EUROPEAN WAR


[Stage Direction]
pledging Canada's unwavering support
Right Hon. W. L. MACKENZIE KING (Prime Minister):: 

OLD AGE PENSIONS


Mr. A. W. NEILL (Comox-Albemi):: Mr. Speaker, I wish to present a petition to the house under standing order 68. It is in order and has the correct superscription-"To the honourable the House of Commons in parliament assembled." It then follows the usual formula-"The petition of the undersigned humbly sheweth;" the subject matter is set forth in paragraphs, and so on, and it concludes with the prayer and the formal words, "And your petitioners as in duty bound will ever pray."
I see by the rule that I must confine myself to a statement of the parties from whom it comes, to the number of signatures attached to the petition, to the material allegations contained in it and to the reading of the prayer of such petition. I shall therefore do so.
The parties from whom it comes are citizens of Canada from the provinces of British Columbia, Alberta, Saskatchewan, Manitoba and a portion of Ontario. Thei. names and addresses are all given. I am told that the petition was got up in a very few weeks and of course it would be impossible to have so many signatures on one petition. Consequently I have a number of them here containing the same heading. I produce one as a sample. Apparently they had the idea that as many names as possible should be on one sheet. This one is forty-eight feet long and contains 1,112 signatures. The others are all much the same.
The number of signatures attached is said by those who are sponsoring the petition to be 57,409. I have not counted them myself, but if anyone wishes to check their accuracy I shall be glad to afford him the opportunity to do so.
The material allegations contained in the petition are briefly as follows:
That the cost of shelter for a single individual is at least $10 and that a further sum of $10 per month is inadequate to provide the necessities of living, including food, clothing, medical care, et cetera.
That thousands of persons in Canada over sixty-five years of age have no means of support and are unable to compete in the labour market.
That to maintain a very modest standard of living would cost $1 a day; this is shown by the experience of governments in the maintenance of patients and soldiers in institutions maintained by the state.

That the age of sixty-five is recognized in the dominion civil service, and also in several of the provinces, as being the age at which retirement is desirable.
That the age of sixty-five is the one adopted for old age pension eligibility in Australia, New Zealand, the United States and other countries having similar conditions to Canada, and that that age has been endorsed by the legislatures of British Columbia and Alberta and by many public bodies.
That the spirit of the Old Age Pensions Act is in some instances defeated by technical regulations which create unnecessary difficulties.
These are the main allegations in the petition.
The prayer is as follows-and in case it should be suggested by someone that the petition is out of order in calling for an expenditure of public money, I would point out that it is drawn up to comply with paragraph 714 of Beauchesne's Parliamentary Rules and Forms, which says that the house would refuse to receive a petition asking directly for a grant of money but that the house does receive petitions which ask simply "for legislation or for such measures as the house may think expedient to take." I now read the prayer of the petition:
Wherefore your petitioners humbly pray that your honourable house may be pleased to enact such measures as the house may think expedient to take to improve conditions above described.
In addition to the signatures on the petition I have received a number of individual letters, numbering about 150, which I am not presenting because technically they are out of order, but they all endorse the petition and describe their own conditions in rather pitiful terms.
The parties who sponsor this petition are a responsible body in Vancouver. In their covering letter they express the hope that the house will give the petition sympathetic consideration, and I would add my own hope that when the financial resources of the country permit it, action will be taken accordingly.



STANDING COMMITTEES


[Stage Direction]
Right Hon. ERNEST LAPOINTE (Minister
of Justice moved:
That the name of Mr. Gingues be substituted for that of Mr. Pottier on the standing committee on miscellaneous private bills.
That the name of Mr. Pottier be substituted for that of Mr. Gingues on the standing committee on industrial and international relations.
That the name of Mr. Lalonde be substituted for that of Mr. Fournier (Hull) on the standing committee on privileges and elections.
That the name of Mr. Fournier (Hull) be substituted for that of Mr. Lalonde on the standing committee on miscellaneous private bills.

Rules oj the House-Reading Speeches
That the name of Mr. Cloutier be substituted for that of Mr. Dupuis on the standing committee on agriculture.
That the name of Mr. Dupuis be substituted for that of Mr. Cloutier on the standing committee on printing.
That the name of Mr. Jaques be substituted for that of Mr. Queleh on the standing committee on banking and commerce.
Motion agreed to.


[Stage Direction]
On the order for motions:
Mr. SPEAKER:: Before the orders of the day are called, I wish to draw the attention of all hon. members to a practice in debate which seems to be growing, and is contrary to the rules of the house. I refer to the reading of speeches.
Standing order No. 41 makes provision for decorum in debate. I would refer hon. members to Beauchesne's Parliamentary Rules and Forms, at page 95, paragraph 293, which states:
Besides the prohibitions contained in this standing order, it has been sanctioned by usage both in England and in Canada, that a member, while speaking, must not: . . .
(o) read from a written, previously prepared speech.
This rule was adopted in 1927, but as long ago as April 19, 1886, a resolution was adopted by the house which I should like to read. It was as follows:
That the growing practice in the Canadian House of Commons of delivering speeches of great length, having the character of carefully and elaborately prepared written essays, and indulging in voluminous and often irrelevant extracts, is destructive of legitimate and pertinent debate upon public questions, is a waste of valuable time, unreasonably lengthens the sessions of parliament, threatens by increased bulk and cost to lead to the abolition of the official report of the debates, encourages a discursive and diffuse, rather than an incisive and concise style of public speaking, is a marked contrast to the practice in regard to debate that prevails in the British House of Commons, and tends to repel the public from a careful and intelligent consideration of the proceedings of parliament.
I realize from my own experience how comforting it is that the written word should be before a speaker while he is speaking in the house, and especially when one is a new member. There are quite a number of new members in the house, and therefore some latitude has been given in the debates which have already
taken place, but I thought it proper to call the attention of hon. members of the house to the practice, which has not been confined to one side of the house; in fact, I think it has been almost universal in its application. I believe that a reference to the rule in this formal and general manner will forestall any objections from the house or from the chair in future debates.


William Lyon Mackenzie King: Mr. Speaker, I hope that the rule will not be construed as applying to important statements made by the Prime Minister on behalf of the government. At a time like the present, every precaution is necessary with respect to utterances of international significance and concern. Statements on all such should I think be read rather than expressed extemporaneously. I believe that that is understood; in fact, in England, it is the practice for such statements to be read.


Georges Parent: Such has been the custom and it has been accepted by the house. As suggested to-day, statements from ministers have been read in this chamber, and the custom and practice of the house has been to permit the reading of such communications where government policy is involved. I think the general sense of the house will be that all such statements should be read, in order that governmental statements may be meticulously and correctly given to the house.



NATIONAL REGISTRATION


[Stage Direction]
On the orders of the day:
Hon. R. B. HANSON (Leader of the Opposition) :: I should like to direct an inquiry to the Prime Minister (Mr. Mackenzie King). In view of the noble words which he has addressed to the Prime Minister of France, and in order that these noble words may be followed up by deeds and action, will he say that the government will give immediate consideration to the question of a national registration in Canada?


William Lyon Mackenzie King: If I were sure that to
comply with the wish of my hon. friend would carry out what he has in mind, I would be the first to give him an answer in the affirmative. Until I have reached that view I am afraid I shall have to say that the matter he has referred to has been, is, and will continue to be under consideration.
National Defence



PRAIRIE FARM ASSISTANCE ACT


[Stage Direction]
On the orders of the day:
Mr. T. C. DOUGLAS (Weybura):: May I ask the Minister of Agriculture (Mr. Gardiner) whether we may expect legislation at the present session to amend the Prairie Farm Assistance Act?


Hon. J. G. GARDINER (Minister of Agriculture) :: The matter is still under consideration.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Mr. J. GORDON ROSS (Moose Jaw):: I should like to know from the Minister of Justice (Mr. Lapointe) whether he has received authentic information from any reliable sources in regard to a threatened invasion of Ontario from the United States?


Right Hon. ERNEST LAPOINTE (Minister of Justice):: No. Immediately after my attention was called by the leader of the opposition (Mr. Hanson) to the statement made by the premier of Ontario the heads of the Royal Canadian Mounted Police communicated with the head of the provincial police of Ontario. As a matter of fact, I believe, Superintendent Kemp, who is in charge of the Ontario division of the force, got in touch with Commissioner Stringer of the Ontario police, who told him that he could not give him any answer without first consulting the premier of Ontario. That was two days ago, and to this very minute neither we nor the police have received any information. May I say also that the Royal Canadian Mounted Police is in constant communication with the police authorities, both federal and state, of the United States. They are in constant communication with the law enforcement agencies in the state of Michigan and the state of New York, which are more directly concerned with our boundary in Ontario. Every precaution is being taken. Nothing unusual has happened, and the consensus of all those in authority is to the effect that there is great exaggeration in the statements which have been made.



MUNITIONS AND SUPPLY


[Stage Direction]
On the orders of the day:
Richard Burpee Hanson: Mr. Speaker, may I direct an inquiry to the Minister of Munitions and Supply (Mr. Howe) of which I gave him some notice? In view of the fact that a company owned and controlled by a person who is in fact now detained as an enemy alien has a huge contract with the government for the manufacture of minesweepers, will the Minister of Munitions and Supply say (a) that the contract is to be continued; or (b) is to be cancelled; or (c) that the government will take over the plant and finish the contract? Or, (d) has the government the power in such a case to confiscate the plant as enemy alien property? Generally, what is the policy of the department and the government in such a situation?


Hon. C. D. HOWE (Minister of Munitions and Supply):: Mr. Speaker, I assume that the contract referred to is a contract by the Dufferin Shipbuilding company for the construction of four minesweepers. The reports of our inspectors indicate that the material is being delivered and that the work is proceeding on schedule. I have no knowledge at the moment of the interest of the president of the company, who has been detained with a view to internment.


Richard Burpee Hanson: I am
informed that he is interned.


Clarence Decatur Howe: Well, he is interned, I assume, subject to the usual appeal. Whether this can be treated as enemy alien property is a matter for the law officers of the crown to decide. But it is important to the department of munitions that the work on these four minesweepers shall proceed, and any steps which will be taken will protect the completion on schedule of the minesweepers. We are examining the situation with the law officers of the crown and will determine the policy in the light of the facts as we discover them.


Mr. M. C. SENN (Haldimand):: I believe that the same concern, or one controlled by the gentleman to whom reference has been made, has contracts for the construction or finishing of airports in certain localities, some

Munitions and Supply Act
of them being in my own riding. Will the minister say whether the same statement would apply in this particular instance?


Clarence Decatur Howe: The company is another company, I think. Certainly the president is the same person, and my remarks apply equally to other contracts.


INFORMATION GIVEN IN PRESS RELEASES WITH RESPECT TO CONTRACTS
[Stage Direction]
On the orders of the day:
Mr. KARL K. HOMUTH (Waterloo South): In the press releases that are sent to hon. members every so often, giving information as to contracts, we are given the number, the name of the company and the price, but could there be another column to show the article ordered?
Clarence Decatur Howe: I shall be glad to take that up with the publicity branch of the Department of Munitions and Supply and ask that that be done.


AMENDMENT TO CLARIFY AND EXTEND POWERS OF MINISTER, ETC.
[Stage Direction]
Hon. C. D. HOWE (Minister of Munitions and Supply) moved that the house go into committee to consider the following resolution:
That it is expedient to amend the Department of Munitions and Supply Act to clarify the powers of the minister and in some respects extend his powers of acquisition, by purchase or otherwise, of munitions and supplies, and to empower him to construct and carry out defence projects, engage services, et cetera.
Motion agreed to and the house went into committee, Mr. Fournier (Hull) in the chair.
Richard Burpee Hanson: Would the minister make a statement now?


Clarence Decatur Howe: The Department of Munitions and Supply Act was passed at the session of parliament held in the week between September 6 and 13, 1939. The act was actually proclaimed on April 9, 1940. In the meantime the work which is now carried on by the department was carried on by the war supply board. The regulations of the war supply board were somewhat similar to the original Department of Munitions and Supply Act. As the work of the department developed, certain wider authority than given by the act was given to the war supply board. Also certain changes in practice developed through experience, which were not the practices set out in the Department of Munitions and Supply Act.
When the act was proclaimed it was of course necessary to continue all the undertakings of the war supply board and to continue the procedure very much as it had been carried on by the war supply board.
The purpose of these amendments is, first, to bring the Department of Munitions and Supply Act into conformity with the amendments to the act which were made by order in council under the War Measures Act to enable the department to function and to take over from the war supply board without interrupting the procedure. A second purpose is further to enlarge the powers of the department under the act and to revise the procedure, primarily for the purpose of permitting a considerable degree of decentralization of the work carried on by the department. It has been found utterly impossible to assemble in Ottawa a sufficient staff to handle all the multiplicity of undertakings that the department has in hand at the present time. The act provides that certain government owned and controlled companies shall be established and headed by business men chosen by the government who will be able to carry on certain operations as companies rather than as part of a departmental staff.
That I think covers the general purpose of the amendments to the act. It is exceedingly difficult to discuss any of them in detail until the bill itself is distributed, but of course I shall be glad to answer, as far as I can, any questions that may occur to hon. members in the meantime.


Richard Burpee Hanson: The act, as the minister stated, which was passed on September 12, 1939, created a new ministry, the Department of Munitions and Supply. It was proclaimed on April 9 last under P.C. 1435. The Prime Minister (Mr. Mackenzie King), in moving the second reading of the bill in September, explained that his purpose was to create a department which would have power to mobilize and control to the fullest extent Canadian industry for war purposes. He said that the bill was modelled on the department which the British government set up under Mr. Lloyd George during the great war. It was further explained that it was not the intention of the government to set up the department immediately, which is borne out by the fact that the act was not proclaimed until April 9 last, the work being carried on meanwhile by the old war supply board.
On April 9, 1940, when the act was proclaimed, substantial additions to the powers and provisions of the act were made by order
Munitions and Supply Act

in council under the War Measures Act, chapter 206 of the revised statutes of Canada. The scope and authority of the powers of the department were very considerably extended. I am assuming of course that that was absolutely necessary by reason of the increase of business arising out of the war. I do not know whether these orders in council have been laid on the table. I refer particularly to P.C. 1437 and P.C. 1438, which I have obtained from the proper authority; also P.C. 2189, which was previously laid on the table, passed on May 24 last, and which provided for the setting up of these government-owned corporations, if I apprehend it correctly, and the authorization of guarantees, et cetera, to a maximum not exceeding 82,000,000 to be given by the Minister of Finance. I do not wish to refer to that item, because I think I understand why that was done and why it is desirable that undue publicity should not be given to the underlying reasons; I shall respect the confidence that was reposed in me on that occasion and not go further into that aspect of the matter.
If I understand the minister's explanation of the resolution, the first object to be attained by the proposed bill is to regularize the orders in council and make them part of the statute which has already been passed. That, I think, is good practice, and there is no objection to it. But with respect to the second and third objects, when we come to the committee stage of the bill I will ask the minister to be good enough to tell us in some detail-not necessarily full detail-what he has in mind with respect to decentralization of operations. I can quite understand that in a country as far-flung as Canada, geographical considerations being what they are, decentralization may be good business. As a lawyer connected with commercial operations all my life I can quite appreciate that.
I do not know how far the minister can take us into his confidence with respect to these government-owned companies. Of course he will admit that in peace time that policy would be considered a very great departure. I give the minister credit as a business man for understanding that this particular power which he is investing in others as trustees on behalf of the government could be exercised only in time of war, and under conditions designed to protect the public treasury. Doubtless that is one of the vital things which the minister has in mind. I invite him now to be good enough, when we come to the committee stage of the bill, to give us as much information as it is in the public interest to give on these points. I am not going to press him beyond that.
(Mr. R. B. Hanson.]


Mr. HOMUTH:: Is it the minister's intention to proceed with the bill now?


Clarence Decatur Howe: The bill is ready for distribution. It depends on whether hon. members would prefer to have time to study it first. My intention to-day was to move first reading and let the bill be distributed, and then continue on another day.


Mr. COLD WELL:: We welcome the suggestion made by the minister that we be given an opportunity to look over the bill before much debate takes place. The minister spoke of setting up government corporations, as it were. Will they be in the same relationship to this parliament as, for example, the Canadian National Railways? I have it in mind that we are not able to obtain information from subsidiary corporations of the type of the national railways or the Canadian Broadcasting Corporation. Will the corporations set up be of that type, or will they be more directly under this parliament so that we may get more information about their activities than we are now able to get about the national railway system?


Clarence Decatur Howe: I think the extent to which
parliament can be given information about these companies depends on the purpose of the company. Take, for example, a company whose duty it is to protect the production of war supplies against a shortage of raw materials that come from countries which may from time to time be cut off as a source of supply. To some extent it would defeat the purpose of the company to give an account of its transactions while they are current, because some of this material is perishable and must not only be bought but sold. There is another company whose purpose would be defeated if full details of its work were given in the house. On the other hand we have a third company which is coordinating the management of governmental enterprises. Several enterprises separate in themselves, with separate management and necessarily separate operation, must be coordinated in order to produce the finished article. Concerning that I shall be delighted to give the fullest possible information to the house at any time. It is a business transaction, carried out by a company simply as a matter of convenience, making possible the assembling of a separate group of men and the providing of office space outside of the capital, where office space is almost impossible to obtain. I think my hon. friend will see the position. I feel that anything we do as a department of munitions and supply should be made public to the fullest possible extent consistent with the public interest, and so far as these companies are concerned that is the view I will take.

Munitions and Supply Act


Mr. COLDWELL:: In explanation I might say that I have never held the view that corporations of this type should be directed by this House of Commons. I do not think that is feasible. But there is a danger of some of these public corporations getting too far away from the control of the house. On occasions we have asked, for example, for information as to the salaries paid by the Canadian National Railway system, and have been told that these things are "matters of internal management." We have to try to strike a middle course. I do not take the view that parliament could run industry; I do not think it could. If the time comes, and I believe it will come and ought to come, probably during this war, when the government will have to take over the control of essential industries, we shall have to work out some method, probably that adopted in Great Britain, under which we can establish publicly-owned corporations free from political interference by parliament. I raised the question in order that when the discussion comes up the minister may be in a position to give some information.


Clarence Decatur Howe: The reason we do not give information about matters of internal management of the Canadian National Railways is that the railway is in a highly competitive position, and to present information on matters of internal management just as it is asked in the house might be harmful to the competitive position and therefore against the public interest. These companies to which this bill will relate are of course not competitive, and I know no present reason why any question such as my hon. friend suggested could not be answered. Taking, for instance, the matter of salaries, I think there would be no difficulty.


Mr. GREEN:: Will the minister explain
the situation with regard to the construction of merchant shipping in Canada at the present time? I believe there is great lack of available shipping space. I know we have had that difficulty in British Columbia in connection with our exports of lumber, and I presume the same situation exists in other parts of the country. The present would seem to be a good time for Canada to inaugurate a steel ship building programme. We shall probably have great difficulty in getting ships from Great Britain. I understand the shipyards there are all working to the limit. Then again if there should be such a thing as the bombing of these British shipyards, that would make it practically impossible for us to get ships from the old country.
I would ask the minister if it would not be possible for Canada now to enter upon a programme for the construction of ships up to,
let us say, 10,000 tons. We built a great many ships during the last war; and while it might cost a little more to build them in Canada than to buy them in Great Britain I suggest that under existing conditions the only way to obtain sufficient shipping to handle our exports may be by building the ships ourselves. As we all know, Canada lives on her exports. If we do not export we will have a very bad time of it.


Clarence Decatur Howe: I suggest to my hon. friend that, as the war has developed, the shipping situation, instead of growing more acute, has eased off. There was a time, at the beginning of the war, when there was a great shortage of shipping to carry Canadian products to their markets. That shortage has steadily become less acute, until to-day I doubt if it can be claimed that there is any shortage of shipping for that purpose. The reason, of course, is that neutral fleets have been diverted more and more to the trade between Canada and Great Britain. Canada is becoming more and more the principal supplier of Great Britain, and consequently British ships and the ships of neutral countries are being directed more and more to that service.
So far as the lumber business is concerned, direct shipments by water from the west coast present some difficulties. There is a shortage of shipping there, war or no war; but there again I am told that the situation has eased greatly, and that by rail shipment to the Atlantic coast and water shipment from there, together with direct shipment by water from the west coast, that situation is being taken care of quite comfortably.
Whether at a time like this we should divert the productive capacity of Canada to the peace-time operation of building merchant ships is, I think, questionable. I would not undertake to say that shipyards could not be created to build merchant ships with reasonable dispatch, but certainly those yards would have to compete with the established yards, now fully occupied with the construction of ships of war, for skilled mechanics and for such materials as are manufactured in this country. The additional demand on our steel industry would be entirely beyond the capacity of that industry to produce, and the imports of raw materials would constitute an extraordinary strain upon our supply of United States exchange. My own opinion would be that a programme of the kind suggested by my hon. friend is quite impracticable at this time.


Howard Charles Green: Is the minister certain that the shipyards of Canada are fully occupied at the present time with the construction of

Munitions and Supply Act
vessels of war? My information, from very good sources, is that they are not; that at least some of the yards even now have the capacity for the construction of merchant ships in addition to such warships as they may be constructing. The minister said we might have to create such yards. I did not mean that; I had in mind that the present shipyards could be used. The minister said also that building ships was a peace-time operation. I hope he is right in that, but things are happening very rapidly these days, and the construction of merchant ships may be a very important war-time operation for Canada before many weeks have gone by. I would suggest to the minister that this question of shipbuilding should not be just put on the shelf but that it should be looked into further. It is possible that we may need those ships very badly in a very short time.


Clarence Decatur Howe: Just to clear up one point, it is my understanding that the shipyards of Canada are fully occupied with Canada's naval programme, having regard to the fact that in certain yards some capacity must be reserved to take care of repairs. Repair work on both coasts, and particularly on the Atlantic, is extremely heavy, due to the great increase in merchant shipping. But I can say that we have contracts for ships that have not been placed at the moment. We should be glad to place contracts for a few more naval vessels, and if my hon. friend can promise me prompt delivery and a reasonable price, I shall be very glad to consider the matter.


Howard Charles Green: I did not promise any prompt delivery, but different members from British Columbia have received a brief on these matters, in which it is stated there is space available for the construction of merchant ships. I would ask the minister to look into the situation and see if that is the case.


Richard Burpee Hanson: The minister said, as I believe to be the case, that the shipping situation has eased up, and he mentioned the fact that neutral fleets had been absorbed into the Canadian traffic. Is there not another reason, that we have lost a substantial portion of our markets and that therefore bottoms are not in as much demand as they were? Is it not a fact that traffic has become very much restricted; and is that not an additional reason why the shipping situation has eased up? That is my understanding of the case.


Clarence Decatur Howe: I think that is true in part, though I believe the supplies and munitions going overseas put as much of a tax on shipping from Canada as has been the case

in the past. I think our port figures show that we are exporting from Canada at this time as much as we have exported at any time in the last several years.


Richard Burpee Hanson: I am wondering if the government is using the port of Saint John to the extent that it might be used, or if it was used to that extent last winter. Perhaps I am treading upon sectional ground; that is not exactly my home port, but it is an important Atlantic port. Last winter I saw trainloads of freight, supplies for overseas, being transported to Saint John, through Saint John and out of Saint John on to Halifax for transhipment, and I just wondered why that was being done. No one has asked me to say this; I am doing it on my own initiative. I have no desire to open old sores down there, but in the last war the facilities of the port of Saint John were utilized to the full, and in days gone by I had something to do with seeing that the port was properly equipped. I am glad to see the minister has carried forward the plans we instituted in that connection, but I regret that he did not rebuild the Petingill wharf, as I understood the former member for that city promised would be done. I assume that there may have been excellent reasons why that was not carried out. I know we did not do it in 1935 because we just could not find the money, but that is an important plan. Those two wharves on the east side ought to be rebuilt. At the present time the sheds are old wooden structures, quite inadequate to handle the traffic. At my suggestion a modern scheme was drawn up under which two or three splendid docks were to be built, established and operated on the east side of the harbour, with a view to having a twelve-month shipping period at that port if possible. I was wondering if the minister would have anything to say with respect to these matters. If he prefers not to say anything now, I shall not press it.


Clarence Decatur Howe: The routing of shipping is
under the control of the British shipping controller. No one in Canada has anything to say as to what port a ship will use. I have always thought that the representative of the British shipping controller in Canada is rather friendly to the port of Saint John, and I am inclined to think he will see that Saint John is not dealt with unfairly in that regard. It is the duty of the railroad to transport goods to the port to which they are billed. Saint John has had an excellent year, according to the figures, perhaps the best in its history.
Mr. HANSON (York-Sunbury: Since the last war.

Munitions and Supply Act


Clarence Decatur Howe: That may be so. We had planned to provide for the rebuilding of Mclveod-Petingill wharf in the work of the current year, but two reasons made us drop the plan. The first and compelling reason was that no public works money was available in any part of Canada. The second was that even though we had the money, it would not have been wise to undertake work which would mean that the capacity of the wharf would be out of service for a considerable time. In order to rebuild the dock it is necessary that at least half of it be out of service. While this dock may not be modern in all respects, it is quite serviceable and it is doubtful if we would be justified in curtailing its capacity at a time when so many demands are being made upon the port.


Mr. NICHOLSON:: Has the government
brought to the attention of the British shipping board the fact that facilities are available at Churchill? A number of people in northern Manitoba and Saskatchewan have directed my attention to the fact that large supplies of pulpwood, timber and various mineral products are available in this part of the country and could be shipped economically through the port of Churchill.


Clarence Decatur Howe: The British shipping board is no doubt aware of the facilities at Churchill and its position as an export port. The difficulty is that all shipping must be brought into one port so that a convoy may be made up. So far that port has been Halifax. The distance from Churchill to Halifax, as I remember it, is slightly greater than the distance from Churchill to Liverpool. To bring a boat from Churchill to Halifax and then send it across would just about double the length of the voyage. I simply mention this as one reason why the British shipping board may not decide to use Churchill this year, although we have had nothing as yet to indicate what action they will take. There are supplies of wheat at that port and whether or not the board sends for them is something that we can hardly control.


Howard Charles Green: A few moments ago I
mentioned having had information about available space on the Pacific coast for building these ships. I now have copies of three letters which deal with this matter. The first is from the Burrard Dry Dock Company, Limited, of North Vancouver, and is addressed to Mr. Hugh Dalton, of the British Columbia division, Canadian Manufacturers' association. This is a substantial shipbuilding firm which is actually engaged at the moment in the construction of war vessels for the government. This letter reads in part:
In reply to your recent inquiry as to the facilities available at our plant in North Vancouver for the construction of cargo tonnage, we have to advise you that we have available on our own property room for two new building berths, immediately adjacent to our existing yard, each with a capacity for ships up to 10,000 tons. These berths, already cleared and graded to receive foundation piling, could be completely equipped and ready for occupancy within six weeks, which would be before steel deliveries could be expected.
Having in the past constructed vessels up to 8,350 tons deadweight, any ordinary sized vessel could be built. Detailed drawings of the following sizes of ships, equipped with steam reciprocating machinery, are available:
1.	400' x 56' x 31'-8,350 tons deadweight.
2.	331' x 46' 6" x 25' 6"-5,100 tons deadweight.
3.	320' x 44' x 25'-4,300 tons deadweight.
The smaller vessels could probably be turned out more quickly than the largest, but the capacity of the latter would make this vessel a very desirable type.
A considerable part of the material for these vessels would have to be procured in the United Kingdom or the United States. The imported material would include plates and' shapes, also possibly crankshaft and line shaft forgings. Boiler plates would have to be imported from the United States. Steam engines for these vessels could be built in our own plant. If diesel driven vessels were required, engines could be readily procured in the United States.
Delivery of the larger vessels could be made in the following periods after receipt of orders:
1st ship-15 months.
2nd ship-17 months.
3rd ship-21 months.
4th ship-23 months.
The smaller vessels could be turned out in from a month to six weeks less time each.
They then go on to give the price and so on. I have also a copy of a letter addressed by the Victoria Machinery Depot Company, Limited, of Victoria, to Mr. Dalton. This is another reliable shipbuilding firm, and their letter dated May 20, 1940, reads in part:
Confirming our conversation regarding building of 8,000 to 9,000 ton merchant vessels, we would like to make our position clear on this matter as follows:
We have available at this time the site on which we built 8,800-ton vessels for the Canadian government merchant marine in 1919-20. There are two berths and launching ways which are still in good condition. We have the plant and equipment capable of building these vessels and have no doubt about obtaining sufficient skilled labour to carry through the construction of two such vessels at once.
We would not like to state just at this moment that we are prepared to take contracts for such construction, but are prepared to entertain such a proposition and would giee it our serious consideration.
The next is a letter from North Van Ship Repairs, Limited, North Vancouver, under date of May 21, 1940, addressed to Mr. Dalton.
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It reads:
In answer to your inquiry re steel merchant marine vessels, we are fully equipped to handle merchant vessels, and would be very pleased to figure on them.
There are at least three firms which are prepared to go ahead.


Clarence Decatur Howe: As I said, I am quite aware that new capacity can be created. All these people have are sites.


Howard Charles Green: They have the machinery and so on. The minister should not say that. I do not think that is fair.


Clarence Decatur Howe: That is what the letters say.


Howard Charles Green: They go a great deal further than that.


Mr. ROSS (St. Paul's):: What is the set-up of these companies to be? Will there be a president, directors and all that sort of thing? Could the minister give us some idea of how they will be formed? What relationship will there be between these companies and the dominion civil service?


Clarence Decatur Howe: These will be companies incorporated with presidents and boards of directors. There will be no relationship between the companies and the civil service. The companies will be free to employ such help as they need. So far as that goes, I do not think they will require large staffs.


Douglas Gooderham Ross: Will the board of directors be made up of government officials?


Clarence Decatur Howe: No.


Douglas Gooderham Ross: What representation will the government have?


Clarence Decatur Howe: The government is simply the body that owns the company.


Richard Burpee Hanson: Without divulging any information that might be inimical to the safety of the state, which is the highest ground upon which I can place it, could the minister state just why it is intended to have these commercial companies? If he will say frankly that he does not want to state this at this time, I shall not press the question. But it is such an unusual departure from the ordinary method of doing government business and spending government money that perhaps some little justification is necessary.


Clarence Decatur Howe: In one or two particular cases there is a reason which I think my hon. friend will appreciate from what I have already said. There are operations which cannot be conducted in the white light of publicity if they are to be conducted successfully.

But in the larger sense it is simply a question of a way to get work done, of bringing into the service of the government people who are capable of doing highly specialized work but without making them in a sense civil servants. We can find business men who have demonstrated over the years that they are well able to operate a company successfully but who are perhaps not in a position to give up their ordinary business and move their place of residence to Ottawa and work here. They perhaps could not-I doubt if they could-carry on the functions I have in mind under a departmental set-up, working through a deputy minister and a minister.


Richard Burpee Hanson: They do
not like the red tape. That is about it.


Clarence Decatur Howe: It makes things unworkable
if there is too much of it.


Richard Burpee Hanson: Yes.


Clarence Decatur Howe: There is only a certain amount of business which you can put through that sort of channel. This will allow us to decentralize and to do work outside which can very well be handled by a company. It will enable us to put certain work into the hands of responsible business men who, after all, are always subject to the owners of the company and to government audit. We can get work done in that way which it would be difficult to get done as well by other means.


Richard Burpee Hanson: One more-question. Will these government-owned corporations come into competition with privately-conducted business institutions? If they will, I suggest to the minister that he should withhold his hand, because even in war-time I do not think the government ought to set up-competition to established private industry.


Clarence Decatur Howe: There is no suggestion of
that so far as any corporation contemplated to date is concerned.


Richard Burpee Hanson: I did notthink so.


Karl Kenneth Homuth: Is it not a fact that these special companies have been set up for the purpose of assisting private industry?


Clarence Decatur Howe: Quite so; that is the purpose.


Mr. STIRLING:: This resolution asks parliament to extend the powers of what was at first a board, now a department, which has been in operation only for a matter of weeks. Last year we passed from the ordinary departmental purchase of munitions to a defence purchasing board, then to a munitions board; and in September parliament passed this act. but the department came into operation only

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in April. It deals with large matters, and the public of necessity is ignorant as to how it is working out. We are gradually obtaining information. A great deal of business is passing through the department, and undoubtedly there must of necessity be criticism, based in part on lack of information. That information we shall receive if we are able to consider and discuss the bill amending the act which incorporates the department; in the light of that information we can give the bill more intelligent discussion.
There are matters such as the rapidity with which contracts are issued. The minister may be able to give the house a very good reason for the time which it now takes to get a contract finally through. There are also matters connected with getting information to firms or individuals who desire to do business with the department. Canada is a large country and of necessity difficulties must be involved in getting information into the hands of individuals at the far ends of Canada that such and such materials are required. The suggestion has been made in my hearing more than once that it might be possible to follow the custom used in the last war in another country, of issuing from time to time the definite items which will be required in contracts shortly to be let. By spreading that information throughout the country the opportunity would be given to comparatively small firms and individuals to offer their services. These are matters which it seems to me we can discuss far more intelligently if the main explanation and discussion of this measure comes on the second reading, after we have had an opportunity of seeing the bill.


Clarence Decatur Howe: It is not my intention to go beyond the resolution and first reading to-day. On the second reading of the bill I shall be glad to have the officers here to help me give the fullest information.


Karl Kenneth Homuth: When will the bill be considered? Will it be on Monday, or Tuesday?


Ernest Lapointe: Not before Tuesday.


Mr. GILLIS:: Mr. Chairman, there are a few remarks I should like to make on the resolution. I understand that the Minister of Munitions and Supply (Mr. Howe) is charged with the responsibility of letting contracts necessary to our war effort. While we believe that the minister is carrying out his duties as head of that department to the best of his ability and in the best interests of the country, there are times when we are sceptical whether he is receiving the cooperation necessary to a
proper war effort from people who are benefiting and making profits from these contracts.
In view of the fact that the resolution concerns possible amendments to the act to clarify and extend the powers of the minister, I wish to take this opportunity to draw to the attention of parliament and the government the aspirations of labour in connection with the matter now before the committee. Again and again in this house members of the group with which I am associated have called upon the government to conduct our war effort in such a way as, first, to protect the interests of the common people of this country, and, second, to preserve and strengthen democracy at home at the same time that we are fighting for its preservation on the battlefields of Europe.
As I pointed out in my first speech to this house, two fundamental bulwarks of democracy are trade union organization and the cooperative movement. To-day I am concerned with the first. I believe I express the hopes of all organized labour, whether national or international, A.F. of L. or C.I.O., when I appeal to the government to introduce into the act a provision which will safeguard labour's right to organize.
Discrimination against workers on the ground of trade union activity is wrong at all times and in all industries. This government recognized that fact when it accepted and adopted an amendment to the criminal code which was first introduced in this house in 1936 by the national leader of the Cooperative Commonwealth Federation, the member for Winnipeg North Centre (Mr. Woodsworth). Such discrimination it seems to me is even more inexcusable in war time when government war contracts are being awarded.
I make this appeal not only on the basis of general principles but on the basis also of confidential information which has come to my notice as to discrimination against employees in plants producing war materials for the government. One such particular case I wish to draw in some detail to the attention of the government, because it will illustrate the point I am trying to make. This case concerns an employee of the John Inglis company of Toronto, by the name of Walter Camm.
We understand that the Bi'en gun contracts of the John Inglis company form the major portion of the firm's business and are largely controlled by the Canadian government from the department of defence. Certain labour organizations in the summer of 1939 were informed that the application form for employment in the John Inglis company was so worded as to indicate that the company was opposed to organized labour.
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Photostatic copies of this application form were secured and when the question dealing with union affiliation was pointed out to representatives of the federal Department of Labour in the city of Toronto and an inquiry made as to why this clause should appear in an application form, the departmental representatives took the matter up with the management of the John Inglis company. The answer given through the department to the labour organization was that" this clause had been put in the application form in order to guard against "subversive elements".
I wish to stop for a moment at this point to protest and warn against the application of the term "subversive elements" to legitimate trade union activities. Spokesmen for my group have already stated clearly that we recognize the need for dealing with those who would interfere to the benefit of our enemy with this country's war effort at the present time. But if the democracy we are fighting for is to retain any reality the organization of trade unions must remain and be recognized as a legitimate and legally protected activity of the workers.


The ACTING CHAIRMAN (Mr. Fournier, Hull):: Order. The Speaker of the house
called attention to-day to a rule which should be followed in debate, that an hon. member should not read his speech. I am informed that the hon. member is reading his speceh.


Clarence Gillis: I should like to make this clear. I am attempting to place before the committee a matter of considerable importance to the Minister of Munitions and Supply which has been drawn to my attention within the last few days. I do not want to overstate the case. I want to be absolutely sure of the details I am giving to the committee and, particularly, to the minister. For that purpose I have taken notes on the matter; I wish to be sure that I am stating the facts clearly and not taking chances on my memory.
This specific case proves conclusively that the company is practising discrimination against organized labour. I stressed in the first attempt I made to address this house that one of the most essential considerations so far as the government and the country as a whole are concerned is the recognition of the rights of labour. You can mobilize industry as effectively as you like, but if the people employed in that industry for the purposes of production are not treated as citizens of this country should be and are unable to exercise the rights of that democracy we say we are fighting for, the result will be greatly to retard Canada's war effort. I repeat that my only object is to bring forward

this particular matter without misstating the facts. It was drawn to my attention by responsible trades union authorities in Ontario, and I want to be sure that the details are given to hon. members as they were given to me.


Ernest Lapointe: May I make a remark to my hon. friend? He is doing very well without reading. I suggest that he might use his notes for purposes of reference, without actually reading them.


Clarence Gillis: I was attempting to state the circumstances of this specific case of discrimination. It is one which I think should be closely checked. In the present situation, when a contract is awarded to a firm or an organization of any kind, we recognize the seriousness of the crisis and we admit that equipment is at this time the most necessary part of our war effort. These contracts are awarded in order to secure that necessary equipment, and when incidents arise such as the specific case which I have attempted to set out, it is evident that we are not receiving the cooperation of the people who are obtaining, on the basis of profits, the benefit of these contracts.
The term "subversive elements" can be seriously abused and, in my opinion, is being abused in Ontario at the present time. Members of the legitimate trades union movement are so classified because they attempt to set up organizations under the laws of the country. Employers of labour who are neither patriotic nor interested in this country, other than to exploit it, use the term "subversive elements" with the object of keeping labour beaten down to a point where they can exploit them and make two hundred per cent profit on the operation of a contract which the government gives them.


Richard Burpee Hanson: Does the hon. gentleman suggest that there are any employers in this country who are making two hundred per cent profit by exploiting labour? If there are, I should like to know who they are, and this parliament, I believe, without regard to class or party or anything else, will get right after them.


Thomas Clement (Tommy) Douglas: Has the leader of the opposition read the John Inglis contract?


Richard Burpee Hanson: Well, I know something about it. I do not think it amounts to two hundred per cent. It is bad enough.


Clarence Gillis: I say that if the democracy we are fighting for is to retain any reality, the organization of trades unions must remain

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and be recognized as a legitimate and legally protected activity of the workers. Those who would interfere with such legitimate trades union organization are the elements which are creating disharmony and resentment at a time when harmony is needed.
Subsequent to the incident of the application form a number of requests for union organization were received by union officials. Substantial progress had been made, when an employee of the company who had taken a prominent part in negotiations at the request of his fellow employees was dismissed by the management. When the employee inquired as to the cause of dismissal he was told that he was unsatisfactory.
Further inquiry as to whether his work was satisfactory or whether the dismissal was for other reasons was answered by the company official with the same statement, "You are not satisfactory to the company." Subsequent to the dismissal the matter was drawn to the attention of the Department of Labour, who made inquiries on behalf of the discharged employee, and they were informed that the man's work was satisfactory, that he had not been dismissed for union activities, but engaged, as the company were, in the production of munitions, it was necessary that they should have confidence in all their employees.
What was their reason for not having confidence in this man? It would seem that the mere fact that this man took a prominent part in the attempt to organize the employees of the company was sufficient for the management of the company to lose confidence in him.
I should like to make it clear that to-day this man is under a cloud. He has a wife and family. The company let him out because they "have not confidence" in him. The conception the average man would get is that this employee is one of the "subversive elements", that he is a fifth columnist. At the same time, according to my information, the company refuses to divulge to the Department of Labour why he was dismissed. He cannot obtain employment, and he is roaming around Ontario under a cloud. It seems to me that the least that this company should do is to divulge to the appropriate department of the government why he was dismissed. If he is a fifth columnist and dangerous to this country in the present situation he should not be at large. If, on the other hand, there is nothing against him except the exercise of his right as a citizen to bargain collectively in accordance with the laws of this country, he should be reemployed. And in this particular case I do not view Major Hahn or the John Inglis company as the employer,
because the government subsidizes this operation and paid for all the equipment, as I understand it, which makes the operation possible. For that reason I consider the government is in the position of employer, and Mr. Hahn or the John Inglis company is merely an agent of the government in this connection. I regard it as a prerogative of the government to do justice in this matter; particularly is it the affair of the Minister of Munitions and Supply, as he is charged with the responsibility of seeing that we are supplied with the equipment which this company is turning out.
Further representations to the Department of Labour were made. Department officials agreed that the answers given to their inquiries by Major Hahn were not satisfactory and that further inquiries would be made. Considerable correspondence took place on this matter and the case was dragged out for a period of more than two months. In the meantime the employee in question was unemployed and suffered greatly as a result of his discharge. The Minister of Labour in replying to a final inquiry stated that so far as the government was concerned they had no inquisitorial power and therefore could not inquire further. In view of the seriousness of the action of the John Inglis company in this matter, as it has been represented to me, I believe that either the Minister of Munitions and Supply or the Minister of Labour should give this house a full explanation of this case.
As I stated earlier in my remarks, I cited this case to illustrate the need for a provision in the act which will place the minister under an obligation to guarantee the workers the right to organize in plants producing war equipment for the government and which will also give him the power to enforce such a guarantee. It is my opinion that the case which I have just brought to the attention of this committee is a scandal. As we all know, public money was poured into the setting up of the plant of the John Inglis company as well as the production of the Bren gun. If the original terms of the contract are being carried out the company is receiving a very fair profit indeed on this contract. In such circumstances it seems to me clear that it was the duty of this government, of the Department of Munitions and Supply and of the Department of Labour to ensure that the workers employed by that company are given the full right to organize in trade unions of their choice if they so desire. Such a general obligation and power should be included in the act now under consideration.
Several times since the outbreak of war all the bodies of organized labour in Canada have publicly offered their full cooperation to
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the government in its war effort. I know they intend to implement that promise in practice. But organized labour has the right to expect in return that its rights will be safeguarded and that the employers of labour will cooperate, at least to the same extent.
I understand the Minister of Munitions and Supply, through this resolution, is asking for a clarification and extension of his powers, and I think the case cited here to-day is an absolute and specific instance. I am satisfied that his powers should be extended and clarified and that he should have the right, when contracts are placed, to see that the workers in the industry concerned are able to exercise their rights as far as trade unionism is concerned, and he should be given the power to see that this provision is enforced.


Clarence Decatur Howe: Does my hon. friend speak for organized labour as a whole when he says that he would like to see the Minister of Munitions given jurisdiction over labour?


Clarence Gillis: I did not say that. Speaking for myself, I said that in my opinion his powers should be extended and clarified, and if he is permitted by the government to pass upon and to award contracts in certain operations in the country he should also be allowed to extend his power so as to see that workers' rights are protected in the particular operation, to the extent of carrying out the laws of the country in regard to collective bargaining. And he should be given the authority to see that the operators comply with the regulations in this regard. He should have the right to enforce his authority to see that the rights of workers are recognized in the matter of bargaining collectively and signing collective agreements in any particular operation.


Clarence Decatur Howe: I have heard other labour leaders express very different views in the matter. The consensus is that everything having to do with labour should be retained in the Department of Labour.


Thomas Clement (Tommy) Douglas: The minister has not met the point made by the hon. member. The hon. gentleman is not suggesting that the Minister of Munitions and Supply should take over the powers now vested in the Department of Labour. The government could work out the technical details, but the minister should have the power in letting contracts to deal with the particular question now under consideration. There are certain minimum wage clauses at present in contracts; certain rights are recognized. Those rights can be extended. The government can also insert in the contract the provision that the

men employed shall have the right to organize in the union of their choice and that the men in any particular trade should be allowed to bargain collectively with the employer, and those who get the benefit of the contract should not be allowed to use the exigency of the war as an excuse for preventing their employees from bargaining collectively or from organizing a union in a particular shop or an industry. There is no reason why the Department of Labour could not insert such a provision in these contracts. I understand that the department has already put in a clause with reference to minimum wages. Why not insert one with reference to collective bargaining on the part of men employed in industry?


Clarence Decatur Howe: The federal statutes already give labour that right, and labour is aware of it. It is made a criminal offence for an employer to interfere.


Thomas Miller Bell: But the amendment to the criminal code is weak in some particulars. Here you have a concrete case-and we know of others-where men who are active in trying to organize their fellow workers are dismissed ostensibly because they are not satisfactory to the company; and yet every one knows it is because the company refuses to have labour organized in the plant. We are anxious to see to it that the relationship that has been brought about in Great Britain, and which I heard the Right Hon. Ernest Bevin discussing from London over the short-wave radio last night, should be brought about here. During the war we should not be subjected to various labour disputes and strikes, and if we are to avoid that kind of thing, then companies like the John Inglis company, if they are doing this sort of thing, as I presume they are, ought to be disciplined by the government, particularly when they are handling government contracts. Unless employers of this type are brought to time we shall be faced with labour disputes which will seriously interfere with our war effort. The hon. member for Cape Breton South has brought this question to the attention of the house because he is anxious, as we all are, that these disputes shall not arise. If Major Hahn's policy is carried out, however, there will be labour disputes and internal difficulties and we do not wish to see such occurrences.


Mr. WARREN:: While the hon. member for Cape Breton South was speaking I was wondering if he had ever met the type of workman who talks himself out of any job he has ever got. Most of us know that type of man. I do not know anything about the particular person the hon. member has been

Munitions and Supply Act
talking about, but I do know individuals who, although good enough workers, can never get a job with a private company or corporation without invariably talking themselves out of it just because they begin to make trouble among the other workers. There is no private employer of labour who will willingly tolerate that sort of thing if his men generally speaking are satisfactory, are doing their work willingly, are getting along well, and are happy and satisfied. When such a condition exists, then one man comes along and immediately starts to agitate and to make trouble, and it is no wonder that such a man eventually finds himself unable to get work with private employers of labour in his own neighbourhood. He is the type of fellow the government sometimes find clamouring for work on government jobs of one sort or another. He is the type of fellow that eventually finds himself wandering from place to place under a cloud, seeking employment and not finding it. In many instances the blame lies not at all with the employer of labour but with the individual himself. Who can blame employers of labour when they find their whole operation disorganized because some individual will persist in agitating and causing trouble, no matter where he may land a job?


Mr. MULOCK:: Since the question of the Bren gun has come up this afternoon, I wish to refer to one matter the public is interested in more than anything else. I do so because when I was in Toronto last week-end responsible people mentioned to me that rumours were current throughout the city that there was some difficulty which was retarding production of the weapon. Instead of devoting our time to disputes of that sort, which surely could be ironed out by the Minister of Labour (Mr. McLarty), at a time like this we ought to be getting down to business in order to expedite the delivery of supplies not only for the use of the dominion's troops but for our allies who have appealed to us, in the words of President Reynaud which we heard this afternoon. If the statements made to the effect that the Bren gun is not being turned out properly, that it is not operating efficiently, are not correct, those responsible for them should be interned and prosecuted, because they are undermining the morale not only of the Canadian people but of the Canadian soldiers who are going to use that weapon to fight for us. Will the minister make a statement as to the correctness or otherwise of the rumours which have been abroad during the last few weeks?


Karl Kenneth Homuth: Surely in this debate we will not discuss again the question of the Bren
gun or anything in connection with it. Whatever debate there was on that subject, it is over. We are trying to get on with the business of the country.


William Pate Mulock: It is a question of rumours that are going around along that line, and I think the hon. member will agree that if those rumours are not correct, the sooner the people know the fact the better.


Major James William Coldwell: We have not heard those rumours this afternoon.


Richard Burpee Hanson: I have no desire to intervene in this debate or to discuss the question from the angle brought forward by the hon. member for York North (Mr. Mulock). He is twenty-four hours late. We were discussing yesterday the resolution of the Minister of Justice (Mr. Lapointe) with regard to the defence of Canada regulations. The hon. member stayed at home too long over the week-end.


William Pate Mulock: I was in the house.


Richard Burpee Hanson: I did not see the hon. gentleman. The hon. member for Cape Breton South (Mr. Gillis) has raised an important principle. We are living now in the nineteen-forties. I think the hon. gentleman to my right who spoke a moment ago is still living in the nineteenth century. This country has recognized, as I think all sensible employers of labour have come to recognize, the principle of corporate or collective bargaining among the labouring men of the country. I have a confession to make. Years ago I opposed the organization of the employees of corporations with which I have been associated, first in a legal capacity and subsequently as a director, and I am bound to say that after a careful review of the whole situation, and without having any thought or idea of its importance to or bearing on my political fortunes, I have reversed my position. I am in favour of the theory of collective bargaining and have urged my clients and the corporations with which I have been associated to agree to the principle. I realize, in reading history, that the labouring men have never got anywhere in the endeavour to improve their position in Canada, and particularly in the old country, until they had some kind of organization to speak for them. Labour organizations are like other organizations; there are good ones and bad ones. In the United States they have gone too far. Labour over there has endeavoured to take governments by the throat, to dictate the election of presidents, and also to dictate national policies. That is beyond their pin-view.
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But to come to the concrete question which the hon. member for Cape Breton South has raised, here is a company which was set up to build a war machine for this government and the British government and for nobody else, and it is public money that is going into it- nobody else's money so far as I know. A proper relationship should be established since it is public money that is being spent. The government of Canada has recognized this principle for a long time. We passed legislation establishing the eight-hour day in dominion public works. I tried to help get through other legislation with respect to social services which would be of assistance in ameliorating social conditions among the workers of Canada, but that legislation was ruled ultra vires by the courts of the country. So far as unemployment insurance is concerned, Canada is at least five years too late in making a start. I do not say that such a scheme will cure unemployment, but it will certainly alleviate the conditions of unemployment. The opposition was challenged by hon. gentle-nen across the way.
That is an old story now; but to come back :o this very point which the hon. member :or Cape Breton South has raised, if I apprehend what the complaint was, it was in effect ;hat Major Hahn of the John Inglis company vas carrying on a system of sabotage against organized labour in that industry, which has its being to-day by virtue of the expenditure of public money. I do not agree with that, and I ask the Minister of Labour (Mr. McLarty) to look into the matter in the interests of the country and-for the most part among the best citizens we have in Canada-the genuine trade unionists. There are others, but the genuine trade unionists in my town are among the best citizens we have there. I am for the principle of collective bargaining; I do not care who knows it. If I am unable to carry this party with me in it, well and good; but that is my view and I think the government ought to see to it that Major Hahn and the John Inglis company do not carry on a system of sabotage against their employees on the theory that they will drive unionism out of that institution. The complaint may not be well founded. The minister should not be asked to go very far- certainly not as far as some hon. gentlemen to my left are asking-in incorporating provisions in contracts already executed and under way, but he should look into the matter and see to it that this company at least is carrying out the laws of the land both federal and provincial.
TMr. R. B. Hanson.]


Clarence Gillis: An hon. member asked me whether I had ever met the sort of man who talked himself out of a job and who would not work. I can answer in two ways. You will generally find the men who will not work, at the head of corporations. The second classification, covers the man who talks himself out of a job. Yes, I have met such men too, the men who pioneered the way for trade unionism, many of them classified as agitators and driven from one end of the country to the other, the sort of men referred to this afternoon as those who talked themselves out of jobs. To men of that kind go the credit for every bit of progress in this and every other country in the world. I have talked myself out of several jobs, too, organizing the trade union movement, but torday I see it established one hundred per cenit in the province in which I lost those jobs. So I lost nothing in the end. I am proud of that activity, as every man who has taken that position is proud. These men understand the road they are travelling and are prepared for whatever repercussions there may be.
The man whose case I took up this afternoon-and I took it up on the authority of a person in whom I have all the confidence in the world-is not that kind of man at all. I understand he is a master mechanic, one of the best qualified men in Canada to carry on the work of the plant from which he was dismissed. All he did was ask that the laws of this country be recognized by those carrying on the operation of that plant. It has been stated in this house that men with these qualifications, specialists in industry and so on, are very badly needed, that there is a great shortage of them in Canada to-day. That has been admitted by the ministers of different departments. Here is a fully qualified man who is now on the road simply because he wants to exercise his rights as a citizen in this year of grace 1940.
I think the day is past when actions of this land should be permitted in this country. I have every hope that the Minister of Munitions and Supply (Mr. Howe) will do something about this matter now that it has been brought to his attention. In my opinion the Department of Labour has gone as far as it can go by way of legislation. I understand that it has had this matter under consideration for a couple of months, but apparently it is not able to do very much about it. So I wanted to bring the matter sharply to the attention of the Minister of Munitions and Supply, because he deals with these people

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directly in connection with their contracts, and, I believe, will be in a better position to force them to take some action.


Mr. MAYHEW:: The hon. gentleman
(Mr. Gillis) who has just spoken has certainly not talked himself out of a job; apparently he has talked himself into a very nice job as a member of this house.


Clarence Gillis: That is my reward for past
activities.


Robert Wellington Mayhew: I do not doubt that the
hon. member deserves it. Although I am a manufacturer and an employer of labour, I am also in favour of unions. My plant is organized, and I have always encouraged my employees to organize. I ask only one thing: that those who are sincere in trying to promote the best interests of the men take an active interest in that organization. So I have no quarrel with my hon. friend. I am quite in agreement with him when he says he would like to see all our plants unionized.
I cannot agree, however, with the man who will deliberately state in this house that the manufacturers of Canada are looking for any 200 per cent profit at this time. Last week I attended the meetings of the Canadian Manufacturers' association in Winnipeg, and I venture to say there is not a plant in Canada of which this government could not take control to-morrow without giving any remuneration whatever. This morning I had the pleasure of offering, on behalf of some of the men of my province, their services, their money and their factories without asking one dollar in return. They are willing to take their money out of their pockets or out of their banks-what is left of it-and all they ask is the capital return. When my hon. friend says that the manufacturers are looking for a profit of 200 per cent, I say that is an indictment of our Minister of Finance (Mr. Ralston) if he brings in a budget that does not make provision for the odd man who wants to graft on the country at this time. It is not a question of whether the Minister of Finance should take twenty per cent, thirty per cent, forty per cent or fifty per cent of the excess profits; he should take every dollar of them. No honest Canadian citizen should come out of this war one dollar better off than he was when it started.
I would say to my hon. friend, however, or to anyone else who rises and asks for his rights in Canada to-day, whether he be an employer or an employee: Will he get his rights if Hitler comes over here and takes charge? If that should happen, he will do
exactly what he is told. If I were in the saddle to-day in this country, both labour and industry would do exactly what they were told, until the war was over.


Howard Charles Green: Are the government taking any responsibility for the training of skilled workmen for our war industries? One hears from time to time that there is, or is apt to be, a shortage of skilled labour. It would be interesting to know whether the government have anything in mind along the line of helping to train men for this special work.


Clarence Decatur Howe: There has been a long debate in this house on the resolution brought in by the Minister of Labour which I thought pretty well dealt with that question. I may tell my hon. friend, however, that there are various training plans. I hardly think it comes under this resolution to deal with those plans in detail, but there are a good many of them, all having the same end in view.


Howard Charles Green: Does the minister mean under the government, or private training plans?


Clarence Decatur Howe: There is assistance given to private plans, and there are provincial plans assisted by federal grants.


Richard Burpee Hanson: Grants in aid from this government?


Clarence Decatur Howe: Yes.


Mr. JOHNSTON (Bow River):: I have something to say in connection with the training of mechanics, but I do not want to go into the matter in detail at this time because the minister has given the assurance that the question will be taken up in greater detail on the second reading of the bill. For that reason I have not said very much about that matter, but I think there should be a definite plan for the training of men. The minister has referred to several plans which are now in operation, but in my estimation they are not up to the standard at all. I can see clearly that in the near future we are going to have a very much greater demand for trained mechanics. I had the privilege of studying some of these plans, and I want to tell the minister that such plans as I have studied are not at all adequate to meet thy great necessities we are about to face. I should like to go into that in greater detail a little later on, but I think the minister would be well advised to consider the suggestion advanced by the hon. member for Victoria, B.C. (Mr. Mayhew), who spoke a moment ago.
From what I have seen I am quite convinced that the sort of training which is being given
Munitions and Supply Act

is not conducive to the best results. It is entirely too elementary. I have been in contact with quite a few principals of technical schools, in this and in other provinces, and I have found that almost without exception those schools are prepared to go to any lengths to assist the government to train mechanics who will be able to step right into these munition plants, aeroplane factories and so on, and carry on efficiently. So far as I know, that is not being done at the present time. I think the government would be well advised to see what can be done in conjunction with these technical schools, in order that the graduates of these schools may give greater assistance to industry than is at present the case. I know from the communications I have had with the principals of these schools that they are only too anxious to cooperate with that end in view. When the bill is up for second reading, I shall want to go into this in more detail because I think there are certain matters that should be straightened out. I believe the minister would be well advised to see what could be done in connection with the further training of mechanics.


Mr. CASTLEDEN:: I was quite pleased to hear the statement of the hon. member who spoke for the manufacturers' association. Apparently we have made a great step forward, and I am quite sure we are going to get some action soon. The minister stated in September 1939 that not one contract offered by the war supply board was accepted with the five per cent limitation. Perhaps the hon. member should explain the reason for that, or would the minister make a statement?


Clarence Decatur Howe: A good deal has been said about that limitation. It has been stated that the limitation of profit was five per cent of the cost of the product, but that was not the case. As my hon. friend knows, the limitation was five per cent of the capital employed in production. That is a very different matter. In practice that limitation proved to be so indefinite and complicated that no contract was accepted with the limitation. I may say that all the supplies the Department of Munitions and Supply have purchased since this war began have been produced at a profit which I am sure does not exceed five per cent.


Douglas Gooderham Ross: Under the bill to be brought in, will the minister have the power to carry on the training of men should a shortage of labour occur? When the labour resolution was before us, I asked the Minister of Labour (Mr. McLarty) to make a statement. Possibly the Minister of Munitions

and Supply could tell us what cooperation there is between his department and the Department of Labour in connection with this matter.


Clarence Decatur Howe: I thought I had taken all the powers there were, but if there is any power not in the bill I shall be glad to include it following the suggestion of my hon. friend.
Resolution reported, read the second time and concurred in. Mr. Howe thereupon moved for leave to introduce Bill No. 41, to amend the Department of Munitions and Supply Act.
Motion agreed to and bill read the first time.


AGRICULTURAL PRODUCTS
[Stage Direction]
Hon. J. G. GARDINER (Minister of Agriculture) .moved the second reading of Bill No. 24, to amend the Agricultural Products Cooperative Marketing Act, 1939.
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-Cooperative association.
Mr. CASGRAIN:: I move that paragraph (b) of scetion 2 of the bill be amended by deleting the words " delivered to it for sale " and substituting the words " produced by the aforesaid primary producers ".


Mark Cecil Senn: This puts the act back where it was before. There are certain objections to the bill as it stands at the present time. It seems to open up a large field and change the intention of the act. As I understood it, the act was intended to enable the primary producers to market their products by cooperative efforts, but this bill as it is would open up an entirely new field. Cooperative associations could be set up and take in and market any kind of goods, and they would be guaranteed against loss. I am glad to know that the minister has changed the wording back to the original form of the act. This act should be for the purpose of enabling the primary producers to market their own goods by cooperative efforts.


James Garfield Gardiner: That is why I asked to have this paragraph amended.


Mark Cecil Senn: What was the reason for the paragraph reading as it does?


James Garfield Gardiner: The proposal came from officials of the department who are administering the act. They felt that certain of

Agriculture Cooperative Marketing Act
these organizations would like to bring in under the operations of the act certain products that might be delivered to them for sale. It *was felt that those products could be handled under the same set-up as was provided for the handling of products delivered by producers who had organized. When this matter was brought before me later on, I pointed out just what has been pointed out now by the hon. member for Haldimand, and the result was that it was decided that the section should be changed back to its original form. The bill had already been printed and other changes would have been required in order to have the wording of this section apply to other following sections, so this method was thought to be the most simple.


Richard Burpee Hanson: The minister would say that this is a case of ill-digested legislation.


Mark Cecil Senn: The minister has been wise in making that decision. The history of cooperative efforts in this country has not always been good. Cooperative organizations have been set up and have carried on successfully for a number of years. In some instances it was decided to broaden out and handle other products, and the result has always been that they got into deep water. I commend the minister for changing the bill back to the original form.


Thomas Clement (Tommy) Douglas: Could we be clear about the amendment? As we understand it, the words "delivered to it for sale" are being struck out and other words substituted.


James Garfield Gardiner: "Produced by the aforesaid primary producers."


Mark Cecil Senn: The same as it was before.


Thomas Clement (Tommy) Douglas: The term is used "under a cooperative plan." Would it not be wise to define somewhere in the act what is meant by a cooperative plan? What is to prevent any line elevator company from taking delivery of goods from a group of producers and marketing those goods for them?


James Garfield Gardiner: Paragraph (c) of section 2 of the original act defines "cooperative plan" as "an agreement or arrangement for the marketing of agricultural products which provides", and so forth, and then it goes on to define further.


Thomas Clement (Tommy) Douglas: I did not bring the act with me, and I do not recall the exact wording that follows. But a definition is provided?


James Garfield Gardiner: Yes, in the original act, but not in this amending act.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 3-Cooperative plan.
Mark Cecil Senn: A new principle is introduced in this clause as well; that is, allowing cooperative organizations of primary producers to set up reserves. What is the reason for such action? I doubt very much whether it is wise for cooperative oganizations, after having sold farm products, to set up reserves of any kind. It might very well be said that the total income of any cooperative organization should be divided among the producers. After all, the personnel of any cooperative organization changes from year to year, some of the members perhaps dying, some moving away and other new members coming into the organization. If these reserves aTe set up, those who drop out of the organization after having consigned their products to the cooperative for sale will not get a just return for those products consigned to the producers' organization. It seems to me there must be some motive behind it beyond what appears on the surface.


James Garfield Gardiner: There is no other motive, as I understand it, except the one mentioned by the hon. member, namely, to give power to the organization to set up a reserve. As the act now reads, section 3 provides:
The minister may, with the approval of the governor in council, by agreement with a selling agency. . . .
Then it goes on to indicate what may be done, but it makes no provision for setting up a reserve. It has been thought wise in some organizations to set up a small reserve to take care of any possible loss that might occur if, say, two short term agreements are entered into in the one year, or if the cooperative decides to carry on into the second year and make a second agreement.


Karl Kenneth Homuth: It is rather a large reserve,
is it not?


James Garfield Gardiner: There is no particular amount set.


Karl Kenneth Homuth: It says "up to."


Mark Cecil Senn: Will there be a limit set to the amount of reserve? Unless the minister has some jurisdiction over the cooperative organization, it might set up a very large reserve. I cannot yet see any reason why a reserve should be set up at all. It seems to me to be establishing the principle of putting this whole cooperative idea on a commercial basis, where it should not be.
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James Garfield Gardiner: Section 3 of the present act provides that the minister may "by agreement with a selling agency." That is, all these matters are contained in the agreement. Subsection 2 of section 3 of the present act provides:
No payment shall be made to primary producers subsequent to the initial payment unless such subsequent payment is first approved by the governor in council.
There is provision made for covering costs, and this additional provision is being made for setting up reserves. The maximum of these costs and reserves would be set in the agreement.


Mark Cecil Senn: But the agreement provides that a certain amount up to 80 per cent of the average price for the past three years shall be guaranteed by the department or the minister at any time that a cooperative organization wants to organize and carry on. I point out that this is progressive. The average for the last three years may not be the average for the next three years, and if the organization continues to set up reserves from year to year, it will lower the average for the past three years, so that after the reserves have been accumulating for three years the average will be considerably lower. It seems to me, therefore, that it might work out finally to the disadvantage of the primary producer himself to have the average lowered by setting up these reserves.


James Garfield Gardiner: When we were discussing the resolution in committee I put on Hansard the details of the different agreements entered into under this legislation, which illustrate the point better than I could do it otherwise. The first of these has to do with honey, and the initial payment is three cents a pound. Then processing, carrying and selling charges-that will be costs now instead of selling charges-were two cents a pound. That was before the reserve was provided for. It was set at two cents a pound right in the agreement. The initial payments and the processing, carrying and selling charges amounted to approximately 55 per cent of the average price during the preceding three years. It has been the desire both of the cooperatives entering into arrangements under this act and of the department to see that very little risk of loss is taken, and for that reason in most instances the liability involved in the initial payment, plus the costs allowed-in this case it will be plus reserves as well-would not exceed the percentage of 80 per cent.	"


Mr. WRIGHT:: Paragraph (iii) of this
section provides:
(iii) for an initial payment to primary producers of a percentage, not exceeding eighty per centum, approved by the governor in council on the recommendation of the minister, of the average price paid to producers according to grade and quality.
I think it would be difficult for the minister to determine the average price paid to the farmer according to grade and quality. In the alfalfa area in northern Saskatchewan there are a dozen different buyers buying alfalfa. How is the minister going to arrive at the average price paid to the producer? Why not retain the wording of the original clause and say the wholesale price? That could be obtained much more easily and it would be a higher price to the producer. Why was this change made?


James Garfield Gardiner: It will be noted that section 6 of this bill retains that wording, "the average wholesale price", which is the important point my hon. friend raises.


Percy Ellis Wright: Why not retain those
words in section 3? Why not say that "the average wholesale price" shall be used?


James Garfield Gardiner: This is the same as it was in the original act, which provides by subsection 3 of section 3:
In the event of a difference arising as to the average sale price under an agreement made under this section, the decision of the minister shall be final.
We, of course, examine the records in the bureau of statistics and any other records available with regard to the average price for the three years, and finally determine what that price has been. The final decision rests with the minister after examining all these records.


Percy Ellis Wright: That does not answer my question. Why is the wholesale price not used in this clause?


James Garfield Gardiner: The wholesale price
would not be the proper term to use here. We are concerned that the producer should have advanced to him, not 80 per cent of what the wholesale price happened to be, but 80 per cent of what the producer himself received during those three years. We are trying to give him an initial payment which will assist him in carrying on until he receives the final payment, and we say that the initial payment should be a certain percentage of the average price that he himself obtained during the preceding three years. That may not be the wholesale price, which is generally

Agriculture Cooperative Marketing Act
interpreted to be the price at which a commodity is turned over to the retailer and sold to the consumer.


Percy Ellis Wright: If the word " wholesale " were left in there, it would mean that the producer would get a guarantee of the highest price for his product.


James Garfield Gardiner: Well, he might.


Percy Ellis Wright: Therefore, I think, the word " wholesale " should be used.


Mark Cecil Senn: I assume that the receipts from the different grades in any cooperative organization will be kept separate and distinct from each other, and settlements will be made on that basis. The minister has mentioned two or three times that the decision of the minister will be final. No doubt the minister is too busy to go into all these details himself. I should like to know what machinery has been or will be set up within the department to look into these matters, advise the minister and give him proper information.


James Garfield Gardiner: The whole organization connected with the marketing branch of the department is available to deal with matters of this kind; and of course, as the hon. member has suggested, I must rest my decision on the information which they gather for me.


Mark Cecil Senn: Has any particular person or persons been designated in that marketing branch to undertake this work?


James Garfield Gardiner: In so far as contact with myself as minister is concerned, Mr. A. M. Shaw, the director, is the person who determines what the recommendations to the minister will be, and I act upon the recommendations.


Mark Cecil Senn: What machinery is there for
auditing the books of these different cooperative organizations so that a report may be made to Mr. Shaw to be carried by him to the minister?


James Garfield Gardiner: All these companies are compelled, under the arrangements made with them, to have a proper audit by a reputable auditing concern. My information is that an audit of a properly constituted auditing firm is usually accepted. If we have any question about the matter, it would be checked by the government auditors themselves.


Mark Cecil Senn: Who pays for the audit?


James Garfield Gardiner: The cooperatives pay
for the audit.


[Stage Direction]
Section agreed to.
Sections 4 and 5 agreed to.
On section 6-Payment to selling agency.
Pierre-François Casgrain: That section 3 (1) of the act as amended by clause six of the bill be further amended by adding thereto the following proviso:
provided further that the agreement may include a provision that the minister may on such notice as he deems fair and reasonable require that the delivery of an agricultural product to a cooperative association, processor or selling agency shall be discontinued with the result that the minister shall not be liable in respect of any agricultural product delivered to the cooperative association, processor or selling agency after such requirement.


Mr. PERLEY:: Would the minister explain that?


James Garfield Gardiner: The explanation is the fact that the clause "together with the actual processing, carrying and selling costs" was inadvertently omitted from section 3 (1) of the act, and the Department of Justice were obliged to rule that the agreements were invalid because they did not comply with the act. The fact is that the agreements were valid according to the intention of the act; it was the act itself which was in error. To anticipate possible losses, it might be as regards onions, furs, or any other products of these cooperative organizations, it was thought best to have this provision put in the bill this year in case there might be some payments to be made.


Percy Ellis Wright: With regard to section 6
of the bill, I take it to mean that if a grower delivers a No. 1 grade to a cooperative association, and it is sold at a profit, and a grower delivers a No. 3 grade article to the cooperative and it is sold at a loss, the profit made on the No. 1 grade may be used to make up the loss on the No. 3 grade. Is that correct?


James Garfield Gardiner: Mr. Chairman, my
reading of the section would be the very opposite of that. It would be that each one of these different grades will form a separate deal, and if there is a loss in connection-with any one of them, we are liable to pay.


Percy Ellis Wright: That is as it should be,
but when I was reading the section I took it to mean the contrary.


James Garfield Gardiner: Wrhich part is the hon. member reading that meaning into?


Percy Ellis Wright: The latter part:
. . . the amount ... by which the initial payment . . . exceeds the average wholesale price . . . computed on the amount of the agricultural product of such grade or quality so delivered; provided that, in determining the average wholesale price of an agricultural product, the minister may . . . require that
800	COMMONS
Agriculture Cooperative Marketing Act
any excess over the initial payment and costs in the sales account of a particular grade or grades shall be applied against any deficit in the sales account of any other grade or grades of such product.


James Garfield Gardiner: The proviso at the end does provide that; that is correct.


Mark Cecil Senn: Then it seems to me that the minister, in his former statement in answer to a question I asked on section 3, must have been in error. I asked him distinctly if the income or proceeds from each grade were to be kept separate and distinct and if people who put in a No. 1 grade, for instance, would be paid on that basis. Now we find under this particular clause that, if there is any loss, if the goods sell for less than the guaranteed price, the person who puts in a No. 1 grade, although it may realize a substantial profit, will be penalized on the lower grades if they happen to make a loss. It seems to me that is an unfortunate situation, and the minister rather misled the committee in making that statement.


James Garfield Gardiner: The statement is, I
should say, partly correct, but in certain circumstances it might not be. If there is no loss in any of the grades that are provided for, of course they will all be pooled separately and carried right through and the initial payment will be made based on the different grades; then, when the final payments are made, they will all be made, again, on the basis of the grade. But if there should be a loss on one particular grade, and a profit in connection with another grade, under this proviso the minister has the right to determine that the loss in the one grade should be made up from the proceeds of the other grades before a distribution is made.


Percy Ellis Wright: That is entirely wrong,
because it penalizes the man who is growing the No. 1 product, in favour of the man who may have a No. 3 product. The different grades should be separate all the way through the pool, so that the man who produces the No. 1 product shall receive what it is sold for; and if there is a loss on the sale of the product of the man who has a No. 3 grade, the department should take the loss, not the man who is growing the No. 1 grade.


Mark Cecil Senn: We should have this matter straightened out in some way. I understand a guarantee is made that a certain percentage of the average price for the past three years will be given by the department. May I ask the minister if the percentage will vary for the different grades? Is it intended that .he same percentage will be for the average
'Mr. Wright.]
price of all grades for the past three years, or will there be a guarantee of price for each separate grade?


James Garfield Gardiner: The intention will be so to fix the variation as to provide against this situation arising. This bill does not cover wheat. Someone mentioned elevators in connection with it. Wheat is covered in the bill that came back from the senate to-day, but the principle has been fairly well established in the handling of wheat. Wheat has been graded over a long term of years. The board meet at the beginning of the season and determine the spread between the different grades. Sometimes they make mistakes, and in this instance it is possible that the departmental officials or others drawing up agreements with officials of the cooperative might make mistakes. The cooperative themselves may have a wrong idea as to what the spreads will be throughout the year, and at the end of the season it may be necessary to sit down again-or it may be in the middle of the season-and consider the situation, when it might be determined that there was too wide a spread between certain grades. The hon. member for Qu'Appelle (Mr. Perley) will be familiar with the experience of last year in connection with wheat, and in setting the spread between No. 3 and No. 4 or, say, between No. 1 and No. 4. The spread was set wider this year on the basis of last year's experience, and that has turned out not to have been the proper thing to do. This makes provision whereby the minister may adjust matters towards the end of the season. It will not result in any particular hardship in the sense that in most instances persons will be delivering products of different grades, and where injustice has been done to those who are delivering, say, a higher grade product as compared with a lower, or vice versa, there is a possibility of correcting any mistakes made, although this is not compulsory-the minister "may" do it.


Mr. TUSTIN:: That is one of the things about which the minister should be very careful, making it compulsory that every one of these articles is paid for according to grade. For the last number of years we have been spending large sums of money endeavouring to get agricultural producers to grade commodities ; we are now reaching the stage where that is beginning to count, and if we go back in this particular case it will do much to disrupt the work already done in the grading of agricultural products.

Agriculture Cooperative Marketing Act


Mark Cecil Senn: I do not think the minister
has drawn a good parallel between wheat and these other products. After all, it is the average price over the past three years on which the guarantee is based, regardless of the spread there may have been in that time. That was the point I was trying to raise. If a guarantee of a certain percentage of the average price of grade No. 3 is made, the department should undertake to carry that out, and if a percentage of the average price of No. 1 is guaranteed, the government should be prepared to carry that out also without penalizing the man who is producing No. 1 quality goods by asking him to meet some of the losses sustained in connection with No. 3. However, I am not going to labour that further.
There is another matter in regard to which I should like to have some information. I refer to the words underlined in line 20 on page 2 of the bill. The minister moved an amendment to the definition of "cooperative association". The word "processor" opens the way again for the very thing he was trying to avoid in the definition of "cooperative association". "Processor" might mean any of the packing companies or any of the milling companies. I do not think the minister intends to guarantee the packing companies or the milling companies of the country that they will be paid a percentage of the initial price. I give this only as an instance. There are a great many processors throughout the dominion who might take advantage of this particular clause, and it would to a great extent nullify the original intention of the act, that only cooperative associations of primary producers should enjoy the benefits of the act.


James Garfield Gardiner: The original act contained the term "selling agency". We have had communications from quite a number of cooperative organizations that were already set up. They had their own selling agency, their whole organization built up, with the agency as part of it. The act was interpreted last year by legal authorities as meaning that anyone concerned, whether cooperative processing plants, or whatever it -might be, entering into an agreement, had to go through the process of setting up a central selling agency; and in order to avoid that, power is given here to enter into an agreement with the one cooperative already set up under provincial legislation. We have not dealt with any cooperative except those that are set up under some form of organization which incorporates them. When we deal with that organization we can make an arrangement directly with that cooperative.
Take a processing plant such as a cheese factory. As I understand, cheese factories in Ontario are largely set up on what is to all intents and purposes a cooperative basis, and processing plants of that kind, one or more of them, could enter into agreements under this particular legislation. Then we have processing plants, such as the Barrie packing plant, which is a farmers' cooperative. We could enter into an agreement with that one plant as it now is; and if under the legislation as it now is, it were thought advisable for the packing plant, which itself may not be organized on a cooperative basis but which may be prepared to enter into an arrangement, to handle all the hogs of certain groups of farmers within a certain area, they might be allowed to make use of their plant for the purpose of processing and marketing the product on a pooling basis. In that event we might be prepared to enter into an agreement. Again, I would call attention to the fact that this legislation only gives us power to enter into agreements, and we enter only into agreements that carry out the spirit of the act as indicated in the defining clause.


Mark Cecil Senn: I am not at all satisfied with the explanation. The minister just stated that it only gives the department power to enter into agreements in accordance with the defining clauses of the act. There is no defining clause of the word "processor" that I can find. It seems to me a dangerous experiment. If there were a packing plant in a locality, the minister suggests they could make an arrangement with a group of farmers to process and sell their product. No doubt that packing plant would be doing other business in goods purchased outright, and it seems to me it would be difficult to keep the records separate. I am afraid that the word "processor" as used there should be defined.


James Garfield Gardiner: Paragraph (f) of section 2 of the act defines it.


Mark Cecil Senn: In any event it seems to me a dangerous experiment.
I wanted to ask the minister a question about section 4, not for the sake of criticism, as he understands. The section reads:
(d) "initial payment" means the sum paid, or credited for merchandise delivered. . . .
That would lead me to believe that these cooperative corporations not only may be merchandizing their own product but will be purchasing agents for these same farmers who are members. I have always felt that the farmers should first learn to merchandise their own products successfully before they try to merchandise the production of others.
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Agriculture Cooperative Marketing Act


James Garfield Gardiner: That is the intention, but some cooperatives that are operating want to enter into arrangements to follow the practice of furnishing certain supplies to their customers.


Mark Cecil Senn: And the minister intends to allow that to continue. Is there any provision made for determining the value of the goods that are exchanged for the products intended to be sold?


James Garfield Gardiner: None other than this, that before entering into an agreement with a company of that kind the department would satisfy itself that these producers are satisfied with the treatment they have received from that organization.


Mark Cecil Senn: Is any provision made whereby there will be no compulsion exercised, that is, that a member of the organization delivering, say, a bunch of hogs or a quantity of honey would not be compelled to take goods in exchange? It seems to me it would be a dangerous thing for the government to guarantee prices under any such conditions.


James Garfield Gardiner: I cannot conceive of an agreement being entered into where there was any complaint whatsoever by producers as to a clause of this kind. The provision for accepting credit would probably not be put in unless producers desired to have it that way.


Mark Cecil Senn: If it were voluntary, there would be no objection.


Thomas Clement (Tommy) Douglas: Would the minister explain the term "wholesale"? The committee will notice that prior to this time the initial price was 80 per cent of the average sale price. Under this amendment it will be 80 per cent of the average price to the producer. That is, the payment will be made on the basis of the difference between the wholesale price and what the cooperative association has paid to the producer. I imagine the minister means by the wholesale price the price the association receives when it sells the producer's product.


James Garfield Gardiner: That is right.


Thomas Clement (Tommy) Douglas: There is no provision in section 2 for a definition of " wholesale price ", although I notice the minister is to have power to determine what the wholesale price is. Would it be better to have a definition of " wholesale price " and say it is the price that the cooperative association will receive for the products of which it disposes?


James Garfield Gardiner: I do not think it would be possible to define the wholesale price for all the different products that might be dealt with. The act does, as suggested by the hon.

member, give to the minister, which means on the recommendation of the officals of the department, the power to determine what the wholesale price is for any product dealt with. I think that is about as far as we could go.


Thomas Clement (Tommy) Douglas: It will be equally difficult to determine what the average price paid to the producer will be. When we come to the next section, the minister might give some idea how that will be determined.


James Garfield Gardiner: I do not know whether the hon. member was in his seat a few minutes ago when I stated the method that has always been followed and that will have to be followed in determining the price the producer obtains. We have our bureau of statistics in Ottawa which is furnishing statistics all the time indicating what producers do receive for different types of products; that is where we would probably go for our information. In other cases where there is not a record here, there is likely to be a provincial record dealing with a product which might be produced entirely in one province. We would go to whatever government record we could find, whether federal, provincial or municipal, in connection with such a product.
Our main reason for retaining the price received by the consumer in the clause in that other section is twofold. In the first place we are paying the producer an initial advance as against the price he is eventually to receive. For that reason we think that is the proper basis to take when we are setting the initial payment to the producer. Then there is the further reason, that it renders the liability of the government less, which we always take care of in legislation of this kind.


Thomas Clement (Tommy) Douglas: I think the same argument would apply when it comes to determining the wholesale price. I suppose that in few instances would the wholesale price be less than the initial price. But there will be a problem of administration. If, instead of the wholesale price, the minister could set up the average price which the cooperative associations have received, and the payment if necessary that had to be paid would be the difference between that average price and the initial price.


James Garfield Gardiner: The wholesale price
stated here is determined after the facts; it is a matter of record in the books. We have access to those books, the actual wholesale price will appear in the books, and that is what will be taken.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Section 7 agreed to.

Agriculture Cooperative Marketing Act
On section 8-Minister may prescribe with approval of governor in council.
James Garfield Gardiner: There is an amendment to that.


Pierre-François Casgrain: I move:
That clause 8 of the bill be amended by striking out the words "the minister may make regulations prescribing," in the fifteenth line, and substituting therefor the words "the minister may prescribe".


Mr GARDINER:: As originally drafted, the bill set out that the minister, with the approval of the governor in council, might make regulations in certain cases, set out under paragraphs
(a), (b), (c), (d), (e), (f) and (g). Some of those obviously were not matters of regulation; they were matters in which the minister might prescribe. Where the act states that with respect to any agreement under it the minister may with the approval of the governor in council prescribe, it sets out those cases in which it requires the approval of the governor in council. Under the act as we have it drafted, the minister may make regulations prescribing; but where the approval of the governor in council is not required, it is not felt necessary to say that the minister may prescribe only by regulations. He may prescribe by regulations, or he may prescribe without regulations.


[Stage Direction]
Amendment agreed to.
Pierre-François Casgrain: I move that the section be further amended by striking out paragraph (d) of subsection 2.


James Garfield Gardiner: That gives the minister
the same power which was given previously to the minister with the consent of council; the power remains with the consent of the governor in council.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Section 9 agreed to.
On section 10-Payment of liabilities under the agreement.
Mark Cecil Senn: Is there any provision for the winding up of the year? Is there any provision for surpluses that may accumulate; and what will be done in case there is a surplus at the close of any year? Will settlement be made only when everything is disposed of?


James Garfield Gardiner: That is taken care of in the agreement which is entered into. In some instances the agreements are not for the full year. Some of the agreements entered into this year already have been paid out, final payments having been made.


Mark Cecil Senn: Supposing at the end of the term of the agreement there is a surplus on hand. What disposition will be made of that, or is there any provision for looking after a matter of that kind?


James Garfield Gardiner: There is not supposed to be any surplus unless it is set up in the form of a reserve, as provided for earlier in this amending legislation. The whole amount obtained for the product is supposed to be paid out as a final payment.


Mark Cecil Senn: Did I understand the minister to say that if any surplus is left over at the end of the agreement period, it will constitute the reserve that was provided for?


James Garfield Gardiner: No, but there will be nothing carried from one year into another unless it is under the provision for a reserve. The end of the agreement will come at some particular time, and any of the product still on hand will be sold out and payment made to the individual producers. That is, I would not anticipate that this product would be carried into a further pool, but if it were, it would be covered by the second agreement.


Mark Cecil Senn: Provision is made that no final payment can be made until the minister consents. Would the minister then say that if a surplus is carried over into the next year, no final payment can be made until that surplus is disposed of?


James Garfield Gardiner: It might work out in
that way. It would depend on what gave the best protection to the individual producers involved in the agreement. There is just the possibility that some products which may be sold on option are disposed of in that way, and the full value which the producer can obtain will be realized on the day the year winds up. If all the money can be obtained it can be distributed, but if the surplus product is to be carried for perhaps a month beyond the end of the year, I do not imagine that you could make a final payment until the product was all sold.


Mark Cecil Senn: I do not want to carry on the discussion too long, but is there any provision for bad debts? Is there any provision for promissory notes which may not be due at the time of the final disposition? It seems to me many of these matters might interfere with the final payment, and I believe the situation should be clarified.


James Garfield Gardiner: That would all be provided for in the agreement and in the audit. The minister would not give consent to final payment unless all those matters were cleaned
European War-France

up. That is the very reason why it is left with the minister to determine finally when that payment should be made.


Pierre-François Casgrain: I move that section 10
of the act, as contained in section 10 of this bill, be deleted.


James Garfield Gardiner: That is the provision
that the act comes into force on a date to be fixed by proclamation.


Karl Kenneth Homuth: Will it come into force
on receiving royal assent?


James Garfield Gardiner: The act is in force now.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Bill reported.

William Lyon Mackenzie King: Mr. Speaker,
this morning while having a word with my hon. friend the leader of the opposition (Mr. Hanson) I mentioned to him that, the situation in Europe being what it is at the moment, I should like to have my colleagues meet me this evening. If hon. members would not object, therefore, I would move that we now adjourn. We have had a strenuous week; I have no doubt that hon. members feel the intense anxiety of the moment, and probably they will be agreeable to adjourning now.
Motion agreed to and the house adjourned at 6 p.m.
Monday, June 17, 1940



EUROPEAN WAR


[Stage Direction]
pledging Canada's unwavering support
William Lyon Mackenzie King: Mr. Speaker, hon. members will have read in the press of this morning the communication sent last night by Prime Minister Churchill to Premier Reynaud of Prance. No pledge of like import to mankind has, I believe, ever been made in the name of one people to another. Given as it is in our name as well as in the name of the other nations of the British Commonwealth, I should like to have this pledge at the earliest moment possible upon the permanent records of the Canadian parliament, with the assurance that its every word expresses the feelings, the convictions and the intentions of the Canadian people. This is the message:

European War-France
In this solemn hour for the British and French nations and the cause of freedom and democracy to which they have vowed themselves, His Majesty's government desires to pay to the government of the French republic the tribute which is due to the heroic fortitude and constancy of the French armies in battle against enormous odds.
Their efforts are worthy of the most glorious traditions of France and have inflicted deep and long lasting injury upon the enemy.
Great Britain will continue to give the utmost aid in her power. We take this opportunity of proclaiming the indissoluble union of our two peoples and our two empires.
We cannot measure the various forms of tribulation which will fall upon our peoples in the near future. We are sure that the ordeal by fire will only fuse them together into one unconquerable whole.
We renew to the French republic our pledge and resolve to continue the struggle at all costs in France, in this island, upon the ocean and in the air, wherever it may lead us, using all our resources to the utmost limits and sharing together the burden of repairing the ravages of war.
We shall never turn from the conflict until France stands safe and erect in all her grandeur, until the wrong and the wronged and enslaved states and peoples have been liberated and until civilization is free from the nightmare of nazism.
That this day will dawn we are more sure than ever. It may dawn sooner than we now have the right to expect.
The prophetic vision of the complete fusion of the British and French peoples as the outcome of the ordeal of fire through which, at this time, both are passing, has already found eloquent expression in our Canadian House of Commons. At the outset of its proceedings, in the first speech made in this new parliament, the mover of the address, the hon. member for Lotbiniere (Mr. Lapointe), used the following words:
The union between the two countries has been not only material, but also intellectual and spiritual. What the outcome of this union will be after the war, it is hard to tell. Some observers have gone so far as to prophesy the union of France and England into one nation.
*
Whatever changes are being made, it seems certain that from the war -will emerge a new relationship between France and England which will surely have its effects in future history, and which will serve as a symbol of bonne entente for the other nations of the world. If so, I feel that we Canadians should rejoice at such an outcome and feel a legitimate pride in that we have already realized such a union.
Hon. members will recall how warmly these sentiments were received in all parts of this house.
Canada's determination to stand, to the very end, at the side of France, no less than at the side of Britain, has since the war commenced been voiced in the name of the Canadian people by his majesty's representative in Canada in speeches delivered from the throne in three successive sessions of parliament.
Many tributes to the heroic fortitude and constancy of the French arms have been paid in all parts of the United States as well as throughout Canada. Through her president, the United States has already pledged the material resources of that nation to the opponents of force.
If I know the heart of the American people as I believe I do, and as I am certain I know the heart of the Canadian people, I believe I can say to Premier Reynaud, in this hour of the agony of France, that the resources of the whole of the north American continent will be thrown into the struggle for liberty at the side of the European democracies ere this continent will see democracy itself trodden under the iron heel of nazism.
In this belief which I am sure is shared by all hon. members of both houses, after reading Mr. Churchill's communication to M. Reynaud, I sent to-day to the Premier of France the following message, which I would now like to renew in the name of parliament:
June 14, 1940.
Monsieur Paul Reynaud,
President of the Council of the
French Republic,
France.
The Canadian people have heard with deep emotion your brave words as you have spoken from day to day. We have watched with the pride of kinsmen the gallant deeds of your unconquerable soldiers. Every word in the tribute paid yesterday in the message by the government of the United Kingdom to the government of the French republic eloquently expresses also the passion and faith in the hearts of our people. Canada pledges to France as she has to Britain her unwavering support to the utmost limit of her power and resources.
I have read your appeal to the United States. You may be sure that the peoples of North America see with clear eyes, the realistic needs of the hour. It is my faith that all the material and economic strength of this continent will be marshalled without delay to help the French republic in the great cause for which she fights. As never before, free men the world over are inspired by the sacrifice and the devotion of France.
W. L. Mackenzie King, Prime Minister of Canada.
Old Age Pensions



OLD AGE PENSIONS


Alan Webster Neill: Mr. Speaker, I wish to present a petition to the house under standing order 68. It is in order and has the correct superscription-"To the honourable the House of Commons in parliament assembled." It then follows the usual formula-"The petition of the undersigned humbly sheweth;" the subject matter is set forth in paragraphs, and so on, and it concludes with the prayer and the formal words, "And your petitioners as in duty bound will ever pray."
I see by the rule that I must confine myself to a statement of the parties from whom it comes, to the number of signatures attached to the petition, to the material allegations contained in it and to the reading of the prayer of such petition. I shall therefore do so.
The parties from whom it comes are citizens of Canada from the provinces of British Columbia, Alberta, Saskatchewan, Manitoba and a portion of Ontario. Thei. names and addresses are all given. I am told that the petition was got up in a very few weeks and of course it would be impossible to have so many signatures on one petition. Consequently I have a number of them here containing the same heading. I produce one as a sample. Apparently they had the idea that as many names as possible should be on one sheet. This one is forty-eight feet long and contains 1,112 signatures. The others are all much the same.
The number of signatures attached is said by those who are sponsoring the petition to be 57,409. I have not counted them myself, but if anyone wishes to check their accuracy I shall be glad to afford him the opportunity to do so.
The material allegations contained in the petition are briefly as follows:
That the cost of shelter for a single individual is at least $10 and that a further sum of $10 per month is inadequate to provide the necessities of living, including food, clothing, medical care, et cetera.
That thousands of persons in Canada over sixty-five years of age have no means of support and are unable to compete in the labour market.
That to maintain a very modest standard of living would cost $1 a day; this is shown by the experience of governments in the maintenance of patients and soldiers in institutions maintained by the state.

That the age of sixty-five is recognized in the dominion civil service, and also in several of the provinces, as being the age at which retirement is desirable.
That the age of sixty-five is the one adopted for old age pension eligibility in Australia, New Zealand, the United States and other countries having similar conditions to Canada, and that that age has been endorsed by the legislatures of British Columbia and Alberta and by many public bodies.
That the spirit of the Old Age Pensions Act is in some instances defeated by technical regulations which create unnecessary difficulties.
These are the main allegations in the petition.
The prayer is as follows-and in case it should be suggested by someone that the petition is out of order in calling for an expenditure of public money, I would point out that it is drawn up to comply with paragraph 714 of Beauchesne's Parliamentary Rules and Forms, which says that the house would refuse to receive a petition asking directly for a grant of money but that the house does receive petitions which ask simply "for legislation or for such measures as the house may think expedient to take." I now read the prayer of the petition:
Wherefore your petitioners humbly pray that your honourable house may be pleased to enact such measures as the house may think expedient to take to improve conditions above described.
In addition to the signatures on the petition I have received a number of individual letters, numbering about 150, which I am not presenting because technically they are out of order, but they all endorse the petition and describe their own conditions in rather pitiful terms.
The parties who sponsor this petition are a responsible body in Vancouver. In their covering letter they express the hope that the house will give the petition sympathetic consideration, and I would add my own hope that when the financial resources of the country permit it, action will be taken accordingly.



STANDING COMMITTEES


[Stage Direction]
Right Hon. ERNEST LAPOINTE (Minister
of Justice moved:
That the name of Mr. Gingues be substituted for that of Mr. Pottier on the standing committee on miscellaneous private bills.
That the name of Mr. Pottier be substituted for that of Mr. Gingues on the standing committee on industrial and international relations.
That the name of Mr. Lalonde be substituted for that of Mr. Fournier (Hull) on the standing committee on privileges and elections.
That the name of Mr. Fournier (Hull) be substituted for that of Mr. Lalonde on the standing committee on miscellaneous private bills.

Rules oj the House-Reading Speeches
That the name of Mr. Cloutier be substituted for that of Mr. Dupuis on the standing committee on agriculture.
That the name of Mr. Dupuis be substituted for that of Mr. Cloutier on the standing committee on printing.
That the name of Mr. Jaques be substituted for that of Mr. Queleh on the standing committee on banking and commerce.
Motion agreed to.


[Stage Direction]
On the order for motions:
Georges Parent: Before the orders of the day are called, I wish to draw the attention of all hon. members to a practice in debate which seems to be growing, and is contrary to the rules of the house. I refer to the reading of speeches.
Standing order No. 41 makes provision for decorum in debate. I would refer hon. members to Beauchesne's Parliamentary Rules and Forms, at page 95, paragraph 293, which states:
Besides the prohibitions contained in this standing order, it has been sanctioned by usage both in England and in Canada, that a member, while speaking, must not: . . .
(o) read from a written, previously prepared speech.
This rule was adopted in 1927, but as long ago as April 19, 1886, a resolution was adopted by the house which I should like to read. It was as follows:
That the growing practice in the Canadian House of Commons of delivering speeches of great length, having the character of carefully and elaborately prepared written essays, and indulging in voluminous and often irrelevant extracts, is destructive of legitimate and pertinent debate upon public questions, is a waste of valuable time, unreasonably lengthens the sessions of parliament, threatens by increased bulk and cost to lead to the abolition of the official report of the debates, encourages a discursive and diffuse, rather than an incisive and concise style of public speaking, is a marked contrast to the practice in regard to debate that prevails in the British House of Commons, and tends to repel the public from a careful and intelligent consideration of the proceedings of parliament.
I realize from my own experience how comforting it is that the written word should be before a speaker while he is speaking in the house, and especially when one is a new member. There are quite a number of new members in the house, and therefore some latitude has been given in the debates which have already
taken place, but I thought it proper to call the attention of hon. members of the house to the practice, which has not been confined to one side of the house; in fact, I think it has been almost universal in its application. I believe that a reference to the rule in this formal and general manner will forestall any objections from the house or from the chair in future debates.


William Lyon Mackenzie King: Mr. Speaker, I hope that the rule will not be construed as applying to important statements made by the Prime Minister on behalf of the government. At a time like the present, every precaution is necessary with respect to utterances of international significance and concern. Statements on all such should I think be read rather than expressed extemporaneously. I believe that that is understood; in fact, in England, it is the practice for such statements to be read.


Georges Parent: Such has been the custom and it has been accepted by the house. As suggested to-day, statements from ministers have been read in this chamber, and the custom and practice of the house has been to permit the reading of such communications where government policy is involved. I think the general sense of the house will be that all such statements should be read, in order that governmental statements may be meticulously and correctly given to the house.



NATIONAL REGISTRATION


[Stage Direction]
On the orders of the day:
Richard Burpee Hanson: I should like to direct an inquiry to the Prime Minister (Mr. Mackenzie King). In view of the noble words which he has addressed to the Prime Minister of France, and in order that these noble words may be followed up by deeds and action, will he say that the government will give immediate consideration to the question of a national registration in Canada?


William Lyon Mackenzie King: If I were sure that to
comply with the wish of my hon. friend would carry out what he has in mind, I would be the first to give him an answer in the affirmative. Until I have reached that view I am afraid I shall have to say that the matter he has referred to has been, is, and will continue to be under consideration.
National Defence



PRAIRIE FARM ASSISTANCE ACT


[Stage Direction]
On the orders of the day:
Thomas Clement (Tommy) Douglas: May I ask the Minister of Agriculture (Mr. Gardiner) whether we may expect legislation at the present session to amend the Prairie Farm Assistance Act?


James Garfield Gardiner: The matter is still under consideration.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
John Gordon Ross: I should like to know from the Minister of Justice (Mr. Lapointe) whether he has received authentic information from any reliable sources in regard to a threatened invasion of Ontario from the United States?


Ernest Lapointe: No. Immediately after my attention was called by the leader of the opposition (Mr. Hanson) to the statement made by the premier of Ontario the heads of the Royal Canadian Mounted Police communicated with the head of the provincial police of Ontario. As a matter of fact, I believe, Superintendent Kemp, who is in charge of the Ontario division of the force, got in touch with Commissioner Stringer of the Ontario police, who told him that he could not give him any answer without first consulting the premier of Ontario. That was two days ago, and to this very minute neither we nor the police have received any information. May I say also that the Royal Canadian Mounted Police is in constant communication with the police authorities, both federal and state, of the United States. They are in constant communication with the law enforcement agencies in the state of Michigan and the state of New York, which are more directly concerned with our boundary in Ontario. Every precaution is being taken. Nothing unusual has happened, and the consensus of all those in authority is to the effect that there is great exaggeration in the statements which have been made.



MUNITIONS AND SUPPLY


[Stage Direction]
On the orders of the day:
Richard Burpee Hanson: Mr. Speaker, may I direct an inquiry to the Minister of Munitions and Supply (Mr. Howe) of which I gave him some notice? In view of the fact that a company owned and controlled by a person who is in fact now detained as an enemy alien has a huge contract with the government for the manufacture of minesweepers, will the Minister of Munitions and Supply say (a) that the contract is to be continued; or (b) is to be cancelled; or (c) that the government will take over the plant and finish the contract? Or, (d) has the government the power in such a case to confiscate the plant as enemy alien property? Generally, what is the policy of the department and the government in such a situation?


Clarence Decatur Howe: Mr. Speaker, I assume that the contract referred to is a contract by the Dufferin Shipbuilding company for the construction of four minesweepers. The reports of our inspectors indicate that the material is being delivered and that the work is proceeding on schedule. I have no knowledge at the moment of the interest of the president of the company, who has been detained with a view to internment.


Richard Burpee Hanson: I am
informed that he is interned.


Clarence Decatur Howe: Well, he is interned, I assume, subject to the usual appeal. Whether this can be treated as enemy alien property is a matter for the law officers of the crown to decide. But it is important to the department of munitions that the work on these four minesweepers shall proceed, and any steps which will be taken will protect the completion on schedule of the minesweepers. We are examining the situation with the law officers of the crown and will determine the policy in the light of the facts as we discover them.


Mark Cecil Senn: I believe that the same concern, or one controlled by the gentleman to whom reference has been made, has contracts for the construction or finishing of airports in certain localities, some

Munitions and Supply Act
of them being in my own riding. Will the minister say whether the same statement would apply in this particular instance?


Clarence Decatur Howe: The company is another company, I think. Certainly the president is the same person, and my remarks apply equally to other contracts.


INFORMATION GIVEN IN PRESS RELEASES WITH RESPECT TO CONTRACTS
[Stage Direction]
On the orders of the day:
Mr. KARL K. HOMUTH (Waterloo South): In the press releases that are sent to hon. members every so often, giving information as to contracts, we are given the number, the name of the company and the price, but could there be another column to show the article ordered?
Clarence Decatur Howe: I shall be glad to take that up with the publicity branch of the Department of Munitions and Supply and ask that that be done.


AMENDMENT TO CLARIFY AND EXTEND POWERS OF MINISTER, ETC.
[Stage Direction]
Hon. C. D. HOWE (Minister of Munitions and Supply) moved that the house go into committee to consider the following resolution:
That it is expedient to amend the Department of Munitions and Supply Act to clarify the powers of the minister and in some respects extend his powers of acquisition, by purchase or otherwise, of munitions and supplies, and to empower him to construct and carry out defence projects, engage services, et cetera.
Motion agreed to and the house went into committee, Mr. Fournier (Hull) in the chair.
Richard Burpee Hanson: Would the minister make a statement now?


Clarence Decatur Howe: The Department of Munitions and Supply Act was passed at the session of parliament held in the week between September 6 and 13, 1939. The act was actually proclaimed on April 9, 1940. In the meantime the work which is now carried on by the department was carried on by the war supply board. The regulations of the war supply board were somewhat similar to the original Department of Munitions and Supply Act. As the work of the department developed, certain wider authority than given by the act was given to the war supply board. Also certain changes in practice developed through experience, which were not the practices set out in the Department of Munitions and Supply Act.
When the act was proclaimed it was of course necessary to continue all the undertakings of the war supply board and to continue the procedure very much as it had been carried on by the war supply board.
The purpose of these amendments is, first, to bring the Department of Munitions and Supply Act into conformity with the amendments to the act which were made by order in council under the War Measures Act to enable the department to function and to take over from the war supply board without interrupting the procedure. A second purpose is further to enlarge the powers of the department under the act and to revise the procedure, primarily for the purpose of permitting a considerable degree of decentralization of the work carried on by the department. It has been found utterly impossible to assemble in Ottawa a sufficient staff to handle all the multiplicity of undertakings that the department has in hand at the present time. The act provides that certain government owned and controlled companies shall be established and headed by business men chosen by the government who will be able to carry on certain operations as companies rather than as part of a departmental staff.
That I think covers the general purpose of the amendments to the act. It is exceedingly difficult to discuss any of them in detail until the bill itself is distributed, but of course I shall be glad to answer, as far as I can, any questions that may occur to hon. members in the meantime.


Richard Burpee Hanson: The act, as the minister stated, which was passed on September 12, 1939, created a new ministry, the Department of Munitions and Supply. It was proclaimed on April 9 last under P.C. 1435. The Prime Minister (Mr. Mackenzie King), in moving the second reading of the bill in September, explained that his purpose was to create a department which would have power to mobilize and control to the fullest extent Canadian industry for war purposes. He said that the bill was modelled on the department which the British government set up under Mr. Lloyd George during the great war. It was further explained that it was not the intention of the government to set up the department immediately, which is borne out by the fact that the act was not proclaimed until April 9 last, the work being carried on meanwhile by the old war supply board.
On April 9, 1940, when the act was proclaimed, substantial additions to the powers and provisions of the act were made by order
Munitions and Supply Act

in council under the War Measures Act, chapter 206 of the revised statutes of Canada. The scope and authority of the powers of the department were very considerably extended. I am assuming of course that that was absolutely necessary by reason of the increase of business arising out of the war. I do not know whether these orders in council have been laid on the table. I refer particularly to P.C. 1437 and P.C. 1438, which I have obtained from the proper authority; also P.C. 2189, which was previously laid on the table, passed on May 24 last, and which provided for the setting up of these government-owned corporations, if I apprehend it correctly, and the authorization of guarantees, et cetera, to a maximum not exceeding 82,000,000 to be given by the Minister of Finance. I do not wish to refer to that item, because I think I understand why that was done and why it is desirable that undue publicity should not be given to the underlying reasons; I shall respect the confidence that was reposed in me on that occasion and not go further into that aspect of the matter.
If I understand the minister's explanation of the resolution, the first object to be attained by the proposed bill is to regularize the orders in council and make them part of the statute which has already been passed. That, I think, is good practice, and there is no objection to it. But with respect to the second and third objects, when we come to the committee stage of the bill I will ask the minister to be good enough to tell us in some detail-not necessarily full detail-what he has in mind with respect to decentralization of operations. I can quite understand that in a country as far-flung as Canada, geographical considerations being what they are, decentralization may be good business. As a lawyer connected with commercial operations all my life I can quite appreciate that.
I do not know how far the minister can take us into his confidence with respect to these government-owned companies. Of course he will admit that in peace time that policy would be considered a very great departure. I give the minister credit as a business man for understanding that this particular power which he is investing in others as trustees on behalf of the government could be exercised only in time of war, and under conditions designed to protect the public treasury. Doubtless that is one of the vital things which the minister has in mind. I invite him now to be good enough, when we come to the committee stage of the bill, to give us as much information as it is in the public interest to give on these points. I am not going to press him beyond that.
(Mr. R. B. Hanson.]


Karl Kenneth Homuth: Is it the minister's intention to proceed with the bill now?


Clarence Decatur Howe: The bill is ready for distribution. It depends on whether hon. members would prefer to have time to study it first. My intention to-day was to move first reading and let the bill be distributed, and then continue on another day.


Thomas Miller Bell: We welcome the suggestion made by the minister that we be given an opportunity to look over the bill before much debate takes place. The minister spoke of setting up government corporations, as it were. Will they be in the same relationship to this parliament as, for example, the Canadian National Railways? I have it in mind that we are not able to obtain information from subsidiary corporations of the type of the national railways or the Canadian Broadcasting Corporation. Will the corporations set up be of that type, or will they be more directly under this parliament so that we may get more information about their activities than we are now able to get about the national railway system?


Clarence Decatur Howe: I think the extent to which
parliament can be given information about these companies depends on the purpose of the company. Take, for example, a company whose duty it is to protect the production of war supplies against a shortage of raw materials that come from countries which may from time to time be cut off as a source of supply. To some extent it would defeat the purpose of the company to give an account of its transactions while they are current, because some of this material is perishable and must not only be bought but sold. There is another company whose purpose would be defeated if full details of its work were given in the house. On the other hand we have a third company which is coordinating the management of governmental enterprises. Several enterprises separate in themselves, with separate management and necessarily separate operation, must be coordinated in order to produce the finished article. Concerning that I shall be delighted to give the fullest possible information to the house at any time. It is a business transaction, carried out by a company simply as a matter of convenience, making possible the assembling of a separate group of men and the providing of office space outside of the capital, where office space is almost impossible to obtain. I think my hon. friend will see the position. I feel that anything we do as a department of munitions and supply should be made public to the fullest possible extent consistent with the public interest, and so far as these companies are concerned that is the view I will take.

Munitions and Supply Act


Major James William Coldwell: In explanation I might say that I have never held the view that corporations of this type should be directed by this House of Commons. I do not think that is feasible. But there is a danger of some of these public corporations getting too far away from the control of the house. On occasions we have asked, for example, for information as to the salaries paid by the Canadian National Railway system, and have been told that these things are "matters of internal management." We have to try to strike a middle course. I do not take the view that parliament could run industry; I do not think it could. If the time comes, and I believe it will come and ought to come, probably during this war, when the government will have to take over the control of essential industries, we shall have to work out some method, probably that adopted in Great Britain, under which we can establish publicly-owned corporations free from political interference by parliament. I raised the question in order that when the discussion comes up the minister may be in a position to give some information.


Clarence Decatur Howe: The reason we do not give information about matters of internal management of the Canadian National Railways is that the railway is in a highly competitive position, and to present information on matters of internal management just as it is asked in the house might be harmful to the competitive position and therefore against the public interest. These companies to which this bill will relate are of course not competitive, and I know no present reason why any question such as my hon. friend suggested could not be answered. Taking, for instance, the matter of salaries, I think there would be no difficulty.


Howard Charles Green: Will the minister explain
the situation with regard to the construction of merchant shipping in Canada at the present time? I believe there is great lack of available shipping space. I know we have had that difficulty in British Columbia in connection with our exports of lumber, and I presume the same situation exists in other parts of the country. The present would seem to be a good time for Canada to inaugurate a steel ship building programme. We shall probably have great difficulty in getting ships from Great Britain. I understand the shipyards there are all working to the limit. Then again if there should be such a thing as the bombing of these British shipyards, that would make it practically impossible for us to get ships from the old country.
I would ask the minister if it would not be possible for Canada now to enter upon a programme for the construction of ships up to,
let us say, 10,000 tons. We built a great many ships during the last war; and while it might cost a little more to build them in Canada than to buy them in Great Britain I suggest that under existing conditions the only way to obtain sufficient shipping to handle our exports may be by building the ships ourselves. As we all know, Canada lives on her exports. If we do not export we will have a very bad time of it.


Clarence Decatur Howe: I suggest to my hon. friend that, as the war has developed, the shipping situation, instead of growing more acute, has eased off. There was a time, at the beginning of the war, when there was a great shortage of shipping to carry Canadian products to their markets. That shortage has steadily become less acute, until to-day I doubt if it can be claimed that there is any shortage of shipping for that purpose. The reason, of course, is that neutral fleets have been diverted more and more to the trade between Canada and Great Britain. Canada is becoming more and more the principal supplier of Great Britain, and consequently British ships and the ships of neutral countries are being directed more and more to that service.
So far as the lumber business is concerned, direct shipments by water from the west coast present some difficulties. There is a shortage of shipping there, war or no war; but there again I am told that the situation has eased greatly, and that by rail shipment to the Atlantic coast and water shipment from there, together with direct shipment by water from the west coast, that situation is being taken care of quite comfortably.
Whether at a time like this we should divert the productive capacity of Canada to the peace-time operation of building merchant ships is, I think, questionable. I would not undertake to say that shipyards could not be created to build merchant ships with reasonable dispatch, but certainly those yards would have to compete with the established yards, now fully occupied with the construction of ships of war, for skilled mechanics and for such materials as are manufactured in this country. The additional demand on our steel industry would be entirely beyond the capacity of that industry to produce, and the imports of raw materials would constitute an extraordinary strain upon our supply of United States exchange. My own opinion would be that a programme of the kind suggested by my hon. friend is quite impracticable at this time.


Howard Charles Green: Is the minister certain that the shipyards of Canada are fully occupied at the present time with the construction of

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vessels of war? My information, from very good sources, is that they are not; that at least some of the yards even now have the capacity for the construction of merchant ships in addition to such warships as they may be constructing. The minister said we might have to create such yards. I did not mean that; I had in mind that the present shipyards could be used. The minister said also that building ships was a peace-time operation. I hope he is right in that, but things are happening very rapidly these days, and the construction of merchant ships may be a very important war-time operation for Canada before many weeks have gone by. I would suggest to the minister that this question of shipbuilding should not be just put on the shelf but that it should be looked into further. It is possible that we may need those ships very badly in a very short time.


Clarence Decatur Howe: Just to clear up one point, it is my understanding that the shipyards of Canada are fully occupied with Canada's naval programme, having regard to the fact that in certain yards some capacity must be reserved to take care of repairs. Repair work on both coasts, and particularly on the Atlantic, is extremely heavy, due to the great increase in merchant shipping. But I can say that we have contracts for ships that have not been placed at the moment. We should be glad to place contracts for a few more naval vessels, and if my hon. friend can promise me prompt delivery and a reasonable price, I shall be very glad to consider the matter.


Howard Charles Green: I did not promise any prompt delivery, but different members from British Columbia have received a brief on these matters, in which it is stated there is space available for the construction of merchant ships. I would ask the minister to look into the situation and see if that is the case.


Richard Burpee Hanson: The minister said, as I believe to be the case, that the shipping situation has eased up, and he mentioned the fact that neutral fleets had been absorbed into the Canadian traffic. Is there not another reason, that we have lost a substantial portion of our markets and that therefore bottoms are not in as much demand as they were? Is it not a fact that traffic has become very much restricted; and is that not an additional reason why the shipping situation has eased up? That is my understanding of the case.


Clarence Decatur Howe: I think that is true in part, though I believe the supplies and munitions going overseas put as much of a tax on shipping from Canada as has been the case

in the past. I think our port figures show that we are exporting from Canada at this time as much as we have exported at any time in the last several years.


Richard Burpee Hanson: I am wondering if the government is using the port of Saint John to the extent that it might be used, or if it was used to that extent last winter. Perhaps I am treading upon sectional ground; that is not exactly my home port, but it is an important Atlantic port. Last winter I saw trainloads of freight, supplies for overseas, being transported to Saint John, through Saint John and out of Saint John on to Halifax for transhipment, and I just wondered why that was being done. No one has asked me to say this; I am doing it on my own initiative. I have no desire to open old sores down there, but in the last war the facilities of the port of Saint John were utilized to the full, and in days gone by I had something to do with seeing that the port was properly equipped. I am glad to see the minister has carried forward the plans we instituted in that connection, but I regret that he did not rebuild the Petingill wharf, as I understood the former member for that city promised would be done. I assume that there may have been excellent reasons why that was not carried out. I know we did not do it in 1935 because we just could not find the money, but that is an important plan. Those two wharves on the east side ought to be rebuilt. At the present time the sheds are old wooden structures, quite inadequate to handle the traffic. At my suggestion a modern scheme was drawn up under which two or three splendid docks were to be built, established and operated on the east side of the harbour, with a view to having a twelve-month shipping period at that port if possible. I was wondering if the minister would have anything to say with respect to these matters. If he prefers not to say anything now, I shall not press it.


Clarence Decatur Howe: The routing of shipping is
under the control of the British shipping controller. No one in Canada has anything to say as to what port a ship will use. I have always thought that the representative of the British shipping controller in Canada is rather friendly to the port of Saint John, and I am inclined to think he will see that Saint John is not dealt with unfairly in that regard. It is the duty of the railroad to transport goods to the port to which they are billed. Saint John has had an excellent year, according to the figures, perhaps the best in its history.
Mr. HANSON (York-Sunbury: Since the last war.

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Clarence Decatur Howe: That may be so. We had planned to provide for the rebuilding of Mclveod-Petingill wharf in the work of the current year, but two reasons made us drop the plan. The first and compelling reason was that no public works money was available in any part of Canada. The second was that even though we had the money, it would not have been wise to undertake work which would mean that the capacity of the wharf would be out of service for a considerable time. In order to rebuild the dock it is necessary that at least half of it be out of service. While this dock may not be modern in all respects, it is quite serviceable and it is doubtful if we would be justified in curtailing its capacity at a time when so many demands are being made upon the port.


Alexander Malcolm Nicholson: Has the government
brought to the attention of the British shipping board the fact that facilities are available at Churchill? A number of people in northern Manitoba and Saskatchewan have directed my attention to the fact that large supplies of pulpwood, timber and various mineral products are available in this part of the country and could be shipped economically through the port of Churchill.


Clarence Decatur Howe: The British shipping board is no doubt aware of the facilities at Churchill and its position as an export port. The difficulty is that all shipping must be brought into one port so that a convoy may be made up. So far that port has been Halifax. The distance from Churchill to Halifax, as I remember it, is slightly greater than the distance from Churchill to Liverpool. To bring a boat from Churchill to Halifax and then send it across would just about double the length of the voyage. I simply mention this as one reason why the British shipping board may not decide to use Churchill this year, although we have had nothing as yet to indicate what action they will take. There are supplies of wheat at that port and whether or not the board sends for them is something that we can hardly control.


Howard Charles Green: A few moments ago I
mentioned having had information about available space on the Pacific coast for building these ships. I now have copies of three letters which deal with this matter. The first is from the Burrard Dry Dock Company, Limited, of North Vancouver, and is addressed to Mr. Hugh Dalton, of the British Columbia division, Canadian Manufacturers' association. This is a substantial shipbuilding firm which is actually engaged at the moment in the construction of war vessels for the government. This letter reads in part:
In reply to your recent inquiry as to the facilities available at our plant in North Vancouver for the construction of cargo tonnage, we have to advise you that we have available on our own property room for two new building berths, immediately adjacent to our existing yard, each with a capacity for ships up to 10,000 tons. These berths, already cleared and graded to receive foundation piling, could be completely equipped and ready for occupancy within six weeks, which would be before steel deliveries could be expected.
Having in the past constructed vessels up to 8,350 tons deadweight, any ordinary sized vessel could be built. Detailed drawings of the following sizes of ships, equipped with steam reciprocating machinery, are available:
1.	400' x 56' x 31'-8,350 tons deadweight.
2.	331' x 46' 6" x 25' 6"-5,100 tons deadweight.
3.	320' x 44' x 25'-4,300 tons deadweight.
The smaller vessels could probably be turned out more quickly than the largest, but the capacity of the latter would make this vessel a very desirable type.
A considerable part of the material for these vessels would have to be procured in the United Kingdom or the United States. The imported material would include plates and' shapes, also possibly crankshaft and line shaft forgings. Boiler plates would have to be imported from the United States. Steam engines for these vessels could be built in our own plant. If diesel driven vessels were required, engines could be readily procured in the United States.
Delivery of the larger vessels could be made in the following periods after receipt of orders:
1st ship-15 months.
2nd ship-17 months.
3rd ship-21 months.
4th ship-23 months.
The smaller vessels could be turned out in from a month to six weeks less time each.
They then go on to give the price and so on. I have also a copy of a letter addressed by the Victoria Machinery Depot Company, Limited, of Victoria, to Mr. Dalton. This is another reliable shipbuilding firm, and their letter dated May 20, 1940, reads in part:
Confirming our conversation regarding building of 8,000 to 9,000 ton merchant vessels, we would like to make our position clear on this matter as follows:
We have available at this time the site on which we built 8,800-ton vessels for the Canadian government merchant marine in 1919-20. There are two berths and launching ways which are still in good condition. We have the plant and equipment capable of building these vessels and have no doubt about obtaining sufficient skilled labour to carry through the construction of two such vessels at once.
We would not like to state just at this moment that we are prepared to take contracts for such construction, but are prepared to entertain such a proposition and would giee it our serious consideration.
The next is a letter from North Van Ship Repairs, Limited, North Vancouver, under date of May 21, 1940, addressed to Mr. Dalton.
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It reads:
In answer to your inquiry re steel merchant marine vessels, we are fully equipped to handle merchant vessels, and would be very pleased to figure on them.
There are at least three firms which are prepared to go ahead.


Clarence Decatur Howe: As I said, I am quite aware that new capacity can be created. All these people have are sites.


Howard Charles Green: They have the machinery and so on. The minister should not say that. I do not think that is fair.


Clarence Decatur Howe: That is what the letters say.


Howard Charles Green: They go a great deal further than that.


Douglas Gooderham Ross: What is the set-up of these companies to be? Will there be a president, directors and all that sort of thing? Could the minister give us some idea of how they will be formed? What relationship will there be between these companies and the dominion civil service?


Clarence Decatur Howe: These will be companies incorporated with presidents and boards of directors. There will be no relationship between the companies and the civil service. The companies will be free to employ such help as they need. So far as that goes, I do not think they will require large staffs.


Douglas Gooderham Ross: Will the board of directors be made up of government officials?


Clarence Decatur Howe: No.


Douglas Gooderham Ross: What representation will the government have?


Clarence Decatur Howe: The government is simply the body that owns the company.


Richard Burpee Hanson: Without divulging any information that might be inimical to the safety of the state, which is the highest ground upon which I can place it, could the minister state just why it is intended to have these commercial companies? If he will say frankly that he does not want to state this at this time, I shall not press the question. But it is such an unusual departure from the ordinary method of doing government business and spending government money that perhaps some little justification is necessary.


Clarence Decatur Howe: In one or two particular cases there is a reason which I think my hon. friend will appreciate from what I have already said. There are operations which cannot be conducted in the white light of publicity if they are to be conducted successfully.

But in the larger sense it is simply a question of a way to get work done, of bringing into the service of the government people who are capable of doing highly specialized work but without making them in a sense civil servants. We can find business men who have demonstrated over the years that they are well able to operate a company successfully but who are perhaps not in a position to give up their ordinary business and move their place of residence to Ottawa and work here. They perhaps could not-I doubt if they could-carry on the functions I have in mind under a departmental set-up, working through a deputy minister and a minister.


Richard Burpee Hanson: They do
not like the red tape. That is about it.


Clarence Decatur Howe: It makes things unworkable
if there is too much of it.


Richard Burpee Hanson: Yes.


Clarence Decatur Howe: There is only a certain amount of business which you can put through that sort of channel. This will allow us to decentralize and to do work outside which can very well be handled by a company. It will enable us to put certain work into the hands of responsible business men who, after all, are always subject to the owners of the company and to government audit. We can get work done in that way which it would be difficult to get done as well by other means.


Richard Burpee Hanson: One more-question. Will these government-owned corporations come into competition with privately-conducted business institutions? If they will, I suggest to the minister that he should withhold his hand, because even in war-time I do not think the government ought to set up-competition to established private industry.


Clarence Decatur Howe: There is no suggestion of
that so far as any corporation contemplated to date is concerned.


Richard Burpee Hanson: I did notthink so.


Karl Kenneth Homuth: Is it not a fact that these special companies have been set up for the purpose of assisting private industry?


Clarence Decatur Howe: Quite so; that is the purpose.


Grote Stirling: This resolution asks parliament to extend the powers of what was at first a board, now a department, which has been in operation only for a matter of weeks. Last year we passed from the ordinary departmental purchase of munitions to a defence purchasing board, then to a munitions board; and in September parliament passed this act. but the department came into operation only

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in April. It deals with large matters, and the public of necessity is ignorant as to how it is working out. We are gradually obtaining information. A great deal of business is passing through the department, and undoubtedly there must of necessity be criticism, based in part on lack of information. That information we shall receive if we are able to consider and discuss the bill amending the act which incorporates the department; in the light of that information we can give the bill more intelligent discussion.
There are matters such as the rapidity with which contracts are issued. The minister may be able to give the house a very good reason for the time which it now takes to get a contract finally through. There are also matters connected with getting information to firms or individuals who desire to do business with the department. Canada is a large country and of necessity difficulties must be involved in getting information into the hands of individuals at the far ends of Canada that such and such materials are required. The suggestion has been made in my hearing more than once that it might be possible to follow the custom used in the last war in another country, of issuing from time to time the definite items which will be required in contracts shortly to be let. By spreading that information throughout the country the opportunity would be given to comparatively small firms and individuals to offer their services. These are matters which it seems to me we can discuss far more intelligently if the main explanation and discussion of this measure comes on the second reading, after we have had an opportunity of seeing the bill.


Clarence Decatur Howe: It is not my intention to go beyond the resolution and first reading to-day. On the second reading of the bill I shall be glad to have the officers here to help me give the fullest information.


Karl Kenneth Homuth: When will the bill be considered? Will it be on Monday, or Tuesday?


Ernest Lapointe: Not before Tuesday.


Clarence Gillis: Mr. Chairman, there are a few remarks I should like to make on the resolution. I understand that the Minister of Munitions and Supply (Mr. Howe) is charged with the responsibility of letting contracts necessary to our war effort. While we believe that the minister is carrying out his duties as head of that department to the best of his ability and in the best interests of the country, there are times when we are sceptical whether he is receiving the cooperation necessary to a
proper war effort from people who are benefiting and making profits from these contracts.
In view of the fact that the resolution concerns possible amendments to the act to clarify and extend the powers of the minister, I wish to take this opportunity to draw to the attention of parliament and the government the aspirations of labour in connection with the matter now before the committee. Again and again in this house members of the group with which I am associated have called upon the government to conduct our war effort in such a way as, first, to protect the interests of the common people of this country, and, second, to preserve and strengthen democracy at home at the same time that we are fighting for its preservation on the battlefields of Europe.
As I pointed out in my first speech to this house, two fundamental bulwarks of democracy are trade union organization and the cooperative movement. To-day I am concerned with the first. I believe I express the hopes of all organized labour, whether national or international, A.F. of L. or C.I.O., when I appeal to the government to introduce into the act a provision which will safeguard labour's right to organize.
Discrimination against workers on the ground of trade union activity is wrong at all times and in all industries. This government recognized that fact when it accepted and adopted an amendment to the criminal code which was first introduced in this house in 1936 by the national leader of the Cooperative Commonwealth Federation, the member for Winnipeg North Centre (Mr. Woodsworth). Such discrimination it seems to me is even more inexcusable in war time when government war contracts are being awarded.
I make this appeal not only on the basis of general principles but on the basis also of confidential information which has come to my notice as to discrimination against employees in plants producing war materials for the government. One such particular case I wish to draw in some detail to the attention of the government, because it will illustrate the point I am trying to make. This case concerns an employee of the John Inglis company of Toronto, by the name of Walter Camm.
We understand that the Bi'en gun contracts of the John Inglis company form the major portion of the firm's business and are largely controlled by the Canadian government from the department of defence. Certain labour organizations in the summer of 1939 were informed that the application form for employment in the John Inglis company was so worded as to indicate that the company was opposed to organized labour.
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Photostatic copies of this application form were secured and when the question dealing with union affiliation was pointed out to representatives of the federal Department of Labour in the city of Toronto and an inquiry made as to why this clause should appear in an application form, the departmental representatives took the matter up with the management of the John Inglis company. The answer given through the department to the labour organization was that" this clause had been put in the application form in order to guard against "subversive elements".
I wish to stop for a moment at this point to protest and warn against the application of the term "subversive elements" to legitimate trade union activities. Spokesmen for my group have already stated clearly that we recognize the need for dealing with those who would interfere to the benefit of our enemy with this country's war effort at the present time. But if the democracy we are fighting for is to retain any reality the organization of trade unions must remain and be recognized as a legitimate and legally protected activity of the workers.


Alphonse Fournier: Order. The Speaker of the house
called attention to-day to a rule which should be followed in debate, that an hon. member should not read his speech. I am informed that the hon. member is reading his speceh.


Clarence Gillis: I should like to make this clear. I am attempting to place before the committee a matter of considerable importance to the Minister of Munitions and Supply which has been drawn to my attention within the last few days. I do not want to overstate the case. I want to be absolutely sure of the details I am giving to the committee and, particularly, to the minister. For that purpose I have taken notes on the matter; I wish to be sure that I am stating the facts clearly and not taking chances on my memory.
This specific case proves conclusively that the company is practising discrimination against organized labour. I stressed in the first attempt I made to address this house that one of the most essential considerations so far as the government and the country as a whole are concerned is the recognition of the rights of labour. You can mobilize industry as effectively as you like, but if the people employed in that industry for the purposes of production are not treated as citizens of this country should be and are unable to exercise the rights of that democracy we say we are fighting for, the result will be greatly to retard Canada's war effort. I repeat that my only object is to bring forward

this particular matter without misstating the facts. It was drawn to my attention by responsible trades union authorities in Ontario, and I want to be sure that the details are given to hon. members as they were given to me.


Ernest Lapointe: May I make a remark to my hon. friend? He is doing very well without reading. I suggest that he might use his notes for purposes of reference, without actually reading them.


Clarence Gillis: I was attempting to state the circumstances of this specific case of discrimination. It is one which I think should be closely checked. In the present situation, when a contract is awarded to a firm or an organization of any kind, we recognize the seriousness of the crisis and we admit that equipment is at this time the most necessary part of our war effort. These contracts are awarded in order to secure that necessary equipment, and when incidents arise such as the specific case which I have attempted to set out, it is evident that we are not receiving the cooperation of the people who are obtaining, on the basis of profits, the benefit of these contracts.
The term "subversive elements" can be seriously abused and, in my opinion, is being abused in Ontario at the present time. Members of the legitimate trades union movement are so classified because they attempt to set up organizations under the laws of the country. Employers of labour who are neither patriotic nor interested in this country, other than to exploit it, use the term "subversive elements" with the object of keeping labour beaten down to a point where they can exploit them and make two hundred per cent profit on the operation of a contract which the government gives them.


Richard Burpee Hanson: Does the hon. gentleman suggest that there are any employers in this country who are making two hundred per cent profit by exploiting labour? If there are, I should like to know who they are, and this parliament, I believe, without regard to class or party or anything else, will get right after them.


Thomas Clement (Tommy) Douglas: Has the leader of the opposition read the John Inglis contract?


Richard Burpee Hanson: Well, I know something about it. I do not think it amounts to two hundred per cent. It is bad enough.


Clarence Gillis: I say that if the democracy we are fighting for is to retain any reality, the organization of trades unions must remain

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and be recognized as a legitimate and legally protected activity of the workers. Those who would interfere with such legitimate trades union organization are the elements which are creating disharmony and resentment at a time when harmony is needed.
Subsequent to the incident of the application form a number of requests for union organization were received by union officials. Substantial progress had been made, when an employee of the company who had taken a prominent part in negotiations at the request of his fellow employees was dismissed by the management. When the employee inquired as to the cause of dismissal he was told that he was unsatisfactory.
Further inquiry as to whether his work was satisfactory or whether the dismissal was for other reasons was answered by the company official with the same statement, "You are not satisfactory to the company." Subsequent to the dismissal the matter was drawn to the attention of the Department of Labour, who made inquiries on behalf of the discharged employee, and they were informed that the man's work was satisfactory, that he had not been dismissed for union activities, but engaged, as the company were, in the production of munitions, it was necessary that they should have confidence in all their employees.
What was their reason for not having confidence in this man? It would seem that the mere fact that this man took a prominent part in the attempt to organize the employees of the company was sufficient for the management of the company to lose confidence in him.
I should like to make it clear that to-day this man is under a cloud. He has a wife and family. The company let him out because they "have not confidence" in him. The conception the average man would get is that this employee is one of the "subversive elements", that he is a fifth columnist. At the same time, according to my information, the company refuses to divulge to the Department of Labour why he was dismissed. He cannot obtain employment, and he is roaming around Ontario under a cloud. It seems to me that the least that this company should do is to divulge to the appropriate department of the government why he was dismissed. If he is a fifth columnist and dangerous to this country in the present situation he should not be at large. If, on the other hand, there is nothing against him except the exercise of his right as a citizen to bargain collectively in accordance with the laws of this country, he should be reemployed. And in this particular case I do not view Major Hahn or the John Inglis company as the employer,
because the government subsidizes this operation and paid for all the equipment, as I understand it, which makes the operation possible. For that reason I consider the government is in the position of employer, and Mr. Hahn or the John Inglis company is merely an agent of the government in this connection. I regard it as a prerogative of the government to do justice in this matter; particularly is it the affair of the Minister of Munitions and Supply, as he is charged with the responsibility of seeing that we are supplied with the equipment which this company is turning out.
Further representations to the Department of Labour were made. Department officials agreed that the answers given to their inquiries by Major Hahn were not satisfactory and that further inquiries would be made. Considerable correspondence took place on this matter and the case was dragged out for a period of more than two months. In the meantime the employee in question was unemployed and suffered greatly as a result of his discharge. The Minister of Labour in replying to a final inquiry stated that so far as the government was concerned they had no inquisitorial power and therefore could not inquire further. In view of the seriousness of the action of the John Inglis company in this matter, as it has been represented to me, I believe that either the Minister of Munitions and Supply or the Minister of Labour should give this house a full explanation of this case.
As I stated earlier in my remarks, I cited this case to illustrate the need for a provision in the act which will place the minister under an obligation to guarantee the workers the right to organize in plants producing war equipment for the government and which will also give him the power to enforce such a guarantee. It is my opinion that the case which I have just brought to the attention of this committee is a scandal. As we all know, public money was poured into the setting up of the plant of the John Inglis company as well as the production of the Bren gun. If the original terms of the contract are being carried out the company is receiving a very fair profit indeed on this contract. In such circumstances it seems to me clear that it was the duty of this government, of the Department of Munitions and Supply and of the Department of Labour to ensure that the workers employed by that company are given the full right to organize in trade unions of their choice if they so desire. Such a general obligation and power should be included in the act now under consideration.
Several times since the outbreak of war all the bodies of organized labour in Canada have publicly offered their full cooperation to
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the government in its war effort. I know they intend to implement that promise in practice. But organized labour has the right to expect in return that its rights will be safeguarded and that the employers of labour will cooperate, at least to the same extent.
I understand the Minister of Munitions and Supply, through this resolution, is asking for a clarification and extension of his powers, and I think the case cited here to-day is an absolute and specific instance. I am satisfied that his powers should be extended and clarified and that he should have the right, when contracts are placed, to see that the workers in the industry concerned are able to exercise their rights as far as trade unionism is concerned, and he should be given the power to see that this provision is enforced.


Clarence Decatur Howe: Does my hon. friend speak for organized labour as a whole when he says that he would like to see the Minister of Munitions given jurisdiction over labour?


Clarence Gillis: I did not say that. Speaking for myself, I said that in my opinion his powers should be extended and clarified, and if he is permitted by the government to pass upon and to award contracts in certain operations in the country he should also be allowed to extend his power so as to see that workers' rights are protected in the particular operation, to the extent of carrying out the laws of the country in regard to collective bargaining. And he should be given the authority to see that the operators comply with the regulations in this regard. He should have the right to enforce his authority to see that the rights of workers are recognized in the matter of bargaining collectively and signing collective agreements in any particular operation.


Clarence Decatur Howe: I have heard other labour leaders express very different views in the matter. The consensus is that everything having to do with labour should be retained in the Department of Labour.


Thomas Clement (Tommy) Douglas: The minister has not met the point made by the hon. member. The hon. gentleman is not suggesting that the Minister of Munitions and Supply should take over the powers now vested in the Department of Labour. The government could work out the technical details, but the minister should have the power in letting contracts to deal with the particular question now under consideration. There are certain minimum wage clauses at present in contracts; certain rights are recognized. Those rights can be extended. The government can also insert in the contract the provision that the

men employed shall have the right to organize in the union of their choice and that the men in any particular trade should be allowed to bargain collectively with the employer, and those who get the benefit of the contract should not be allowed to use the exigency of the war as an excuse for preventing their employees from bargaining collectively or from organizing a union in a particular shop or an industry. There is no reason why the Department of Labour could not insert such a provision in these contracts. I understand that the department has already put in a clause with reference to minimum wages. Why not insert one with reference to collective bargaining on the part of men employed in industry?


Clarence Decatur Howe: The federal statutes already give labour that right, and labour is aware of it. It is made a criminal offence for an employer to interfere.


Thomas Miller Bell: But the amendment to the criminal code is weak in some particulars. Here you have a concrete case-and we know of others-where men who are active in trying to organize their fellow workers are dismissed ostensibly because they are not satisfactory to the company; and yet every one knows it is because the company refuses to have labour organized in the plant. We are anxious to see to it that the relationship that has been brought about in Great Britain, and which I heard the Right Hon. Ernest Bevin discussing from London over the short-wave radio last night, should be brought about here. During the war we should not be subjected to various labour disputes and strikes, and if we are to avoid that kind of thing, then companies like the John Inglis company, if they are doing this sort of thing, as I presume they are, ought to be disciplined by the government, particularly when they are handling government contracts. Unless employers of this type are brought to time we shall be faced with labour disputes which will seriously interfere with our war effort. The hon. member for Cape Breton South has brought this question to the attention of the house because he is anxious, as we all are, that these disputes shall not arise. If Major Hahn's policy is carried out, however, there will be labour disputes and internal difficulties and we do not wish to see such occurrences.


Ralph Melville Warren: While the hon. member for Cape Breton South was speaking I was wondering if he had ever met the type of workman who talks himself out of any job he has ever got. Most of us know that type of man. I do not know anything about the particular person the hon. member has been

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talking about, but I do know individuals who, although good enough workers, can never get a job with a private company or corporation without invariably talking themselves out of it just because they begin to make trouble among the other workers. There is no private employer of labour who will willingly tolerate that sort of thing if his men generally speaking are satisfactory, are doing their work willingly, are getting along well, and are happy and satisfied. When such a condition exists, then one man comes along and immediately starts to agitate and to make trouble, and it is no wonder that such a man eventually finds himself unable to get work with private employers of labour in his own neighbourhood. He is the type of fellow the government sometimes find clamouring for work on government jobs of one sort or another. He is the type of fellow that eventually finds himself wandering from place to place under a cloud, seeking employment and not finding it. In many instances the blame lies not at all with the employer of labour but with the individual himself. Who can blame employers of labour when they find their whole operation disorganized because some individual will persist in agitating and causing trouble, no matter where he may land a job?


William Pate Mulock: Since the question of the Bren gun has come up this afternoon, I wish to refer to one matter the public is interested in more than anything else. I do so because when I was in Toronto last week-end responsible people mentioned to me that rumours were current throughout the city that there was some difficulty which was retarding production of the weapon. Instead of devoting our time to disputes of that sort, which surely could be ironed out by the Minister of Labour (Mr. McLarty), at a time like this we ought to be getting down to business in order to expedite the delivery of supplies not only for the use of the dominion's troops but for our allies who have appealed to us, in the words of President Reynaud which we heard this afternoon. If the statements made to the effect that the Bren gun is not being turned out properly, that it is not operating efficiently, are not correct, those responsible for them should be interned and prosecuted, because they are undermining the morale not only of the Canadian people but of the Canadian soldiers who are going to use that weapon to fight for us. Will the minister make a statement as to the correctness or otherwise of the rumours which have been abroad during the last few weeks?


Karl Kenneth Homuth: Surely in this debate we will not discuss again the question of the Bren
gun or anything in connection with it. Whatever debate there was on that subject, it is over. We are trying to get on with the business of the country.


William Pate Mulock: It is a question of rumours that are going around along that line, and I think the hon. member will agree that if those rumours are not correct, the sooner the people know the fact the better.


Major James William Coldwell: We have not heard those rumours this afternoon.


Richard Burpee Hanson: I have no desire to intervene in this debate or to discuss the question from the angle brought forward by the hon. member for York North (Mr. Mulock). He is twenty-four hours late. We were discussing yesterday the resolution of the Minister of Justice (Mr. Lapointe) with regard to the defence of Canada regulations. The hon. member stayed at home too long over the week-end.


William Pate Mulock: I was in the house.


Richard Burpee Hanson: I did not see the hon. gentleman. The hon. member for Cape Breton South (Mr. Gillis) has raised an important principle. We are living now in the nineteen-forties. I think the hon. gentleman to my right who spoke a moment ago is still living in the nineteenth century. This country has recognized, as I think all sensible employers of labour have come to recognize, the principle of corporate or collective bargaining among the labouring men of the country. I have a confession to make. Years ago I opposed the organization of the employees of corporations with which I have been associated, first in a legal capacity and subsequently as a director, and I am bound to say that after a careful review of the whole situation, and without having any thought or idea of its importance to or bearing on my political fortunes, I have reversed my position. I am in favour of the theory of collective bargaining and have urged my clients and the corporations with which I have been associated to agree to the principle. I realize, in reading history, that the labouring men have never got anywhere in the endeavour to improve their position in Canada, and particularly in the old country, until they had some kind of organization to speak for them. Labour organizations are like other organizations; there are good ones and bad ones. In the United States they have gone too far. Labour over there has endeavoured to take governments by the throat, to dictate the election of presidents, and also to dictate national policies. That is beyond their pin-view.
Munitions and Supply Act

But to come to the concrete question which the hon. member for Cape Breton South has raised, here is a company which was set up to build a war machine for this government and the British government and for nobody else, and it is public money that is going into it- nobody else's money so far as I know. A proper relationship should be established since it is public money that is being spent. The government of Canada has recognized this principle for a long time. We passed legislation establishing the eight-hour day in dominion public works. I tried to help get through other legislation with respect to social services which would be of assistance in ameliorating social conditions among the workers of Canada, but that legislation was ruled ultra vires by the courts of the country. So far as unemployment insurance is concerned, Canada is at least five years too late in making a start. I do not say that such a scheme will cure unemployment, but it will certainly alleviate the conditions of unemployment. The opposition was challenged by hon. gentle-nen across the way.
That is an old story now; but to come back :o this very point which the hon. member :or Cape Breton South has raised, if I apprehend what the complaint was, it was in effect ;hat Major Hahn of the John Inglis company vas carrying on a system of sabotage against organized labour in that industry, which has its being to-day by virtue of the expenditure of public money. I do not agree with that, and I ask the Minister of Labour (Mr. McLarty) to look into the matter in the interests of the country and-for the most part among the best citizens we have in Canada-the genuine trade unionists. There are others, but the genuine trade unionists in my town are among the best citizens we have there. I am for the principle of collective bargaining; I do not care who knows it. If I am unable to carry this party with me in it, well and good; but that is my view and I think the government ought to see to it that Major Hahn and the John Inglis company do not carry on a system of sabotage against their employees on the theory that they will drive unionism out of that institution. The complaint may not be well founded. The minister should not be asked to go very far- certainly not as far as some hon. gentlemen to my left are asking-in incorporating provisions in contracts already executed and under way, but he should look into the matter and see to it that this company at least is carrying out the laws of the land both federal and provincial.
TMr. R. B. Hanson.]


Clarence Gillis: An hon. member asked me whether I had ever met the sort of man who talked himself out of a job and who would not work. I can answer in two ways. You will generally find the men who will not work, at the head of corporations. The second classification, covers the man who talks himself out of a job. Yes, I have met such men too, the men who pioneered the way for trade unionism, many of them classified as agitators and driven from one end of the country to the other, the sort of men referred to this afternoon as those who talked themselves out of jobs. To men of that kind go the credit for every bit of progress in this and every other country in the world. I have talked myself out of several jobs, too, organizing the trade union movement, but torday I see it established one hundred per cenit in the province in which I lost those jobs. So I lost nothing in the end. I am proud of that activity, as every man who has taken that position is proud. These men understand the road they are travelling and are prepared for whatever repercussions there may be.
The man whose case I took up this afternoon-and I took it up on the authority of a person in whom I have all the confidence in the world-is not that kind of man at all. I understand he is a master mechanic, one of the best qualified men in Canada to carry on the work of the plant from which he was dismissed. All he did was ask that the laws of this country be recognized by those carrying on the operation of that plant. It has been stated in this house that men with these qualifications, specialists in industry and so on, are very badly needed, that there is a great shortage of them in Canada to-day. That has been admitted by the ministers of different departments. Here is a fully qualified man who is now on the road simply because he wants to exercise his rights as a citizen in this year of grace 1940.
I think the day is past when actions of this land should be permitted in this country. I have every hope that the Minister of Munitions and Supply (Mr. Howe) will do something about this matter now that it has been brought to his attention. In my opinion the Department of Labour has gone as far as it can go by way of legislation. I understand that it has had this matter under consideration for a couple of months, but apparently it is not able to do very much about it. So I wanted to bring the matter sharply to the attention of the Minister of Munitions and Supply, because he deals with these people

Munitions and Supply Act
directly in connection with their contracts, and, I believe, will be in a better position to force them to take some action.


Robert Wellington Mayhew: The hon. gentleman
(Mr. Gillis) who has just spoken has certainly not talked himself out of a job; apparently he has talked himself into a very nice job as a member of this house.


Clarence Gillis: That is my reward for past
activities.


Robert Wellington Mayhew: I do not doubt that the
hon. member deserves it. Although I am a manufacturer and an employer of labour, I am also in favour of unions. My plant is organized, and I have always encouraged my employees to organize. I ask only one thing: that those who are sincere in trying to promote the best interests of the men take an active interest in that organization. So I have no quarrel with my hon. friend. I am quite in agreement with him when he says he would like to see all our plants unionized.
I cannot agree, however, with the man who will deliberately state in this house that the manufacturers of Canada are looking for any 200 per cent profit at this time. Last week I attended the meetings of the Canadian Manufacturers' association in Winnipeg, and I venture to say there is not a plant in Canada of which this government could not take control to-morrow without giving any remuneration whatever. This morning I had the pleasure of offering, on behalf of some of the men of my province, their services, their money and their factories without asking one dollar in return. They are willing to take their money out of their pockets or out of their banks-what is left of it-and all they ask is the capital return. When my hon. friend says that the manufacturers are looking for a profit of 200 per cent, I say that is an indictment of our Minister of Finance (Mr. Ralston) if he brings in a budget that does not make provision for the odd man who wants to graft on the country at this time. It is not a question of whether the Minister of Finance should take twenty per cent, thirty per cent, forty per cent or fifty per cent of the excess profits; he should take every dollar of them. No honest Canadian citizen should come out of this war one dollar better off than he was when it started.
I would say to my hon. friend, however, or to anyone else who rises and asks for his rights in Canada to-day, whether he be an employer or an employee: Will he get his rights if Hitler comes over here and takes charge? If that should happen, he will do
exactly what he is told. If I were in the saddle to-day in this country, both labour and industry would do exactly what they were told, until the war was over.


Howard Charles Green: Are the government taking any responsibility for the training of skilled workmen for our war industries? One hears from time to time that there is, or is apt to be, a shortage of skilled labour. It would be interesting to know whether the government have anything in mind along the line of helping to train men for this special work.


Clarence Decatur Howe: There has been a long debate in this house on the resolution brought in by the Minister of Labour which I thought pretty well dealt with that question. I may tell my hon. friend, however, that there are various training plans. I hardly think it comes under this resolution to deal with those plans in detail, but there are a good many of them, all having the same end in view.


Howard Charles Green: Does the minister mean under the government, or private training plans?


Clarence Decatur Howe: There is assistance given to private plans, and there are provincial plans assisted by federal grants.


Richard Burpee Hanson: Grants in aid from this government?


Clarence Decatur Howe: Yes.


Charles Edward Johnston: I have something to say in connection with the training of mechanics, but I do not want to go into the matter in detail at this time because the minister has given the assurance that the question will be taken up in greater detail on the second reading of the bill. For that reason I have not said very much about that matter, but I think there should be a definite plan for the training of men. The minister has referred to several plans which are now in operation, but in my estimation they are not up to the standard at all. I can see clearly that in the near future we are going to have a very much greater demand for trained mechanics. I had the privilege of studying some of these plans, and I want to tell the minister that such plans as I have studied are not at all adequate to meet thy great necessities we are about to face. I should like to go into that in greater detail a little later on, but I think the minister would be well advised to consider the suggestion advanced by the hon. member for Victoria, B.C. (Mr. Mayhew), who spoke a moment ago.
From what I have seen I am quite convinced that the sort of training which is being given
Munitions and Supply Act

is not conducive to the best results. It is entirely too elementary. I have been in contact with quite a few principals of technical schools, in this and in other provinces, and I have found that almost without exception those schools are prepared to go to any lengths to assist the government to train mechanics who will be able to step right into these munition plants, aeroplane factories and so on, and carry on efficiently. So far as I know, that is not being done at the present time. I think the government would be well advised to see what can be done in conjunction with these technical schools, in order that the graduates of these schools may give greater assistance to industry than is at present the case. I know from the communications I have had with the principals of these schools that they are only too anxious to cooperate with that end in view. When the bill is up for second reading, I shall want to go into this in more detail because I think there are certain matters that should be straightened out. I believe the minister would be well advised to see what could be done in connection with the further training of mechanics.


George Hugh Castleden: I was quite pleased to hear the statement of the hon. member who spoke for the manufacturers' association. Apparently we have made a great step forward, and I am quite sure we are going to get some action soon. The minister stated in September 1939 that not one contract offered by the war supply board was accepted with the five per cent limitation. Perhaps the hon. member should explain the reason for that, or would the minister make a statement?


Clarence Decatur Howe: A good deal has been said about that limitation. It has been stated that the limitation of profit was five per cent of the cost of the product, but that was not the case. As my hon. friend knows, the limitation was five per cent of the capital employed in production. That is a very different matter. In practice that limitation proved to be so indefinite and complicated that no contract was accepted with the limitation. I may say that all the supplies the Department of Munitions and Supply have purchased since this war began have been produced at a profit which I am sure does not exceed five per cent.


Douglas Gooderham Ross: Under the bill to be brought in, will the minister have the power to carry on the training of men should a shortage of labour occur? When the labour resolution was before us, I asked the Minister of Labour (Mr. McLarty) to make a statement. Possibly the Minister of Munitions

and Supply could tell us what cooperation there is between his department and the Department of Labour in connection with this matter.


Clarence Decatur Howe: I thought I had taken all the powers there were, but if there is any power not in the bill I shall be glad to include it following the suggestion of my hon. friend.
Resolution reported, read the second time and concurred in. Mr. Howe thereupon moved for leave to introduce Bill No. 41, to amend the Department of Munitions and Supply Act.
Motion agreed to and bill read the first time.


AGRICULTURAL PRODUCTS
[Stage Direction]
Hon. J. G. GARDINER (Minister of Agriculture) .moved the second reading of Bill No. 24, to amend the Agricultural Products Cooperative Marketing Act, 1939.
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-Cooperative association.
Pierre-François Casgrain: I move that paragraph (b) of scetion 2 of the bill be amended by deleting the words " delivered to it for sale " and substituting the words " produced by the aforesaid primary producers ".


Mark Cecil Senn: This puts the act back where it was before. There are certain objections to the bill as it stands at the present time. It seems to open up a large field and change the intention of the act. As I understood it, the act was intended to enable the primary producers to market their products by cooperative efforts, but this bill as it is would open up an entirely new field. Cooperative associations could be set up and take in and market any kind of goods, and they would be guaranteed against loss. I am glad to know that the minister has changed the wording back to the original form of the act. This act should be for the purpose of enabling the primary producers to market their own goods by cooperative efforts.


James Garfield Gardiner: That is why I asked to have this paragraph amended.


Mark Cecil Senn: What was the reason for the paragraph reading as it does?


James Garfield Gardiner: The proposal came from officials of the department who are administering the act. They felt that certain of

Agriculture Cooperative Marketing Act
these organizations would like to bring in under the operations of the act certain products that might be delivered to them for sale. It *was felt that those products could be handled under the same set-up as was provided for the handling of products delivered by producers who had organized. When this matter was brought before me later on, I pointed out just what has been pointed out now by the hon. member for Haldimand, and the result was that it was decided that the section should be changed back to its original form. The bill had already been printed and other changes would have been required in order to have the wording of this section apply to other following sections, so this method was thought to be the most simple.


Richard Burpee Hanson: The minister would say that this is a case of ill-digested legislation.


Mark Cecil Senn: The minister has been wise in making that decision. The history of cooperative efforts in this country has not always been good. Cooperative organizations have been set up and have carried on successfully for a number of years. In some instances it was decided to broaden out and handle other products, and the result has always been that they got into deep water. I commend the minister for changing the bill back to the original form.


Thomas Clement (Tommy) Douglas: Could we be clear about the amendment? As we understand it, the words "delivered to it for sale" are being struck out and other words substituted.


James Garfield Gardiner: "Produced by the aforesaid primary producers."


Mark Cecil Senn: The same as it was before.


Thomas Clement (Tommy) Douglas: The term is used "under a cooperative plan." Would it not be wise to define somewhere in the act what is meant by a cooperative plan? What is to prevent any line elevator company from taking delivery of goods from a group of producers and marketing those goods for them?


James Garfield Gardiner: Paragraph (c) of section 2 of the original act defines "cooperative plan" as "an agreement or arrangement for the marketing of agricultural products which provides", and so forth, and then it goes on to define further.


Thomas Clement (Tommy) Douglas: I did not bring the act with me, and I do not recall the exact wording that follows. But a definition is provided?


James Garfield Gardiner: Yes, in the original act, but not in this amending act.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 3-Cooperative plan.
Mark Cecil Senn: A new principle is introduced in this clause as well; that is, allowing cooperative organizations of primary producers to set up reserves. What is the reason for such action? I doubt very much whether it is wise for cooperative oganizations, after having sold farm products, to set up reserves of any kind. It might very well be said that the total income of any cooperative organization should be divided among the producers. After all, the personnel of any cooperative organization changes from year to year, some of the members perhaps dying, some moving away and other new members coming into the organization. If these reserves aTe set up, those who drop out of the organization after having consigned their products to the cooperative for sale will not get a just return for those products consigned to the producers' organization. It seems to me there must be some motive behind it beyond what appears on the surface.


James Garfield Gardiner: There is no other motive, as I understand it, except the one mentioned by the hon. member, namely, to give power to the organization to set up a reserve. As the act now reads, section 3 provides:
The minister may, with the approval of the governor in council, by agreement with a selling agency. . . .
Then it goes on to indicate what may be done, but it makes no provision for setting up a reserve. It has been thought wise in some organizations to set up a small reserve to take care of any possible loss that might occur if, say, two short term agreements are entered into in the one year, or if the cooperative decides to carry on into the second year and make a second agreement.


Karl Kenneth Homuth: It is rather a large reserve,
is it not?


James Garfield Gardiner: There is no particular amount set.


Karl Kenneth Homuth: It says "up to."


Mark Cecil Senn: Will there be a limit set to the amount of reserve? Unless the minister has some jurisdiction over the cooperative organization, it might set up a very large reserve. I cannot yet see any reason why a reserve should be set up at all. It seems to me to be establishing the principle of putting this whole cooperative idea on a commercial basis, where it should not be.
m	COMMONS
Agriculture Cooperative Marketing Act


James Garfield Gardiner: Section 3 of the present act provides that the minister may "by agreement with a selling agency." That is, all these matters are contained in the agreement. Subsection 2 of section 3 of the present act provides:
No payment shall be made to primary producers subsequent to the initial payment unless such subsequent payment is first approved by the governor in council.
There is provision made for covering costs, and this additional provision is being made for setting up reserves. The maximum of these costs and reserves would be set in the agreement.


Mark Cecil Senn: But the agreement provides that a certain amount up to 80 per cent of the average price for the past three years shall be guaranteed by the department or the minister at any time that a cooperative organization wants to organize and carry on. I point out that this is progressive. The average for the last three years may not be the average for the next three years, and if the organization continues to set up reserves from year to year, it will lower the average for the past three years, so that after the reserves have been accumulating for three years the average will be considerably lower. It seems to me, therefore, that it might work out finally to the disadvantage of the primary producer himself to have the average lowered by setting up these reserves.


James Garfield Gardiner: When we were discussing the resolution in committee I put on Hansard the details of the different agreements entered into under this legislation, which illustrate the point better than I could do it otherwise. The first of these has to do with honey, and the initial payment is three cents a pound. Then processing, carrying and selling charges-that will be costs now instead of selling charges-were two cents a pound. That was before the reserve was provided for. It was set at two cents a pound right in the agreement. The initial payments and the processing, carrying and selling charges amounted to approximately 55 per cent of the average price during the preceding three years. It has been the desire both of the cooperatives entering into arrangements under this act and of the department to see that very little risk of loss is taken, and for that reason in most instances the liability involved in the initial payment, plus the costs allowed-in this case it will be plus reserves as well-would not exceed the percentage of 80 per cent.	"


Percy Ellis Wright: Paragraph (iii) of this
section provides:
(iii) for an initial payment to primary producers of a percentage, not exceeding eighty per centum, approved by the governor in council on the recommendation of the minister, of the average price paid to producers according to grade and quality.
I think it would be difficult for the minister to determine the average price paid to the farmer according to grade and quality. In the alfalfa area in northern Saskatchewan there are a dozen different buyers buying alfalfa. How is the minister going to arrive at the average price paid to the producer? Why not retain the wording of the original clause and say the wholesale price? That could be obtained much more easily and it would be a higher price to the producer. Why was this change made?


James Garfield Gardiner: It will be noted that section 6 of this bill retains that wording, "the average wholesale price", which is the important point my hon. friend raises.


Percy Ellis Wright: Why not retain those
words in section 3? Why not say that "the average wholesale price" shall be used?


James Garfield Gardiner: This is the same as it was in the original act, which provides by subsection 3 of section 3:
In the event of a difference arising as to the average sale price under an agreement made under this section, the decision of the minister shall be final.
We, of course, examine the records in the bureau of statistics and any other records available with regard to the average price for the three years, and finally determine what that price has been. The final decision rests with the minister after examining all these records.


Percy Ellis Wright: That does not answer my question. Why is the wholesale price not used in this clause?


James Garfield Gardiner: The wholesale price
would not be the proper term to use here. We are concerned that the producer should have advanced to him, not 80 per cent of what the wholesale price happened to be, but 80 per cent of what the producer himself received during those three years. We are trying to give him an initial payment which will assist him in carrying on until he receives the final payment, and we say that the initial payment should be a certain percentage of the average price that he himself obtained during the preceding three years. That may not be the wholesale price, which is generally

Agriculture Cooperative Marketing Act
interpreted to be the price at which a commodity is turned over to the retailer and sold to the consumer.


Percy Ellis Wright: If the word " wholesale " were left in there, it would mean that the producer would get a guarantee of the highest price for his product.


James Garfield Gardiner: Well, he might.


Percy Ellis Wright: Therefore, I think, the word " wholesale " should be used.


Mark Cecil Senn: I assume that the receipts from the different grades in any cooperative organization will be kept separate and distinct from each other, and settlements will be made on that basis. The minister has mentioned two or three times that the decision of the minister will be final. No doubt the minister is too busy to go into all these details himself. I should like to know what machinery has been or will be set up within the department to look into these matters, advise the minister and give him proper information.


James Garfield Gardiner: The whole organization connected with the marketing branch of the department is available to deal with matters of this kind; and of course, as the hon. member has suggested, I must rest my decision on the information which they gather for me.


Mark Cecil Senn: Has any particular person or persons been designated in that marketing branch to undertake this work?


James Garfield Gardiner: In so far as contact with myself as minister is concerned, Mr. A. M. Shaw, the director, is the person who determines what the recommendations to the minister will be, and I act upon the recommendations.


Mark Cecil Senn: What machinery is there for
auditing the books of these different cooperative organizations so that a report may be made to Mr. Shaw to be carried by him to the minister?


James Garfield Gardiner: All these companies are compelled, under the arrangements made with them, to have a proper audit by a reputable auditing concern. My information is that an audit of a properly constituted auditing firm is usually accepted. If we have any question about the matter, it would be checked by the government auditors themselves.


Mark Cecil Senn: Who pays for the audit?


James Garfield Gardiner: The cooperatives pay
for the audit.


[Stage Direction]
Section agreed to.
Sections 4 and 5 agreed to.
On section 6-Payment to selling agency.
Pierre-François Casgrain: That section 3 (1) of the act as amended by clause six of the bill be further amended by adding thereto the following proviso:
provided further that the agreement may include a provision that the minister may on such notice as he deems fair and reasonable require that the delivery of an agricultural product to a cooperative association, processor or selling agency shall be discontinued with the result that the minister shall not be liable in respect of any agricultural product delivered to the cooperative association, processor or selling agency after such requirement.


Ernest Edward Perley: Would the minister explain that?


James Garfield Gardiner: The explanation is the fact that the clause "together with the actual processing, carrying and selling costs" was inadvertently omitted from section 3 (1) of the act, and the Department of Justice were obliged to rule that the agreements were invalid because they did not comply with the act. The fact is that the agreements were valid according to the intention of the act; it was the act itself which was in error. To anticipate possible losses, it might be as regards onions, furs, or any other products of these cooperative organizations, it was thought best to have this provision put in the bill this year in case there might be some payments to be made.


Percy Ellis Wright: With regard to section 6
of the bill, I take it to mean that if a grower delivers a No. 1 grade to a cooperative association, and it is sold at a profit, and a grower delivers a No. 3 grade article to the cooperative and it is sold at a loss, the profit made on the No. 1 grade may be used to make up the loss on the No. 3 grade. Is that correct?


James Garfield Gardiner: Mr. Chairman, my
reading of the section would be the very opposite of that. It would be that each one of these different grades will form a separate deal, and if there is a loss in connection-with any one of them, we are liable to pay.


Percy Ellis Wright: That is as it should be,
but when I was reading the section I took it to mean the contrary.


James Garfield Gardiner: Wrhich part is the hon. member reading that meaning into?


Percy Ellis Wright: The latter part:
. . . the amount ... by which the initial payment . . . exceeds the average wholesale price . . . computed on the amount of the agricultural product of such grade or quality so delivered; provided that, in determining the average wholesale price of an agricultural product, the minister may . . . require that
800	COMMONS
Agriculture Cooperative Marketing Act
any excess over the initial payment and costs in the sales account of a particular grade or grades shall be applied against any deficit in the sales account of any other grade or grades of such product.


James Garfield Gardiner: The proviso at the end does provide that; that is correct.


Mark Cecil Senn: Then it seems to me that the minister, in his former statement in answer to a question I asked on section 3, must have been in error. I asked him distinctly if the income or proceeds from each grade were to be kept separate and distinct and if people who put in a No. 1 grade, for instance, would be paid on that basis. Now we find under this particular clause that, if there is any loss, if the goods sell for less than the guaranteed price, the person who puts in a No. 1 grade, although it may realize a substantial profit, will be penalized on the lower grades if they happen to make a loss. It seems to me that is an unfortunate situation, and the minister rather misled the committee in making that statement.


James Garfield Gardiner: The statement is, I
should say, partly correct, but in certain circumstances it might not be. If there is no loss in any of the grades that are provided for, of course they will all be pooled separately and carried right through and the initial payment will be made based on the different grades; then, when the final payments are made, they will all be made, again, on the basis of the grade. But if there should be a loss on one particular grade, and a profit in connection with another grade, under this proviso the minister has the right to determine that the loss in the one grade should be made up from the proceeds of the other grades before a distribution is made.


Percy Ellis Wright: That is entirely wrong,
because it penalizes the man who is growing the No. 1 product, in favour of the man who may have a No. 3 product. The different grades should be separate all the way through the pool, so that the man who produces the No. 1 product shall receive what it is sold for; and if there is a loss on the sale of the product of the man who has a No. 3 grade, the department should take the loss, not the man who is growing the No. 1 grade.


Mark Cecil Senn: We should have this matter straightened out in some way. I understand a guarantee is made that a certain percentage of the average price for the past three years will be given by the department. May I ask the minister if the percentage will vary for the different grades? Is it intended that .he same percentage will be for the average
'Mr. Wright.]
price of all grades for the past three years, or will there be a guarantee of price for each separate grade?


James Garfield Gardiner: The intention will be so to fix the variation as to provide against this situation arising. This bill does not cover wheat. Someone mentioned elevators in connection with it. Wheat is covered in the bill that came back from the senate to-day, but the principle has been fairly well established in the handling of wheat. Wheat has been graded over a long term of years. The board meet at the beginning of the season and determine the spread between the different grades. Sometimes they make mistakes, and in this instance it is possible that the departmental officials or others drawing up agreements with officials of the cooperative might make mistakes. The cooperative themselves may have a wrong idea as to what the spreads will be throughout the year, and at the end of the season it may be necessary to sit down again-or it may be in the middle of the season-and consider the situation, when it might be determined that there was too wide a spread between certain grades. The hon. member for Qu'Appelle (Mr. Perley) will be familiar with the experience of last year in connection with wheat, and in setting the spread between No. 3 and No. 4 or, say, between No. 1 and No. 4. The spread was set wider this year on the basis of last year's experience, and that has turned out not to have been the proper thing to do. This makes provision whereby the minister may adjust matters towards the end of the season. It will not result in any particular hardship in the sense that in most instances persons will be delivering products of different grades, and where injustice has been done to those who are delivering, say, a higher grade product as compared with a lower, or vice versa, there is a possibility of correcting any mistakes made, although this is not compulsory-the minister "may" do it.


George James Tustin: That is one of the things about which the minister should be very careful, making it compulsory that every one of these articles is paid for according to grade. For the last number of years we have been spending large sums of money endeavouring to get agricultural producers to grade commodities ; we are now reaching the stage where that is beginning to count, and if we go back in this particular case it will do much to disrupt the work already done in the grading of agricultural products.

Agriculture Cooperative Marketing Act


Mark Cecil Senn: I do not think the minister
has drawn a good parallel between wheat and these other products. After all, it is the average price over the past three years on which the guarantee is based, regardless of the spread there may have been in that time. That was the point I was trying to raise. If a guarantee of a certain percentage of the average price of grade No. 3 is made, the department should undertake to carry that out, and if a percentage of the average price of No. 1 is guaranteed, the government should be prepared to carry that out also without penalizing the man who is producing No. 1 quality goods by asking him to meet some of the losses sustained in connection with No. 3. However, I am not going to labour that further.
There is another matter in regard to which I should like to have some information. I refer to the words underlined in line 20 on page 2 of the bill. The minister moved an amendment to the definition of "cooperative association". The word "processor" opens the way again for the very thing he was trying to avoid in the definition of "cooperative association". "Processor" might mean any of the packing companies or any of the milling companies. I do not think the minister intends to guarantee the packing companies or the milling companies of the country that they will be paid a percentage of the initial price. I give this only as an instance. There are a great many processors throughout the dominion who might take advantage of this particular clause, and it would to a great extent nullify the original intention of the act, that only cooperative associations of primary producers should enjoy the benefits of the act.


James Garfield Gardiner: The original act contained the term "selling agency". We have had communications from quite a number of cooperative organizations that were already set up. They had their own selling agency, their whole organization built up, with the agency as part of it. The act was interpreted last year by legal authorities as meaning that anyone concerned, whether cooperative processing plants, or whatever it -might be, entering into an agreement, had to go through the process of setting up a central selling agency; and in order to avoid that, power is given here to enter into an agreement with the one cooperative already set up under provincial legislation. We have not dealt with any cooperative except those that are set up under some form of organization which incorporates them. When we deal with that organization we can make an arrangement directly with that cooperative.
Take a processing plant such as a cheese factory. As I understand, cheese factories in Ontario are largely set up on what is to all intents and purposes a cooperative basis, and processing plants of that kind, one or more of them, could enter into agreements under this particular legislation. Then we have processing plants, such as the Barrie packing plant, which is a farmers' cooperative. We could enter into an agreement with that one plant as it now is; and if under the legislation as it now is, it were thought advisable for the packing plant, which itself may not be organized on a cooperative basis but which may be prepared to enter into an arrangement, to handle all the hogs of certain groups of farmers within a certain area, they might be allowed to make use of their plant for the purpose of processing and marketing the product on a pooling basis. In that event we might be prepared to enter into an agreement. Again, I would call attention to the fact that this legislation only gives us power to enter into agreements, and we enter only into agreements that carry out the spirit of the act as indicated in the defining clause.


Mark Cecil Senn: I am not at all satisfied with the explanation. The minister just stated that it only gives the department power to enter into agreements in accordance with the defining clauses of the act. There is no defining clause of the word "processor" that I can find. It seems to me a dangerous experiment. If there were a packing plant in a locality, the minister suggests they could make an arrangement with a group of farmers to process and sell their product. No doubt that packing plant would be doing other business in goods purchased outright, and it seems to me it would be difficult to keep the records separate. I am afraid that the word "processor" as used there should be defined.


James Garfield Gardiner: Paragraph (f) of section 2 of the act defines it.


Mark Cecil Senn: In any event it seems to me a dangerous experiment.
I wanted to ask the minister a question about section 4, not for the sake of criticism, as he understands. The section reads:
(d) "initial payment" means the sum paid, or credited for merchandise delivered. . . .
That would lead me to believe that these cooperative corporations not only may be merchandizing their own product but will be purchasing agents for these same farmers who are members. I have always felt that the farmers should first learn to merchandise their own products successfully before they try to merchandise the production of others.
802	COMMONS
Agriculture Cooperative Marketing Act


James Garfield Gardiner: That is the intention, but some cooperatives that are operating want to enter into arrangements to follow the practice of furnishing certain supplies to their customers.


Mark Cecil Senn: And the minister intends to allow that to continue. Is there any provision made for determining the value of the goods that are exchanged for the products intended to be sold?


James Garfield Gardiner: None other than this, that before entering into an agreement with a company of that kind the department would satisfy itself that these producers are satisfied with the treatment they have received from that organization.


Mark Cecil Senn: Is any provision made whereby there will be no compulsion exercised, that is, that a member of the organization delivering, say, a bunch of hogs or a quantity of honey would not be compelled to take goods in exchange? It seems to me it would be a dangerous thing for the government to guarantee prices under any such conditions.


James Garfield Gardiner: I cannot conceive of an agreement being entered into where there was any complaint whatsoever by producers as to a clause of this kind. The provision for accepting credit would probably not be put in unless producers desired to have it that way.


Mark Cecil Senn: If it were voluntary, there would be no objection.


Thomas Clement (Tommy) Douglas: Would the minister explain the term "wholesale"? The committee will notice that prior to this time the initial price was 80 per cent of the average sale price. Under this amendment it will be 80 per cent of the average price to the producer. That is, the payment will be made on the basis of the difference between the wholesale price and what the cooperative association has paid to the producer. I imagine the minister means by the wholesale price the price the association receives when it sells the producer's product.


James Garfield Gardiner: That is right.


Thomas Clement (Tommy) Douglas: There is no provision in section 2 for a definition of " wholesale price ", although I notice the minister is to have power to determine what the wholesale price is. Would it be better to have a definition of " wholesale price " and say it is the price that the cooperative association will receive for the products of which it disposes?


James Garfield Gardiner: I do not think it would be possible to define the wholesale price for all the different products that might be dealt with. The act does, as suggested by the hon.

member, give to the minister, which means on the recommendation of the officals of the department, the power to determine what the wholesale price is for any product dealt with. I think that is about as far as we could go.


Thomas Clement (Tommy) Douglas: It will be equally difficult to determine what the average price paid to the producer will be. When we come to the next section, the minister might give some idea how that will be determined.


James Garfield Gardiner: I do not know whether the hon. member was in his seat a few minutes ago when I stated the method that has always been followed and that will have to be followed in determining the price the producer obtains. We have our bureau of statistics in Ottawa which is furnishing statistics all the time indicating what producers do receive for different types of products; that is where we would probably go for our information. In other cases where there is not a record here, there is likely to be a provincial record dealing with a product which might be produced entirely in one province. We would go to whatever government record we could find, whether federal, provincial or municipal, in connection with such a product.
Our main reason for retaining the price received by the consumer in the clause in that other section is twofold. In the first place we are paying the producer an initial advance as against the price he is eventually to receive. For that reason we think that is the proper basis to take when we are setting the initial payment to the producer. Then there is the further reason, that it renders the liability of the government less, which we always take care of in legislation of this kind.


Thomas Clement (Tommy) Douglas: I think the same argument would apply when it comes to determining the wholesale price. I suppose that in few instances would the wholesale price be less than the initial price. But there will be a problem of administration. If, instead of the wholesale price, the minister could set up the average price which the cooperative associations have received, and the payment if necessary that had to be paid would be the difference between that average price and the initial price.


James Garfield Gardiner: The wholesale price
stated here is determined after the facts; it is a matter of record in the books. We have access to those books, the actual wholesale price will appear in the books, and that is what will be taken.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Section 7 agreed to.

Agriculture Cooperative Marketing Act
On section 8-Minister may prescribe with approval of governor in council.
James Garfield Gardiner: There is an amendment to that.


Pierre-François Casgrain: I move:
That clause 8 of the bill be amended by striking out the words "the minister may make regulations prescribing," in the fifteenth line, and substituting therefor the words "the minister may prescribe".


Mr GARDINER:: As originally drafted, the bill set out that the minister, with the approval of the governor in council, might make regulations in certain cases, set out under paragraphs
(a), (b), (c), (d), (e), (f) and (g). Some of those obviously were not matters of regulation; they were matters in which the minister might prescribe. Where the act states that with respect to any agreement under it the minister may with the approval of the governor in council prescribe, it sets out those cases in which it requires the approval of the governor in council. Under the act as we have it drafted, the minister may make regulations prescribing; but where the approval of the governor in council is not required, it is not felt necessary to say that the minister may prescribe only by regulations. He may prescribe by regulations, or he may prescribe without regulations.


[Stage Direction]
Amendment agreed to.
Pierre-François Casgrain: I move that the section be further amended by striking out paragraph
(d)	of subsection 2.


James Garfield Gardiner: That gives the minister
the same power which was given previously to the minister with the consent of council; the power remains with the consent of the governor in council.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Section 9 agreed to.
On section 10-Payment of liabilities under the agreement.
Mark Cecil Senn: Is there any provision for the winding up of the year? Is there any provision for surpluses that may accumulate; and what will be done in case there is a surplus at the close of any year? Will settlement be made only when everything is disposed of?


James Garfield Gardiner: That is taken care of in the agreement which is entered into. In some instances the agreements are not for the full year. Some of the agreements entered into this year already have been paid out, final payments having been made.


Mark Cecil Senn: Supposing at the end of the term of the agreement there is a surplus on hand. What disposition will be made of that, or is there any provision for looking after a matter of that kind?


James Garfield Gardiner: There is not supposed to be any surplus unless it is set up in the form of a reserve, as provided for earlier in this amending legislation. The whole amount obtained for the product is supposed to be paid out as a final payment.


Mark Cecil Senn: Did I understand the minister to say that if any surplus is left over at the end of the agreement period, it will constitute the reserve that was provided for?


James Garfield Gardiner: No, but there will be nothing carried from one year into another unless it is under the provision for a reserve. The end of the agreement will come at some particular time, and any of the product still on hand will be sold out and payment made to the individual producers. That is, I would not anticipate that this product would be carried into a further pool, but if it were, it would be covered by the second agreement.


Mark Cecil Senn: Provision is made that no final payment can be made until the minister consents. Would the minister then say that if a surplus is carried over into the next year, no final payment can be made until that surplus is disposed of?


James Garfield Gardiner: It might work out in
that way. It would depend on what gave the best protection to the individual producers involved in the agreement. There is just the possibility that some products which may be sold on option are disposed of in that way, and the full value which the producer can obtain will be realized on the day the year winds up. If all the money can be obtained it can be distributed, but if the surplus product is to be carried for perhaps a month beyond the end of the year, I do not imagine that you could make a final payment until the product was all sold.


Mark Cecil Senn: I do not want to carry on the discussion too long, but is there any provision for bad debts? Is there any provision for promissory notes which may not be due at the time of the final disposition? It seems to me many of these matters might interfere with the final payment, and I believe the situation should be clarified.


James Garfield Gardiner: That would all be provided for in the agreement and in the audit. The minister would not give consent to final payment unless all those matters were cleaned
European War-France

up. That is the very reason why it is left with the minister to determine finally when that payment should be made.


Pierre-François Casgrain: I move that section 10
of the act, as contained in section 10 of this bill, be deleted.


James Garfield Gardiner: That is the provision
that the act comes into force on a date to be fixed by proclamation.


Karl Kenneth Homuth: Will it come into force
on receiving royal assent?


James Garfield Gardiner: The act is in force now.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Bill reported.

William Lyon Mackenzie King: Mr. Speaker,
this morning while having a word with my hon. friend the leader of the opposition (Mr. Hanson) I mentioned to him that, the situation in Europe being what it is at the moment, I should like to have my colleagues meet me this evening. If hon. members would not object, therefore, I would move that we now adjourn. We have had a strenuous week; I have no doubt that hon. members feel the intense anxiety of the moment, and probably they will be agreeable to adjourning now.
Motion agreed to and the house adjourned at 6 p.m.
Monday, June 17, 1940