REPORTS OF COMMITTEES

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Second and final report of special committee on defence of Canada regulations.-Mr. McKinnon (Kenora-Rainy River).
Sixth report of standing committee on agriculture and colonization.-Mr. Weir.

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(Questions answered orally are indicated by an asterisk.

Mr. COLD WELL:: 1.	Has an airport been built at Gimli. Manitoba?
2.	Who has the contract?
3.	What amounts have been paid for, (a) fencing, (b) clearing the land of brush, (c) excavating, (d) surfacing, (e) erection of buildings?


Mr. RALSTON:: 1.	Construction now under way.
2.	Bird Construction Company.
3.	(a), (b), (c), (d) Accounts have not yet been received covering actual expenditures. The projected cost of aerodrome development is $1,113,500.
(e) The estimated cost of the proposed buildings is $1,276,600, but the contract has not yet been let.


PURCHASE OF LAND IN POINTE CLAIRE PARISH,. QUE.-RENTAL TO AIR FORCE FOR MANNING DEPOT
Mr. MARIER:: 1. Did Mr. A. G. Houghton purchase from Ames Dawes Realty on the 7th of May, 1941, a farm bearing the following numbers: 197-198-

External Affairs
That it is expedient to amend the Department of Externa] Affairs Act to provide for the application of the Civil Service Superannuation Act to certain diplomatic or consular representatives.
Motion agreed to and the house went into committee, Mr. Fournier (Hull) in the chair.


Mr. MACKENZIE KING:: I will make the same explanation at this stage that ordinarily I would make on the motion for first reading of the bill. This explanation is one which will be found in the explanatory note forming part of the bill which will be introduced later.
Under the existing constitutional practice, appointments as ministers plenipotentiary, as consuls general and as consuls are made by His Majesty the King. Since the beginning of I93S there have been three appointments of Canadian permanent civil servants as ministers plenipotentiary and three appointments as consuls. The Department of Justice has ruled that, upon appointment as a minister plenipotentiary a civil servant ceases to be eligible to contribute to the superannuation fund, and there is some doubt as to the position of permanent civil servants who are appointed to consular posts.
In the case of the appointments as ministers plenipotentiary, the appointees were placed upon a lower salary scale than that which had been established for persons appointed from outside of the civil service with the understanding that they would be eligible or made eligible to contribute to and to receive the benefits of superannuation. There is one instance in which a permanent civil servant so appointed has since died.
It is therefore necessary to amend the Department of External Affairs Act so as to ensure that civil servants performing duties which involve appointment by His Majesty the King will not lose their status as permanent civil servants and also to enable such civil servants or the estates or the widows in appropriate cases to refund the appropriate percentage of their salaries for the period between the dates of their appointment and the coming into force of this act or, in the case of a deceased person, the date of his death.
In a word it means simply this that where appointments are made from the permanent civil service to- diplomatic posts, if the appointees had been contributing to the superannuation fund, unless this amendment is passed to the Department of External Affairs Act they will lose all the benefits of that fund. This is to enable an appointee from the service to sc diplomatic post to have refunded to the treasury the amount he would
have to make by way of contribution to get the benefits of superannuation at the end of his term.


Mr. CHURCH:: I see no necessity for any of these vast expenditures on external affairs, especially when there is a war on. This committee passed a draft estimate, and after it was passed a very large sum of money was run up by the government and the Minister of External Affairs in opening many of these new agencies which were already covered by trade commissioners.
We should have some economy in these matters connected with the Department of External Affairs. Many of these are only amateur diplomats who have had no training for their work. So far as this department is concerned, they are not functioning in the way they should be. I have in mind the one in Eire, and several others. It is bad enough in a time of peace to have divisions within the empire, but in a time of war it is even more fatal.
Some of these envoys and ministers plenipotentiary are causing untold strife among the dominions, and in addition to that they are interfering with the conduct of the war. Let us consider Washington, for example; we have a small expeditionary force there, in which there are representatives of the army, the navy, the air force, and even the women's army. They put on all the airs and manners of a nation of 75,000,000 people. Australia and New Zealand have not gone to that extent. Those people are here to-day and away to-morrow, because they will be changed with every change of government. So far as I can see, they have done little or nothing in Washington compared with what they should have done.
I am absolutely opposed to the extension of the principle of envoys and ambassadors, and the disregard of the fact that we are a nation of only around 11,000,000 people. I am opposed to this extension of the application of superannuation to these diplomats. This matter should be considered when the estimates are before the committee, and should not be put through in this form. There should be a vote before the committee of supply, and yet we' have not had a dollar voted by that committee. This is the 114th day of the session, and yet we have not considered one item in the Department of External Affairs.
Out of respect for the Prime Minister I do not wish to delay the progress of the resolution. I believe, however, we should pay heed to the handwriting on the wall and try to reduce our expenditures, because after all is said and done a man cannot learn to be an
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Mr. STIRLING:: I suggest that third reading be delayed until to-morrow.


Some hon. MEMBERS:: No.


Mr. POLTLIOT:: I am ready.


Mr. SPEAKER:: Standing order 77 reads:
All amendments made in committee are reported by the Chairman to the house, which shall receive the same forthwith. After report the bill is open to debate and amendment, before it is ordered for a third reading. But when a bill is reported without amendment, it is forthwith ordered to be read a third time at such time as may be appointed by the house.


Grote Stirling: May I direct your attention to citation 811 of Beauchesne, which in the latter part states:	.
The Speaker formally puts the motion for the second reading of the same, and if it is carried he says: "When shall the bill be read a third time?" and the answer generally is "next sitting of the house."


William Lyon Mackenzie King: I think the hon. member has stated the matter correctly when he says the answer generally is "next sitting of the house," but as a matter of right the house would be entitled to third reading at the present time.


Grote Stirling: That is so.


William Lyon Mackenzie King: However, I presume that if we proceeded with the third reading to-night we should not be able to conclude it, and in the circumstances I 'would regard it as preferable to proceed with the third reading to-morrow. In the interval between now and eleven o'clock we might get a few more of the departments into committee of supply, so that we may be able to proceed with them later on.


Georges Parent: When shall the bill be read a third time?


William Lyon Mackenzie King: Next sitting of the house.

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


DEPARTMENT OF NATIONAL DEFENCE
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Normal services.
180. Cadet services, $659,000.
Item stands.

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47. Departmental administration, $417,106.
Item stands.
Grote Stirling: That gives the government two more departments in supply, which makes ten departments now open. Surely

that should suffice for the present, considering that hitherto the examination of only one department has been carried on.


William Lyon Mackenzie King: My hon. friend understands that on Thursday, Friday and Saturday the rule is that a department must have been called previously, or its estimates may not be taken up. We are trying to conclude the session this week, I understand, though I do not know that we shall be able to do so.


Grote Stirling: Not a hope.


William Lyon Mackenzie King: But I would submit to my hon. friend that there is really nothing to be gained by not having all the departments in at once.


Grote Stirling: Oh, no; I do not agree with that.


William Lyon Mackenzie King: Then let us get in at least two more to-night.


Grote Stirling: I understand that someone on behalf of the government spoke to the leader of the opposition and mentioned two or three departments. I do not think I could possibly agree to more than another one, which would make eleven.


DEPARTMENT OF PUBLIC WORKS
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$59. Departmental administration, $194,450.
Item stands.
William Lyon Mackenzie King: My hon. friend will not agree to any more?


Grote Stirling: No. That makes eleven.



BUSINESS OF THE HOUSE

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Right Hon. W. L. MACKENZIE KING
(Prime Minister): We have a few minutes left. I wonder if the house would allow me to proceed a stage with the resolution having to do with the application of the Civil Service Superannuation Act to certain diplomatic or consular representatives. I should like to introduce the bill based upon this resolution. This is a very simple matter.
['On the point of order, I think I understand the rule. What I proposed to say would be entirely referable to section 3, which is the repealing clause, and if I must proceed under that section I shall be content to do so. But I thought that for convenience, and following the practice which has come to be almost universal, I might be allowed to do so on the short title. A moment ago I was not allowed by you, Mr. Chairman, to proceed. I am not finding fault with that, because certainly I have no great desire to see a prolonged debate upon this matter, but there are certain things I think should be said. I can say them under section 3 if necessary; for I have no doubt that under that section anything and everything would be in order that could be said about this bill at any time. If the committee will not grant me the indulgence of making my remarks on the short title, then I shall\n\nMobilization Act\na day or . a week or a month. You have to take a proportion of the profits for a year when the profit and loss account is made up, when the statement is prepared, and that must apply in the case of these companies.']
Grote Stirling: Is the Prime Minister proposing to make a statement in explanation?


William Lyon Mackenzie King: Yes, I shall make a statement.



[Stage Direction]
Right Hon. W. L. MACKENZIE KING (Prime Minister) moved that the house go into committee to consider the following resolution:

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as for the defence of Temiscouata, andi I would ask you to tell the hon. member for Fraser Valley not to bang his desk.
Mr. CRUICKSHANK:: I will look after the member for Fraser Valley myself. When did I bang the desk?


Jean-François Pouliot: If I was mistaken in thinking it was the hon. member for Fraser Valley I apologize.


George Alexander Cruickshank: The hon. member had better apologize and try to keep order a little more.


Jean-François Pouliot: If what I have said is not absolutely according to the facts I am the first to offer an apology.
We think of Great Britain; she gives us a great example, an example of national defence which is real national defence. The British isles are now called an impregnable fortress. There are many Canadians over there who are there for the defence of that country. How is it that those who are always prone to call themselves good Britishers are not following the example of Great Britain in having the same thing done in Canada as in Great Britain, in making Canada a fortress? Some will say that it is impossible. Even a member of parliament has gone to the United States to tell the people there that the war should be decided outside this continent. I do not recall now his exact words, but that was the meaning. Now we shall hear some say that we have to defeat the enemy wherever he is, and the farther away the better for this country. That theory could be accepted only if we had a certain guarantee that Canada would not be invaded by the enemy before the end of this war. That guarantee cannot be given. It cannot be given by the Minister of National Defence. It cannot be given even by the Prime Minister. When I asked him that very question at the time the Scharnhorst and the Gneisenau had been getting out of French ports, I got no answer. I was told that my question was inconsiderate, that no one should ask such a question. How is it that there is such a blackout of intelligence, not to realize what the situation is now? We have the enemy right at our doorstep, and the admission of the Minister of National Defence for Naval Services that German submarines have been sinking allied vessels in the St. Lawrence. It seems to be enough. It is not considered at all.


The CHAIRMAN:: Shall the sections 2 and 3 carry?


Some hon. MEMBERS:: Carried.


Jean-François Pouliot: No, sir.


Thomas Vien: Those in favour will
please say "aye".


Some hon. MEMBERS:: Aye.


Thomas Vien: Those opposed will please say "nay".


Some hon. MEMBERS:: Nay.


Thomas Vien: In my opinion the ayes have it.
Sections 2 and 3 agreed to.
On the title.


Thomas Vien: Shall the title carry?


Jean-François Pouliot: No, Mr. Chairman.


Thomas Vien: Carried.


[Stage Direction]
Title agreed to.
Thomas Vien: Shall I report the bill?


Jean-François Pouliot: No, sir.


Thomas Vien: Those in favour will kindly say "aye."


Some hon. MEMBERS:: Aye.


Thomas Vien: Those opposed will kindly say "nay."


Some hon. MEMBERS:: Nay.


Thomas Vien: In my opinion the "ayes" have it.


Jean-François Pouliot: This is a most unusual procedure.


Thomas Vien: Not at all.


Jean-François Pouliot: It is worse than closure, because with closure you can at least speak for twenty minutes.


Thomas Vien: In my opinion the "ayes" have it.


Mr. LACOMBE:: On section 3, Mr. Chairman-


Thomas Vien: Section 3 is carried.


Liguori Lacombe: Section 3 is not carried.


Thomas Vien: I am sorry, but it' is carried.


Liguori Lacombe: It is not carried.


Thomas Vien: It has been carried.
Bill reported.


Georges Parent: When shall the bill be read a third time?


Some hon. MEMBERS:: Now.


Jean-François Pouliot: I wish to speak on the third reading.

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the question, now, because we are entitled to know whether the working or the operation or the application of the act of 1940 has been successful. What I find strange is that as soon as something is decided by this house, ns soon as some legislation is passed by the house in one direction, the opposite is done. The purpose of this legislation was the defence of Canada within its own boundaries, and it was after the fall of France that the government decided to establish conscription for home defence. But it was never for home defence; the object was to bring boys to camps where they were submitted to high pressure in order to induce them to enlist for service overseas.
I listened with interest and sorrow to the remarks of the hon. member for Stormont (Mr. Chevrier). He is one of the best debaters in this house, and he has sugar-coated pills. But he knows very well about what happened at Cornwall, though no one objected to his remarks. He knows very well that there was no camp in regard to which the complaints were so numerous. I do not want to be unfair to anyone; I do not want to be unfair to the commanding officer of that camp, because perhaps he was following closely instructions he had been receiving from higher officers in the Department of National Defence and was bound to execute those instructions. Nevertheless I had numerous complaints. I have not so many friends in that part of the country as the hon. member for Stormont, but I have seen young soldiers coming from that camp at Cornwall who told me that the difference between rice soup and rice pudding was that little raisins were floating in the rice pudding, and so on and so on. But that is of no importance whatever. These are frugal men, and they do not insist so much upon the quality of the food that is offered them. Still they were subjected to a thing that is the cause of divorce; I mean mental cruelty. Those who were unwilling to enlist for service overseas were treated differently; they were made to wash the floors and so on. They had no better treatment than was accorded the winner of the Victoria Cross *whom I brought to the committee the other day and who was cleaning spittoons in the house. I regret very much that during the last twenty-five years no one has taught the" children what a hero is and who were the heroes of the last war. There were published some expensive books which nobody read; but the little boys and girls in the schools were not told of the prowess of the men, which was the honour and glory of the heroes of that war.
There is now another call for recruits. I have here a large French newspaper, the largest in America, La Presse of Montreal,

and on the front page of the second section there is a news item of wide interest. Not only 15,000 recruits are to be called, not only 25,000. but 100,000 are to be called shortly, probably before the end of the year. I will translate that news item, which is of wide interest:
Thirty thousand recruits will be called in Quebec.
Of the 100,000 young men who will be called in service from August, in the whole dominion, it is believed that approximately 30,000 will be from the province of Quebec, we learn from an official source to-day. Medical classes A and B, and the classes from twenty to thirty years of age will be called. We have already observed that some young men of the twenty-year class have already received their notice.
The need of men in the army is more and more urgent and it is on account of that that there is such a call en masse. Nevertheless, if we consider that 30 to 40 per cent of the recruits are refused as unfit for military service, that number will not in fact be so large.
To come to what I said in the first place, after the Minister of National Defence went to London in the winter of 1940-41 and spent some time there, he undoubtedly made a pledge on behalf of this country to the British government. What was the number of Canadian men that he pledged to Great Britain on that occasion? No ope knows. I have asked, but I have never obtained that information. The minister referred to it at one meeting at which two federal members were present, in the railway committee room of this building, some time after the adjournment of this house. Not only were we not informed of the number of men that had been pledged by the Minister of National Defence, but we were never informed as members of parliament that the Minister of National Defence had pledged men to Great Britain on that occasion. He told it at a meeting where there were many officers and only those two members of parliament; no other member of parliament was there, and I am surprised that my colleague and I have been kept in ignorance of what was done in England by the minister during that winter.
The number of men requisitioned by the Department of National Defence is twice the number that was required after that trip of the minister to Great Britain. What were the other commitments of this government or of any other member of this government to the British government with regard to the sending of men from Canada to Great Britain? We see that a certain number of men are called at certain periods, but we do not know the basis for that call.
Mr. Chairman, what I am saying now is just as much for the defence of Fraser Valley

Mobilization Act


Thomas Vien: The hon. gentleman has the floor. Will he kindly address the committee on sections 2 and 3?


Jean-François Pouliot: Yes, sir. As I have already said, the case is different with the department for naval services and the department for air on the one hand, and this department of militia on the other hand, because the minister for naval services and his colleague the minister for air indulge in recruiting in the normal way, by posters, certain propaganda and so on, but it is not at all the same system which binds the Department of National War Services and the Department of National Defence. If the Minister of National Defence for Naval Services-and I regret that his colleague the Minister of National Defence for Air is not here at present -needs men, the only way for him to get those men is through propaganda, by putting advertisements in the press that we need men for the navy. Similarly the Minister of National Defence for Air will advertise that we need men for the air force. But the Department of National Defence proceeds otherwise; and when it has not enough men, those fellows who are high-ranking officers, and many of whom have never been to any theatre of war either in the last war or in the present one-a fact which I am not going to withdraw, because it is established in a return and is well known to all hon. members- may make a requisition in the same fashion as they requisition for Bren guns or anything else: "We need 2,000 Bren guns; we need 2,000 men, 10,000 men, 25,000 men, 30,000 men." They do not consider the effect of that order on men from the farms, from industry, lumberjacks, and so on. As the Prime Minister pointed out to me, in June, 1940, they do not consider at all the effect of taking those men away from their occupations, from the munitions plants, from railways, from everywhere. They do not consider that at all. They say, "We need so many men and the men must come", just the same as they must have their Bren guns, or caps or uniforms or long coats or anything else. That is one thing.
Another thing I want the Minister of National Defence to tell this committee is what pledge he made in London when he was there in the winter of 1940-41; what pledge of men, Canadian men, not to the British army but to the English army; I would say first to the English army, and in the second place to British army. The minister may say that I do not know my business, but I take the trouble to read the publications of his department, and I have enough friends in the army who inform me
about what is going on. In fact he has never denied specifically any statement I have made with care and with proof in hand. During the last war there were four divisions, and it took all the man-power of Canada at the time to fill those four divisions. We are now making a war effort which is much more considerable than that of the last war. I am credibly informed that we have eight divisions, and therefore the number of men who are expected to fill those eight divisions should be twice as many as those who filled the four divisions during the last war. This may be denied, but I know that it is true. Therefore, since we had 600,000 men under arms during the last war, and since we nearly exhausted the manpower of our country at that time, if we double that man-power effort now the number of men required from this country in the three branches of the armed forces will be at least 1,200,000. It is impossible for us to send that number of men overseas when there are practically none to defend this country now. The Prime Minister stated in reply to one hon. gentleman opposite that the time was not ripe to submit the question of confidence to this house, and I maintain that it will not be opportune to do so unless the defence of this country is completed and assured. Therefore the government will have ample time to consider the matter, and I hope that no such order will be passed before the population of Canada is defended as it should be. Some of my hon. friends opposite and some on this side of the house are of the opinion that it should be done right now, and they have expressed their views in that regard. I respect such views when they come from one like the hon. member for Lambton West (Mr. Gray), who is a returned man, who went through the last war. I cannot conceive how anyone who is not a veteran of the last war and whose children are not all serving under the colours can say that he is in favour of conscription of others for service overseas. But conscription for home defence is the duty of every born Canadian and of every man born outside Canada who has made Canada the country of his choice.


Thomas Langton Church: Will the hon member permit a question before he concludes? Would he object to adding to the notices to be sent out in Temiscouata county a clause that the whole bill is dedicated to the honour of Ethelred the Unready?


Jean-François Pouliot: I agree with my hon.
friend on that; nothing is done with regard to defence. It is proper that we should discuss
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Mr. FRASER (Northumberland, Ont.):: On a point of order, Mr. Chairman, should this chamber be subjected to a continual tirade by any hon. member reflecting on the headquarters staff or the office-s in charge of his majesty's forces?


Jean-François Pouliot: I think the point of order is childish.


Thomas Vien: I think an hon. member can under sections 2 and 3 state why he is or is not in favour of these provisions. These two sections refer to the National Resources Mobilization Act. There is sufficient connection between the bill before us and the National Resources Mobilization Act to justify references with respect to the general administration of that act. But I would call the attention of hon. members to the desirability of restricting such remarks as much as possible. We are not called upon to pass the mobilization act anew.


Jean-François Pouliot: It is most difficult, Mr. Chairman, for anyone to make an argument when he is subjected to interruptions from hon. members who have not read the rules shortly before rising.


Thomas Vien: Order. We are now on sections 2 and 3, and my ruling has been given.


Jean-François Pouliot: I know that. I am just explaining the difficulty I have now. I am not complaining about the Chair.


Thomas Vien: I understand, but I think we should proceed with the study of sections 2 and 3. These sections purport to remove the restrictions which were imposed by the act to the effect that no mobilization of man-power for service overseas could be ordered. Under this bill, if it is enacted, these restrictions will be removed. That is the gist of these two sections, to which the remarks of hon. members should be directed.


Jean-François Pouliot: I cannot do so, sir, unless I show how that mobilization is effected now.


Thomas Vien: I must confess that I cannot see how remarks about the mummies of Egypt and the brass hats, and comparisons between high officers of the Department of National Defence and the mummies of Egypt, can help the committee.


Jean-François Pouliot: Then I will not continue.


Mr. RALSTON:: I will ask that the hon. member be ordered to withdraw.


Jean-François Pouliot: No, Mr. Chairman.


James Layton Ralston: I am getting entirely sick-


Jean-François Pouliot: Well, be sick, and go.


James Layton Ralston: -of hearing a man who knows nothing about service overseas-


Jean-François Pouliot: I know more than the minister does, because of his total ignorance.


James Layton Ralston: rising in his place and talking about men who have served overseas. The army council is composed of four men all of whom have seen service overseas, and is headed by the chief of the general staff, who has a Distinguished Service Order and a Military Cross to his credit.


Jean-François Pouliot: What about the V.C. who
works here?


James Layton Ralston: It is about time that remarks of this kind ceased, about men who are serving their country well and faithfully.


Thomas Vien: It is out of order in any debate in the house to make offensive remarks with reference to His Excellency the Governor General, judges of the high court, or other high officials of the crown.


Mr. MACKENZIE (Vancouver Centre):: It is citation 305.


Thomas Vien: Therefore I think the hon. member should eliminate from his speech any such remarks, particularly when these high officers are not here to defend themselves.


James Layton Ralston: I ask that the hon. gentleman be requested to withdraw his remarks.


Jean-François Pouliot: No, sir.


James Layton Ralston: I do not care whether my hon. friend says "no" or not; I am not interested.


Jean-François Pouliot: I am not going to withdraw for John de Kuyper gin.


Thomas Vien: On the point of order which has been raised, I must ask the hon. member to withdraw the offensive remarks he made concerning high officers of the Department of National Defence.


Jean-François Pouliot: To my great humiliation, sir, I bow to your decision. Now I want the minister to sit down. I have the floor, and I do not want to be interrupted by anyone, especially by those whom I have to inform about the working of their departments- especially, John de Kuyper gin.	*
This is the way in which requisitions are made for national resources, material and men. The officials of the Department of National Defence, and by that I mean militia only- if the hon. gentleman cannot speak to answer my questions, Mr. Chairman, will you please tell him to keep silent when I speak?

Mobilization Act
regulations, 1941", which were drafted in virtue of the mobilization act. Section 8 in those regulatons gave the minister power to extend indefinitely for the duration of the war the training period of conscripts, draftees or recruits.


James Layton Ralston: The service period.


Jean-François Pouliot: Yes, the service period. In virtue of the first two orders in council it was training that was required from the conscripts; afterwards it was service. This means that the extension had been made by a stroke of the pen by the minister. The regulations passed by order in council gave him the discretion to act as he wished. Since the orders in council were made public by insertion in the Canada Gazette, why did the minister not proceed in the same manner in announcing his decision regarding the extension of training from four months to the duration of the war? I understand that the order of the minister appeared in the Canadian army orders but was not made public to the Canadian people. In fact that decision of the minister was first announced by Colonel Panet in Montreal, two days, I think, before the minister mentioned it. Why did the minister not inform the Canadian public of his decision earlier, and in the future will orders in council passed by the government by virtue of the mobilization act appear only in army orders or will they be published in the Canada Gazette as soon as they are made?


James Layton Ralston: My hon. friend was referring to the four months training?


Jean-François Pouliot: I am speaking of the two orders in council, one extending the training from one month to four months, and the other extending the four months training to the duration.


James Layton Ralston: I cannot throw my mind back to say just how the announcement was made, but I know that it was made in the most public fashion possible, either by a statement issued to the press or at a press conference. I have a very clear recollection that one change that was made, and I think it was this one, was announced in a statement made by the Prime Minister himself. I think it was in connection with the four months training that the Prime Minister issued that statement, and I have a half-recollection that it included an indication that the men called up would remain in the army after the four months training for the duration.


Jean-François Pouliot: The order in council of March 18, 1941, related to the four months training, but it was only in the following
summer, on July 2, that the order regarding service for the duration was signed by the minister. I would tell the minister that I remember the circumstances very well, because that summer I made a scrapbook of what the minister had done and of things pertaining to his department. I remember distinctly that the first announcement of this order was made by Colonel Panet in Montreal, and it was two or three days afterwards that the minister confirmed what Colonel Panet had said. The first news was given by Colonel Panet in a somewhat haphazard manner. I know that my memory is correct, and I could substantiate it by evidence if I were strong enough to bring my big scrapbook to the committee to-morrow.
Another thing which one has to understand well is that the position of the three war departments is not at all the same. Those who enlist in the naval service or in the air force do so voluntarily. They are volunteers, sailors or airmen as the case may be, and therefore the Department of National War Services has nothing to do with the Department of National Defence for Air and the Department of National Defence for Naval Services.
It must also be understood, as indeed it is understood by every hon. member, that the Department of National War Services is the feeder for the Department of National Defence, to bring in more men for that department, men who did not enlist voluntarily in the army. The Minister of National War Services thus is the milkman for the Minister of National Defence, and he brings in cream, butter, eggs and milk, and in a very nice way. Men are requisitioned by the Department of National Defence, and that requisition for men goes to the Department of National War Services in the same way that requisitions for material from the Department of National Defence go to the Department of Munitions and Supply. The Department of Munitions and Supply is the feeder in material just as the Department of National War Services is the feeder in manpower and woman-power.
To understand it all well one must remember that the old school tie is strong at headquarters. I see my hon. friend the Minister of Pensions and National Health (Mr. Mackenzie), who was in the Department of National Defence for some time, smiling broadly. He knows I am telling the truth. One must also remember what is a mummy. A mummy is an old Egyptian person tied up in tape, and it is the same thing with the brass-hats in the Department of National Defence. They are like old Egyptian mummies tied up in red tape.
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others. By way of illustration may I give the impact of the agricultural regulations which were enacted and made effective as from March 24. The impact is greater in some areas than it is in others, and affects the pool of manpower to a greater extent in one administrative division than in another.


Mr. GREEN:: But how many notices will have to be sent out in order to get 25,000 men?


Mr. THORSON:: I was informed that in the Toronto division, for example, for the July call approximately 20,000 notices had to be sent out.


Howard Charles Green: To get how many men?


Joseph Thorarinn Thorson: To fill the quota for administrative division B located at Toronto.


Howard Charles Green: What is the quota?


Joseph Thorarinn Thorson: About 2,400 or 2,500 men.


Mr. ROSS (Souris):: I noticed in a press report not long ago that in one province it was necessary to call 10,000 men in order to fill a quota of 600; is that correct?


Joseph Thorarinn Thorson: I would prefer to have the actual figures before me. However, the figure varies in different administrative divisons by reason of the facts I set out a moment ago.


Thomas Langton Church: How many of the 25,000 would be allotted to each province?


Joseph Thorarinn Thorson: The requisition comes to the Department of National War Services from the Department of National Defence, and it is broken up into very great detail, indicating	the	various	training	centres	ordepots to which the men are to report. The desire is to fill the training facilities of the various centres as efficiently as possible. If there are not enough men available in one administrative division to fill the requisitions for	the	various	training	centres	or
depots in that particular division, then a call is made on a neighbouring division.


Mr. BOUCHER:: Would the minister give some further explanation of the point raised by the hon. member for Lake Centre wherein he stated that higher age groups are resorted to in some military districts than in others, when the call is sent out. A short time ago the Minister of National War Services stated that the pool of available men in administrative district C, covering that portion of eastern Ontario located around Ottawa and, I believe, a portion of Quebec, had been raised to a higher category. I understand 
that was done along with one or two other divisions in the dominion. I believe at the present time men in this division in their early thirties are being called, while in other divisions they are not being called in such high categories. I can appreciate that where there is some difference in the available men, the ratio of allotments for men required for military service may vary. But in this particular area, administrative division C, we have an agricultural district in which we are suffering from a great shortage of help. I know that in my community large quantities of hay will not be harvested because of the shortage of farm help.
That is a critical condition. If the department goes ahead and calls up men in their thirties, up to the age of forty in this division, it is going to leave a very critical situation, one which is even more accentuated than it is now. It is critical now, so far as farm help is concerned. I should like to have from the minister a more detailed explanation than we have heard to date as to why such a situation should exist.


Joseph Thorarinn Thorson: The reply to the hon. member is exactly the reply I made to the hon. member for Vancouver South. As the pool becomes less in any one division, naturally the age groups called go up.


George Russell Boucher: Would the minister
explain why the department raises the age group in a particular division instead of exhausting the already existing age group in another division, and filling up the quota in that way?


Joseph Thorarinn Thorson: Every single man or widower without child or children from twenty to forty in every part of Canada is subject to the proclamation.


George Russell Boucher: Subject to the proclamation, yes; but not actually being called. The result is that in some districts higher age groups are being called, while perhaps in a neighbouring district a smaller age group has not been exhausted. I should like to have an explanation of that point.


Jean-François Pouliot: I hold in my hand a copy of Hansard in which orders in council were explained by the Minister of National Defence for Air, a colleague of the Minister of National Defence. By P.C. 4904 of September 17, 1940, the period of thirty-days training was ordered, and that order in council wals published in the Canada Gazette. By P.C. 1910 of March 18, 1941, the thirty-day period was extended to four months, and that provision was also published in the Canada Gazette. Afterwards there were some regulations described as "reserve army special

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Mobilization Act than to the two sections now before the committee. The general administration of the act will come up for *discussion at another time. I do not believe the remarks of the hon. member are sufficiently relevant to the two sections now before the committee.


Mr. MacINNIS:: I did not think the points of order raised by the Chair this evening were well taken, because my understanding of this bill is that it amends the National Resources Mobilization Act, 1940.


Thomas Vien: In one particular.


Angus MacInnis: Very well. Section 2 of
this bill amends section 2 of the 1940 act, and in discussing section 2 of Bill No. 80, we must discuss it in relation to the other part of this section of the National Resources Mobilisation Act. Otherwise section 2 taken by itself does not make sense and1 has no substance. Sections 2 and 3 which the committee, I think wisely, have decided to consider together, make a whole; and everything contained in section 2 of the National Resources Mobilization Act is, I submit, a proper subject for debate at this time.


Thomas Vien: It might be shorter to
listen to the remarks of the hon. member.


Angus MacInnis: Yes. However, I do not wish to debate the matter further. I will take it up, possibly in a more satisfactory way, with the Minister of National War Services.


Joseph Thorarinn Thorson: I shall be very glad to
satisfy my hon. friend as to the situation now existing.


Grote Stirling: I do not think the Prime Minister replied to the question of the hon. member for Lake Centre with regard to the intention of the government in the matter of the lottery. The remarks of the Prime Minister on March 24 were so distinct that I know a great many people in Canada have been wondering when the lottery system was going to be commenced. The right hon. gentleman said, at page 1566 of Hansard:
In other words, the age limit for compulsory service has been raised from 24 to 30. It has also been decided to select the men to be called up for service by drawing lots over the whole field of those who are subject to the proclamation. As soon as the necessary administrative arrangements have been worked out for this plan of selection by lot, a detailed announcement will be made by the Minister of National War Services.
Has the government decided to give up the method of choosing by lot, or when does the Prime Minister expect it to be commenced?


William Lyon Mackenzie King: The information I gave to the house at that time came to me from the Minister of National War Services, who is in the house this evening and who, I understood intended to make some reference to the matter. I would ask him to do so now.


Joseph Thorarinn Thorson: I informed the hon.
member for Lake Centre that the system of selection by lot would not be in effect for the August call, and that I was not sure whether it would be in effect for subsequent calls. When the Prime Minister made the statement about selection by lot he further stated that detailed plans with regard to the change from the former system would be announced by the Minister of National War Services when the administrative details had been worked out. I have found that the administrative details are more extensive than I had at first imagined. Furthermore, the call for the month of July, and the proposed call for the month of August, are substantial calls, and the various administrative divisions are concentrating their attention upon the important work of filling the requisitions that come from the Department of National Defence. The question of working out the administrative details, which are quite complicated in connection with the system of selection by lot, is being put aside for the time being. Whether it will be desirable to put such a system into effect in the light of all the circumstances and in the light of the heavy call is, as I indicated in my reply to the hon. member for Lake Centre, a matter which is under consideration.


Thomas Langton Church: Will the minister withdraw the lottery principle altogether?


Joseph Thorarinn Thorson: I indicated in my reply to the hon. member for Lake Centre that the question was under consideration.


Thomas Langton Church: You cannot beat Hitler with lotteries; he will beat you every time at that.


Howard Charles Green: Is there anything in the press report that in order to get 25,000 men it will be necessaiy to call 250,000?


Joseph Thorarinn Thorson: There has been some misunderstanding of the situation. The number of men who will be available in any particular division will depend upon the manpower pool still left there after all the various factors, such as voluntary enlistments which have already taken place in a particular division, and deferments or postponements for one reason or another, have been taken into account. I indicated earlier in reply to certain questions that the man-power pool available in some divisions was less than in
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done by a committee. I realize that it could not be done now, but I suggest that when we come back again such a committee be set up. They could also consider the regulations passed by the wartime prices and trade board. There is a great deal of misunderstanding in connection with those regulations, and it would help a great deal if they were considered by some committee of this house.


William Lyon Mackenzie King: The last part of the hon. member's remarks was rather reassuring, where he spoke of having a committee at another session. I have a certain sympathy with his outlook and1 would1 be inclined to consider carefully in the interval what steps might be taken to meet his wishes. But I would not think it advisable to attempt such a committee at this session.


Howard Charles Green: Yes; I realize that, and said so.


Thomas Langton Church: Many will be called but few chosen. Hitler may arrive first.


Angus MacInnis: There is a matter I want to bring to the attention of the Minister of National Defence, and I must do so to-night for fear I shall not have another opportunity before the session ends. It has been brought to my attention that certain employers are notifying their employees that under these war services regulations the government has made arrangements with them by which the government accepts the categories in which the employers place their employees in priority for calling them for service. If the minister would like to have the point made with a little more clarity, I should be glad to read a letter sent to each of its employees by a large company in British Columbia.


James Layton Ralston: I know of such a suggestion from the Department of National Defence with respect to the reserve army. I know of no such suggestion from the Department of National Defence with regard to the active army. It must be some suggestion from the Department of National War Services or one of its boards, because I do not think the Department of National Defence has made any arrangement of the kind. Perhaps my hon. friend is dealing with the reserve army; is he?


Angus MacInnis: No; it affects all services. The first category is A, covering employees who the management consider should be available to the company at all times and who should not join the reserve army, A.R.P. or other civilian protection organizations.


James Layton Ralston: That is the point; it is the reserve army, the A.R.P. or other civilian organizations. It has nothing to do with the active army.


Angus MacInnis: Then there is the next category, B: employees who may join outside organizations other than the reserve army, but whose services with such organizations should be available only outside regular working hours. Then there is category C: employees who may join any of the services, active or reserve, but who, before doing so, should give their immediate superior proper notice. Then the last paragraph reads:
Telephone service is a vital necessity in every phase of military and civilian war activities and this is recognized by the government, who have left it to the management of the company to arrange for the retention of adequate trained personnel to maintain service.
The companies concerned, I am told, are using this agreement with the government or with the Department of National War Services, however you like to put it, to discriminate as between employee and employee. If they have one employee who has been active in trade union work they put him in category C, even though because of age, physical condition and for other reasons he should be in one of the other categories. I have these examples before me. This is a very dangerous and serious situation, when one employee finds himself discriminated against because of his labour activities; finds himself in such a category that if and when he is called, the company will make no effort to have his services retained, while another person who may be younger and more physically fit will have the company intercede on his behalf. I want to tell the ministers concerned that this is having a very serious effect on the morale of those working people who are likely to be called for military service.


James Layton Ralston: I should like to hear more about this, because if it has anything to do with the active army I am very much interested. May I say to my hon. friend that so far as I know there is no tribunal with any power to make any decision with regard to whether or not a man shall receive a postponement as far as his services in the active army are concerned, except the boards appointed under the department of rny colleague the Minister of National War Services. If any other body is doing that or attempting to do it, it is acting absolutely without authority, as I understand the situation.


Angus MacInnis: I should be glad to furnish the information I have to both the Minister of National Defence and the Minister of National War Services.


Thomas Vien: I should like to point
out that the remarks of the hon. member have been directed more to the general administration of the National Resources

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once and for all what this government will do, in a voice that will be heard all across Canada. Let them tell the people that delay and procrastination and expediency will no longer be considered as necessary elements in Canada's war effort.


Gordon Knapman Fraser: That is the speech of a leader!


Mr. DOUGLAS (Weyburn):: A few minutes ago I asked the Prime Minister two questions. I am satisfied with the answer to the first, but far from satisfied with the answer to the second. The Prime Minister gives, as the only reason for not bringing down some bill containing these regulations, the element of time. He said nothing to refute the advisability of having such a bill. It seems to me that the argument of time is not a very strong one. The government started moving in this direction in June, 1940; in the speech from the throne in January of this year they intimated that they were going to ask the people to release them from certain moral obligations. The government have had these regulations under which men have been called up now for nearly two years. Surely it would not have been difficult to have these framed into a bill and have it brought down in the house during this session. It seems to me that the time of members of the House of Commons is not nearly as important as the effect on the morale of the people of Canada if we proceed to conscript human life in this country on the basis of a series of regulations administered by a series of boards, each of them administering and interpreting the regulations in their own way, with various age groups called up, and different bases upon which postponements and exemptions are granted. As the war progresses, the feeling between different parts of Canada, whether justified or not, that some parts are being discriminated against and some favoured, is bound to rise. It seems to me that the few days or even weeks it might take to pass such a bill would be fully justified by results.
As a matter of fact, the party of which the Prime Minister is leader fought its most heated political battle in 1917 around this very issue, when it refused to give the Union government of that day power to conscript human life by regulation, and insisted that the clauses and conditions under which men would be called up should be placed on the statute books. The Prime Minister says that what the government want most is with all possible speed to get this power. That does not jibe very well with the statement he made [DOT]on July 7 that they propose to refer this matter back to parliament for a vote of [DOT]confidence, and if parliament is not sitting,
to take the few days to call parliament together. If he is going to have time to call parliament and refer this matter back for a vote of confidence, he certainly could find time to bring a bill down in this house and, if necessary, refer it to a special committee and place something on the statute books that will be uniform, standardized, so that the people of Canada from the Atlantic to the Pacific will know that the same conditions, the same responsibility, the same obligations, rest equally and equitably upon all Canadians and that there is no loophole for possible discrimination, favouritism or partisanship. The feeling that there is such a loophole is bound to occur in war time unless every possible precaution is taken against it. It seems to me that it would be in keeping with the tradition of the government's party to bring down such a bill and thereby assure the people of Canada that the conscripting of human life is done on the most fair and equitable basis possible.


William Lyon Mackenzie King: There is this difference between the situation in 1917 and that to-day. In 1917 all the regulations had still to be framed. To-day we have regulations that have been in existence since the National Resources Mobilization Act was passed. The act has been on the statute books now for a couple of years; the regulations have been framed; action has been taken under them; they are known, and what is perhaps most important of all is that the years have brought experience in the framing of regulations, the benefit of which could not have been obtained in any other way. The regulations that will govern hereafter will be, as I said a moment ago, to all intents and purposes the same regulations, only made applicable over a wider area. Therefore the necessity for any legislative enactment setting out the regulations at this time is entirely different from what it was in 1917. It is correspondingly unnecessary.


Howard Charles Green: In connection with the suggestion of the hon. member for Weyburn, does the Prime Minister not think it might be wise if a special committee were set up whose duty it would be to consider such regulations as are passed from time to time under the National Resources Mobilization Act?


An hon. MEMBER:: No, there are too many committees.


Howard Charles Green: Those regulations affect the lives of hundreds of thousands of Canadians and affect them drastically. It would go a long way toward doing away with misunderstanding if the representatives of the people in this house were able at least to go over the regulations carefully. This could very well be
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system in order to distribute the call equitably across the dominion. My question is this-and I submit that it is relevant and one on which the people of Canada have a right to have information: How is this act when amended going to be carried into effect? Here we are in the month of July calling up
25.000	men, not on the basis of population in the various provinces, but in a haphazard manner, and in the month of August, 15,000-


James Layton Ralston: It is the other way about;
15.000	in July and 25,000 in August.


Mr. DIEFENBAKER:: Well, 15,000 in July.


James Layton Ralston: I do not call them. The Minister of National War Services (Mr. Thorson) is not here at the moment, but they are called on the basis of population.


John George Diefenbaker: I will come to
that in a moment. There will be 15,000 in July and 25,000 in August-


Jean-François Pouliot: And 35,000 in September.


John George Diefenbaker: What the number will be in September we do not know yet. The minister says they are being called up according to population. I have here a return brought down on July 20 in answer to a series of questions which I asked over six weeks ago in order to ascertain the position of affairs in so far as the man-power situation in Canada was concerned. This is the question I asked:
Has a survey been made by the government with a view to ascertaining how many men are still available for military service in each of the foregoing classes?
That is the classes from eighteen to forty-five years of age.
If so, who made the survey and when was it made?	.
How many men were estimated to be still available for military service by provinces, military districts and/or administrative divisions in each ot the said age groups?
Surely, after nearly three years of war the government should be in a position to tell the people what it will do with the powers that are being given under this act, what its plans are, how many men will be allocated to agriculture, how many to industry and how many to the armed services of the country. Yet here is the answer given by the government:
The question of the number of men available for military training in the age groups subject to proclamation is under continuous consideration by the registrars of the administrative divisions and the mobilization division of the Department of Natonal War Services. It is not possible to say definitely at any given time how many men are still available for military

training in each division until after the necessary deductions have been made for voluntary enlistments, persons rejected on application for enlistment, men unfit for military service, men essential to war industries, persons wholly or mainly employed in agriculture within P.C. 2252, persons whose military training will be postponed as conscientious objectors, et cetera, in the national interest, et cetera.
That is the answer of the government to the people of Canada-it reveals no plan-[DOT] no survey. No one knows what will happen when this act is amended, who will be called, how many will be called. There is continuing uncertainty and delay. I ask the government to tell the people to-night-not next September, October or December, but to-night- what they may expect, what the plans of the government are, and whether the main effort of this dominion will be concentrated, in the armed services, in agriculture or in industry. Surely it is time that this government, having had ample opportunity since March 24, should give a better answer than was given yesterday by the Minister of National War Services. When I asked him if the lottery system would be brought into effect, he said, "The question is being given reconsideration". Does that mean that a decision was made that it would not be brought into effect and that the matter is now being reconsidered? The Minister of National Defence says that they call the manpower of this dominion according to population-


James Layton Ralston: I said I did not make the call, but I assumed or understood that that was so.


John George Diefenbaker: Then why is it
that in certain districts in Ontario, according to the return brought down here yesterday, they are calling men from twenty-five to thirty years of age, and that in other parts of Canada they are not calling them beyond twenty-three and twenty-four? Is there any equity or equality of service in that? I ask the government to-night in the interests of the morale of this country, in the interests of the men in the services, in the interests of the people as a whole, to announce its policy and plan definitely once and for all.
The Prime Minister says we will wait until conditions get worse and then, after we decide as a government to bring into effect conscription for overseas service, parliament will be called. Surely with conditions as they are to-day all over this world no one can say that they could be much worse. I ask the government-not in a critical sense, there has been nothing critical in the words I have spoken to-night-I implore the Prime Minister and the government to tell the people

Mobilization Act
in the form of an act. To introduce further legislation at this session would help to defeat one of the main purposes of this legislation, namely to get into the hands of the government, as soon as possible, the power which it is desirable it should have at this particular time.


James Arthur Ross: Just to follow up this question which the Prime Minister has just answered, is it still the intention, if the order in council he has mentioned is passed, that before it can become effective he shall consult parliament for a vote of confidence, as he stated in one of his speeches on the second reading?


William Lyon Mackenzie King: I shall have something to say about that a little later on.


James Arthur Ross: I think it has a distinct bearing on these sections, because I know, as one of the members of this house, that many people throughout the country, especially in the armed forces, have not very much confidence in the government as constituted with the present leader; they pin their faith to the ministers of the armed forces.


William Lyon Mackenzie King: Well, it is because of hon. members like my hon. friend who has just spoken that I have felt it absolutely necessary to have an expression of the confidence of this house before I undertake to put into force any conscription act with respect to service overseas.


John George Diefenbaker: As soon as these amendments are passed, those men called to service under this bill will, subject to proclamation, be available for service overseas, subject to further submission to parliament, or whatever the scheme is which the Prime Minister intends to follow.


William Lyon Mackenzie King: There is no submission to parliament with regard to conscription. Let me make it perfectly clear that, so far as coming back to parliament for any purpose is concerned, there will be no coming back to parliament for a second debate on conscription, nor will there be any coming back to get the approval of parliament of the decision made. When the government makes its decision that decision is made, and it will be carried out either by this government or by some other government. It will not have to be approved by parliament first. The question whether or not a ministry headed by myself will enjoy sufficient confidence in the minds of hon. members of this House of Commons and of the people of this country to administer conscription, once it has been decided that conscription for service overseas
shall be enforced, is a separate matter, and it is a matter on which I shall wish to have an expression of confidence.


John George Diefenbaker: The point I was coming to is this. As soon as these amendments are passed, all men will be called up and will be subject to service overseas.


William Lyon Mackenzie King: That is right, once an order in council to that effect is passed.


John George Diefenbaker: Once an order in council is passed, as the Prime Minister says. Then the matter of the call-up of these men becomes very important. Parliament places the power in the hands of the government to determine when and if these men shall be sent overseas. The time has come for the government to place before this house the plans it has in reference to the calling up of men. The present scheme of calling up men is working a detriment to industry and to agriculture. It is not distributing the sacrifice fairly across Canada by provinces and according to population. Some months ago, on March 24, the Prime Minister announced, when he referred to orders in council in reference to man-power that had been passed, that a proclamation was being issued. I quote from page 1566 of Hansard:
A proclamation is being issued making liable to call for military training and service all men born in the years from 1912 to 1921, who on July 15, 1940, were unmarried or widowers without children. In other words, the age limit for compulsory service has been raised from 24 to 30. It has also been decided to select the men to be called up for service by drawing lots over the whole field of those who are subject to the proclamation. As soon as the necessary administrative arrangements have been worked out for this plan of selection by lot, a detailed announcement will be made by the Minister of National War Services.
The Prime Minister recognized on March 24 last that the scheme of calling men then in effect and still in effect was not such as would fairly distribute the call across the dominion, and announced that, in order to carry into effect the scheme he had in mind, the lottery system would be adopted.


Thomas Vien: I am afraid the hon. member is too far afield. Sections 2 and 3 are not capable of supporting the line of reasoning he is now developing.


John George Diefenbaker: What I am trying to find out and what the people of Canada want to know is this. What is this government going to do with the power when it is given it? How will the scheme be administered? On March 24 the Prime Minister promised the establishment of the lottery
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second reading, I should like to ask two questions arising out of the second objection, the matter of requisitioning human life by order in council. The first is this, what is the intention of the government with reference to this order in council? For instance, will it be an order in council which will place all men that have been or are likely to be called up under the National Resources Mobilization Act on an active service basis? In other words, will there be an order in council wiping out the distinction, so that we shall no longer have two armies in Canada, but one, or is it the intention of the government merely to pass a series of orders in council calling groups of men from the army in Canada, the garrison army, into the active army. It is important that we should know what the government intends to do. If the government intends to do the latter, it means really piecemeal conscription, and it seems to me that the government must have some intention in mind now as to their policy. In that regard, do they intend to take the entire National Resources Mobilization Act force and place it on an active service basis, not necessarily sending it overseas, but wiping out all distinctions, or do they intend merely on a piecemeal basis to call a unit here and a unit there, pass an order in council and send such units overseas?
Second, in view of the fact that this is enabling legislation, will these men continue to be called up for active service overseas on the basis of the war service regulations at present in existence? I doubt if many hon. members know fully -what these war service regulations are. They have been amended from time to time. Orders in council have been frequently passed. On March 24, the Prime Minister tabled orders in council Nos. 2250, 2251 and 2252. The last order in council said this:
A board-
That is the national war services board.
-subject to the approval of the minister, may make rules not inconsistent with these regulations for its guidance and to govern its procedure.
I am not going to repeat what has been gone over so often, particularly when the national war service estimates were up, but it is common knowledge that the rules passed by these boards, that is the sets of interpretations issued by them, vary from military district to military district. These regulations are open to various interpretations in various places. I am sure there is hardly one hon. member from a rural constituency who has not come across the fact that men have been called up since March 24 who were totally ignorant of the fact that order in council 2252 had been passed; they have been called up despite the fact

that they were bona fide farmers on farms on March 23. Apparently the board has paid little or no attention to that unless the man was in a position to make his plea on the basis of that order in council.
I should like to make an appeal to the government. It seems to me it would be much more satisfactory to everyone concerned to incorporate all these regulations and orders in council in a bill, bring it down to this house, have it passed by this house, and leave the proclamation of it until such time as the government decides to pass the order in council placing men under the National Resources Mobilization Act on active service. The act could then be proclaimed, and the men who were subject to call would know what their responsibilities were, what rights and privileges they had, who had the right to exemption and who had not. It would be there in statutory form; it would be the law of Canada, and above all it would be uniform for the whole of Canada. There would be no feeling that it varied from province to province, and that there were different interpretations of regulations in one province as against another.
My questions are, first, how the government proposes to deal with this matter by order in council, and second, whether it would be possible to put these regulations into a bill and have it passed by this house and proclaimed when and if this government decides it is necessary.


Thomas Langton Church: This is all shadow-boxing.


William Lyon Mackenzie King: When the
government decides that it is necessary and advisable to resort to conscription as a method of raising men for service overseas, an order in council will be passed dealii g with members of the forces as a whole. It will not be a matter of passing a series of orders in council, but one order in council will cover the entire force. That, I think, answers my hon. friend's first question.
As to the second, what he proposes is further legislation at this session of parliament, the introduction of an act which will amount to a military service act or something equivalent to it. My hon. friend will realize that that would mean a second debate, which would resolve itself into going over, time and time again, very much the ground already covered, notwithstanding that at the present time we have the existing regulations in reference to the calling up of men under the mobilization act. Any regulations that will be passed with respect to service overseas, I should say, broadly speaking, would be similar if not wholly identical. I cannot see wherein it is necessary to embody all these regulations

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Mr. CARDIN:: Where is that restriction, in the biil?


James Layton Ralston: The restriction is that the power is given to the governor in council by the bill, and not to the Minister of National Defence.


Mr. RAYMOND:: At the present time is an order in council required to send overseas those who have enlisted voluntarily?


James Layton Ralston: You do not need a special order in council for that.


Donat Raymond: But their expenses have to be paid.


James Layton Ralston: The order in council is passed when the war appropriation bill is enacted. Then the treasury board makes certain allotments to the Department of National Defence for certain specific purposes, and out of these moneys are paid the transportation costs.


Donat Raymond: But you will require an order in council to send them overseas?


James Layton Ralston: That is all we require now. The act as it stands now authorizes the governor in council to call upon person's and property for any purpose within the scope of the act, subject to this, that the government cannot under the present powers require persons to serve compulsorily outside Canada. The governor in council has passed an order in council requiring men to serve but has placed a limitation in the order in council similar to that which is contained in section 2, to the effect that they shall not be required to serve outside Canada. After this section 2 is repealed, if the governor in council takes action to require them to serve overseas, then that is effective, but not on the action of the Minister of National Defence, not until the governor in council has actually authorized it.


Pierre-Joseph-Arthur Cardin: In that case there would be no necessity for an order in council to send them overseas. The order in council, as I understand it, is to call up the trainees by classes, and once they are called up they come under the Department of National Defence and are in the same position as the volunteers.


James Layton Ralston: It depends, of course, upon the terms of the order in council which is to be passed under the terms of the unrestricted measure. I cannot forecast what the terms of the order in council will be. An order in council might be passed giving the Minister of National Defence power to call them and to prescribe the service they shall
be called upon to do, or it might reserve that to the governor in council. One would think that the order in council would provide that those called up shall be liable for service anywhere, and that liability would be actually put into effect on the order of the Minister of National Defence. That is exactly the procedure which prevails now in regard to calling up trainees for service in Canada. At the present time the governor in council by order in council prescribes that men who are called up under proclamation are subject to the order of the Minister of National Defence as to their training, duty and service, but there is a limitation that they shall not be required to serve outside Canada. If a new order in council were passed under the unrestricted measure, I would assume that that restriction would be left out, and under those circumstances the Minister of National Defence would have power to order them overseas, but only after the governor in council has made the decision and formally executed that decision by an order in council.


Thomas Clement (Tommy) Douglas: Sections 2 and 3 of this bill provide only for the words which are to be deleted. It seems to me that in order to discuss the meaning of these two sections properly we have to realize how they stand when the words proposed to be deleted are taken out. Section 2 will then read:
The governor in council may do and authorize such acts and things, and make from time to time such orders and regulations, requiring persons to place themselves, their services and their property at the disposal of His Majesty in the right of Canada, as may be deemed necessary or expedient for securing the public safety, the defence of Canada, the maintenance of public order, or the efficient prosecution of the war, or for maintaining supplies or services essential to the life of the community.
Actually what happens, apart from the promise made by the Prime Minister, which was contingent upon his remaining head of the government, is that when Bill No. 80 is passed by the house the government will have complete power for the conscription of all the resources of Canada for service anywhere in the world.
I should like to direct two questions to the minister who is piloting the measure through the house. The group with which I am associated here raised two objections to this piece of legislation: first, that it did not provide for the conscription of wealth and industry, and second, that the terms and conditions under which men would be called up for service overseas were not being set out and that the conscription of men would be by order in council. Leaving aside the first objection, which I think was dealt with adequately on the
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graduating class. In the month of June, out of a graduating class of 329, no less than 121 were French Canadians. In attendance at' that time at the school were 1,106 officers, 305 of whom were French Canadians.
The committee will remember that the officer in command of this school is none other than Colonel Milton Gregg, Y.C., the Sergeant-at-Arms of this house, who came back from England with a distinguished military record. The chief instructor at that school is Colonel Blais, a distinguished French-Canadian officer.
I should like to say a word or two with reference to army instruction manuals. A special organization under the direction of the general staff has been set up to translate all military literature previously published only in English, and now more than 100 manuals which heretofore had not been translated into French are available in French to students of the various army training centres.
Recently the minister announced the appointment of Major-General P. E. Leclerc as the commander of the 7th division. That appointment was well received all across Canada. I hope that the minister will be able before long to announce another such appointment.
The 7th division will have an all French-'Canadian brigade group consisting of an .artillery regiment, engineering company, signal sections, three infantry battalions, one machine-gun battalion and field ambulance, army service corps and ordnance units. This brigade will be commanded by Brigadier J. A. Leclaire, who has recently come back from England with an excellent record.
During the year 1942 one bilingual infantry battalion, the Sherbrooke Fusiliers, has been incorporated into the 4th armoured division. A French-Canadian battalion will hereafter form part of the army tank brigade of the second Canadian army. The army programme for the present year includes the formation of the following French-Canadian units:	A
regiment of medium artillery R.C.A., a battalion of engineers, five field batteries R.C.A., a searchlight battery R.C.A., five infantry battalions, an ordnance corps unit, a field ambulance, a general hospital, a provost company and a forestry company.
My hon. friend the member for Temiscouata asked a moment ago about the training centre at Cornwall. That training centre is commanded by a French-Canadian officer.


Jean-François Pouliot: A French-Canadian officer
who does not speak a word of French.


Mr. CHEVRIER:: My hon. friend apparently is not in possession of the facts. Colonel
	: fji j
Larose, whom I know personally, the officer commanding the training centre at Cornwall, speaks French fluently.
The roll of French-Canadian regiments on active service in Canada and overseas already constitutes an impressive representation. It follows from this that French Canadians are playing a more and more important part in the army. It is unfortunate that the treatment meted out to them in this war was not accorded to them in the last war and since, because had that been done we would not have had what is happening at the moment. French Canadians in the Canadian army are on the way to writing in the military annals of Canada a page that forever will be to their pride and honour. Had it not been for the sympathetic understanding of the Minister of National Defence, this could not have been accomplished. Again I commend him heartily, and I have every reason to believe that any inequalities which may now or hereafter exist will be made to disappear.


Donat Raymond: I should like to have some information from the Minister of National Defence with reference to the trainees who have been called up under the National Resources Mobilization Act. When this bill is passed there will be two classes of trainees, as indeed there are at the present time: those *who have enlisted voluntarily for service overseas, and those who have been called to a training centre under the act. I understand that there is a difference between these two classes, that those who have been called up under the mobilization act cannot be sent overseas. What will foe the difference between these two classes when the bill is passed. Will those who have been called up under the mobilization act one month ago or two months ago or six months ago be liable to be sent overseas as soon as this bill is passed, like those who have enlisted voluntarily for service overseas? I should like to know exactly what their status will be.


James Layton Ralston: The governor in council would have power under this amendment to make them liable to be sent overseas, but the passing of this bill does not make them liable. There has to be one further step, a decision to send them overseas and action by the government to put that decision into effect.


Donat Raymond: But the Minister of National Defence, once this bill passes, will have the right to send them overseas just as if they had enlisted voluntarily?


James Layton Ralston: Not until the government has so decided.

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which appeared in the Ottawa Journal of May 25. This article quotes General McNaughton from somewhere in England, and reads as follows:
Lieut.-Gen. McNaughton, commander-in-chief of the Canadian army overseas, disclosed in an interview that there has been a gradual increase in the number of French-Canadian officers in responsible army posts. "Obviously", the general said, "we cannot form overnight among the French Canadians as many leaders as we would wish but, gradually the number in responsible posts is increasing. I have always had in mind a plan to which I firmly adhere, that of including within the framework of commands a number of French-Canadian officers in proportion to the number of French Canadians in the Canadian army."
Paying tribute to the work of the soldiers of French Canada, the army chief said, "I assure you that the French-Canadian troops are well entrenched and they are acquiring military polish in marvellous fashion".
"It goes without saying that at the start, certain Canadians of the French tongue encountered some difficulty in expressing themselves in English and in understanding thoroughly what they -were being taught", Gen. McNaughton said. "But, in one way or another, we adapted ourselves to this situation."
"Thus, advanced military training is given in English, but when it arises that a French Canadian has trouble understanding the instructions, he is given a preparatory course in order to help him complete his training with the same facility as his English colleagues. In this respect, it must be said that we have received all the necessary sympathy and encouragement."
I presume the sympathy and encouragement to which General McNaughton refers are the sympathy and encouragement he has received from the department.
Next I would point out to the committee that there were set up in a number of important centres across Canada civilian committees composed of prominent French-Canadian citizens whose duty it was to seek out-


Thomas Langton Church: I rise to a point of order. Has this speech anything to do with sections 2 and 3? I suggest it has not.


Lionel Chevrier: This speech has to do
with section 3, because it concerns persons who will hereafter serve in military units overseas. I am speaking at the moment of those who are being prepared for that service.


Thomas Vien: It is permissible for an lion, member to state his reasons why he believes sections 2 and 3 should be enacted, and the reasons for which he favours those sections. The general principle of the legislation cannot be discussed, but the member may say why sections 2 and 3 of the bill would properly carry out the principle indicated on second reading. The ruling is not debatable, of course, but I would point out
to the hon. member for Broadview that when I ruled him out of order he was discussing [DOT]the principle of the bill, which should have been done on second reading.


Jean-François Pouliot: If one hon. member has the right to say he is for it, we must have the right to say we are against it.


Lionel Chevrier: When the point of
order was raised I was pointing out that civilian committees were set up, and that prominent French-Canadian citizens had accepted it as their duty to seek out officer material, make recommendations and find out what qualifications the men possessed. It was then up to the district officer commanding to approve or reject the recommendations. In military district No. 3, Kingston, I am happy to say that eighty-two young French-Canadian men have been selected because of their qualifications to be sent to advanced training schools.
Then, again, it is important to know that a special school for these young men was opened at St. Jerome, in the province of Quebec. At that point young potential officers are given one month's basic training. If they qualify after that time they are sent to the cadet wing of the school, at which point they are given another month's training similar to a sort of pre-training for officers. In both instances it is to be remembered that these young men receive their instructions in the French language from French officers and French instructors. They receive it in their own language. If they are found to be up to standard they are sent to the officers training centre at Brockville, where they receive four months training. Again they receive the training in French, if they are unable to understand English. At that point they mingle with their English-speaking compatriots from all across Canada. Besides the-Brockville training school and the preparatory school at St. Jerome, a bilingual school for non-commissioned officers was set up at Megantic, in the province of Quebec. This school has the task of supplying Frenchspeaking instructors for military training centres in eastern Ontario, Quebec and New Brunswick. The number of these instructors is proportioned to the number of French-Canadian soldiers. In the officers' training centre the proportion is even higher.
In Brockville the staff is made up of both French- and English-speaking instructors, so that language is no handicap either in the classroom or at the examination table. Last March, as the house probably knows, at one graduation exercise at the officers' training centre in Brockville, French Canadians constituted more than a quarter of the total
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dignity of that high calling, our ancestors have turned a savage wilderness into a glorious empire; and have made the most extensive, and the only honourable conquests, not by destroying but by promoting the wealth, number and happiness of the human race.
This is the darkest hour of the war. During the seven months we have been sitting here talking about what changes might be made in the mobilization act, what has been happening in the world? Up to date we have lost the war, with all the defeats we have suffered on land, on sea and in the air. Even before we adjourn the enemy may be up the St. Lawrence. A great Frenchman, Sir Etienne-Pascal Tache, said:
If this country ever ceases to be British, the last shot for the preservation of British sovereignty in America will be fired by a French-Canadian.
On the monument to Wolfe and Montcalm in Quebec this inscription may be seen;
Valour gave them a common death, history a common fame, and posterity this common monument.
We must get back to those principles. What is the mother country doing for us to-day? We all know that but for her and her fleet and air force this bill would not be necessary; we would have someone in here, the axis powers, who would not consider referendums, plebiscites and all that sort of thing. As Mr. Lyttleton, the British Minister of Production told the people of the United States, when commenting on the help they are giving Canada and the United Kingdom, the mother country is producing tanks, jeeps and other vehicles at the rate of 257,000 a year.


Thomas Vien: I am sorry, but I cannot follow the hon. gentleman. I must apply standing order 58.
Mr. CHURCH; I have a great deal of respect for your ruling, Mr. Chairman. Therefore I may have to make the remainder of my observations on third reading. I do not wish to interfere with the rules of the house.


Mr. DONNELLY:: I should like to ask a question arising out of one of the remarks or questions asked by the hon. member for Richelieu-Vercheres. Is it not a fact that many men from Saskatchewan called under this legislation are sent to other provinces? Are not some sent to Quebec, some to Ontario, some to Manitoba and some to the other provinces?


James Layton Ralston: That is so, and for the same reason, namely, a matter of accommodation. As I said before, we try as far as possible to accommodate the men of each province in basic training centres. Sometimes

the accommodation is more crowded in one province than in another, and therefore adjustments are made accordingly.


Lionel Chevrier: I should like to make one or two observations concerning a group of persons required to serve in the military forces and outside the territorial waters of Canada by virtue of the repeal of section 3, as well as a few observations concerning the group which heretofore were required to serve within the territorial waters of Canada. In other words, I should like to say something concerning the treatment of and the part played by French-Canadian officers and men' in the army, the treatment received by them at the hands of the Department of National Defence, and particularly the treatment received by them at the hands of the minister of that department.


Jean-François Pouliot: Speak about the Cornwall camp.


Lionel Chevrier: During the debate on the bill much was said about conscription. I do not intend to speak on that subject, because perhaps too much has been said already. But little-perhaps too little-has been placed upon the record as to the treatment accorded our people at the hands of the Department of National Defence. Many facilities have been accorded them, and I should like to commend the minister for what he has done in that respect. I should like to say to him how appreciative my people are of what he has done, and I say to him further that he deserves the commendation of all thoughtful French Canadians.
At the outset of the war the people of my race flocked to the colours in the same proportions as did the people of other races. Unfortunately I believe on that occasion some injustices were committed. I. refer to the fact that officers in the army were not given ranks in proportion to the number of men who had enlisted. At the moment I can think of certain regiments in eastern Ontario which, after they had mobilized, were sent overseas, and in which to-day few if any French-Canadian officers are serving. I am happy to say, however, that while the position has not been entirely remedied, the department has taken cognizance of it and has by several methods attempted to remedy an anomaly which should never have existed.
I should like to place on record a number of things which have been done to help our people, and to assure the French Canadians that the army belongs to them just as mucn as it does to those of English descent. In this connection I would quote from an article

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see a total war effort. The government should get on with the war, because men are needed. Since eight o'clock we have had several hon. gentlemen raising various points in connection with this bill. We cannot defend the St. Lawrence by raising points in committee here. As you know, sir, but for the British fleet the enemy would have been up the St. Lawrence long ago, and we would have experienced what they have suffered in all the low countries of Europe; the gestapo, the loud speaker, the whip and everything else.


Thomas Vien: I believe the hon. gentleman is speaking to the principle of the legislation, and that would not be in order. We are now on section 2, and we must limit the discussion to the provisions of this section.


Thomas Langton Church: I have great respect for the Chair, but I wish to speak to the principle of the bill-there is one in each section of it-and I gave up my right to do so before the vote was taken on second reading, at the request of the government whip, in order to accord more time to the right hon. Prime Minister. I do not wish to claim any special privilege in that connection, but I do want to speak to the principle involved in section 3.


Thomas Vien: We are on section 2. The hon. gentleman cannot speak to the principle of the bill. If he has any remarks to make in connection with section 3, would he please wait until we reach that section?


Thomas Langton Church: I will speak on section 2 if you wish, because the same principle is contained there. Under section 2 the National Resources Mobilization Act did not raise an army, and no one knows that better than hon. members of this house.


Thomas Vien: Would it be more convenient for the committee to discuss sections 2 and 3 together? They are somewhat linked together. Is it the pleasure of the committee to take these two sections at the same time?


Some hon. MEMBERS:: Yres.


Thomas Vien: Carried.
On sections 2 and 3 together-Special powers of the governor in council-limitation in respect of service overseas.


Thomas Langton Church: That is what I was proposing to do, Mr. Chairman, to take sections 2 and 3 together, because now section 2 is out and section 3 is the only one remaining. The principle contained in section 3 is whether you are to limit this measure to home defence and the territorial waters of Canada, or whether it is to extend to Europe, 44561-288i
Asia and everywhere else. That is one question, but that is not the question before the people to-day, according to the principle contained in section 3. After the vote was taken on the second reading the Prime Minister said, "We are going to amend this act, but we are going to keep a string on it. We will do so-and-so if, as and when it may be necessary." Then two or three weeks later he added another string, when he said that before this principle could be extended he would have to come back to this house for a vote of confidence, and that parliament would decide in the end.
I want to point out to the hon. members from the province of Quebec that history always repeats itself. The enemy came up the St. Lawrence once before, in 1774, and appeared before the citadel at Quebec.


Thomas Vien: Order, please. The
hon. gentleman is not discussing the phraseology of sections 2 and 3, as to whether they properly carry out the principles approved by the house on second reading. He is making a speech which would have been in order on the motion for second reading, but under standing order 58 it is not in order in committee.


Thomas Langton Church: Probably I should have spoken on second reading, but if I am ruled out any further I can speak on third reading. I would have spoken for only a very few moments if I had not been interrupted, but if necessary I can complete my remarks on third reading. I do not want to urge this point, but I was promised that I would have an opportunity to discuss the principle of Bill No. 80 when we came to consider section 3.
How are we going to raise an army under the existing legislation? What is the use of blaming the Minister of National Defence, trying to make him the scapegoat, when neither he nor anyone else could get an army under section 3 of this bill? I would defy any minister of the crown to do so, the way his hands are tied by this legislation, with all the strings, the riders and the provisos which were added to section 3. This is not what the people voted for. They voted for a total war effort, and they are not getting it. I just want to remind my colleagues from the province of Quebec that history always repeats itself. Let me refer to a great authority on military affairs, a great statesman and a great friend of the province of Quebec. In 1774 Edmund Burke, referring to the necessity of sending an army then from the motherland to defend the citadel of Quebec, said:
We ought to elevate our minds to the greatness of that trust to which the order of providence has called us. By adverting to the

Mobilization Act
delete those words from the original section 2. That is the only question now before the committee.


Jean-François Pouliot: I admit it, sir. The very purpose of section 2 is to withdraw one part which was essential in the section and which submitted the operation of section 2 of the act of 1940 to the provision contained in section 3 of that act, forbidding the sending of our men overseas. The point that is vital and of the utmost importance is precisely the way in which the trainees-call them trainees, draftees, recruits or what you will-are treated in the camps so as to induce them by hard pressure to enlist for service overseas. This is disguised conscription, much worse than open conscription. If we are to have conscription, let us have it in the open way, without concealment, without hiding, without hypocrisy, without high pressure to force those who are called up to enlist voluntarily for service overseas. My contention is that section 2 will be useless, because we already have conscription, not in the statute book but disguised conscription by members of the Department of National Defence, a large number of whom have never seen any theatre of war but who decide upon sending others to the firing line. That is what is being done. The first example should be given by those very men. At times I have been interrupted by hon. members in high standing who said I was not speaking reverently enough of those who were shedding their blood for this country. I was not speaking of them but only of people in the Department of National Defence at Ottawa who have shed their blood only by scratching their fingers when tying red tape.
I should like to have something definite, something clear. I do not want any member of the government to state that we have no conscription, because we have disguised conscription, which I cannot bear. If conscription is necessary, let them take the responsibility for it, although I do not think conscription for service overseas is necessary. But be men; do it in the open. Do not do it by the backdoor; do it by the front door. That is the way to do it. What I cannot stand is the statement that we have no conscription, that everyone is a volunteer for service overseas, when this pressure is put upon them. Although the minister says he does not know about it I know it is true. I know the instructions come to the officers commanding and then are communicated by the officers commanding of the various districts to the colonels or commanders of regiments. That is the way it is done, in virtue of those orders from Ottawa.
[The Chairman.]


Thomas Vien: Order. These remarks would be in order on the estimates of the department, but they are hardly in order when determining how we could best carry out the principle of the legislation adopted by the house on second, reading. Is it proper that the words "subject to the provisions of section 3 hereof" be struck out? It is not the principle of the legislation we are considering. The committee must decide whether it is expedient to strike out from section 2 the words "subject to the provisions of section 3 hereof."


Pierre-Joseph-Arthur Cardin: On the point of order; the striking out of the words referred to from section 2 is what really matters in the bill. When those words are struck out of that section the government will have the power to conscript for military service everywhere in the world, and I submit that .on that very section all the questions relating to mobilization can properly be discussed. When that section is amended it will provide for the government the power by order in council to take the goods and property of any individual and force him to give his service to the country anywhere the government may decide. Therefore I think this is the proper time to discuss all questions pertaining to this matter.


Thomas Vien: I agree with the remarks made by the hon. gentleman, except that we cannot discuss here, in general terms, the principle of the legislation. The principle has been decided upon on second reading. The committee has to decide whether section 2 of this bill is carrying out, in a proper way, the principle that the house has adopted.


Thomas Langton Church: I wish to discuss section 2 which links up with section 3 of this famous mobilization act which in many respects has failed to mobilize an adequate army. Section 2 begins:
Subject to the provisions of section 3 hereof. . . .
Section 3 relates to limitation in respect of service overseas. The original section reads:
The powers conferred by tile next preceding section may not be exercised for the purpose of requiring persons to serve in the military, naval or air forces outside of Canada and the territorial waters thereof.
That is to be struck out by this bill, and the only question before the committee to-night is that amendment.
There was a referendum preceding this bill. I do not wish to go into the merits of the question to-night. I have a great deal of sympathy for the government, and I know everyone on this side of the house wants to

Mobilization Act
have been issued up to date, the so-called trainees, after they have reported in district No. 4 or No. 5 in Quebec, have been scattered in certain sections of Canada, particularly in Ontario?


James Layton Ralston: I would not say it is a fact that most of the trainees have been scattered.


Pierre-Joseph-Arthur Cardin: In the province of Quebec at present is there any training centre in operation where trainees are receiving their instruction as a whole under Freneh-Canadian officers?


James Layton Ralston: If I remember aright, there are thirteen basic training centres in the province of Quebec, and most of them are under French-Canadian Commanding officers.


Pierre-Joseph-Arthur Cardin: What are the reasons to justify the sending of a trainee from the province of Quebec to a military centre in Ontario?


James Layton Ralston: There may be cases in which the training centres in Quebec are full or in which the particular training centre to which the man has to go, an advanced training centre, does not exist in Quebec; just as, the. other way about, there are certain training centres in Quebec which do not exist in other provinces-machine-gun and forestry training centres, for example.


Pierre-Joseph-Arthur Cardin: I can understand the answer in regard to advanced training centres, but what about the young man who was called last week, say, and was sent, as soon as he reported to the office in Montreal, to Camp Borden in Ontario?	.


James Layton Ralston: I cannot tell my hon. friend at the moment, but if he will give me the individual case I will find out. Generally speaking, basic training takes place in the province in which the man is, unless the training centres are full or there are not sufficient facilities or accommodation.


Jean-François Pouliot: What are the instructions that are given by the Department of National Defence regarding the treatment to be given on the one hand to those who have volunteered and on the other hand to the trainees?


James Layton Ralston: The general effect of the instructions that are given is that there is to be absolutely no difference in treatment between the two classes.


Jean-François Pouliot: Is it not true that instructions are being given, with or without the knowledge of the minister, by his own department to the effect that trainees who have not 44561-288
volunteered should mix with the soldiers who have volunteered, in the companies and different sections of the regiment, and shall not enjoy the same leave and the same treatment as those who have volunteered, in order to exercise pressure on the trainees to force them to volunteer; moreover, that instructions have been given to 'General Panet to the same effect and that he gives, transmits or communicates the same instructions to the other commanding officers within his district? Is it to the knowledge of the minister that such things happen?


James Layton Ralston: Is this cross-examination, Mr. Chairman?


Jean-François Pouliot: I will not let it alone. It is impossible.


James Layton Ralston: If my hon. friend addresses the Chair he can ask his question. I do not know that there is any need for these ferocious motions toward me. In the first place my hon. friend asks if it is not true that those instructions were given with or without the knowledge of the minister. Obviously, if they were given without the knowledge of the minister I would not be able to speak of them. As far as I know there were no instructions of that kind or to that effect given, but I want to say I would be very much surprised if the trainees, as my hon. friend calls them, that is the "R" recruits, are not mixed in with the other soldiers in the camps. I see no reason why they should be kept separate. The very purpose of the basic training centres is that eveiy one in them shall be trained in the same way, and that would be one reason for making no distinction rather than for putting the "R" recruits in a platoon or a detachment by themselves.
As far as the other question is concerned, I have no knowledge of any such instruction.


Jean-François Pouliot: Well I have knowledge; I know it is done, and I will inform the minister, if he does not know what is going on in his department because he is so busy as Minister of Finance that he does not care about the duties of Minister of National Defence.


Some hon. MEMBERS:: Order.


Thomas Vien: Order. I have drawn attention of members of the committee to standing order 58, subsection 2, which I hope is well known by this time. The purport of section 2 of the bill is to remove from section 2 of the act the words "subject to the provisions of section 3 hereof". Therefore the committee has before it a section the effect of which, if it is enacted, will be to

Mobilization Act

sense to thrust this house into another debate and to go over all this again, and I do not think that the membership is in the humour to stand for it. Besides, I do not believe that anybody will be convinced by arguments on this new amendment even if it is in order. I am not open to conviction, for my mind is made up, and I am going to vote as I did before.


Mr. ROY:: Mr. Chairman, with reference to the remarks of the Minister of Pensions and National Health, may I say that you have already given your decision on this amendment when you maintained it in principle before the house a while ago. I believe the rule is that we can amend a clause of a bill either by striking out some of the words or by adding to it. This is what I am doing; I am adding something to clause 2, and it has the meaning which has been explained by the hon. member for Temiscouata. I hope the amendment will be maintained.


Thomas Vien: Is the committee ready for the question? A point of order is raised on an amendment proposed by the hon. member for Gaspe. The amendment reads as follows:
Provided that this act do not come into force until it has, by means of a referendum, been submitted to and approved of by the electors of Canada.
This amendment is, in my opinion, inconsistent with the scheme of legislation which has been referred to the committee after second reading. We are in committee stage, and the committee must take the scheme of legislation as submitted after second reading. I shall cite May, Twelfth edition, page 371, and note in Beauchesne's Parliamentary Rules and Forms, citation 781:
An amendment must be relevant both to the subject matter of the bill and the clause to which it relates; it must not be inconsistent with any previous decision of the committee; it must not be such as to make the clause which it proposes to amend unintelligible ... it must not be based on schedules or other provisions the terms of which have not been placed before the committee.
The amendment has the effect of submitting the bill to a provision, namely a referendum, which is not within the scheme submitted, and therefore it would be inconsistent therewith.
Further, I would point out the difference between the amendment presented at this stage of the proceedings in committee of the whole and the amendment proposed in 1917 by Sir Wilfrid Laurier. The amendment of Sir Wilfrid Laurier was presented in the house on the second reading of the bill before the principle of the bill had been adopted by
IMr. Mclvor.]
the house. Once the house on second reading has admitted the principle and has referred it to the committee, we cannot accept, in committee, an amendment which would be inconsistent with the general scheme which has been referred to us and which is not subject to a referendum. This legislation is to enable the government, if and when it so decides, to mobilize the man-power of Canada for certain military service, even overseas. An amendment subjecting that legislation to the formality of a referendum would alter it materially and fundamentally. In my opinion this reason in itself is sufficient to support the point of order raised. But subsidiarily, I would point out that if this amendment were enacted the act would become ineffective unless a referendum were held. Therefore it would destroy the effect of the act unless a referendum were held. If a referendum were held, it would entail a very large expenditure of money. I would quote from Bourinot's Parliamentary Procedure, page 524:
The committee cannot agree to any clauses involving payments out of the public funds (z), or imposing any dominion tax or charge upon the people.
Undoubtedly an expenditure of money is involved if a referendum is held, and if a referendum were not held, it would negative the principle of this bill. I must hold that the amendment is out of order. Is the committee ready for the question? The question is on section 2 of the bill.


Pierre-Joseph-Arthur Cardin: As the law stands at present, what is the status of a man called under the mobilization act which we are trying to amend by this legislation? After a man has received his notice and has reported to the officer to whom he is called to report, what becomes of him and under what authority does he pass from that moment? Does he not pass as a matter of fact under the authority of the Department of National Defence?


James Layton Ralston: My hon. friend knows that the proclamation is passed at the instance of the Minister of National War Services (Mr. Thorson). The man is then ordered to report, and he reports to the training centre. After he is examined he becomes subject to duty or service as may be designated by the Minister of National Defence. He therefore does come under the Department of National Defence after he has passed his examination and has been regularly enrolled.


Pierre-Joseph-Arthur Cardin: Is it not a fact that most of the young men who have been called under orders in council or proclamations which

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various grounds this amendment to section 2 is out of order, and I think it is out of order at any stage of the bill.


Jean-François Pouliot: Mr. Chairman, on the point of order, I have followed closely the argument of my hon. friend and learned confrere in support of his contention that the amendment moved by the hon. member for Gaspe is out of order.
One of his contentions is that the amendment should not have been moved to section 2. Well, what is section 2? Section 2 of this bill seeks to amend the National Resources Mobilization Act, 1940, which is chapter 13 of the statutes of 1940, by striking out in the first line thereof the words "subject to the provisions of section 3 hereof." Section 2 and section 3 of chapter 13 of 3 George VI, which is the National Resources Mobilization Act, 1940, are one and the same with regard to the kind of military service imposed by the legislation of 1940. Section 2 of that act is proposed to be amended by striking out in the first line thereof the words "subject to the provisions of section 3 hereof."
To understand section 2 we must read section 3 of the National Resources Mobilization Act, which reads as follows:
The powers conferred by the next preceding section may not be exercised for the purpose of requiring persons to serve in the military, naval or air forces outside of Canada and the territorial waters thereof.
And if the limitation in section 2, worded as follows-
Subject to the provisions of section three hereof.
-is struck out, it means that the special powers conferred on the governor in council in virtue of section 2 may be used, not only for the exclusive defence of this country within this country, but also for sending men overseas, and it shows the way-


Thomas Vien: I am soriy, but I cannot observe any close connection beween the remarks of my hon. friend and the point of order. Is my hon. friend discussing the point of order?


Jean-François Pouliot: Yes. It is not my fault;
it is on account of the fact that the law has been so badly drafted.


Thomas Vien: Order. The point of
order is not the law. A point of order has been raised that the amendment proposed is inconsistent with the principle of the bill as referred to this committee after second reading, and, furthermore, that it would negative this bill and would entail an expenditure of money. Those are the points raised to which the hon. member should now direct his attention.


Jean-François Pouliot: Yes, sir. I always abide
by what you say. I am arguing in favour of the legality of the amendment of the hon. member for Gaspe, although personally I am not in favour of that amendment, with regard to the matter of principle.


Thomas Vien: The hon. gentleman
is talking of the merits of the amendment.


Jean-François Pouliot: No, no.


Thomas Vien: Well, the hon. member is stating that he is not in favour of the amendment. This is irrelevant to the point of order.


Jean-François Pouliot: Yes, but I was not arguing on that, I was merely mentioning it for a moment. What is a referendum? I think I shall be perfectly in order in quoting the definition of "referendum" in a book which is the dictionary provided for the needs of the house. It is the "Concise Oxford Dictionary," and lies on the table, and therefore the definition of "referendum" which is contained in this dictionary, kept here for the use of all hon. members, is the only one which can be acceptable in this connection. Here it is, at page 981:
Referendum. Referring of certain political questions or of such questions under certain circumstances to the electorate for direct decision by a general vote on the single question.
The hon. member for Gaspe explained the reason why he suggests that the matter should be referred to the people by referendum. I cannot touch on that now. But the definition of "referendum" is as I have read it. He said that Sir Wilfrid Laurier made a similar amendment when the Borden government was in power, at the time that Sir Wilfrid was leader of the opposition, and the Minister of Pensions and National Health (Mr. Mackenzie) remarked that. that was altogether different because Sir Wilfrid had moved that amendment on the second reading of the bill. Well, this is not the reason. Everybody knows that such an amendment may be moved at any time, and this time is just as proper as the time that Sir Wilfrid judged proper to move a similar amendment, twenty-five years ago.
In conclusion, sir, I submit that there is nothing in the rules of the house to prevent the hon. member for Gaspe from moving such an amendment at this stage of the bill, and therefore I submit it should be submitted to the opinion of the committee.


Mr. McIVOR:: I should like to say just a word on this issue. I have been looking through Beauchesne's Parliamentary Rules and Forms, and I cannot find the law that I wanted, namely the law of common sense, but I do not think it is practical common

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principles of the bill. It is only a short time ago, namely on February 9 last, that the principle of conscription was condemned right in the midst of conscriptionist Canada, right in the community of the so-called group of two hundred in Toronto. That was the time when the man who represented the idea of the principle of conscription presented himself for election in the constituency of York South, on a platform of conscription for overseas service.
Well, there were no French Canadians there, but the population in that constituency voted against the conscriptionist candidate, and for the man who opposed conscription for overseas service. That was the situation in a constituency where the group of two hundred were very strong, and yet the population rejected conscription by a heavy majority.
There are many other reasons why this measure should not be enforced without the consent of the people of Canada. It seems to me that the result of the plebiscite has been interpreted throughout the country as an approval of conscription. I do not believe that is so, and there are many others throughout the country who believe as I do.
In the first place, through the pledges of the Prime Minister and his colleagues in the cabinet, over the radio and in the press Quebec was told that the plebiscite did not mean conscription. Is there anyone in this chamber to-day who will deny that? No, I do not think there is. It meant no conscription. In any campaign among French Canadians in Quebec it was urged that there would be no conscription. I believe I might venture to say that had it been put to the people as an issue of conscription for overseas service there would have been far fewer "yes" votes given not only in Quebec but throughout the rest of Canada.
At this time when Canada is threatened by enemies on both coasts and when our allies are asking for more and more food, more and more supplies and ammunition, more and more weapons, is it wise to look only at one thing with both our eyes instead of looking at the question more objectively? If we send our most able young men overseas, our war production is going to suffer. We cannot expect to raise an army as big as the armies of other countries which are not producing half as much as we are. We cannot do that and at the same time produce in such large volumes as we are producing. We cannot do that and continue to support the armies, of other countries with what they need. That would be a little too much to expect from a small population of 11,500,000.
At six o'clock the committee took recess.
[Mr. Roy.)
After Recess
The committee resumed at eight o'clock.


Ian Alistair Mackenzie: Mr. Chairman, on a point of order with reference to the amendment moved by the hon. member for Gaspe (Mr. Roy), which I did not have an opportunity of seeing before the dinner recess but of which I now have a copy before me, I submit, without any desire at all to impede the hon. member, that on several grounds the amendment is out of order.
In the first place I would submit that it is not a proper amendment to section 2 of the 1940 act, the National Resources Mobilization Act. Section 2 of the bill is merely a restrictive amendment to section 2 of that act. The amendment proposed by the hon. member for Gaspe for a reference to the people is not an amendment to section 2 of the bill. The hon. member quoted in support of his amendment the amendment moved by Sir Wilfrid Laurier to the Military Service Act of 1917. That will be found at page 2403 of Hansard of that year, and it reads as follows:
That the further consideration of this bill be deferred until the principle thereof has, by means of a referendum, been submitted to and approved of by the electors of Canada.
That amendment was moved on the second reading of that bill and not by way of an amendment to a specific section of the bill. My hon. friend now moves an amendment to section 2 of this bill, in these words:
Provided that this act do not come into force until it has, by means of a referendum, been submitted to and approved of by the electors of Canada.
I also submit that the amendment which I have just read has the effect of an expanding negative, and that if the referendum were held it would involve the expenditure of public money.
The hon. member has quoted the amendment of Sir Wilfrid Laurier to the Military Service Act, but that amendment dealt with the principle of that bill and not with a specific section, which is quite different.
The principle of this enabling legislation has been before the people; the people have already conferred enabling authority upon the government, and therefore I submit that the amendment moved by my hon. friend is quite different from that moved by Sir Wilfrid Laurier in 1917, when the principle of the Military Service Act had never been before the people. The principle of this enabling legislation has been before the people, and the people have conferred the necessary authority on the government. This is purely enabling legislation. I submit, Mr. Chairman, that on these

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Thomas Vien: Order. The hon. gentleman misinterprets the rule. He should have resumed his seat when the hon. member interrupted him.


Jean-François Pouliot: I thought I heard a sound, Mr. Chairman, but I saw no one, and that was why I had to stand up.


Thomas Vien: Order, please. We are on section 1.


Gordon Knapman Fraser: I am glad the hon. gentleman made that statement in the house.


Thomas Vien: We are on section 1, the short title.


Some hon. MEMBERS:: Carried.


Jean-François Pouliot: I am not impressed by noise, but I would ask hon. members to let us proceed.


Thomas Vien: Order. We are on the short title.


Jean-François Pouliot: Yes, sir; and you will admit that I have remained within the limits imposed by the Chair, and have not infringed upon them. I want to conclude, but I trust that the committee realizes the importance of the bill now before us, and that we shall not be disturbed by any buffoonery or anything of the sort. I do not blame anyone; that sort of thing suits some people, but I take this matter seriously, as everyone should. We must know where we are. That is my request, and I believe other hon. members share my views in that regard. We shall see in due course what may have to be said if our request for a more precise and more comprehensive title is not granted.


[Stage Direction]
Section agreed to.
On section 2-Special powers of the governor in council.
Joseph Sasseville Roy: Mr. Chairman, before I proceed with my remarks on this section of the bill, I will read the amendment I intend to propose. I have the honour to move, seconded by the hon. member for Laval-Two Mountains (Mr. Lacombe), that the following words be added to section 2 of the bill:
Provided that this act do not come into force until it has, by means of a referendum, been submitted to and approved of by the electors of Canada.
No doubt the older members of the house will recognize this amendment as the one moved on a similar occasion by Sir Wilfrid Laurier. If Sir Wilfrid Laurier was right in 1917 in moving this amendment on the ground that compulsory service for overseas was a denial of the most sacred principles of
democracy, then surely we to-day are hundreds of times more right in taking the same course under present circumstances.
It may serve some useful purpose to recall that since 1917 election campaigns have been fought on this very question of conscription for overseas. In every campaign this principle has been brought before the population, and they have been asked to condemn it again and again and again. On many occasions the Liberal party, and in the last election campaign the Conservative party, have asked the people to condemn the principle of conscription for overseas.
If it was not right to enforce conscription for overseas in 1917, and after the people have been urged to oppose it so many times since that year, then surely we cannot laugh at them now; we cannot laugh at their common sense. We cannot forsake that sentiment we have created and supported for so long a time. That is why I move the same amendment to-day. Moreover, recent campaigns have created stronger opposition than was found to the measure of 1917. We have always been supported in the stand that the enforcement of a compulsory measure of service for overseas was a denial of the principle of democracy. We have been supported by declarations of the leaders of all parties. This applies not only to the Liberal party. A few moments ago the leader of the opposition recalled the declaration in speeches of the Prime Minister. May I point out to the right hon. gentleman that in 1926, at a time when he was Prime Minister of Canada, the Right Hon. Arthur Meighen declared in Hamilton with respect to the opposition to that measure from Quebec that that province should not be ignored, and that if ever Canada were placed in a position where she had to decide whether she would go to war with England or the empire, such question should be referred to the people by referendum.
So it is that for twenty-five years the population of this country has been taught to oppose that measure. Leaders of different parties, and chiefly the Liberal party, have urged their arguments against that principle. Therefore to-day we cannot forsake this sentiment which for so long has been supported by Canada's political chiefs and leaders.


Gordon Knapman Fraser: Bring yourself up to date.


Joseph Sasseville Roy: Bringing myself up to date I [DOT]would say this, that conscriptionists are not in the majority in this country. We must keep that in mind. As was proved a few minutes ago by the leader of the opposition, most members of the cabinet are against the

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you who are masters of language, you have never received such an ambiguous title for any piece of legislation.
Hear this again: "The National Resources Mobilization Act Amendment Act, 1942." It is like a German name that covers a long space in a book. It should be drafted more clearly. It should read, "an act to establish definitely conscription for overseas service". Then we would know what it is. I know it has been the practice to call things by other names than their own and to change the dictionary. One example of that was the word "draftee". We did not hear the word "draftee" or the word "conscript"; we heard the word "recruit", a word that was improper. The real word was "draftee" or "conscript", because the man was conscripted either from the land or from industry. But it was not permitted to call the conscript or the draftee a conscript or a draftee; he was not that, he was a recruit, which, of course, meant the same thing.
Mobilization means conscription. Consequently, why not use that term? I am not in favour of conscription, but if this bill is for that purpose, why not call it so? It would satisfy hon. members on both sides of the house who are in favour of that, and every Canadian citizen would know what it means. We have already wasted about two months of this session in arguing about the plebiscite. I do not see why we do not have better drafted legislation. This draft is bad, this draft is wrong; it may mean anything, and it may mean nothing. Why not call things by their names?
Some hon. members want conscription. If it is at their request, as the leader of the opposition stated a moment ago, that this legislation has been brought down, well, does this satisfy them? By changing the short title of the bill and calling it "the bill that came at last to establish conscription for overseas", it would not be ambiguous any more; it would be clear. I wonder whether the government will take the responsibility of a bill which will be as clear as crystal and which people will understand as being what it really is? The Prime Minister has often said that he has great respect for parliament. It is a feeling that honours him, a feeling that honours all those who are true to the undying principles of British parliamentary life. Here we are in a game of hide-and-seek; we are legislating for what we think will benefit the people and the country at large. Why try to describe things otherwise than they are?
This has gone on long enough. We must come down to brass tacks, we must separate .the chaff from the good grain, so that we may

know where we stand. At the present time we are in a fog so thick that it could be cut with a knife. We want clarity; we want legislation with a meaning, whatever it is. It seems only fair, Mr. Chairman, to ask for something which those learned in law as well as those who have never studied law may understand, provided they know how to read. The legislation that is on our statute books, the legislation that we find in the Canada Gazette, is an abomination in regard to the way it is drafted. Who does it? No one knows. For a bill as important as this, the first conscription we should make is that of the most skilful brains, the most skilful men who understand that the law of the land applies to all those within the boundaries of the land and all those within the possessions of a country outside its natural boundaries, which, of course, is not our situation.
My first appeal to the government is to ask them to reconsider this section and to call things by their proper names. Either this bill means conscription for overseas, or it does not. If it means conscription for overseas, let us have a title that will truly describe the bill.


Gordon Knapman Fraser: If I may ask the hon. member a question, if the bill means conscription for overseas will he support it?


Jean-François Pouliot: Each thing in its turn; my hon. friend will see later on what I have to say on the matter. His question was very short, because if it had been longer he would have been called to order by the Chair. I think it most unfair of the hon. member for Northumberland, Ontario, to ask such a question when he knows very well-


Some hon. MEMBERS:: What was the question?


Jean-François Pouliot: I cannot repeat it; I am precluded from doing so by the Chair. It was most unfair of the hon. member to ask that very short question, in contravention of the decision of the Chair, when he knew very well that the member for Temiscouata, who always abides by the decisions of the Chair, could not answer it.


Gordon Knapman Fraser: If the hon. member cannot answer that question he should discontinue his speech.


Jean-François Pouliot: I regret that the hon. member for Northumberland-


Thomas Vien: Order. The hon. member has the floor. The incident is closed.


Jean-François Pouliot: Since the hon. member for Northumberland, Ontario, has interrupted me, I presume I am allowed forty minutes more.

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adequacy of our reinforcements for overseas. The reply was, to say the least, unsatisfactory -unsatisfactory in the sense that we were not given the ratio of our trained reinforcements to the active army overseas available to fill the places vacated when the casualty lists begin to pour in, as pour in they will, when the Canadian army gets into action. When that day comes, reinforcements in trained personnel will be required in ever-increasing numbers.
My fear is this, that while we are told we have adequate reinforcements for the time being, yet we shall not have them when they are most urgently required. That was found to be the case on other occasions. If, then, this testing time comes and we do not have the necessary reserves, it will be said of Canada that she did too little, too late. To me, the supply of adequate reinforcements properly trained when the testing time comes is of supreme importance. It will be too late then to apply the principle of conscription. As the Minister of National Defence for Naval Sendees said during the course of the debate, there is nothing wrong with the principle of conscription. Most of us, I think, will admit that apart from certain considerations obtaining in Canada, as a result of the education given to our people in the last twenty-five years, it is the only proper system to use. It is democratic; it is equitable; it is just and fair. I was curious to hear and read the arguments of certain of those members, including some members of the administration, who opposed the principle of conscription and who suggested that conscription had become a symbol of total war in the minds of those who urged its adoption. Mr. Chairman, nothing could be further from reality. It is the one thing Canada has not done, the one thing which she has delayed doing to provide for total war. The provision for ample reinforcements is the most necessary duty for Canada, for without that everything else fails. Therefore it is not a symbol; it is a necessary vital instrument of war. Its adoption in order to achieve that vital objective should not be delayed. It would be shameful to have history record that in this one vital factor, when the testing time came, Canada failed to send adequate reinforcements.
There is another factor about this situation with respect to our army, and that is what I have termed the anomaly of two armies, one volunteer and one drafted. I do not propose to restate that position. But I do say that from an administrative point of view the position must be almost intolerable. Those who are within the sound of my voice, who know what the position is, will know exactly what I mean. I have myself no special
information, but I am told that the difficulties created by the present position are almost insuperable.
But the one great argument in support of this principle, the one great reason why I appeal to the government not to delay the settlement of this question, is the wholesome fear I have that we have not adequate trained reinforcements overseas, and that the voluntary system will not provide them. We are now diverting the stream of man-power into other channels, necessary, but not as vital, weighed in the balance, as reinforcements for the army when action comes. I fear that we as a nation may fail the gallant lads who are now overseas prepared to do battle with the enemy wherever he may be found, if we do not prepare now by the only obvious method to support them to the limit.
No, conscription is not a symbol of total war. It is a vital living necessity for total war.


Jean-François Pouliot: I have the bill here, and I shall have no other opportunity-


Thomas Vien: Order. I would point out that the leader of the opposition had unanimous consent. If it is desired that the debate should be general-


Some hon. MEMBERS:: No. No.


Thomas Vien: Otherwise the hon.
member will be confined to the propriety of the short title, covered by section No. 1.


Jean-François Pouliot: Yes, sir. I will abide by your decision, and I will stay within my confinement. Since there was a little interval on account of the long speech delivered by the leader of the opposition I shall have to read this section again. The short title is:
This act ir.ay be cited as The National Resources Mobilization Act Amendment Act, 1942.
Well, sir, I find this a redundant title. It looks like a conundrum. It seems to me that in order to be fair to all those who are or who are not familiar with the law of the land and who desire from the bottom of their hearts to understand the meaning of the legislation, this title should be changed. At the present time it is obvious that this title-will be the joy of all those who would like to argue pro and con, for and against. One will say that it means conscription for overseas;, others will say, "no, the time has not come yet, you will have to wait a little. It does not mean that".
All I ask is clearness and lucidity in legislation. I have been praying for that for years and years, but my prayers have never been heard. This time we have this conundrum.. Think of that, you who are well-read in law

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maintain the solidarity of his party and of his own position. He has now announced that we are to have conscription on the "if, as and when" principle. Parliament is to be asked to give a vote of confidence. More delay; more shelving of responsibility on a vital issue, and by a government which has in the past two years, usurped more power and assumed more arbitrary control of our lives and property than any other government in all our history. Surely the time has arrived when we should do away with temporizing. Why should the government not be forthright on this question-say it will or it won't? Then we would know where this administration stands.
I pause now to put this query to the three defence ministers, one of whom only is in his seat to-day, having regard to their utterances in this chamber on the debate on the second reading of Bill 80. How can they as self-respecting men, after what they said in that debate, accept this latest chapter of the Prime Minister's policy? I put it to these hon. gentlemen, and I put it to them jointly and severally to declare themselves during the course of this debate, and before this bill becomes law, as to just where they stand. The country expects it of them. How can a cabinet, having regard to the principle of cabinet solidarity, accept this latest addition to this "Comedy of Errors" without a voice of protest from these three hon. gentlemen, followed by action? Let us have an end of all this twisting and turning. Let us be men and meet the issue squarely, man-fashion. Let us say that we will or we won't. The whole nation awaits the announcement of these three defence ministers, and it should not be delayed for another day. The statement of their position, having regard to what the Prime Minister said in his last speech, is long overdue.
What does this vote of confidence mean? It means just another unnecessary pledge which ties the Prime Minister's hands and will prevent him from ever putting complete compulsory national service into effect. What will be the verdict of history if our soldiers overseas meet disaster while the Prime Minister fiddles away with another political move which means delay and is definitely lacking in courage and decision? Let us end this farce. Let us face the situation and be done with political shadow-boxing and political expediency.
Then, on this question of coming to parliament on a vote of confidence. Is not that debatable? Such a motion or resolution involving confidence in the government cannot be put through without debate if any single member of this house wishes to discuss the

subject. Under the rules of the house anyone has an absolute right to discuss the subject. The Prime Minister knew this when he made the statement, and all his talk about getting through without debate is just so much eyewash. It was done, I verily believe, so as to give an appearance of getting things into conformity with what he had said in his previous speeches. Any motion involving confidence in the government is debatable, and it would be utterly outrageous if it were not so.
Later in that speech of Tuesday, July 7, the Prime Minister indicated that the debate would have to be curtailed. Well, who will do the curtailing. There is only one way to curtail debate in parliament, and that is by invoking the rules with respect to closure. Consequently, what the Prime Minister said on July 7 was that the action of his government in imposing conscription would be submitted again to debate in the House of Commons, but that closure would be applied in the debate, and the motion or resolution put through under closure.
I suggest that the time has come for the Prime Minister to state his case, his position, his proposal, in language which conveys his real meaning and that the country shall have some finality on this question. Heretofore, up to this point, we have had a flood of words and the most skilful concealment of the real intentions of the administration. I wonder what he himself and his followers, who have for nearly thirty years denounced conscription with bell, book and candle, who have also denounced closure with all the anathemas at their command, will think of conscription put through by closure, under the Prime Minister himself. Just fancy that spectacle in this house, you who have read the debates here.
During the course of the debate on the second reading of the bill I did not debate the question of conscription. I thought I had done so effectively in the course of my remarks in the debate on the speech from the throne. On that occasion I argued the case for national selective service, including service for overseas, with all the vigour at my command. I realized then, as I do now, that compulsory service for overseas is only one aspect of the whole question, but in my view it is a vital question; for without efficient, well-trained man-power all our other efforts for carrying on total war are nullified. No matter how well equipped our army may be, if it is lacking in adequate, well-trained reinforcements, near to the scene of actual action, it cannot long remain in action.
It will be recalled that on more than one occasion I interrogated the Minister of National Defence on this vital question of the

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whatever lies within my power to see that parliament is informed as soon as possible after the decision has been reached.
I intend, at the same time, to see that, before the administration assumes the additional responsibility of enforcing its decision, hon. members are given an opportunity, not for any second debate on the question of conscription, but of showing their confidence or want of confidence in the administration.
In following this course, I hope it will be agreed that I am fulfilling the spirit of an earlier undertaking given to parliament on February 25, that "when we find that we cannot raise the required numbers of men for enlistment overseas by the voluntary method, and it is absolutely necessary to raise more men by other methods, then we will make our decision, present it to parliament, and have it discussed on its merits." The debate on the merits of conscription has, of necessity, come on the present bill. What really is important hereafter is that the government's decision should immediately be presented to parliament, and that the government should be prepared to stand or fall on its decision.
Let us analyse that proposal. His proposal and undertaking is that although this bill, when passed, meant the authorization by parliament of compulsory selective overseas service, he would not actually give effect to the measure by introducing and implementing the policy of conscription until he had again come to parliament and made known his intentions of putting conscription into effect and asking for a vote of confidence. He rather indicated, too, by portions of his speech that this vote would have to be without any debate.
The progressive positions which the Prime Minister has assumed on this whole subject matter may be summarized as follows:
1.	March 30, 1939; September 8, 1939; June 17, 1940: no conscription for overseas under any circumstances while his government remained in office.
2.	November 12, 1941: no conscription for overseas, without consultation with the people.
3.	February 25, 1942: no conscription for overseas until the voluntary system has failed and it is absolutely necessary to raise more men by other methods-and until parliament has at that time debated and decided upon its merits.
4.	June 10, 1942: conscription is not now necessary and may never be necessary, but parliament should decide the issue now and enable the government to act at once without reference to parliament and without a second debate, if it should become necessary.
5.	July 7, 1942: conscription is not now necessaiy and may never be necessary, the policy being paraphrased in the words, "not necessarily conscription, but conscription if necessary"; but if the government should
decide it is necessary, it will come to parliament for a vote of confidence prior to enforcing it.
Trust the government, the Prime Minister has said. After everyone thought parliament had settled on a principle which would stick, we had the last rabbit out of the hat-no conscription without a vote of confidence in the government! What a spectacle of twisting and turning. Did the country ever see or hear of the like before? What leadership! Talk about shying at hurdles! Never in the whole history of responsible government has the world witnessed such an unholy spectacle!


Jean-François Pouliot: Would the leader of the opposition kindly repeat that sentence?


Mr. HANSON (York-Sunbury):: Oh, the hon. member can read it to-morrow.
I ask this question: what is to be the next contortion? What is to be the next and last rabbit which the Prime Minister will pull out of the hat? W'ill it be no conscription without the consent of the conscriptee? I have more than a suspicion that the Prime Minister would go that far if he thought it would be effective. Again, what a spectacle!
The Prime Minister would have it appear that at all times during his career he has avoided the extreme view on any great public issue. I think in the main that is correct; at all events, it has served him usefully in the days that have gone by. I think he has always waited until public opinion has crystallized. I assert that he has not led public opinion, that he has been led by public opinion and that he has taken what may be termed the opportunist course.


Mr. BLAIR:: That is responsible government.


Richard Burpee Hanson: That is not responsible government; that is opportunist government. He has always been susceptible to pressure of public opinion, and he has never done more than public opinion obliged him to do.
To-day national unity which he sought to preserve has been proved to be illusory, and party unity is shattered. He seeks now to restore it by temporizing once again. Will that method restore either national unity or even party unity?
Many times the theme has run through his speeches that when parliament was through with the plebiscite bill and the amendment of the mobilization act, all further responsibility would be on the government. Then comes this great afterthought, this boxing of the compass, this exhibition of indecision and procrastination-in the interest of what? Party unity-one last valiant attempt to

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Mark these words well:
-the place for it to be fought out is on the floor of this parliament.
Is it not abundantly clear from this sentence that at that stage in his progress away from his previous pledges and policies and toward the ultimate goal, it was the intention of the Prime Minister and the government that when freedom of action was received as a result of the vote of the people the government would take its decision, bring it to parliament and stand or fall by that decision? There can be no other logical inference from that language, and that is confirmed by the Prime Minister's own words of February 25, 1942, at page 832 of Hansard:
When we find that we cannot raise the required numbers of men for enlistment overseas by the voluntary method, and it is absolutely necessary to raise more men by other methods, then we will make our decision,-
That is, the government will make its decision, and:
-present it to parliament and have it discussed on its merits. . . . We are simply asking to be given freedom to make an untrammelled decision and to come to parliament with that decision.
That was another step. Beyond perad-venture, it is clear from this declaration that what was to be brought to parliament was the question of the implementation and the enforcement of the compulsory method for military service overseas, not the principle involved.
This was the situation as it stood until the time the Prime Minister moved the second reading of Bill No. 80, to amend the mobilization act, on the tenth day of June last Speaking on that day on the second reading of the bill, the Prime Minister quoted his own words of February 25, above referred to, and then went on to say at page 3234 of Hansard:
Unless the question of conscription for overseas service is to be twice debated, that, as I see it, is the stage we have now reached-
That was an admission that there had been a departure at least.
The government is making its policy with respect to the raising of men for service overseas fully known. We are presenting that policy to parliament, and, as 1 have just said, we welcome the opportunity of having the whole question discussed upon its merits.
Now I wish hon. gentlemen to note these words:
Also, it will, I think, be generally agreed that discussion on so important a subject should not be left to a time of crisis. As between debating the issue now or later on, obviously the wisdom and advantage is wholly in favour of the earlier moment.

He goes on in another place:
As I already have said, I am certain that with war on every side, hon. members of parliament would not wish two debates upon the subject of conscription when one should suffice, and I am even more certain that the people of Canada would not view with patience any such action on the part of their representatives.
In other words, the Prime Minister stated on February 25 that when the voluntary method failed to raise the required number of men, he would at that time present his decision to parliament and have it discussed on its merits. What happened? He came to parliament on June 10 and stated that "conscription for overseas service is not necessary at the present time. Moreover, it may never become necessary." Nevertheless he asked parliament then and there to decide the issue. What a contradiction! Those two positions are'not compatible. They are illogical. There is no sequence to' them. He was practising the same old policy of procrastination and appeasement. No wonder the words that I used in this house on June 10 with reference to his position, as set out in the quotation from Gilbert and Sullivan's opera, have been so greedily seized upon and approved by the general public of this country.
On July 7, winding up the debate on the second reading of Bill No. 80, he invented and brought forward a new formula-a pure compromise between his two positions of February 25 and June 10; and he put forward for that formula the claim that it was in fulfilment "of the spirit" of his earlier undertaking of February 25. Could anything better illustrate the type of casuistry in which the Prime Minister indulges?
I say with great assurance that the formula presented by the Prime Minister in his concluding speech was a new one and constituted an undertaking entirely distinct from and additional to the proposals of the bill and, indeed, definitely at variance with what he had said in his speech in moving the second reading of the bill. He introduced new matter in his reply, and he introduced it at a time when he knew there could not be any effective reply.
In that speech of July 7, the Prime Minister made the following statements, to which I direct particular attention, as recorded in Hansard at page 4014:
I intend, therefore, if the time should come when the government decides that it has become necessary to send overseas men who have not volunteered for general service, and I should be in office at the time, to ask my colleagues to join me in seeing that parliament is immediately informed of the government's decision. If parliament is not in session, I would do

Mobilization Act
forces overseas. Once again I wish to repeat my undertaking, frequently given, that no measure for the conscription of men for overseas service will be introduced by the present administration.
This was the third occasion on which he had given this pledge, this arrangement as it has been termed, this agreement, this gesture of appeasement to his followers in certain portions of Canada, those loyal followers who believed him when he made that statement but who now find themselves in the position where some of them are of the opinion that he has betrayed them. These men, even if we do not agree with them, are entitled to be given the credit at least of consistency.


Jean-François Pouliot: Who are they?


Richard Burpee Hanson: I am looking at one of them now. They believed in his pledge. The hon. member for Beauhamois-Laprairie (Mr. Raymond) has reaffirmed this position on more than one occasion. He believed in that pledge. He believed in that arrangement, and he referred to it in his speech. They believed in the pledge of the Prime Minister. The Prime Minister had taught them to believe that that would be the course his party would pursue. And they have every right to think that he has betrayed them.
I shall not traverse the events which intervened between June, 1940, and January, 1942. My colleague, the hon. member for Yale (Mr. Stirling) put on record on July 6 a statement of our position, and of the progress of events in relation to this question of man-power. Those were the progressive steps which we advocated and which one by one we have succeeded in having the administration adopt.
From all I have said it is quite clear that down to January last the Prime Minister's position was that under no circumstances, in no event and for no reason whatsoever would he or his government while in power enact or promulgate legislation for compulsory service for overseas. I should say, however, that in November last there was an indication of a change of front-not a vigorous, manful declaration of a change of policy, which, in the light of two years of disastrous retreats and defeats, would have been understandable, but a veiled intimation that he might consult the people on such a change of policy. I want to read his words to the membership of this house and recall them to their minds. On the twelfth of November, 1941, as recorded at page 4321 of Hansard, the Prime Minister said this:
But so far as conscription for service overseas is concerned in the armed forces of Canada, that question was submitted to the people of Canada at the last general election, an election which
was held in war time, and in which the leaders
of all political parties made their statements to the electorate, and the people of Canada decided against conscription for overseas service.
And now, Mr. Chairman, will you please note the Prime Minister's concluding sentence of that statement:
So far as I am concerned, without any consultation of the people on that subject, I do not intend to take the responsibility of supporting any policy of conscription for service overseas.
It will be seen from that, I think, that already the Prime Minister was wavering, and there was reason why he should waver. But he still refused to assume the responsibility which devolved upon him and which, I submit, the correct practice under our constitutional system demanded. He would "consult the people." He must have had this thought in his mind when, in January of this year, in the speech from the throne, he announced the plebiscite. Was this the consultation he had in mind in November? I think I am justified in asserting that it was. True, the consultation was not in direct form. But in the light of subsequent history, is there anyone outside the ranks of the ministry who does not now believe that the people were being consulted through the medium of the plebiscite? To argue otherwise, in the light of subsequent events, is to insult our intelligence. The people in Quebec who voted "no" had no other thought in mind. They believed then, and the vast majority of their representatives here in this house believed, that they were voting against conscription for overseas service. I may be pardoned if I repeat for the purpose of this argument that portion of the speech from the throne in which are found these words:
The government is of the opinion that, at this time of gravest crisis in the world's history, the administration, subject only to its responsibility to parliament, should in this connection and irrespective of any previous commitments, possess complete freedom to act in accordance with its judgment of the needs of the situation as they may arise.
In that paragraph is stated in clear terms an express departure from the principle so often enunciated by the Prime Minister. Subject to his responsibilities to parliament and, I should add, to parliamentary support, he desired for himself and his government complete release from his commitments-in relation to what? In relation to one thing and one thing only.
Then, in expanding that statement during the course of his speech on January 26 last, at page 4S of Hansard, the Prime Minister made this declaration:
If the issue of conscription for service overseas is to be fought out

Mobilization Act

now that peril is upon this nation and upon the whole world, those chickens have come home to roost. Banquo's ghost now haunts the Prime Minister, and he is driven from pillar to post to protect his own position and to preserve the position of his party. Time truly has wrought many changes. But through all these changes it is clearly visible that the Prime Minister's desire is to preserve his own political position and that of his party.
Let me review his position in these later years. In a debate on foreign policy held in this chamber as recently as March 30, 1939, the Prime Minister made this declaration, a declaration of isolationism, in the following terms, to be found at page 2419 of Hansard:
The idea that every twenty years this country should automatically and as a matter of course take part in a war overseas for democracy or self-determination of other small nations, that a country which has all it can do to run itself should feel called upon to save, periodically, a continent that cannot run itself and to these ends risk the lives of its people, risk bankruptcy and political disunion, seems to many a nightmare and sheer madness.
These words were not uttered by an isolationist in the United States; they were uttered, by the present Prime Minister of Canada. No wonder that John MacCormac, in his recent book "America and World Mastery", characterized the right hon. gentleman as the "king of isolationists". Isolation for Canada in relation to any of Britain's wars was the guiding star of the Prime Minister all through his tenure of office as Prime Minister down to the month of September, 1939. He held strenuously to the view that what happened in Europe was no concern of ours. He was preaching then what he had practised all his life. He was preaching what the little Canadians, to whom his appeal was directed, believed in. All the time he had in mind the consolidation of his political position. And on March 30, 1939, in the same speech on foreign policy, he took occasion to make a pledge to the people of Canada, and especially to his followers in Quebec, in the following terms as they appear at page 2426 of Hansard:
The present government believes that conscription of men for overseas service would not be a necessary or an effective step.
I call the attention of hon. members to this
S'mtence:
Let me say that so long as this government may be in power, no such measure will be enacted.
This pledge was reiterated by the Prime Minister when he was speaking in the house in the debate on the address in reply to the

speech from the throne, at the special war session on September 8, 1939. At page 36 of Hansard his position is reported as follows:
I wish now to repeat the undertaking I gave in parliament on behalf of the government on March 30 last. The present government believe that conscription of men for overseas service will not be a necessary or effective step.
Note well these words:
No such measure will be introduced by the present administration.
That was on September 8, 1939, and it was a reaffirmation of his previous position.
In the light of subsequent events, in the light of what has happened since that time, what a silly pledge that was I Nobody will recognize that fact more fully than himself because he has been trying to extricate himself from just such a position for two full years. What a futile undertaking that was, when we consider that to-day we have the full principle of compulsory military service for overseas or anywhere on the statute book of this country, and by the direction of the right hon. gentleman himself, and the party which supports him in this house!
In June, 1940, a little over two years ago, after the evacuation of Dunkirk, at the direct instigation of myself and my colleagues the mobilization act was introduced.


Some hon. MEMBERS:: Oh, oh!


Richard Burpee Hanson: I say that, and I can prove it. However, I shall not pause to do it now. Emphatically it was an emergency measure, copied, with one striking limitation, from the legislation passed by the British parliament the month before. It was merely enabling legislation. It never was intended in itself as a substantive measure. But with the exception of that limitation, it, together with the Militia Act and the War Measures Act, constituted, and to-day after the passage of this bill will constitute, the fullest possible power and authority any government ever obtained from the representatives of a democratic nation. And mark you well: it embodied within its ambit the principle of compulsory military service. We on this side of the house accepted the limitation, with some misgivings, but on the theory that half a loaf was better than no bread.
In introducing the bill the Prime Minister went to infinite pains to make it clear that he adhered to the traditional policy of his party on this question of compulsion for overseas service. Indeed I think he went out of his way to do so. On that occasion, June 17, 1940, he spoke, as recorded at page 854 of Hansard, as follows:
The bill to be introduced to-day in no way affects the raising of men to serve in the armed

Mobilization Act
have to endeavour to exercise my rights under section 3. But I do submit that in my position I should be allowed to proceed now.


Jean-François Pouliot: Yes, go on.


Thomas Vien: Does any hon. member desire to speak to the point of order? If the rule is not suspended by unanimous consent, I must hold that under section 1 there is only one matter to be discussed, and that is whether the words, "The National Resources Mobilization Act Amendment Act, 1942" are a proper short title for this bill. If I departed from the rule, which is binding upon the Chairman, where should I draw the line? Under section 3 the leader of the opposition might perhaps speak to the matters to which he has just referred. Therefore I will now read section 1.


Richard Burpee Hanson: Then may I ask for the unanimous consent of the committee? I am asking that, and I am wondering if this committee will refuse it.


William Lyon Mackenzie King: I will support my hon. friend's request.


Richard Burpee Hanson: I thank my right hon. friend; I think perhaps he has been in the same position himself.


Thomas Vien: Has the leader of the opposition leave to speak generally under section 1?


Some hon. MEMBERS:: Yes.


Richard Burpee Hanson: I want to thank you, Mr. Chairman, and the committee, and particularly the Prime Minister. I have no doubt that he has found himself in the same position on other occasions.
For several weeks this house debated the second reading of this bill. On June 10 the Prime Minister made one of his lengthy addresses in which, stripped of a mass of redundant verbiage, he stated the position of himself and his government as being "not necessarily conscription, but conscription if necessary," and announced that the principle of conscription would be debated then and there, once and for all. I replied to that speech on the same day, and exposed with all the power at my command the hollowness and what I considered the sham, the shadow-boxing and the practice of political expediency which it protrayed. I will say without fear of contradiction that every word I said then was justified. If I needed any confirmation of that view it was to be found in the speech delivered by the Prime Minister in the house on Tuesday, July 7, in winding up the debate
on the second reading of this bill, a speech to which at the time there was no opportunity for reply, in which he reviewed the position and made what I considered to be a definitely new proposal and undertaking entirely distinct and additional to the proposals of the bill itself, and indeed definitely at variance with what he had said in his speech in moving second reading. I intend to have something further to say in this regard later on.
The house will recall that immediately after the vote was taken the Prime Minister moved the house into committee of the whole on the bill, and that I then and there took the floor to analyse the Prime Minister's change of attitude. What followed is a matter of record, against which I shall not cease to protest. I had intended at that time to protest the proposal of the Prime Minister that he would seek to have any vote of confidence in his government in connection with this matter passed without debate, or with very limited debate. I was denied that opportunity then, but I assert here and now that any such motion of confidence is debatable, and every member of this house has the right to debate it. Otherwise there would be a flagrant violation of the basic privileges of parliament. I shall have something further to say about this particular topic later on in my remarks, but I cannot refrain from observing that only by invoking closure can the Prime Minister limit debate on such a motion. If he does so, then we shall witness the spectacle of the leader of the Liberal party, who has always denounced the principle and the operation of closure, who has always denounced conscription for overseas service as a monstrous policy, inimical to national unity, coming to this House of Commons announcing that policy and invoking the rule of closure to throttle debate upon it.
I now propose, Mr. Chairman, to review the rather tortuous course of the Prime Minister with respect to this question of compulsory military service for overseas, or rather shall I say the principle of national selective service for overseas or anywhere. It is a well known fact which cannot be denied, that for nearly twenty-five years prior to this war the Prime Minister and his principal lieutenants preached the doctrine that he and his party would never, under any circumstances, no matter how grave or perilous, resort to the principle of compulsory military service for overseas. It was the one theme which in season and out of season was preached by him and his lieutenants to the people of Canada, and in particular to the people of the province of Quebec. And now that disaster has come;
Mobilization Act

Personally I am not concerned. My only difficulty is always to apply the rule impartially to all hon. members, once an irregularity has been allowe^.
Mr. P0ULIOT: We all agree that subsection 2 of standing order 58 is the rule that binds us in our discussion in committee as we are sitting now. What is the item or clause under consideration? It is the short title of the bill, which reads thus:
This act may be cited as The National Resources Mobilization Act Amendment Act, 1942.
The bill which is now before the committee is to amend an act the purpose of which was to mobilize all the resources of this country. Therefore my contention is that at the present time, since general discussion is permitted with regard 'to the real purpose of the bill, any hon. member should be allowed to discuss the operation of the act that it is now proposed to amend, not only with regard to man-power affecting the three armed services, but also with regard to the mobilization of all other wealth that we have in this country. Moreover, any hon. member is entitled to criticize the operation of the former act, or to approve it, and thus any hon. member has the right and privilege to express his opinion on the principle of amending the former act and on the purposes of the amendment. The more so because when the matter was discussed here in this house many divergent views were expressed; this has the effect of taking off all limitations to the discussion of the matter, provided that an hon. member discusses the mobilization of man-power and all other resources of this country. Moreover-


Thomas Vien: Order. I should like the hon. member to limit his remarks to the interpretation of standing order 58. We are now on a point of order as to whether, on the short title, a general discussion can be permitted.


Jean-François Pouliot: Exactly, sir; I do not want to go further. I was just giving that as an illustration of the wide scope of discussion under the rule. Moreover, I submit that the subject matter of any discussion allowed by the Chair, either when Mr. Speaker was in the Chair or when you, sir, were in the Chair, could be referred to, provided it was while this bill was under discussion on second reading. The reason is obvious. It is the very same bill, and although hon. members are not permitted to refer to former speeches while asking questions on the orders of the day, they are surely allowed to refer to statements
[The Chairman.]
made on the second reading of the bill, and to take advantage of them to ask questions of the government, or even of the leader of the opposition or any other hon. member.
Therefore, without discussing the merits of the bill which is now before us, I bring to your attention the two points. The first reason why the scope of the discussion is unlimited, provided that the mobilization of man-power or of other resources is the subject of discussion, is that the bill has been drafted in such a way that it is impossible to know what it means; therefore we can know this only by asking questions. We have to get some understanding before voting. If the bill is read and nobody knows what it means, it can be interpreted just as that story about the bible. A clergyman was reading the bible and speaking about Eve, the wife of Adam. Turning over two pages at once, he said, "She was covered with tar both outside and inside". That of course referred to Noah's ark. The same might be said about the interpretation that could be given to the bill. Therefore, sir, I hope you will be very broad in allowing discussion.


Daniel (Dan) McIvor: Speaking to the point of order, I have tried to keep as quiet as possible on this matter because of the length of the former debate, some six weeks or more, and it is putting a heavy load upon the whips to try to keep a quorum in this house to listen to those who want to make more long speeches on this issue. I do not wish to advise the chairman, but I think he would show wisdom by hewing close to the line and allowing nothing to come in that is not relevant.


Richard Burpee Hanson: On the point of order, I think I understand the rule. What I proposed to say would be entirely referable to section 3, which is the repealing clause, and if I must proceed under that section I shall be content to do so. But I thought that for convenience, and following the practice which has come to be almost universal, I might be allowed to do so on the short title. A moment ago I was not allowed by you, Mr. Chairman, to proceed. I am not finding fault with that, because certainly I have no great desire to see a prolonged debate upon this matter, but there are certain things I think should be said. I can say them under section 3 if necessary; for I have no doubt that under that section anything and everything would be in order that could be said about this bill at any time. If the committee will not grant me the indulgence of making my remarks on the short title, then I shall

Mobilization Act
a day or . a week or a month. You have to take a proportion of the profits for a year when the profit and loss account is made up, when the statement is prepared, and that must apply in the case of these companies.


[Stage Direction]
Amendment agreed to.
Resolution 28 (formerly 26) as amended agreed to.
Resolutions reported, read the second time and concurred in. Mr. Ilsley thereupon moved for leave to introduce Bill No. 115, to amend the Income War Tax Act.
Motion agreed to and bill read the first time.

[Stage Direction]
Hon. J. L. ILSLEY (Minister of Finance) moved for leave to introduce Bill No. 112, to amend the Dominion Succession Duty Act.
Motion agreed to and bill read the first time.

[Stage Direction]
Hon. J. L. ILSLEY (Minister of Finance) moved for leave to introduce Bill No. 113, to amend the Excess Profits Tax Act, 1940.
Motion agreed to and bill read the first time.

[Stage Direction]
Hon. J. L. ILSLEY (Minister of Finance) moved for leave to introduce Bill No. 114, to amend the Special War Revenue Act.
Motion agreed to and bill read the first time.


[Stage Direction]
Bill No. 116, to incorporate Canadian Alliance Insurance Company-Mr. Bertrand (Laurier).
Bill No. 117, to incorporate The Felician Sisters of Winnipeg-Mr. Howden.
Bill No. 118, for the relief of Bessie McKenzie Balfour Whiteley Willard-Mr. Boucher.
Bill No. 119, for the relief of Ada Lahn Corber-Mr. Bercovitch.


[Stage Direction]
The house resumed from Tuesday, July 7, consideration in committee of Bill No. 80, to amend the National Resources Mobilization Act, 1940-Mr. Mackenzie King-Mr. Vien in the chair.
On section 1-short title.
Richard Burpee Hanson: I should like to make some observations on this section at this time, and as they will be of some little length I crave the indulgence of the committee in doing so.


Thomas Vien: I wish to call the attention of the committee to my difficulty in applying the rules. Standing order 58 is binding on the Chairman, and unless there is unanimous consent to suspend it, I would be unable to apply it equally to all members if I allowed the hon. gentleman to proceed. Under this rule no general statement may be made, either by the leader of the opposition or by anyone else in committee. The rule states that the debate must be strictly relevant to the clause before the committee. By unanimous consent, the short, title clause has often given occasion for a general discussion on the principle of a bill, lout this can take place only by unanimous consent. If at this moment the leader of the opposition made a general statement, where should I draw the line, and how Gould I prevent other hon. members from engaging in a general discussion?


Richard Burpee Hanson: I do not desire in any respect to challenge the interpretation which you, sir, put upon the rule. If it is necessary to do so I shall ask the unanimous consent of the committee while I make this speech, because for obvious reasons the position in which I find myself arises out of what took place here on July 7, when the Prime Minister, in closing the debate on the second reading, made a new and what was to me a startling change of policy.


Thomas Vien: Order. The remarks of the leader of the opposition raise another fundamental question of procedure, and a point of order. The leader of the opposition is referring to the debate which took place not in committee but in the house on second reading of the bill. On the second reading a general discussion developed which lasted several weeks, and before the Prime Minister concluded the debate His Honour the Speaker drew the attention of the house to the fact that the speech of the Prime Minister would conclude the debate. Then a vote was taken. References to that debate, concluded by a vote in the house, would be out of order in committee.
Standing order 58 is not ambiguous. It does not give rise to the application of canons. It is in clear language. Subsection 2 of standing order 58 states:
2. Speeches in committee of the whole house must be strictly relevant to the item or clause under consideration.

Income War Tax Act


Mr. ILSLEY:: There are many on which no tax is collected, because the total income is not taxable. It is below the exemption.


[Stage Direction]
Amendment agreed to.
James Lorimer Ilsley: The other amendment is:
(f) Resolution II shall be deemed to have come into force on the first day of July, 1942, and to apply to one-half of the profits of the calendar year 1942 and to the profits of all subsequent years and fiscal periods, provided that in the case of fiscal periods ending after June 30, 1942, and prior to June 30, 1943, the said enactment shall be applicable to that portion of the profits in any such fiscal period which the number of days therein after June 30, 1942, bears to the total number of days of such fiscal period.
That is the royalty company tax.


Mr. GIBSON:: I so move.


James Lorimer Ilsley: The hon. member for
Vancouver South asked a question based on this resolution. His question was: How is it that it is only payments to prospecting syndicates out of the profits of years which end in 1942 which may be used as deductions from income for income tax purposes? That may be a mistake, or it may not be; I will look into it before the bill is brought in. It may be that all the payments of companies whose years have ended before this in 1942 that are expected to be made have already been made. This prospecting programme has been under way for some time, and perhaps, as regards companies whose fiscal years ended, let us say, on March 31 or since, it was hot planned that payments made in their new year, that is their year ending in the calendar year 1943, were to qualify. But I shall have to look into that. It was a plan worked out by several departments-the metals controller, the mines department, the finance department, and so on, and if there should be an alteration we will make it in the bill.


Howard Charles Green: When was the minister's
previous announcement made?


James Lorimer Ilsley: I am told it was on April 30.


Howard Charles Green: Then these companies would have no way of knowing before April 30?


James Lorimer Ilsley: That is right. It looks as
though it should be changed; I will admit that.


Mr. ROSS (Calgary East):: The minister
stated in reference to resolution 11 that these royalty companies would be required to pay half the profits made in 1942. If it is left that way it is going to lead to a great deal of confusion. If the minister would say that all profits since July 1, 1942, would be taxed, it would simplify matters a great deal, because

the profits made prior to July 1 have already been distributed and are now in the hands of the holders.


James Lorimer Ilsley: That is what this means, I
think.


George Henry Ross: That is not
what was stated. The minister said, as I understood, half the profits for the year 1942.


James Lorimer Ilsley: I will read it again:
Resolution 11 shall be deemed to have come into force on the first day of July, 1942, and to apply to one-half of the profits of the calendar year 1942. . . .


George Henry Ross: You say, "one-half of the profits of the calendar year 1942." If you would say, "all profits made since the first day of July, 1942," it would mean a good deal less bookkeeping.


James Lorimer Ilsley: I do not think you can get at profits for a month or a week.


George Henry Ross: Yes; the profits are paid monthly, as the oil is sold. It is sold every month and the profits are divided every month among royalty holders.


James Lorimer Ilsley: Are those the profits for
the month?


George Henry Ross: On July 1 they pay the profits for the June operations.


James Lorimer Ilsley: I will look into that. The
w-ay rve deal with companies generally is to consider that the profits are for the twelvemonth period or for the fiscal period.


George Henry Ross: Yes, but these are peculiar companies.


James Lorimer Ilsley: Can profits for a day be
determined?


George Henry Ross: Oh, yes. Oil
is sold every day.


James Lorimer Ilsley: What are the expenses
allocable to that day? Somebody has expenses.


George Henry Ross: I believe they allocate the expenses every two weeks, or every' month, anyway.


James Lorimer Ilsley: The hon. gentleman knows
a good deal more about this than I do, but surely there are times of the year when there are special expenses, large expenses, lump sum expenses, and these would have to be spread over a fiscal period of some kind. What about depreciation? What about depletion? Do those not apply in this case? My point is that unless you have a fiscal period of some duration-it might be six months or twelve months-you cannot determine what the profits are. You cannot determine the profits for

Income War Tax Act
It cannot continue to pay that dividend because of the increased tax in the budget, because of the increased costs of operations, and because its rates are frozen under the price ceiling scheme.
Would it not have been less disturbing to industry, more just, and even equally effective in raising revenue for the treasury-
I am putting it on that principle as well as the other-if a normal tax of 18 per cent, as against 30 per cent in the new budget, were collected and a 100 per cent Excess Profits Tax Act, with no rebate, enacted? That is the theorem I am propounding.
Under the present budget, those earning slightly more than standard profits are the hardest hit. Thus a company earning 156j per cent of standard profits under the last budget would have 94 per cent of standard profits available for dividends. Now such a company only has 70 per cent, while companies prospering most from the war recover 20 per cent of the profits liable to the 100 per cent tax. Thus, moderate profits are reduced by taxation from 94 per cent to 70 per cent, but taxes on the higher bracket profits are increased only from 75 per cent to 80 per cent-that is, 75 per cent as against 100 per cent minus 20 per cent credit, equalling 80 per cent.
It is true that the total income of the government from corporation taxes, including the rebate, is greatly increased under the present budget; I admit that. But personal incomes, and therefore personal income taxes, will be greatly reduced through reductions in dividends. Personal income taxes will go down. They are bound to do so if the lead given by the two banks to which I have referred is followed all along the line, as I fear it may be.
Deducting rebates, which are forced savings, the net taxes which the government will receive may very well be much the same as in the past year, or even be actually reduced. And whatever the merit of forced saving for the individual, it has not the same merit for the corporations. What they have invested in rebatable tax will reduce by the same amount their ability to buy government bonds. That is a factor to which I have not heard previous reference. These people will be expected to buy government bonds, and how can they do both? Pledge their credit, I suppose. Many of them have had to do it in the past. Even if they never would buy bonds and, by the present scheme, are compelled to help finance government expenditures, this only means that their position with their bankers has been changed.
They will have to lean on their credit with the banks to a greater degree than they would without the 20 per cent. It has not meant that there has been more money made available. A corporation, unlike individuals, does not let money bum a hole in its pocket.
I hope the minister will read over these observations, because they do state some truths. It is too late to give effect to these principles in this budget, but I am hopeful that by the time another budget comes around, if the minister is in his present position, he will think seriously over the statement I have made and the principles I have endeavoured to enunciate.


James Lorimer Ilsley: This resolution, Mr. Chairman, requires certain amendments. The first is:
That resolution 26 be renumbered resolution 28, and that paragraph (a) thereof be rescinded and the following substituted therefor:
(a)	Resolutions 1 to 10, inclusive, and 12 to 15, inclusive, 20, 21, 26 and 27 shall be applicable to the income of the 1942 taxation period and fiscal periods ending therein and to all subsequent periods.


Colin William George Gibson: I so move.


Richard Burpee Hanson: What is the effect of these changes? I cannot follow them.


James Lorimer Ilsley: The effect of this change is simply this. Resolution 11, the one about royalties, is left out, because, as I stated this morning, we do not propose to apply this tax on royalty companies in fiscal periods ending in 1942; we intend to start it at July 1, 1942, to apply from then on. Also we have put in resolutions 26 and 27, which relate to the alimony and to the members of the armed forces.


Mr. JACKMAN:: The minister undertook the other day to explain whether or not there was any discrimination in taxation on residences occupied by ministers of various religions throughout Canada.


James Lorimer Ilsley: The value of the residences occupied by all clergymen is taxable; that is about all I can say. In a good many cases clergymen do not have enough income to be taxable.


Harry Rutherford Jackman: In the case which the leader of the opposition put before the minister the other evening there was very definitely a tax on the value of the rental. I asked whether there were any residences occupied by ministers, of various denominations, which were not taxable. I did not say theoretically taxable. I mean, is there any tax collected on them?
Income War Tax Act

the service, or at a later time. If to make that suggestion is an offence, then I am guilty. But I believe I would be doing those men a very great service in the long ran.


Ian Alistair Mackenzie: May I say to the hon. member for Souris that the private, single, who is overseas, and is on deferred pay for ten months, upon his return will have to his credit, plus rehabilitation, exactly the. amount of the 16 per cent required under the land settlement bill.


James Arthur Ross: I had reference more to the married man who has to assign a portion of his pay. His wife and family are using that money to live on. He will need assistance more than the single man.


James Lorimer Ilsley: 
Howard Charles Green: For a comparatively small number. Take the men in the battalions and batteries defending this country to-day. They are all in quarters. They are with their units.


James Lorimer Ilsley: They get subsistence.


Howard Charles Green: They get rations.


James Lorimer Ilsley: Rations in lieu of subsistence.


[Stage Direction]
Amendment agreed to.
Resolution 27 (new) agreed to.
Harry Rutherford Jackman: Mr. Chairman, I wish to Tevert to the previous resolution, having to do with alimony, which was introduced without advance notice, so that we could not possibly examine it thoroughly.


Thomas Vien: It was carried. We *could revert to it only by unanimous consent.


Harry Rutherford Jackman: I ask for unanimous oonsent.


James Lorimer Ilsley: It is all right with me.


Some hon. MEMBERS:: No.


Thomas Vien: I am sorry. The former resolution 26 is renumbered and becomes 28.
28. That any enactments founded on
(a)	Resolutions 1 to 15 inclusive, 20 and 21 shall be applicable to the income of the 1942 taxation period and fiscal periods ending therein and to all subsequent periods:
(b)	Resolution 10 shall be applicable to the income of 1943 taxation period and fiscal periods ending therein and all subsequent periods;

(c)	Resolution 17 shall be applicable only to the income of the 1942 taxation period and fiscal periods ending therein;
(d)	Resolution 18 shall be applicable to the income of the 1941 taxation period and fiscal periods ending therein and all subsequent periods;
(e)	Resolution 19 shall be deemed to have come into force on the 24th day of June, 1942, and shall be applicable to all payments made on and after the said date.


Richard Burpee Hanson: This is
the last resolution, Mr. Chairman, is it not?


Thomas Vien: Yes.


Richard Burpee Hanson: I think it appropriate that I should make just two or three general observations on the budget resolutions before they are reported. They may not be exactly pertinent to personal income tax, but it is too late for me to make any observations on the excess profits tax.
A day or two ago I asked for some information with respect to the progress that had been made in fixing standard profits for depressed industries. I have not yet received that. I was hoping the minister would give me the information before these resolutions were reported.
It is becoming increasingly apparent, if one watches the trend of the stock market quotations and of events themselves, that this budget will have the effect of compelling wholesale reduction of dividends. Only this morning I saw an announcement that two of the larger banks had reduced their dividends from eight to six per cent. The reason for that, I apprehend, is that no company can now retain or dispose of more than 70 per cent of the standard profits. No company will take the risk of disposing, by way of dividends, of all the profits which it is allowed to retain, and hereafter less than 70 per cent of standard profits, so long as the present high level of taxation is maintained, will be distributed.


Mr. GILLIS:: Sabotage.


Richard Burpee Hanson: No; I am just pointing out the effects of the budget on dividend payments because of the high taxation imposed. I am not saying whether it is right or wrong. I have my own opinions about that. But I think it will be accepted that the statement I have made in this regard is correct. The evidence is accumulating that the minister is going to get less in taxation from sources which should pay and have been paying a substantial amount of money. That will be true of industrial concerns and true also of public utilities. I know of one public utility company which I am sure cannot go on paying its moderate dividend of 5 per cent.

Income War Tax Act
from day- to day an amount would be added to these men's pay. It should not be taken away from them by income tax. That, it seems to me, is the proper position parliament should be taking at this time, because when these men return to Canada the problem of rehabilitation for them is going to be much greater than that which will face those of us who are in the civilian population. It will be a great deal more difficult than the problem faced by you or by me as we sit in this chamber. Those men have been lifted out of their civilian occupations and have been put in entirely different positions. Perhaps they will remain in those positions for three or four or five long years, years which will be taken from their lives-and a good many men in this house who came through the last war know what that means.
Instead of our debating how much we are going to take away from men in the armed forces, we should be debating how much we are going to add to their incomes from day to day, how much we are going to put aside by way of war savings certificates or some other such method. In any event a substantial sum should be put aside so that when these men come back they will have a stake in this country, and something worth while to return to.
That, it seems to me, is the proper perspective which we as members of parliament should have. That is the way in which the minister should be tackling this whole problem and coming to grips with it this afternoon.


Thomas Vien: I would point out, first, that the question of pay for officers, noncommissioned officers and men is not now before the committee. Second, the question of exempting, to a certain extent, officers or others in the armed forces from the operation of the income tax has been debated ad nauseam, and it is not proper to repeat an argument which has already been made often. If the minister cannot agree to hon. members' suggestions, then the only remedy is by way of vote. It is my duty to draw hon. members' attention to this question of procedure.


Angus MacInnis: Mr. Chairman, your ruling has robbed the committee of a very good speech. However I shall have to content myself with something less. I had some good ideas as to how we might get the meat out of the nest-egg after the war is over, but I shall not enlarge upon them.
It is a bad principle to try to increase a person's income by exemption from income tax. If we have adopted the principle of taxing the incomes of persons in the armed
forces, and if after we have applied the tax equitably, as it is applied to all other people, it is found that the income of one class is too low as compared with that of another class, the proper way to get over the difficulty is to increase the income-not to increase it by exemption from income tax. I object to the principle of raising a person's income by allowing tax exemption. That is not a proper way to do it. Neither is it fair to the minister to be continually pressing for exemptions of this kind. If incomes are not high enough, let us take the proper procedure and make them high enough-but not by exemption from taxation.


James Arthur Ross: I should like to support what has been said by the hon. member for Peel. With reference to the ruling of the Chair I would point out that we are debating the savings provision. In that connection I would agree with the minister. On Monday a bill was passed which, since its passage, has given me some concern. We have now in our armed forces many men who are agriculturists and who, upon their return, will wish to take advantage of that bill. They must be in a position to pay down 10 per cent, or they will not be permitted to avail themselves of the advantages offered in that legislation. I believe the minister is justified in setting up a savings clause, as he has done. But I do not think it goes far enough. He will probably have to take the advice offered by the hon. member for Peel, and do something more to enhance the pay of our men in the armed forces. It may have to be done by saving for them, so that when they come back they can get off to a good start,. Many of the finest young farmers in the country are in the armed forces, and if something is not done to save money for them they will not be able on their return to Canada to come under the provisions of the Veterans' Land Act. They will not have funds sufficient to pay the required 10 per cent. The savings clause is all to the good and should be enlarged upon.


Richard Burpee Hanson: In my innocence, and being somewhat old-fashioned, and a great believer in the virtue of thrift, I seem to have got into some little difficulty with some of my friends. I was not suggesting that there should be increased taxation, as such, on anybody. What I was saying was that probably in the case of these warrant officers, the only group of non-commissioned officers to wThich the minister referred in his table, some provision for compulsory saving might well have been made. They might well be asked to pay it in, and have the amount returned to them with interest upon their discharge from
Income War Tax Act


Howard Charles Green: Why was it not possible to give these officers an exemption equal to the pay of the sergeant-major, and then tax them on everything over that? Why could this not have been done?


James Lorimer Ilsley: Well, that would be an exemption of $1,600 of income from taxation in regard to everyone on service in Canada, would it not?


Howard Charles Green: Why could that not be done?


James Lorimer Ilsley: There would be a terrific loss of revenue.


Richard Burpee Hanson: Did the minister give consideration to having these top N.C.O's. save something also, and in that way equalize the condition?


James Lorimer Ilsley: Yes, I did.


Richard Burpee Hanson: They get much more than I thought they did, and I would not be opposed to imposing upon them the necessity of saving something and lending part of that money to the country.


James Lorimer Ilsley: I wholly agree.


Richard Burpee Hanson: Why should we not do it, then? That would level out the position and maintain the distinction. Surely there are not so very many of these men. I should not think nearly as many as there are junior officers.


James Lorimer Ilsley: You would have to apply that to all non-commissioned officers, of whom there are some 66,000. I am in favour of that being done, but I do not know that the army or the navy or the air force are in favour of it. When they do come to the conclusion that it should be done they can defer the pay and equalize the cash position.


Richard Burpee Hanson: They can do it now?


James Lorimer Ilsley: Yes.


James Arthur Ross: I do not know whether my leader was referring to all non-commissioned officers or just to warrant officers.


Richard Burpee Hanson: I was
thinking of the warrant officers.


James Arthur Ross: There is a discrepancy, and taking all things into consideration the warrant officer is much better off than the junior commissioned officer, who is senior to him, so that there might be some justification for some action of this kind. But I would not want it to be felt that all non-commissioned officers below that rank should be included.


Richard Burpee Hanson: I had
reference only to the man in relation to whom the figures were given.


Mr. GRAYDON:: I find myself in a very unusual position; that is, in disagreement with some on this side of the house and also with the minister in respect to the question just raised.


James Lorimer Ilsley: The latter is not unusual.


Gordon Graydon: No, it is not, and there are very good reasons why that should be so. But I wonder if we have the proper perspective of this whole matter. There is such a thing as not being able to see the forest for the trees. Do we realize that at this moment we are discussing the question of imposing taxation upon the men of our armed forces, when they are fighting to preserve the very system of taxation that now exists in this country? I believe we are following the wrong principle. If parliament wants to preserve its prestige we should not attempt to tax our men in the armed forces. I cannot agree with my good friend and leader. Sometimes he disagrees with me; and certainly I disagree with him on this point. So far as warrant officers are concerned, I do not believe we should tax anyone in our armed forces who is not now taxed.
I repeat, it seems to me we are following a wrong principle. It is all very well for us to say that this will allow some brass hats to go free of income tax. But that is not the principle about which we have to be concerned. If there are brass hats who should not have positions in the armed forces of our country, then it is for the Minister of National Defence to reduce them to the proper rank. If they are getting too much money now, surely it is not the job of the Department of Finance to see that through income tax they are brought down to their proper level. Surely it is not for that department to bring about this result by some savings scheme.
I offer what seems to me a tenable argument, namely that as best we can we should preserve the morale of our forces. I do not believe that morale can be preserved if we indulge in long debates about taxing what they get by way of pay and allowances, whether they be in Canada or somewhere else. When we take this position with respect to the men in our forces we in parliament are belittling our position. I believe I am on solid ground when I say-and I mean every word of it-that the government ought not to tax the pay of these men; it should be setting up a first-class nest-egg scheme rather than taking something away from them. There should be some such scheme under which

Income War Tax Act


Howard Charles Green: Would the minister deduct from those figures the refundable tax these officers have to pay? That is the only way to arrive at the actual income they will get.


James Lorimer Ilsley: I do not admit that, and I have proceeded on the opposite principle, which I think is the right principle. And I do not agree with the doctrine that it does not make any difference whether men save or not, no matter where they are. There is just as much reason for saving in the case of men in the army as anywhere else. I know the hon. member does not agree with that; he proceeds on a different principle altogether, but I am expressing my views, and I think they are sounder views. If the hon. member had advocated that there be some deferred pay for non-commissioned officers, he would have been on much sounder ground than he is in saying there should not be any saving for commissioned officers. That is what I think, but I will not press those views because' that is not for me to say.


Richard Burpee Hanson: Do the figures the minister has given represent what is left after the tax and compulsory savings .are taken away?


James Lorimer Ilsley: Yes.


Howard Charles Green: No, they do not.


James Lorimer Ilsley: As soon as hon. gentlemen subside I will give those figures; I have been trying to give them for some time. The net income, after tax and savings are deducted, of the top N.C.O. is 81,533; of the second lieutenant and pilot officer, $1,427; of the lieutenant and flying officer, $1,454; of the captain and flight lieutenant, $1,604, and of the major and squadron leader, $1,849. That is for single men.


Howard Charles Green: So that in two cases they are still getting less than the N.C.O.?


James Lorimer Ilsley: Yes, but they have an asset. They are saving that money and drawing interest on it, and our effort should be to get
the non-commissioned officers to save, either voluntarily or compulsorily, so that they will have savings also. That is my opinion.


James Arthur Ross: In reference to the question raised by the hon. member for Lake Centre and the hon. member for Lambton West, if these flying instructors, when seconded to the elementary schools, are classed as civilians for income tax purposes, I think that is very unfair. I would doubt that they were so classed; I should think they would still be protected, because they are only on loan. I should like the minister to clear up that point. With respect to the question just raised by the hon. member for Vancouver South, I think there should be some greater distinction between the warrant officer and the commissioned officer. The present situation will lead to difficulties in the army in matters of promotion, and so on, because a commissioned officer has certain undertakings and obligations he must discharge, about which the warrant officer or N.C.O. does not need to worry. I do not think we have the proper distinction there. I differ to some extent with some of the opinions that have been expressed here. I quite agree that everyone should be encouraged to save something, but I do believe the distinction created by this taxation between a warrant officer and a commissioned officer is very unfair and will lead to difficulties in the armed forces. Perhaps the minister would clear up that matter of the flying instructors who are seconded to elementary schools, because I think it is very important.


James Lorimer Ilsley: Before the bill comes in I will find out the interpretation. My impression is that under the interpretation, since they are paid by private employers, not by the government, they are therefore taxable.


Howard Charles Green: Would the minister give the figures in connection with married officers and married non-commissioned officers?


James Lorimer Ilsley: Yes. The figures are as follows:
Married-No children	iN.lj.U.
Net income after tax deduction
only	   $2,013
Net income after deducting tax
and savings	 2,013
Married-One child
Net income after tax deduction
only	 2,157
Net income after deducting tax
and savings	 2,157
Married-Two children
Net income after tax deduction
only	 2,301
Net income after deducting tax
and savings	 2,301
Second Lieut. Pilot Officer	Lieutenant FI. Officer	Captain Fit. Lieut.	Major Sqn. Ldr,$2,080	$2,080	$2,399	$2,7191,871	1,843	2,102	2,3702,224	2,236	2,628	2,9522,011	1,962	2,285	2,5522,368	2,402	2,859	3,1892,177	2,151	2,468	2,736
Income War Tax Act


John George Diefenbaker: No, these are not civilian instructors.


Mr. GRAY:: They may be seconded one month, they may be brought back to a service flying school the next month. They are not like Trans-Canada Air Lines pilots, who make that their livelihood; they are seconded to that school by the Royal Canadian Air Force and therefore are subject to the rules and regulations of the Royal Canadian Air Force. They are entirely different from pilots in the T.C.A., who are pilots of their own choice.


James Lorimer Ilsley: Are they exempted by the resolution?


Ross Wilfred Gray: I do not know.


James Lorimer Ilsley: I do not think we should change the resolution. If it is wrongly interpreted, we should interpret it correctly, but the moment we begin to change it to deal with civilians we shall never end.


Howard Charles Green: I have not had an opportunity to read the proposed amendment, but as I understand it, the effect of the change is that whereas at the present time an officer is taxed on his pay and his dependents' allowance and on a portion of his subsistence allowance-or I presume where he is in a mess that really means he is taxed on a portion of the cost of his rations-


James Lorimer Ilsley: He is taxed on 70 cents a day.


Howard Charles Green: He is not taxed on the full cost of $1.70 but on 70 cents a day. I understand the proposal is that now he will not be taxed on this 70 cents a day.


James Lorimer Ilsley: That is right.


Howard Charles Green: For three hundred and sixty-five days in the year that comes to $255.50. So that the amendment means that he will be taxed on $255.50 less than he has been in the past. According to my calculation, that means that for normal tax the sum of $17.85 will be saved, and on the graduated tax, taking it at 30 per cent, which is the lowest rate-actually some will be charged at the higher rate, I presume-it comes to something over $76. So that the amendment will mean that he will save something less than $100. I am not sure that these figures are correct, but I think they are approximately right. Then there is the further provision to be made, that if that still leaves him with less income than a sergeant-major he is not to be taxed so that his income is lower than that of a sergeant-major. But there is this exception, that the refundable portion of his tax can still be taken from

him, so that in effect he will still be getting less than a sergeant-major. I submit that the refundable portion should not be taxed against an officer. The reason for levying that tax is to set aside a fund which the man, civilian or officer, can use to help reestablish himself after the war. The duty of reestablishing these officers rests with the Canadian government Officers and men in the forces are entitled to be reestablished by the government. They should not have to pay the refundable portion of the tax at all. I suggest to the minister that that should be dropped, that they should not be asked to pay any of the refundable portion of the tax, putting them in the same category as people over sixty-five years of age who do not have to pay the refundable portion.
As I understand it, the general result of this change will be that the sergeant-major and the lieutenant and the captain will all be getting about the same pay.


James Lorimer Ilsley: No, that is not right.


Howard Charles Green: Or very close to the same.


James Lorimer Ilsley: It is a long way from that.


Howard Charles Green: I cannot see how the saving of $100 in the tax can put the lieutenant and the captain above the pay of a sergeant-major, because with those ranks, in the army at any rate, the discrepancy now is far more than $100.


Colin William George Gibson: That is only part of the saving.


James Lorimer Ilsley: Let me answer the hon.
member for York South. A second lieutenant and a pilot officer will have a tax benefit of $369 by this proposal if single, and $338 if married with no dependents.


Howard Charles Green: Will the minister explain
how it is that the lieutenant and the captain will not be reduced to the pay of a sergeantmajor?


James Lorimer Ilsley: I give the net income after tax under this proposal. The top non-commissioned officer in the army and the air force will get $1,533.


An hon. MEMBER:: Is that a warrant
officer?


James Lorimer Ilsley: Yes.


An hon. MEMBER:: That is single?


James Lorimer Ilsley: Yes, I am talking about
single now. The second lieutenant and the pilot officer wall have $1,551. The lieutenant and the flying officer will have $1,600; the captain and the flight lieutenant will have $1,794; the major and the squadron leader will have $2,075.

Income War Tax Act


James Lorimer Ilsley: It would mean that the
commissioner of income tax or someone else would be picking out officers and taxing them while other officers would not be taxed. It would create hard feelings.


Richard Burpee Hanson: It is a
question of doing it properly.


James Lorimer Ilsley: General rules must be
applied in matters of this kind.


John George Diefenbaker: There is one group I would bring to the attention of the minister. As a result of changes recently effected, particularly in connection with the operation of elementary flying training schools, quite a large number of sergeant pilots are being transferred from time to time to the elementary flying training schools as instructors. They are doing as dangerous work as they would do if they remained in the service of the air force in Canada. The only difference is that during the time they are with the elementary school they cease to hold their official rank in the air force. They are seconded to the school and they proceed with instructional work; yet under the terms of this amendment they would not be entitled to any exemption. These young men, if they were transferred to the service training schools as sergeant pilots, would be exempt, but because of the fact that they are sent to elementary schools operated by private individuals they are treated as civilians for the time being and cease to enjoy the rights that would otherwise be theirs. I do not think it would be unfair, and it would not change the principle in any way to include these men. They are not serving in the elementary schools because of their own wish or1 desire, but because they are carrying out orders. Some are sent overseas, some are sent to instructional schools for further training, others are sent to the service flying training schools as instructors, and in all these eventualities they are exempt. But because of the fact that, pursuant to discipline, they are seconded to elementary schools, they are denied exemption. I suggest that consideration be given the question of including these young men in the exemptions. I might point out an anomaly in the air force that should be done away with. It is that, non-commissioned officers, while serving with commissioned officers, receive a dollar a day less flying pay than the officer.


James Lorimer Ilsley: It is not taxed.
Mr. DIEFENBAKER; But when they are in the elementary school all of it is taxable as the bill now stands, and there is a considerable number of young men in this classification. They have all the danger and none of the
glory. I suggest that this resolution be so altered as to exempt non-commissioned officers who are seconded to elementary schools.


Mr. NOSEWORTHY:: Can the minister give us a rough estimate of the difference which resolution 27 will make in the pay of a second lieutenant in the army and a flying officer in the air force?


James Lorimer Ilsley: I shall have some more information in a minute. I have it here but it has to be worked out. With regard to the observations of the member for Lake Centre (Mr. Diefenbaker), representations have been received from instructors in the elementary training schools to the same effect as those he has made. Unless we adhere to the line between members of the service and those outside we can never adhere to any line. I have also had representations from the pilots of Trans-Canada Air Lines, who contend that they are just as much entitled to income tax concessions as those who are in the forces. They do not go the length of saying that they should be entirely freed from taxation, but they say they should be given some consideration, that their tax should be lessened to some extent.


Richard Burpee Hanson: Do they not get very high pay?


James Lorimer Ilsley: They admit that they get high pay, but they say that even so it is unfair for them to pay taxes if those who fly in the air force are not taxed. If we go among civilians and begin exempting them from income tax I do not know where we shall stop. I do not know what the end will be if we lay down risk and danger as a justification for exemption from income tax. In that case, what about workers in explosives plants?


Richard Burpee Hanson: Is it not
service?


James Lorimer Ilsley: It is restricted to service now, but the hon. member for Lake Centre is asking that it be extended to those in civilian employment who have been in service.


John George Diefenbaker: No, the minister has not followed me. I am speaking of the non-commissioned officers, sergeant pilots in the Royal Canadian Air Force, who complete their course and receive their wings and are seconded to civilian schools. They enlisted for sendee in the R.C.A.F.; they are still sergeant pilots, but they are not doing military duty during the time they are in the civilian schools.


James Lorimer Ilsley: That is exactly what I said.
Income War Tax Act

harm in going the whole way and freeing subsistence altogether. That is what we are doing, and it will mean a considerable concession to the whole range of officers. But I do not think we can free dependents' allowances from taxation, because that is part of the income of the officer. It is paid to him or paid on his account to his dependents; it is certainly part of the same sort of income on which anybody else is taxed. This is the resolution:
That the following resolution be added as resolution No. 27:
27. (a) That subsistence allowances received or deemed to be received by commissioned officers of the armed forces serving in Canada shall not be taxable income, unless such allowance exceeds the rate of $1.70 per day, in which case the excess over $1.70 per day shall be taxable income.
(b) That the payment of tax, exclusive of the refundable portion, as calculated under the provisions of the foregoing resolutions, shall not reduce the income of any commissioned officer serving in the armed forces in Canada below the level of $1,600 if not in receipt of allowances in respect of dependents, and below the level of $1,600 increased by the amount of the allowances in respect of dependents payable to the highest rank of non-commissioned officer in the same service and having the same number of dependents.
That is the proposal. It will mean a somewhat substantial reduction in the taxation of the lower commissioned ranks.


Colin William George Gibson: I so move.


Richard Burpee Hanson: How much loss of revenue?


James Lorimer Ilsley: I am not sure. About $4,000,000, I think.


Mr. HANSON (York-Sunbuiy):: That, of course, is a substantial sum, and to that extent it is relief of these lower-taxed officers. Has the minister given any consideration to the suggestion I made-I am free to say it was the only one I could think of on the spur of the moment-that officers in Canada who it is never contemplated will go outside Canada, and who are actually not fighting men, should be recategorized in one classification, and the others in another?-because I think it was the intention of parliament that fighting men were to be given consideration. I shall not go over the ground which was traversed here by many hon. members in regard to the men who have been brought back from overseas. I am thinking of my friend Major-General Ganong, who has just been brought back with the rank of major-general to take command of the eighth division, and wondering how he is going to fare.
If a concrete illustration were desired, take the position of a high ranking officer of the 
air force, we will say the man in charge of an air station, say in Newfoundland, and his opposite number in Canada. Assume that the pay is around $10,000; is there not an advantage to the man in Newfoundland of over $3,000 as against the man in Canada?


James Lorimer Ilsley: That is true.
Mr.	HANSON	(York-Sunbury):	I	have
seen that stated. I have not checked on it, but the minister can correct me if it is wrong.


James Lorimer Ilsley: It is not wrong.
Mr.	HANSON	(York-Sunbury):	It	is a
substantial amount in the high brackets. As to the other suggestion, what would be the difference between the officer commanding in Newfoundland with $10,000 a year, as opposed to the man in Canada with the same rank and salary? What would the man in Newfoundland save over the man in Canada?


James Lorimer Ilsley: It is a matter of taking the tax on $10,000.
Mr.	HANSON	(York-Sunbury):	That is
about $4,500.


James Lorimer Ilsley: Yes, for a married man
with two children.
Mr.	HANSON	(York-Sunbury):	We	will
assume that in both cases. Would not the man in Newfoundland be $3,000 better off than the man in Canada? It is an anomalous situation.
Mr. ILSLEY': It would be $3,346.


Richard Burpee Hanson: Well,
there is a man, a high ranking officer in the air force, but of a rank junior to the chief of general air staff. He may be in a combatant area. I do not know whether you would call Newfoundland a combatant area or not. I would wTant $3,000 more to live in Newfoundland than in Ottawa; nevertheless he is a soldier and he has gone where he has been sent. I still think that this would perpetuate a great discrimination. I will not argue the point further. But could not the minister give some effect to the suggestion I made? If it was not worthy of consideration, all he has to do is to say so.


James Lorimer Ilsley: I would not say it is not
worthy of consideration, but I feel it would be absolutely impossible.
Mr. HANSON (York-Sunbury).:	Of
administration?


James Lorimer Ilsley: Yes.


Richard Burpee Hanson: You have to draw the line.

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James Lorimer Ilsley: The new resolution 27 relates to the members of the forces. This, of course, is a question of great difficulty. The main practical difficulty created was this, that with the high rate of taxes certain commissioned officers after payment of tax were left with less net income than non-eommissioed officers, and therefore, it was thought, non-commissioned officers would hesitate to accept promotions.


Richard Burpee Hanson: That was
one aspect of it.


James Lorimer Ilsley: Yes, that was the main difficulty to overcome. Of course, the imposition of the higher rate of taxes accentuates the difference in tax treatment between those serving overseas and those serving in Canada, which -would tend to a preference for serving outside of Canada or on the ocean, or qualifying for exemption as a flying officer. But we did not feel that there was any way in which we could overcome that. There would be one way, and that would be to remove income tax from officers in Canada altogether. That was advocated by certain hon. members, but it would be extremely costly. As I told the house, the cost under present budget rates, including compulsory savings, would be between fifteen and twenty-five million dollars, according to our estimates. Moreover I do not think that to do so would be in accordance with the sentiments of the house or of the public. It is not done in Great Britain or in the United States. Recent' concessions in the latter country have gone a very short distance. So that we felt we had to dismiss that suggestion.
Another thing we might have done was to tax officers overseas, and tax non-commissioned officers, and even privates. Naturally we shrank from that course; because we have started the other way, it is very difficult to make a change of that kind, and probably it would have a detrimental effect on the morale of at least some of the troops. So that we thought we could not do that. There has been no demand of any magnitude or consequence on the part of the officers in Canada to be relieved of taxation. Some of them have felt that the present rates are pretty high, but the great bulk of representation has been that they do not wish to avoid taxation. We therefore had to work out a system which would leave untaxed the non-commissioned officers and privates, leave untaxed the officers overseas who are now untaxed, and at the same time soften to a certain extent the disparity in tax treatment between the officers in Canada and those overseas; also do away with the marginal problem, the problem of that dividing line between non-commissioned
officers and commissioned officers. The formula which has eventually been adopted, and which, although open to objection from several points of view, is the best I have been able to devise after a great deal of thought and work, is to free subsistence allowance up to $1.70 per day from taxation. The surplus over $1.70 will continue to be taxed, but freeing up to $1.70 will free practically all subsistence from taxation, which will be a concession to all officers who are now taxed; and then to provide somewhat roughly, as the committee will see, that the payment of tax-I am not referring now to refundable tax-shall not reduce the income left to any officer below the income which the high noncommissioned officer receives. That is the general principle which has been applied.
Of course it will be readily apparent that if this is applied strictly there will be variations in tax credits, so to speak, to officers as between the different services, and moreover it will tend to level the amount of pay left to officers of various ranks. I thought when I started that the effect of it might be to make the amount of pay left to the major, the captain, the first lieutenant, the second lieu-enant and the warrant officer, the same, which would be most undesirable. By working at this we have been able to get rid of most, although not all, of those difficulties, and what we have done is this. We have taken the pay of the warrant officer, who is not receiving trade pay; he is the non-commissioned officer receiving the highest pay. Pay varies between the three services. It is higher for the highest warrant officer in the navy than it is for the other two services; it ranges from fifteen hundred and some dollars to seventeen hundred and some dollars. So that we have taken the rough average of $1,600, and we are going to ask the committee to provide that the taxation which is imposed on the officers will not reduce the pay of an officer below $1,600 -that is, for the single officer. For those who are married, dependents' allowances must be added.


Howard Charles Green: Will they be taxed on
dependents' ajlowances?


James Lorimer Ilsley: Oh, yes. What is freed is the subsistence. Hon. members have contended that there is something anomalous about taxing subsistence. Of course there is not, according to ordinary taxation principles, but the treatment of the taxation of subsistence has not been logical here. The subsistence allowance for an officer is ordinarily $1.70, and the income tax division has been taxing only 70 cents, deducting $1 from the subsistence. Having gone that far, there is not much
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had taken out an insurance policy on young children in order to create a fund for their future education. I also referred to annuities on young children, and joint policies for man and wife. The minister was going to give an answer. Is it now ready?


James Lorimer Ilsley: No; I shall give it on the bill.


Howard Charles Green: In the present resolution No. 26 I notice in paragraph (c) that the exemption given in respect of prospectors is applicable only to income of the 1942 taxation period, and fiscal periods ending therein.


James Lorimer Ilsley: Yes.


Howard Charles Green: Why is it only for one year? As I read the latter part of the paragraph the result would be that if the fiscal period of a company ends on June 30 that particular company would not receive the benefit of the exemption.


James Lorimer Ilsley: Correct. I should like to deal with that, however, when we come to it. There are other resolutions which come first.
Resolution 17 agreed to.


Colin William George Gibson: I move:
That the following resolution be added as resolution No. 26:
''26. That in the case of divorced persons or persons separated as to bed and board by judgment or decree of a competent court, or by a valid and binding agreement, and who are in fact living apart, any amount paid by one consort to the other under the terms of such judgment, decree or agreement, for the support of such consort and children, if any, shall be considered the separate income and taxable in the hands of the consort receiving such amount. The amount so paid shall not be allowed as a deduction from the income of the consort paying the same, but he shall be entitled to deduct from the total taxes payable by him on his total income, including the amount so paid to his consort, the amount of taxes payable on the alimony or separation allowance by the other consort as if it were her sole income as a single person -with such children (if any) of the marriage as dependents as are in fact in her custody."


Harry Rutherford Jackman: That does not follow the
United States practice.


Mr. HARRIS (Danforth):: Could the minister answer the question I asked last night at eleven o'clock, as to whether the administrator or executor should encroach - on the capital, in the event of succession duties and income tax being higher than the income?


James Lorimer Ilsley: I looked at the hon. member's question, and will consider it when the bill is brought down. I have not had time to go into it in detail, but I shall do so later.
At one o'clock the committee took recess.
The committee resumed at three o'clock.


Richard Burpee Hanson: Mr. Chairman, I have had the opportunity, thanks to the minister's consideration, of trying to analyse this proposal during the lunch hour. As I understand it, first, the alimony is to be taxable in the hands of the recipient; second, there is no deduction from the income of the one paying the alimony, that is the alimony is not a deductible expense or charge; and third, the tax paid by the consort is to be subtracted from the tax paid by the payer of the alimony. That, as I understand it, is the proposal. I have no considerable amount of anxiety for people who find themselves in this position, but I am wondering whether this is really very much of a concession. I hold in my hand a copy of the Wall Street Journal of July 15. which contains a special digest and analysis of the new revenue bill as presented to the House of Representatives at Washington on the fourteenth of July. This is what it says with respect to this subject:
Those paying alimony get a break under the terms of the bill. They can deduct payments in determining taxable income. Those receiving alimony must report it as income and pay taxes on it.
It goes on to say:
The reason for the change is simple. Taxes and alimony were exceeding 100 per cent of income in some instances.
Is there any possibility of that occurring here? I shall not labour that point. I think the minister has made a concession to these people, of whom I would not suppose there were many. In one instance of which I had heard, the tax would have been tremendous, and this will be some little alleviation. Of course, the crown is not losing much, if any, income tax at all. There may be a lower rate on the income paid by the consort.


Colin William George Gibson: The reason for this resolution not being along the lines adopted in the United States is that if the person paying alimony is permitted to deduct it from his income for taxation purposes, the total amount of tax paid by two consorts who were separated would be less than that paid if they were living together. Under this proposal the person who is paying the alimony calculates his own tax as heretofore, but he is allowed as a deduction from his tax the amount that the person receiving the alimony is required to pay under this resolution.


Richard Burpee Hanson: That is exactly what I said.


[Stage Direction]
Amendment agreed to.
Resolution 26 (new) agreed to.
fMr. J. A. Ross.]

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that so when we look at the agreements which have been reached with such large corporations as International Nickel undler the War Exchange Conservation Act, under which tax exemptions are granted. For proposed construction amounting to about $34,000,000, taxation allowance for depletion and depreciation of $5,000,000 is allowed annually to this corporation for five years. Then there is a similar agreement with the Consolidated Mining and Smelting company, granting that company similar exemptions in connection with the construction of a dam amounting to about $9,500,000, extended over a period of years. Then we find that the government will not grant tax exemptions to individuals who want to undertake this work, and to me this seems very deplorable. It has gone so far that a good many people in Canada are beginning to feel that the only thing left is to nationalize all the resources of this dominion.
There must be expansion in these days, and the greater the expansion, we can obtain the better it will be. The National Resources Mobilization Act gives the government power to mobilize all the resources of this dominion, and nothing should be allowed to interfere. In times of peace these companies operate the natural resources of this dominion on the basis of securing profits for themselves. The natural resources of our country should be used for the benefit of the individual needs of the people of Canada and our allies. Conditions are too serious to permit the profit motive or any other motive to interfere with the rights andl privileges of our people. Leases should be set to one side if they are hindering our development. Let us get our natural resources into industry to produce the sinews of war.
The government would do well to consider every avenue which would assist individuals and corporations to increase production. Let us have this production and do not let anything interfere with it. Every field should be opened and every development encouraged.
Howard Charles Green: I was born and brought up in a mining district of British Columbia where silver, lead and zinc are produced. My memories of that Kootenay country are of prospecting being carried on by means of the local merchant or some such person grubstaking the prospectors. It was largely in that way that the whole country was opened up. I have known many of those prospectors and have been out to their mines with them. They are the finest possible types of men. It is a tragedy that they are being completely shoved out of the picture; that no provision is being made to help the individual prospector. Merchants in small towns, local bank managers, perhaps local high school principals or men of that type, are not the kind who are going to- try to cheat the government. On the contrary they are the backbone of our citizenry, and I suggest the government should not let a difficulty in auditing stand in the way of extending exemptions so that the individual prospector may be sent out into the hills. I am quite sure he is more likely to find a prospect than the employee of the big mining company who is perhaps sent out on salary, and has not the same incentive as the prospector. There would not be many claims for exemptions, and I suggest the principle of granting the same privileges to the individual prospector as are granted to the associations or companies is a sound one. It will be found that some of the big mining companies will send out fifty to a hundred employees and then come in with exemption claims for each.


James Lorimer Ilsley: It is not to exceed $5,000.


Howard Charles Green: Yes, that is right. There is a limit.


Richard Burpee Hanson: Before the resolution carries there are a few brief observations I should like to make.


James Lorimer Ilsley: Before the hon. member begins may I point out that there are two additional resolutions to be proposed. One of these relates to alimony, and the other to the members of the armed services. The one relating to alimony will be resolution No. 26 and the second one will be No. 27. The present No. 26 is to be renumbered 28, and is to be amended so as to provide for the royalty company tax taking effect on July 1, 1942.
I suggest that the alimony resolution be proposed now, because I have an idea hon. members would like to see it. The situation is one of extreme difficulty. I am not referring of course to the situation of the persons themselves, but rather to the way of meeting the tax. It is almost impossible to decide upon a satisfactory solution. My colleague will move the resolution now, and we could proceed to discuss it at three o'clock.


Richard Burpee Hanson: Why not give us both of them now?


James Lorimer Ilsley: I cannot give the other one, no.


James Arthur Ross: Even if the resolution is to be renumbered I would point out that I asked the minister a question yesterday with respect to the head of a household who
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a return in connection with the arrangements made between the government of Canada and the Metals Reserve Company of the United States. The answer I received was that a letter of intent had been drawn up by the Metals Reserve Company, Washington, addressed to War Supplies Limited, Ottawa, recording in general terms an agreement with a view to formulating and carrying out a joint programme designed to increase Canadian production of copper, zinc and lead, and other strategic and critical metals and minerals required for the common war effort, but that as yet the agreement has not been signed. According to authoritative United States newspapers an advance has been made to the Aluminum Corporation of Canada totalling $50,000,000, in order to provide for a further extension of the production of aluminum in Canada. So that there is great need for the production of zinc, lead and copper.
When we are prepared to spend millions in order to encourage the greater production of these minerals, of which to-day there is an ever-increasing shortage-in fact in regard to the production of certain munitions we are fast approaching the limit of our production because of this shortage-what loss would there be to the treasury if we permitted any merchant in a district adjacent to a mineral area-and this would apply only to such .merchants-to advance the sum of $500, or whatever sum the merchant might choose, ras a grubstake to an independent prospector? There is no reason why there should be such a concentration of authority in the hands of corporations.
When I listened to the argument in regard to oil a short time ago I wondered if the time had not come when we as members of this house should call upon the government to decentralize many of these controls. With regard to oil and minerals, everything is falling under the control of a few corporations, due to the fact that we have this system of controllers representative of the great interests. To-day the position is that a man who wishes to go out and produce oil cannot do so. Even when individuals join together in a syndicate they cannot do so, because first of all they must have the consent of the oil controller or someone connected with him, in order to secure the necessary metals and machinery required in the production of oil. The result is that instead of an increasing development of our natural resources, minerals, oil and the like, under these war-time controls we are placing power in the hands of a few corporations to the

detriment of the people as a whole. And while there may be some reason for the sort of regulations we have made in connection with oil production, at least something should be done in regard to the production of minerals which will enable the individual to work.
Recently I was in Kirkland Lake which has one of the greatest mining developments in Canada, one of the most unusual places one could visit. There I saw several mines, all in a line. The first mines there were not found or discovered as the result of a great corporation development. They were the outcome of the fact that there were prospectors who were prepared to take a chance and merchants who were prepared to finance those prospectors and give them a chance. And they went ahead against the opinions of geologists and others who ought to know, and prospected that area which I suppose to-day produces more revenue, for its size, than any other place in Canada.
The same is true in Saskatchewan. In northern Saskatchewan there are areas awaiting development, and they are being held back only because of the fact that they have come under the control of certain corporations or syndicates who believe it is in their interest to begin development, complete the assessment work, secure title and then go elsewhere, not proceeding with further development until such time as copper and other basic metals will return a profit sufficient for their purposes. Look at the situation to-day in connection with mining. A prospector stakes out an area. He discovers a worthwhile find, and those who finance him are able in a few years to obtain title, by doing the assessment work. Then they have absolute control for twenty years, whether or not they continue that development. Under resolution 17 the minister has gone a certain distance toward recognizing the need for further production of these basic metals, and I do not think there would be any administrative difficulty in extending this provision to cover the individual prospector, financed by the local merchant.


Mr. CASTLEDEN:: 1 wish to support the
plea that some advantage should be extended the individual prospector. The history of the development of the natural resources of this country would indicate that the tendency has been to hand over the resources of this dominion to a few people, a few privileged syndicates. Not to allow individuals to secure tax exemptions of this kind is certainly a move in the wrong direction. Particularly is

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from prospectors is that the young prospectors are in the armed services. The old prospectors are all joined up with syndicates and have been working for them for years.
I have been in a number of syndicates. They were formed by a few people who put in perhaps $500 each. An agreement is drawn up with the prospectors who go out, and the agreement is registered. In other instances a number of persons get together, a syndicate is formed, and they generally send out these older prospectors. In many cases you will find it is just a personal agreement drawn up with the prospector.


Howard Charles Green: Will this section be broad enough to cover the merchant in a mining town who grubstakes a prospector to go out for six or eight weeks?


James Lorimer Ilsley: The individual prospector? I should not think so.


Howard Charles Green: Why should he not be entitled to the exemption? The tendency seems to be too much to give all the advantages to the big operating companies and no consideration to the little fellow who is helped out by his friend who keeps a store in a mining town. Why should not that exemption be given to the storekeeper or anyone else who is willing to find the money to enable the prospector to get out into the hills?


James Lorimer Ilsley: It would be pretty hard to check the eligibility of the applicant for the deduction. This is an important concession that the taxpayer is getting.


Howard Charles Green: Then the only reason this little man is not given that help is the difficulty in checking or auditing?


James Lorimer Ilsley: That is right.


Howard Charles Green: There are income tax offices in the different centres across Canada, staffed by efficient civil servants. These men have to make checks and audits in every town in Canada anyway; why could they not look after the auditing of these comparatively few cases where a man advances money to a prospector?


James Lorimer Ilsley: The merchant would be allowed to subtract $500 from his income for taxation purposes in consideration of having given it to someone who, he says, is a prospector and went prospecting. He did not find anything, but he was away quite a while-he was a prospector. Now, was he? If so, was he a prospector who had a reasonable chance of finding something, and did he look where a qualified prospector would look? I do not know how the income tax people are going
to check up on that. One thing we do know is that we will get tax on $500 less of that merchant's income.


Howard Charles Green: How are they in any better position to check the prospector who is working for a prospecting syndicate?


James Lorimer Ilsley: Because of their standing.


Howard Charles Green: That prospector may go out and sit under a tree and eat his beans and! bacon all summer and find nothing, yet the' syndicate is entitled to exemption. There are just as many opportunities for bad faith there as with the prospector sent out by an individual. I do not think it is right that these privileges should not be extended right down to the individual, that they should be restricted to the large companies-because that in effect is what this will be doing.


James Lorimer Ilsley: No; it is not large companies at all. Prospectors' syndicates are not large companies.


Howard Charles Green: But it extends also to the larger companies.


James Lorimer Ilsley: Also, but it is not limited to them.


Howard Charles Green: In many cases it is not good for the country, because these big companies will hear of a find in a certain spot and will send out twenty-five or thirty of their employees and stake the whole countryside. That results in freezing the individual prospector out of the picture. The old prospector who opened up British Columbia is being pushed rignt out of the picture by these large companies, and by refusing to give this exemption in his case the dominion government is furthering that course. That is what has been going on for some years.


John George Diefenbaker: The justification
for this section would be a desire on the part of the government to increase the production of certain basic metals. I understand that is the reason for the exemption which is given.


James Lorimer Ilsley: Yes.


John George Diefenbaker: So far as the western provinces are concerned the main discoveries that have been so far made, the original one at Flin Flon, the one at Goldfields and the one at Yellowstone in the northwest territories, were the result of the activities of independent prospectors operating with the benefit of grubstakes given to them byindividuals in the manner outlined by the hon. member for Vancouver South in reference to British Columbia. The other day I asked for
Income War T(tx Act


James Lorimer Ilsley: Before the resolution carries, I should say that it is intended that this taxation shall apply only from the first of this July.
Resolution 11 agreed to.
On resolution 17:


Howard Charles Green: The minister was to get some information.


James Lorimer Ilsley: I did not get along as well as I hoped in obtaining this information. The memorandum from Dr. Camsell is as follows:
My information with regard to the facilities for registration of prospecting syndicates in the provinces is incomplete but I am informed by the companies branch of the Secretary of State department that such facilities do exist in the provinces of Ontario, Quebec, Manitoba and Alberta. There seems some doubt about British Columbia, but certainly no facilities exist in the maritime provinces or in Saskatchewan. The opinion however is expressed by the companies branch that it would be as well to allow' the clause to stand as presently worded and if the necessity should arise for registration facilities in provinces that do not now have them these provinces would not delay in setting them up.
A telephone call is now being put through to the British Columbia officials, but they may not be in at the moment.


Howard Charles Green: My objection to the resolution is the use of the term "registered prospecting syndicate." I have checked the British Columbia law and I can find no such animal as a "registered prospecting syndicate" in that province. Provision is made in our mineral act for mining partnerships. Properties staked for a mining partnership are registered in the name of the partnership, and to that extent I suppose there could be said to be a registration of the partnership. But I assume the idea is to give this exemption to any prospective organization which can be properly checked.


James Lorimer Ilsley: Yes.


Howard Charles Green: Under those conditions I suggest that the minister should put in the words "mining partnership or other similar association or organization," so that there will be no question that these partnerships in British Columbia and in the maritime provinces are covered by the legislation. The wording here is too narrow. It does not cover the minister's intention so far as British Columbia is concerned.


James Lorimer Ilsley: No. I should say that there has been no complaint about the statement I made in the house, which I am fairly certain used this language, "registered prospecting syndicate," and the prospectors of British Columbia-some of them at least-have

organized themselves or made plans to take advantage of the arrangement. This arrangement is an old story now. I announced it in the house several months ago, and this is the time when they are doing their prospecting, or are supposed to be.


Howard Charles Green: They are all out on the hills now, I guess.


James Lorimer Ilsley: I saw an item in the press this morning indicating that there was some hitch about it, but it was not on any such ground as has been mentioned. I suggest that the resolution pass and that we take pains with the language in the bill. I am told that the bill is not yet printed, although it is drafted. When we get further information from the Department of Mines and Resources we can frame the bill accordingly.
I now have another memorandum here which says that Mr. O'Meara of the companies branch has just telephoned to say that he talked to Doctor J. F. Walker, deputy minister of mines in British Columbia. Doctor Walker assured him there are facilities in the laws of the province of British Columbia for the formation of prospectors' syndicates. They either can be registered or there is a second type that can be formed without registration, but in any event there are registration facilities. The result clearly is that the resolution in the terms in which it was read to him would be workable so far as British Columbia prospectors are concerned.
The hon. gentleman says he thinks the terminology is wrong, that while there may be prospectors' syndicates they are not called that in the statutes of British Columbia.


Howard Charles Green: That is what I understand. Our mineral act is forty or fifty years old. It is a codification of our mining law, and the terminology used in it has been used for so many years that it would not be wise to introduce new terms. ,


James Lorimer Ilsley: We will see that proper terminology is used in the bill.


Howard Charles Green: As long as the amendment is wide enough to cover these prospecting partnerships, that is all that is necessary.


James Lorimer Ilsley: I think the bill as drafted is probably all right anyway. The words used are "in one association or syndicate," and then it is limited to associations or syndicates which are registered. However, I will check that.


Gordon Knapman Fraser: I think the reason the minister has had no letters

Income War Tax Act
Mr. O'NEILL: The argument in the committee this morning is the finest I have heard for a long time in favour of government development of natural resources.


Thomas Vien: I should like to point out to the committee that we have now laboured this point pretty extensively. When a point has been made, and repeated, and when a minister has taken the position about it which is taken by the minister who is in charge of this measure, the only method is not to labour the same argument by repetition; it is to take a vote if the committee is not satisfied. Furthermore, it would be quite out of order to bring under this resolution the question of the national ownership of natural resources, or any subject of the kind.


George Henry Ross: assistance is necessary in order that sufficient drilling of new wells may take place to maintain or extend the production of oil in Canada and if the Minister of Mines and Kesources certifies that such drilling is in oil-bearing areas which give reasonable prospect of yielding producing wells. The provisions of any such agreements granting special tax credits and/or special allowances for depreciation or depletion shall be effective notwithstanding anything contained in the Income War Tax Act or the Excess Profits Tax Act.
I suppose the argument of the hon. member for Calgary West is that that is not applicable to a new company-they have to be operating.


Mr. EDWARDS:: I understand that only a producing oil company, that is a company which actually has a flowing well from which it derives revenue, receives some offset if it goes out and prospects in what we call a wild-cat area, or new fields. But here you have a person going out and prospecting in a new field. He starts from scratch, with no resources, with no producing wells behind him on which to set off depreciation or allowance for which that section provides.


Mr. FAIR:: I do not think the minister can fairly accuse me of any form of pretence. If a company is guaranteed profits I am not objecting to these profits being taxed. In this particular case, as the hon. member for Calgary West has pointed out, men are engaged on a wild-cat venture, sinking their money without any guarantee of return. If when returns are guaranteed it is definitely provided that taxes will be collected on their profits, and if all companies are treated alike, I have no objection whatever. But I do say that mining companies are getting benefits which other companies are denied.


Mr. BLACKMORE:: Has the minister gone into the question of what percentage of new wells has been opened by royalty companies compared with the other types of company during the last three or four years? I am really concerned, as the hon. member for Calgary West expresses himself to be, with respect to increased production. We can easily discourage the movement so seriously that it might not recover for a considerable number of months. We should be very discreet before we do anything which might discourage them. What percentage of wells in 1941, say, or 1942, was developed by royalty companies?


James Lorimer Ilsley: I do not know that.


John Horne Blackmore: I was wondering
whether the 90 per cent estimate was a little exaggerated, or whether it is not enough.


James Lorimer Ilsley: I think consideration should be given to extending the same privileges to royalty companies that are not already in 
business as to those that are. That can be done by order in council. The section is just as the hon. member for Calgary West says, but I do not think we should refrain from taxing these organizations simply as a matter of encouragement to the business. I do not see why this method could not be extended to timber companies or any other companies. As the hon. gentleman says, it was not invented as a means of tax avoidance, because at that time the tax on corporations was very low, but the increase of the tax has given this type of organization a tremendous advantage.


Manley Justin Edwards: Would the minister consider taking, instead of a percentage of' the net profits, a percentage of returns from the well as such, on the same basis as the royalty itself operates? At least there would then be certain security; the royalty holder would know what there was ahead of him. He knows at the present time that royalty, if any, is payable to the provincial government; royalty, if any, is payable to the antecedent leaseholder, and if he knew for certain that the dominion government was taking a percentage of the production of that well, it would be helpful.


James Lorimer Ilsley: Why would it not be just as good for him if he knew that the dominion government was taking a percentage of the profits?


Manley Justin Edwards: Because he has no means of knowing what are the profits or what are the expenses of operation. He does not know what has actually gone into the well. When he is buying a royalty he is buying a percentage of what that well produces, not of what some company declares is a dividend or a profit on the well.
Mr. O'NEILL: To my mind the committee has developed this morning a splendid argument in favour of government development of natural resources. In view of the fact that there is a definite shortage of oil, and the further fact that British Columbia has advocated government development of these natural resources, will the dominion government give or has it given any thought to such a procedure on the part of the dominion?


James Lorimer Ilsley: Well, the question is one for my colleague the Minister of Munitions and Supply. I am not sure whether there is any direct government prospecting activity or not.
Mr. O'NEILL: Government development of oil wells has been advocated by British Columbia.


James Lorimer Ilsley: I do not myself know of any.

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taking 40 per cent-that makes 50 per cent, and probably the intermediate leaseholder takes another 10 per cent. What is there left on which the investing public may gamble or speculate in the hope of any return at all from their investment? It is not good enough, and it just will not be done. A royalty company cannot get any concession under existing legislation for wildcat exploration, because the legislation now in effect is applicable only to producing companies as such.


Thomas Langton Church: What is the meaning of the words "royalty company, association, or other body" in the first line of resolution 11? Are all these royalty companies, associations and bodies private organizations -which pay income tax on the proceeds of their operations? Are they all privately owned? The minister promised last session in connection with a private bill related to this same matter and on the estimates, that a study would be made of the question of public ownership of oil and gasoline. Has any study been made, or will a study be made in the coming recess with a view to allowing groups of small municipalities to cooperate in the development and sale of oil and gasoline? The gas and oil industry is only in its infancy in Canada. These words "royalty company, association, or other body" should be extended by law to enable any group of small municipalities to operate wells on properties in their localities, under public ownership. It is only within the last seventy-five or eighty years that science has discovered the power inherent in oil, gas and falling water. I would ask the minister what study was made in the recess or will a study be made to give a group of municipalities power to go into this industry on a public ownership basis as was done in connection with falling water in Ontario?


James Lorimer Ilsley: I am afraid I do not understand the suggestion. Is it proposed that a study be made of the question whether municipalities may cooperate in an association for the development of oil on a royalty basis? Is that the suggestion?


Thomas Langton Church: I mean that they could enter the business under public ownership if they were so empowered by legislation, and do better than private ownership has done.


Robert Fair: The holders of these royalties are subject to double taxation. When they invest their money they receive nothing until this 40 per cent is taken; then if they are lucky enough to get into the higher income tax brackets they are taxed again and this second tax runs over 37 per cent. I understand that 90 per cent of the new oil fields are being
tested out by these companies financed by royalty holders, and no concession is granted to them, while large concessions are granted to other large oil companies which are taking very little chances in development work.


James Lorimer Ilsley: It takes a proposal like this to get certain members to understand that double taxation is a feature of our system. We hear members like the member for Battle River urging us to put higher and higher taxes on corporations, not worrying himself at all about double taxation, although double taxation is there to just exactly the same extent and to no greater extent than is proposed with regard to these royalty companies. These royalty companies may in a sense be cooperatives, but they are certainly commercial or industrial profit-making organizations, and how on principle we can justify side by side the existence of two forms of commercial or industrial organizations, one subject to 40 per cent or the higher excess profits tax, and the other subject to no taxation whatever as a commercial organization, I do not know. Take the companies which are exploring for strategic minerals and other metals; none of them is free of taxation. Under the relief provided by section 89 of the Income War Tax Act, the companies discovering new mines -and a few years ago we badly wanted them to discover new gold mines; later, new strategic mineral mines-are not relieved from taxation; they are relieved from excess profits tax but they pay the corporation rate of income tax of 18 per cent. I think the sound thing to do in regard to these royalty companies is to put them on the same basis as other commercial or industrial organizations so far as taxation is concerned, and then extend the same -kind of assistance, special assistance, depending upon the circumstances, to them as you do to the other organizations. I think that is open to us under the War Exchange Conservation Act. The amending act assented to on June 14, 1941, provides as follows:
The governor in council in order to increase or conserve Canada's supply of foreign exchange may, on the recommendation of the Minister of Finance, enter into agreements with individuals, partnerships or corporations to grant assistance by way of special tax credits and/or special allowances for depreciation or depletion under the Income War Tax Act and/or the Excess Profits Tax Act, if, in the opinion of the governor in council, such assistance is necessary in order that an expansion of the exports of any individual, partnership or corporation receiving such assistance may take place or that the exports of any such individual, partnership or corporation may be maintained at levels higher than would otherwise obtain, or, in the case of any individual, partnership or corporation operating an oil well or oil wells, if, in the opinion of the governor in council such

Income War Tax Act

encouraging production, in fact. But the section of the Income War Tax Act originally applied to gold and other metalliferous mines, and I do not know that I would care to extend it to oil wells.


Harry Rutherford Jackman: The winning of the war
is of first importance.


Mr. JOHNSTON (Bow River):: If we need the oil wells as much as we need the mines, we should do it.


James Lorimer Ilsley: We would have to consider
a great many other things we need just as much as we need these.


Charles Edward Johnston: But oil
is very important.


Robert Fair: Could we not transfer these
benefits from gold mines to the oil fields? We can do without gold, because wedding rings and commodities of that kind seem to be the only uses for gold in these days. We are not using it as a base for our money. We would be well advised to transfer to the oil companies some of the benefits extended to the mining companies.


Manley Justin Edwards: If I understood the minister correctly, the provision, means that 40 per cent of the production of every oil well is to be taken by the government.


Richard Burpee Hanson: Forty per cent of the profits.


Manley Justin Edwards: Yes, of the profits. How is a royalty holder going to know what he is buying, if he owns a one per cent royalty? I am very much disturbed as to what the effect of this legislation is going to be on the oil industry. The one thing about which we are most agitated is the production of oil. The exploration and development of new oil fields in the one and only actual oil field in Canada, and probably in the British empire as it is at the present time, is of great importance.
These royalty companies, as such, deal primarily in the exploration of possibly one well. They are not big operating companies as we know them. They are not the type of company which comes to the minds of ordinary citizens when they think of oil companies. The people of Canada generally and the government owes a great deal to the initiative and enterprise of the investing public who have invested their money in these royalty companies. It is they who have extended the Turner Valley field both north and south-not the recognized and old-established oil companies which have sold shares to the public. This system of financing oil wells, contrary to the general impression, was not devised to escape taxation, either provincial or federal, but by reason of the fact that speculation in

shares such as takes place in ordinary industrial companies has militated against the successful exploration and development of our oil resources. When the investing public bought a one per cent royalty in a well, they knew that for every hundred barrels of oil that came out of the well they got one. The investor was not dealing with the company. His money goes into a trust company, to be paid out as the well is developed. The money received from any oil produced from that well goes to the trust company and is paid direct to the investor, and the investor is not at the mercy of any manipulation by company directors. If the investor buys a one per cent royalty he gets one per cent of the proceeds from the oil sold from that well, or he can take the oil itself if he wishes.
But where is he going to be under this proposal? I foresee that this legislation will completely dry up individual initiative, and the royalty method, which has proved more successful than any other method of financing the exploration and development of our oil resources in Alberta, will be done away with. 1 ou buy a royalty in a well, not a fractional interest in a company as such, and no royalty company will be able to get any advantage from the concessions being granted under the exchange control act because they are not producing companies as such. They are companies organized to develop one particular well or one particular lease. They are essentially cooperative in nature and in purport and intent. It is a cooperative venture. Suppose you have bought a one per cent royalty. You know that you have a one per interest in the production of that particular well, and not in a number of wells. We have recognized in our legislation in this house throughout the years that favourable consideration should be given to cooperative enterprises as such, and this form of enterprise is essentially cooperative. Cooperatives as such have heretofore been free from taxation. A royalty company, from its very nature, is cooperative in spirit.
I would ask the minister to consider the matter further. I am sure, from such information and knowledge as I now have of the oil industry in my province, that this legislation will kill the enterprise and initiative which has resulted in expanding that field. Suppose you buy a one per cent royalty in one of these wells for two or three or four or five thousand dollars, as many people of Ontario and Quebec have done. Costs of development are excessively high, and generally speaking the life of a well is not more than four or five years. The provincial government is taking ten per cent of the actual production, and now this government is coming along and in effect

Income War Tax Act


George Henry Ross: In answering the hon. member for Battle River the minister pointed out that under agreement no concession is granted in connection with gold mining and other metalliferous mines. Concessions have been granted to gold mining companies by statute, and section 89 of the act we are now considering grants certain exemptions to metalliferous mines. So that they have been getting concessions which the oil producers have not been getting.


James Lorimer Ilsley: Since 1936. That is an old policy. There was freedom from taxation for the first three years of operation.


Harry Rutherford Jackman: Resolution 10, Excess Profits Tax Act, deals with that matter.


James Lorimer Ilsley: The provision runs out this year so far as gold mines are concerned.


George Henry Ross: But they have been getting those concessions despite the fact that the oil industry is much more important at this time.


James Lorimer Ilsley: It is being discontinued on gold.


George Henry Ross: It is being discontinued on gold, but not on the other metalliferous mines?


James Lorimer Ilsley: No.


Harry Rutherford Jackman: If the country considers the bringing into production of new oil wells a procedure which would help the war effort, I suggest that some greater credit be given them by way of tax exemption. If the successful wells are to be taxed 40 per cent, such a tax will be a great hardship and will discourage the bringing in of new wells.
Let us take the example of a syndicate which drills two wells at a cost of $200,000 each. One 'well may be a dry hole, but the other one may produce. The one which produces will pay 40 per cent, the government taking no risk whatsoever in connection with capital loss involved in dealing with the dry hole. This is just another example of controlled economy as against free economy. Who will risk his money in the hazardous enterprise of oil wildcatting in Alberta or anywhere else in Canada and be entitled to receive only 60 per cent of the profits, if there are any, while at the same time receiving no offset against loss on wells which do not prove productive?
Resolution 10 under the Excess Profits Tax Act provides:
That the income of any company derived from the production of base metals or strategic minerals shall be exempt from taxation hereunder if the company first came into production
during the period of three years commencing the first day of January, 1943, and such exemption shall extend to the income of the first three fiscal periods of twelve months each of any such company following commencement of such production.
There is an example of a provision made by the government wdien it really wants something brought into production-. There is in Canada a dearth of strategic minerals, and here the government is making a reasonable concession, one which will induce private enterprise to go out into production, because they are going to get exemptions for three years under the Excess Profits Tax Act. They will still remain subject to the 18 per cent provision-I believe that is the correct percentage-


James Lorimer Ilsley: Yes.


Harry Rutherford Jackman: -which is a bearable tax, although perhaps it should not be there. Nevertheless a company can go on and still suffer the payment of that tax. There is no such provision for oil companies. There is also a shortage of natural gas in Ontario. The wells now in production are being rapidly depleted by the companies which do the servicing of industries and provide for domestic heating, because all the gas is being used for war purposes-that is, all except the absolute minimum required for warmth in the winter time.
I know of a syndicate which wishes to spend $50,000 or more in a search for additional wells in southern Ontario. It has a well-formulated plan for the development of certain properties in that area, but it is being held back because of the heavy taxation that is staring them in the face. Surely if the production of oil and gas in Canada is helpful to the war effort, then at least for the next three years they should be included in resolution 10 under the Excess Profits Tax Act, whereby they would be freed from any taxation above 18 per cent of any earnings they make.


Charles Edward Johnston: In view of this provision in the Excess Profits Tax Act, in which it appears that some companies are getting consideration, and in view of the fact that we are in need of an increase in oil production, the minister would be well advised to consider making some concession to oil companies in that connection, as he has done with other companies.


James Lorimer Ilsley: We make special agreements with them. It is just a question of judgment as to how far we should go. The throwing off of a tax undtoubtedly encourages production. It is a very popular way of
Income War Tax Act

taxable at 40 per cent before being distributed, and they will buy the royalties on that basis.


Charles Edward Johnston: The point has been brought up that these royalty companies are going to be more harshly treated than the share companies. Is there any way in which a share company, through its holdbacks, is given any preference over a royalty company? There seems to be an idea that there is discrimination as between the royalty companies and the share companies.


James Lorimer Ilsley: I cannot think of any way in which there will be discrimination. The same rules will apply with regard to depletion and depreciation. The rate will be the minimum rate applied to incorporated companies, and I cannot think of any discrimination against these organizations implicit in this proposal.


Charles Edward Johnston: I do not mean to suggest that there is discrimination, but that statement has been made. I could not see where the discrimination existed, and I asked the minister as a matter of information. because I think if there is any discrimination as between the share companies and the royalty companies it would be unfair. The minister says he does not know of any.


James Lorimer Ilsley: The method of operation of the royalty syndicates is to treat each well as a separate unit, and some wells may be good while others are bad. There might be a tax advantage to a company because of the difference in practice. That is, the organization investing in one well will perhaps either lose a good deal of money or make a good deal of money. If it loses money it gets no advantage ; if it makes money it is taxed at the rate of 40 per cent. Another company may have some paying wells and some losing wells, and it would offset the losses of the losing wells against the profits of the paying wells; therefore, on the entire number of wells, if they paid at the 40 per cent rate they might pay the government a smaller sum than would be paid by a group of royalty syndicates. But these syndicates choose to operate one well at a time, for their own reasons, and I do not know that we can help it if they do. If they want to do it in some other way, as a company, they may do so. That is the only discrimination or possible discrimination that I can think of that is implied in this proposal.


Charles Edward Johnston: Could not the royalty companies reorganize in some way?


James Lorimer Ilsley: I do not know enough about it to be able to say whether they could or {Mr. Ilsley.]
not, but I do not think it is a difference that we should recognize at all for taxation purposes.


Robert Fair: Have any concessions been made to mining companies opening up new mines during the past two or three years? If so, what have they been? With this information we can make a comparison between mining companies and oil companies.


James Lorimer Ilsley: Under the War Exchange Conservation Act the Minister of Finance is authorized to make agreements with persons drilling for oil by which special depreciation or tax credits may be allowed to encourage these persons to drill. Under that authority agreements have been entered into with some of the companies.


Robert Fair: My question was in connection with gold and other minerals. What concessions have been made to those companies?


James Lorimer Ilsley: Oh, there are no concessions to gold mines; no agreements have been made with them.


Robert Fair: Have any been made during the past two or three years?


James Lorimer Ilsley: Oh, no. The Excess Profits Tax Act has a special provision for persons producing gold and oil, and if the hon. gentleman will read that act he will see what that provision is. That was all explained1 thoroughly to the House of Commons and debated at the time the reasons were given. But no agreements have been made under the War Exchange Conservation Act to encourage the production of gold. Agreements have been made, I do not know just how many, to encourage the production of other metals, notably nickel, and several agreements have been made to encourage the production of oil, but not gold.


Mr. PERLEY:: If an individual who is not associated or connected with any company or syndicate decides of his own initiative to drill for oil or gasoline, to what concessions or deductions would he be entitled?


James Lorimer Ilsley: He is just as eligible as a company for any concession under the War Exchange Conservation Act. Nobody is entitled to anything; it is merely a matter of the minister's discretion. Different agreements are made with various applicants. This is one of the most difficult matters in connection with the operation of the Department of Finance.


Ernest Edward Perley: An individual would have to take it up directly with the department.


James Lorimer Ilsley: Yes.

Income War Tax Act
of the oil fields in the hands of the large companies, or what he terms the world petroleum cartel. But as the minister stated, they will now understand what the tax will be, and I assume from what he has said that he intends to protect independent companies that are financing on royalties, to that extent anyway.


James Lorimer Ilsley: To that extent, yes.


Robert Fair: Three days ago I received a resolution in connection with this matter from the Vermilion board of trade. Vermilion is one of the parts of Alberta in which quite a quantity of oil is found, and the board of trade of that town believe that the little operators or investors are being discriminated against. I believe the minister has a copy of this resolution. It reads as follows:
Whereas in the province of Alberta exploration for petroleum has heretofore to a large extent been financed by the sale of preferred royalty certificates, whiqh represented an interest in the production of any petroleum from the well in respect of which such certificates were sold;
And whereas the said certificates are sold upon a condition that all of the proceeds of the net production from any discovery shall be paid to the certificate holders until such time as such certificate holders have received the return of their investment in full, the proceeds thereafter being divided between the holders of such certificates and the owners of the remaining interests in the well, in proportion to their holdings;
And whereas heretofore the production of the well required to be paid to the certificate holder was not subject to taxation until it reached the hands of the certificate holder, when it became subject to taxation in the same manner as other income;
And whereas unless some differentiation between other taxes payable at the source and the tax at source is provided for, the deduction of royalty tax at source will alter the situation and royalty certificates, owing to the hazardousness of the venture and great possibility of no return in a great many instances, will cease to be an investment sufficiently attractive to enable further development to proceed by public financing.
Therefore, be it resolved that in the opinion of the Vermilion Board of Trade, of Vermilion, Alberta, some provision ought to be made in the revenue act whereby royalties from petroleum and/or natural gas ventures are not subject to taxation in respect of sufficient of the first net production to return to the owners of such certificates their full capital investment, and thereafter a rate of taxation lower than that imposed upon other securities ought to be imposed, in order that exploration for petroleum production may continue upon an increased rather than an abated schedule.
And further be it resolved that the owner of a well, who has invested his own money in exploring and bringing in the same, should be entitled to have a return of the moneys expended in drilling operations from production prior to the imposition of a tax upon the production.
And further be it resolved that copies of this resolution be forwarded to the Minister of Finance and to such other persons as in the opinion of the president and secretary may be advisable.
Passed at Vermilion, Alberta, this 17th day of July, A.D. 1942.
That is signed by Mr. Richardson, the secretary-treasurer. My information is that 4)0 per cent of the new oil fields have been financed by royalty owners. It would seem that under these proposals some hindrance will be placed in the way of the development of new fields and further advantages handed out to the large oil companies.


Charles Edward Johnston: Would it not avoid a great deal of difficulty if the minister would impose a straight production tax, right at the well head?


James Lorimer Ilsley: No. That suggestion has
been made, but I do not think the dominion government should adopt it. The provinces have been insistent, generally speaking, on their exclusive right to tax directly natural resources, such as timber or minerals or anything of the kind; and when we entered into the dominion-provincial agreements their right to impose taxes in that field was expressly preserved. While now I believe the Alberta government would be willing and perhaps desirous to have us put on an output or production tax-


Charles Edward Johnston: It would save a lot of trouble.


James Lorimer Ilsley: -instead of a profits tax, it would constitute an exception in our taxation system, and I would not care to go into that field. The representations which were made to me were in favour of certainty. They said they did not object to the rate of the proposed taxation; but they thought the investors should know that each unit of oil produced would bear a certain rate of taxation. That will not be the case under my proposal, but I cannot see anything uncertain about my proposal because the profits of the enterprise will be determined on the same principles as the profits of an incorporated company conducting a similar enterprise are determined. There will be the usual depreciation and depletion, and so forth, and then whatever profits are left will be taxed at 40 per cent, just as a corporation would be taxed if it were paying the minimum rate. I may say that most of the companies are paying at the minimum rate of 40 per cent, rather than the 75 per cent or, as it will be hereafter, the 100 per cent rate, so that I cannot see anything uncertain about the tax. The investors will know that any profits they make will be
Income War Tax Act

fund or plan. Apparently doubt exists as to whether payments to the civil service retirement fund are covered by the amended resolution. It will be recalled that the retirement fund is on a different principle from the civil service superannuation fund. It has been suggested to me that payments made to the retirement fund are not deductible under this resolution. This would be a most unfortunate discrimination. I ask the minister to give some consideration to the question and perhaps clarify it. I understand there are five thousand people affected by this, and they think they are being discriminated against. I leave that idea with the minister in order that consideration may be given to these persons, whose position is not dissimilar in principle from that of those who pay into the superannuation fund.


James Lorimer Ilsley: It was intended that the retirement fund would be covered. The words of the resolution were "approved superannuation, retirement or pension fund or plan", and the amended resolution does not change those words.


Richard Burpee Hanson: The minister thinks the word "retirement" covers it?


James Lorimer Ilsley: Yes.


Richard Burpee Hanson: Well, that is the understanding.


James Lorimer Ilsley: That is the understanding.


Richard Burpee Hanson: That clarifies the position.


Thomas Vien: We are on resolution 11.


Ernest Edward Perley: The minister said yesterday he would make a statement on this resolution.


James Lorimer Ilsley: This resolution effects an important change in the law and makes this type of commercial or industrial organization taxable in all respects as if it were a corporation. My knowledge of this type of organization is not very extensive, but I understand that it was invented in Oklahoma or one of the oil producing districts of the United States. The United States tax these organizations and we do not. Some years ago I think there was a case on their taxability; the government lost it, and they have gone along without any corporation tax. There is of course an individual tax, but with the increased corporation rates the apparent discrimination between a company drilling for oil and a syndicate financed by royalties drilling for oil is very considerable. We decided that the time had come when they ought to be taxed. Strong representations have been made to me that to tax these syndicates, simply putting them in exactly the same position as companies, would result in much
[Mr R. B. Hanson.]
difficulty in financing. The argument that has been used is that when it is proposed to drill for oil and a group of investors are asked to put their money into the venture and in exchange for their money to take royalties, there ought to be some certainty as to the taxation; otherwise, with our present excess profits tax, there might be great discouragement to investment.
The discouragement would arise in this way, that these are new companies, at least from now on they would be new syndicates, and the investors might very well ask: "What is the taxation going to be?" The only answer the person attempting to sell royalties could make would be: "Application will have to be made to the board of referees and a standard profits base determined. If that is high enough, there will not be any 100 per cent tax, but if it is not high enough, there may be." To an investor that would be a very discouraging answer. As we need oil and would like to see greater developments in that respect, I have decided that there should be incorporated in the legislation based on this resolution a provision that in no event will the tax be more than 40 per cent. That will be the minimum rate for incorporated companies.


Richard Burpee Hanson: The minister said, "Not more than 40 per cent" and then said, "that will be the minimum."


James Lorimer Ilsley: Well, it will be 40 per cent.


Richard Burpee Hanson: That will be the maximum?


James Lorimer Ilsley: It will be 40 per cent. The reason I said "not more than" is it might slip to 100 per cent on part. That is an eventuality which I think should be avoided.
So far as I can see, that meets the argument of those who desire certainty. The submission to me has been that a corporation tax should not be imposed on these organizations, but that there might be an output tax, a natural resources tax. I pointed out that we have conscientiously and consistently avoided imposing such a tax. The provinces reserve that field to themselves, and so far at least we are quite content to have them do so. I should not want to start in that way the imposition of taxes on natural resources.


Ernest Edward Perley: I think the minister has made it plain that he has come to an understanding with them as to what their position is. I had a telegram from an independent company which is financing on the sale of royalties. They felt that if the tax went through as proposed they might be put out of business, and it would leave the development

Income War Tax Act
a security service for the whole of Canada. I hold in my hand a certified minute of a meeting of the treasuiy board approved on that day. It quotes from a long memorandum submitted by the Minister of Justice, in which he recommends, under the authority of the War Measures Act, fifteen different proposals. I do not propose to read them all, but No. 1 reads:
There shall be a security service for the whole of Canada under the control of the commissioner of the Royal Canadian Mounted Police.
No. 2 provides:
Canada is to be divided into control areas, covering ports, landing fields and any entry airports, as well as railway and other transportation centres, as decided by the Minister of Justice.
The estimated cost of this establishment is one and a half million dollars, as set out in the order in council or the minute, and is to comprise a force of about 700 men. What has developed in recent months or weeks which has made this necessary? I think a statement from the minister would be reassuring to the country, because the establishment of this force is bound to become public knowledge and the people should be informed as to why it is being set up. I had thought that we had an adequate intelligence service in Canada, not only in connection with the Royal Canadian Mounted Police but in connection with the three armed services. Apparently that is not the case, notwithstanding the fact that the mounted police force has been increased by several hundreds in recent months. Possibly the real objectives of establishing such a force in this country are not apparent from the order in council. I invite the Minister of Justice either now, or at a later day, to give the house and country the underlying reasons for the establishment of this force.
Hon. L. S. ST. LAURENT (Minister of Justice): Perhaps it would be more satisfactory if the explanations required in this regard were supplied when the estimates are being voted to provide for the service.


Richard Burpee Hanson: This is being provided for now out of moneys already voted through the war appropriation bill. If the Minister of Justice will look at the terms of the order I am sure he will see that it is so.
Mr. ST. LAURENT: The estimates for the Royal Canadian Mounted Police will have to be considered by the house and I had thought that it might be a convenient time then to give such information as can be given publicly in respect of this new security service, if that is satisfactory.


Richard Burpee Hanson: It will *have to be.
44561-285J



ACCOUNTANTS AND AUDITORS


[Stage Direction]
On the orders of the day:
Mr. N. J. M. LOCKHART (Lincoln):: May I direct a question to the Minister of National War Services, arising out of a recent competition invited by the civil service commission.. It is competition No. 42-936. This matter i* of the utmost importance, because I have hadi three letters to-day from chartered accountants-and auditors who are doing tremendous work; in connection with the endeavour to facilitate small industries throughout the country. This invites applications, the salaries running from, SI,920 to $3,000. Three persons have written: to me to-day asking whether they should! apply or should carry on their civil occupations, or whether they will ultimately be1 found a better place by serving in some auditing branch of the armed forces. They are in a quandary as to what to do; they do-not know whether to apply for this or wait until some direction is given, or whether they will eventually end up in the army. I think the matter should be clarified.


Joseph Thorarinn Thorson: I am not familiar with the details of the civil service competition to-which the hon. member has referred, and' without knowing more about it I am unable to answer his question. The Department of National War Services regards accountants generally as being in a very important classification. They have been listed under section. 15 of the national war services regulations. I shall be glad to look into the matter with, a view to answering the hon. gentleman's question if I can.



WAYS AND MEANS


[Stage Direction]
The house in committee of ways and! means, Mr. Vien in the chair.
11. That where any royalty company, association, or other body is organized for the purpose of drilling for and operating oil or gas wells whereby the production belongs not to the company but to the investors in the property, the production shall be deemed to be for and on behalf of the company and the income of the company shall be deemed to include the proceeds secured from the sale of the said oil or gas, less necessary expenses.
Richard Burpee Hanson: We have passed the amended resolution 7(1) (a), and I have no desire to return to it, but a question has arisen this morning upon which I would ask that the minister give a ruling. Resolution 7(1) (a) relates to the payments into any approved superannuation, retirement or pension.
The Plebiscite

few days ago. I read it yesterday. That was the first time I had a chance to read it. I will make a statement within a few days.


Thomas Langton Church: The war committee has nothing to do with housing, as I see it.


THE PLEBISCITE
[Stage Direction]
On the orders of the day:
Richard Burpee Hanson: On April 29, a question regarding the cost of the plebiscite was asked by the hon. member for Peterborough West (Mr. Fraser) and was passed as an order for return. On June 3 a question asked by the hon. member for Cumberland (Mr. Black) on the same subject was passed as an order for return. On several occasions these two hon. members have asked when they might expect the return, but no return has yet been forthcoming. Realizing that all accounts might not have been paid, the hon. member for Cumberland placed another question on the order paper, asking for payments to date. This question should immediately have been answered. But instead, it was passed on Monday last as an order for return. I think we are entitled to have this information presented to us at the earliest possible day. I ask the Secretaiy of State to bring down the information to-morrow. There certainly should be no difficulty about doing so in respect of the last question asked by the hon. member for Cumberland.
With regard to the interruption of the Minister of Mines and Resources the other day ini connection with extravagance, may I page the plebiscite in answer to him.
Hon.. N. A. McLARTY (Secretary of State): Each of these proposed orders for return was submitted to the chief plebiscite officer. I am of course completely in his hands as to the expense. If I remember correctly, there were 32,246 electoral booths required in connection with the plebiscite; there was also the overseas vote and the active service vote. It takes some time to coordinate an answer which will give the total cost. I could of course give a statement of the amounts paid to date, and I shall be glad to expedite that return as much as I can possibly do so.


NATIONAL DEFENCE
[Stage Direction]
'in the orders of the day:
Mr. JEAN-FRANQOIS POULIOT (Temis-ouata):	Mr. Speaker, I hold in my hand

the orders of the day for to-day, and I am greatly surprised that question No. 3, which bears the date of June 12, has not yet been answered. It is a month and ten days since that question was put on the order paper. It is the easier to answer because the minister has already given the totals of all these particulars, and if the totals were right it is undoubtedly very easy for the most efficient staff of the headquarters to answer the question at once. I am sure that I shall be lucky in following the example set by the leader of the opposition and asking for a reply to-morrow.
James Layton Ralston: I may say to my hon. friend that
there is no chance of a reply being given to-morrow, and, further, that that question is taking its usual turn in connection with the business of the Department of National Defence. I am not going to give instructions that other work which is far more important should be made subsidiary to the answering of questions of this kind. If the house will take the trouble to read the question it will find out how much detail is involved and how futile the work is after it is all done. .


Jean-François Pouliot: Mr. Speaker, I protest strongly against the words of the leader of the opposition.


Some hon. MEMBERS:: Oh, oh.


Jean-François Pouliot: The more futile he calls them the more important they are to the public and the press.


Richard Burpee Hanson: I hope the hon. member does not attribute the answer to me.


Jean-François Pouliot: No, but the leader of the opposition is the power behind the throne in the Department of National Defence; therefore I may be excused.


SECURITY SERVICE
[Stage Direction]
On the orders of the day:
Richard Burpee Hanson: I desire to direct the attention of the Minister of Justice to a subject matter which I have discussed with him. It is in reference to the creation of a new force in our services under the provisions of order in council P.C.85/6073. I do not ask this question in any critical sense at all, but merely for the purpose of information. On July 14 this order in council was passed establishing

Housing-Hostel in Ottawa
view with Mr. Vining at the time, before he presented his report. As a matter of fact I have not had an opportunity to discuss its representations with Mr. Vining since this report was received. I think it is well that the house should know the facts as to there having been no endeavour on the part of the government to pigeonhole the report, but rather the wish to give it the careful study which it merits.


Thomas Langton Church: Why not drop it? The people of the United States resent it. Britain tried it for two hundred years and failed.


Richard Burpee Hanson: Mr. Vining occupies an important position in the industrial and commercial life of Canada. He was appointed, as I understood it, to survey the situation with relation to our publicity in the United States-a very important subject and one which has not received the attention it should have received in the long months that this country has been at war. He was sent down there, as I understand it, for a definite purpose. He has made a report. It must be of a constructive character, and unless there is something highly confidential in it, it should be tabled.
I do not know why the government is always seeking to reserve to itself reports of this kind, which are ordered in the public interest. I do not think any harm can be done by publishing this report. Only on the basis of giving away secrets which might be of service to the enemy should the government be deterred from producing documents such as this.


William Lyon Mackenzie King: My hon. friend knows that it would be quite impossible for a government to carry on its business if there is to be nothing in the nature of confidential reports between officials and the government, or persons appointed by the government for special missions. In the nature of things Mr. Vining, to make his report as comprehensive as the government hoped it might be, found it necessary to get personal opinions from a number of individuals, some of whom have distinctly stated that they would not wish to have their identities known. It is not any desire on the part of the government to keep documents secret, but it is a desire on the part of the government to have information and inquiries serve the best purposes in the best way, and that can be done only by respecting the wishes of people in the matter of information which might not be elicited from them otherwise.
As to what my hon. friend has just said about publicity being a difficult problem,
there is no question as to that. The government of every country has had this same problem. There is no single problem that has occasioned so much discussion and difference of view and debate and rearrangement as has publicity in Great Britain, and equally in the United States, and it is not surprising that it should have been a difficult problem here. I assure my hon. friend that the government is as anxious as he is, indeed more anxious, to have Canada's war effort as widely and as accurately known as possible.


Georges Parent: Dropped.


Thomas Langton Church: A waste of money.


HOUSING
[Stage Direction]
On the orders of the day:
Richard Burpee Hanson: I should like to ask the Secretary of State or the Minister of Finance if any progress has been made in connection with the proposed erection of a hostel for government employees in the city of Ottawa. This matter has been up on several occasions for several months, and apparently no progressive step has been taken yet beyond the inquiry stage. I think the time has arrived when something definite should be announced.


Hon. N. A. McLARTY (Secretary of State):: Perhaps it will be appropriate if I answered the leader of the opposition in connection with this question. It has been decided to erect a residence for the lower-paid girls in the civil service. I will have a statement to make, I trust, within two or three days in connection with that residence, but in the meantime the decision has been arrived at to erect it.


REQUEST FOR STATEMENT ON GENERAL SITUATION
Thomas Langton Church: I wish to ask the Minister of Finance a question. Would the minister make a statement on this, the 114th day of the session, on the general housing situation, especially as regards the continuance of the act for another year? On the 34th day of the session I was promised a statement, and this is the 114th day. The situation is serious and is becoming worse.


James Lorimer Ilsley: I have to make a statement before the house adjourns. The report of the committee of the House of Commons which dealt with the situation, and dealt with it very comprehensively, was presented to the house only a



Questions as Orders jor Returns
interests in this area, with full power to submit reports on the treatment of Canadian prisoners-of-war and civilian internees.
2.	See answer to question 1.
3.	The representative of the protecting power in charge of Japanese interests in Canada has requested permission to visit camps and settlements where Japanese nationals in Canada are situated.
4.	Yes.
5.	Mr. P. E. Schwartz, consul-general of Spain. Spain is the protecting power in charge of Japanese interests in Canada.
6.	None.
7.	Permission was granted for a member of the Japanese community in British Columbia to accompany the Spanish consul-general as translator and assistant.


AIR RAID PRECAUTIONS-GASOLINE RATIONING
Mr. BLACK (Cumberland):: 1.	Have the gasoline rations been increased or promised to any A.R.P. workers in Ontario, and to what extent?
2.	Have the gasoline rations been increased or promised to any A.R.P. workers in Nova Scotia, and to what extent?


Mr. HOWE:: 1.	A.R.P. workers in all parts of Canada are entitled to apply for inclusion in category B if the head of their local civilian defence committee is prepared to certify that extra gasoline is required by applicant in discharge of their A.R.P. duties.
2.	Answered by 1.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. LACOMBE:: 1.	What is the total value of contracts awarded by the Department of Munitions and Supply for, (a) Canada, (b) United Kingdom,
(c)	allied nations?
2.	What is the amount of the financial engagements undertaken by Canada on the United Kingdom account by reason and from the date of our participation in the war?
3.	What is the amount of similar engagements undertaken by Canada on behalf of allied countries ?


Mr. McNIVEN:: 1.	What quantities of kapok were imported in the years 1939, 1940, 1941, 1942 from (a) Java, (b) other countries?

2.	Is the floss from the milkweed a suitable substitute for kapok in the manufacture of life jackets and flying suits required by the navy and the air force?
3.	Is the milkweed a product of Canada and will the government subsidize its growth, as has been done in Michigan?


Mr. McNIVEN:: 1.	What quantities of glue were imported in the years 1938, 1939, 1940, 1941 and 1942, (a) from the British isles, (b) from other countries?
2.	What is the estimate of Canada's requirements of glue for the years 1942 and 1943?
3.	Has the government authorized the annual export of 1,000 cars or any number of cars of dry prairie bones suitable for the manufacture of glue, to Consolidated Chemicals Industries Inc., of San Francisco, California?
4.	Has the government contracted for the purchase of glue for war purposes from said company, and if so, in what quantities and at what price?
5.	By what agency is the glue so purchased distributed or sold in Canada and upon what terms?
6.	Why was a plant for the manufacture of glue not established in western Canada?


PUBLICITY IN THE UNITED STATES-REPORT OF CHARLES VINING
Mr. CARDIFF:: For a copy of the report made by Mr. Charles Vining with respect to publicity in the United States of America.


William Lyon Mackenzie King: Mr. Speaker, this report is a confidential report prepared as such for the government. It contains a number of references to persons not only in Canada but in the United States, and was not intended for publication but for the guidance of the government in considering this whole question of publicity. Therefore the report cannot be tabled-certainly not at present.
I should like in speaking of the report to draw attention to an editorial which I read in one of the local newspapers, dated July 8. It is headed "Vining Report Pigeonholed." There is a statement in the editorial that "his report"-that is Mr. Vining's-"is in the hands of Mr. King," and it goes on to say what is recommended in the report, and the name of a certain person is suggested as the one who is to be the head of some new department. This editorial is dated July 8, and I have noticed in other papers of Canada editorials based on this particular editorial. I have in my hand at the moment Mr. Vining's letter to me transmitting his report. As a matter of fact it is dated July 10, 1942, and was not received by me until July 11. I had no knowledge whatever of anything the report contained. I had not had any personal inter-

Questions
2. How many men from Gaspe were members of the 1st battalion of the Royal Rifles of Canada?


James Layton Ralston: Mr. Speaker, I want to ask the hon. member to drop this question, more on the grounds that it would take a great deal of time to compile the information and would establish a precedent which I think the house would not want to see put into effect. The Royal Canadian Air Force advises that its enlistment records are not classified according to constituencies. To tabulate this information would require a review of the record of the entire strength of the Royal Canadian Air Force, and the time and work involved would seriously retard the normal work of the division.
In regard to the army, a compilation to answer question 1 (b) is not at present available. It would take several weeks to compile it, and if compiled for Gaspe a precedent would be established on which members might base demands for similar information with respect to the other 244 constituencies.
Question dropped.


VICHY CONSULATES
Mr. FULFORD:: 1.	Has the government any check on the activities of the former consuls of Vichy France whose offices were ordered closed?
2.	Where are these consuls now?


William Lyon Mackenzie King: All French consular offices in Canada were closed at the end of May. The former consul general in Montreal, and the former consul at Vancouver will be leaving Canada as soon as the necessary travel arrangements can be completed. The former consul at Winnipeg and the former vice-consul at Montreal are presently employed by the French legation in handling consular business which has been transferred to the legation since the closing of the consular offices. In their present capacity they have neither diplomatic nor consular status. The honorary consular agents of France are practically all British subjects who have been continuously residents in Canada.


PRICE CEILING-FLUID MILK
Mr. PURDY:: 1.	Is the ceiling for fluid milk still fixed at one cent per quart higher in Saint John, New Brunswick, than in Halifax, Nova Scotia?
2.	What price is paid for fluid milk by the distributors to the producers in, (a) the Saint John district, (b) the Halifax district?


Mr. ILSLEY:: 1.	The ceiling price for fluid milk at Halifax is 12 cents per quart; the ceiling price for fluid milk at Saint John is 13 cents per quart.
2.	The price paid by distributors to producers in the Saint John district is $2.45 per one hundred pounds of milk having a minimum test of 3-8 per cent butterfat; and in Halifax district $2.25 per one hundred pounds of milk having a minimum test of 3-7 per cent butterfat.
The above prices are for milk delivered in the cities of Saint John and Halifax respectively, and are taken from the latest orders of the New Brunswick and Nova Scotia milk control board, which were approved by the wartime prices and trade board.


CANADIAN PRISONERS IN JAPAN-JAPANESE NATIONALS IN BRITISH COLUMBIA
Mr. REID:: 1.	Have any representations been made by Canada asking that a representative of the Canadian government be allowed to visit Japan with the view of finding out at first hand how Canadian soldiers and citizens, now prisoners of Japan, are being treated?
2.	If so, has any intimation been made by Japan that a representative of the Canadian government would be allowed to make such an inspection?
3.	Have any similar representations been made on behalf of Japan m connection with Japanese nationals in British Columbia?
4.	Is there a representative of Japan at present in Canada making an investigation into conditions affecting Japanese nationals at Hastings Park work camps and other places *where Japanese nationals are being located?
5.	If so, -what is the name of the Japanese representative and to what country does he belong ?
0.	How many such representatives, if any, have been permitted to enter Canada for this purpose?
7.	Are there any Japanese nationals or of Japanese origin accompanying the representative on his tour of inspection?


Mr. MACKENZIE KING:: 1.	Representatives of the protecting power in charge of Canadian interests have been in touch with Canadian nationals in Japan since the outbreak of war, and reports have been received both through these official representatives and through the local delegate of the International Red Cross regarding conditions in the internment camps in Japan.
The Japanese government have not yet permitted representatives of the protecting power to visit Hong Kong, which is still designated a "zone of military operations." An International Red Cross delegate has been allowed to go from Shanghai to Hong Kong to assist in the distribution of relief. Strong representations have been made to the Japanese government that a Swiss representative be permitted to take charge of Canadian
Income War Tax Act

(c)	Resolution 17 shall be applicable only to the income of the 1942 taxation period and fiscal periods ending therein;
(d)	Resolution 18 shall be applicable to the income of the 1941 taxation period and fiscal periods ending therein and all subsequent periods;
(e)	Resolution 19 shall be deemed to have come into force on the 24th day of June, 1942, and shall be applicable to all payments made on and after the said date.


Joseph Henry Harris: Paragraph (a) of this resolution reads;
Resolutions 1 to 15 inclusive, 20 and 21 shall be applicable to the income of the 1942 taxation period and fiscal periods ending therein and to all subsequent periods.	[DOT]
The question I raised this morning pertained with a greater degree to 1942 taxation than perhaps the taxation of any previous year. When the minister is framing the bill I should like him to give consideration to giving the power to the minister to permit an administrator or executor of an estate, whose income from the estate is not sufficient to pay income taxes and succession duties, to encroach on the capital to the extent necessary to pay these taxes, at least to the extent of the difference between taxation at the date the will was drawn and the date of probate, or allow the entire succession duties to be paid out' of the estate.


James Lorimer Ilsley: May I look at that question and perhaps answer it to-morrow? There are two or three resolutions which have been allowed to stand, including the royalty and prospecting resolutions. I do not think we can finish them to-night. I think this resolution should stand also.
Resolution stands.
Progress reported.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
Wednesday, July 22, 1942