PRIVATE BILL


[Stage Direction]
Bill No. 26, to incorporate The Alberta Provincial Bank-Mr. Blackmore.


[Stage Direction]
Hon. J. L. ILSLEY (Minister of National Revenue) moved for leave to introduce Bill No. 27, to amend the Department of National Revenue Act.
Some hon. MEMBERS:: Explain.


Mr. ILSLEY:: The Department of National Revenue Act provides, among other things, for the appointment by order in council of certain officers of the customs and excise divisions. These are preventive officers, appraisers, investigators of values and drawback officers. The practice, however, has fallen into disuse. The preventive work is now done by the Royal Canadian Mounted Police, and since 1934 appointments to all the other offices I named have been made by the civil service commission. It has been done in that way as a matter of policy by succeeding ministers, and it is now considered desirable to repeal the provisions that empower the governor in council, on the recommendation of the minister, to make these appointments, leaving it entirely in the hands of the civil service commission.
Motion agreed to and bill read the first time.



QUESTIONS

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

Mr. HOMUTH:: 1.	Have wooden shell boxes been ordered from any Canadian firms?
2.	If so, were tenders called?


Mr. HOWE:: 1.	Yes.
2.	Yes.


GEORGES GONTHIER
Mr. McGREGOR:: 1.	For how many years was Georges Gonthier auditor general of the Dominion of Canada?
2.	When did he retire?
3.	Is he in receipt of superannuation?


Mr. RALSTON:: 1.	15 years, 10 months, 3 days.
2.	November 21, 1939.
3.	Yes.


PRODUCTION IN CANADA OF MACHINE GUNS AND TANKS
Mr. BRUCE:: 1.	Has the Minister of Supply canvassed the possibility of securing the production of modern machine guns and tanks in substantial quantities, in any of the existing factories in Canada?
2.	If so, have orders been placed, and for what amount?


Mr. HOWE:: 1.	Yes.
2.	Excluding Bren guns, no.
Questions


CALLING OCT OP MILITIA-MILITIA CAMPS AND TRAINING EQUIPMENT
Mr. CHURCH:: 1.	Will the government give immediate consideration at once to the calling out of all the militia of Canada, under the Militia Act, for active service or a period of training for emergency service ?
2.	Will the instructions or orders of all kinds herein, to military districts, be tabled for the information of the house?
3.	What June camps for the militia are being held, and where?
4.	Will uniforms, rifles, and other modern mechanized armament be available for training at these camps?


Mr. ROGERS:: 1.	It is not customary to announce government policy in answer to specific questions on the order paper.
2.	Answered by 1.
3.	Owing to the mobilization of the 3rd and part of the 4th divisions, the camps originally authorized for the non-permanent active militia units in June are being postponed. The question of non-permanent active militia camp training is now under consideration.
4.	Answered by 3.


IMPORTATIONS OP COFFEE
Mr. HATFIELD:: 1.	What quantity of coffee was imported into Canada in the years 1938 and 1939 from: (a) Brazil, and (b) Venezuela?
2.	What quantity is imported:	(a) direct
through Canadian points, and (b) via United States ?
3.	Does Canada receive credit as the importing country for coffee imported via United States?
4.	If not, has the government taken any steps to see that Canada gets trade credit for these and other imports reaching Canada via United States ports from Brazil, Venezuela, and other South American and Central American countries?


Mr. MacKINNON (Edmonton West):: 1 and 2.
Coffee imported direct or on through bill of lading:
Calendar	Brazil	VenezuelaYear	Pounds	Pounds1938	
5,627,713	98,0601939	
8,527,076	150,837
Coffee imported indirect:
1938		
1939		
3.	In Brazilian statistics the destination of merchandise exported is that declared in the manifests; however, that is not always the ultimate destination. It is stated in the
[Mr Howe.]
Brazilian trade returns that there are no means of accurately determining in their statistics the final destination of merchandise. It is also stated: "As Brazil does not have direct navigation lines to all countries, it so happens that many countries are not shown as importers of our products, whereas others are shown, unduly, with larger quantities than those which they really import."
The situation with respect to Venezuelan exports is similar. Accordingly, exports of coffee from these countries to Canada tend to be somewhat smaller than the amount actually purchased and consumed in Canada.
4.	Yes. The Department of Trade and Commerce has recently made an investigation of the discrepancies between Canadian statistics and those of other countries covering the same trade. The Canadian government has, from time to time, as occasion required, made representations to various South American and other countries drawing attention to the true position of Canada as a market for their products.


WAR CONTRACTS BY PROVINCES
Mr. HANSELL:: What is the total amount of war contracts placed in each of the provinces since September 1, 1939?


Mr. HOWE:: Amount of contracts placed by the Defence Purchasing Board, the War Supply Board, and the Department of Munitions and Supply, classified by provinces, July 14, 1939, to April 30, 1940. '
Province	Total
Nova Scotia	 $4,438,920.09
New Brunswick	 2,707,755.03
Prince Edward Island	 810.00
Quebec	 66,658,776.15
Ontario	 54,987,490.90
Manitoba	 920,302.32
Saskatchewan	 146,882.84
Alberta	 367,347.27
British Columbia	 20,426,278.10
Unclassified	 12,960,000.00
Total	 $163,614,562.70


ROYAL CANADIAN AIR FORCE-WIRELESS TRAINING
Mr. MAYBANK:: 1.	Does the Royal Canadian Air Force give complete training in wireless to persons enlisting in the force?
2.	Does the Royal Canadian Air Force take in recruits with no wireless experience at all with a view to training them as wireless operators?

Questions
3.	If not, what is the minimum wireless knowledge requirements necessary for one to enlist in the Royal Canadian Air Force to become a wireless operator?


Mr. POWER:: 1.	Only to wireless operators and wireless electrical mechanics.
2.	Yes.
3.	Not applicable (see 2 above.)


TRANS-CANADA AIR LINES-NUMBER OF AEROPLANES AND EMPLOYEES
Mr. HANSELL:: 1.	How many aeroplanes are now in the service of the Trans-Canada Air Lines?
2.	What types of planes are used, and how many of each?
3.	How many people are employed by the Trans-Canada Air Lines, and how many are in each classification?


Mr. HOWE:: 1.	Fifteen (15).
2.	All aircraft used by Trans-Canada Air Lines are of the Lockheed 14'H-2, low wing; monoplane type.
3.	As at April 30, 1940, Trans-Canada Air
Lines had a total of 615 employees, classified as follows:	Administrative, operations and
traffic officers, 16; clerical, accounting and stores staffs, 46; traffic staffs, 31; station staffs, 18. Flight personnel:	Captains, 35;
first officers, 46; stewardesses, 46. Maintenance and overhaul: Engineering, 7; foremen, chief mechanics and crew chiefs, 28; air engineers, 38; helpers, 50; mechanics, 52; radio mechanics, 11; chauffeurs, labourers and learners, 79; janitors, firemen, carpenters, etc, 15. Communications and dispatch:	Dispatchers and
operator-dispatchers, 15; operators, 76; radio technicians, 6. Total, 615.


* WAR REFUGEES
Mr. BRUCE:: 1.	Has the Canadian government sent a message to the British government offering to take refugees and evacuees into Canada?
2.	If so: (a) on what date; (b) how many?
3.	Has the British government got control of all shipping?


Mr. CRERAR:: Communications have passed between this government and the high commissioner's office. I do not think it desirable- certainly not at this time-to give the information asked for in the second part of the question. In regard to the third part of the question I would say that the British government controls all shipping under British registry, and I am informed that that includes practically all Canadian transatlantic shipping.


ROYAL CANADIAN AIR FORCE-ENLISTMENTS
Mr. McLEAN (Simcoe East):: 1.	What is the number of officers and airmen with previous military experience who have been taken on the strength of the Royal Canadian Air Force since the outbreak of hostilities on September 10, 1939?
2.	How many of these have had experience in actual war?


Mr. ROGERS:: 1.	Officers with previous military experience, 546; airmen with previous military experience, 1,284.
2.	Officers with war experience, 239; airmen with war experience, 219.


WHEAT AND CATTLE SHIPMENTS VIA HUDSON BAY ROUTE
Mr. DIEFENBAKER:: 1.	How many bushels of wheat were shipped by the Hudson bay route during each of the years 1935 to 1939 inclusive?
2.	How many cattle were shipped over the said route during the same years?


Mr. MacKINNON (Edmonton West):: 1.
Year	Bushels
1935		 2,407,000
1936		 4,293,501
1937		 603,982
1938		 916,913
1939		 1,772,460
2.	None.


NATIONAL DEFENCE-RAILWAY AND FORESTRY TROOPS
Mr. COCKERAM:: 1.	Has the British war office made any suggestion to the Canadian Department of National Defence that they would welcome the services of railway and forestry troops?
2.	If so, what reply was given to the British government?


Mr. ROGERS:: It is not customary to disclose war office communications. The Canadian government has indicated its readiness to provide both railway and forestry troops.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. HOMUTH:: 1.	Have the tripods for the Bren machine guns been ordered?
2.	If so, were tenders called?
3.	Who was the successful tenderer?
4.	Have any tripods been delivered up to and including May 23?
5.	If not, when may delivery be expected? Mr. HOWE: Return tabled.

Questions as Orders for Returns


IMPORTS OP VEGETABLE OIL
Mr. HATFIELD:: 1.	What quantity of vegetable oil has been imported into Canada during each of the last sixteen months, and from what countries?
2.	What use is made of this vegetable oil in Canada?
3.	What estimated quantity of butter, lard and other dairy products do these imports of vegetable oil replace in Canada?


James Angus MacKinnon: Return tabled.


IMPORTS OF TABLE POTATOES PROM UNITED STATES
Mr. HATFIELD:: 1.	What quantity of table potatoes entered Canada from the United States during each of the last sixteen months?
2.	What quantity of above were: (a) United States grade 1 size, and (b) United States grade 1 size "A"?
3.	Why does the government allow United States grade 1 size "B" potatoes, which are similar to Canada grade 1 small, to enter Canada when potato growers in Canada are not allowed to market this grade of potatoes in Canada?
4.	What quantity of said potatoes imported were trucked across the border into New Brunswick and shipped to the Canadian market under the Maritime Freight Rates Act?


MANUFACTURE OF AEROPLANES AT LONGUEUIL, QUEBEC
Mr. BRUCE:: 1.	Are aeroplanes being manufactured at Longueuil, Quebec?
2.	If so, how many have been completed and delivered at the airport at Rockcliffe?
3.	Are these aeroplanes tested out in Longueuil before being sent to Rockcliffe?
4.	If so, by what method are they transported to Rockcliffe?
5.	Are contracts for the building of ships, trawlers and minesweepers let only to experienced shipbuilding firms?


IMPORTS OF PORK AND PORK PRODUCTS
Mr. HATFIELD:: 1.	What quantity of pork and pork products was imported into Canada from the United States during each of the last six months? (a) What quantity of above pork was consumed in Canada; and (b) what quantity was processed in Canada and exported, on which drawback duty was earned and payable?
2.	Was a quota established for United States pork entering Canada? If so, what was the quota ?
3.	Was there a surplus of pork in Canada at the time quota was established?
4.	If so, why was quota established instead of prohibiting importation?
[Mr Howe.]



FISHING BONUSES

Mr. ROY:: To whom, and how much did the Department of Fisheries pay in bonus during the 1939 fishing season only, of the fiscal year 1939-40, either directly or through the Salt or Canned Fish Board or through any other body to the fishermen of Cap-aux-Meules, l'Etang-du-Nord, Grande-Entree, Havre-aux-Maisons, Havre-Aubert, and Grosse-Ile, in Magdeleine Islands; and to fishermen of Newport, Grande-Riviere, Ste-Therese, Anse-a-Beaufils, Cap-des-Rosiers, Riviere-au-Renard, St-Maurice, Clorydorme, and Grande-Vallee, in Gaspe county?



CANADIAN NAVAL SERVICES-PAT AND ALLOWANCES

Mr. DIEFENBAKER:: 1.	Have any changes been made in the rates of pay and separation allowances in the Canadian naval services since the outbreak of war?
2.	If so, when were these changes made, and upon whose recommendation, and what are the particulars thereof?



MOTIONS FOR PAPERS


Mr. CASTLEDEN:: For a return showing a list of all persons released in 1939-40 from internment camps in the provinces of Manitoba, Saskatchewan, Alberta, and Ontario, together with the dates of release and reasons therefor.


Mr. LAPOINTE (Quebec East):: In
answer to some questions with regard to the same matter I have already stated that circumstances connected with the internment and release of enemy aliens cannot be disclosed to the public. Such disclosures would involve the publication of sources of information which it would not be in the public interest to disclose. As a matter of fact some of the information it would be impossible to disclose, coming as it does even from the secret services of other countries, neutral as well as allied countries. This matter is of somewhat the same nature as questions relating to the release of prisoners, ticket-of-leave, and the like. It has been the policy of all governments that such information is of a highly confidential nature and that it would be against public policy and the interests of the state to give it.


Mr. HANSON (York-Sunbury):: I realize
the motion is not debatable, but I suggest to the Minister of Justice that the argument he has advanced-and to this extent I agree with it-relates entirely to the last part of the motion, which asks for the "reasons therefor." The government, however, might produce, as the hon. member moving the motion requests, a return showing the list of persons released,

Motions for Papers
with dates of release. To do that, it seems to me, would not be in contravention of any public interest.


Ernest Lapointe: I should
like to consider the suggestion of the leader of the opposition. I do not think, however, that the names of the persons interned should be given.


Richard Burpee Hanson: The order asks for the names of persons "released," not "interned."


Mr. POULIOT:: All the K.K.K. should
be interned.


Richard Burpee Hanson: Order;
this is a serious matter.


Ernest Lapointe: All right; let it stand.
Motion stands.



INTERNMENT OF F. K. SCHNEIDER

Mr. MAYBANK:: For a copy of all correspondence, letters, telegrams and other documents relating to the internment as an enemy alien of F. K. Schneider, of Loclcport, Manitoba, and the subsequent release of the said F. K. Schneider.


Ernest Lapointe: For the same reasons I object to the carrying of this motion.



SURVEY OF ENGINEERING SHOPS IN CANADA

Mr. BRUCE:: For a return of the survey made by Lieutenant-Colonel Ogilvy, of the Department of National Defence, relating to the engineering, machine and metal-working shops of Canada, in which was set out the capacity of these shops which are now being used for munitions, as well as their maximum capacity.


Clarence Decatur Howe: I would point out that Lieutenant-Colonel Ogilvy and his staff are continuing to make the survey referred to in this motion. The last time I had a report the surveys then made totalled over 2,200. Each survey is contained in a voluminous document, and I suggest that it be quite impossible to produce in the form of a return what is here asked for.


Richard Burpee Hanson: I appreciate the magnitude of the reports to which the minister has referred. However, if the order were allowed to stand some plants might be selected on which copies of reports could be received. I have not conferred with the hon. member sponsoring the motion, but I should not like to see it dropped. I agree with the minister that to produce in its entirety what is requested would involve a huge task.


Clarence Decatur Howe: I would try to table the information with respect to specific plants, if that were called for.


Richard Burpee Hanson: Let it
stand.
Motion stands.



NELWAY, B.C., UNEMPLOYMENT PROJECT

Mr. ESLING:: For a copy of all correspondence, letters, telegrams, claims and other documents in connection with claims for damages resulting from a fire at unemployment project No. 65, Nelway, British Columbia.



NATIONAL DEFENCE-MANUFACTURE OF TANKS IN CANADA

Mr. STIRLING:: For a copy of all correspondence, cables, telegrams, memoranda, notes of telephone conversations, and any other papers or documents passing between this government and His Majesty's government in the United Kingdom and/or any agent or authorized representative of either government, and between this government and persons or corporations, relating to the manufacture of tanks in Canada since January 1, 1938.


Clarence Decatur Howe: I must point out that communications between governments are privileged, and in any event could be released only with the consent of the other government concerned. If there are any communications they are supplemented by conversations between the British mission in Canada and the Department of Munitions and Supply or the war supply board, which in any ease would not be available to table. I suggest that under all the circumstances this motion be dropped.


Grote Stirling: I wonder if it would be possible for the government to bring down those portions of the request which do not apply as between the two governments-for instance, the agents for other firms who have been communicated with?


Clarence Decatur Howe: I shall look at the files to see what communications there are. If there are any such as described by the hon. member, the matter could be further considered.
Motion stands.



COMMONWEALTH AIR TRAINING


[Stage Direction]
On the orders of the day:
Richard Burpee Hanson: Mr. Speaker, before the orders of the day are called I should like to direct a
Commonwealth Air Training

question to the Prime Minister (Mr. Mackenzie King). Is it true that during an address which Mr. James S. Duncan, acting deputy minister of national defence for air, delivered at noon to-day before a joint meeting of service clubs he made several announcements concerning important changes in governmental policy in connection with the commonwealth air training plan? If so, when did it become the practice to have important announcements of government policy with respect to matters of vital national interest made by an acting deputy minister, no matter how able, important and valuable he may be, to the public while parliament is in session? It seems to me that such a course is directly contrary to correct practice and to the repeatedly expressed conviction of the Prime Minister, and is not in keeping with responsible government. I think some explanation is due to the house and the country.


Hon. C. G. POWER (Minister of National Defence for Air):: Mr. Speaker, I happened to be present at the joint meeting of service clubs which was addressed to-day by Mr. Duncan. I do not know that one could describe the declarations or statements made by Mr. Duncan as indicating important changes in government policy.


Richard Burpee Hanson: I have the speech here, and that is how I interpreted it.


Charles Gavan Power: However, it may be that certain information was given to the public with respect to the commonwealth air training plan which up to that time had not been made known. I believe that it was in the public interest that such information be made known.


Richard Burpee Hanson: Yes, but here in this house.


Charles Gavan Power: Complaints have been
received that the public have not been taken into our confidence. Although very often we have taken parliament into our confidence, apparently the information did not get to the public. If Mr. Duncan took this means of making this information generally known to the country, I think he is to be commended.


Richard Burpee Hanson: I have an advance copy of the press release of the speech, and my interpretation of it is that it is an announcement of vital changes in matters of public policy respecting this scheme, an announcement which should have been made to parliament.


Charles Gavan Power: It is an announcement of certain means taken to accelerate the commonwealth air training scheme.


Mr. CASSELMAN (Grenville-Dundas):: Why not adjourn parliament and let us go home?



WHEAT BOARD


[Stage Direction]
On the orders of the day:
Mr. E. E. PERLEY (Qu'Appelle):: Mr. Speaker, I should like to direct a question to the Minister of Trade and Commerce (Mr. MacKinnon) based upon a report which appeared in to-day's Ottawa Journal, a copy of which I hold in my hand. The report is headed "Grain exchange open to July 1st." The second paragraph states that the government has decided not to close the Winnipeg grain exchange for the remainder of this crop year. The third paragraph reads:
The Canadian wheat board sold 50,000,000 bushels of wheat to the buying agency of the British government at a price considerably above the present market.
Is the minister prepared to make a statement with respect to the sale of this considerable amount of wheat? Would he mind stating also what was the price and who is the British buying agency? Is there any intermediary, such as members of the Winnipeg grain exchange, between the Canadian wheat board and the British buying agency?
While I am on my feet I should like to ask the minister whether the British government or the British buying representatives have at any time since last September made representations to this government to have the Winnipeg grain exchange closed.
Hon. JAMES A. MacKINNON (Minister of Trade and Commerce): I shall accept this as a notice and make a statement to the house to-morrow.


Ernest Edward Perley: I think the matter is of sufficient importance to warrant an answer to parliament to-day.



ENEMY ALIENS


[Stage Direction]
On the orders of the day:
Mr. W. P. MULOCK (York North):: Mr. Speaker, I should like to direct a question to the Minister of Mines and Resources (Mr. Crerar). Has his attention been called to a report in the Globe and Mail of to-day which states "Ship passengers are angry as 50 Germans reach Quebec." The article is as follows:

Defence of Canada Regulations
More than 50 Germans, all of whom were born in Germany, but now hold British passports, were among the passengers arriving in Quebec to-day from overseas. Most of them, it is believed, are en route to the United States.
I should like to ask if this newspaper report is correct and if any of these Germans are remaining in Canada. If so, what is going to be done with them?


Thomas Alexander Crerar: Mr. Speaker, it will not be difficult to answer this question. My attention was drawn to this matter just a few moments before I came into the chamber. Officials of the immigration department had seen this dispatch, I believe in the Toronto Globe and Mail, and immediately made inquiry of the officials at Quebec. The story is entirely inaccurate and without foundation in fact. There were three refugees with American visas who disembarked from the ship, and they are on their way to the United States. That is all the foundation there is for this story. While I am on my feet may I suggest that newspaper stories of this kind going out to the country naturally have a disturbing effect upon the people. I have no doubt that within the next twenty-four hours I shall receive several telegrams and letters protesting against it. Such stories result in taking up the time of the officials of the department, including myself. There is not a shadow or shred of foundation for this story.



BRITISH COLUMBIA-REVIEW OF DEFENCE OF CANADA REGULATIONS SINCE SEPTEMBER, 1939-STATEMENT OF MINISTER OF JUSTICE

[Stage Direction]
On the orders of the day:
Mr. G. A. CRUICKSHANK (Fraser Valley):: Mr. Speaker, I should like to ask the Minister of Justice (Mr. Lapointe) what action is being taken in connection with enemy aliens who are now resident in the lower mainland of British Columbia, particularly in the locality where the entire power production of British Columbia is developed and in the area where the oil refineries are located. In those particular areas there are now located approximately 25,000 Japanese. I should like to ask also if Japanese in these areas are still allowed to have powder.
, Right Hon. ERNEST LAPOINTE (Minister of Justice): Mr. Speaker, the hon. gentleman handed me a telegram, I believe on Friday, which he had received from the secretary of the Fraser Valley Mayor and Reeves Association of British Columbia. I communicated
the telegram to the committee officials who are cooperating and helping me in this matter, and perhaps I cannot do better than read the memorandum they have given me about it. The secretary of the Fraser Valley Mayor and Reeves Association for British Columbia telegraphed me as follows:
Mayors and reeves representing sixteen municipalities Fraser Valley passed following resolution:	That the dominion of Canada do
forthwith intern all enemy aliens and investigate all persons alien origin whether naturalized or not; further that all arms, ammunition and explosives be confiscated forthwith. This matter urgent owing to large percentage of enemy aliens resident in British Columbia who are openly showing their anti-British sympathies. Immediate action is necessary and the seriousness of fifth column activities brought to the attention of authorities.
With regard to the first part of the resolution, many such resolutions were forwarded to me from all parts of the dominion and as a result I instructed the committee on enemy aliens to review the defence of Canada regulations dealing with enemy aliens in the light of the experience obtained of nearly nine months of war and having regard to these representations. The committee's report is as follows:
The most important question which was considered by the committee was a suggestion that all enemy aliens in Canada of military age should be interned. After a careful discussion, the committee unanimously reached the conclusion that it could not at present recommend the internment of all enemy aliens in Canada of military age. The reasons which led the members of the committee to this conclusion may be summarized as follows:
1.	The necessity, in the public interest, of this step was not at present apparent. The police authorities intimated that alien enemies had been registered under regulation 25 and that they were satisfied that they had reasonably sufficient information concerning those alien enemies not presently interned whose conduct seemed to require quiet investigation and observation.
2.	Very large expense would be involved in guarding and maintaining internment camps and providing for the dependent families of the 16,000 enemy aliens now registered and reporting to the police.
May I add in passing that many have suggested that all persons of German origin or German descent, whether naturalized or not, should be interned. That would mean the internment of 495,000 persons.
3.	It was realized that of the 16,000 enemy aliens presently registered and reporting, there were many who, while technically enemy aliens, by reason of birth or citizenship in Czechoslovakia, or other districts now occupied by the enemy, did not adhere in sympathy to the cause of the enemy.
4.	It was further recognized that many of the alien enemies lived on remote farms, in isolated districts, where possibilities of sabotage or civil disorder were practically negligible.
Defence of Canada Regulations

On the other hand, the committee recognized that the situation might change and is of the opinion that it is very desirable that the police authorities should not in any way relax their vigilance.
With regard to the suggestion that the police investigate all persons of alien origin whether naturalized or not, the answer to this is that the police have been investigating such persons and watching their activities for some time. Quite a number of such persons were arrested at the outbreak of war. As additional information is received, or where the police have reasonable grounds to suspect that activities prejudicial to the interests or safety of the state are being carried on, further arrests will be made.
With regard to the suggestion that all arms, ammunition and explosives be confiscated forthwith, it should be pointed out that on the 11th day of October, 1939, P.C. 3042 was passed prohibiting the possession of firearms or any ammunition therefor or of any dynamite, gunpowder or other dangerous explosive by any enemy alien.
The said order further provided that every such person within Canada having in his possession or upon his premises any firearm or any ammunition therefor or any dynamite, gunpowder or other dangerous explosive, should, within ten days from the publication of the order in the Canada Gazette, that is ten days from the 21st day of October, 1939, cause such firearm, ammunition, dynamite, gunpowder or other dangerous explosive to be delivered to a justice of the peace residing, or to an officer or constable of a police force of a province or city in or near the locality where such firearm, ammunition, dynamite, gunpowder or other dangerous explosive is had in possession or to an officer or constable of the Royal Canadian Mounted Police.
This order further provides that if any enemy alien within Canada is reasonably suspected of having in his possession or upon his premises any firearm or ammunition therefor, dynamite, gunpowder or other dangerous explosive, he may be searched or his premises or any place occupied or believed to be occupied by him may be searched by any peace officer or by any officer or constable of the Royal Canadian Mounted Police without warrant, and if any such articles be found upon the person or premises of any such enemy alien or in any premises occupied or believed to be occupied by him, the same shall be seized and the property forfeited to the crown; and further, the person upon whom or upon whose premises any such article is found shall further be liable to a penalty not exceeding $500 or to imprisonment for any term not exceeding three months.

The order further provides that it is an offence for any person to give, sell, hire, lease or transfer possession of any firearm, ammunition, dynamite, gunpowder or other dangerous explosive to an enemy alien, and any person so doing shall be guilty of an offence and liable to a penalty not exceeding $100 or to imprisonment for any term not exceeding one month.
The order further provides that if any question arises under the order with reference to anything done or proposed to be done thereunder as to whether any person is an enemy alien, the onus of proof that any person so suspected or charged is not an enemy alien shall lie upon the accused in such proceeding.
The Royal Canadian Mounted Police report that the provisions of this order have been carried out. Any persons having information to the effect that enemy aliens are in possession of any of the articles mentioned in the said order should report the facts to a peace officer or officer of the Royal Canadian Mounted Police.
With regard to the statement that a large percentage of enemy aliens resident in British Columbia are openly showing their anti-British sympathies, it should be pointed out that cases of this nature should be reported to the police.
It is a great disservice to Canada and the allied cause to spread stories that Canada is filled with enemy agents and enemy sympathizers. We have never believed that Canada, before the outbreak of war, was free from nazi sympathizers. There were some here as there were in every country. The government knew about them, and the Royal Canadian Mounted Police knew about them too. Where it was thought necessary, they were placed in internment camps after the police rounded them up at the outbreak of war. The Royal Canadian Mounted Police, who have a uniformed strength of 2,450-by the way, this strength will be increased by 500 additional men-and their secret service are in control of the situation, and have built up an organization which keeps constant watch over the activities of subversive elements throughout the country. It is obviously not in the public interest, and would, in fact, be giving useful information to the enemy, to give details of the preventive and counterespionage measures which have been and are being taken by the police.
All enemy aliens in Canada have been registered, examined and fingerprinted. People have been writing to urge: Why don't you do as they do in the United States, have them fingerprinted? We fingerprinted them long before .he United States did.

' Beauharnois Power-Mr. Coldwell
Those who are believed to be a source of danger to this country in war-time are being interned. Those who are not interned are all known to the authorities and their activities are closely watched by the police. Naturalized Canadians of enemy origin whose activities cast doubt on the loyalty they have sworn to this country are being investigated. When the results of the investigation warrant it their naturalization certificates will be revoked with a view to their eventual deportation. Pending such action, naturalized Canadians in this category are liable to internment in the same way as enemy aliens.
The public must rely on the Royal Canadian Mounted Police and other police authorities who are collaborating closely with them to do what is necessary to safeguard the country against the activities of the "enemy within". It will be nothing but a clear sign of unjustified alarm and weakness if arbitrary and indiscriminate action is taken to harass a small minority of persons in this country, most of whom are loyal to Canada and the allied cause.
As an added precaution against sabotage, from which, thanks to splendid police work, we have so far been free-after many months of war there have been no complaints that the precautions have not been effective; there has been no actual case of sabotage- the government has announced that a home guard to be composed of veterans will be formed. This action has been taken to meet the needs of war as they arise. I should, however, like to emphasize the fact that every unnecessary man and dollar engaged in work of this kind is a man and a dollar taken away from the winning of the war.
No punishment is too severe for those who, living within our shores, seek to give comfort to the enemy. But let us be careful not to mistake for pro-Germans, persons who have German names and German descent. Most of them came to Canada to escape the Prussian yoke. The overwhelming majority are passionately anti-nazi. Any persecution of racial minorities in this country, as I said the other day, is unworthy of our people, and a betrayal of our traditions, our national spirit and the very freedom we are fighting to preserve. Nothing the ordinary Canadian can do will help the nazis more than the spreading of rumours and creation of suspicions which set race against race and class against class. The nazis, of course, want to spread division and dissension in Canada, to destroy our unity and cripple our war effort. This is a well known nazi tactic which already has worked to divide and weaken by mutual distrust the small countries of Europe.
The so-called "fifth column" is being dealt with by the police and the authorized military guards. They are on the job; they know their business. If any citizen has evidence of what he thinks are enemy activities he should report it at once to the police, but he should not mention it to his neighbour. Remember that secrecy is essential to police work of this kind.
May I say in conclusion that it is necessary, indeed it is imperative, that we in Canada maintain our calmness, do not become unduly nervous and restless, and more particularly do not spread wild rumours which can only hamper the work of the police. I wish I felt at liberty to repeat what the police officers tell me about those who are hampering their work the most at the present time. We must, all of us, try to help, but not spread suspicions which are unwarranted and which can only handicap the progress of our war work.


Grote Stirling: May I ask the Minister of Justice one question in connection with the statement he has just made? He referred to 16,000 enemy aliens.


Ernest Lapointe: Who are registered.


Grote Stirling: Included in that number are there any naturalized Canadians?


Ernest Lapointe: No. All those are not naturalized.



VETERANS HOME GUARDS


[Stage Direction]
On the orders of the day:
Mr. J. H. HARRIS (Danforth):: Can the Minister of National Defence (Mr. Rogers) tell the house when the veterans home guard for military district No. 2 will be established, and the name of the senior officer who will be in charge of the organization of it?
Hon. NORMAN McL. ROGERS (Minister of National Defence): I shall be very glad to take note of the question and to supply the hon. member with the information when it becomes available.



BEAUHARNOIS POWER COMPANY


[Stage Direction]
Hon. C. D. HOWE (Minister of Transport) moved the third reading of Bill No. 9, respecting the Beauharnois Light, Heat and Power Company.
Mr. M. J. COLDWELL (Rosetown-Biggar):: Mr. Speaker, on Friday, when this matter was before the house, we urged that the application
444	COMMONS
Beauharnois Power-Mr. Coldwell '
should be referred to the standing committee on railways, canals and telegraph lines; and we are still urging that that procedure should be followed before this bill is given its final reading.
At the outset, when this company endeavoured to get permission to divert a large amount of water from the St. Lawrence river through the Beauharnois canal, they applied for permission to divert all the water from the river, and after vigorous protests in this house and across the country they amended their application so that it provided for the diversion of 40,000 cubic feet per second. I was looking up the debate which led to the investigation into the granting of the right to this company, and I find that on May 19, 1931, Mr. Robert Gardiner, who was then the member for Acadia, said this:
Their lease,-
The lease which they obtained from the government.
-size of their canal, the order in council, their plans filed, all absolutely limit them to a diversion of 40,000 cubic feet per second.
Does this lease and the order in council represent the honest and real intentions of those concerned? Was it an honest transaction? What are the real facts? Scarcely had the ink dried on this order in council when these very same promoters proceeded to violate not only the letter but the very spirit of the provincial lease and of the order in council. They prepared plans that provided for the diversion of the whole flow of the river; they sold their bonds on the representation that they would eventually get the whole flow; and they are now building without authority a canal which will take the whole flow of the river. Further, they have acquired 13,000 cubic feet from the Montreal Cottons. To add insult to injury, they have secured this past winter 30,000 additional cubic feet from Quebec, and are awaiting a favourable opportunity to ask for another order in council from this government.
It is apparent the then government and these Beauharnois promoters entered into an agreement which they never intended should be carried out.
I quote that because we have before us the application to which Mr. Gardiner referred in 1931 and which he contended at that time was intended further to facilitate the taking over of the entire flow of the river and the building up of a great power concern which would have a stranglehold on the province of Quebec and the electric power generated by the St. Lawrence river.
To-day, of course, we are told that under the pressure of war conditions an additional amount of diversion is warranted and is necessary. I think that that is a point into which the committee should inquire very closely, because my information differs from the representation of the company in that regard.

Are they to-day using the limit of the power they can generate through a diversion of the
53,000	cubic feet per second already granted; and in reality are we dealing now with the Beauharnois corporation, or are we really dealing with a subsidiary of Montreal Light, Heat and Power Consolidated, which, I am also told, is exporting power to the United States?
I want for a few moments to look at the record of the Beauharnois company during the past few years, in order that I may give the house some reasons why I think we should thoroughly investigate this application.
In 1937 the authorized number of capital shares of the Beauharnois corporation was 762,000, all the shares having been issued. Official reports state that this company at that time was already entirely controlled by Montreal Light, Heat and Power Consolidated, which means of course that the latter company must have held more than half the shares, or at least 381,001 of them.
In 1938-this was mentioned in the house at the time-the company was reorganized financially; the authorized capital was increased to 1,431,559 shares. The Montreal Light, Heat and Power Consolidated took 579,559 of the additional shares, which if my first figure is correct, gave it a minimum total of about 960,560 shares. It does not appear that at that time the increased capital was made necessary by any business expansion. At that time the Montreal Light, Heat and Power Consolidated was, it would seem, its principal creditor as well as its principal customer. In 1938 Beauharnois transferred all its physical assets to Montreal Light, Heat and Power, and they appeared on the balance sheet of that company; a fact which was at the same time stated authoritatively, in spite of some denials that appeared in the press.
I think we are interested also in the question whether the Montreal Light, Heat and Power Consolidated was the principal if not the only shareholder of the company at that time, as well as its principal creditor and principal customer, and if as a matter of fact it was the owner of all of the assets of the Beauharnois company.
On Friday last the hon. member for Davenport (Mr. MacNicol) raised some question as to this application and this bill. He stated that the maximum capacity of the installation with the present diversion of 53,000 cubic feet per second is 400,000 horse-power. I understand that the reports of the company state the present capacity to be some 500,000 horse-power, of which 400,000 is now being produced.

Beauhamois Power-Mr. Coldwell
The company to-day has certain contracts. In order to see whether the application now being made to parliament is valid and whether the additional diversion is warranted by the amount of power necessary for war and other purposes, we should see what those contracts are. The company at the moment is obligated to supply the following: To the Montreal Light, Heat and Power Consolidated, 150,000 horse-power; to the Ontario Hydro-Electric Power Commission, 125,000 horse-power.
In connection with the latter figure account must be taken of the fact that in 1941 they will have to supply the Ontario hydroelectric power commission with an additional
25.000	horse-power, bringing the amount up to 150,000; in 1942 under the same contract the amount will have to be increased to
200.000	horse-power, and in 1943 to 225,000 horse-power. No further increases are foreseen until 1976. If these figures are correct, as I have every reason to believe they are, this means that they have a total of 375,000 horse-power contracted for from 1943 and following years. This leaves, according to the company's own statement, a margin of
125.000	horse-power. Why, then, are they asking for more water to produce another substantial increase of power when following 1943 they will have a surplus of 125,000 horsepower?
The question was raised on Friday whether the company is exporting power to the United States. We are told that the company itself is not exporting power to the United States, and I believe that statement is correct. But the Ontario hydro-electric power commission is taking a substantial amount of power from Beauhamois, and some of that may be exported to the United States. The Montreal Light, Heat and Power Consolidated is exporting power to the United States. In 1935-I have not the figures subsequently; there may be some alteration one way or the other-the Montreal Light, Heat and Power Consolidated exported to the United States 696,641,320 kilowatt hours, which at that time was about 22 per cent of its production. I am also told that on this power exported the company takes a substantial loss. Of course the argument may be raised that this is surplus power and that if a large amount of power is generated other than that exported it can be sold at a cheaper rate to other classes of consumers. But does it work out that way in actual practice? I am informed, and believe the information is correct, that Montreal Light, Heat and Power Consolidated sells its electric energy at the following average prices:
Domestic current, 2.99 cents per kilowatt hour, or $195 per horse-power year. The commercial rate I am told is 2-8 cents, or $183
per horse-power year. The general rate is IT cent or $76 per horse-power year, and the export rate is 1-23 mills per kilowatt hour, or $8 per horse-power year. I am told also that certain classes of favoured consumers benefit by a special rate which, if higher at all, is not much higher than the low export rate charged.
It seems to me one of the first obligations of this house to the people of Canada is to see to it that our people get services such as this, originating in our great natural resources, at prices as low and reasonable as possible. If these figures are correct, as I have every reason to believe them to be-and that is why I think this matter should go before the committee- there is an enormous difference between the rates for the two types of power, the difference between the export rate of $8 and the top domestic current rate of $195. The people of Quebec and the people of Canada ought to receive the benefit of this great Canadian natural resource; and our principal objection to all bills of this description is that we are constantly alienating our resources to powerful corporations who are monopolistic in their character and ownership and who charge the public much higher rates than are warranted if we take into consideration the output and the rates which ought to be given to the domestic consumer.
Again, if we examine the cost of production per horse-power, according to the records of the company itself, we find that figure, all costs included, to be about 4 mills per kilowatt hour. That is the figure for Montreal Light, Heat and Power Consolidated; but the average cost for the Beauhamois plant is 2T mills per kilowatt hour, or about half the average of the whole of the corporation's power plants.
In view of these facts and the circumstances surrounding the granting of the original charter I am of opinion that the government would be well advised to accept the suggestion I offered on Friday and have the whole matter referred to a committee, where we could get the technical and other advice we require. If we accept the statements the company has been making in its literature for the last ten years, we find that it can generate some 500,000 horse-power from the 53,000 cubic feet per second now diverted from the St. Lawrence through the Beauhamois canal. That being so, as I have indicated already, from 1943 to 1976 they will have a surplus of some 125,000 horse-power with which to assist the greater industrial development of this country.
I want to emphasize that we are creating great power monopolies in Canada, and there is no greater power monopoly in this country to-day than Montreal Light, Heat and Power Consolidated, which has subsidiaries here and
446	COMMONS
Beauharnois Power-Mr. Coldwell
there across the country. I think we should know that Montreal Light, Heat and Power Consolidated and the Beauharnois company are almost identical as far as their officers go. The chairman of the board of Montreal Light, Heat and Power and of Beauharnois is the same, Sir Herbert Holt. The president of the two companies is the same, Mr. J. S. Norris. The vice-presidents are the same, Mr. G. H. Montgomery, Mr. C. S. Bagg, Mr. Severe Godin and Mr. R. A. C. Henry. Mr. Henry, of course, is the gentleman who to-day is on the executive of our war purchasing board and who was deputy minister at the time the original agreement was made with the Beauharnois company. The secretary is the same, Mr. C. C. Parkes. The assistant secretary is the same, Mr. W. R. McLeod. The treasurer is the same, Mr. P. C. Drake. The assistant treasurer is the same, Mr. A. M. Ste-Marie. Finally, they have the same manager, Mr. C. S. Bagg, and the same offices in the Power building on Craig street in the city of Montreal.
I submit, Mr. Speaker, that we should bear in mind the circumstances which surrounded the original application, and the fact that as far back as 1931, when Mr. Robert Gardiner made his charges in the house which resulted in the investigation, the company planned to obtain an additional diversion of 30,000 cubic feet per second. To-day, nine years later, we have the foreshadowed and identical application before us. In laying out its plans originally the company constructed a canal sufficiently large to take the entire flow of the St. Lawrence river. I know it is said that to-day that canal is an asset of this dominion. It was a year or two after the parliamentary investigation and report that a statute was passed by this parliament taking over the canal as a work of public importance.
The other evening the Minister of Transport (Mr. Howe) told us that the additional power was required because of the war. Well, we are being asked to grant this diversion not for the duration of the war but for all time, in perpetuity; and we should beware lest the war necessity of this country is used as an excuse by which this private corporation may further its original plan to obtain control of the entire flow of the St. Lawrence river. That is our obligation to this country. I do not know what figures have been given the minister by the company to substantiate their claim that more power is required due to war industry expansion. I understand that one large munitions plant is being constructed at Sorel by the Sehneider-Creusot company. I understand further that in its last annual report the Shawinigan power company mentions this 
plant as a possible customer and foresees an initial demand for further power to the extent of about 4,000 horse-power.
These are some of the considerations which impelled me to rise and to suggest to the house that before the bill be given its third reading, and before this resource be alienated in perpetuity, we ought, in the interests of the people of Canada, to inquire very carefully into both the application and the terms of the bill. I am not going to rake up the old scandal about Beauharnois. Every hon. member knows that at least to some extent that brought about, shall we say, a reprimand of the government of the day, and we know the Prime Minister stated that the Liberal party went into the valley of humiliation.
In view of the position taken at that time and the fact that the application now before us is for the very amount of power that Mr. Robert Gardiner indicated would be sought in the future, I suggest that we ought to beware of this application and inquire into it very carefully indeed. I am not going to refer to the report of the Beauharnois committee presented to the house, which, as the record shows, represented the unanimous opinion of the committee which sat at that time, but I do-


Mr. RALSTON:: If my hon. friend will permit me, he has heard more than once my colleague the Minister of Pensions and National Health (Mr. Mackenzie) say that he did not concur in that report. My hon. friend may tell us what the record shows, but he must have heard the minister say on several occasions that he did not concur in it.


Major James William Coldwell: I should like to have that point cleared up, because the minutes of the proceedings of the committee state this:
The committee resumed at 2.15 p.m.
Members present: Messrs. Dorion, Fiset (Sir Eugene), Gardiner, Gordon, Jacobs, Jones, Lennox, Mackenzie (Vancouver Centre), Stewart (Lethbridge).
On motion of Mr. Lennox,-
Ordered that,
(1)	Counsel for the committee;
(2)	The secretary to Mr. White, K.C., of counsel for the committee; and
(3)	The auditors employed by the committee, be retained until the committee's final report is disposed of by the House of Commons.
On motion of Sir Eugene Fiset,-
Certain moneys were ordered paid. And then:
The committee resumed consideration of the draft report submitted by the chairman.
It was unanimously agreed that the following be presented to the House cf Commons as a fourth report, viz:-

Beauhamois Power-Speaker's Ruling
And then comes the report of the committee, as finally adopted in the house.


James Layton Ralston: And is it signed?


Major James William Coldwell: Yes; I believe it is signed by the chairman.


James Layton Ralston: The Hon. Mr. Gordon?


Major James William Coldwell: It is signed by John T. Dun, clerk of the committee.


Mr. DOUGLAS (Weyburn):: He must have demurred mentally.


Major James William Coldwell: In view of these considerations, and of the fact that it is the obligation of this parliament to protect the people of Canada both now and in the future, it is our contention that this bill and the matters connected therewith should be referred back to the committee of the whole. I move, therefore, seconded by Mr. Maclnnis:
That the bill be not now read a third time, but that it be referred back to the committee of the whole with a view to further amendment.


Clarence Decatur Howe: I am not a parliamentary expert, but it seems to me that the amendment is not in order, in that the motion should be that the bill be referred back to the committee with certain instructions. The reference back should include some specific direction to the committee.


Ernest Lapointe: There must be an instruction.


Mr. SPEAKER:: This amendment is moved under standing order 77, which states:
All amendments made in committee are reported by the chairman to the house, which shall receive the same forthwith. After report the bill is open to debate and amendment, before it is ordered for a third reading. But when a bill is reported without amendment, it is forthwith ordered to be read a third time at such time as may be appointed by the house.
Paragraph 813 of Beauchesne's Parliamentary Rules and Forms states the following:
When a bill comes up for third reading a member may move that it be not now read a third time but that it be referred back to the committee of the wdiole for the purpose of amending it in any particular. The motion for third reading is debatable under standing order 38.
The amendment we now have before us is in conformity with that requirement, and moves that the bill be not now read a third time but that it be referred back to the committee of the whole with a view to further amendment. In my opinion the amendment is in order. Is the house ready for the question?


Ernest Lapointe: But there is no instruction.


Major James William Coldwell: I understand Mr. Speaker's ruling has been given.


Georges Parent: Order. I am now informed that the bill was not amended at any time, and it is drawn to my attention that the motion to refer back asks " that the bill be not now read a third time, but that it be referred back to the committee of the whole with a view to further amendment." There is no
further amendment," because there was no amendment to the bill as it stood. That of course alters the opinion I have already given. It cannot be further amended when it has not already been amended; therefore in that regard the motion is not in order.
Mr. MaeINNIS:	I refer again to paragraph 813, to which reference has already been made:
When a bill comes up for third reading a member may move that it be not now read a third time but that it be referred back to the committee of the whole for the purpose of amending it in any particular.
And then it continues:
The motion for third reading is debatable under standing order 38. Or the bill may then be ordered to be reprinted or committed to a select committee. Bills may be re-committed a number of times with or without limitation; in the latter case, the whole bill is opened to reconsideration, but in the former case the committee can only consider the clause or amendments or instructions referred to them.
Then we turn to page 217, and refer to paragraph 755.


Ernest Lapointe: But that is not a rule.
Mr. MaeINNIS: It is as follows:
It is also competent to a member who desires to place on record any special reasons for not agreeing to the second reading of a bill-
May I point out in passing that paragraph 814 states that what can be done on second reading can also be done on third reading. The paragraph continues:
-to move as an amendment to the question, a resolution declaratory of some principle adverse to, or differing from, the principles, policy, or provisions of the bill, or expressing opinions as to the circumstances connected with its introduction, or prosecution; or otherwise opposed to its progress; or seeking further information in relation to the bill by committees. . . .
This amendment is for the purpose of seeking further information in committee; consequently I think it is strictly in accordance with Beauchesne's Parliamentary Rules and Forms.


Georges Parent: The hon. gentleman has referred to the amendment, but he has not stated just what it says. When I gave my
448	COMMONS
Beauhamois Power-Speaker's Ruling
opinion in the first instance I was not aware of the fact that there had been no amendment in committee of the whole when this bill was being considered. Having had that brought to my attention, and since the amendment seeks to refer the bill back "with a view to further amendment," it would appear that there cannot be a further amendment of something that has not already been amended. Therefore, in my opinion the amendment is not in order.


Thomas Clement (Tommy) Douglas: Mr. Speaker-


Georges Parent: I am afraid I shall have to call the attention of the house to the fact that my ruling is not debatable.


Thomas Clement (Tommy) Douglas: I was not
about to debate Your Honour's ruling. I am assuming the amendment has been ruled out of order and I rise for the purpose of proposing an amendment which may be in order in view of the statement which Your Honour has just made. I move:
That the bill be not now read a third time but that it be referred back to the committee of the whole with a view to amending it.


Ernest Lapointe: Mr. Speaker, before you give your ruling I should like to draw attention to standing order 77, which reads:
All amendments made in committee are reported by the chairman to the house, which shall receive the same forthwith. After report the bill is open to debate and amendment, before it is ordered for a third reading. But when a bill is reported without amendment, it is forthwith ordered to be read a third time at such time as may be appointed by the house.
Paragraph 808 reads:
Upon the report stage of any bill no amendment may be proposed which could not have been proposed in committee without an instruction from the house.
My experience in parliament has been that where an amendment of this kind is moved on the third reading of a bill it must contain formal instructions to the committee of the whole that it should be amended in a certain way. It was not merely a motion to refer the bill back without saying why it was being sent back.


Richard Burpee Hanson: Mr. Speaker, without desiring in any way to restrict debate by or action on the part of hon. gentlemen to my left, I must say that the Minister of Justice (Mr. Lapointe) has interpreted the rule as I have understood it for many years, that on the motion for third reading of a bill an amendment to refer it back to the committee of the whole must lontain instructions. I am not sure that the

wording of the rule is a happy one. It states that it shall be " for the purpose of amending it in any particular," but perhaps a better wording would be " for the purpose of amending it in some particular," or " in a certain particular." I am inclined to the belief that your ruling, sir, in the first instance was wrong, but that your present ruling is correct.


Georges Parent: I direct the attention of hon. members to page 529 of Bourinot, which
reads:
Bills may be recommitted a number of times to the committee of the whole or to a special committee. Bills may be recommitted with or without limitation; in the latter ease the whole bill is open to reconsideration but in the former ease the committee can only consider the clauses or amendments or instructions referred to them.
In my opinion the amendment as now put is in order.


Clarence Decatur Howe: Mr. Speaker, certain reasons have been given by my hon. friend (Mr. Coldwell) for reopening the case. He has stated that in his opinion there is evidence to show that the Beauharnois Light, Heat and Power Company is within the orbit or under the influence of Montreal Light, Heat and Power Consolidated. While I am not certain, I think I stated in my previous argument that the Beauharnois Light, Heat and Power Company has been a wholly-owned subsidiary of Montreal Light, Heat and Power since 1932. Therefore it seems to me that no new evidence can be produced in that regard.
My hon. friend also discussed prices of power. He said that in one instance- power had been sold for $8 per horse-power while in another case a charge of S195 per horse-power was made. This shows the futility of laymen discussing the price of power; there are so many factors entering into the matter. Eight dollars per horse-power may be a reasonable charge for high tension power measured at a switch-board, while $195 per horse-power may be a reasonable price to charge for power sold at 110 volts in some remote area where the cost of transmission and providing a transformer system has a considerable bearing on the delivered cost.
The Hydro-Electric Power Commission of Ontario is a publicly owned institution which undertakes to sell power at cost. If anything, I think, they lean backward in order to charge the small user a lower price than that charged to the large user-I mean a lower price having in mind all the elements of cost. Many times as a consulting engineer in private practice I have had occasion to negotiate contracts with the Ontario HydroElectric Power Commission, and the analyses

Beauhamois Poiver-Mr. Howe
I have made lead me to believe that this is the case. It may not be intentional but I think it is their usual feeling toward the small man as compared to the large user. I think almost as wide discrepancies in sales of power in dollars will be found in the rates of the Ontario hydro-electric commission. The fact that there may be a discussion of the cost of power is to me one reason why this bill should not be referred back to the committee. In the province of Quebec the amounts charged for power are under the jurisdiction of the provincial authorities. These charges are regulated by the Quebec provincial electricity board which is composed of technical experts.


Mr. HOMUTH:: Do they set rates?


Clarence Decatur Howe: They regulate rates. They function in the direction of regulation much the same as the Ontario hydro-electric commission functions in the generation and sale of power. Laymen could argue for a long time whether one rate was comparable with another, but if ever there was a technical problem, the question of rates for the sale of power is one which ought to be dealt with by people who know a great deal about the power industry.
It is true, as my hon. friend said, that a lease from the province of Quebec for an additional 30,000 cubic feet per second was granted in 1931. It is also true that it was not until 1940 that this government saw fit to ask parliament to grant this diversion of an additional quantity of water. As I have said, we have had before us for at least eighteen months an application from this company asking for this extra diversion. Up until a short time ago it was not apparent that there was a need for additional power in that area and that it would be in the public interest to grant the diversion. But to-day there is ample evidence that the prosecution of the war and the furnishing by Canada of munitions supplies will be greatly hampered unless additional power can be made available. My hon. friend in his remarks mentioned the munitions plant at Sorel as a factor in this situation. As a matter of fact that particular plant is not a factor in this situation because it happens to be supplied by the Shawinigan company and the Shawinigan problem is a separate problem from the Montreal Light, Heat and Power problem.
We are breaking ground at the present time for an explosives plant in the Montreal area which will depend for operation upon being able to contract for 12,000 horse-power. We are placing other contracts in the Montreal area, all having to do directly with the supply of munitions, which will also call for sizable blocks of power. An alloys plant served by
Beauhamois which at the beginning of the war was using 10,000 horse-power, is now using 30,000 horse-power, and has applied for an extension of its contract up to 40,000 horsepower.


Mr. BLACICMORE:: Is there no other
establishment in Canada equipped to produce the particular kind of munitions which it is proposed to manufacture as a result of the use of this power? Are there no other concerns in Canada able to produce such explosives, alloys and other things as are to be produced in Montreal?


Clarence Decatur Howe: The situation in Montreal
is the key to the situation throughout the industrial area of central Canada. I know of no plant to-day which could take on contracts in any quantity calling for 12,000 horse-power. The Ontario hydro-electric power commission I know is veiy short of power. We are selling them a block of power from the excess water on the Welland canal and they are pressing us to send over every drop of water that we can in that locality to prevent them from having to limit the amount of power in the area served by them.


Mr. MacNICOL:: Do you mean to develop the power at Decew Falls?


Clarence Decatur Howe: Yes.


John Horne Blackmore: Is it impossible to
manufacture these munitions from another source of power? Is there no source of energy which can be used elsewhere in Canada?


Clarence Decatur Howe: The production of explosives, particularly nitrocellulose, calls for hydro power. My hon friend is perhaps suggesting that we can generate power from coal or something of that sort.


John Horne Blackmore: Or from natural gas.


Clarence Decatur Howe: It was my understanding that power in mechanical form was required and it was my understanding that it would be required to convert the coal or the gas into electric energy to do this particular job. I am not a technical expert in the manufacture of explosives, but the power is required not for heat but for mechanical energy.


John Horne Blackmore: In view of all these aspects is there not good reason to submit the bill to a committee to determine these matters upon which as individuals we are perhaps not qualified to judge?


Clarence Decatur Howe: Perhaps I might illustrate the need for power by reading a letter-it is not marked confidential and I think it is therefore in order to read it-from the HydroElectric Power Commission of Ontario, signed



Beauharnois Power-Mr. Howe
by the chairman, T. H. Hogg, to J. S. Norris, president of Montreal Light, Heat and Power Consolidated, and dated November 18, 1939: Dear Mr. Norris:
The commission is making a very thorough canvass of power resources in southern Ontario available to meet any growth in load that may occur over a period of five or six years. Naturally the ordinary uncertainties in the growth of power demand are greatly aggravated by the much greater uncertainties attributable to possible war activity and we are therefore anxious to make the widest possible canvass of possibilities.
Among other sources of supply, I have naturally considered Beauharnois and although I understand that you have already contracted for the full output that can be developed from the water which you are now permitted to use, I would be interested to have from you an expression of opinion as to the possibility of supplying the commission additional power. In answering, you might bear in mind that the commission is primarily concerned with the demands that may arise during the progress of the war.
To that Mr. Norris replied under date of November 24, 1939:
Dear Dr. Hogg:
Replying to vour letter of November 18 instant, I regret to say that having regard to existing contracts with your commission and others and our available water supply, we have sold the complete productive capacity of our Beauharnois plant and, consequently, cannot supply any additional power to your commission from that or any other source unless and until we obtain federal approval of our pending application for the diversion oi additional water.
If we obtain approval, as above, for the diversion of additional water within a reasonable time we would be in a position to furnish additional power to your commission, as asked, and will be very happy to negotiate with your commission to this end as, if_ and wrhen the right of diversion of % additional water is granted.
That is an indication that Beauharnois has no unsold power at present.


Major James William Coldwell: What figures do they give to substantiate that statement?


Clarence Decatur Howe: I have figures here of the present power resources of Montreal Light, Heat and Power and its subsidiary or controlled companies, together with the actual consumer demand:
Resources Beauharnois Chambly.. . Cedars.. ..



H.P. 400.000 6,000 133.000

John Ritchie MacNicol: Do they not divert enough water at Cedars to develop 225,000 horse-power?


Clarence Decatur Howe: No; 133,000 is the only figure I have ever seen for eousideration.


John Ritchie MacNicol: I have seen 225,000.


Clarence Decatur Howe: I think their lease is for only about 130,000.
Resources	H.P.
Montreal Island	Power Company.. 30,000
Canadian Light	& Power	 15,000
Purchased power (Shawinigan Power)	161,000
Consumer Demand Under contract-
Hydro-Electric Power Commission
of Ontario	      150,000
Beauharnois and	district	 50,000
Montreal and district	 383,700
Aluminum Company of America .. 116,800


Major James William Coldwell: Is that exported?


Clarence Decatur Howe: Yes. I referred to that in my address on the previous day as power generated at Cedars and exported from there to the Aluminum Company of America at Massena on a contract that has been outstanding, I believe, since before the last war.
So that there is generated by Montreal Light, Heat and Power and all its subsidiaries 745,000 horse-power; and at the time this information was collected, which was November 17, 1939, the total outstanding contracts called for 700,500, leaving a then surplus of 44,500 horse-power.


Richard Burpee Hanson: About five per cent?


Clarence Decatur Howe: Yes. And that was several months ago.
Mr. Speaker, I could have brought this application along at previous sessions, certainly at one previous session, but I was not then convinced that this power was actually needed for the benefit of the people of the provinces of Ontario and Quebec. To-day I am satisfied that harm will be done if this readily available power is not made available. I am certain that it will seriously dislocate our present production plans for munitions required in our war effort. I believe that to-day there is no argument which would convince anyone who has taken the time to study the situation that this government is not proceeding wisely in asking this house to vote the third reading of the bill. For this reason I ask that the amendment for recommitting the bill to the committee be defeated.


Hon.   I@: Mr. Speaker, I do not question for a moment the motives of hon. gentlemen in bringing forward this amendment, but in the circumstances I do not see that it is logical for me, giving the matter reasoned consideration, to vote for the amendment. If they will bring forward constructive views as to the manner in which this bill should be

Beauharnois Power-Mr. Maclnnis
amended, we will give those views consideration on their merits; but as I understand the present amendment, it is a wide-open invitation to the house to amend the bill. Where it falls down, if I may say so, is that it does not make any concrete suggestion as to the manner in which the bill should be amended. That is one reason why I intend to vote against the amendment. The other reason is this. I have made some investigation into the question of the necessity of further power at this point, and I am convinced that, so far as the amount of power available from the Montreal Light, Heat and Power pool is concerned, they are within five per cent or less of their maximum.
The minister assures us that more power is required in two directions, namely for the Ontario hydro-electric and for the manufacture of munitions at or near the site of the development. I think we should accept this statement, in the absence of any evidence to the contrary. After all, in one aspect, if not altogether, this is a quasi war measure.
I know that the company as presently controlled is quite a different proposition from what it was as promoted. I believe hon. members should distinguish between the situation to-day and what it was in 1931. I do not need to go back into that, but there is certainly a vast difference. This is a business undertaking. You may not like the auspices under which this company is operating. Personally I have no objection to power monopolies if they are properly regulated. 1 do not know that they are, in the province of Quebec; possibly they are not properly regulated anywhere; but certainly there is a governing body whose duty it is to regulate the question of rates, and the jurisdiction, as I tried to point out last week, is in that provincial body.
The objection, if such it might be termed, that I had to this bill was to the interference with navigation and with navigation rights, because I visualized this company coming back to parliament from time to time, as the demand upon it for power might grow, and asking for the entire diversion of the river St. Lawrence. I should think they would get it from this parliament, if it acts on principle, provided the interests of navigation are conserved.
With respect to the whole power proposition question, jurisdiction over power qua power is in the provincial government, whether we like it or not, and whether or not this power is developed as a result of a change in navigation possibilities.
Although this is a government measure,
I do not think it is in any sense a political 95826-29J
measure; therefore hon. members who am supporting me are entitled to vote on the amendment as they please; but I must vote on some principle in relation to the matter. Until my hon. friends to the left are able to show me in what constructive way they would amend the measure-and I am not introducing anything-I do not see how I can support the amendment.


Mr. ANGUS MacINNIS (Vancouver East):: I wish to say only a very few words in connection with this amendment. The leader of the opposition (Mr. Hanson) has just remarked that until we tell him how we want to amend the bill, he cannot see his way clear to vote for the bill.


Richard Burpee Hanson: Vote for the amendment.


Angus MacInnis: Vote for the amendment- I thank the hon. gentleman for the correction. What we are trying to do by the amendment is to have the bill sent to a committee where we can get information in regard to its implications.


Richard Burpee Hanson: I tried to give them to you.


Angus MacInnis: The best reason for sending the bill to a special committee was stated by the Minister of Transport (Mr. Howe) a few minutes ago. He said that he could have introduced this bill several years ago but did not do so because he saw no necessity. He says that anyone who had given consideration to the matter would see the necessity for this authority at this time. But we have not the facts the minister may have which would enable us to give consideration to the matter. It is in order that we may know these facts, know what the consequences of our vote will be, that we ask that this bill be referred to the proper committee where an investigation can be had. Ordinarily a bill of this kind might be introduced by a private member. Whether introduced by a private member or by the government, I am sure that in normal times the bill wrould be referred to the committee to which we suggest that it be referred now. There is no member in the house apart from the Minister of Transport who has any knowledge or understanding of matters involved in this bill; we are asked to vote entirely in the dark. We ask that our amendment be put and carried and the bill referred to the committee.
The minister suggests that this would hold up an essential war service. But this parliament met over two weeks ago; we have waited two weeks to deal with this matter; we could send it to the committee and have

Beauhamois Power-Mr. Blackmore
it dealt with in less than two weeks. Surely that is not an unreasonable request, in order to safeguard the interests of the people of Canada.


John Horne Blackmore: I do not find myself at all impressed by the arguments against the amendment. I do not want in any way to slow up the activity of this country in connection with the war; it is slow enough now. It is a disgrace to the whole British empire that we are so slow. But at the same time we have to be watchful. I am not impressed by the implication which seems to be conveyed by the minister that if for any reason these great power plants in the province of Quebec should be destroyed or should fall into the hands of an enemy, Canada would be unable to produce necessary and vital explosives and so on. While I am not an authority on the different explosives and munitions that are necessary, I venture to suggest there are many places in Canada where these explosives and munitions can be manufactured. Consequently I cannot see that it is of tremendously urgent importance that this bill be rushed through with such haste. We are going to be here for six weeks or so I judge, and I do not think it will impair Canada's war efficiency if we take a little time to do a thing like this properly. A committee should not require a great deal of time, as the bon. member who spoke before me (Mr. Maclnnis) pointed out.
I would draw the attention of the house to the fact that the confidence of the Canadian people is severely shaken in regard to everything with which the name Beauharnois is associated. Whether that name is deserving of the discredit attached to it I do not know, but I know that name was a very offensive word in my vocabulary long before I became a member of this parliament. That is another reason why it seems to me the utmost care should be exercised to allay as far as possible this lack of confidence in the public mind.
Furthermore the confidence of the Canadian people in this government is severely shaken. I have not caviled; I believe hon. members of the government will grant that, but I have received resolutions and letters from all parts of Canada indicating an extreme anxiety because of the feeling that this government is not getting on with the job since war was declared. Whether that suspicion is well founded or not, in view of its existence surely it would be a good thing to clear up this water diversion proposal so that everyone will be completely satisfied that all is on the square. I hasten to say to the minister who is piloting .this bill through, that I have and have had
[ Mr. Maclnnis.]
ever since I came to parliament the highest regard for his integrity; I do not for a moment want him to think that there is any doubt of his sincerity in this matter; but I am talking in general terms and I say that by reason of the lack of confidence which has developed in the aggressiveness and energy of the government, it would be a good thing to avoid contributing to that anxiety by rushing this bill through.
There is another matter that is very important; the hon. member for Rosetown-Biggar (Mr. Coldwell) has put on Hansard the names of the gentlemen who are prominent in the companies applying for water power.
I do not happen to be acquainted with these gentlemen; I have no knowledge concerning them; but there certainly does not exist among the people with whom I have talked any great confidence in any of those men, probably because of their too close association with the Beauharnois scandal.
Then another matter is exercising the people.
I speak purely from the point of view of the morale of this country. We are vitally concerned in having the people of Canada united, confident that the government of Canada is out to win this war and to put everything into our war effort, and that we are not going to be sold out, betrayed, or "sold down the river" as they say across the line. Inasmuch as there is a lack of confidence in a number of these men, I believe this bill ought to go to a committee.
Another matter about which many people are very suspicious is these dollar-a-year men.


An hon. MEMBER:: They take the contracts home.


John Horne Blackmore: Perhaps all of these men are entirely above reproach, but it is a cause of anxiety all over the west that men who apparently, as far as the public knows, have up to the present time devoted their lives to the pursuit of dollars should suddenly become so magnanimous and unselfish that they offer their services to this country for a dollar a year and out-of-pocket expenses. "Out-of-pocket expenses, et cetera" are generalities into which people can read a great deal of cause for suspicion. This is another reason why in my judgment, we should manoeuvre to put this whole question before a committee that has power to get the facts. I would say that a committee would be the very best way to go about it to revive confidence. I learn that the object of those who move this amendment is simply to put the bill back into committee, from which it can be referred to a special committee of this house which will have power to call witnesses.

Farmers' Creditors
One more thing I wish to say probably arises from my general ignorance concerning explosives and munitions. As far as I can judge from news from overseas, what we need above everything else is aeroplanes and bombers, a great many of them, and tanks and armoured cars. Our immediate need is for these. To produce them, this electric energy is not, it seems, to be used. Where is the urgency?
I have not had impressed upon me how great is the need for the particular kind of explosive to which reference is made. If the need is very great, I am impressed by the fact that during the last war we produced a tremendous amount of explosives-so far as I know more than we are producing now-and at that time we did not have this extra power. In consideration of these matters, therefore, I propose to vote for the amendment.



FARMERS' CREDITORS


[Stage Direction]
Hon. J. L. RALSTON (Minister of Finance) moved the second reading of Bill No. 25, to amend the Farmers' Creditors Arrangement Act, 1934.
Messrs: .
Adamson	Fleming
Bertrand (Prescott)	Fournier (Hull)
Bertrand (Terrebonne)	Fulford
Black (Cumberland)	Gardiner
Bourget
Bradette
Bruce
Brunelle
Cardin
Casgrain
Casselman
(Edmonton East) Corman Cote Crerar Cruickshank Damude d'Anjou Deehene Donnelly Douglas (Queens) Dubois Edwards Evans
Gershaw
Gibson
Golding
Graham
Hanson (Skeena) Hanson
(Yorlc-S unbury) Harris (Danforth) Harris (Grey-Bruce) Hazen Henderson Homuth ITowden Howe Hurtubise llsley
King, Mackenzie
Kinley
Kirk
Lacroix (Beauce)
Mr. HARRY LEADER (Portage la Prairie):: Mr. Speaker, this bill is of peculiar interest to Manitoba. While it is not my intention to offer any extended remarks at this time, I feel I should say something in regard to the measure. I want to commend the goverment for reenacting this legislation which places our province in the same position as it was prior to 1938. We shall now enjoy the same privileges as are enjoyed by our two sister provinces, Alberta and Saskatchewan. The repeal of the act in so far as it affected Manitoba was by means of an amendment proposed by the senate and concurred in by the government. The legislation is not ideal; it has serious defects and limitations. I think the most serious drawback is that no provision is made for the unsecured creditor such as the small store-keeper, the butcher or other private persons who may have helped out a debtor
Farmers' Creditors

and received no security. In my province at least, this type of creditor has been overlooked whereas those who had security have been protected to a certain extent.
This legislation was passed in order to keep our farmers on the land, but there are other measures which I think would prove more appropriate. I should like to refer to an act passed unanimously by the Manitoba legislature, known as the land court act. Representations have been made to me to endorse in this house the action of the Manitoba government, and this I promised to do. Answering a question submitted the other evening by the hon. member for Souris (Mr. Ross), I understood the Minister of Finance (Mr .Ralston) to say that it was not the intention of the government to pass enabling legislation this year in support of the provincial act.
Last session this house passed the mortgage bank bill, and we had hopes that that legislation would provide a greater measure of relief than the Farmers' Creditors Arrangement Act and be more equitable for all concerned. But that legislation never came into force. If we are going to keep many of our farmers on the land, it is essential that the Farmers' Creditors Arrangement Act should apply to Manitoba. I should like to suggest to the government that they again press this measure and serve notice on the senate that we do not want any amendment which will nullify its provisions.


Georges Parent: The hon. member cannot make any reference to what may happen in the other place or refer to instructions to be given by the government.


Harry Leader: I do not wish to transgress the rules of the house. Perhaps I can refer to the senate as the other place, as other hon. members have done. It seems to me that if members of the House of Commons, the representatives of the people, cannot name a body, the members of which are not elected by the people but appointed by the government in power, and which has power to nullify any measure passed by this house, then I say that this is democracy at its worst.


Mr. TLIORSON:: You can change the rules if you want to.


Harry Leader: I am abiding by the rules. I simply want to reiterate what I said in the first place, that the government deserves commendation for making the provisions of this measure available to the people of Manitoba. I want to say also that the demand to reenact this legislation is endorsed unanimously by the provincial legislature as well as by the federation of agriculture in
|,Mr. Leader.]
Manitoba. Above all, it is endorsed by my constituents, and I am offering these remarks in their behalf.


George Alexander Cruickshank: I should like to ask the minister if British Columbia is definitely out of this?


James Layton Ralston: When the bill got into committee I intended to make clear just what provinces this legislation would affect. This matter came up before when we were discussing the resolution in committee. If my hon. friend wants just that one question answered, the act has expired so far as British Columbia is concerned but still applies to soldier settlers there.


George Alexander Cruickshank: Will the minister see that British Columbia is reincluded in
the act?


John Horne Blackmore: Mr. Speaker, I too would like to commend the minister (Mr. Ralston) for introducing this bill. This is a tacit acknowledgment, long overdue, that the western farmer really does have a debt problem which to him under existing circumstances is insuperable. This debt problem has developed from a number of causes, among which might be named: (1) the variability of prices; (2) the increasing costs of the commodities which the western farmer buys, from agricultural implements all the way down the list of some 147 articles which, according to the Searle index report, have increased in price since 1914 from 100 to 134; (3) an adverse tariff incidence which bears particularly heavily on the three prairie provinces; and (4) increased taxes, federally, provincially and municipally.
The bill is further a tacit acknowledgment that interest rates in the Dominion of Canada are far too high. I fancy the day will come when our descendants will look back on our times in utter amazement that we were so stupid as to be unable to see this years ago. Five per cent is an exorbitant price for money to-day, and many of our farmers are paying far more than that, and our provinces too. Interest rates are far too high on mortgages, loans and bonds, and that is tacitly acknowledged by this bill.
There is a conclusion which must follow, and again it is tacitly admitted, I take it, that the three prairie provinces are as provinces faced with a debt situation which to them is completely insupportable, that they too are paying far too high interest rates, and that they too must be relieved. I shall look forward with increasing interest to the time when the minister, who is manifestly a man

Farmers' Creditors
of vision, will show clearly that he recognizes that fact by taking measures to relieve the pressure existing on the provinces as well.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Fournier (Hull) in the chair.
Section 1 agreed to.
On section 2-Compositions.
Mr. ROSS (Souris):: Speaking the other
evening, I favoured this bill with some reservations. They were exactly as put forward this afternoon by the hon. member for Portage la Prairie (Mr. Leader). My question is with regard to the unsecured creditor. Is it a question simply for the judge who happens to be administering the act to decide, or does the act itself specifically point out that the unsecured creditor is not protected?


James Layton Ralston: I understand my hon.
friend to ask whether the act itself provides that the unsecured creditor must be protected, by which I presume he means given priority?


James Arthur Ross: No; put on the same basis as the secured creditor. Does that power rest with the judge administering the act?


James Layton Ralston: My hon. friend will understand that first a proposal is made by the debtor. Then, if the proposal is not approved and not agreed to by the creditors, the board of review formulates a proposal, and in that proposal it may make provision for the unsecured creditor as well as for the secured creditor. I do not think there is in the act anything which gives definite priority to one class of creditors or any direction as to how the respective classes of creditors shall be treated. The important thing about the act- and it is a matter which was the subject of a good deal of litigation-was the question whether we could affect title to land by an act of this kind, having regard to the fact that the secured creditors, where the English law applies, have a title to the land itself, and the question was whether our powers over bankruptcy wrould affect that security. It was decided by the privy council that the act was intra vires and that that security could be affected.


Ernest George Hansell: We had some little discussion the other day with regard to farmers who come under this act and whose hearings took place about 1935. Might I ask the finance minister if this act means that the farmer who had a hearing prior to, say, 1935 can have a rehearing now?


James Layton Ralston: No; this does not provide for any additional hearing. What it does do is to remove the bar which exists in.Manitoba
by virtue of the legislation of two years ago, whereby no proposals were permitted to be submitted after June 30, 1939. This legislation permits proposals to be submitted in Manitoba similarly to proposals made under the provisions with regard to Alberta and Saskatchewan.


Ernest George Hansell: The only conclusion we can reach then is that if a debtor has not been able to meet his payments since the hearing he had in those early days, there is no possibility of any settlement for him except through the courts.


James Layton Ralston: There is the possibility of settlement by negotiation. But what my hon. friend is suggesting is really an appeal from a proposal which has already been submitted and from a decision which has already been laid down by a board of review. He will understand that if such a provision as that were made, it would have to apply on behalf of the creditor as well. That would mean that all the thousands of cases which have been heard would all be subject to reopening.


Ernest George Hansell: The debtor could then appeal from the previous decision.


Mr. HATFIELD:: Can the soldier settler in any part of Canada make application under the act?


James Layton Ralston: The provisions of the act are still open to soldier settlers in British Columbia, where the act is now cut off so far as other applicants are concerned; also in Alberta and Saskatchewan where the act is in full force with respect to all applicants including soldier settlers. The revival of the act in Manitoba would also, of course, reopen the act to soldier settlers there.


Heber Harold Hatfield: Why single out British Columbia?


James Layton Ralston: Perhaps my hon. friend's question might be put the other way: Why should the soldier settler be cut off in the other provinces? The act was repealed in all the other provinces except those four, and reports were received from the soldier settlement board that all proposals had been dealt with.
I have before me a record of the cases in all the provinces. I believe that in the eastern provinces as of March 31, practically all the cases are cleared up, with the exception of something like 114 in New Brunswick, which have been considerably reduced in number since then, and which will probably be disposed of within twro or three months. At that time there were in Quebec 359 cases, which will probably be cleared up by the end of July; in Ontario only fifteen cases are left;
Farmers' Creditors

in Manitoba, unless this bill becomes law, 626 cases are left; in British Columbia only nineteen cases remain to be cleared up as of March 31.


Mr. BROOKS:: I believe the minister misunderstood the question of the hon. member for Victoria-Carleton (Mr. Hatfield). He asked if there could be any further applications from soldier settlers beyond those which have already been made, to which the minister has referred, and which are being cleared up. Can the soldier settlers in the provinces he has mentioned make any further applications?


James Layton Ralston: In the eastern provinces? No.


Mr. BLACK (Cumberland):: Why are the eastern provinces dealt with differently from the others? This is a federal measure and should, I think, if it is to have application at all, be applicable to the whole of Canada. Is it at the special request of, say, Nova Scotia, or other eastern provinces that they are excluded?


James Layton Ralston: I believe that it was on the reports of the boards in the various provinces that the act was finally repealed as to those provinces. My hon. friend will observe, if he looks at the debates, that there was considerable discussion about the act. Originally the act was to have been repealed as to all the provinces. Finally it was decided, upon certain representations with regard to particular hardships in the western provinces, that the cut-off date should be postponed in respect of them to a certain time, namely June 30, 1939. In respect of British Columbia the date was, I believe, a little later. But the repeal as to all the eastern provinces took place in 1938, upon the reports of the boards of review which were hearing the cases. My hon. friend may not have recalled that the act refers only to debts contracted before May 1, 1935. "


George Alexander Cruickshank: I come from a
purely farming district in British Columbia. We in that province have far more debts than have the farmers in Saskatchewan and Manitoba, and we should have consideration in this matter. Farmers in my riding are writing to me every day in this connection. I do not see why British Columbia should be left out. The prices we receive for farm commodities are no better than those received on the prairies. We sympathize with the prairie farmers and we expect them to sympathize with us. I earnestly ask the minister to consider exempting British Columbia from the repeal provision. It should be within everyone's knowledge that in no part of Canada 
during the past ten years has the farmer been able to pay off past debts, clear off mortgages, or buy new equipment.


James Layton Ralston: My hon. friend and I
should have been here in 1938. That was the time when the matter was dealt with. May I point out that at the present time only nineteen cases are outstanding in British Columbia.


George Alexander Cruickshank: The nineteen
cases are those which are being heard, but probably there are in my own district 290 cases to which this treatment should have applied, and which have every right to it.


James Layton Ralston: All I can say to my hon. friend is that the act was brought into force to meet a particularly difficult situation which was found to exist in 1934. It was an emergency measure; it was not intended to be a piece of permanent legislation; and that fact was recognized in 1938 when parliament repealed the act as to the various provinces mentioned. The Minister of Agriculture (Mr. Gardiner) reminds me that the repeal with regard to British Columbia was effected in another place. I had forgotten this; I had it in mind that one of the other provinces was included in the bill brought down in 1938. Now it is not intended to revive this act and start this all over again in all the provinces; but special representations have come from Manitoba, having regard to the crop situation there in the last two or three years, and the fact that farmers have been so down on their luck that they have not been in a position even to make proposals, and on the other hand, that creditors have not been pressing them because they felt the farmers were not able to make proposals. As a consequence, proposals were not made within the time limit set by the act. This bill is for the purpose of putting Manitoba on the same basis as Alberta and Saskatchewan.


Mr. JOHNSTON (Bow River):: While we arc discussing the amendment to the Farmers' Creditors Arrangement Act, there is one other respect in which that measure should be adjusted; I refer to section 6A, chapter 47 of the Statutes of Canada, 1938, page 346. I would draw particularly to the attention of the minister subsection 1, which says in part:
In the event of the death of a farmer occurring on or after the third day of July, 1934. . . .
Under that section the board has not the power to deal with estates created before that date. I have before me a case which was taken up last year in Calgary. The husband died before July 3, 1934, and because of that fact the lady in question was unable to come under the jurisdiction of the board. May I

Farmers' Creditors
read part of this communication which indicates clearly the ruling of the board in this particular case?
The said land creditor has objected to the jurisdiction of the board, alleging that the case does not come within section 10A of the act-
It really means "6A of the act."
-and contending that it is the duty of the applicant as executrix to sell the assets of the estate to satisfy creditors. As this application does not appear to be one authorized by section 10A of the act-
Again it should be corrected to read "6A."
-the board does not consider that it has jurisdiction to formulate a proposal.
The board accordingly declines to formulate a proposal herein.
Apparently this is a case where, after argument presented by the creditor's lawyer, the board does not even know whether it has the power under this act. In view of that fact, and because this lady is absolutely deprived of any redress through the board, and the case cannot come under the provincial debt adjustment board, the applicant is absolutely at the mercy of a creditor who lives outside Canada, in California. She applied in the proper manner to have the case brought under the jurisdiction of the board, and it is a fact that she has paid already more than the property was worth in the first place, and is merely asking the board to giye her some satisfaction.


James Layton Ralston: Did my hon. friend say that the applicant was living in California?


Charles Edward Johnston: No; the creditor.


James Layton Ralston: The applicant is where? On a farm?


Charles Edward Johnston: The applicant is in Alberta, a short distance from Calgary.


James Layton Ralston: On a farm?


Charles Edward Johnston: Yes; living on a farm. The board absolutely refused to give her a ruling on the case and has not stated definitely whether she can come under the act or not. If one looks at the section, it appears that it neither gives the debtor the right definitely nor takes it away. Therefore, since it is not definitely stated that the board could deal with this matter, they threw the whole case out, and the woman has no protection. If that section were struck out, it would, I think, definitely give the board power to deal with these cases. It seems unfair that because a man delayed so long in dying, his wife should not come under this act. I do not think that was the intention.


James Layton Ralston: If my hon. friend will send me a memorandum of the case, I shall be glad to get a definite opinion with regard to the applicability of the act. My hon. friend will realize that July 3, 1934, is the date the act came into force. The act does not apply when death occurred prior to the act coming into force.


Charles Edward Johnston: But when other cases are allowed and this particular type of case is rejected, I do not think that is fair.


James Layton Ralston: My hon. friend has not got my point. I think the cases allowed are those in which the death occurred after the act came into force and the deceased had qualified as a farmer. The situation which the hon. member is putting now is where the farmer had died prior to the coming into force of the act. I am speaking without the book and without any experience as to the practice before these boards, but I think if the widow could qualify as a farmer in her own right, she would be entitled to relief. If my hon. friend will give me a memorandum of the case, I shall be glad to take it up not only with the officer administering the act but with the board.


Thomas Clement (Tommy) Douglas: The minister will remember that the board of review in Saskatchewan was changed some time in December, 1936. Has the minister the number of cases dealt with by the first board, the board under Mr. Justice McLean I believe, that was in office in 1935 and 1936?


James Layton Ralston: I am sorry I have not those figures separately. I have only the total number of cases, by provinces.


Thomas Clement (Tommy) Douglas: Has the minister the average reduction of accumulated debt of all cases handled in Saskatchewan?


James Layton Ralston: Yes, to March 31, 1939. In Saskatchewan the average reduction per case was S3,998.82, the average debt per case being $10,400.95. Those are cases dealt with by the board of review. In the cases dealt with by official receivers, the average reduction per case is 82,677.05, the average debt per case being $7,434.69.


Thomas Clement (Tommy) Douglas: Has the minister the percentage of the amount reduced to the total debt?


James Layton Ralston: Yes; on secured debt, dealt with by boards of review, the percentage is 37-96 per cent. For unsecured debts it is 43-87 per cent; or the total average, 38-45 per cent.

Farmers' Creditors

Of debts dealt with by official receivers, the reduction in case of secured debts was 34-78 per cent; unsecured, 46-37 per cent, or an average of 36-01 per cent.


Thomas Clement (Tommy) Douglas: The minister has some valuable tables there. In other years I have put questions on the order paper in order to get that information. Would the minister care to table that information in order that members may have it without having to ask for it?


James Layton Ralston: The total is the only other thing I have.


Richard Burpee Hanson: If the
minister has a table for all the provinces in convenient form, it might be valuable.


James Layton Ralston: I do not see any objection. As a matter of fact, I spoke to the officer who is administering the act, and he tells me that shortly the report for the year with regard to the operation of the boards of review will be filed and this information will be in it. But at the moment I see no reason why I should not table this statement, which is up to March 31, 1939. The Saskatchewan figures are as follows:
Farmers' Creditors Arrangement Act, 1934
Statistical review of cases disposed of by boards of review and official receivers
to March 31, 1939
Saskatchewan
Average Average
No. of Average debt reduction annual interest cases	per case	per case reductionBoards of review	
3,653	$10,400	95	$3,998	82	$276	43Official receivers	
2,491	7,434	69	2,677	05	194	80Total	
6A14	9,198	32	3,467	81	243	38
Debt reduction percentages
Secured Unsecured Total
Boards of review	
37-96	43-87	38-45Official receivers	
'-4-78	46-.ii	36-01Total	
35-03	44-83	37-65


Mr. DIEFENBAKER:: There are some official receivers who encourage applications and others who more or less discourage them. Would the minister state the basis on which official receivers are paid? Is it a fee basis or a sum per month?


James Layton Ralston: As I remember, it is a .tariff of fees.


John George Diefenbaker: Has that always been the basis since the inception of the act?


James Layton Ralston: I happen to be looking at the schedule for Prince Edward Island, appointment January 1, 1936. In Saskatchewan the official receivers are without exception on a tariff of fees all the way through back to 1934.


James Layton Ralston: All I can say is that in the schedule I have here I see appointments back as far as 1934, and running down to 1935 and 1936, and opposite the names of every one of the official receivers is the statement "tariff of fees." There may be a question in that the tariff of fees may be in effect to-day but may not have been when they were appointed.


Arza Clair Casselman: In one county I know definitely that it was a monthly basis.
At six o'clock the committee took recess.
After Recess
The committee resumed at eight o'clock.
Section 2 agreed to.


Arza Clair Casselman: Will the minister give information on that point with respect to Ontario? I understand that at first the receivers were paid on a monthly basis, and then some two or three years after the act became effective they changed it to a fee basis.
IMr. Ralston.]
On the title.


Thomas Clement (Tommy) Douglas: Before the
title carries, I should like to take just a minute or two to touch again upon the matter I brought to the attention of the minister the other evening, when this bill was in the resolution stage. I am not going to weary the

Farmers' Creditors
committee with a reiteration of the arguments I presented at that time, except to say this. The main argument advanced against granting rehearing to those who came before the first board of review, which operated in Saskatchewan from some time in 1934 until December 1, 1936, is that it would mean going over thousands upon thousands of cases. I have been looking up the figures, and from an answer given me by the Minister of Finance in 1937, I find that in Saskatchewan it would affect only 1,401 cases even if all those concerned were to ask to have their cases reconsidered and adjusted.
I should like to point out to the committee that when this legislation was first brought down, it was, as the minister said, emergency legislation drawn up with a view to meeting a drastic situation. The farmers immediately flocked to avail themselves of the benefits of this legislation. Those who came under it first are the people who have been penalized. According to the statistics given me by the Department of Finance, which I find coincide with what was said by the minister just before the dinner recess, the first board of review operating in Saskatchewan effected an average reduction of about 27 per cent in accumulated debt. The board of review set up when this government came into power brought about an average reduction of somewhere round 44-38 per cent, an increase of about 17 per cent. This means that the farmers who availed themselves of the benefits of this legislation in the latter months of 1934, 1935 and 1936, received proposals which were not as favourable as those received by farmers who have come under the benefits of this act since then.
It is easy to understand why this should be so. Here were men acting as members of a board appointed to reduce debts. They had no measure to go by. They did not know what the average farmer could stand. They did not know how much he could produce. They did not know how much of this debt he could meet, and for the first two or three years they were really carrying on a process of experimentation. As the years have gone by, they have pretty well found a balance; and, as I said the other night, in the last year or two they have done an excellent job. But it seems hardly fair to penalize those people who came under the first board, who had to accept reductions that really were not adequate. Not only were the reductions made in the first two and a half years not adequate; but since that time conditions have grown much worse. I have before me appendix No. 4 of the report of the dominion-provincial commission, entitled "National Income." On page 87 I find that in Saskat-
95826-30}
chewan receipts from the sale of grain, seed and hay, which constitute our main commodity, have been as follows:
1926	$257,630,000
1934		 70,180,000
1935		 81,420,000
1936		 86,870,000
1937		 43,760,000
In other words, in that ten year period the agricultural income of the farmers engaged primarily in wheat production had dropped to almost one-sixth of the figure for 1926, while the income for 1937 was only about sixty per cent of the 1934 income. I do not think I need labour the point. To begin with, these people did not receive as great a reduction. In the second place, on account of low prices and climatic conditions, in the period that followed they could not begin to meet the proposals that were formulated, to which they and their creditors had agreed. So I want to ask the minister seriously to give consideration to granting a rehearing to those farmers who came under this board of review prior to December 1, 1936. I do not believe a single member from west of the great lakes who knows the conditions on the prairies will oppose that suggestion.
This afternoon the hon. member for Portage la Prairie (Mr. Leader) referred to the action taken by the legislature of Manitoba. I have before me a resolution passed by the legislature of Saskatchewan, as follows:
That the legislature of the province of Saskatchewan, while deeply sensible of the great assistance rendered to our people by the provisions of the Farmers' Creditors Arrangement Act in the solution of their financial difficulties occasioned by the present depression, aggravated by unprecedented drought in our most productive areas, are of the opinion that experience of the working of the said act in our province renders desirable amendments thereto whereby it may be provided-
Then follow several suggestions, among them being:
(2) That the board of review be given power to rehear and amend proposals formulated prior to the 1st of December, 1936.
Because I can think of no good and sufficient reason why this request should not be granted; because it would involve not thousands of cases but only some 1,401 cases in Saskatchewan, and because I feel that a real injustice has been done a group of people who were actually pioneers in this field of legislation, I ask the minister to take into serious consideration this amendment. I move:
That section twelve of the said act, as amended by sections four, five, six and seven of chapter twenty of the statutes of 1935, and by this act, is further amended by adding thereto the following subsection, as subsection 7A:
Farmers' Creditors

"7A. The board or boards shall have power to rehear and amend proposals formulated prior to the 1st day of December, 1936."
This, if it were accepted, would constitute section 3 of the bill.


James Layton Ralston: Like someone else who spoke this afternoon, I do not profess to be an authority on procedure, but I suggest that this amendment involves an expenditure of money and therefore cannot properly be made by my hon. friend.
My hon. friend will remember that the resolution on which this bill is founded had to be introduced by a declaration to the effect that his excellency, having been made acquainted with the subject matter of the resolution, recommended it to the favourable consideration of the house. That was done because the measure involved an expenditure of money. To give the boards power to rehear all the proposals made prior to December 1, 1936, would certainly involve a very heavy expenditure.


John Horne Blackmore: As I understand the rule, the amendment would be out of order if it involved an expenditure of money on the part of the government, but I cannot see how this amendment calls for any such expenditure.


Mr. MACKENZIE (Vancouver Centre):: It is a potential commitment.


Thomas Clement (Tommy) Douglas: I believe
the minister is making a rather fine distinction. While it is true that the amendment might involve extra work or extra hearings, yet any amendment moved by a private member would involve the sending of a letter or the buying of a stamp.


James Layton Ralston: That is not the point.


Thomas Clement (Tommy) Douglas: But these
boards are already set up, and I am merely asking that in certain particulars their work be extended.


James Layton Ralston: That is exactly the circumstance with regard to Manitoba. The board is already set up in Manitoba; but in order that I might introduce the bill I had to found it on a resolution, because it involved an expenditure of money in the hearing of cases which could not have been heard under the bill as it stood. I have no intention of making a fine distinction, but I urge that my point is a substantive one, and I take it because in my view our proceedings should be regular. Of course the hon. member has a perfect right to appeal to me as a member of the government to take the point he has mentioned into consideration. I have expressed

my doubt, however, as to whether it is in order for him to move the amendment which now stands in his name.
THE CHAIRMAN: My ruling is that the amendment entails a substantial commitment, and that no amendment entailing a financial commitment can be presented, unless it be by a member of the privy council, a member of the cabinet, with the approval of his excellency in council. The amendment is out of order.


Mr. GERSHAW:: Facts concerning a case have reached my desk to-day. The case in question has particular reference to the Farmers' Creditors Arrangement Act, and I draw it to the attention of the minister. The man in question bought a farm some years ago for $8,000, on which he has paid $7,096. He still owes a large sum of money, which the board is willing to write down to some S4,000.
Two factors have entered into the situation, one being the drought conditions in the particular district in question, and the other being the low price he is able to obtain for his farm products. His proposition is that he could pay $2,000, but he sees no hope of making a living for his family if he has to pay $4,000, plus interest. His question is this: What will happen to him if he moves away and leaves the place? Will he be held personally responsible, or will he be free of debt? This farmer feels that he cannot in any way meet the requirements of the board of review.


James Layton Ralston: As I understand my hon. friend, a proposal had been made?


Frederick William Gershaw: Yes.


James Layton Ralston: I can only make the same offer as I made to another hon. member before recess, namely that I shall be glad, if he will submit the case to me, to procure the opinion of the law officers of the department in regard to the matter. I am afraid that offhand I cannot offer a legal opinion which would be worth very much.


Mr. GRAHAM:: This is a bill in which I am sure every member from Saskatchewan will take a great deal of interest. Most of us have grown up in eastern Canada, and I can quite understand the reason why the eastern provinces have not favoured the application of this particular statute. I want to assure hon. members, however, that at least in Saskatchewan-and I think the same is true in the neighbouring provinces of Alberta and Manitoba-this measure has been a good thing, for both creditor and debtor classes.
The position in Saskatchewan is this, that a decided surgical operation had to be performed if agriculture were to survive. I find

Farmers' Creditors
myself in the position of suggesting to the minister that we ought to go even farther than has been suggested by the hon. member for Weybum. In the light of the experience which has been gained since the beginning of the operation of the act, the boards, which have had to discharge a very difficult task, have improved the handling of the cases.
Incidentally may I say to the minister that one of the most important factors in connection with the operation of this act in Manitoba will be the choice of the chairman of the board. His capacity to deal fairly with both creditor and debtor classes, and to take a sympathetic and appreciative attitude in the administration of the affairs of his board, is of the utmost importance. His task is a very difficult one, and one requiring a particularly high type of judicial mind.
In the light of decisions of our own courts with regard to the interpretation of some of the sections of the act, I would hope that the minister would see fit to refer the consideration of the whole act to the committee on agriculture, so that a careful study might be made. We private members from the west have considerable knowledge of conditions out there, and I think we could be of assistance to the government and to all the people in Canada if we could make the act do the task it was meant to do.
I am in complete agreement with the hon. member for Weyburn when he says that many points were discovered in applications which came later, and that those who happened to make application earlier suffered not only because of the smallness of the percentage of reduction of debt, but also in making provision for future years of possible drought. Proposals now emanating from boards of review make the very proper provision that the terms of the proposal are not operative in a year in which a drought or crop .failure occurs. The board of review directs that the sheriff of the judicial district in which the land is situated shall be designated as the person authorized to declare that in that particular district and in that particular year a crop failure has existed. That provision in the proposal has been attacked in our Saskatchewan courts. I am not certain that our higher courts have dealt with it, that is beyond the court of king's bench. I feel certain that even those members who live in eastern Canada will realize the necessity of performing that operation in order that some hundreds of thousands of farmers may be saved to Canada, as is set out in the preamble to the act. We private members, particularly those from western Canada, may possibly be able to assist the government by
occupying some of our time in studying, in the light of the experience of the last six years, what may be brought in by way of sensible amendments. I do not propose to embarrass the minister and his cabinet any further, except to suggest that he take this matter under consideration.


James Layton Ralston: The hon. member for Weyburn (Mr. Douglas) gave some figures, and I should just like to understand them correctly. Was he stating the income of Saskatchewan for the years 1935, 1936, 1937 and 1938?


Thomas Clement (Tommy) Douglas: I was stating the agricultural income.


James Layton Ralston: I do not suppose my hon. friend could give me an estimate for 1939?


Thomas Clement (Tommy) Douglas: I was quoting from the Sirois report, and the last figures given are for 1937.


James Layton Ralston: I understood my hon. friend to give figures for 1938.


Thomas Clement (Tommy) Douglas: I gave the figure for 1926, which was $257,630,000. Then I gave the figure for 1934, the year the act came into operation, which was $70,180,000. The total income for 1935 was $81,420,000; for 1936, $86,870,000, and for 1937, $43,760,000.


James Layton Ralston: The hon. member cannot give me the figures for 1938 and 1939?


Mr. DOUGLAS (Weybum):: No, I cannot. I could have stopped at 1936. I was simply pointing out the decline in agricultural income in the three years during which the first board of review operated in Saskatchewan. As I understand, it was appointed in 1934 and ceased to function on December 1, 1936. I was pointing out that during that period there had been a decline in agricultural income.


James Layton Ralston: I cannot see where there is a decline as between 1934 and 1935 and 1936. In 1934 the income was $70,180,000; in 1935, it was $81,420,000, and in 1936, $86,870,000.


Thomas Clement (Tommy) Douglas: A decline is shown in 1937.


James Layton Ralston: That is not in the three-year period. I understood my hon. friend to say there was a decline in the first three years the act was in force; but the income for the first year was $70,180,000; for the next, $81,420,000, and for the next, $86,870,000. The figures for 1938 and 1939 would be useful. May I say to my hon. friend and to the hon. member for Swift Current (Mr. Graham), that I think it is drawing a rather violent
Farmers' Creditors

assumption simply to say that because the percentage of reductions happened to be less in a certain year in a certain period, therefore the proposals were not fair to the applicants. It is quite possible that the reductions may not be quite as large because applicants may have been in a better position to pay. I see no real sequence between the two sets of facts. I believe that is the argument upon which my hon. friend's contention and suggestion are based.
The hon. member for Swift Current suggests, [DOT] as I understand him, that there should be a review in a drought year. This would mean that we would never get to the end of the matter. It is provided in section 10A that proceedings cannot be taken in bankruptcy against an applicant who has made a proposal if his failure to carry out the extension or scheme was on account of causes beyond his control. I would assume that drought would come within that category. It seems to me that that situation is provided for.
My hon. friend suggests that there are only 1,400 cases. He is referring to Saskatchewan alone and only up to December 1, 1936. If it went only to December 1, 1936, and I had made a proposal on December 22, 1936, I would not understand why I should not be included. The same would apply to a man who had made a proposal in 1937. Why the cut-off date? Obviously the suggestion of my hon. friend is that the amendment to cover Saskatchewan would operate in every province. In view of its present form and the ameliorating clause in section 10A, I submit that the situation is fairly well covered.
I indicated before recess that in connection with an amendment of this kind consideration would have to be given. It is obvious that there would have to be some provision for review at the instance of the creditor. The list of cases number 3,653 for Saskatchewan; 2,077 for Manitoba and 3,276 for Alberta. Therefore in those three provinces there are 9,000 cases which would have to be reviewed. If this ameliorating clause is to apply to Manitoba, Alberta and Saskatchewan, there should be some remedy for the farmer who has made a proposal and who lives in a province where the act is no longer in effect. What the government is trying to do here is to meet a special situation which has been presented in the case of Manitoba. I ask hon. members not to attempt, at this late .date in the year of grace 1940, after this act has been in force for six years and when the [DOT]number of cases is getting smaller rather than greater, to reopen the act and have all cases reviewed, which would mean that the act would be perpetuated indefinitely.


Mr. TUCKER:: Mr. Chairman, what the minister has said about there being fewer cases under the Farmers' Creditors Arrangement Act is certainly not true in Saskatchewan. As the minister knows, we now have two boards of review which, as I understand, are barely able to keep abreast of the work. If we are going to leave this act as the only definite system to adjust the debts of Saskatchewan farmers, then I agree with the hon. member for Swift Current (Mr. Graham) when he says that it would be only fair and proper to correct any deficiencies which may have been discovered in the act. For example, proposals made by the first board of review in Saskatchewan provided a rate of interest on first mortgages of seven per cent per annum. When the new board was brought into existence, all proposals then provided for a rate of six per cent per annum on first mortgages. It should not be very difficult to make an amendment to this or some other appropriate act to provide that all proposals under the act should be considered as not having provided for an interest rate of more than six per cent per annum. In that way some measure of justice would be granted to those who made applications under the first board of review and who are to-day paying seven per cent interest.
The minister pointed out that a farmer could not be placed in bankruptcy if the proposals made in Saskatchewan by the first board of review were such that a farmer could not possibly carry on. He stated also that the fact that the rate of reduction in the case of the first board of review was not nearly as great as in the case of the boards of review that have been appointed since, did not necessarily mean that the applicants were being treated differently. I have had an opportunity of appearing before these boards of review in connection with many cases, and I know that they were. One needs only to compare the rate of interest as applied by the first board of review with that applied by the second board of review to see that a different attitude was taken.
Further I assure the minister that an entirely different attitude was taken to the whole matter by the second board as compared with the first board. For example, on the question of crop failure, orders were made by the first board that certain moneys should be paid but no provision was made for the case of crop failure. The second board of review in Saskatchewan provided that in the event of crop failure certified by the sheriff of the district in which the farmer resided all payments due that year should be postponed for one year after the time when the payments

Farmers' Creditors
otherwise would have been completed. Owing to repeated crop failures, under the proposals made by the first board of review many of the farmers are in default and their fans can be foreclosed under the act, and *'i it were not for the debt adjustment board in Saskatchewan I am afraid that a great many of these farms would have been foreclosed by this time.
There is a tendency for the argument to be made that, a man having taken his case before the board of review, the provincial debt adjustment board should not intervene when he is in default, and so foreclosures have been permitted. I submit that if we are going to have this act-and we have to have it or some other act to take its place providing, for instance, a land court, as has been suggested by the province of Manitoba, for we must have some debt adjustment machinery for western Canada. If we are going to have this act as the only machinery we are to have, I do not see why in the world there should be any objection to accepting the suggestion of the hon, member for Swift Current (Mr. Graham) to refer this matter to a committee for study and to recommend improvements in the act.
There is one other matter I bring to the attention of the minister to indicate the anomalies arising under this act. If a man died in 1933 and left his family to carry on his farm; if his family are unable to pay their debts, they cannot apply under this act; but if the man happened to die a year later, his family could apply under this act. Surely the family needs just as much help when the breadwinner happened to die in 1933 as when he died in 1934. Why any definite cut-off date? The thing is preposterous to my mind. If a man who incurred debts from 1920 on can in his lifetime apply and get the benefit of the act, why cannot his widow apply and get the benefit of the act in order to stay on the land and help support her family? To make any distinction between 1933 and 1934, whichever might happen to be the year in which the man died, is an anomaly in the act which I submit should not be there. There is no reason for it, Mr. Chairman. I do not think the private members of this house are so busy that they would not be glad to give their time to correcting some of the anomalies under this act.
It has been decided by one of our courts that the very heart of the proposals that are now being made by our present boards of review in Saskatchewan, namely, that in the event of crop failure certified by the sheriff of the district, payments shall be postponed, is beyond the jurisdiction of the board of review.
If that decision is upheld in the higher courts, .hen all these orders made by boards of review subsequent to those made by the first board are not valid, and practically every single farmer under these boards is now in default for two or three years, depending on the number of crop failures in the particular case. Surely we are sufficiently interested in the farmers of western Canada and in their plight, at least to make sure by an amendment to the act that the board of review has the power to delegate the right to the sheriff of the district to certify to a crop failure so that there may be a postponement of the payments due that year. If the decision I have mentioned is upheld in the higher courts and we do not act in this parliament and explicitly give the power to the board and make that power retroactive, I venture to say that every farmer who has got an order from the second and third boards of review in Saskatchewan will be found in default.
As a matter of fact, what has already happened is this. It is the very case where the ruling to which I have referred was made. There was a crop failure and the farmer got his certificate that there was a crop failure. Then there was an attempt to foreclose. The farmer showed that under the proposal of the board of review he was not in arrears because he had the necessary certificate which postponed the payments due that year. The court held that the sheriff had no right to give that certificate and that the board of review had no right to delegate its powers to the sheriff to give a certificate of crop failure. They held that therefore the farmer was in arrears and made an order accordingly, and the man is being foreclosed to-day on his farm. That is something in which we in western Canada are bound to be interested. When a man gets an order from a duly authorized board of review and has met his payments under that order, we should stand behind the order of the board of review and see that that man is not thrown off his farm.
I	realize that the minister is very busy and wants to get this bill through so that he may proceed with other work, but we are all not as busy as the minister and I contend that this whole problem might very well be submitted to a committee. If the east is not interested in this question, at least we in the west are interested in it. When it was definitely provided that the act should expire except in the provinces of Saskatchewan and Alberta, it was realized in this parliament that we had a problem that had to be met, and when we from those western provinces ask for the act to be so amended as to fit our needs,
Farmers' Creditors

parliament, I submit, should be good enough to agree to that request and to deal with the problem we have.


James Lester Douglas: The minister, in reply to the suggestion that has come from several members from the west, said that at this late date we should not be trying to alter the act. May I point out that the suggestions I made to-night I made in 1937 and again in
1938,	asking for this very thing. So it is not something new that we are asking, nor are we asking for it at the tail end of the session, but we have asked for it year after year in western Canada because we realize the injustice that has been done to a certain group of our people.
The minister referred to the figures I gave regarding Saskatchewan income and attempted to wave them aside, saying it would be interesting to have the figures for 1938 and
1939.	The Sirois report covers up to and including 1937 only. But I have a statement from the dominion bureau of statistics giving the index figures for all farm products, not just for Saskatchewan but for all western Canada, showing the decline there has been in prices, and the decline would be more accentuated in the case of Saskatchewan. I find that in 1936 there was a drop in the index commodity figure price to 69-4; in 1937, 87-1; in 1938, 73-6; in 1939, 64-3; in 1940, 70-0. In other words, from 1937 to 1940 there was a drop of 18-1 in the index commodity figure for agricultural products. So the situation has not bettered but has grown worse. When I quoted these figures to the minister I was quoting them in relation to the base year, 1926, when farm income was $257,630,000, to show the tremendous drop there has been in the income of those who are called upon to meet the terms of proposals made under this act.
We are not dealing now merely with a matter of statistics, although statistics show a difference of 17 per cent in the reductions. But we are dealing, as someone has already said, with personalities; the personnel of the board appointed in December, 1936, was of a totally different type from the personnel of the previous board, and the second board tackled the question with either a better knowledge of conditions or a much more courageous approach. The fact of the matter is that the people who came under the first board were treated differently from, and did not get as good a proposal as, the people who have subsequently come under the benefits of this legislation.
I am not going to labour the matter, except to say this as I sit down. The Minister of Agriculture (Mr. Gardiner) and others have 
been stressing the fact that in no small part Canada's contribution towards the successful prosecution of this war will be agricultural products. Agricultural commodities cannot be produced if large sections of people on the land are burdened down with debts which they cannot possibly hope to meet. Unless these people can see some way out, we are going to have thousands of men flocking to the cities and into industry-just the problem Great Britain is facing at this moment. If we are going to keep the young men on the farms in western Canada, we must deal with this debt situation; and I entirely agree with the hon. member for Swift Current that the western members at least would be glad to give their time in the mornings in committee to see if we cannot work out, irrespective of our differing political views, something which will solve the problem of the debt-ridden prairie farmer.
I agree with the minister when he says that this suggestion that a board shall rehear cases which came before the first board will not cancel the whole difficulty. Of course I had not that idea in mind. I suggested that it would deal merely with one little group. If we open up the question before a committee of this house, we shall have to go to the very root of the matter; and the root of the matter is this, that in each one of these contracts should be inserted a crop failure clause providing that if in any year the amount received by the farmer was not in excess of a certain number of bushels or dollars per acre, in that year there would be no interest payable, and interest would not accrue during the yeans when there were crop failures.
If the farmer, as this bill contemplates, is to be kept on the land as an efficient producer, the House of Commons either now or later must face this problem. I hope the minister, even though he cannot give consideration to further amendments at this time, will at least take cognizance of the representations which may have been made to him from various parts of this chamber, and he might make a reference to the committee on agriculture or to a special committee of this house to study the whole question of the prairie farmer in relation to the Farmers' Creditors Arrangement Act.


John George Diefenbaker: I rise to support
the suggestion of the hon. member for Swift Current (Mr. Graham). The situation in Saskatchewan has been placed before this committee by several hon. members from that province who have spoken. At no time has it been more necessary than at the present to mobilize agriculture. That fact has been stressed over and over again by the Minister

Farmers' Creditors
of Agriculture (Mr. Gardiner). Agriculture cannot be mobilized in Saskatchewan-and I think that statement applies generally to western Canada-until in the first place a fair and reasonable price is given to the western farmer. The western farmer has no objection to the various interests-munitions manufacturers and other manufacturers-receiving a fair profit. To-day, however, the price of agricultural products all over western Canada is such that the farmers are in a condition scarcely better than they were in a few years ago. The only method whereby they can secure a measure 'of justice and be kept upon the land is through the proper operation of the Farmers' Creditors Arrangement Act.
The hon. member for Weyburn (Mr. Douglas) has mentioned that to-day different considerations govern the board of review in our province from those followed by the first board of review. When the first board was set up, in 1934, it had to enunciate certain principles upon which it would proceed. It had no precedents upon which to go. Apparently there was no real desire as between the creditors and the debtors to cooperate. But in process of time, by December 1, 1936, some precedents had been formulated. Then a new board of review was set up, and from that day onward-and the same principles are being followed by the board recently appointed -the whole principle behind the administration has been the necessity of so adjusting debts as to enable the farmer to remain upon the land.
I appreciate the argument that there must be a finality to all things. There were dealt with in Saskatchewan prior to December 1, 1936, 1,401 cases; and I venture the opinion that, of the debtors concerned, not more than 100 are to-day in a position where they can carry on. Under the principles which guided the first board of review the write-off was small. It was believed to be emergency legislation. There was no guiding plan to follow. I can see no reason why, if the minister should be unable to see his way clear to amend the act as suggested by the hon. member for Weyburn, the whole matter of agricultural debt should not be referred to a committee on agriculture. As pointed out by the hon. member for Rosthem (Mr. Tucker), there are to-day, in the operation of that act, anomalies which, if continued, will nullify the act itself. One of the courts in Saskatchewan has decided that any proposal made which permits of an extension upon the certificate of a sheriff is inoperative. If that judgment is upheld by the court of appeal, it will mean this, that whenever a farmer in Saskatchewan, through
crop failure, gets into default under the proposal which has been made, he places himself in a position where he may be foreclosed.
The farmer is not responsible for drought conditions and for low prices. The necessity of mobilizing agriculture was never more important than it is to-day. Under the act anomalies exist which have been pointed out; and my suggestion is this, that the whole matter be referred to a committee on agriculture, to the end that western agriculture will have an opportunity to present a collective viewpoint before a committee of the house, and those anomalies which exist in the act to-day may be removed, in order that the western farmer will be able to contribute something to the empire and at the same time assure for himself a reasonable living and a chance to enjoy some of the better things of life.


Ernest Edward Perley: The amendment proposed by the hon. member for Weyburn (Mr. Douglas) to give consideration to reopening and rehearing the proposals made by the first board of review in Saskatchewan has provoked a discussion which has been worth while; the time has not been wasted. There is considerable merit in the suggestion made by the hon. member for Swift Current (Mr. Graham); and with his experience in appearing before a committee of this house, he no doubt could bring to a committee information that would be worth while. I would remind the committee that at the last regular session of parliament in 1939 a special committee of this house was set up to consider the mortgage bank bill. They sat for some considerable time; representations were made before them by practically every interest in Canada; the whole debt problem of Canada was pretty well threshed out before that committee, and finally the Central Mortgage Bank Act was passed by parliament. I would suggest that if the machinery provided in that act were put in operation, it would take care of debt adjustments not only in western Canada but all over Canada. I think the minister might make a statement to the committee at the present time with respect, to that act. Has any consideration been given to putting that act into operation, because I think it would bring about a general readjustment of the debts, in particular the mortgage debts of western Canada. That would be worth while; it would put many thousands of farmers on their feet and give them heart to go ahead. The machinery is there. Has the minister considered putting the Central Mortgage Bank Act into operation?
Farmers' Creditors


Mr. WRIGHT:: I should like to point out to the minister, who stated that this act was only temporary, that as long as the price which the farmer in the west receives for his product bears no just relationship to the price of the commodities he has to buy, this act is going to be necessary. It is not a temporary thing at all. We should do something about the matter at this time.


Richard Burpee Hanson: Before the minister replies, I should like to say a word. I had no intention of participating in this debate, but something said by one of the hon. members for Saskatchewan prompted me to speak. He intimated that the east is not interested in this legislation. I should like to tell him that when this legislation was introduced in 1934 by the then Minister of Finance, it was because there was an appreciation on the part of eastern members of the problems not only of their own farmers but of western farmers. I was myself one of those who was consulted by the then Minister of Finance with respect to some such measure as this. In view of the fact that this is bankruptcy legislation-and the basis of jurisdiction in this matter is bankruptcy under section 91 of the British North America Act-in view of the fact that we already had on the statute books of this country legislation authorizing the manufacturers, merchants and traders of Canada to go to court with a scheme of arrangement, and that these facilities were denied by that bankruptcy legislation to the farmers of Canada; and in view of the plight in which the farmers of Canada found themselves as a result of the depression, I felt that it was only fair and just, and so recommended to the minister at that time, that the farmers of Canada should have an equal opportunity with the merchants, manufacturers and traders of Canada to make an arrangement of their liabilities.
No one ever considered for a moment that this was anything but interim legislation, if I may use that term. No one ever believed that the conditions then obtaining would continue for such a long period. If we had thought that, we might have taken a longer view. But they have continued. I am not going to express any opinion with respect to the merits of the proposals made here to-night by hon. members from the great province of Saskatchewan; but I have this feeling and have had it for a long time, and it may surprise some of our western Canadian friends as coming from an easterner; I have felt that a country which could produce one billion dollars of new wealth in a normal year was a country that was worth attempting to save. I still hold that view. I have never yet opposed in principle anything that would go

to ameliorate the condition of the people in western Canada. I had an opportunity to see for myself the heart-breaking sight of what happened in the west as a result of drought. I urge the minister to give consideration to the representations that have been made by these hon. gentlemen to-night. I am not in a position to express an intelligent opinion as to what he should do, but I ask him to give the matter consideration.
I must, however, remind him that there is another point of view with respect to the farmer, one that I must say had not presented itself to me at the time that the legislation was introduced. It has been found in my own province-and I speak of that province because I know the conditions there-that the effect of the legislation has been to dry up credit to our farmers.


Thomas Alexander Crerar: The same is true in the west.


Richard Burpee Hanson: I live in a country town; it is a small city, but it is in the midst of a beautiful agricultural country. We are the only town of any consequence within a radius of thirty miles or so. It is the centre of a large community of 60,000 to 70,000 people. Naturally the condition of the farmers there is known to the members of the legal profession. From the day I started to practise in Fredericton down to the present time, the bulk of our business has been with the farmers, and it was largely a business of lending money; not institutional lending, but lending by private individuals on mortgages. To-day you could not get a private individual to lend a dollar to a farmer in the whole of that county of York unless the person who had money to lend was actuated by something other than purely financial reasons. For that reason, weighing in the balance one consideration against the other, I am of opinion that our farmers in eastern Canada at all events, are suffering because of this legislation. In 1934 I think it was a good thing for them; to-day I think it is a bad thing, and I want to get rid of it as quickly as possible in the interest of the farmers themselves.


Mr. NICHOLSON:: 
Mr. QUELCH:: I find myself thoroughly in accord with the suggestion made by the hon. member for Weyburn (Mr. Douglas) and the proposal of the hon. member for Swift Current (Mr. Graham) that the whole question of the agricultural debts of western Canada be referred to a special committee. As the minister is well aware, the government of Alberta has passed many measures in the
last few years to deal with the question of debt, because I think it is well recognized that this act does not deal adequately with the debt problem. I must add that as long as the farmers of western Canada are compelled to produce for less than the cost of production, as they have been in the past, and until such time as we have an adequate form of crop insurance, just so long will the farmers of the west go deeper and deeper into debt. As some hon. members have said, this cannot be looked upon as temporary legislation, because as long as these conditions exist, legislation will have to be kept in operation to deal with the situation. If the federal government will not pass that legislation, then we shall find the western provinces doing it, which will further complicate the situation. So I seriously ask the minister to consider referring this matter to a special committee of the house.


James Layton Ralston: I think the committee is entitled to a word from me. I do not want it to appear, as may have been indicated by the hon. member for Rosthern (Mr. Tucker), that because the minister happens to be busy, he is not disposed to take full account and full cognizance of all that has been said.
I think I realize as fully as anyone in this house-and that is saying quite a bit, having regard to the humble position I happen to occupy in Canada at the present time-just how vital the interests of the farming community of this country are to the economic life of the nation. I also realize to some extent what one would almost think, after hearing my hon. friends to-night, had not been recognized at all; that is, that the governments of Canada-and here I am speaking not of this government particularly but of successive governments-have been by no means indifferent to the representations which have been made with respect to the importance of the agricultural community and the agricultural industry of this country. I have been in this house before, and sometimes I think it would be only fair to all of us as Canadians if hon. members, while painting one side of the picture, would at least endeavour to give some indication that they realize the other side of the picture as well; and that these general statements which have been made, which would almost indicate that the agricultural industry has been totally neglected by the governments of this country, are perhaps hardly founded in fact.
There has not been very much said tonight to indicate that any attention whatever has been paid the farming community by any government of this country. From what my hon. friends have said, one would
Farmers' Creditors

almost feel that there has been total indifference exhibited to that great industry. That has not been so, as hon. members know; and the fact that we do not accept amendments to certain sections of the particular legislation before the committee to-night does not by any stretch of the imagination mean that this government is not fully alive to the importance of the industry and to the necessity for its maintenance if we are to have any sort of balanced economy in the Dominion of Canada.
I presume hon. members realize that this debate has gone far beyond the confines of the bill and that the particular section we are discussing at this moment provides that the words "the said" shall be struck out and the word "this" inserted instead. However, this has provided an opportunity, which I am sure has been welcomed by hon. members as I can assure you it has been welcomed by the government, for an expression of opinion with regard to the vital problems and vital interests of the agricultural industry.
The hon. member for Qu'Appelle (Mr. Perley) asked me to say something with regard to the central mortgage bank. I do not think anything can be added to the statement made shortly after war broke out. When I assumed the portfolio I now hold, this whole matter of the mortgage bank came up for consideration. After giving it the fullest thought and study, the government felt in the first place that in view of the fact that the Central Mortgage Bank Act was founded on a long term valuation of practically all the lands in all the municipalities of our provinces, particularly our western provinces, and that conditions in war time were not those under which a sound and stable valuation could be made, it was impossible from the point of view of either the debtor or the creditor to fix a valuation which would be fair without the criteria generally present in comparatively normal times. That was the first thing.
The second was that Canada, as hon. members know, undertook under that legislation a very heavy load in the way of the issue of debentures, and it was felt that in view of the commitments which this country faced it was not a good or feasible time for it to undertake the tremendous obligations which would be involved in the issue of debentures under that act. The act is not dead; it is suspended. A certain amount of work has been done in connection with it, and the studies are being pursued. I cannot give the committee any definite indication as to when the act may come into full operation; I can only give the reasons for the act not being put into effect so far. I think the committee

can understand and appreciate, about as well as I can, when conditions may arise which will enable us to go forward with that act.
I am not sure that any other matter was referred to. The only other thing I did want to say was this, that hon. members will realize that a bill similar to the one we are now considering, has had, shall I say, a rather stormy passage on previous occasions.
I come back to the purpose of the act, which is to extend its benefits, whatever they may be, to Manitoba, having regard to the special conditions which exist. I would ask hon. members to unite with the government in endeavouring to see that this particular piece of legislation is put through for the purpose for which it is proposed. I assure them again that on behalf of the government I have taken full cognizance of what has been said in connection with agriculture generally, and that they can be absolutely sure that those representations, and others which we have in mind, will not be forgotten.


[Stage Direction]
Title agreed to.
Bill reported, and read the third time.
Georges Parent: Mr. Ralston moves that the said bill be passed and that the title be as on the order paper. Is it the pleasure of the house to adopt the motion?


James Layton Ralston: Mr. Speaker, there is one point I should like to have on record, and I believe I may make the statement on the motion you have just put.
Some hon. members before recess asked me to put on record certain tables from which I have quoted. I find that both tables are in the printed report in connection with the Farmers' Creditors Arrangement Act, which I presented the first day of this session. The tables to which I refer are Nos. 7 and 7A. If hon. members will accept the tables appearing in the report, a certain amount of printing in the debates will have been saved.
Motion agreed to and bill passed.



CIVIL SERVICE SUPERANNUATION


[Stage Direction]
Hon. J. L. ILSLEY (Minister of National Revenue) moved that the house go into committee to consider the following resolution:
That it is expedient to introduce a measure to provide that the order in council respecting civil service superannuation dated 11th August, 1939, shall have the same force and effect as if sanctioned by act of parliament on the said date.
Motion agreed to and the house went into committee, Mr. Vien in the chair.

Civil Service Superannuation
Richard Burpee Hanson: Has this order in council been tabled?


James Lorimer Ilsley: I am not sure about that.


Richard Burpee Hanson: I think we ought to see it. Would the minister make an explanation?


James Lorimer Ilsley: At the last session of the last parliament the house appointed a committee to consider amendments to the Civil Service Superannuation Act. That committee made a report which, if I remember correctly, contained twenty-eight recommendations, and was adopted by the House of Commons. The government explained at that time that it would not be possible at the session then in progress-that was about a year ago-to introduce legislation carrying out the terms of the report. It was intimated, however, by the government that it might be possible to put some of the recommendations into effect by order in council. Accordingly on August 11, 1939, an order in council was passed carrying out a few of the recommendations contained in the report. The law officers advise that the order in council should be ratified by legislation.


Richard Burpee Hanson: On that theory would it not appear that the order in council was illegal, and that there was no statutory authority for it? I was not here at the time, but I am interested in the matter.


James Lorimer Ilsley: I have not gone very deeply into that question, because in so far as the order in council was beneficial to contributors, it was an act of the government which, I imagine, was not illegal.


Richard Burpee Hanson: Then why the necessity for legislation?


James Lorimer Ilsley: I do not think it contravened the provisions of the act. But in so far as the order in council was not beneficial to the contributors and in so far as it imposed heavier burdens upon them than otherwise would have been imposed by the act, that difficulty was met by taking an agreement from the contributors. A paragraph in the order in council refers to the agreement, and when the bill is introduced it will be seen by hon. members that from now on, contributors will not be asked or expected to sign an agreement to make contributions in excess of those provided for by the act itself.


Thomas Clement (Tommy) Douglas: Would the sections in the order in council be identical with those of the bill?


James Lorimer Ilsley: Yes. It is proposed to have a very short section in the bill stating that the order in council shall have the same force
and effect as if it had been sanctioned by act of parliament at the date on which it was approved. There is just one section in the bill. There is a subsection which deletes the paragraph of the order in council providing for the taking of agreements from contributors, because hereafter that will not be necessary, because it will be covered by the act.


Thomas Clement (Tommy) Douglas: Is the order in council lengthy? Would it be possible to put it in Hansard?


James Lorimer Ilsley: It would be possible, but there will be a much quicker way for members to gain access to it. It is an appendix to the bill; and as soon as the bill receives first reading, every hon. member will be able to see the order in council.


Richard Burpee Hanson: I suggest that we accept the resolution, have first reading of the bill and then let it stand so that hon. members may read the order in council. I received the bill only a moment ago, through the courtesy of the minister.
Resolution reported, read the second time and concurred in. Mr. Ilsley thereupon moved for leave to introduce Bill No. 28, to amend the Civil Service Superannuation Act, 1924.
Motion agreed to and bill read the first time.



CITY OF OTTAWA AGREEMENT

[Stage Direction]
AUTHORIZATION OF PAYMENT OF §100,000 FOR THE YEAR ENDING JULY 1, 1940.
Hon. P. J. A. CARDIN (Minister of Public Works) moved that the house go into committee to consider the following resolution:
That it is expedient to introduce a measure to authorize the Minister of Public Works on behalf of His Majesty to enter into an agreement to pay 'to the corporation of the city of Ottawa the sum of $100,000 for the year ending July 1, 1940.
Motion agreed to and the house went into committee, Mr. Yien in the chair.
Mr. CARDIN:: streets, maintenance of bridges and so on. In 1919 it was decided that the federal government would contribute 875,000 to the corporation of the city of Ottawa. The idea was to make a settlement of a claim which had been made upon the Department of Public Works based upon certain representations by the city of Ottawa that the federal government should reimburse the city for the opening up of certain streets, loss of taxes, protecting certain public buildings against fire, supplying water, sprinkling services and so on. In that year it was decided that in consideration of this sum of $75,000 a year the city of Ottawa would abandon all claims against the federal government. I cannot remember at the moment the total of the claim, but it was considerable.


Mr. HANSON (York-Sunbuiy):: They preferred to take cash.


Pierre-Joseph-Arthur Cardin: Yes. If my memory serves me aright, in 1925 this amount was raised from $75,000 to $100,000. The agreement has been renewed each year since that time, and the purpose of the bill which will be based upon this resolution is to authorize the Minister of Public Works to renew the agreement for another year.


Richard Burpee Hanson: This resolution is a hardy annual. I do not think there is any objection to extending this agreement from year to year, but I hope the minister will regard the settlement as more or less final and conclusive. I am aware that the Ottawa newspapers and the Ottawa citizens make allegations from time to time that it is not enough. I never could understand the basis upon which this amount of $100,000 was arrived at. The agreement has never been itemized, but I understand that it covers the expense of keeping up certain approaches to these buildings, the supplying of certain water [DOT]-not all the water used by the government by any means-and other items. The government also pays considerable amounts for taxes and water rates on buildings belonging to foreign legations and other buildings of that kind. I would not have it go out that this is the only amount that the government contributes to Ottawa. The bill to be founded on this resolution does not cover the vote to the commission which has jurisdiction over the driveways.


Pierre-Joseph-Arthur Cardin: No; that is S150,000.


Richard Burpee Hanson: I think
we can well renew this agreement for this year, but I do trust that the extravagant demands which are made from time to time will not be repeated. Different governments, having regard to their financial ability, have contributed to the beautification of this capital 
city. That is quite proper, but at the same time I wish the government would give consideration to the beautifying of its property in other capital cities of this dominion. I have in mind my own beautiful little city where the government owns a whole block right in the heart of the business section between the river and the main business street. In that block is located the customs house, the post office, what used to be called the officers' quarters and a public square used in connection therewith. These grounds are not adequately lighted and are not always kept up; in fact, they are much neglected. I hope the minister will give consideration to spending just a little money on these grounds in the city of Fredericton.


Karl Kenneth Homuth: Could the minister give us some idea of how much money the government spends each year in Ottawa? There is this $100,000, and then the minister referred to another $150,000 for the federal district commission. I have in mind the expenditures for tearing up the sidewalks and laying the pavement around parliament hill which were borne by the government.


Pierre-Joseph-Arthur Cardin: Apart from this $100,000
which is paid to the city of Ottawa under this agreement, the federal government pays to the federal district commission, which is under the Department of Finance, the sum of $150,000 for maintenance of parks and other beautification projects in the city. Then we pay for the water used in our buildings at the rate of 13 cents per 1,000 gallons up to 200,000 gallons, after which the rate is 10 cents per 1,000 gallons. Under this agreement it is the responsibility of the government to maintain Connaught bridge between the parliament buildings and the Chateau Laurier. We maintain also Laurier avenue bridge over the railroad tracks and a bridge crossing the river to Hull from the western section of Ottawa. We also maintain the pavement and sidewalks on Wellington street from Connaught place to the old Perley property. These are the annual expenditures that the government makes in Ottawa.
As the leader of the opposition (Mr. Hanson) has said, this was not a settlement of a detailed account. The Minister of Public Works of the time discussed with representatives of Ottawa their famous claim for compensation for loss of taxes because the government had taken over properties which formerly had been paying taxes to the city. The amount of $75,000, now $100,000, was settled upon as a sort of compromise; and in that compromise the Minister of Public Works and the government of the day accepted responsibility for looking after the services I

Wheat Cooperative Marketing
have indicated, the maintenance and repair of pavements and certain sidewalks. So this sum of $100,000 is really the result of a compromise between the government and the city. As to the suggestion of the hon. leader of the opposition, I will do the best I can to throw a little light into that dark corner which he has indicated exists in his city.


Mr. ROSS (St. Paul's):: Does the federal
government pay taxes on its buildings in other cities?


Pierre-Joseph-Arthur Cardin: No.


Douglas Gooderham Ross: And no compromise has been arrived at with other cities?


Pierre-Joseph-Arthur Cardin: No such rule applies elsewhere than in Ottawa. The government of the day and all succeeding governments, I suppose have felt that they should be a little more generous to Ottawa as it was the capital of the country. Besides, if the argument that is made holds good, it is much stronger in Ottawa than anywhere else because in this city the federal government has taken over large areas of land and thus deprived the city of loss of revenue from taxation which they were previously collecting. The city of Ottawa thought, and still think they are justified in claiming compensation from the government, particularly on the ground of loss of revenue through the taking over of property by the federal government. Although we have very important property in other cities, it is not comparable at all with the property that has been taken over by the federal government in Ottawa.


Richard Burpee Hanson: I believe
the minister has correctly stated the principle on which this demand is made, and I think we ought to be fairly generous with the city of Ottawa having regard to our other commitments. The only question I have to ask the minister is whether there has been any enlargement or extension of the arrangement with the city, or is this identically the same agreement as in other years?


Pierre-Joseph-Arthur Cardin: It is identically the same,
and has been so ever since 1920.


Douglas Gooderham Ross: I appreciate the reasons which the minister has given for this agreement and the fact that the city of Ottawa is losing taxes on property taken over by the government. At the same time we must not lose sight of the fact that were it not for these large federal public buildings and other governmental expenditures here, the city of Ottawa would not have its present taxing power on individual citizens. I have always thought that this $100,000, as well as
the $140,000, paying for the water, fire service, inspection and a few things like that, was a substantial sum of money to give to Ottawa. Not only that, but all governments have kept in view the beautifying of the city, and over the years have spent millions of dollars in beautifying Ottawa. It just strikes me that at a time when money is going to be so necessary for war purposes this might be one place where we might save a few dollars for the purposes of the war. It is very necessary that we should keep our dollars for the prosecution of the war, and I think every effort should be made by the government to cut down on expenditures which are not immediately necessary so that more money may be available for the war I would also point out that there are many public buildings in Toronto, Montreal and other cities which receive no compensation whatever from the government, nor do these cities have any federal moneys spent on them for their beautification. So this I think is one place where we might cut down on our expenditure and save a few dollars for war purposes.
Resolution reported, read the second time and concurred in. Mr. Cardin thereupon moved for leave to introduce Bill No. 29, to authorize an agreement between His Majesty the King and the corporation of the city of Ottawa-.
Motion agreed to and bill read the first time.



WHEAT COOPERATIVE MARKETING


[Stage Direction]
Hon. J. G. GARDINER (Minister of Agriculture) moved the second reading of Bill No. 20, to amend the Wheat Cooperative Marketing Act, 1939.
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Vien in the chair.
On section 1-Short title.
Ernest Edward Perley: I propose, Mr. Chairman, at this stage to make a few general remarks on the bill. I stated on the resolution that I did not think there was any real demand for such a measure last year, nor do I think that Mr. Justice Turgeon's report recommends any such legislation. In fact, quite the contrary. He stated that the wheat board act was sufficient, especially in case of an emergency. There is nothing in this bill to encourage the cooperatives to keep prices up.
Wheat Cooperative Marketing

If this bill were confined to producers' organizations only, I would have no particular objection. The bill of last year did not help the individual producer. We have other acts, the wheat board act in particular, which provide every facility for the marketing of grain, and our western pools are well organized.
I stated also on a former occasion that the act discriminates to a certain extent against independent private dealers, track buyers and so on. The amendment provides the minister with certain means of, so to speak, winding up the affairs of the cooperatives; and it defines certain terms, such as "producer" and "selling agent". But I would remind the minister that last year when the bill was before the committee, he stated definitely that it would provide a system of marketing grain which would be different from what we already had, and he remarked that it was more by way of an experiment. It seems to me, considering the statement he made on the resolution the other evening, that the experiment has not proved to be of much value. It has not been a success. We might also take into consideration the comments made on the measure last year by the western committee when they were here. I believe they met the minister and discussed another of the measures which he placed on the statute books. I hold in my hand a submission termed the "second submission" of the western committee to the government and to the minister. In dealing with what was then known as Bill No. 82, it states, at page 14:
With reference to this bill, the committee wishes to say that it is its unanimous opinion that under existing conditions the method proposed is impracticable and no organization could undertake to cooperate successfully under such a selling agency as contemplated in the face of present marketing uncertainties.
We have the same uncertainties this year, and I regard the comments made by the western committee on the bill last year as proof that there was no real demand for it, certainly not from such organizations as the committee represented.
I am not going to labour the point. I have no particular objections to this amendment; it merely helps the minister to wind up the affairs of the cooperative or to arrive at some system of adjusting losses. But at the proper time, after these other amendments have been disposed of, I purpose moving an amendment to add a further section to the bill.


Major James William Coldwell: Last year the producers of western Canada sent down a committee to interview the government regarding the wheat legislation which was then under discussion, including the bill, then known as No. 82, which it is now proposed to amend. It is
[Mr. Perley.l
perhaps worth while quoting what that committee had to say to the government at that time.


Mr. GARDINER:: It has just been read into the record.


Major James William Coldwell: Was it read? I could not hear it. If it has just been read, there is no need to read it again. But I was going to add that I have heard during the past year, or at any rate during the past six or eight months, arguments vindicating the position taken by the western committee at that time, and I believe the very fact that a greater amount of grain has not been marketed under this plan than was indicated by the minister confirms the correctness of the statement made last year.
One thing I should like to ask the minister is this. 'In the explanatory note he quotes paragraph (g). Last year it read:
(g) "primary producer" means a person engaged in growing spring wheat in any of the provinces of Manitoba, Saskatchewan, Alberta or British Columbia.
I notice that -the limitation has been left out. I assume, therefore, that this amendment will not be limited as in the other bill, but will apply to all parts of Canada where spring wheat is grown. I see no objection to that, but I should like to see the whole of our wheat marketing under a board representative of the producers themselves and with a guaranteed minimum price which would provide an adequate return. As I said the other day, producers of grain and other farm commodities in the other countries at war are all more or less protected in that manner. The nations at war realize that under these conditions agriculture is a basic industry as far as food production and the winning of the war are concerned. Only yesterday in Great Britain-where the circumstances are of course somewhat different from those in this country-the government, I notice, has provided an increase in the money standards of those engaged in agriculture. The money wage of farm labourers was increased by twelve shillings a week, to forty-eight shillings a week. That is a recognition that the people who work on the land are entitled to a better standard of living than they have been receiving all through the years. I remember that when I -was a boy in the old land the man engaged on the farm was the lowest paid worker in the country. I can recall quite well a time when the farm labourer in Great Britain was paid twelve shillings a week, and out of that he kept himself and his family. It seems to me that in this country we have not yet arrived at the stage where we realize

Wheat Cooperative Marketing
that the man on the land is ehtitled to a proper, reasonable and decent standard of living.
I should like to see the whole marketing scheme for agricultural products placed under the appropriate boards. As far as marketing western wheat is concerned, particularly at this time, speculative marketing should cease and the grain exchange should be closed. I was disappointed at the announcement in the press that the exchange is to remain open until Aug. 15. I understood a week or ten days ago it was likely to be closed in the course of a few days; however, unfortunately, the government has decided otherwise.
If we are to have a cooperative plan of marketing, let it be cooperative. This particular plan is not in reality a cooperative plan. We in this country have got into the habit of calling all sorts of privately-owned concerns "cooperative organizations"-which in my opinion is a wrong use of the term "cooperative."
I should very much like to see the government reconsider this whole marketing system, particularly in view of the war situation, and place the entire marketing of, we will say "wheat" in this particular, under a board representative of the wheat producers themselves and satisfactory to the people who produce the product.
I repeat that I do not believe this act meets at all the needs of the western situation, and the experience of the past year thoroughly vindicates the opinion expressed by the so-called Bracken committee when it was here just over a year ago.


The CHAIRMAN:: May I draw to the attention of the committee that the rules of the house provide that in committee we should confine the discussion to the subject matter of each clause? We are now on the short title. I did not want to interrupt hon. members who were speaking, but it will make for more orderly debate if we adhere to the rules. Hon. gentlemen will have an opportunity of speaking to the next clauses. I think clause I should carry unless some hon. member finds fault with the title.


Mr. COLD WELL:: I was speaking to the title.


Thomas Vien: The short title is not the title of the bill.


[Stage Direction]
Section agreed to.
On section 2-Primary producer.
Alexander Malcolm Nicholson: In connection with
paragraph (g), I notice that in the 1939 act "primary producer'' is defined as a person
engaged in growing spring wheat. Now "primary producer" has a much wider interpretation. Would the minister explain why the interpretation last year was so restricted?


James Garfield Gardiner: Last year's act defines wheat as:
(j) "Wheat" means spring wheat grown in any of the provinces of Manitoba, Saskatchewan, Alberta or British Columbia.
It was not necessary to insert that a second time. The bill means the same as last year's act; only this definition of wheat was repeated in paragraph (g) last year. There is an amendment to this section which I would ask my colleague, the Minister of National Revenue, to move.


James Lorimer Ilsley: I move:
That .section 2 subsection (g) be amended by striking out the word "mortgagor" in line thirteen and substituting therefor the word "mortgagee".


[Stage Direction]
Amendment agreed to.
Grote Stirling: I take this new wording to mean that it is to be applied to all provinces in Canada?


James Garfield Gardiner: No; I explained a
moment ago that in the original act, section 2, paragraph (j) defines wheat as meaning spring wheat grown in Manitoba, Saskatchewan, Alberta or British Columbia. In thus bill " wheat " means spring wheat grown in those provinces.


Grote Stirling: If the names of the provinces are not mentioned in this new section-


James Garfield Gardiner: Wherever the word
" wheat " occurs, that definition applies.


Alexander Malcolm Nicholson: In the act of 193f>
" primary producer " was restricted to the person actually engaged in growing wheat. In this bill apparently' it is extended to the landlord, vendor or mortgagee.


James Garfield Gardiner: Paragraph (j) of the original act defines "wheat" as I have just stated. So that it means the same now' as before.


Alexander Malcolm Nicholson: But in the original act there was no provision for the landlord, vendor or mortgagee. Why is provision being made this year that was not made a year ago?


James Garfield Gardiner: After this legislation was passed last year, the definition of " primary producer " in the wheat board act was changed to include persons who held grain under, say, the one-third crop agreement. One man delivers two-thirds of the crop because he grew it; another man obtains one-third under his rental agreement. This wording simply provides that both the renter and
Wheat Cooperative Marketing

the person who rents can deliver their grain, as well as others who are in similar relationship.


Charles Edward Johnston: But the two of them are restricted to a total of 5,000 bushels.


John George Diefenbaker: What is the meaning of the words in line twelve, " shall be deemed to include any person entitled, whether as landlord, vendor, mortgagee or otherwise or by contract or operation of law, to wheat grown by a producer or to any share therein"? What do the words " by contract or operation of law " contemplate?


James Garfield Gardiner: I suppose any agreement entered into between two persons whereby [DOT]one becomes possessor of grain.


John George Diefenbaker: By purchase?


James Garfield Gardiner: I am not sure whether it would cover purchase. It might be a share crop agreement. I think that is mostly what is covered.


Ernest Edward Perley: How about a non-resident landlord?


James Garfield Gardiner: Non-residence would
make no difference if he is entitled to a share of the crop.
Section as amended agreed to.
Sections 3, 4 and 5 agreed to.


Thomas Clement (Tommy) Douglas: What is meant by section 10, " coming into force"?


James Garfield Gardiner: Section 7 of the original act, just as it was. That should not be dropped.


Ernest Edward Perley: I should like to propose an amendment, moved by myself, seconded by Mr. Ross (Souris):
That another section he added to the bill, numbered 6, to this effect:
"6. This act shall not be operative after the 1st day of August, 1940, other than for the purpose of winding up transactions on agreements entered into as between the minister and the cooperatives for the crop year 1939-40."


James Garfield Gardiner: Speaking to the suggestion, I should like to reply to some of the remarks made by the hon. member for Qu'Appelle (Mr. Perley) a few minutes ago. A statement which has been read to the committee as having been presented to the government by the Bracken committee last year is, of course, a correct statement of that submission at that time. But if hon. members will examine Hansard I think they will find that when this legislation was placed on the statute books last year, I stated to the house '*hat
fMr. Gardiner.]
members of that committee, first, those representative of the pool organizations and, following that, those representative of other elevator companies, came to me; and I think in fact I had placed on Hansard last year written statements from them suggesting that if this legislation were put on the statute books they would make use of it if circumstances so warranted. The legislation as then drafted, was placed on the statute books, the only difference now being the difference we have made by changing the different sections that have been changed by the committee tonight, and the last section of the bill as indicated here was a section to the effect that this legislation would come into effect only on proclamation. The only reason why it has been in effect during this last year is that every one of the pool organizations asked to have it brought into effect. The government did not bring it into effect of its own volition.


Ernest Edward Perley: That is last year?


James Garfield Gardiner: The grain year we are now in. Every one of the pool organizations and every one of the thirty-seven elevator companies organized under it asked to have it brought into effect. On the request of those organizations it was brought into effect, and they have made use of it. It would not be going too far to say that a considerable amount of wheat has been marketed under it this year, when one takes into consideration all the circumstances. Of the wheat that was delivered between the time the farmers started to thresh last fall and, say, December 1, I would say 95 per cent was delivered when the price was below 70 cents a bushel; and during that period of time any farmer who delivered wheat to an elevator could get 70 cents a bushel from the government for up to 5,000 bushels. Therefore there was no particular reason for him to deliver any of his wheat to an organization where he could get an advance of only 60 cents a bushel. So during all the time wheat was under 70 cents, naturally deliveries were made to the wheat board; but during the part of the season when wheat was above 70 cents, a few farmers may have decided that they would like to try out a cooperative organization which they themselves controlled rather than simply market through a board set up by the government.
So I say there is nothing strange about the fact that not very much wheat was delivered under this legislation this year. Perhaps the fact that any wheat was delivered is more a matter that should be explained than the fact that there was so little of it. Some other

Wheat Cooperative Marketing
year, if farmers knew they could always market .their wheat at, let us say, 80 cents a bushel or more, and there was one piece of legislation under which the advance would be 60 cents if the farmers set up their own organization while there was other legislation under which the government would take the wheat and pay in advance of 70 cents, then there might be a choice made as between the two if the farmers believed that in all probability all the wheat would be sold at about the same price and they wanted to find out which system would be the better under which to market their grain.
Someone has said that this is not a cooperative measure. In reply I would say that with the exception of this there is no system of handling grain in Canada to-day that does provide for cooperation. We have wheat pools, it is true, but they are all operating elevator companies which are just like any other elevator companies.


Thomas Miller Bell: They are owned by the farmers, though.


James Garfield Gardiner: They do not take the wheat, except under this bill, on a cooperative .plan. They are receiving wheat like anyone else, for delivery to the wheat board. In other words, they are operating the handling facilities in order to take wheat from the farmer and deliver it to the wheat board, just as any other elevator company does. So there is no other legislation under which anyone is operating a cooperative. This legislation says to any farmer, "You can drive into any elevator that has organized itself, or along with others, to set up a central selling agency; and when you drive into the elevator you can say that you are going to take a 60 cent advance and put your wheat in with the wheat of all the other farmers who do the same thing. That wheat will go to the central selling agency which you select," and the farmers who send their wheat to that central selling agency are cooperating with one another in taking an advance of 60 cents and allowing their w'heat to be sold by that agency. Each one is benefiting by the fact that they have cooperated in so marketing their grain and may obtain an interim payment, which is provided by the bill, with a final payment later on.
In other words, this legislation sets up a system entirely different from any other system under any other piece of legislation, and it provides a means of testing out three different methods, if our legislation and our controls remain as they are to-day. First there is the wheat board system; then there is the cooperative system under this legislation, and finally there is the open market system as it is
operated through the grain exchange. These three systems have been in operation during this last year; and I repeat that with the price below 70 cents during the greater part of this year, nothing could have been expected but that most of the wheat would have been delivered to the wheat board. The farmers saw no advantage in doing anything else this year, except in regard to a small part of the wheat.
I suggest that this amendment should not pass at this time and that this statute should be allowed to remain in operation. If no one wants to use it; if as my hon. friend suggests, the wheat pools do not wTant to use it; if none of the elevator companies want to use it and none of the farmers want to use it, the solution is very simple. They do not need to deliver wheat under it; then it will not be used. They do not need to form central selling agencies under it; then these agencies will not be set up. The agreements are for only one year; and if none of these organizations want to take advantage of this legislation, they need not make the agreement next year. But I do not know why the hon. member for Qu'Appelle suggests that we should deprive these .people of the right to use it if they so desire. Simply to read a statement made to the government before this legislation was drafted, to the effect that someone did not want it then, is not at all an argument, since most of the grain handling organizations in western Canada have used the legislation this year. Apparently they did want it; it was not used until afteT they had asked the government to bring it into operation, and they have been using it from that time up to the present.


Mr. FAIR:: Would this act be used if the limitation of 5,000 bushels had not been placed in the wheat board act?


James Garfield Gardiner: I do not know that I am in a position to answer that question. It was used, and the 5,000 bushel provision was in the act. I understand that some wheat was delivered under this legislation even apart from the 5,000 bushels.


Thomas Clement (Tommy) Douglas: I am inclined to think the minister cannot make a virtue out of the fact that some of the wheat handling organizations in western Canada have made use of this statute. There are two very simple reasons for that. The first, of course, is that if their competitors were going to use it, they had to use it as well. Take the pools as an illustration. If the line elevator companies were going. to come under this legislation the pools had to be prepared so that if one of their customers came in-
Wheat Cooperative Marketing


James Garfield Gardiner: The first to ask to come in were the pools.


James Lester Douglas: Quite so, because the pools knew perfectly well that many of the line elevator companies would come under this legislation.


James Garfield Gardiner: No; it was not in operation at all. The act had to come into force by proclamation.


James Lester Douglas: But they knew it had been passed.


James Garfield Gardiner: It was not in operation, and they asked to have it proclaimed.


James Lester Douglas: But the pools knew it had been passed.


James Garfield Gardiner: My hon. friend is putting up an argument to the effect that the pools had to come in because they knew the elevator companies were going to come in. The elevator companies did not suggest coming in until the pools came along and asked to have this act proclaimed, and they formed their organizations later.


Thomas Clement (Tommy) Douglas: The minister knows perfectly well, as most of us do, that the pools were in this position. This legislation had been passed by the house, and they knew that the line elevator companies would most certainly avail themselves of it. The pools had to be able to give their customers the benefits of this legislation, if those customers thought there were benefits under it.
The second reason why some wheat was sold under this legislation is that there was a 5,000 bushel limitation clause in the Canadian Wheat Board Act. When representations were first made by the so-called Bracken committee, it will be remembered that the first draft of Bill No. 63, as it was then called, had no 5,000 bushel limitation clause in it. But when later a new draft was brought in and the initial price raised to 70 cents, there was a 5,000 bushel limitation clause, which meant that the farmers in the heavy wheat areas had some wheat which could not be marketed through the wheat board, and must be marketed elsewhere. They had the choice then of either the open market, or this legislation, and I imagine most of them chose this legislation. That explains why probably the pool and some other organizations-


James Garfield Gardiner: Not "most of them"- only three million bushels.


Thomas Clement (Tommy) Douglas: The minister has just said he is surprised that under the circumstances as much wheat was sold under this legislation as has been sold. I suggest

that if the 5.000 bushel limitation clause had not been in the Canadian Wheat Board Act last year, there would have been even less wheat sold under this legislation than actually was sold. I do not think there is any doubt about that. And if the government were prepared during this session to take that 5,000 bushel limitation clause out, and put the initial price somewhere closer to the cost of production, the chances are that this legislation would .not be used at all. As a matter of fact, it would have very little value.


James Garfield Gardiner: Just by way of correction, I have checked the records showing the order in which these central selling agencies were formed. The first organization to form a central selling agency was the United Grain Growers Limited, a farmers' company which operates out of Winnipeg; the second one was the Saskatchewan Cooperative Wheat Producers Limited of Regina and the third was the Alberta Wheat Pool, of Calgary, Alberta.
The first purely private elevator organization that was set up under the legislation was set up one month, all but one day, after the Saskatchewan pool came in. I make this statement so as to clear up the suggestion that this was a matter of the elevator companies being likely to come in, and then other people asking to come in. The farmers' companies came in first, and one of them was in a month or six weeks before the line elevators came in. Another one was in a month before, and a third one about three weeks before.
So that the position is reversed, in so far as the order in which they came in or the order in which they desired to come in is concerned. When they asked permission to come in under the act, the act was proclaimed, and these different organizations set up and operated under the legislation. It is true that probably one of the reasons for that was the fact that certain people were not able to market under the wheat board a certain part of their wheat, i.e. that part which is over 5,000 bushels. Some of that was delivered to the organizations set up in this manner. That may have been one of the chief reasons for wheat being brought in this year, but it is not a reason for saying that this legislation has now had a fair trial before the people of western Canada.
There was no opportunity during the last year to have used this legislation at all, except for the purpose outlined a moment ago. And having been proclaimed for that purpose, there was probably some other grain put in during that period of time. In order to give it a proper trial, it would have to be operative when the price of wheat throughout a whole

Wheat Cooperative Marketing
year was higher than the advance either under this legislation or under the wheat board act. Then farmers would know that they were going to get more than 70 cents, no matter what happened, and they could then make the choice as to whether they would take 60 cents in advance, under their own organization set up in their own way, or whether they would take 70 cents advance under a government organization. There must be some test as to which of these pieces of legislation they desire most. There was no test during this last year.


Thomas Clement (Tommy) Douglas: I am partly in agreement with the minister in respect of what he said during the latter part of his observation. But I point out to him that a mere recital of the chronological order in which these different organizations came in under the scheme does not destroy the validity of my argument. The minister is not suggesting for a moment that line elevator companies ever came in merely because pools had suggested their intention of coming under this legislation.


James Garfield Gardiner: You were suggesting the reverse, and I am straightening you out.


Thomas Clement (Tommy) Douglas: No, I was
not. I am suggesting that first of all these pooling organizations already had their own pools or associations. It was no value to them to come in under this legislation. They already had such organizations. But they knew that an act had been passed, and they knew that many of their customers with an excess over the 5,000 bushel limitation, would want somewhere to market it, and that many of them would desire this cooperative form of marketing. As long as the 5,000 bushel limitation clause remains, there will be a field of operation for this act.


James Garfield Gardiner: For that reason this
amendment should not be passed.


Thomas Clement (Tommy) Douglas: But I do
urge the minister to take into consideration the acceptance of delivery of all wheat by the wheat board at a guaranteed price. As suggested the other day, there are three ways of marketing wheat: There is the open market, the cooperative way and the wheat board. In a time of war, and in view of the fact that Great Britain is taking steps to buy wheat through one agency, in company with France, and the fact that Australia has nationalized the handling of wheat, this would look like a good time for the Canadian government to take steps to buy all wheat through one board, to market through that board and to dispose of these other facilities.


James Garfield Gardiner: In respect of that I
suggest that this legislation does not in any way interfere with any decision the government may wish to make with regard to the placing of all the wheat under the wheat board. I believe it was yesterday the statement appeared in the press, and I think it was announced to-day by the Minister of Trade and Commerce (Mr. MacKinnon), that the Winnipeg grain exchange would not be closed until the end of this crop year, namely, until August 15. But no announcement has been made as to anything that will happen beyond that date. In other words, the method of handling the n w crop has not been announced by anyone. The matter is still under consideration as to what will be done. However this legislation in no way interferes with the decision one way or the other in that connection. The legislation as we are suggesting it now simply means the present crop year and makes it possible for us to make a payment if there happens to be a loss. Last session we neglected to put that section into the bill. The only reason why we have got it down this session is to make it possible to make a payment if there happens to be a loss on the wheat handled this year. If action is taken, it is suggested this legislation will not operate -or any other legislation-as long as we are taking full delivery of the wheat.


Thomas Vien: I would draw attention of hon. members to the fact that we are discussing the amendment, which states that the act shall not be operative after August 1,
1940.


Thomas Clement (Tommy) Douglas: We have been discussing whether the act should be terminated, and whether it has fulfilled any useful function.


Thomas Vien: The question is on
the amendment. Mr. Perley has moved that another section, to be known as section 6, be added to the bill, and that that section shall state:
This act shall not be operative after the first day of August, 1940, other than for the purpose of winding up transactions on agreements entered into as between the minister and cooperatives for the crop year 1939-40.
Therefore the question before the committee is whether this act should be operative after the first day of August, 1940.


Thomas Clement (Tommy) Douglas: Exactly.


James Arthur Ross: In view of the amendment and all that has been said, I feel quite satisfied that these cooperatives are simply cluttering up our wheat marketing system. I am convinced that the present wheat board has not functioned as it was anticipated it would. As has been pointed out by previous
Wheat Cooperative Marketing

speakers, we have three systems of marketing our wheat; and I think the sooner we eliminate the cooperatives, close up our grain exchange and have the wheat board functioning as most people in the west anticipated it would, that is, have our wheat handled at a price which will compensate the producer for his labour and investment, the better off we shall be as a nation. We want a price set yhich will compensate the producer for his work, a price considerably higher than has been discussed this evening. We should like to see these other departments eliminated as soon as possible and have the wheat board handling our wheat as it should be handled.


Ernest Edward Perley: I do not think it is necessary to labour this question any further. The statement which the minister has made proves conclusively that no useful purpose will be served by this legislation. The hon. member for Weyburn (Mr. Douglas) and others have presented arguments which substantiate the stand I am taking and the amendment I propose. I should like to have had more information from the minister, but possibly he would be out of order if he answered all my questions. I should like to know the number of bushels handled by each one of the cooperatives, the Saskatchewan pool, the Alberta pool, the United Grain Growers' and others. According to the statement he gave the other day, the Saskatchewan pool handled most of the 3,000,000 bushels, and this would seem to prove that they came in purely for the purpose of accommodating many of their customers who were not members of their pool but who came in with 5,000 bushel lots. We should have had more information with respect to the standing at the present time of the cooperatives and the extent of their holdings. It may be that they will secure such profits that there will be no need for this bill to provide payments for losses. I think it quite possible that the minister knows how much wheat these cooperatives hold at the present time, and a statement with respect to that would be quite interesting. Surely he has this information, especially when he is putting through legislation such as he proposes. I am prepared to allow the matter to go to a vote or whatever else the minister proposes to do.


Percy Ellis Wright: All this bill does is to authorize the setting up of a number of small pools. This is an entirely wrong principle, and I do not think the farmers of the west are in favour of it.
Amendment (Mr. Perley) negatived on division.
Bill reported, read the third time and passed. 

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



DEPARTMENT OF NATIONAL REVENUE

[Stage Direction]
213. Customs and excise divisions-Customs excise chemical laboratory, $42,145.
Grote Stirling: Where is this laboratory, what is its purpose and is it the only one in Canada?
Hon. J. L. ILSLEY (Minister of National
Revenue): I simply wanted to call a noncontentious item for the purpose of getting into supply. This laboratory is on Queen street in Ottawa and is the only laboratory of the Department of National Revenue. It discharges a varied number of functions. These chemists analyse a number of different substances, notably sugar and liquids alleged to contain alcohol.


Joseph Henry Harris: As the minister knows, similar work is carried on by the chemical laboratory of the Department of Pensions and National Health, under the authority of the drugs act. There is a lack of expeditious conclusion in connection with the analyses which the minister's department makes. This tends to hold in bond shipments of goods which must be analysed before release. When a shipment of goods arrives in Canada, it remains in bond until instructions are received from the laboratory that it meets the requirements of the act. As an example I would refer to shipments of gelatine which have come in from Australia. These are in bond and will not be released until such time as the departmental chemists say that they are in line with the restrictions laid down by the act. The net result is that the importers cannot fill their orders even though the goods are actually in the country.
I bring particularly to the attention of the minister the delay, amounting sometimes to as long as five or six weeks, in getting a simple analysis made of the nitrogen content of products of that kind, and I would ask him to give the committee some detail as to the personnel employed in the Queen street branch, the degree of cooperation which they have with the Department of National Health and what cooperation they have with the chemists in the national research council. I think it is high time that the work of the chemical laboratories in the different departments in the city of Ottawa was consolidated. As the situation is now, each department seems to have a laboratory of its own answerable to its minister, and in turn the laboratories in the other departments are answerable to their ministers, the result being a great duplication.

Supply-Revenue-Customs,
of work and of ideas. There should be some consolidation, of the work which is being done by the various chemical laboratories in the city of Ottawa.
I plead particularly that during these difficult times, when it is by no means easy to get bottoms to bring to this country products which we do not manufacture in Canada, they should be cleared as quickly as possible, and not be held up for weeks awaiting simple laboratory tests by the department.
I have no objection to this particular increase because I know the work which the department is doing.


James Lorimer Ilsley: I am not sure that I can remember all the questions which the hon. gentleman asked me. He spoke of gelatine. The analysis of gelatine is made by the chemists of the Department of Pensions and National Health, under pure food legislation, and not by the chemists of the Department of National Revenue. I am aware, however, that in saying that I am giving some support possibly to his own argument that there should be more unity in organization for chemical analyses by the different government services.
I am not aware of all the reasons that were given to parliament in 1928 or 1929 when the national research council was set up, but I believe it was thought at that time that the national research council could be so organized that these different laboratories could be brought within it. But that has not been done, and when attempts have been made to get all the laboratories under one roof, very strong reasons have always been presented against it by the departments.


Grote Stirling: By each department.


James Lorimer Ilsley: By each department concerned. So far as our own laboratory on Queen street is concerned, I have no reason to think that they are not doing efficient work, or that the government is not getting good value for the money expended there.


Thomas Miller Bell: What is the procedure followed in prohibiting the admission of patent medicines into this country. I imagine that would come under this department. I know of cases of people who probably were getting some benefit from certain medicines they had been importing and they felt that their prohibition was a deprivation. On the other hand, I know from personal experience of alleged patent medicines coming in for which large prices were charged and the people who were taking them were more or less victimized. These patent medicines were brought in from the United States. I am thinking of one which the department prohibited of which I had some personal knowledge. I wTas wondering how these decisions
were arrived at, and if this is the particular department which deals with that matter. To what extent is prohibition invoked to protect the Canadian public from being victimized, and also what measures are taken to ensure a supply of medicines which 'people are in the habit of feeling that they need.


James Lorimer Ilsley: I am not familiar with all the acts, such as the Proprietary and Patent Medicines Act and others which are administered by the Department of Pensions and National Health, but if under that act or under the regulations made under the act by the Department of Pensions and National Health a particular medicine is prohibited, we act as policemen and see that it is not delivered to the importer.


Major James William Coldwell: Does the minister's
department do the laboratory work?


James Lorimer Ilsley: No.


Joseph Henry Harris: Perhaps the minister would give me an answer to the question I raised concerning what seems to be a new restriction laid down by the department. Previously reputable firms could clear their goods, a sample only being retained by the department for subsequent analysis. If later it was found not to be in accordance with certain standards, the goods were put in the category where they belonged and extra duties levied. Reputable firms then had an opportunity of arguing their case, checking the analysis, and if they felt they were at fault they paid the extra charges. But in the last year, under some new regulation or restriction, no goods can be cleared until the analysis has been completed. Would the minister give us some information on that?


James Lorimer Ilsley: If the hon. gentleman will give me some instance he has in mind, I will check up and see whether that is the case. I am not able at the moment to say whether that is the general practice or not, or whether it is done just in some particular instances. If the hon. gentleman will give me a case he has in mind, I will find out whether there is anything wrong with the rule or practice.


Joseph Henry Harris: I would not say that there is anything wrong with the rule or practice, but a departmental rule or regulation has been laid down with which the minister may not be familiar. The case I bring forward is this. Gelatine was coming from Australia to Canada, and delivery was promised to the customer at such and such a time when it was known that the gelatine was in the bottom and on the way over here. When it gets here, it is held up under some departmental regulation or restriction for
4S0
Supply-Revenue-Customs

five or six weeks, a condition which did not obtain previously, with the result that the importing company find themselves in a very difficult position, having said that the goods would arrive at such and such a time. Then when the goods arrive, they are unable to clear them. In these difficult times particularly, when it is difficult to get shipment of goods of a class or kind not produced in Canada, I think the department should be a little lenient in the case of reputable firms which are supplying us, say, from Australia at the present time.
What are the extra chemist and the extra clerk doing in the department?


James Lorimer Ilsley: These two officers are not really additional. They are temporary officers who have been made permanent, so that the list comprises fifteen instead of thirteen permanents.


Joseph Henry Harris: There is extra money required to pay a salary of $1,800. Was this man on the staff last year?


James Lorimer Ilsley: There is an additional junior chemist who was previously employed as laboratory assistant. The increase in permanent salaries of $3,210 is on account of this additional junior chemist being employed at $1,800 per annum because of the increase of work; a temporary clerk at $720 being made permanent; and statutory increases, $690. The chemist is engaged in the ordinary or general work of a chemist at the laboratory.


Joseph Henry Harris: I wish to make one general observation with regard to the employing of extra personnel in government departments. We are now at a very difficult time; we have established a new ministry of munitions and supply; we shall probably have to establish other ministries before we go much further. I have in mind also that before long there will probably be a ministry of home defence. All these new ministries and departments will surround themselves with different classifications of assistants and help of one kind and another; with the net result that, when this difficult conflict we are now engaged in is over, we shall find our civil service expanded to a very great degree. I would say to the Minister of National Revenue, whose department is more or less constant and perhaps not so much concerned with the prosecution of the war as is, for instance, the ministry of defence for air and the ministry of munitions and supply, that such departments as his should be careful to the extreme to see to it that they do not add too many permanent employees to their personnel, so that when, after this conflict is over, we start 
to break down the very heavy civil service we shall then have, he will, rather than have his department loaded 100 per cent with permanent employees, be able to leave room for some of those who will be coming out of other departments which have been temporarily established.
We find throughout the estimates that personnel has been added in practically every department. Some departments, for example public works, have declared a holiday as regards expenditures. That department is not concerned in this item, but I use it as an illustration. Yet the civil service personnel in that department still carries on at the same old place. On general principles I object to the increase in the Department of National Revenue of even one chemist and one clerk, having in mind the day when we shall probably have to dissolve other ministries which are now being set up. It seems to be a habit in Ottawa that, once an appointment is made, that appointee surrounds himself with a messenger, a stenographer and a clerk, as well as office space, and is there seemingly for all time. That state of affairs obtains in this particular phase of the work; the minister in his statement admitted it.
We have chemical laboratories in all departments, although the same kind of determinations is being made and the same apparatus employed for making those determinations. We find one on Elgin street, another at the other end of the city, yet another on Queen street. If you go into these laboratories you will find the same chemical equipment in each. Yet that equipment is probably not in use for more than five per cent of the time, and the actual space where the determination is being made is probably not occupied for more than five per cent of the time. That condition obtains in the Department of Agriculture, in the forest products laboratory, in three or four branches of the national research council, in the department of national health, and I do not know how many other places. It constitutes a waste of space, a waste of equipment, and to a degree, undoubtedly, through lack of coordination and consolidation of services, a waste of the time and talent of the highly-paid employees who are doing this technical work. In other words, of the men equipped with knowledge to make the determinations to which I have referred, some are out at the experimental farm determining the nitrogen content of No. 1 hard wheat; others having the same knowledge are to be found in the forest products laboratory on Elgin street determining the values of nitrogen and ammonia in the breaking down of the products analysed in that institution. They

Supply-Agriculture-Administration
are highly trained and expensive men, using costly equipment, but not all used in an efficient manner.
I realize that this is a very small item to complain about. I know that the minister's department is doing good work. He is furnished, I had almost said " blessed ", with an efficient staff, particularly his senior officers. They are able men, but they should have an eye to business and to present conditions, and the minister should pursue the idea which was brought to his attention some years ago, and see if he cannot effect some consolidation, not only to cut out the waste, but so that when the time comes to demobilize extra departments, there will be places and opportunities for those who are surplus elsewhere to find vocations in the civil service.


[Stage Direction]
Item agreed to.
DEPARTMENT OP AGRICULTURE Administration service
[Stage Direction]
1. Departmental administration, $ 120,005.
Mr. SENN:: Would the minister explain the additions which have been made during the past year to this staff, particularly in view of the address to which we have just listened from the hon. member who is seated beside me?


James Garfield Gardiner: All the additions are shown on page 59 of the main estimates. The first one is a clerk-seven clerks instead of six. There is a reduction in stenographers, noted just above that item, from three to two. The next is an increase in stenographers from one to three. The next is an increase in clerks from two to three. This makes four more now than last year.


John Ritchie MacNicol: Are these extra employees being taken out of departments which are more or less defunct at the present time or doing very little. Two or three days ago I read in an article that the government contemplated taking clerks, stenographers and other employees from departments in which at the present time they are doing little or nothing, and putting them into other departments where there is an increase of work. For instance, were any of these taken from other departments?


James Garfield Gardiner: Two of them were transfers from other departments, and two temporaries made permanent.


Grote Stirling: How is the minister able to say that telegrams, telephone and postage, and travelling expenses, will be successfully
cut by 55,500, which apparently is just the amount by which he has raised salaries, from the deputy minister to the stenographer?


James Garfield Gardiner: The cut in cost is largely on account of the use of air mail instead of
telegrams.


Grote Stirling: Travelling by airmail?


Mr. MARSHALL:: 
James Garfield Gardiner: 
James Alexander Marshall: 
James Garfield Gardiner: I am informed that the statement of the amount not expended out of last year's vote is not available until July 15.


Alexander Malcolm Nicholson: 
James Garfield Gardiner: That is just continuing from where I was reading before:
Temporary salary statutory increase
to office boys	$ 330
Secretary to executive	 1,740
New positions	 3,720
Total	$5,790
Less:
Positions made permanent	 4,200
Balance	$1,590



Supply-Agriculture-Administration


Alexander Malcolm Nicholson: The information I
should like to have is the number of temporary assistants the minister had last year and the number he proposes to have this year?


James Garfield Gardiner: In my own office the number last year was three, and it is three this year. In the general1 administration the number last year was twelve; this year, fifteen.


Grote Stirling: The minister did not answer my question as to how he is able to estimate a reduction of 35 per cent in travelling expenses.


James Garfield Gardiner: We intend to have the travelling expenses this year cut to the very minimum because of the fact that it was necessary to cut $5,000,000 off our total expenditure this year out of $18,000,000, and in doing so we are cutting travelling expenses along with everything else.


Grote Stirling: Was the amount voted in 1939 all expended?


James Garfield Gardiner: Not totally, but there was a much larger amount expended last year than will be permitted this year.


John Horne Blackmore: I am wondering what happened to that $20,000 mentioned by the hon. member for Mackenzie (Mr. Nicholson). Does that come back to the money available to the department to be expended, or does it go into the consolidated revenue fund? Would the department have that surplus which it might use for some other purpose?


James Garfield Gardiner: No, there is nothing which was not spent last year that we can spend this year without having it revoted.


Thomas Vien: Shall the item carry?


John Horne Blackmore: I would rather this
did not carry to-night because I want to ask about a number of matters. I should like to know whether the salaries of the officials under the Prairie Farm Rehabilitation Act are included in this item.


James Garfield Gardiner: No; there is a special vote for the Prairie Farm Rehabilitation Act. This is only for the general administration of the department. There are other administrative votes as well.
Progress reported.
On motion of Mr. Crerar the house adjourned at 11.05 n.m.

Tuesday, June 4, 1940



PRIVATE BILL


[Stage Direction]
Bill No. 26, to incorporate The Alberta Provincial Bank-Mr. Blackmore.