentleman. There are hon. members who will say, "Well and good; let the trade agreement go by the board; forget it, and raise your duties sky-' high on imports of fruits, vegetables and other commodities from the United States, placing other articles, such as farm machinery, on the free list, or keeping them on the free list, and seeing that no other duties are imposed." There are hon. members who will say that this is the course we ought to have taken, but I should like my hon. friend to consider the effect of terminating, cancelling the trade agreement with the United States. Is not the United States market of value for cattle from his own province, for example? Is not the United States market of value for fish from the maritimes? Is it not of value for lumber? Is there not a wide range of commodities for which we have to think of export .possibilities?
The hon. gentleman made a plausible case for a selective war exchange tax which in effect would be a highly protective budget, but the price we should have been obliged to pay for it would have been undoubtedly the termination of the United States trade agreement. A flat ten per cent war exchange tax was not open to these objections; it applied to everything. The United States understood our necessities in a time of war and were prepared to accept it without disrupting the existing trade arrangement. But to introduce a budget with greatly increased duties on certain commodities without duties on certain other commodities, having in mind the interests of a particular industry, would have meant, I am sure, the termination of the present trade arrangement with the United States. Perhaps hon. gentlemen will say that this too would be a good thing, but it would have meant a long and acrimonious debate in this house. It must be remembered that it is not only agriculture that has an interest in ithe fiscal system of Canada. All industries have an interest in that system, and there would have been on all sides of the house spokesmen for the interests predominant in their particular constituencies, arguing the insufficiency of certain tariffs that were imposed, or arguing against certain increases, if we had taken the course which the hon. gentleman has suggested.
I am inclined to think that the course which was taken was the only one that was practicable and possible. I do not agree with the hon. gentleman that this tax is inoperative. It may be that, due to increases in the income of many people in this country, they are importing more fruit and vegetables from the United States this year than last, but they would have been importing still more if it had not been for the imposition of this ten per cent tax. No one, I think, can argue that the levying of a ten per cent duty encourages importation.


Mr. GRAYDON:: It does not discourage it much either.


James Lorimer Ilsley: I think everyone will admit that it discourages it to some extent.


Grote Stirling: Very little.


Mr. TUCKER:: I feel that I can not let this item pass without raising a protest on behalf of the people who have done me the honour to elect me to this house. It is just because of what the minister has said that I feel I must speak. I realize that, as far as certain luxuries are concerned, a ten per cent import tax will not stop the importation of such luxuries. The people who import them can well afford to pay the extra cost. But the imposition of a ten per cent tax on farm implements does mean the introduction of a highly protective principle as far as they are concerned. If the minister means what he says, that the government do not want to introduce the protective principle into this budget, then I urge him with all the force and all the sincerity of which I am capable to exempt the implements of primary production-


An hon. MEMBER:: The hon. member voted for the budget.


Walter Adam Tucker: I did not vote for the budget, and the reason why I did not is that in it there is this highly protective tariff being imposed in respect of farm implements.
I rose not to make any attack, but to urge and plead with the government to exempt farm implements from this tax. It may be all right to put a tax such as this on luxuries, but in regard to the very implements of production of one of the most depressed industries in the country, one that is barely able to subsist under present conditions, I submit that is not what we should do, particularly as a Liberal party. In connection with this protective principle, let me point out that when this party came into office the tariff on farm implements was 25 per cent. We finally got

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it reduced to 7J per cent. The argument was that by that reduction we were taking away a great deal of the protective principle as far as farm implements were concerned.
To-day the situation is this: There is still a 7} per cent duty against farm implements, also a 10 per cent exchange rate, which brings the protection to home industries up to about 18 per cent. Now can it be said that putting on still another 10 per cent is not introducing a protective principle in regard to farm implements? If a total of 28 per cent is not protective, then we did the Right Hon. R. B. Bennett and his government a great injustice in saying they had put a very high tariff on farm implements. I believe .that he did a great injustice to the farming industry at that time, and I think any government that puts a tax like that on the implements with which our farmers have to make their living is introducing the protective principle. For that reason I submit that this 10 per cent import tax on farm implements is protection, whereas 10 per cent on luxuries does not introduce that principle at all.
To add 10 per cent to the cost of the implements of production of the great basic primary industries of this country at a time when they are barely able to carry on at all may well strike a blow at them under which they will reel for years. I sometimes think that hon. members representing other industries in Canada do not realize how depressed our farming industry is to-day. In appendix No. 4 to the report of the royal commission on dominion-provincial relations, dealing with the income of various groups in this country, on page 59 I find that the net income of the farming industry in 1926 was $728-2 millions. In 1937 that net income was reduced to $439-4 millions. It should be pointed out that this net income includes a large allowance as income for the privilege of farmers living in their own houses. The average net income for the last seven years since 1931 has been $274-8 millions. This means that the average farm income of Canada for the seven years ending with 1937 was reduced 65 per cent, as compared with 1926. I would ask hon. members representing other industries, if the income of their industries had been reduced during the seven years, 1931 to 1937, by 65 per cent as compared with 1926, would they not think that the matter of imposing further heavy taxation on that industry which is being pressed down and down and down should receive some special consideration?
Progress reported.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock. YUKON ACT AMENDMENT


VALIDATION OF YUKON FUR EXPORT TAX ORDINANCE ACT ASSENTED TO MAY 20, 1919-CONCURRENCE IN SENATE AMENDMENTS
[Stage Direction]
Hon. T. A. CRERAR (Minister of Mines and Resources) moved the second reading of and concurrence in amendments made by the senate to Bill No. 11, to amend the Yukon Act.
He said: It will be recalled that when amendments to the Yukon Act were before the house the hon. member for Yukon (Mr. Black) suggested an amendment. That suggestion was accepted. It was approved by the law officers of the crown, and the bill passed the house in that form. In the other chamber further consideration was given to the measure, and a slight change was made in the amendment, which has been accepted by the law officers of the crown. That amendment carries out perhaps more fully the purpose in the mind of the hon. member for Yukon, and that being so, I have no objection to accepting it.
Motion agreed to, amendments read the second time and concurred in.


[Stage Direction]
Hon. T. A. CRERAR (Minister of Mines and Resources) moved the second reading of and concurrence in amendments made by the senate to Bill No. 12, to amend the Northwest Territories Act.
He said: These amendments are to be found in the senate votes and proceedings for July
10.	They change slightly, but not materially, the amendments to the Northwest Territories Act I proposed in this house.
Hon. members will recall that the measure gave the courts in the provinces jurisdiction to deal with civil matters arising in that area known as the Northwest Territories, and also empowered the courts in the provinces to deal in the same way with surrogate court matters. The amendment made by the senate reads:
The superior courts of the provinces of Ontario, Quebec, Nova Scotia, New Brunswick and Prince Edward Island shall, in all parts of the territories east of the eighty-ninth meridian of west longitude, and the superior courts of the provinces of Manitoba, Saskatchewan, Alberta and British Columbia shall, in all parts
(Mr. Tucker.3

Supply-National Health
of the territories west of the eighty-ninth meridian of west longitude, have and exercise in civil matters the like jurisdiction and powers with respect to persons and property and to actions, suits and proceedings affecting them as the said courts have with respect to persons and property within the territorial limits of their ordinary jurisdiction and to actions, suits and proceedings affecting them.
The effect of this amendment is to divide the civil proceedings which may necessarily arise in the northwest territories, so that the provinces west of the eighty-ninth meridian of longitude deal with the cases west of that meridian, and the provinces from Ontario east to the seaboard have jurisdiction to deal with cases arising east of that meridian.
Richard Burpee Hanson: Is the
eighty-ninth meridian between Manitoba and Ontario?


Thomas Alexander Crerar: No; that meridian is somewhat east of Churchill, in Hudson bay. I looked it up on the map the other day.


John Ritchie MacNicol: It comes down through
Ontario.


Thomas Alexander Crerar: Yes, but the greater part
of Ontario lies east of it. Then, there is this further amendment:
The courts having surrogate powers, of all the provinces, shall, throughout the territories, have the like jurisdiction and authority in relation to the granting or revoking probate of wills and letters of administration of the property of deceased persons and all matters arising out of or connected with the grant or revocation of grant of probate or administration as the said courts have within the territorial limits of their respective ordinary jurisdiction.
This provision gives any court in any province the power to deal with any surrogate court matter in any part of the northwest territories.


[Stage Direction]
Motion agreed to, amendments read the second time and concurred in.